As filed with the Securities and Exchange
Commission on March 17, 2000 Registration No.
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ABLEAUCTIONS.COM, INC.
(Exact name of Registrant as specified in its charter)
Florida Not Applicable
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1963 Lougheed Highway
Coquitlam, British Columbia, Canada V3K 3T8
(604) 521-2253
----------------------------------------------
Address of Principal Executive Offices
1999 Stock Option Plan
Stock Option Granted on October 14, 1999 to Barrett Sleeman
----------------------------------------------
(Full title of the plan)
CT Corporation System
1200 Pine Island Road
Plantation, Florida, U.S.A. 33324
----------------------------------------------
(Name and address of agent for service)
(954) 473-5503
----------------------------------------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
Title of Each Class of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered(1) Registered Offering Price Per Share Aggregate Offering Price Registration Fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock subject to an outstanding 50,000 shares $3.20 $160,000 $43.04
option under the Barrett Sleeman Grant
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock subject to outstanding 967,500 shares $4.10(2) $3,966,750 $1,067.06
options under the 1999 Stock Option Plan
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock not subject to outstanding 2,032,500 shares $8.25(3) $16,768,125 $4,510.63
options under the 1999 Stock Option Plan
- -----------------------------------------------------------------------------------------------------------------------------------
Total 3,050,000 shares $20,894,875 $5,620.73
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Common Stock, with a par value of $0.001 per share, offered by the
Registrant pursuant to the Plan described herein.
(2) Based on the average exercise price of options granted under the 1999 Stock
Option Plan outstanding as of the date of the filing of this registration
statement.
(3) The proposed maximum offering price per share and the registration fee were
calculated in accordance with rule 457(c) and (h) based on the average high
and low prices for the Registrant's shares of common stock on March 2,
2000, as quoted on the National Association of Securities Dealer
Over-The-Counter Bulletin Board, which was US$8.25 per share.
================================================================================
<PAGE>
2
This registration statement on Form S-8 registers shares of common stock, with a
par value of $0.001 per share, of Ableauctions.com, Inc. (the "Registrant") to
be issued pursuant to the exercise of options or rights granted under the Stock
Option Grant to Barrett Sleeman and the Registrant's 1999 Stock Option Plan.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in (a) through (c) below are incorporated by reference in
this registration statement.
(a) The Registrant's registration statement on Form 10-SB filed with the
Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on November 18, 1999,
including any amendment thereto, and containing audited financial
statements for the Registrant's latest fiscal year.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the
Registrant's Form 10-SB referred to in (a) above.
(c) The description of the Registrant's securities contained in the
Registrant's registration statement on Form 10-SB filed with the
Securities and Exchange Commission under the Exchange Act on November
18, 1999, including any amendment or report filed for the purpose of
updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date hereof and before the filing of a
post-effective amendment, which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, will be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of those documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
The Registrant's Bylaws require the indemnification, to the fullest extent
permitted by law, of each person that is empowered by law to indemnify. The
Registrant's Articles of Incorporation
<PAGE>
3
require the indemnification, to the fullest extent permitted by Florida law,
each person that the Registrant has the power to indemnify.
Florida law permits a corporation, under specified circumstances, to indemnify
its directors, officers, employees, or agents against expenses (including
attorney's fees), judgments, fines, and amounts paid in settlements actually and
reasonably incurred by them in connection with any action, suit, or proceeding
brought by third parties by reason of the fact that they were or are directors,
officers, employees, or agents of the corporation, if those directors, officers,
employees, or agents acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminal action or proceeding, had no reason to believe
their conduct was unlawful. In a derivative action (i.e. one by or in the right
of the corporation), indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees, or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they have acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation,
except that no indemnification will be made if that person has been adjudged
liable to the corporation, unless and only to the extent that the court in which
the action or suit was brought determines on application that the defendant
directors, officers, employees, or agents are fairly and reasonably entitled to
indemnity for expenses the adjudication of liability.
The Registrant's Articles of Incorporation and Bylaws also contain provisions
stating that no director will be liable to the Registrant or any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except with respect to: (1) a breach of the director's duty of loyalty to the
corporation or its stockholders; (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (3)
liability under Florida law (for unlawful payment of dividends or unlawful stock
purchases or redemptions); or (4) a transaction from which the director derived
an improper personal benefit. The intention of the foregoing provisions is to
eliminate the liability of the Registrant's directors or stockholders to the
fullest extent permitted Florida law.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Exhibit
Number Exhibit
- --------- -------
4.1 Stock Option Grant to Barrett Sleeman
4.2 1999 Stock Option Plan
5.1 Opinion of Eric Littman
23.1 Consent of Davidson & Company, Chartered Accountants
23.2 Consent of Eric Littman (Included in Exhibit 5.1)
24.1 Power of Attorney (See page 7 of this registration statement)
<PAGE>
4
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events that arise
after the effective date of the registration statement (or
the most recent post-effective amendment thereof), which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Despite the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was
registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the
form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the
change in volume and price represents no more than 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to that information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, or Form
F-3 and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated
by reference in this registration statement.
(2) That for the purpose of determining any liability under the Securities
Act, each post-effective amendment will be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of those securities at that time will be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to
<PAGE>
5
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Exchange Act) that is incorporated by reference in the
registration statement will be deemed to be a new registration statement
relating to the securities offered therein, and the offering of those
securities at that time will be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, that indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. If a
claim for indemnification against liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any
action, suit, or proceeding) is asserted by the director, officer, or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether the indemnification by it is against
public policy as expressed in the Securities Act and that question will be
governed by the final adjudication of the issue.
<PAGE>
6
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Burnaby, Province of British Columbia, Canada,
on this 9th day of March, 2000.
ABLEAUCTIONS.COM, INC.
