As filed with the Securities and Exchange Commission on February 11, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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SPECTRUM SIGNAL PROCESSING INC.
(Exact name of registrant as specified in its charter)
British Columbia, Canada 04-2976120
(State or other juris- (I.R.S. Employer
diction of incorporation Identification
or organization) Number)
One Spectrum Court
200-2700 Production Way
Burnaby, British Columbia, Canada V5A 4X1
Telephone (604) 421-5422
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Spectrum Signal Processing Inc. 1995 Stock Option Plan, as amended
Spectrum Signal Processing Inc. Employee Stock Purchase Plan
(full title of the plan)
Martin M. McConnell
Spectrum Signal Processing Inc.
One Spectrum Court
200-2700 Production Way
Burnaby, British Columbia, Canada V5A 4X1
Telephone (604) 421-5422
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications, including all communications sent to
the agent for service, should be sent to:
Paul Jacobs, Esq.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
(212) 318-3000
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<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Securities Proposed maximum offering Proposed maximum aggregate Amount of
to be registered Amount to be registered price per unit (1) offering price (1) registration fee
<S> <C> <C> <C> <C>
- -------------------------------- ------------------------ --------------------------- ---------------------------- -----------------
Common Stock without par value A maximum of 3,050,000 $4,469 $13,630,450 $3,598.44
per share shares (2)
- -------------------------------- ------------------------ --------------------------- ---------------------------- -----------------
Common Stock without par value A maximum of 250,000 $4,469 $1,117,250 $294.95
per share shares (3)
- -------------------------------- ------------------------ --------------------------- ---------------------------- -----------------
</TABLE>
(1) The price is estimated in accordance with Rule 457(h)(1) under the
Securities Act of 1933, as amended, solely for the purpose of
calculating the registration fee, based on the average of the high and
low prices of the Common Stock as reported on the New York Stock
Exchange on February 8, 2000.
(2) Shares to be issued pursuant to the Spectrum Signal Processing Inc.
1995 Stock Option Plan.
(3) Shares to be issued pursuant to the Spectrum Signal Processing Inc.
Employee Stock Purchase Plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
In accordance with the rules and regulations of the Securities and
Exchange Commission, the documents containing the information called for in Part
I of Form S-8 will be sent or given to (i) individuals who participate in our
1995 Stock Option Plan and who consent to and execute our stock option agreement
(Exhibit 4.1) and (ii) individuals who participate in our Employee Stock
Purchase Plan. Such information is being filed with or included in this Form
S-8.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Spectrum Signal Processing Inc. (the
"Company") are incorporated herein by reference:
(a) The Company's Registration Statement on Form F-3 (Registration number
333-58115) filed on July 26, 1999 containing audited financial statements for
the fiscal year ended December 31, 1998 and unaudited financial statements for
the three months ended March 31, 1998.
(b) The description of the Company's Common Stock contained in the Company's
Registration Statement on Form F-3 (Registration number 333-58115) filed on July
26, 1999.
(c) The Company's Report on Form 6-K filed on August 17, 1999 and the Company's
report on Form 6-K filed on November 12, 1999.
In addition to the foregoing, all documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment
indicating that all of the securities offered hereunder have been sold or
deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed document that is
also incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
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<PAGE>
Item 6. Indemnification of Directors and Officers
The Company Act (British Columbia) provides as follows with respect to
indemnification of directors and officers:
"Sec. 152. Indemnification.
A company, with the approval of the court, may indemnify a person who
is a director or former director of the company or is a director or former
director of a corporation of which the company is or was a shareholder, and the
person's heirs and personal representatives, against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonably incurred by the person, including an amount paid to
settle an action or satisfy a judgment in a civil, criminal or administrative
action or proceeding to which the person is made a party because of being or
having been a director, including an action brought by the company or
corporation, if
(a) the person acted honestly and in good faith with a view to the best
interests of the corporation of which the person is or was a director; and
(b) in the case of a criminal or administrative action or proceeding,
the person had reasonable grounds for believing that the person conduct was
lawful.
(1)The court, on the application of a company, director or a
former director, may make an order approving an indemnity under this section and
the court may make any further order it considers appropriate.
(2)On an application under subsection (2), the court may order
notice to be given to any interested person.
(3)A company may purchase and maintain insurance for the
benefit of a person referred to in this section against any liability incurred
by the person as a director or officer.
(4)Subsections (1) to (3) apply to officers or former officers
of a company or of a corporation of which the company is or was a shareholder."
The Company's Articles provide as follows with respect to
indemnification of directors and officers:
19.1 Subject to the provisions of the Company Act, the directors shall
cause the Company to indemnify a director or former director of the Company and
the directors may cause the Company to indemnify a director or former director
or a corporation of which the Company is or was a shareholder and the heirs and
personal representatives of any such person against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonable incurred by him or them including an amount paid to
settle an action or satisfy a judgment in a civil, criminal or administrative
action or proceeding to which he is or they made a party be reason of his being
or having been a director of the Company or a director of such corporation,
including any action brought by the Company or any such corporation. Each
director of the Company on being elected or appointed shall be deemed to have
contracted with the Company on the terms of the foregoing indemnity.
