SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
WAVERIDER COMMUNICATIONS INC.
(Exact Name of Registrant as Specified in its Charter)
NEVADA 33-0264030
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
700 - 555 West Hastings St., Vancouver, B.C., Can. V6B 4N5
(Address of Principal Executive Offices) (Zip Code)
EMPLOYEE STOCK OPTION (1997) PLAN
(Full Title of the Plan)
ROBERT CLARKE,
WAVERIDER COMMUNICATIONS INC.
700 - 555 West Hastings Street,
Vancouver, B.C., Canada, V6B 4N5
(604) 482-1211
(Name, Address and Telephone No. of Agent for Service)
If any of the Securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 other than securities offered only in connection with Dividend or Interest
Reinvestment Plans, check the following: __X__.
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Title of Securities to Amount to be Proposed Maximum Proposed Maximum Amount of
Be Registered Registered Offering Price per Aggregate Offering Registration
Share Price(2) Fee(3)
Common Shares(1) 5,000,000 $0.69 $3,450,000 $1,035.00
<FN>
NOTES:
1. The securities registered hereunder are shares of the registrant's common
stock, $.001 par value, subject to award to persons defined as employees under
the registrant's EMPLOYEE STOCK OPTION (1997) PLAN.
2. Estimated solely for the purpose of calculating the registration fee.
3. The fee with respect to these shares has been calculated pursuant to Rules
457(c) and 457(h) under the Securities Act of 1933, as amended, and based upon
the average bid and ask prices per share of the registrant's Common stock on a
date within 5 days prior to the filing of this registration statement, as quoted
on the OTC Electronic Bulletin Board.
</FN>
</TABLE>
<PAGE>
PROSPECTUS
WAVERIDER COMMUNICATIONS INC.
5,000,000 Shares of Common Stock, $0.001 par value granted at the
discretion of the Directors and expiring June 10th, 1999.
EMPLOYEE STOCK OPTION (1997) PLAN
This Prospectus relates to an offering by WaveRider Communications Inc. of an
aggregate of 5,000,000 shares of its Common Stock which may be issued pursuant
to its Employee Stock Option (1997) Plan dated the 10th day of June, 1997.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus does not constitute an offer to sell securities in any State or
other jurisdiction to any person to whom it is unlawful to make such offer in
such State or other jurisdiction.
The date of this Prospectus is August 27, 1997.
AVAILABLE INFORMATION
WaveRider Communications Inc., (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934 as amended, (the "Exchange
Act"), and, in accordance therewith, files reports, proxy and information
statements and other information with the Securities and Exchange Commission,
(the "Commission"). Reports, proxy statements and other information filed with
the Commission can be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C., 20549, as
well as at the following regional offices of the Commission: 7 World Trade
Center, Suite 1300, New York, New York, 10048 and Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois, 60661-2511. Copies of
this material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Washington, D.C., 20549
The Company has filed with the Commission a Registration Statement on Form S-8,
(the "Registration Statement"), under the Securities Act of 1933, as amended,
(the "Securities Act"), with respect to an aggregate of 5,000,000 shares of the
Common Stock eligible to be issued pursuant to the said Employee Stock Option
(1997) Plan, (the "Plan"). This Prospectus, which is Part I of the Registration
Statement, omits certain information contained in the Registration Statement.
For further information with respect to the Company and the shares of Common
2
<PAGE>
Stock offered by this Prospectus, reference is made to the Registration
Statement, including the Exhibits thereto. Statements in this Prospectus as to
any documents are not necessarily complete, and where any such document is an
exhibit to the Registration Statement or is incorporated herein by reference,
each such statement is qualified in all respects by the provisions of such
exhibit or other document, to which reference is hereby made for a full
statement of the provisions thereof. A copy of the Registration Statement with
exhibits, may be obtained from the Commission's office in Washington, D.C., (at
the above address), upon payment of the fees prescribed by the rules and
regulations of the Commission, or examined there without charge.
The Company will provide without charge to each person to whom a Prospectus has
been delivered, upon the written or oral request of such person, a copy of any
or all of the information that has been incorporated by reference in this
Prospectus, (not including exhibits to such information that is incorporated by
reference unless such exhibits are specifically incorporated by reference into
the information that the Prospectus incorporates). Requests for such copies
should be directed to WaveRider Communications Inc. 700 - 555 West Hastings
Street, Vancouver, B.C., Canada, V6B 4N5, Telephone: (604) 482-1211.
No person has been authorized by the Company to give any information or to make
any representation other than as contained in this Prospectus and, if give or
made, such information or representation must not be relied upon as having been
distributed by the Company. Neither the delivery of this Prospectus, nor any
distribution of shares of the Common Stock pursuant to the Plan, shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof.
EMPLOYEE STOCK OPTION (1997) PLAN
DATED JUNE 10TH, 1997.