By: /s/ Abdul Ladha
---------------------------------------
Abdul Ladha, Chief Executive Officer
<PAGE>
7
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Abdul
Ladha and N.H. (Nosh) Vellani, or any of them, his attorney-in-fact, with the
power of substitution, for them in any and all capacities, to sign any
amendments to this registration statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Abdul Ladha Chairman of the Board, March 9, 2000
- ------------------------- Chief Executive Officer
Abdul Ladha and Director
(Principal Executive Officer)
/s/ N.H. (Nosh) Vellani Chief Financial Officer March 9, 2000
- ------------------------- (Principal Financial Officer
N.H. (Nosh) Vellani and Accounting Officer)
/s/ Barrett Sleeman Director March 9, 2000
- -------------------------
Barrett Sleeman
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Page
- ------- ------- ----
4.1 Stock Option Grant to Barrett Sleeman
4.2 1999 Stock Option Plan
5.1 Opinion of Eric Littman
23.1 Consent of Davidson & Company, Chartered Accountants
23.2 Consent of Eric Littman (Included in Exhibit 5.1)
24.1 Power of Attorney (See page 7 of this registration statement)
EXHIBIT 4.1
ABLEAUCTIONS.COM, INC.
1999 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
THIS AGREEMENT is entered into as of the 14th day of October, 1999 (the
"Date of Grant") between ABLEAUCTIONS.COM, INC., a Florida corporation (the
"Company"), and barrett sleeman (the "Optionee"), of P.O. Box 18111, 2225 West
41st Avenue, Vancouver, British Columbia, V6M 4L3, Canada.
WHEREAS the Company's Board of Directors (the "Board") has approved and
adopted the 1999 Stock Option Plan (the "Plan"), pursuant to which the Board is
authorized to grant to employees and other selected persons stock options to
purchase common stock without par value of the Company (the "Common Stock");
WHEREAS the Plan provides for the granting of stock options that either (i)
are intended to qualify as "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
(ii) do not qualify under Section 422 of the Code ("Non-Qualified Stock
Options");
WHEREAS the Board has authorized the grant to the Optionee of an option to
purchase a total of 50,000 shares of Common Stock (the "Option"), which Option
is intended to be (select one):
--- an Incentive Stock Option
X a Non-Qualified Stock Option
---
NOW THEREFORE the Company agrees to offer to the Optionee the option to
purchase, on the terms and conditions set forth herein and in the Plan, 50,000
shares of Common Stock. The Option will not be exercisable by the Optionee until
the Company has filed a Form S-8 with the United States Securities and Exchange
Commission (the "Form S-8 Filing Date"). Capitalized terms not otherwise defined
herein will have the meanings ascribed to them in the Plan.
1. Exercise Price. The exercise price of the Option will be $3.20 per share.
2. Limitation on the Number of Shares. If the Option granted is an Incentive
Stock Option, the number of shares that may be acquired on exercise thereof is
subject to the limitations set forth in Section 5(a) of the Plan.
<PAGE>
3. Vesting Schedule. The Option is exercisable in accordance with the following
vesting schedule:
(a) 100% of the Option may be exercised after the Form S-8 Filing Date.
4. Option Not Transferable. The Option may not be transferred, assigned,
pledged, or hypothecated in any manner (whether by operation of law or
otherwise) other than by will, by applicable laws of descent and distribution,
or (except in the case of an Incentive Stock Option) pursuant to a qualified
domestic relations order, and will not be subject to execution, attachment, or
similar process; provided however that if the Option represents a Non-Qualified
Stock Option, the Option is transferable without payment of consideration to
immediate family members of the Optionee or to trusts or partnerships
established exclusively for the benefit of the Optionee and the Optionee's
immediate family members. On any attempt to transfer, pledge, hypothecate, or
otherwise dispose of the Option or of any right or privilege conferred by the
Plan contrary to the provisions thereof, or on the sale, levy or attachment, or
similar process on the rights and privileges conferred by the Plan, the Option
will terminate and become null and void.
5. Investment Intent. By accepting the Option, the Optionee represents and
agrees that none of the shares of Common Stock purchased on exercise of the
Option will be distributed in violation of applicable federal and state laws and
regulations. In addition, the Company may require, as a condition of exercising
the Option, that the Optionee sign an undertaking, in the form reasonably
specified by the Company, that the shares are being purchased only for
investment and without any then-present intention to sell or distribute the
shares.
6. Termination of Employment and Options. A vested Option will terminate, to the
extent not previously exercised, on the occurrence of the first of the following
events:
(a) Expiration: October 14, 2004; except that the expiration date of any
Incentive Stock Option granted to a greater-than-ten-percent (>10%)
shareholder of the Company will not be later than five years from the
Date of Grant;
(b) Termination for Cause: The date of an Optionee's termination of
employment or contractual relationship with the Company or any Related
Corporation for cause (as determined in the sole discretion of the
Plan Administrator);
(c) Termination Due to Death or Disability: The expiration of one year
from the date of the death of the Optionee or cessation of an
Optionee's employment or contractual relationship by reason of
Disability (as defined in Section 5(g) of the Plan). If an Optionee's
employment or contractual relationship is terminated by death, any
Option held by the Optionee will be exercisable only by the person or
persons to whom the Optionee's rights under the Option will pass by
the Optionee's will or by the laws of descent and distribution;
<PAGE>
(d) Termination Due to Cessation of Service as a Director: The expiration
of three months from the date an Optionee, if a director of the
Company, ceases to serve as a director of the Company; or
(e) Termination for Any Other Reason: The expiration of three months from
the date of an Optionee's termination of employment or contractual
relationship with the Company or any Related Corporation for any
reason whatsoever other than cause, death or Disability (as defined in
Section 5(g) of the Plan).
Each unvested Option granted pursuant hereto will terminate immediately on
termination of the Optionee's employment or contractual relationship with the
Company for any reason whatsoever, including death or Disability unless vesting
is accelerated in accordance with Section 5(f) of the Plan.
7. Stock. In the case of any stock split, stock dividend, or similar alteration
of the shares of Common Stock covered by this Agreement, the number of shares
and exercise price will be proportionately adjusted as set forth in Section 5(m)
of the Plan.
8. Exercise of Option. The vested portion of the Option will be exercisable, in
full or in part, at any time after vesting, until termination; provided however
that any Optionee who is subject to the reporting and liability provisions of
Section 16 of the Securities Exchange Act of 1934 with respect to the Common
Stock will be precluded from selling or transferring any Common Stock or other
security underlying an Option during the six months immediately following the
grant of that Option. If less than all of the shares included in the vested
portion of the Option are purchased, the remainder may be purchased at any
subsequent time before the expiration of the Option term. No portion of the
Option for less than 100 shares (as adjusted pursuant to Section 5(m) of the
Plan) may be exercised; provided that if the vested portion of the Option is
less than 100, it may be exercised with respect to all shares for which it is
vested. Only whole shares may be issued pursuant to the Option, and to the
extent that the Option covers less than one share, it is unexercisable.