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<PAGE>
19.2 Subject to the provisions of the Company Act, the directors may
cause the Company to indemnify any officer, employee or agent of the Company or
of a corporation of which the Company is or was a shareholder (notwithstanding
that he is also a director) and his heirs and personal representatives against
all costs, charges and expenses whatsoever incurred by him or them and resulting
from his acting as an officer, employee or agent of the Company or such
corporation. In addition, the Company shall indemnify the Secretary or an
Assistant Secretary of the Company (if he shall not be a full time employee of
the Company and notwithstanding that he is also a director) and his respective
heirs and legal representatives against all costs, charges and expenses
whatsoever incurred by him or them and arising out of the functions assigned to
the Secretary by the Company Act or these Articles and each such Secretary and
Assistant Secretary shall on being appointed be deemed to have contracted with
the Company on the terms of the foregoing indemnity.
19.3 The failure of a director or officer of the Company to comply with
the provisions of the Company Act or of the Memorandum or these Articles shall
not invalidate any indemnity to which he is entitled under this Part.
19.4 The directors may cause the Company to purchase and maintain
insurance for the benefit of any person who is or was serving as a director,
officer, employee or agent of the Company or has a director, officer, employee
or agent of any corporation of which the Company is or was a shareholder and his
heirs or personal representatives against any liability incurred by him as such
director, officer, employee or agent.
The Company's directors and officers are insured against losses arising
from any claim against them as such for wrongful acts or omissions, subject to
certain limitations.
Item 7. Exemption from Registration Claimed
Not Applicable.
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<PAGE>
Item 8. Exhibits
4.1 Spectrum Signal Processing Inc. 1995 Stock Option Plan, as amended
4.2 Form of Stock Option Agreement
4.3 Spectrum Signal Processing Inc. Employee Stock Purchase Plan
5 Opinion of Clark, Wilson
23.1 Consent of Independent Auditors KPMG
23.2 Consents Clark, Wilson (included in Exhibits)
24 Power of Attorney (included in signature page)
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes that:
(1)To file, during any period in which offers or sales are being made,
a post-effective amendment of this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
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; notwithstanding 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 end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement of any material change to such 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 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
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(2) For the purpose of determining any liability under the Securities
Act of 1933, each 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 remain unsold at the termination of
the offering.
(b) The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 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.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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 that 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 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 of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Vancouver, British Columbia, Canada, on February 11, 1999.
Spectrum Signal Processing Inc.
/s/ Martin M. McConnell
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Martin M. McConnell
Vice President, Chief Financial Officer and Treasurer
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<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Martin McConnell his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
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<PAGE>
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 dates indicated:
<TABLE>
Signature Title Date
<S> <C> <C>
/s/ Kenneth A. Spencer Chair of the Board of Directors February 11, 2000
- --------------------------------
Kenneth A. Spencer
/s/ Martin McConnell Vice President, Chief Financial Officer and February 11, 2000
- -------------------------------- Treasurer ( principal executive officer and
Martin McConnell principal financial and accounting officer)
/s/ Barry W. Jinks Director February 11, 2000
- --------------------------------
Barry W. Jinks
/s/ Pascal Spothelfer President, Chief Executive Officer and February 11, 2000
- -------------------------------- Director
Pascal Spothelfer
/s/ Andrew Harries Director February 11, 2000
- --------------------------------
Andrew Harries
/s/ John E. Brennan Director February 11, 2000
- --------------------------------
John E. Brennan
/s/ Charles C. Johnston Director February 11, 2000
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Charles C. Johnston
/s/ Samuel Znaimer Director February 11, 2000
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Samuel Znaimer
Authorized Representative
in the United States:
/s/ John E. Brennan Director February 11, 2000
- --------------------------------
John E. Brennan
Attorney in Fact:
/s/ Martin M. McConnell February 11, 2000
- --------------------------------
Martin M. McConnell
</TABLE>
SPECTRUM SIGNAL PROCESSING INC.
1995 Stock Option Plan
(Amended June 22, 1999)
1 PURPOSE
The purpose of the 1995 Stock Option Plan (this "Plan) is to
provide a means whereby selected employees, senior officers and directors of
Spectrum Signal Processing Inc. (the "Company"), or of any affiliate thereof,
may be granted incentive stock options to purchase Common Shares (as defined in
Section 3) of the Company, in order to attract and retain the services or advice
of such employees, senior officers and directors, and to provide added incentive
to such persons by encouraging share ownership in the Company.
2 ADMINISTRATION
This Plan shall be administered by the Board of Directors of
the Company (the "Board") or, in the event the Board shall appoint and/or
authorize a committee to administer this Plan, by such committee. The
administrator of this Plan shall hereinafter be referred to as the "Plan
Administrator".
In the event a member of the Board (or the committee) may be
eligible, subject to the restrictions set forth in Section 4, to participate in
or receive or hold options under this Plan, no member of the Board or the
committee shall vote with respect to the granting of an option hereunder to
himself or herself, as the case may be.
The members of any committee serving as Plan Administrator
shall be appointed by the Board for such term as the Board may determine. The
Board may from time to time remove members from, or add members to, the
committee. Vacancies on the committee, however caused, may be filled by the
Board.
