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EXHIBIT 10.8
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SHARE PLAN
FOR HOLDERS OF CLASS "F" SHARES OF
EXFO ELECTRO-OPTICAL ENGINEERING INC.
OR OF SHARES RESULTING FROM THE
CONVERSION OF THE CLASS "F" SHARES
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1. DEFINITIONS
1.1. The terms listed herein shall have the following meanings, unless the
context requires otherwise
1.1.1 "Board" shall mean the Board of directors of the Corporation;
1.1.2 "Change of Control" shall mean:
a) the acquisition by any person or entity, or any persons or
entities acting jointly or in concert, whether directly or
indirectly, of voting securities of the Corporation which,
together with all other voting securities of the Corporation
held by such persons or entities, constitute, in the
aggregate, either (a) fifty percent (50%) or more of the
votes attached to all outstanding voting securities of the
Corporation, or (b) forty percent (40%) or more of the votes
attached to all outstanding voting securities of the
Corporation and is followed within twenty-four (24) months
by changes of the members of the Board resulting in a change
of the majority of the Board;
b) an amalgamation, arrangement or other form of business
combination of the Corporation with another entity which
results in the holders of voting securities of that other
entity holding, in the aggregate, either (a) fifty percent
(50%) or more of the votes attached to all outstanding
voting securities of the entity resulting from the business
combination, or (b) forty percent (40%) or more of the votes
attached to all outstanding voting securities of the entity
resulting from the business combination and is followed
within twenty-four (24) months by changes of the members of
the Board resulting in a change of the majority of the
Board;
c) any event or series of events (which event or series of
events may include, without limitation, a proxy fight or
proxy solicitation with respect to the election of directors
of the Corporation made in opposition to the nominees
recommended by the Continuing Directors during any period of
twenty-four (24) consecutive months) as a result of which a
majority of the members of the Board consists of individuals
other than Continuing Directors; or
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d) the sale, lease or exchange of all or substantially all of
the property of the Corporation to another person or entity,
other than in the ordinary course of business of the
Corporation or any of its Subsidiaries.
1.1.3 "Continuing Directors" shall mean with respect to any period of
twenty-four (24) consecutive months, (a) any members of the Board
on the first (1st) day of such period, (b) any members of the
Board elected after the first (1st) day of such period at any
annual meeting of shareholders who were nominated by the Board or
a committee thereof, if a majority of the members of the Board or
such committee were Continuing Directors at the time of such
nomination, and (c) any members of the Board elected to succeed
Continuing Directors by the Board or a committee thereof, if a
majority of the members of the Board or such committee were
Continuing Directors at the time of such election;
1.1.4 "Corporation" shall mean EXFO Electro-Optical Engineering Inc.;
1.1.5 "Plan" shall mean the Share Plan of the Corporation as embodied
herein;
1.1.6 "Shareholder" or "Shareholders" shall mean, unless otherwise
stipulated, one or more holders of Shares;
1.1.7 "Shares" shall mean (i) the class "F" shares of the Corporation
issued pursuant to the Stock Purchase Plan for Officers,
Directors and Key Employees of EXFO Electro-Optical Engineering
Inc. adopted by the Corporation on September 19, 1998 (the
"SPP"), or (ii) the class "F" shares of the Corporation issued by
the Board outside the purview of the SPP, if any, or, as the case
may be, (iii) the Subordinate Voting Shares of the Corporation
resulting from the conversion of the shares issued pursuant to
(i) or (ii), which shall be listed on a recognized stock
exchange;
1.1.8 "Subsidiaries" shall mean (i) any legal entity of which the
Corporation is the holder or the beneficiary, directly or
indirectly, otherwise than by way of security only, of securities
to which are attached over 50% of the vote enabling it to elect
the majority of the directors of such entity as well as any
subsidiaries of such legal entity and (ii) any legal entity in
which the Corporation or a subsidiary of the Corporation holds at
least 50% of the voting rights or in which it has a majority
interest and of which the Corporation or a subsidiary of the
Corporation manages the operations.
2. PURPOSE OF THE PLAN
2.1 The Plan is designed to establish restrictions on the rights of the
Shareholders and the terms and conditions governing the holding of the
Shares further to the closing of the initial public offering of the
Corporation on the Canadian and United States markets.
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2.2 Subject to the prior approval of the competent regulatory authorities, the
Board shall be entitled to amend or modify, in whole or in part, any or all
of the provisions of the Plan. However, any amendment or modification
affecting retroactively and prejudicially the rights of the Shareholders
shall be approved by 66 2/3% of the votes cast at a meeting of
Shareholders.