Each exercise of the Option must be by means of delivery of a notice of
election to exercise (which may be in the form attached hereto as Exhibit A) to
the Company's President at its principal executive office, specifying the number
of shares of Common Stock to be purchased and accompanied by payment in cash by
certified or cashier's cheque in the amount of the full exercise price for the
Common Stock to be purchased. In addition to payment in cash by certified or
cashier's cheque, an Optionee or transferee of an Option may pay for all or any
portion of the aggregate exercise price by complying with one or more of the
following alternatives:
(a) by delivering to the Company shares of Common Stock previously held by
that person or by the Company withholding shares of Common Stock
otherwise deliverable pursuant to exercise of the Option, which shares
of Common Stock received or withheld will have a fair market value at
the date of exercise (as
<PAGE>
determined by the Plan Administrator) equal to the aggregate purchase
price to be paid by the Optionee on exercise;
(b) by delivering a properly signed exercise notice together with
irrevocable instructions to a broker promptly to sell or margin a
sufficient portion of the shares and deliver directly to the Company
the amount of sale or margin loan proceeds to pay the exercise price;
or
(c) by complying with any other payment mechanism approved by the Plan
Administrator at the time of exercise.
9. Holding Period for Incentive Stock Options. In order to obtain the tax
treatment provided for Incentive Stock Options by Section 422 of the Code, the
shares of Common Stock received on exercise of any Incentive Stock Option
pursuant to this Agreement must be sold, if at all, after a date which is later
of two years from the date of this Agreement or one year from the date on which
the Option is exercised. The Optionee agrees to report sales of shares before
the above determined date to the Company within one business day after the sale
is concluded. The Optionee also agrees to pay to the Company, within five
business days after the sale is concluded, the amount necessary for the Company
to satisfy its withholding requirement required by the Code in the manner
specified in Section 5(l)(2) of the Plan. Nothing in this Section 9 is intended
as a representation that Common Stock may be sold without registration under
state and federal securities laws or an exemption therefrom, or that
registration or exemption will be available at any specified time.
10. Subject to 1999 Stock Option Plan. The terms of the Option are subject to
the provisions of the Plan, as it may from time to time be amended, and any
inconsistencies between this Agreement and the Plan, as it may be from time to
time amended, will be governed by the provisions of the Plan, a copy of which
has been delivered to the Optionee and which is available for inspection at the
Company's principal offices.
11. Professional Advice. The acceptance of the Option and the sale of Common
Stock issued pursuant to the exercise of the Option may have consequences under
federal and state tax and securities laws which may vary depending on the
individual circumstances of the Optionee. Accordingly, the Optionee acknowledges
that he or she has been advised to consult his or her personal legal and tax
advisor in connection with this Agreement and his or her dealings with respect
to the Option for the Common Stock. Without limiting other matters to be
considered, the Optionee should consider whether, on exercise of the Option, the
Optionee must file an election with the Internal Revenue Service pursuant to
Section 83(b) of the Code.
12. No Employment Relationship. Whether or not any Options are to be granted
under the Plan will be exclusively within the discretion of the Plan
Administrator, and nothing contained in the Plan will be construed as giving any
person any right to participate under the Plan. The grant of an Option will in
no way constitute any form of agreement or understanding binding on the Company
or any Related Company, express or implied, that the Company or any Related
Company will employ or contract with an Optionee for any length of time, nor
will it
<PAGE>
interfere in any way with the Company's or, where applicable, a Related
Company's right to terminate the Optionee's employment at any time, which right
is hereby reserved.
13. Entire Agreement. This Agreement is the only agreement between the Optionee
and the Company with respect to the Option, and this Agreement and the Plan
supersede all prior and contemporaneous oral and written statements and
representations and contain the entire agreement between the parties with
respect to the Option.
14. Notices. Any notice required or permitted to be made or given hereunder will
be mailed or delivered personally to the addresses set forth below, or as
changed from time to time by written notice to the other:
The Company: ABLEAUCTIONS.COM, INC.
3112 Boundary Road
Burnaby, British Columbia V5M 4A2
Canada
Attention: Abdul Ladha
The Optionee: Barrett Sleeman
P.O. Box 18111
2225 West 41st Avenue
Vancouver, British Columbia V6M 4L3
Canada
ABLEAUCTIONS.COM, INC.
Per:
/s/ Abdul Ladha
- --------------------------------
Abdul Ladha, President
/s/ Barrett Sleeman
- --------------------------------
Signature of Optionee
Barrett Sleeman
- --------------------------------
Print Name
THERE MAY NOT BE PRESENTLY AVAILABLE EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS FOR THE ISSUANCE OF
SHARES OF COMMON STOCK ON EXERCISE OF THIS OPTION. ACCORDINGLY, THIS OPTION
CANNOT BE EXERCISED UNLESS THE OPTION AND THE SHARES OF COMMON STOCK TO BE
ISSUED ON
<PAGE>
EXERCISE ARE REGISTERED OR AN EXEMPTION FROM REGISTRATION REQUIREMENTS IS
AVAILABLE.
THE SHARES OF COMMON STOCK ISSUED PURSUANT TO THE EXERCISE OF THIS OPTION WILL
BE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF
1933 AND WILL BEAR A LEGEND RESTRICTING RESALE UNLESS THEY ARE REGISTERED UNDER
STATE AND FEDERAL SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THE COMPANY IS NOT OBLIGED TO REGISTER THE SHARES OF COMMON STOCK OR
TO MAKE AVAILABLE ANY EXEMPTION FROM REGISTRATION.
<PAGE>
EXHIBIT A
Notice of Election to Exercise
This Notice of Election to Exercise will constitute proper notice pursuant
to Section 5(h) of the 1999 Stock Option Plan (the "Plan") of ABLEAUCTIONS.COM,
INC. (the "Company") and Section 8 of the Stock Option Agreement dated as of the
14th day of October, 1999 between the Company and the undersigned (the
"Agreement").