2.1 Procedures
The Board shall designate one of the members of the Plan
Administrator as chairman. The Plan Administrator may hold meetings at such
times and places as it shall determine. The acts of a majority of the members of
the Plan Administrator present at meetings at which a quorum exists, or acts
reduced to or approved in writing by all Plan Administrator members, shall be
valid acts of the Plan Administrator.
<PAGE>
2.2 Responsibilities
Except for the terms and conditions explicitly set forth in
this Plan, the Plan Administrator shall have the authority, in its discretion,
to determine all matters relating to the options to be granted under this Plan,
including selection of the individuals to be granted options, the number of
shares to be subject to each option, the exercise price, and all other terms and
conditions of the options. Grants under this Plan need not be identical in any
respect, even when made simultaneously. The interpretation and construction by
the Plan Administrator of any terms or provisions of this Plan or any option
issued hereunder, or of any rule or regulation promulgated in connection
herewith, shall be conclusive and binding on all interested parties.
3 SHARES SUBJECT TO THIS PLAN
The shares subject to this Plan shall be the Company's common
shares, without par value (the "Common Shares"), presently authorized but
unissued or subsequently acquired by the Company. Subject to adjustment as
provided in Section 6, the aggregate amount of Common Shares to be delivered
upon the exercise of all options granted under this Plan shall not exceed
3,050,000 shares as such Common Shares were constituted on the effective date of
this Plan. If any option granted under this Plan shall expire or be cancelled or
terminated for any reason without having been exercised in full, the unpurchased
shares subject thereto shall thereupon again be available for purposes of this
Plan.
4 ELIGIBILITY
An incentive stock option may be granted only to any
individual who, at the time the option is granted, is an employee, senior
officer or director of the Company or an affiliate of the Company as that term
is defined in the Company Act (British Columbia) (an "Affiliate"), a trustee on
behalf of such individual, or an entity, all of the voting securities of which
are beneficially owned by an employee or director. Any party to whom an option
is granted under this Plan shall be referred to hereinafter as an "Optionee".
5 TERMS AND CONDITIONS OF OPTIONS
Options granted under this Plan shall be evidenced by written
agreements which shall contain such terms, conditions, limitations and
restrictions as the Plan Administrator shall deem advisable and which are not
inconsistent with this Plan. Notwithstanding the foregoing, options shall
include or incorporate by reference the following terms and conditions:
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5.1 Number of Shares and Price
The maximum number of shares that may be reserved pursuant to
the exercise of each option and the price per share at which such option is
exercisable (the "Exercise Price") shall be as established by the Plan
Administrator, provided that the number of shares that may be reserved pursuant
to the exercise of options and granted to any person shall not exceed 5% of the
issued and outstanding share capital of the Company, and further provided that
the Plan Administrator shall act in good faith to establish the exercise price
which shall be not less than the closing price of the Company's shares on the
Toronto Stock Exchange on the day immediately preceding the date of grant of
such options.
5.2 Term and Maturity
The term of each incentive stock option shall be as
established by the Plan Administrator and, if not so established, shall be 5
years from the date it is granted but in no event shall it exceed 10 years.
To ensure that the Company or Affiliate will achieve the
purpose and receive the benefits contemplated in this Plan, the Plan
Administrator may, in respect of any options granted to any Optionee hereunder,
establish a schedule for the exercise of such option (a "Vesting Schedule").
5.3 Exercise
Subject to any Vesting Schedule each option may be exercised
in whole or in part at any time and from time to time; provided, however, that
no fewer than 100 shares (or the remaining shares then purchasable under the
option, if less than 100 shares) may be purchased upon any exercise of option
rights hereunder and that only whole shares will be issued pursuant to the
exercise of any option. During an Optionee's lifetime, any options granted under
this Plan are personal to him or her and are exercisable solely by such
Optionee. Options shall be exercised by delivery to the Company of notice of the
number of shares with respect to which the option is exercised, together with
payment of the exercise price.
5.4 Payment of Exercise Price
Payment of the option exercise price shall be made in full at
the time the notice of exercise of the option is delivered to the Company and
shall be in cash, bank certified or cashier's cheque or personal cheque (unless
at the time of exercise the Plan Administrator in a particular case determines
not to accept a personal cheque) for the Common Shares being purchased.
The Plan Administrator can determine at any time before
exercise that additional forms of payment will be permitted. To the extent
permitted by the Plan Administrator and applicable laws and regulations
(including, but not limited to, federal tax law, securities laws and regulations
and provincial company law), an option may be exercised by delivery of Common
Shares of the Company held by an Optionee having a fair market value equal to
the exercise price, such fair market value to be determined in good faith by the
Plan Administrator; provided, however, that payment in Common Shares held by an
Optionee shall not be made unless the Common Shares shall have been owned by the
Optionee for a period of at least six months.
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5.5 Withholding Tax Requirement
The Company or any Affiliate shall have the right to retain
and withhold from any payment of cash or Common Shares under this Plan the
amount of taxes required by any government to be withheld or otherwise deducted
and paid with respect to such payment. At its discretion, the Company may
require an Optionee receiving Common Shares to reimburse the Company for any
such taxes required to be withheld by the Company and withhold any distribution
in whole or in part until the Company is so reimbursed. In lieu thereof, the
Company shall have the right to withhold from any other cash amounts due or to
become due from the Company to the Optionee an amount equal to such taxes. The
Company may also retain and withhold or the Optionee may elect, subject to
approval by the Company at its sole discretion, to have the Company retain and
withhold a number of shares having a market value not less than the amount of
such taxes required to be withheld by the Company to reimburse the Company for
any such taxes and cancel (in whole or in part) any such shares so withheld.