ITEM 1. PLAN INFORMATION.
General Plan Information.
WaveRider Communications Inc., (the "Company"), a Nevada Corporation is offering
by this Prospectus an aggregate of 5,000,000 shares, (the "Shares") of Common
Stock, $0.001 par value, (the "Common Stock"), to be issued upon the exercise of
options granted pursuant to its Employee Stock Option (1997) Plan, (the "Plan")
dated the 10th day of June, 1997. The purpose of this Plan is to further the
growth and advance the best interests of the Company and affiliated companies by
supporting and increasing the Company's ability to attract, retain and
compensate persons of experience and ability, and whose services are considered
valuable, to encourage the sense of proprietorship in such persons, and to
stimulate the active interest of such persons in the development and success of
the Company and affiliated companies. The Plan provides for the award or grant
of non-statutory "incentive stock options" within the meaning of Section 422 of
the Internal Revenue Code of 1986 as amended, (the "Code") and shall be
administered by the Board of Directors of the Company who may in turn delegate
this function to a Committee of not less than 2 non-employee directors.
3
<PAGE>
The Plan is effective as of the 10th day of June, 1997 and runs for a period of
2 years to expire on the 10th day of June, 1999.
The Directors of the Company have the power to suspend or terminate the Plan at
any time or from time to time, but any such suspension or termination shall not
affect the rights of anyone to whom an option under this Plan has previously
been granted.
The Directors of the Company have the power to amend or alter the Plan at any
time to decrease the number of Common shares subject to this Plan or in order to
conform to any change in applicable law or to comply with provisions of any rule
or regulation of the Securities and Exchange Commission, provided that no
amendment or alteration is to be made which would impair the rights of any
participant under any Option previously granted without his consent (unless made
solely to conform to changes in the said laws, rules or regulations).
The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA") and is not qualified under Section 401(a) of the
the Code.
Where applicable herein, the "Company" shall include any affiliate thereof.
"Affiliate" means any Parent or Subsidiary of the Company.
Securities To Be Offered.
Securities to be offered pursuant to the Plan consist of Common Stock of the
Company which is registered under Sec. 12(g) of the Securities and Exchange Act
of 1934.
Pursuant to the terms of the Plan, the maximum number of shares of the Common
Stock for which options may be awarded is 5,000,000 shares. Any additional
securities will only be as a result of a stock split or other reorganization or
recapitalization affecting all Common shares and in which case all such
additional shares resulting from the same shall be deemed to have been
registered under this registration statement.
Employees Who May Participate in the Plan.
Only Employees as defined in the Plan are entitled to receive Options granted
pursuant to this Plan however employment with the Company does not by itself
entitle an employee to an award under this Plan.
Under the terms of the Plan, "Employees" means and includes: i) executive
officers, officers and directors, (including advisory and other special
directors) of the Company; ii) full-time and part-time employees of the Company;
iii) any person or entity engaged by the Company as a consultant, advisor or
agent; and iv) a lawyer, law firm, accountant, accountant firm, or other
professional or professional firm, engaged by the Company.
4
<PAGE>
Purchase of Securities Pursuant to the Plan and Payment for Securities Offered.
Awards of options, and any conditions or restrictions to be attached thereto,
including conditions with respect to vesting, shall be at the discretion of the
Directors (or Committee as the case may be). The option exercise period shall be
for a term of not more than 3 years from the date of granting of any option
however shall be 30 days following termination of employment for cause, 365 days
following termination of employment for other reason and 12 months in the event
of the death of the recipient.
The exercise price of the shares for which an option is granted shall be not
less than 100% of the fair market value of a share of Common stock on the date
the option is granted. The exercise or purchase price of the shares shall be
paid in full at the time of exercise and may be paid by: i) cash, represented by
bank or cashier's check, certified check or money order, or bank wire transfer;
ii) delivering shares of the Company's common stock, which have been
beneficially owned by the recipient, the recipient's spouse or both of them, for
a period of at least 6 months prior to such exercise, in a number equal to or
greater than the number of shares to be received as a result of such exercise,
(the "delivered stock"); iii) a combination of cash and delivered stock; iv) by
delivery of shares of corporate stock which are freely tradeable without
restriction and which are part of a class of securities which has been listed
for trading on the NASDAQ system or a national securities exchange, with an
aggregate fair market value equal to or greater than the exercise price of the
plan shares being purchased under the option, (the "other shares"); or, v) a
combination of cash, delivered stock and other shares. The Board of Directors or
the Committee as the case may be, shall have absolute discretion with respect to
accepting other shares and in valuing such shares.
All funds received by the Company pursuant to this Plan shall be added to and
form part of the working capital of the Company.