The undersigned elects to exercise the Optionee's option to purchase
- ------------ shares of the common stock of the Company at a price of $3.20 per
share, for aggregate consideration of $------------, on the terms and conditions
set forth in the Agreement and the Plan. The aggregate consideration, in the
form specified in Section 8 of the Agreement, accompanies this notice.
The undersigned has signed this Notice this ----- day of --------------,
- -----.
- -----------------------------------------------
Signature
- -----------------------------------------------
Name (typed or printed)
EXHIBIT 4.2
ABLEAUCTIONS.COM, Inc.
1999 STOCK OPTION PLAN
This 1999 Stock Option Plan (the "Plan") provides for the grant of options
to acquire shares of common stock with a par value of $0.001 (collectively, the
"Common Stock") of Ableauctions.com, Inc. (the "Company"), a Florida
corporation. Stock options granted under the Plan that qualify under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), are referred to
in the Plan as "Incentive Stock Options." Incentive Stock Options and stock
options that do not qualify under Section 422 of the Code ("Non-Qualified Stock
Options") granted under the Plan are referred to collectively as "Options."
1. PURPOSES
The purposes of the Plan are:
(a) to retain the services of valued key employees and consultants of the
Company and other persons selected by the Plan Administrator in accordance
with Section 3 below;
(b) to encourage those persons to acquire a greater proprietary interest in the
Company, thereby strengthening their incentive to achieve the objectives of
the Company's shareholders and to serve as an aid and inducement in the
hiring of new employees; and
(c) to provide an equity incentive to consultants and other persons selected by
the Plan Administrator.
2. ADMINISTRATION
The Plan will be administered initially by the Company's Board of Directors
(the "Board"), except that the Board may, in its discretion, establish a
committee (the "Committee") composed of two or more members of the Board or two
or more other persons to administer the Plan. The Committee may be an executive,
compensation, or other committee, including a separate committee especially
created for this purpose, and will have the powers and authority vested in the
Board hereunder (including the power and authority to interpret any provision of
the Plan or of any Option). The members of any Committee will serve at the
pleasure of the Board. A majority of the members of the Committee will
constitute a quorum, and all actions of the Committee must be taken by a
majority of the members present. Any action may be taken by a written instrument
signed by all of the members of the Committee and any action so taken will be
fully effective as if it had been taken at a meeting. The Board or, if
applicable, the Committee is referred to herein as the "Plan Administrator."
<PAGE>
The Plan will be administered by the Board or by the Committee which, for
the purposes hereof, will be composed of two or more members of the Board who
are "Non-Employee Directors" (as defined below) and, as applicable, outside
directors. The term "outside director" will have the meaning assigned to it
under Section 162(m) of the Code (as amended from time to time) and the
regulations (or any successor regulations) promulgated thereunder ("Section
162(m) of the Code"). The term "Non-Employee Director" will have the meaning
assigned to it under Rule 16b-3 (as amended from time to time) promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
successor rule or regulatory requirement.
Subject to the provisions of the Plan, and with a view to effecting its
purpose, the Plan Administrator will have sole authority in its absolute
discretion to:
(a) construe and interpret the Plan;
(b) define the terms used in the Plan;
(c) prescribe, amend, and rescind the rules and regulations relating to the
Plan;
(d) correct any defect, supply any omission, or reconcile any inconsistency in
the Plan;
(e) grant Options under the Plan;
(f) determine the individuals to whom Options will be granted under the Plan
and whether the Option is an Incentive Stock Option or a Non-Qualified
Stock Option;
(g) determine the time or times at which Options will be granted under the
Plan;
(h) determine the number of shares of Common Stock subject to each Option, the
exercise price of each Option, the duration of each Option and the times at
which each Option will become exercisable;
(i) determine all other terms and conditions of the Options; and
(j) make all other determinations and interpretations necessary and advisable
for the administration of the Plan. All decisions, determinations and
interpretations made by the Plan Administrator will be binding and
conclusive on all participants in the Plan and on their legal
representatives, heirs, and beneficiaries.
The Board or, if applicable, the Committee may delegate to one or more
executive officers of the Company the authority to grant Options under the Plan
to employees of the Company who, on the Date of Grant (as defined in Section
5(b) of the Plan), are not subject to Section 16 of the Exchange Act with
respect to the Common Stock ("Non-Insiders"), and are not "covered employees" as
that term is defined for purposes of Section 162(m) of the Code ("Non-Covered
Employees"), and in connection therewith the authority to determine: (1) the
number of
<PAGE>
shares of Common Stock subject to those Options; (2) the duration of the Option;
(3) the vesting schedule for determining the times at which the Option will
become exercisable; and (4) all other terms and conditions of those Options. The
exercise price for any Option granted by action of an executive officer or
officers pursuant to a delegation of authority will not be less than the fair
market value per share of the Common Stock on the Date of Grant. Unless
expressly approved in advance by the Board or the Committee, a delegation of
authority will not include the authority to accelerate vesting, extend the
period for exercise, or otherwise alter the terms of outstanding Options. The
term "Plan Administrator" when used in any provision of this Plan other than
Sections 2, 5(f), 5(m), and 11 will be deemed to refer to the Board or the
Committee, as the case may be, and an executive officer who has been authorized
to grant Options pursuant thereto, insofar as these provisions may be applied to
persons that are Non-Insiders and Non-Covered Employees and Options granted to
those persons.
3. ELIGIBILITY
Incentive Stock Options may be granted to any individual who, at the time
the Option is granted, is an employee of the Company or any Related Corporation
(as defined below) ("Employees"). Non-Qualified Stock Options may be granted to
Employees and to any other persons (other than directors who are not Employees)
that are selected by the Plan Administrator. Options may be granted in
substitution for outstanding Options of another corporation in connection with
the merger, consolidation, acquisition of property or stock, or other
reorganization between that other corporation and the Company or any subsidiary
of the Company. Options also may be granted in exchange for outstanding Options.
Any person to whom an Option is granted under this Plan is referred to as an
"Optionee." Any person who is the owner of an Option is referred to as a
"Holder."