5.6 Non-transferability of Options
Options granted under this Plan and the rights and privileges
conferred hereby may not be transferred, assigned, pledged or hypothecated in
any manner (whether by operation of law or otherwise) other than by will or by
the applicable laws of descent and distribution and shall not be subject to
execution, attachment or similar process. Any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of any option under this Plan or any
right or privilege conferred hereby, contrary to the provisions of this Plan, or
the sale or levy or any attachment or similar process upon the rights and
privileges conferred hereby shall be null and void. Notwithstanding the
foregoing, if the Company permits, an Optionee may, during the Optionee's
lifetime, designate a person who may exercise the option after the Optionee's
death by giving written notice of such designation to the Plan Administrator.
Such designation may be changed from time to time by the Optionee by giving
written notice to the Plan Administrator revoking any earlier designation and
making a new designation.
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5.7 Termination of Relationship
If the Optionee's relationship with the Company or any
Affiliate ceases for any reason other than termination for cause, death or total
disability, and unless by its terms the option sooner terminates or expires,
then the Optionee may exercise, for a ninety day period that portion of the
Optionee's option which is exercisable at the time of such cessation, but the
Optionee's option shall terminate at the end of such period following such
cessation as to all shares for which it has not theretofore been exercised,
unless such provision is waived in the agreement evidencing the option or by
resolution adopted at any time by the Plan Administrator. If an Optionee's
relationship with the Company or any Affiliate changes (i.e., from employee to
nonemployee, such as a consultant), such change shall constitute a termination
of an Optionee's relationship with the Company or any Affiliate and the
Optionee's option shall terminate in accordance with this subsection 5.7. Upon
the expiration of the ninety day period following cessation of an Optionee's
relationship with the Company or any Affiliate, the Plan Administrator shall
have sole discretion in a particular circumstance to extend the exercise period
following such cessation beyond that specified above, subject to any extension
being pre-cleared by The Toronto Stock Exchange.
If an Optionee is terminated for cause, any option granted
hereunder shall automatically terminate as of the first discovery by the Company
of any reason for termination for cause, and such Optionee shall thereupon have
no right to purchase any shares pursuant to such option. "Termination for cause"
shall mean dismissal for dishonesty, conviction or confession of a crime
punishable by law (except minor violation), fraud, misconduct or disclosure of
confidential information. If an Optionee's relationship with the Company or any
Affiliate is suspended pending an investigation of whether or not the Optionee
shall be terminated for cause, all the Optionee's rights under any option
granted hereunder likewise shall be suspended during the period of
investigation.
If an Optionee's relationship with the Company or any
Affiliate ceases because of a total disability, no further vesting shall occur
after the cessation, the Optionee's option shall not terminate until the end of
the 24-month period following such cessation (unless by its terms it sooner
terminates and expires). As used in this Plan, the term "total disability"
refers to a mental or physical impairment of the Optionee which is expected to
last for a continuous period of 12 months or more and which causes the Optionee
to be unable, in the opinion of the Company and two independent physicians, to
perform his or her duties for the Company and to be engaged in any substantial
gainful activity. Total disability shall be deemed to have occurred on the first
day after the Company and the two independent physicians have furnished their
opinion of total disability to the Plan Administrator.
For purposes of this subsection 5.7 a transfer of relationship
between the Company and any Affiliate shall not be deemed to constitute a
cessation of relationship with the Company or any of its Affiliates. For
purposes of this subsection 5.7, with respect to incentive stock options,
employment shall 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). The foregoing notwithstanding, employment shall not be deemed to
continue beyond the first 90 days of such leave, unless the Optionee's
reemployment rights are guaranteed by statute or by contract.
5.8 Death of Optionee
If an Optionee dies while he or she has a relationship with
the Company or any Affiliate or within the ninety day period (or 24-month period
in the case of totally disabled Optionees) following cessation of such
relationship, any option held by such Optionee to the extent that the Optionee
would have been entitled to exercise such option, no further vesting occurring
after the date of death, may be exercised within one year after his or her death
by their personal representative of his or her estate or by the person or
persons to whom the Optionee's rights under the option shall pass by will or by
the applicable laws of descent and distribution but in any event, options may
not be exercised any later than 10 years from the date of grant.
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<PAGE>
5.9 No Status as Shareholder
Neither the Optionee nor any party to whom the Optionee's
rights and privileges under the option may pass shall be, or have any of the
rights or privileges of, a shareholder of the Company with respect to any of the
shares issuable upon the exercise of any option granted under this Plan unless
and until such option has been exercised.
5.10 Continuation of Employment
Nothing in this Plan or in any option granted pursuant to this
Plan shall confer upon any Optionee any right to continue in the employ of the
Company or of an Affiliate, or to interfere in any way with the right of the
Company or of any such Affiliate to terminate his or her employment or other
relationship with the Company at any time.