Shares obtained pursuant to this Plan are expected to constitute a taxable event
at the time of issuance and may be deemed to constitute taxable income in the
hands of the recipient based on the fair market value of the same at the time of
exercise of an Option in relation to the price determined at the time the Option
was granted. Subsequent resale by the Recipient may create either a capital loss
or gain depending on the value of the Shares at the time of such resale.
Recipients should consult with their tax advisors as to the particular tax
consequences to them arising out of the exercise of an option under this Plan.
Should the Company be subject to any withholding tax resulting from any award,
it may require the recipient to pay to the Company the entire amount or any
portion of any taxes which the Company is required to withhold and in lieu
thereof, may elect to withhold sufficient Shares to satisfy its withholding
obligations and may withhold an amount up to 50% of each payment of salary or
bonus until the Company has been reimbursed for the entire withholding tax it is
required to pay.
Unless the shares covered by the Plan have been registered prior to issuance,
the Company may require a recipient thereof to give a representation in writing
that he is acquiring such shares for his own account for investment and not with
a view to or for sale in connection with the distribution of any part thereof.
5
<PAGE>
There are no charges or expenses in relation to the operation of the Plan that
will be incurred by the Recipients.
Participants may obtain additional information about the Plan and its
administrators by directing their requests to Mr. Robert Clarke, WaveRider
Communications Inc., 700 - 555 West Hastings Street, Vancouver, B.C., Canada,
V6B 4N5 , Telephone No. (604) 482-1211.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The Company will provide, without charge, to each Recipient upon its written or
oral request, a copy of the Company's latest Annual report on Form 10-KSB for
the year ended December 31st, 1996, which document is incorporated herein by
this reference in this Prospectus and is made a part hereof. There is also
incorporated herein by this reference and made a part hereof, all documents
filed and to be filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act prior to this filing. Requests for any such
information or copies should be directed to Mr. Robert Clarke, WaveRider
Communications Inc., 700 - 555 West Hastings Street, Vancouver, B.C., Canada,
V6B 4N5, Telephone No. (604) 482-1211
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Annual Report of WaveRider Communications Inc., (the "Company" or the
"Registrant"), on Form 10-KSB for the year ended December 31st, 1996, its
Quarterly Report on Form 10-QSB for the quarter ended March 31st, 1997, and all
other reports filed pursuant to Section 13(a) or 15(d) of the Securites Exchange
Act of 1934, as amended, (the "Exchange Act"), since the end of the said year,
are each incorporated by reference in this Registration Statement and made a
part hereof. There is also incorporated herein by reference and made a part
hereof, the description of the class of securities subject to the Plan as
contained in Item 3 of the registration statement on Form 8-A (SEC file no.
0-25680) filed under Section 12(g) of the Exchange Act together with all other
documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered by the Prospectus have been awarded or which deregisters all securities
then remaining.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
6
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the securities being awarded from this Plan will be passed upon
for the Registrant by Brasher & Company, 90 Madison Street, Suite 707, Denver,
Co., 80206 . John D. Brasher, Jr., of that firm is the holder of 200,000 shares
of the Common Stock of the Company and has been granted an option under a prior
Company Stock Option Plan to purchase up to 350,000 additional Common shares at
a price of $0.0625 per share, both being received in lieu of payments for
certain legal fees.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Ninth of the Certificate of Amendment to the Certificate of
Incorporation of the Company filed the 8th day of October, 1993 permits the
indemnification of persons including directors and officers of the Registrant
against actions, suits, or proceedings other than by or in the right of the
Company, where such person or persons acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his act was unlawful. The same resolution permits the indemnification
of persons including directors and officers of the Registrant against actions or
suits by or in the right of the Company, where such person or persons acted in
good faith and in a manner reasonably believed to be in or not opposed to the
best interest of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
All of the following exhibits, except those designated with an asterisk, are
incorporated herein by reference to a prior registration statement filed under
the Securities Act or a periodic report filed by the Registrant pursuant to
Section 13 or 15(d) of the Exchange Act. Those exhibits designated with an
asterisk are filed as an exhibit to this Registration Statement.
Number Description
- ------ -----------
4.1 Specimen common stock certificate, incorporated by reference to
Exhibit 4.1 to registration statement on Form S-18, file no.
33-25889-LA.
5. * Legal opinion of Brasher & Company.
23.1 * Consent of Brasher & Company (included in Opinion filed Exhibit 5)
23.2 * Consent of Johnson, Holscher & Company, P.C.
99 * Employee Stock Option (1997) Plan.
7
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which awards 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 arising 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, and
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 such information in the Registration Statement.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall 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 remains undisbursed at the termination
of the Plan.
The undersigned Registrant hereby undertakes, that, for the purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to be delivered
with the Prospectus, to each person to whom the Prospectus is sent or given, the
latest annual report to security holders that is incorporated by reference in
the Prospectus and furnished pursuant to and meeting the requirements of Rule
14a-3 or Rule 14c-3 under the Exchange Act; and , where interim financial
information required to be presented by Article 3 of Regulation S-X is not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the Prospectus to provide such interim
financial information.