As used in this Plan, the term "Related Corporation" will mean any
corporation (other than the Company) that is a "Parent Corporation" of the
Company or "Subsidiary Corporation" of the Company, as those terms are defined
in Sections 424(e) and 424(f), respectively, of the Code (or any successor
provisions) and the regulations thereunder (as amended from time to time).
4. STOCK
The Plan Administrator is authorized to grant Options to acquire up to a
total of 3,000,000 shares of the Company's authorized but unissued, or
reacquired, Common Stock. The number of shares with respect to which Options may
be granted hereunder is subject to adjustment as set forth in Section 5(m)
hereof. If any outstanding Option expires or is terminated for any reason, the
shares of Common Stock allocable to the unexercised portion of that Option may
again be subject to an Option granted to the same Optionee or to a different
person eligible under Section 3 of this Plan; provided however, that any
canceled Options will be counted against the maximum number of shares with
respect to which Options may be granted to any particular person as set forth in
Section 3 hereof.
<PAGE>
5. TERMS AND CONDITIONS OF OPTIONS
Each Option granted under this Plan will be evidenced by a written
agreement approved by the Plan Administrator (the "Agreement"). Agreements may
contain provisions, not inconsistent with this Plan, that the Plan Administrator
in its discretion deems advisable. All Options also will comply with the
following requirements:
(a) Number of Shares and Type of Option
Each Agreement will state the number of shares of Common Stock to which it
pertains and whether the Option is intended to be an Incentive Stock Option or a
Non-Qualified Stock Option. In the absence of action to the contrary by the Plan
Administrator in connection with the grant of an Option, all Options will be
Non-Qualified Stock Options. The aggregate fair market value (determined at the
Date of Grant, as defined below) of the stock with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee during any
calendar year (granted under this Plan and all other Incentive Stock Option
plans of the Company, a Related Corporation, or a predecessor corporation) will
not exceed $100,000 or any other limit that may be prescribed by the Code, as
amended from time to time. Any portion of an Option that exceeds the annual
limit will not be void but rather will be a Non-Qualified Stock Option.
(b) Date of Grant
Each Agreement will state the date the Plan Administrator has deemed to be
the effective date of the Option for the purposes of this Plan (the "Date of
Grant").
(c) Option Price
Each Agreement will state the price per share of Common Stock at which it
is exercisable. The exercise price will be fixed by the Plan Administrator at
whatever price the Plan Administrator determines in the exercise of its sole
discretion; provided that the per share exercise price for an Incentive Stock
Option or any Option granted to a "covered employee", as that term is defined
for the purposes of Section 162(m) of the Code ("Covered Employee"), will not be
less than the fair market value per share of the Common Stock at the Date of
Grant as determined by the Plan Administrator in good faith; provided further
that with respect to Incentive Stock Options granted to greater-than-ten percent
(> 10%) shareholders of the Company (as determined with reference to Section
424(d) of the Code), the exercise price per share will not be less than 110% of
the fair market value per share of the Common Stock at the Date of Grant as
determined by the Plan Administrator in good faith; and, provided further that
Options granted in substitution for outstanding options of another corporation
in connection with the merger, consolidation, acquisition of property or stock,
or other reorganization involving that other corporation and the Company or any
subsidiary of the Company may be granted with an exercise price equal to the
exercise price for the substituted option of the other corporation, subject to
any adjustment consistent with the terms of the transaction pursuant to which
the substitution is to occur.
<PAGE>
(d) Duration of Options
At the time of the grant of the Option, the Plan Administrator will
designate, subject to paragraph 5(g) below, the expiry date of the Option, which
date will not be later than 10 years from the Date of Grant in the case of
Incentive Stock Options; provided that the expiry date of any Incentive Stock
Option granted to a greater-than-ten percent (> 10%) shareholder of the Company
(as determined with reference to Section 424(d) of the Code) will not be later
than five years from the Date of Grant. In the absence of action to the contrary
by the Plan Administrator in connection with the grant of a particular Option
and except in the case of Incentive Stock Options as described above, all
Options granted under this Section 5 will expire 10 years from the Date of
Grant.
(e) Vesting Schedule
No Option will be exercisable until it has vested. The vesting schedule for
each Option will be specified by the Plan Administrator at the time of grant of
the Option before the provision of services with respect to which the Option is
granted; provided that if no vesting schedule is specified at the time of grant,
the Option will vest according to the following schedule:
Number of Months Percentage of Total
Following Date of Grant Option Vested
--------------------------- ---------------------------
3 12.5%
6 25%
9 37.5%
12 50%
15 62.5%
18 75%
21 87.5%
24 100%
The Plan Administrator may specify a vesting schedule for all or any
portion of an Option based on the achievement of performance objectives
established in advance of the Optionee's commencement of services related to the
achievement of the performance objectives. Performance objectives will be
expressed in terms of one or more of the following: return on equity, return on
assets, share price, market share, sales, earnings per share, costs, net
earnings, net worth, inventories, cash and cash equivalents, and gross margin or
the Company's performance relative to its internal business plan. Performance
objectives may be in respect of the performance of the Company as a whole
(whether on a consolidated or unconsolidated basis), a Related Corporation, or a
subdivision, operating unit, product or product line of either of the foregoing.
Performance objectives may be absolute or relative and may be expressed in terms
of a progression or a range. An Option that is exercisable (in full or in part)
on the achievement of one or more performance objectives may be exercised only
following written notice to the
<PAGE>
Optionee and the Company by the Plan Administrator that the performance
objective has been achieved.
(f) Acceleration of Vesting
The vesting of one or more outstanding Options may be accelerated by the
Plan Administrator at the times and in the amounts that it will determine in its
sole discretion.
(g) Term of Option
Vested Options will terminate, to the extent not previously exercised, on
the occurrence of the first of the following events:
(1) the expiry of the Option, as designated by the Plan Administrator in
accordance with Section 5(d) above;
(2) the date of an Optionee's termination of employment or contractual
relationship with the Company or any Related Corporation for cause (as
determined in the sole discretion of the Plan Administrator);
(3) the expiry of three months from the date of an Optionee's termination
of employment or contractual relationship with the Company or any
Related Corporation for any reason whatsoever other than cause, death,
or Disability (as defined below), unless, in the case of a
Non-Qualified Stock Option, the exercise period is extended by the
Plan Administrator until a date not later than the expiry date of the
Option; or
(4) the expiry of one year from termination of an Optionee's employment or
contractual relationship by reason of death or Disability (as defined
below), unless, in the case of a Non-Qualified Stock Option, the
exercise period is extended by the Plan Administrator until a date not
later than the expiry date of the Option.