5.11 Modification and Amendment of Option
Subject to the terms and conditions and within the limitations
of this Plan, the Plan Administrator may modify or amend outstanding options
granted under this Plan, subject to the prior approval of The Toronto Stock
Exchange. The modification or amendment of an outstanding option shall not,
without the consent of the Optionee, impair or diminish any of his or her rights
or any of the obligations of the Company under such option. Except as otherwise
provided in this Plan, no outstanding option shall be terminated without the
consent of the Optionee.
6 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
The aggregate number and class of shares for which options may
be granted under this Plan, the number and class of shares covered by each
outstanding option and the exercise price per share thereof (but not the total
price), and each such option, shall all be proportionately adjusted for any
increase or decrease in the number of issued Common Shares of the Company
resulting from a split-up or consolidation of shares or any like capital
adjustment, or the payment of any share dividend out of the ordinary course.
6.1 Effect of Liquidation or Reorganization
(a) Cash, Shares or Other Property for Shares
Except as provided in subsection b upon a merger (other than a
merger of the Company in which the holders of Common Shares
immediately prior to the merger have the same proportionate
ownership of Common Shares in the surviving corporation
immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a
mere reincorporation or the creation of a holding company) or
liquidation of the Company, as a result of which the
shareholders of the Company, receive cash, shares or other
property in exchange for or in connection with their Common
Shares, any option granted hereunder shall terminate, but the
Optionee shall have the right immediately prior to any such
merger, consolidation, acquisition of property or shares,
separation, reorganization or liquidation to exercise such
Optionee's option to the extent the vesting requirements set
forth in the option agreement have been satisfied.
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<PAGE>
(b) Conversion of Options on Shares for Share Exchange
If the shareholders of the Company receive shares in the
capital of another corporation ("Exchange Shares") in exchange
for their Common Shares in any transaction involving a merger
(other than a merger of the Company in which the holders of
Common Shares immediately prior to the merger have the same
proportionate ownership of Common Shares in the surviving
corporation immediately after the merger), consolidation,
acquisition of property or shares, separation or
reorganization (other than a mere reincorporation or the
creation of a holding company), all options granted hereunder
shall be converted into options to purchase Exchange Shares
unless the Company and the corporation issuing the Exchange
Shares, in their sole discretion, determine that any or all
such options granted hereunder shall not be converted into
options to purchase Exchange Shares but instead shall
terminate in accordance with the provisions of subsection a.
The amount and price of converted options shall be determined
by adjusting the amount and price of the options granted
hereunder in the same proportion as used for determining the
number of Exchange Shares the holders of the Common Shares
receive in such merger, consolidation, acquisition or property
or stock, separation or reorganization. Unless accelerated by
the Board, the vesting schedule set forth in the option
agreement shall continue to apply to the options granted for
the Exchange Shares.
6.2 Fractional Shares
In the event of any adjustment in the number of shares covered
by any option, any fractional shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full shares
resulting from such adjustment.
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<PAGE>
6.3 Determination of Board to Be Final
All Section 6 adjustments shall be made by the Board, and its
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.
7 SECURITIES REGULATION
Shares shall not be issued with respect to an option granted
under this Plan unless the exercise of such option and the issuance and delivery
of such shares pursuant thereto shall comply with all relevant provisions of
law, including without limitation the Securities Act (British Columbia), any
applicable provincial and state securities laws, the U.S. Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance, including the availability of an
exemption from registration for the issuance and sale of any shares hereunder.
Inability of the Company to obtain from any regulatory body having jurisdiction,
the authority deemed by the Company's counsel to be necessary for the lawful
issuance and sale of any shares hereunder or the unavailability of an exemption
from registration for the issuance and sale of any shares hereunder shall
relieve the Company any liability in respect of the nonissuance or sale of such
shares as to which such requisite authority shall not have been obtained.
As a condition to the exercise of an option, the Company may
require the Optionee to represent and warrant at the time of any such exercise
that the shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any relevant provision of the
aforementioned laws. At the option of the Company, a stop-transfer order against
any shares may be placed on the official stock books and records of the Company,
and a legend indicating that the shares may not be pledged, sold or otherwise
transferred unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on share certificates in order to
assure exemption from registration. The Plan Administrator may also require such
other action or agreement by the Optionees as may from time to time be necessary
to comply with the federal and state securities laws. THIS PROVISION SHALL NOT
OBLIGATE THE COMPANY TO UNDERTAKE REGISTRATION OF THE OPTIONS OR SHARES
HEREUNDER.
Should any of shares of the Company of the same class as the
shares subject to options granted hereunder be listed on a securities exchange
or other securities trading facility, all shares issued hereunder if not
previously listed on such exchange or facility shall be authorized by that
exchange or facility for listing thereon prior to the issuance thereof.
8 AMENDMENT AND TERMINATION
8.1 Board Action
The Board may at any time suspend, amend or terminate this
Plan, subject to, in the case of amendments, to such
amendments being pre-cleared with The Toronto Stock Exchange
provided that except as set forth in Section 6, the approval
of the holders of a majority of the Company's outstanding
voting shares, voting either in person or by proxy at a duly
held shareholders' meeting is necessary within 12 months
before or after the adoption by the Board for any amendment
which will:
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<PAGE>
(a) increase the number of shares that may be issued under this
Plan;
(b) change the designation of the participants or class of
participants eligible for participation in this Plan; or
(c) otherwise materially increase the benefits accruing to the
participants under this Plan.