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, such
indemnification is against public policy as expressed in the Act and is
therefore, unenforceable. In the event that a claim for indemnification against
such 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
8
<PAGE>
successful defense of any action, suit or proceeding), is asserted by such
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 whether such indemnification by itself is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES:
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all 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 Vancouver, Province of British Columbia, Canada on
August 27, 1997.
WaveRider Communications Inc.
By: /s/Robert Clarke
........................
Robert Clarke, President, Chief Executive Officer
And Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons, constituting a majority of
the Board of Directors.
Signature Title Date
- --------- ----- ----
/s/Robert Clarke Director/President 08/27/97
................
Robert Clarke,
/s/Walter Pickering Director/Secretary 08/27/97
...................
Walter Pickering,
/s/Charlie Rodriguez Director 08/27/97
....................
Charlie Rodriguez
August 21, 1997
Board of Directors
WAVERIDER COMMUNICATIONS INC.
#700 - 555 West Hastings Street
Vancouver, B.C. V6B 4N5
Re: Registration Statement on Form S-8
1997 Employee Stock Option Plan
Gentlemen:
We have acted as counsel to WAVERIDER COMMUNICATIONS INC., a Nevada
corporation ("Company"), in connection with the preparation and filing with the
U.S. Securities and Exchange Commission ("Commission") under the Securities Act
of 1933, as amended ("Act"), of the Company's registration statement on Form S-8
(together with all amendments, supplements and exhibits, the "Registration
Statement"). This Registration Statement relates to the registration under the
Act of 5,000,000 shares of the Company's common stock, $.001 par value
("Shares"), which may be issued pursuant to the Company's 1997 Employee Stock
Option Plan ("Plan").
In connection with the opinions herein expressed, we have reviewed the Plan
and the Registration Statement and included prospectus, and have examined and
relied upon, as to factual matters, originals or certified or photostatic copies
of such corporate records, including, without limitation, minutes of the Board
of Directors and other instruments, certificates of corporate officers and such
other documents as we have deemed necessary or appropriate for the opinions
expressed herein. In making such examinations, we have assumed the genuineness
of all signatures, the legal capacity of natural persons, the authenticity of
documents submitted to us as originals, the conformity to original documents of
documents submitted to us as certified or photostatic copies, and the
authenticity of originals of such photostatic copies.
We have examined and relied upon, as to matters of law, such statutes,
rules and judicial precedents and such other considerations of law as we, in our
judgment, have deemed necessary or appropriate for the purposes of rendering the
opinions expressed herein.
<PAGE>
Brasher & Company
Board of Directors WAVERIDER COMMUNICATIONS INC.
August 21, 1997
Page 2 of 2
Based upon and in reliance upon the foregoing, and subject to the
qualifications and limitations herein set forth, we are of the opinion that,
when the Registration Statement shall have become effective pursuant to the
rules and regulations of the Commission, and the Shares have been sold and
issued as contemplated in the Registration Statement, such Shares will be
legally issued, fully paid and nonassessable.
This opinion is limited to the laws of the United States of America and the
laws of the State of Nevada, and we express no opinion with respect to the laws
of any other jurisdiction.
We consent to the filing of this opinion with the Commission as an exhibit
to the Registration Statement and to all references made to our firm in the
Registration Statement. However, in rendering this opinion, we do not hereby
admit that we are acting within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission under the Act.
This opinion is being delivered and is intended for use solely in regard to
the transactions contemplated by the Registration Statement and may not be used,
circulated, quoted in whole or in part or otherwise referred to for any purpose
without our prior written consent and may not be relied upon by any person or
entity other than the Company, its successors and assigns. This opinion is based
upon our knowledge of law and facts as of its date. We assume no duty to
communicate to you with respect to any matter which comes to our attention
hereafter.
Very truly yours,
BRASHER & COMPANY
/s/ John D. Brasher Jr.
------------------------------
for the Firm
Johnson, Holscher & Company, P.C.
Certified Public Accountants
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
WaveRider Communications, Inc. on Form S-8 of our report dated April 4, 1997,
incorporated in the Annual Report on form 10-KSB of Channel i, Inc., for the
years ended December 31, 1995 and 1996.
/S/ Johnson, Holscher & Company, P.C.
.....................................
Johnson, Holscher & Company, P.C.
August 21, 1997
Member of the American Institute of Certified Public Accountants
Member of the Private Companies Practice Section
Member of the SEC Practice
5975 Greenwood Plaza Blvd, Suite 140
Greenwood Village, CO 80111
(303)694-2727
FAX (303)694-3172
EMPLOYEE STOCK OPTION (1997) PLAN
WAVERIDER COMMUNICATIONS INC.