On the death of an Optionee, any vested Options held by the Optionee may be
exercisable only by the person or persons to whom the Optionee's rights under
the Options pass by the Optionee's will or by the laws of descent and
distribution of the state or county of the Optionee's domicile at the time of
death and only until the Options terminate as provided above. For the purposes
of the Plan, unless otherwise defined in the Agreement, "Disability" means
medically determinable physical or mental impairment which has lasted or can be
expected to last for a continuous period of not less than 12 months or that can
be expected to result in death (within the meaning of Section 22(e)(3) of the
Code). The Plan Administrator will determine whether an Optionee has incurred a
Disability on the basis of medical evidence acceptable to the Plan
Administrator. On making a determination of Disability, the Plan Administrator
will, for the purposes of the Plan, determine the date of an Optionee's
termination of employment or contractual relationship.
<PAGE>
Unless accelerated in accordance with Section 5(f) above, unvested Options
will terminate immediately on termination of the Optionee's employment by the
Company for any reason whatsoever, including death or Disability. For the
purposes of this Plan, transfer of employment between or among the Company and
any Related Corporation will not be deemed to constitute a termination of
employment with the Company or any Related Corporation. For the purposes of this
subsection, employment will be deemed to continue while the Optionee is on
military leave, sick leave, or other bona fide leave of absence (as determined
by the Plan Administrator). Despite the foregoing, employment will not be deemed
to continue beyond the first 90 days of leave, unless the Optionee's
re-employment rights are guaranteed by statute or by contract.
(h) Exercise of Options
Options will be exercisable, in full or in part, at any time after vesting
until termination. If less than all of the shares included in the vested portion
of any Option are purchased, the remainder may be purchased at any subsequent
time before the expiry of the Option term. No portion of any Option for less
than 100 shares (as adjusted pursuant to Section 5(m) below) may be exercised;
provided that if the vested portion of any Option is less than 100 shares, it
may be exercised with respect to all shares for which it is vested. Only whole
shares may be issued pursuant to an Option, and to the extent that an Option
covers less than one share, it is unexercisable.
Options or portions thereof may be exercised by giving written notice to
the Company, which notice must specify the number of shares to be purchased and
must be accompanied by payment in the amount of the aggregate exercise price for
the Common Stock so purchased, which payment must be in the form specified in
Section 5(i) below. The Company will not be obliged to issue, transfer, or
deliver a certificate of Common Stock to the Holder of any Option until
provision has been made by the Holder, to the satisfaction of the Company, for
the payment of the aggregate exercise price for all shares for which the Option
has been exercised and for satisfaction of any tax withholding obligations
associated with the exercise. During an Optionee's lifetime, Options are
exercisable only by the Optionee or, in the case of a Non-Qualified Stock
Option, a transferee who takes title to the Option in the manner permitted by
subsection 5(k) hereof.
(i) Payment on Exercise of Option
On the exercise of any Option, the aggregate exercise price will be paid to
the Company in cash or by certified or cashier's cheque. In addition, the Holder
may pay for all or any portion of the aggregate exercise price by complying with
one or more of the following alternatives:
(1) by delivering to the Company shares of Common Stock previously held by
the Holder or by the Company withholding shares of Common Stock
otherwise
<PAGE>
deliverable pursuant to exercise of the Option, which shares of Common
Stock received or withheld will have a fair market value at the date
of exercise (as determined by the Plan Administrator) equal to the
aggregate exercise price to be paid by the Optionee on exercise;
(2) by delivering a properly signed exercise notice together with
irrevocable instructions to a broker promptly to sell or margin a
sufficient portion of the shares and deliver directly to the Company
the amount of sale or margin loan proceeds to pay the exercise price;
or
(3) by complying with any other payment mechanism approved by the Plan
Administrator at the time of exercise.
Despite the foregoing, without the Plan Administrator's prior written
consent, a Holder will not surrender or attest to the ownership of shares of
Common Stock in payment of the exercise price if that action would cause the
Company to recognize compensation expense (or additional compensation expense)
with respect to any option for financial reporting purposes.
(j) Rights as a Shareholder
A Holder will have no rights as a shareholder with respect to any shares
covered by an Option until the Holder becomes a record holder of the shares,
irrespective of whether the Holder has given notice of exercise. No rights will
accrue to a Holder and no adjustments will be made on account of dividends
(ordinary or extraordinary, whether in cash, securities, or other property) or
distributions or other rights declared on, or created in, the Common Stock for
which the record date is before the date on which the Holder becomes a record
holder of the shares of Common Stock covered by the Option, irrespective of
whether the Holder has given notice of exercise.
(k) Transfer of Option
Options granted under this Plan and the rights and privileges conferred by
this Plan may not be transferred, assigned, pledged, or hypothecated in any
manner (whether by operation of law or otherwise) other than by will, by
applicable laws of descent and distribution, or (except in the case of an
Incentive Stock Option) pursuant to a qualified domestic relations order, and
will not be subject to execution, attachment, or similar process; provided
however that any Agreement may provide or be amended to provide that a
Non-Qualified Stock Option to which it relates is transferable without payment
of consideration to immediate family members of the Optionee or to trusts or
partnerships or limited liability companies established exclusively for the
benefit of the Optionee and the Optionee's immediate family members. On any
attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of any
Option or of any right or privilege conferred by this Plan contrary to the
provisions hereof, or on the sale, levy, or any attachment or similar process on
the rights and privileges conferred by this Plan, the Option will terminate and
become null and void.