3. DEPOSIT OF SHARES IN TRUST
3.1 The Shareholders hereby deposit with CIBC Mellon Trust Company (the
"Trustee"), to be held in trust under and subject to this Plan, the Shares
held by each of them.
3.2 The Corporation and each Shareholder hereby direct the Trustee to retain
the Shares in trust until the Shares are released pursuant to the terms of
this Plan.
3.3 The deposit of the Shares in trust will not impair any right of a
Shareholder to exercise voting rights attaching to the Shares.
3.4 The deposit of the Shares in trust will not impair any right of a
Shareholder to receive a dividend or other distribution on the Shares or to
elect the form or manner in which a dividend or other distribution on the
Shares will be paid. If, during the period in which the Shares are retained
in trust pursuant to this Plan, any dividend or other distribution, other
than one paid in Shares of the Corporation, is received by the Trustee in
respect of the Shares held in trust, such dividend or other distribution
will be paid or transferred forthwith to the respective Shareholder
entitled thereto. Additional Shares distributed on the Shares will, if
received by the Trustee, be retained in trust and, if received by the
Shareholder, be deposited in trust in accordance with section 2, to be held
in and released from the trust on the same terms and conditions as applied
to the Shares on which the distribution was paid.
3.5 Subject to Article 9, the deposit of the Shares in trust will not impair
any right of a Shareholder to exercise a right attaching to the Shares that
entitles the Shareholder to purchase or otherwise acquire another security
or to exchange or convert Shares for or into another security.
4. PERMITTED TRANSFERS
4.1 The Shares may be transferred within the trust by a Shareholder to a
Registered Retirement Savings Plan ("RRSP") or Registered Retirement Income
Fund ("RRIF"), or subsequently between RRSPs or from an RRSP to an RRIF,
provided that the Trustee first receives:
4.1.1 evidence from the trustee of the RRSP or RRIF, as applicable,
stating that, to the best of trustee's knowledge, the Shareholder
is, during the Shareholder's lifetime, the sole beneficiary of
the RRSP or RRIF;
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4.1.2 a transfer power of attorney, duly executed by the transferor and
giving full power and authority to the trustee of the RRSP or
RRIF to act in accordance herewith; and
4.1.3 an acknowledgement signed by the trustee of the RRSP or RRIF
confirming that it agrees to be bound by the terms and conditions
hereof.
4.2 In the event of the bankruptcy of a Shareholder, the Shares of such
Shareholder may be transferred within the trust to the trustee in
bankruptcy, provided that the Trustee first receives:
4.2.1 a certified copy of either:
a) the assignment in bankruptcy of the Shareholder filed with
the superintendent of bankruptcy; or
b) the receiving order adjudging the Shareholder bankrupt;
4.2.2 a certified copy of a certificate of appointment of the trustee
in Bankruptcy;
4.2.3 a transfer power of attorney, duly executed by the transferor and
giving full power and authority to the trustee in bankruptcy to
act in accordance herewith; and
4.2.4 an acknowledgment signed by the trustee in bankruptcy or other
person (or company) legally entitled to the Shares or an amended
agreement reflecting the transfer.
4.3 Upon completion of a transfer of Shares pursuant to this section 4, the
transferee will be a Shareholder and the Shares transferred will remain in
trust, to be held in and released from the trust on the same terms and
conditions as were applicable prior to the transfer.
4.4 Without limiting the generality of the foregoing, the provisions of
Articles 6, 7 and 8 shall apply mutatis mutandis to a Shareholder that is
the trustee of a RRSP or a RRIF when any of the events set forth in those
Articles affect the beneficiary of such RRSP or RRIF.
5. RELEASE OF THE SHARES
5.1. Subject to Articles 6, 7 and 8, the Shares shall be released from the trust
under this Plan on August 31, 2004 (the "Release Date").
5.2 As soon as reasonably practicable after the Release Date, the Trustee will
deliver, to or at the direction of the Shareholder, certificates evidencing
the Shares released from the trust.
5.3 The Trustee shall have no further responsibility for the Shares held in
trust for a Shareholder after it has delivered the Shares to or at the
direction of such Shareholder in accordance with the terms of this Plan.
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5.4 Notwithstanding any provisions to the contrary contained herein, the
Trustee shall not be entitled to release the Shares from the trust and to
deliver the Shares to or at the direction of a Shareholder if such shares
are also held in trust by the Trustee pursuant to any other agreement among
the Shareholder and the Corporation.