1. Purpose of the Plan.
This Employee Stock Option (1997) Plan, (the "Plan") is intended to further
the growth and advance the best interests of WAVERIDER COMMUNICATIONS INC., (the
"Company"), and affiliated companies, by supporting and increasing the Company's
ability to attract and retain persons of experience and ability, and whose
services are considered valuable, to encourage the sense of proprietorship in
such persons, and to stimulate the active interest of such persons in the
development and success of the Company and affiliated companies. This plan
provides for the issuance of non-statutory stock options ("Option" or
"Options"), which are not intended to qualify as "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, (the "Code").
2. Definitions.
Whenever used in this plan, except where the context might clearly indicate
otherwise, the following terms shall have the meanings ascribed to them:
a) "Act" means the U.S. Securities Act of 1933, as amended.
b) "Affiliate" means any Parent or Subsidiary of the Company.
c) "Award" or "Grant" means any grant of an Option made under this Plan.
d) "Board" means the Board of Directors of the Company and where applicable
includes any Committee to whom any powers of the Board have been delegated in
accordance with this Plan.
e) "Code" means the Internal Revenue Code of 1986, as amended.
f) "Date of Grant" means the day the Board authorizes the grant of an
Option or such later date as may be specified by the Board as the date a
particular grant will become effective.
g) "Employee" means and includes the following persons: i) executive
officers, officers and directors, (including advisory and other special
directors), of the Company or an Affiliate; ii) full-time and part-time
employees of the Company or an Affiliate; iii) any person or entity engaged by
the Company or an Affiliate, as a consultant, advisor or agent; and iv) a
lawyer, law firm, accountant, accountant firm, or other professional or
professional firm, engaged by the Company or an Affiliate. h) "Optionee" means
an Employee to whom an Option has been granted.
i) "Parent" means any corporation owning 50% or more of the total combined
voting stock of all classes of the Company or another company qualifying as a
Parent within this definition.
j) "Participant" means an Employee to whom an award of Stock has been made.
1
<PAGE>
k) "Plan Shares" means shares of Stock from time to time subject to this
Plan.
l) "Stock" means the Common shares of the Company, or in the event that the
outstanding Common shares are hereafter changed into or exchanged for different
shares or securities of the Company, such other shares or securities.
m) "Subsidiary" means a company more than 50% of whose total combined
capital stock of all classes is held by the Company or another company
qualifying as a Subsidiary within this definition.
3. Term.
This Plan shall be effective as of the 10th day of June, 1997, and no
Options shall be granted pursuant to this Plan after its expiration. This Plan
shall expire on the 10th day of June, 1999, unless sooner terminated in
accordance with the terms herein, with the exception of any Options then
outstanding which shall remain in effect until they have expired or have been
exercised.
4. Administration of the Plan.
This Plan shall be administered by the Board; provided however, that the
Board may delegate administration of the Plan to a committee composed of no
fewer than two (2) non-employee members of the Board, (the "Committee").
If administration is delegated to a Committee, that Committee shall have,
in connection with the administration of the Plan, the powers possessed by the
Board. The Board may abolish or change the Committee at any time and revest in
the Board the administration of the Plan.
A majority of the members of a Committee shall constitute a quorum. All
decisions and selections made by the Committee pursuant to this Plan's
provisions shall be made by a majority of its members. Any decision reduced to
writing and signed by all of the members of the Committee shall be fully
effective as if it had been made by a majority at a meeting duly held.
Subject to the terms herein, "Administration" shall include the full
authority and sole and absolute discretion to designate Plan participants, to
determine the provisions, restrictions, conditions and terms of the Options,
(which need not be identical as to number of shares covered by any Option, the
method or exercise as related to exercise in whole or in installments, or
otherwise), including the Option price, and to interpret the provisions and
supervise the administration of this Plan. Administration shall also include the
authority to provide that certain Options not vest (that is, become
exercisable), until expiration of a certain period after issuance or until other
conditions are satisfied, so long as not contrary to this Plan.
Each Option shall be evidenced by an agreement in writing containing the
provisions, terms and conditions of each such Option granted consistent with the
provisions of this Plan.
2
<PAGE>
5. Stock subject to the Plan.
A total of 5,000,000 Plan Shares shall be subject to this Plan. The Plan
Shares shall consist of unissued shares of Common stock or previously issued
shares of Common stock reacquired and held by the Company or any Affiliate and
such number of Plan Shares shall be and are hereby reserved for such purpose.
Any Plan Shares which may remain unsold and which are not subject to outstanding
Options at the termination of this Plan shall cease to be reserved for the
purpose of this Plan, but until termination of this Plan, the Company shall at
all times reserve a sufficient number of shares to meet the requirements of this
Plan. Should any Option expire or be cancelled prior to its exercise in full,
the unexercised Plan Shares subject to such Option may again be subjected to an
Option under this Plan.