Any amendment made to this Plan which would constitute a
"modification" to incentive stock options outstanding on the date of such
amendment, shall not be applicable to such outstanding incentive stock options,
but shall have prospective effect only, unless the Optionee agrees otherwise.
8.2 Automatic Termination
Unless sooner terminated by the Board, this Plan shall
terminate ten years from the earlier of:
(a) the date on which this Plan is adopted by the Board; or
(b) the date on which this Plan is approved by the shareholders of the
Company.
No option may be granted after such termination or during any suspension of this
Plan. The amendment or termination of this Plan shall not, without the consent
of the option holder, alter or impair any rights or obligations under any option
theretofore granted under this Plan.
9 EFFECTIVENESS OF THIS PLAN
This Plan shall become effective upon adoption by the Board so
long as it is approved by the holders of a majority of the Company's outstanding
voting shares at any time within 12 months before or after the adoption of this
Plan.
EMPLOYEE STOCK OPTION AGREEMENT
THIS AGREEMENT made the __ day of __, 2000.
BETWEEN:
SPECTRUM SIGNAL PROCESSING INC.
200-2700 Production Way
Burnaby, B.C. Canada V5A 4X1
(hereinafter called the "Company")
OF THE FIRST PART
AND:
----
c/o 200-2700 Production Way
Burnaby, B.C. Canada V5A 4X1
(hereinafter called the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. The Purchaser is an Employee as defined herein;
B. The Company wishes the Purchaser to continue as an Employee and to
continue to receive the benefit of his services.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of other good and
valuable consideration and the sum of One ($1.00) Dollar now paid by the
Purchaser to the Company (the receipt and sufficiency whereof is hereby
acknowledged), it is hereby agreed by and between the parties as follows:
1. In this Agreement, the following terms shall have the following meanings:
<PAGE>
(a) "Employee" means an employee of the Company or a subsidiary
thereof or an employee of a company under contract to provide
management services to the Company;
(b) "Exchange" means The Toronto Stock Exchange;
(c) "Expiry Date" means ___;
(d) "Insider" means a director or senior officer of the Company,
or a director or senior officer of a person that is itself an
insider or subsidiary of the Company, or a person whose
control or direct or indirect beneficial ownership, or a
combination of that control and ownership over securities of
the Company extends, not counting securities in respect of
which he is acting as an underwriter in the course of a
distribution, to securities carrying more than 10% of the
voting rights attached to all the Company's outstanding voting
securities;
(e) "Notice of Exercise" means a notice in writing addressed to
the Company at its address first recited, which notice shall
specify therein the number of Optioned Shares in respect of
which the Option is being exercised;
(f) "Option" means the irrevocable right and option to purchase,
from time to time, all, or any part of the Optioned Shares
granted to the Purchaser by the Company pursuant to paragraph
0 hereof;
(g) "Optioned Shares" means the common shares of the Company,
subject to the Option; and
(h) "Shares" means the common shares in the capital stock of the
Company.
2. The Company hereby grants to the Purchaser as an incentive and in
consideration of his services and not in lieu of salary or any other
compensation, subject to the terms and conditions hereinafter set forth, the
Option to purchase a total of __ (__) Optioned Shares at the price of __ (__)
per Optioned Share, to be granted on the dates listed below (the "Vesting
Dates"):
(a) __ Optioned Shares on __, 19__
(b) __ Optioned Shares on __, 19__
(c) __ Optioned Shares on __, 19__
3. The Option shall, at 5:00 o'clock p.m., Vancouver time, on the Expiry
Date, forthwith expire and terminate and be of no further force or effect
whatsoever.
-2-
<PAGE>
4. In the event of the death of the Purchaser on or prior to the Expiry
Date, the Option, or such part thereof as remains unexercised, may be exercised
by the personal representative of the Purchaser at any time prior to 5:00
o'clock p.m., Vancouver time, on the first anniversary of the date of death of
the Purchaser or prior to 5:00 o'clock p.m., Vancouver time, on the Expiry Date,
whichever is the earlier.
5. The Purchaser represents and warrants that he is an Employee. In the
event the Purchaser ceases to be an Employee prior to the Expiry Date, the
Option shall, at 5:00 o'clock p.m., Vancouver time, on the thirtieth day after
the date upon which the Purchaser ceases to be an Employee, terminate and be of
no further force or effect whatsoever.
6. In the event that the Purchaser ceases to be an Employee prior to any
Vesting Date, the Purchaser shall on the date on which he ceases to be an
Employee, be granted that number of Optioned Shares as is equal to the number of
Optioned Shares to which the Employee would have been entitled to on the next
Vesting Date, multiplied by the number of months following the last Vesting Date
that the Purchaser was an Employee, divided by twelve.
7. Subject to the provisions hereof, the Option shall be exercisable in
whole or in part (at any time and from time to time as aforesaid) by the
Purchaser or his personal representative giving a Notice of Exercise together
with payment (by cash or by certified cheque, made payable to the Company) in
full of the purchase price for the number of Optioned Shares specified in the
Notice of Exercise.