<PAGE>
(l) Securities Regulation and Tax Withholding
(1) Shares will not be issued with respect to an Option unless the
exercise of the Option and the issuance and delivery of the shares
complies with all relevant provisions of law, including without
limitation Section 162(m) of the Code; any applicable state securities
laws; the Securities Act of 1933, as amended; the Exchange Act and the
rules and regulations thereunder; and the requirements of any stock
exchange or automated inter-dealer quotation system of a registered
national securities association on which the shares may then be
listed. The share issuance will be further subject to the approval of
counsel for the Company with respect to compliance, including the
availability of an exemption from registration for the issuance and
sale of the shares. The Company's inability to obtain from any
regulatory body the authority deemed by the Company to be necessary
for the lawful issuance and sale of any shares under this Plan, or the
unavailability of an exemption from registration for the issuance and
sale of any shares under this Plan, will relieve the Company of any
liability with respect to the non-issuance or sale of the shares.
As a condition to the exercise of an Option, the Plan Administrator
may require the Holder to represent and warrant in writing at the time
of exercise that the shares are being purchased only for investment
and without any then-present intention to sell or distribute the
shares. At the option of the Plan Administrator, a stop-transfer order
against the shares may be placed on the stock books and records of the
Company and a legend indicating that the stock may not be pledged,
sold, or otherwise transferred unless an opinion of counsel is
provided stating that the transfer is not in violation of any
applicable law or regulation may be stamped on the certificates
representing the shares to assure an exemption from registration. The
Plan Administrator also may require other documentation that may from
time to time be necessary to comply with federal and state securities
laws.
(2) The Holder will pay to the Company by certified or cashier's cheque,
promptly on exercise of an Option or, if later, on the date that the
amount of the obligations becomes determinable, all applicable
federal, state, local, and foreign withholding taxes that the Plan
Administrator, in its discretion, determines to result on exercise of
an Option or from a transfer or other disposition of shares of Common
Stock acquired on exercise of an Option or otherwise related to an
Option or shares of Common Stock acquired in connection with an
Option. On the Plan Administrator's approval, a Holder may satisfy
that obligation by complying with one or more of the following
alternatives selected by the Plan Administrator:
(A) by delivering to the Company shares of Common Stock previously
held by the Holder or by the Company withholding shares of Common
Stock otherwise deliverable pursuant to the exercise of the
Option, which shares of Common Stock received or withheld will
have a fair market value at the
<PAGE>
date of exercise (as determined by the Plan Administrator) equal
to any withholding tax obligations arising as a result of the
exercise, transfer, or other disposition;
(B) by signing appropriate loan documents approved by the Plan
Administrator by which the Holder borrows funds from the Company
to pay any withholding taxes due under this Paragraph 2, with any
repayment terms selected by the Plan Administrator; or
(C) by complying with any other payment mechanism approved by the
Plan Administrator from time to time.
Despite the foregoing, without the Plan Administrator's prior written
consent, a Holder will not surrender or attest to the ownership of
shares of Common Stock in payment of the exercise price if that action
would cause the Company to recognize compensation expense (or
additional compensation expense) with respect to any option for
financial reporting purposes.
(3) The issuance, transfer, or delivery of certificates of Common Stock
pursuant to the exercise of Options may be delayed, at the Plan
Administrator's discretion, until the Plan Administrator is satisfied
that the applicable requirements of the federal and state securities
laws and the withholding provisions of the Code have been met and that
the Holder has paid or otherwise satisfied any withholding tax
obligation as described in (2) above.
(m) Stock Dividend or Reorganization.
(1) If:
(A) the Company at any time becomes involved in a transaction
described in Section 424(a) of the Code (or any successor
provision) or any "corporate transaction" described in the
regulations thereunder;
(B) the Company declares a dividend payable in, or subdivides or
combines, its Common Stock; or
(C) any other event with substantially the same effect occurs,
the Plan Administrator will, subject to applicable law, with respect
to each outstanding Option, proportionately adjust the number of
shares of Common Stock subject to that Option and/or the exercise
price per share to preserve the rights of the Holder substantially
proportionate to the rights of the Holder before that event, and to
the extent that the adjustment includes an increase or decrease in the
number of shares of Common Stock subject to outstanding Options, the
number of shares available under Section 4 of this Plan will
automatically be
<PAGE>
increased or decreased, as the case may be, proportionately, without
further action on the part of the Plan Administrator, the Company, the
Company's shareholders, or any Holder.
(2) If the presently authorized capital stock of the Company is changed
into the same number of shares with a different par value or without
par value, the stock resulting from the change will be deemed to be
Common Stock within the meaning of the Plan, and each Option will
apply to the same number of shares of the new stock as it applied to
old shares immediately before the change.
(3) If the Company at any time declares an extraordinary dividend with
respect to the Common Stock, whether payable in cash or other
property, the Plan Administrator may, subject to applicable law, in
the exercise of its sole discretion and with respect to each
outstanding Option, proportionately adjust the number of shares of
Common Stock subject to the Option and/or adjust the exercise price
per share to preserve the rights of the Holder substantially
proportionate to the rights of the Holder before the event, and to the
extent that the adjustment includes an increase or decrease in the
number of shares of Common Stock subject to outstanding Options, the
number of shares available under Section 4 of this Plan will
automatically be increased or decreased, as the case may be,
proportionately, without further action on the part of the Plan
Administrator, the Company, the Company's shareholders, or any Holder.
(4) The foregoing adjustments in the shares subject to Options will be
made by the Plan Administrator, or by any successor administrator of
this Plan, or by the applicable terms of any assumption or
substitution document.
(5) The grant of an Option will not affect in any way the right or power
of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure; to
merge, consolidate, or dissolve; to liquidate or to sell or transfer
all or any part of its business or assets.
6. EFFECTIVE DATE; TERM
Incentive Stock Options may be granted by the Plan Administrator from time to
time on or after the date on which this Plan is adopted (the "Effective Date")
through the day immediately preceding the 10th anniversary of the Effective
Date. Non-Qualified Stock Options may be granted by the Plan Administrator on or
after the Effective Date and until this Plan is terminated by the Board in its
sole discretion. Termination of this Plan will not terminate any Option granted
before termination. Any Incentive Stock Options granted by the Plan
Administrator before approval of this Plan by the Company's shareholders in
accordance with Section 422 of the Code will be granted subject to ratification
of the Plan by the shareholders of the Company within 12 months before or after
the Effective Date. Any Option granted by the Plan Administrator to any Covered
Employee before approval of this Plan by the Company's shareholders in
accordance with Section 422 of the Code will be granted subject to ratification
of
<PAGE>
this Plan by the shareholders of the Company within 12 months before or after
the Effective Date. If shareholder ratification is sought and not obtained, all
Options granted prior thereto and thereafter will be considered Non-Qualified
Stock Options and any Options granted to Covered Employees will not be eligible
for the exclusion set forth in Section 162(m) of the Code with respect to the
deductibility by the Company of certain compensation.