6. Persons eligible to participate.
Options under this Plan may be granted to Employees only. The Board, (or
the Committee, as the case may be), shall have the full power to designate from
among the eligible parties, those to whom Options may be granted. A person who
has been granted an Option hereunder may be granted and additional Option or
Options. Persons eligible under this Plan additionally may be granted one or
more options under any other compensatory or stock option plan or awarded shares
under any other benefit plan of the Company. No Option shall confer any right
upon the Optionee with respect to the continuation of his employment (or his
position as an officer, director, employee, agent or consultant), with the
Company or any Affiliate, and shall not interfere with the right of the Company
or any Affiliate to terminate such relationship(s) at any time in accordance
with law and any other agreements in force.
7. Option Exercise Price.
The purchase price of each Plan Share shall not be less than one hundred
per cent (100%), of the fair market value of a share of Common stock on the date
the Option is granted. The fair market value on a particular date shall be
deemed to be the average of either i) the highest and lowest prices at which
shares of Common stock were sold on the date of grant, if traded on a national
securities exchange, ii) the high and low sale prices reported on the date of
grant if traded on the Nasdaq Small Cap Market or National market System, or
iii) the high bid and low asked price, or if available, the closing high bid and
low asked price, on the date of grant, if quoted on the OTC Electronic Bulletin
Board. If no transactions in the Common stock occur on the date of grant, the
fair market value shall be determined as of the next earliest day for which
reports or quotations are available. If the Common stock is not then quoted on
any exchange or in any quotation medium at the time of grant, then the Board of
Directors (or Committee, as the case may be), will use its discretion in
selecting in good faith a value believed to represent the fair market value
based on factors then known to them. The cash proceeds for the sale of Plan
Shares are to be added to the general funds of the Company.
8. Exercise Period; Vesting.
a) The Option exercise period shall be a term of not more than three (3)
years from the date of granting of each Option and shall automatically
3
<PAGE>
terminate: i) 30 days following termination of the Optionee's employment with
the Company for cause, defined as termination for reasons other than Layoff due
to lack of work, injury, illness, disability or due to economic reasons
unrelated to the Optionsee's job performance, or for a reason stated in
subparagraph (b) below; ii) Subject to subparagraph (c) below, at the expiration
of a period to be determined by the Board (or Committee as the case may be), at
the time of grant, which shall be not less than 30 days and not more than 365
days following the date of termination of the Optionee's employment with the
Company without cause for any reason other than death, provided that if the
Optionee dies within such period, subclause iii) below shall apply; or iii) at
the expiration of twelve (12) months after the date of death of the Optionee.
b) "Employment with the Company" as used in this Plan shall include: i)
employment with, ii) or as to a consultant, advisor, or agent, engagement by,
or; iii) service as a director of the Company or any Affiliate, in any such
capacity, even if employment or engagement in another capacity ceases, and
Options granted under this Plan shall not be affected by an Employee's transfer
of employment within the Company or between it and any Affiliate or between any
Affiliates. An Optionee's employment shall not be deemed interrupted or
terminated by a bona fide leave of absence, such as sabbatical leave, military
or other services required by the Government, or sick leave.
c) The Board (or Committee, as the case may be), may determine at the time
of grant that the Option granted shall not vest immediately, but over a
specified time, in specified amounts per time period, or subject to other
restrictions or limitations. Unless otherwise set forth in the granting
resolution, an Option shall vest immediately upon grant. If employment ceases
before an Option vests, then vesting shall never take place and unvested Options
shall then be lost forever. Nothing contained in this Section shall be construed
to extend the term of any Option or to permit anyone to exercise an Option after
the expiration of its term, nor shall it be construed to increase the number of
shares as to which any Option is exercisable from the amount exercisable on the
date of termination of the Optionee's employment or relationship as a
consultant, advisor, director or officer.
9. Exercise of Options.
a) The Board (or Committee as the case may be), in granting Options shall
have discretion to determine the terms upon which the Options shall be
exercisable, subject to applicable provisions of this Plan. Once available for
purchase, unpurchased Plan Shares shall remain subject to purchase until the
Option expires or terminates in accordance with the terms herein. Unless
otherwise stipulated in an Option, an Option may be exercised in whole or in
part, one or more times, but no Option may be exercised for a fractional share.