5.5 Notwithstanding any provisions to the contrary contained herein, the Board
shall have the power to accelerate the Release Date of the Shares in the
event the employment of a Shareholder with the Corporation or one of its
Subsidiaries is terminated for any reason whatsoever other than those set
forth in Article 8 hereof.
6. RELEASE UPON DEATH
6.1 Upon receipt by the Trustee of written notice from the Corporation of the
death of a Shareholder, the Shares will be released from the trust and the
Trustee will deliver certificates evidencing such Shares to the legal
representative of the deceased Shareholder, provided that the Trustee first
receives:
6.1.1 a certified copy of the death certificate; and
6.1.2 such evidence of the legal representative status that the Trustee
may reasonably require.
7. RELEASE UPON DISABILITY
7.1 Upon receipt by the Trustee of written notice from the Corporation of the
establishment of the permanent disability of a Shareholder, the Shares will
be released from the trust and the Trustee will deliver certificates
evidencing such Shares to the legal representative of the disabled
Shareholder, provided that the Trustee first receives:
7.1.1 a medical report establishing the disability of the Shareholder.
For the purposes of this Plan, a permanent disability, whether
total or partial, is a disability preventing a Shareholder from
carrying out his functions within the Corporation for a minimum
6 month period; and
7.1.2 such evidence of the legal representative status that the Trustee
may reasonably require.
8. COMPULSORY SALE
8.1 Upon receipt by the Trustee of written notice from the Corporation of the
occurrence of one of the following events prior to the Release Date,
instructions are hereby irrevocably given to the Trustee by the Shareholder
concerned by such event (the "Concerned Shareholder") and the Corporation,
to sell the Shares (the "Offered Shares") held in trust by the Trustee for
such Concerned Shareholder on the public market in accordance with the
terms hereof:
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8.1.1 misappropriation of funds, theft, or fraud by a
Shareholder against the Corporation or one of its
Subsidiaries or any termination of employment with the
Corporation or one of its Subsidiaries for cause,
including but not limited to refusal or systematic
negligence by a Shareholder to fulfil the functions he
undertook to fulfil for the Corporation or one of its
Subsidiaries and which is not cured within five (5)
days following receipt of a written notice from the
Corporation to that effect;
8.1.2 violation of any non-competition covenant of a
Shareholder towards the Corporation or one of its
Subsidiaries;
8.1.3 concurrent holding of another position by a Shareholder
who is a full-time employee of the Corporation or one
of its Subsidiaries;
8.1.4 failure by a Shareholder to comply with the provisions
of this Plan within five (5) days following receipt of
a written notice from the Corporation to that effect;
8.1.5 seizure or forced transfer of ownership of Shares held
by a Shareholder in favor of a third party;
8.1.6 resignation or voluntary departure from the Corporation
or one of its Subsidiaries by a Shareholder.
8.2 The sale of the Offered Shares on the public market shall take
place 10 days after receipt by the Trustee of a notice from the
Corporation indicating the occurrence of one of the events
mentioned in section 8.1, with evidence of delivery of such
notice to the Concerned Shareholder.
8.3 Within 30 days following the sale of the Offered Shares pursuant
to the provisions of section 8.1, the Trustee shall distribute
the net proceeds of the sale of the Offered Shares as follows:
8.3.1 if the sale of the Offered Shares results from the
occurrence of one of the events set forth in
subsections 8.1.1 to 8.1.5,
a) the Trustee shall pay to the Concerned Shareholder
a sum equal to the lesser of (i) the price (the
"Subscription Price") paid by the Concerned
Shareholder for the Offered Shares at the time of
their subscription, and (ii) the net proceeds of
the sale of the Offered Shares; and
b) the Trustee shall pay the balance to the
Corporation, if any;
8.3.2 if the sale of the Offered Shares results from the
occurrence of the event set forth in subsection 8.1.6,
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a) the Trustee shall pay to the Concerned Shareholder a sum
equal to the lesser of (i) the Subscription Price to which
is added a premium of 8% per year since August 31st, 1999
regardless of the date of subscription of such Shares, and
(ii) the net proceeds of the sale of the Offered Shares;
b) the Trustee shall pay the balance to the Corporation, if
any.