7. NO OBLIGATIONS TO EXERCISE OPTION
The grant of an Option will not impose an obligation on the Optionee to exercise
the Option.
8. NO RIGHT TO OPTIONS OR TO EMPLOYMENT
Whether or not any Options are to be granted under this Plan will be exclusively
within the discretion of the Plan Administrator, and nothing contained in this
Plan will be construed as giving any person any right to participate under this
Plan. The grant of an Option will in no way constitute any form of agreement or
understanding binding on the Company or any Related Corporation, express or
implied, that the Company or any Related Corporation will employ or contract
with an Optionee for any length of time, nor will it interfere in any way with
the Company's or, where applicable, a Related Corporation's right to terminate
an Optionee's employment at any time, which right is reserved.
9. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock issued on the
exercise of Options will be used for general corporate purposes, unless
otherwise directed by the Board.
10. INDEMNIFICATION OF PLAN ADMINISTRATOR
In addition to all other rights of indemnification they may have as members of
the Board, members of the Plan Administrator will be indemnified by the Company
for all reasonable expenses and liabilities of any type or nature, including
attorneys' fees, incurred in connection with any action, suit, or proceeding to
which they or any of them are a party by reason of or in connection with the
Plan or any Option granted under the Plan, and against all amounts paid by them
in settlement thereof (provided that the settlement is approved by independent
legal counsel selected by the Company), except to the extent that those expenses
relate to matters for which it is adjudged that the Plan Administrator member is
liable for willful misconduct; provided, that within 15 days after the
institution of any action, suit or proceeding, the Plan Administrator member
involved therein must, in writing, notify the Company of the action, suit, or
proceeding so that the Company may make appropriate arrangements to prosecute or
defend it.
11. AMENDMENT OF PLAN
The Plan Administrator may, at any time, modify, amend, or terminate the Plan or
modify or amend Options granted under the Plan, including without limitation any
modifications or amendments necessary to maintain compliance with applicable
statutes, rules, or regulations;
<PAGE>
provided however that no amendment with respect to an outstanding Option that
has the effect of reducing the benefits afforded to the Holder will be made over
the objection of the Holder; and further provided that the events triggering
acceleration of vesting of outstanding Options may be modified, expanded, or
eliminated without the consent of Holders. The Plan Administrator may condition
the effectiveness of any amendment on the receipt of shareholder approval at the
time and in the manner that the Plan Administrator considers necessary for the
Company to comply with or to avail the Company and the Optionees of the benefits
of any securities, tax, market listing, or other administrative or regulatory
requirement. Without limiting the generality of the foregoing, the Plan
Administrator may modify grants to persons who are eligible to receive Options
under this Plan who are foreign nationals or employed outside the United States
to recognize differences in local law, tax policy, or custom.
Effective Date: October 14, 1999
ABLEAUCTIONS.COM, INC.
Per:
/s/ Abdul Ladha
- --------------------------------
President
EXHIBIT 5.1
March 6, 2000
Ableauctions.com Inc.
c/o 3112 Boundary Road
Burnaby, British Columbia
Canada V5M 4A2
Re: Ableauctions.com Inc. (the "Company")
Ladies and Gentlemen:
We are delivering this opinion in connection with the Company's
Registration Statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the issuance of 3,000,000 shares of common stock
("Shares") issuable upon the exercise of options granted to certain employees,
officers, directors, consultants, and service providers of the Company, of
which:
(i) 50,000 Shares are issuable upon the exercise of an option granted
pursuant to a Stock Option Agreement between the Company and Barrett
Sleeman dated October 14, 1999 (the "Sleeman Grant"); and
(ii) 967,500 Shares are issuable on the exercise of options granted
pursuant to the Company's 1999 Stock Option Plan (the "Plan") by
participants in the Plan (the "Participants"),
(collectively, the "Option Grants").
We have examined such documents and have reviewed such questions of law as
we have considered necessary and appropriate for the purposes of our opinions
set forth below. In rendering our opinions set forth below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We have also assumed the legal capacity for all
purposes relevant hereto of all natural persons and, with respect to all parties
to agreements or instruments relevant hereto other than the Company, that such
parties had the requisite power and authority (corporate or otherwise) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
upon certificates of officers of the
<PAGE>
Company. We have also assumed that the Shares will be sold in accordance with
the terms and conditions set forth in the Option Grants, as established by the
authorizing resolutions adopted by the Company's Board of Directors in
accordance with such resolutions.
Based on the foregoing and having due regard for such legal questions as we
have deemed relevant, we are of the opinion that the Shares to be sold by the
Company have been duly authorized by all requisite corporate action and, upon
issuance, delivery and payment pursuant to the terms of (i) the Sleeman Grant
and (ii) the Plan with respect to the Participants, the Shares will be validly
issued, fully paid, and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above.
Very truly yours,
/s/ Eric P. Littman
--------------------------------------
Eric P. Littman
EXHIBIT 23.1
DAVIDSON & COMPANY Chartered Accountants A Partnership of Incorporated
Professionals
INDEPENDENT AUDITOR'S REPORT
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Ableauctions.com inc. of our report dated September 9, 1999 (except
as to Note 6 which is as of December 20, 1999) in respect of the audited
financial statements of Ableauctions.com, Inc. (formerly J.B. Financial Services
Inc.) for the fiscal year ended December 31, 1998 and 1997, which are included
in the Registration Statement on Form 10-SB of Ableauctions.com Inc. filed on
November 18, 1999 and subsequently amended by Amendments Nos. 1 and 2.
"DAVIDSON & COMPANY"
Vancouver, Canada Chartered Accountants
March 8, 2000
A Member of Accounting Group International
Suite 1200, Stock Exchange Tower, 609 Granville Street, P.O. Box 10372,
Pacific Centre, Vancouver, BC, Canada, V7Y 1G6
Telephone (604) 687-0947 Fax (604) 687-6172