Resulting fractions shall be rounded up or down as appropriate.
b) Options may be exercised solely by the Optionee or a permitted
transferee during his lifetime or by a spouse or former spouse pursuant to a
qualified domestic relations order, or after his death (with respect to the
number of shares which the Optionee could have purchased at the time of death)
by the person or persons entitled thereto under the decedent's Will or the laws
of descent and distribution.
c) The purchase price of the Plan Shares to which an Option is exercised
shall be paid in full at the time of exercise and no Plan Shares shall be issued
until full payment is made therefor. Payment shall be made either i) in cash,
represented by a bank or cashier's check, certified check or money order, or
4
<PAGE>
made by bank wire transfer; ii) by delivering shares of the Company's Common
stock which have been beneficially owned by the Optionee, the Optionee's spouse
or both of them for a period of at least six (6) months prior to the time of
exercise (the "Delivered Stock"), in a number equal to the number of Plan Shares
being purchased upon exercise of the Options; iii) a combination of cash and
delivered stock; iv) by delivery of shares of corporate stock which are freely
tradeable without restriction and which are part of a class of securities which
has been listed for trading on the NASDAQ system or a national securities
exchange, with an aggregate fair market value equal to or greater than the
exercise price of the Plan Shares being purchased under the Option, (the "Other
Shares"), or v) a combination of cash, Delivered Stock and Other Shares. An
Option shall be deemed exercised when written notice thereof, accompanied by the
appropriate payment in full, is received by the Company. No holder of an Option
shall be or have any of the rights and privileges of a shareholder of the
Company, in respect of any Plan Shares purchased upon exercise of an Option
unless and until certificates representing such shares have been issued by the
Company to him or her. The Board (or Committee as the case may be), shall have
absolute discretion whether to accept Other Shares offered and in valuing such
shares.
10. Options in Substitution for Other Options.
The Board, (or Committee, as the case may be), may in its sole discretion,
at any time during the term of this Plan, grant new Options to an Employee under
this Plan or any other stock option plan of the Company, on the conditions that
such Employee shall surrender for cancellation one or more outstanding Options
which represent the right to purchase, (after giving effect to any previous
partial exercise thereof), a number of shares, in relation to the number of
shares to be covered by the new conditional grant hereunder. No such new
conditional grant shall become exercisable in the absence of such Employee's
consent to the condition, surrender and cancellation, as appropriate. New
conditional Options shall be treated in all respects under this Plan as newly
granted Options. Options may be granted under this Plan from time to time in
substitution for similar rights held by Employees of other corporations who are
about to become Employees of the Company or an Affiliate as a result of a merger
or consolidation of the employing corporation with the Company or an Affiliate,
or the acquisition by the Company or an Affiliate of the assets of the employing
corporation, or the acquisition by the Company or an Affiliate, of stock of the
employing corporation as the result of which such other corporation becomes an
Affiliate.
11. Assignability.
Except with the express written consent of the Board, an Option for Plan
Shares may not be assigned nor otherwise transferred except by Will or by
operation of law, pursuant to a qualified domestic relations order (as defined
in Rule 16B-3 of the Securities and Exchange Commission, or any successor rule),
or pursuant to Title 1 of the Employee Retirement Income Security Act of 1974,
as amended (ERISA) or rules thereunder. No Option shall be pledged or
hypothecated in any manner, whether by operation of law or otherwise, and no
5
<PAGE>
Options shall be subject to execution, attachment or similar process . Plan
Shares themselves may be assigned only after such shares have been awarded,
issued and delivered, and only in accordance with law and any transfer
restrictions imposed at the time of Option.
12. Reorganizations and Recapitalizations of the Company.
a) The existence of this Plan and Options granted hereunder shall not
affect in any way the right or power of the Company or its shareholders to make
or authorize any and all adjustments, recapitalizations, reorganizations, or
other changes in the Company's capital structure or its business, or any merger
or consolidation of the Company or any issue of bonds, debentures or other
indebtedness, or any preferred or prior preference stocks senior to or affecting
the Company's Common stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale, exchange or transfer of all or any part
of its assets or business, or any other corporate act or proceeding, whether of
a similar character or otherwise.
b) The Plan Shares in respect to which Options may be granted hereunder are
shares of Common stock currently constituted. If, and whenever, prior to
delivery by the Company of all of the Plan Shares which are subject to Options
granted hereunder, the Company shall effect a subdivision or consolidation of
shares or other capital readjustment, a stock split, combination of shares
(reverse stock split), or recapitalization or other increase or reduction in the
number of shares of the Common stock outstanding without receiving compensation
therefore in money, services or property, and other than as a dividend, then the
number of Plan Shares with respect to which Options granted hereunder may
thereafter be exercised shall i) in the event of an increase in the number of
outstanding shares, be proportionately increased and the cash consideration
payable per share shall be proportionately reduced; and ii) in the event of a
reduction in the number of outstanding shares, be proportionately reduced and
the cash consideration payable per share shall be proportionately increased
c) If the Company is reorganized, merged, consolidated or party to a plan
of exchange with another company pursuant to which shareholders of the Company
receive any shares of stock or other securities, in exchange for the Common
stock, there shall be substituted for the Plan Shares subject to the unexercised
portions of outstanding Options, an appropriate number of shares of each class
of stock or other securities which were distributed to the shareholders of the
Company in respect of the Common stock in the case of a reorganization, merger,
consolidation or plan of exchange; provided however, that all outstanding
Options may be cancelled by the Company as of the effective date of a
reorganization, merger, consolidation, plan of exchange, or any dissolution or
liquidation of the Company, by giving notice to each Optionee or his personal
representative of its intention to do so and by permitting the purchase of all
the Plan Shares subject to such outstanding Options for a period of not less
than thirty (30) days during the sixty (60) days immediately preceeding such
effective date.