8. Upon the exercise of all or any part of the Option, the Company shall
forthwith cause the registrar and transfer agent of the Company to deliver to
the Purchaser or his personal representative within ten (10) days following
receipt by the Company of the Notice of Exercise a certificate in the name of
the Purchaser or his personal representative representing, in aggregate, the
number of Optioned Shares specified in the Notice of Exercise and in respect of
which the Company has received payment.
9. Nothing herein contained shall obligate the Purchaser to purchase any
Optioned Shares except those Optioned Shares in respect of which the Purchaser
shall have exercised his Option in the manner hereinbefore provided.
10. In the event of any subdivision, redivision or change of the Shares of
the Company at any time prior to the Expiry Date into a greater number of
Shares, the Company shall deliver at the time of any exercise thereafter of the
Option such additional number of Shares as would have resulted from such
subdivision, redivision or change if such exercise of the Option had been made
prior to the date of such subdivision, redivision or change.
-3-
<PAGE>
11. In the event of any consolidation or change of the Shares of the
Company at any time prior to the Expiry Date into a lesser number of Shares, the
number of Shares deliverable by the Company on any exercise thereafter of the
Option shall be reduced to such number of Shares as would have resulted from
such consolidation or change if such exercise of the Option had been made prior
to the date of such consolidation or change.
12. The Purchaser shall have no rights whatsoever as a shareholder in
respect of any of the Optioned Shares (including any right to receive dividends
or other distribution therefrom or thereon) except in respect of which the
Option has been properly exercised in accordance with paragraph 7 hereof.
13. Time shall be of the essence of this Agreement.
14. This Agreement shall enure to the benefit of and be binding upon the
Company, its successors and assigns, and the Purchaser and his personal
representative to the extent provided in paragraph 0 hereof.
15. Subject to paragraph 0, this Agreement shall not be transferable or
assignable by the Purchaser or his personal representative and the Option may be
exercised only by the Purchaser or his personal representative.
16. The granting of the Option and the terms and conditions hereof shall be
subject to the approval of the Exchange and, if the Purchaser is an Insider, is
further subject to the approval of the shareholders of the Company prior to the
exercise of the Option.
17. If at any time during the continuance of this Agreement, the parties
hereto shall deem it necessary or expedient to make any alteration or addition
to this Agreement, they may do so by means of a written agreement between them
which shall be supplemental hereto and form part hereof and which shall be
subject to the approval of the Exchange and, if the Purchaser is an Insider,
shall be subject to the approval of the shareholders of the Company.
18. Wherever the plural or masculine are used throughout this Agreement,
the same shall be construed as meaning singular or feminine or neuter or the
body politic or corporate where the context of the parties thereto require.
19. This Agreement may be executed in several parts in the same form and
such parts as so executed shall together constitute one original agreement, and
such parts, if more than one, shall be read together and construed as if all the
signing parties hereto had executed one copy of this Agreement.
IN WITNESS WHEREOF the Company has hereunto caused its corporate seal to be
affixed in the presence of its duly authorized officers in that behalf and the
Purchaser has hereunto set his hand and seal as of the day and year first above
written.
-4-
<PAGE>
THE COMMON SEAL OF SPECTRUM SIGNAL PROCESSING INC. was )
hereunto affixed in the presence of: )
)
- ------------------------------------ )
Authorized Signatory ) C/S
)
- ------------------------------------ )
Authorized Signatory )
)
)
SIGNED, SEALED AND DELIVERED by __ in the presence of: )
)
)
- ------------------------------------ )
Name )
- ------------------------------------ )
Address ) ---------------
- ------------------------------------ ) ____
)
- ------------------------------------ )
Occupation )
)
)
-5-
EMPLOYEE STOCK PURCHASE PLAN
Spectrum Signal Processing Inc.
One Spectrum Court
200-2700 Production Way
Burnaby, British Columbia
V5A 4X1
(the "Company")
Date of Adoption - November 1, 1999
The Company hereby establishes an employee share purchase plan (the "Plan") to
be known as the Spectrum Signal Processing Inc. Employee Share Purchase Plan and
to be effective as of November 1, January 13, 2000.
1. PURPOSE OF THE PLAN
1.1 The purposes of the Plan are to:
(a) facilitate the purchase of the Company's shares by employees;
(b) continue the Company's efforts to share Company success with
its employees; and
(c) improve the Company's ability to retain a skilled workforce.
1.2 It is the intention of the Company to qualify the Plan as an "Employee
Stock Purchase Plan" under Section 423 of the Code, and as a Tax Credit
Eligible program under the Act.
2. DEFINITIONS
2.1 In this Plan, the following terms have the following meanings:
(a) "Act" means the British Columbia Employee Investment Act, as
amended from time to time;
(b) "Administrator" means the person designated under the Act to
perform the duties of the administrator under the Act;
(c) "Affiliated Corporation" means an "affiliate" of the Company
as defined in the Act that is also a "subsidiary" or "parent"
corporation of the Company within the meaning of Section 424
of the Code;
(d) "Board" means the board of directors of the Company;
(e) "Business Day" means a day other than a Saturday, Sunday or
statutory holiday on which the Burnaby office of the Company
is open for business;
(f) "Code" means the United States Internal Revenue Code of 1986,
as amended from time to time.