9. TAKEOVER BID
9.1 A Shareholder who wishes to tender certain of its Shares (the "Tendered
Shares") to a bona fide formal takeover bid, plan of arrangement,
amalgamation, merger or similar transaction (a "Transaction") will deliver
to the Corporation which shall deliver to the Trustee:
9.1.1 a written direction signed by the Shareholder (a "Direction")
that directs the Trustee to deliver to a specified person
(or company) (the "Depositary") either:
(a) certificates evidencing the Tendered Shares, or
(b) where the Shareholder has provided the Trustee with a notice
of guaranteed delivery or similar notice of the
Shareholder's intent to tender the Tendered Shares to the
Transaction, that notice,
together with a letter of transmittal or similar document and,
where required, transfer power of attorney duly executed for
transfer, and any other documentation specified or provided by
the Shareholder and required to be delivered to the Depositary
under the terms of the Transaction; and
9.1.2 such other information concerning or evidence of the transaction
as the Trustee may reasonably require.
9.2 Subject to section 9.1, forthwith after its receipt of the information and
documentation specified in subsection 9.1, the Trustee will deliver to the
Depositary, in accordance with the Direction, documentation specified or
provided under subsection 9.1 (a), together with the Trustee's standard
documentation addressed to the Depositary that:
9.2.1 identifies the Tendered Shares;
9.2.2 states that the Tendered Shares are held in trust;
9.2.3 states that the Tendered Shares are delivered only for the
purposes of the Transaction and that they will be released from
the trust only upon receipt by the Trustee of the information
described in section 9.3;
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9.2.4 where certificates for the Shares have been delivered to the
Depositary, requires the Depositary to return to the Trustee, as
soon as practicable, the certificates evidencing the Shares that
are not releasable from the trust as described in clause (9.2.3)
above; and
9.2.5 where applicable, requires the Depositary to deliver or cause to
be delivered to the Trustee, as soon as practicable, certificates
representing securities acquired by the Shareholder under the
Transaction in exchange, substitution or consideration for the
Tendered Shares.
9.3 Subject to section 9.1, the Tendered Shares will be released from the trust
upon receipt by the Trustee of the Depositary's standard documentation in
respect of the Transaction indicating that:
9.3.1 the terms and conditions of the Transaction have been met; and
9.3.2 the Tendered Shares have either been taken up and paid for or are
subject to an unconditional obligation to be taken up and paid
for under the Transaction.
9.4 Subject to Section 9.1, the Trustee will hold any additional securities
acquired by a Shareholder under the Transaction in trust on the same terms
and conditions, including Release Date, as applied to the Shares for which
they were exchanged, substituted or constituted consideration.
9.5 Notwithstanding any provisions to the contrary contained herein, the Shares
shall be released forthwith from the trust upon the occurrence of a Change
of Control and, as soon as reasonably practicable, the Trustee will
deliver, to or at the direction of the Shareholder, certificates evidencing
the Shares released from the trust.
10. REMUNERATION OF TRUSTEE
The Corporation shall pay the Trustee reasonable remuneration for, and
reimburse the Trustee for its expenses and disbursements in connection
with, its services under this Plan.
11. INDEMNIFICATION OF TRUSTEE
The Shareholders and the Corporation agree, jointly but not severally, to
indemnify and save harmless the Trustee from and against all claims,
liabilities, losses, penalties, actions, suits, costs, expenses and
disbursements (including the fees and expenses of legal and other advisers)
made against it by anyone, in the absence of gross negligence or fraud by
the Trustee, its officers, directors and employees, by reason of Trustee's
compliance in good faith with the terms hereof.
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12. RESPONSIBILITY OF TRUSTEE
12.1 The Trustee will bear no responsibility for seeking, obtaining, compiling,
preparing or determining the accuracy of any information or document, the
Trustee's receipt of which is a condition to a release from the trust or a
transfer within the trust under this Plan.
12.2 The Trustee may retain legal counsels and advisors as may be reasonably
required for the purpose of discharging its duties or determining its
rights under this Plan, and may rely and act upon advice of such counsels
or advisors. The Corporation shall pay or reimburse the Trustee for any
reasonable fees, expenses and disbursements of such counsels or advisors.
12.3 The Trustee shall be protected in acting and relying reasonably upon any
written notice, direction, instruction, order, certificate, confirmation,
request, waiver, consent, receipt statutory declaration or other paper or
document (collectively referred to as "Documents") furnished to it and
signed by any person required to or entitled to execute and deliver to the
Trustee any such Documents in connection with this Plan, not only as to its
due execution and the validity and effectiveness of its provisions, but
also as to the truth and accuracy of any information therein contained,
which the Trustee in good faith believes to be genuine.