6
<PAGE>
d) Except as expressly provided above, the Company's issuance of shares of
capital stock of any class, or securities convertible into shares of capital
stock of any class, as dividends or for cash, property, labor or services,
either upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into or exchangeable for shares of capital stock or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to the
number of Plan Shares subject to Options granted hereunder or the purchase price
of such shares.
13. Purchase for Investment.
Unless the Plan Shares covered by this Plan have been registered under the
Act prior to issuance, each person exercising an Option under this Plan may be
required by the Company to give a representation in writing that he is acquiring
such shares for his or her own account for investment and not with a view to or
for sale in connection with the distribution of any part thereof.
14. Laws and Regulations.
This Plan and the granting and exercise of Options hereunder, and the
obligation of the Company to sell and deliver Plan Shares under such Options,
shall be subject to all applicable laws, rules and regulations and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
15. Withholding of Taxes.
If subject to withholding tax, the Company may be required to collect
withholding taxes upon the exercise of an Option. The Company may require, as a
condition to the exercise of an Option that the Optionee concurrently pay to the
Company the entire amount or a portion of any taxes which the Company is
required to withhold by reason of such exercise, in such amount as the Company
in its discretion may determine. In lieu of part or all of any such payment, the
Optionee may elect to have the Company withhold from the Plan Shares to be
issued hereunder, a sufficient number of shares to satisfy withholding
obligations.
16. Reservation of Shares.
The stock subject to this Plan, shall, at all times, consist of authorized
but unissued Common shares, or previously issued shares of Common stock
reacquired or held by the Company or an Affiliate, equal to the maximum number
of shares the Company may be required to issue under this Plan, and such number
of Common shares is hereby reserved for such purpose. The Board, (or Committee,
as the case may be), may decrease the number of shares subject to this Plan, but
an increase in such number may only occur as a consequence of a stock split or
other reorganization or recapitalization affecting all Common shares.
7
<PAGE>
17. Termination of the Plan.
The Board may suspend or terminate this Plan at any time or from time to
time, but no such action shall adversely affect the rights of a person granted
an Option under this Plan prior to that date. Otherwise, this Plan shall
terminate on the earlier of the date previously specified herein, or the date
when all the Plan shares have been issued.
18. Amendment of the Plan.
The Board may amend or alter this Plan at any time in such respects as it
shall deem advisable in order to conform to any change in any other applicable
law, or in order to comply with the provisions of any rule or regulation of the
Securities and Exchange Commission required to exempt this Plan or any Options
granted hereunder from the operation of Section 16(b) of the Securities Exchange
Act of 19934, as amended, (the "Exchange Act"), or in any other respect not
inconsistent with Section 16(b) of the Exchange Act; provided that no amendment
or alteration shall be made which would impair the rights of any participant
under any Option theretofore granted, without his consent (unless made solely to
conform such Option to and necessary because of changes in the foregoing laws,
rules or regulations).
19. Delivery of a copy of the Plan.
A copy of this Plan shall be delivered to every person to whom an Option is
granted.
20. Liability.
No member of the Board of Directors, the Committee (where applicable), or
any other Committee of Directors, Officers, Employees, or agents of the Company
or any Affiliate, shall be personally liable for any action, omission or
determination made in good faith in connection with this Plan.
21. Miscellaneous Provisions.
The place of administration of this Plan shall be wherever the Company's
principal executive offices are located and the validity, construction,
interpretation and effect of this Plan and of its rules, regulations and rights
relating to it, shall be determined solely in accordance with the laws of the
State of Nevada. Without amending this Plan, the Board, (or Committee as the
case may be), may issue Plan Shares to employees who are foreign nationals or
employed outside the United States or both, on such terms and conditions
different from those specified in this Plan but consistent with the purpose of
this Plan, as it deems necessary and desirable to create equitable
8
<PAGE>
opportunities, given the difference in tax laws in such other countries. All
expenses of administering this Plan and issuing Plan Shares shall be borne by
the Company.
By Signature below, the undersigned officers of the Company hereby certify that
the foregoing is a true and correct copy of the Employee Stock Option (1997)
Plan of the Company.
Dated:
June 10th, 1997. WAVERIDER COMMUNICATIONS INC.
By: /s/Robert Clarke
.............................
Robert Clarke
Authorized Officer
(SEAL)
By: /s/Walter Pickering
............................
Walter Pickering
Secretary