13. RESIGNATION OF TRUSTEE
The resignation of the Trustee will be effective and the Trustee will cease
to be bound by this Plan on the date that is 60 days after the date of
receipt by the Corporation of a notice of the Trustee's intent to resign,
or, as the case may be, on such other date as the Trustee and the
Corporation may agree upon (the "Resignation Date"), provided that the
Resignation Date will not be a date that is less than 10 days before the
Release Date. The Corporation will, before the Resignation Date, appoint
another Trustee, which appointment will be binding on the Corporation and
the Shareholders. If the Corporation fails to appoint another Trustee
within the 60-day period set forth above, the Trustee will be entitled to
deliver the Shares held in trust pursuant to this Plan to the Corporation
which shall act according to the provisions of the Plan and appoint another
Trustee forthwith.
14. ASSIGNMENT OF SHARES
14.1 A Shareholder shall not, without the prior written consent of the
Corporation, hypothecate, mortgage, pledge, encumber, or otherwise assign
as security any portion of the Shares held in trust by the Trustee.
14.2 Notwithstanding the provisions of Section 14.1, a Shareholder shall be
entitled to hypothecate, mortgage, pledge and encumber, or otherwise assign
as security any portion of the Shares held in trust by the Trustee, in
favour of the Corporation and as a guarantee
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for the reimbursement of any loan by the Corporation to such Shareholder
for the acquisition of Shares.
15. CONVERSION OF SHARES
The provisions of the Plan shall apply mutatis mutandis to any shares or
securities into which the Shares may be converted, changed, reclassified,
redivided, redesignated, subdivided or consolidated, to any shares or
securities that may be subscribed for by a Shareholder as a stock dividend
or similar distribution payable in shares or securities of the Corporation
and to any shares or securities of the Corporation or of any successor or
continuing company or corporation to the Corporation that may be received
by a Shareholder or the Trustee as the registered holder of the Shares on a
reorganization, amalgamation, consolidation or merger, statutory or
otherwise. All such shares or securities to which the Plan applies mutatis
mutandis shall be deposited in trust according to the provisions hereof.
16. NOTICES
16.1 Notice to the Trustee:
Documents will be considered to have been delivered to the Trustee on the
next business day following the date of transmission, if delivered by fax,
the date of physical delivery, if delivered by hand or by prepaid courier,
or 5 days after the date of mailing, if delivered by mail, to the
following:
CIBC Mellon Trust Company
2001 University Street
16th Floor
Montreal, Quebec
H3A 2A6
Attention: Corporate Trust Department
Fax: 514-285-3640
16.2 Notice to the Corporation:
Documents will be considered to have been delivered to the Corporation on
the next business day following the date of transmission, if delivered by
fax, the date of physical delivery, if delivered by hand or by prepaid
courier, or 5 days after the date of mailing, if delivered by mail, to the
following:
EXFO Electro-Optical Engineering inc.
465 Godin Avenue
Vanier, Quebec
G1M 3G7
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Attention: The Vice President, Finance Fax: 418-683-2170
16.3 Deliveries to Shareholders:
Documents will be considered to have been delivered to a Shareholder on the
next business day following the date of transmission, if delivered by fax,
the date of physical delivery, if delivered by hand or by prepaid courier,
of 5 days after the date of mailing, if delivered by mail, to the last
address of the Shareholder entered in the Corporation's records. The
Trustee will, unless a Shareholder directs the Trustee in writing
otherwise, deliver all certificates representing the Shares of the
Shareholder that have been released from the trust to the last address of
the Shareholder entered in the Corporation's records.
16.4 Change of Address
A change in an address for delivery of the Trustee or the Corporation under
this section 16 will be effective upon delivery to each other party hereof
of a written notice of such change. A change in an address for delivery of
a Shareholder under this section 16 will be effective upon delivery to the
Trustee and the Corporation of a written notice of such change.
16.5 Postal Disruption
A party will not effect a delivery by mail if the party is aware of an
actual or impending disruption of postal service.
17. DIVISIBILITY OF THE PLAN
Each section of this document is a whole. If a court of law should find
that one section is null and unenforceable, the remaining sections shall
remain valid and enforceable.
18. TITLES
Titles of paragraphs are inserted for reference purposes only and do not
affect the structure or the interpretation of the provisions of the Plan.
19. JURISDICTION
The Plan shall be interpreted and governed by the laws applicable in the
Province of Quebec.
20. EFFECTIVE DATE
This Plan is dated as of April 3, 2000.
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