1
<PAGE>
(g) "Commitment Date" will be the first day of the Offering
Period;
(h) "Commitment Form" means the form of commitment for a monthly
dollar contribution attached as Appendix D;
(i) "Constitution" means the memorandum and articles of the
Company, a certified true copy of which (as of the date of
adoption of the Plan) is attached as Appendix F, as amended
from time to time;
(j) "Disclosure Document" means a document delivered to Eligible
Employees in connection with obtaining commitments to the
purchase of Shares under the Plan, a general form of which is
attached as Appendix C;
(k) "Eligible Employee" means:
(i) all Tax Credit Eligible Employees;
(ii) all other employees of the Company and any
Participating Employers.
Notwithstanding the foregoing, in no event may any individual resident
in the United States qualify as an Eligible Employee if such individual is (i) a
"five percent shareholder" (within the meaning of Section 423(b)(3) of the Code)
of the Company or any "subsidiary" or "parent" corporation of the Company, or
(ii) not employed by the Company or a Participating Employer on a customary
basis for at least twenty hours per week;
(l) "Employee Contribution" means funds contributed by a
Participating Employee for the purpose of purchasing Shares;
(m) "Employee Shareholder" means at any relevant time:
(i) a Shareholder who continues to be an
employee of the Company or any Affiliated
Corporation; or
(ii) a Shareholder which is a Trust where the
annuitant or beneficiary of such Shareholder
continues to be an employee of the Company
or any Affiliated Corporation;
(n) "Financial Statements" means:
(i) the financial statements of the Company
filed with the Administrator in accordance
to section 2(1)(a) of the Act; or
(ii) if more recent financial statements of the
Company have subsequently been delivered to
Eligible Employees by the Company, the most
recent of those financial statements;
2
<PAGE>
(o) "Market Price" means as of any date, the closing price for the
Shares on The Toronto Stock Exchange less a 15% discount, or,
if no trades in the Company's shares took place on such date,
the closing price for the next preceding date of which such
trades took place, less a 15% discount;
(p) "Offering Period" means in respect of any Plan Year, the six
month periods commencing as at November 1 and May 1 of such
Plan Year with the first such period commencing November 1,
1999;
(q) "Plan" means this Employee Stock Purchase Plan dated for
reference November 1, 1999, including all appendices attached
hereto, as supplemented and amended from time to time in
accordance with the provisions hereof;
(r) "Participating Employee" means an Eligible Employee who has
elected to commit to the purchase of Shares under the Plan;
(s) "Participating Employer" means any Affiliated Corporation
designated by the Board as a "participating employer" from
time to time;
(t) "Plan Year" means a twelve-month period commencing on November
1 of each year and ending on October 31 of that year;
(u) "Purchase Price" means, in respect of any Offering Period, the
lesser of the Market Price calculated as at the beginning of
the Offering Period and the Market Price calculated as at the
end of the Offering Period;
(v) "Regulations" means the regulations enacted pursuant to the
Act in force from time to time;
(w) "Report Period" is the annual period to be covered by reports
to Employee Shareholders described in Appendix A;
(x) "Shares" means common shares without par value of the Company;
(y) "Share Allotment" means the calculation of the number of
shares to be issued each Offering Period pursuant to the Plan
as detailed in Section 3.4;
(z) "Share Certificate" means a share certificate or an
appropriate equivalent representing Shares purchased under the
Plan;
(aa) "Share Entitlement" means, in respect of any Eligible
Employee, that portion of the Share Allotment in respect of
any Offering Period as determined in accordance with Section
8.1;
(bb) "Shareholder" means, at any relevant time:
(i) a person who has committed to the purchase
of Shares under the Plan (whether or not the
Shares have been paid for in full), if at
such time the person continues to hold any
such Shares (or if the Shares have not been
3
<PAGE>
issued at that time, continues to be
entitled to receive the Shares when issued);
or
(ii) a Trust which acquired Shares pursuant to
Article 17 hereof, if at such time the Trust
continues to hold any such Shares;
(cc) "Tax Credit Eligible Employee" means an individual who, at the
time of purchasing Shares under the Plan, is:
(i) resident in British Columbia,
(ii) employed by the Company (or a predecessor or
an Affiliate Corporation of the Company) on
a continuing basis for an average of at
least twenty hours a week, and
(iii) is not a major shareholder (as defined in
the Act) of the Company;
(dd) "Treasury Purchase" means the purchase of Shares from the
Company at the Market Price;
(ee) "Trust" means a trust governed by a registered retirement
savings plan under the Income Tax Act (Canada) for which an
Eligible Employee is the annuitant; and
(ff) "Trustee" means the trust company selected by the Board,
subject to review and substitution from time to time at the
Board's discretion, to administer the Plan.
2.2 In this Plan, words (including defined terms) importing the singular
number include the plural and vice versa and words importing the
masculine gender include the feminine and neuter genders and
capitalized terms not otherwise defined herein shall have the meaning
given to them in the Act.
3. ADOPTION, COMMENCEMENT AND TERMINATION OF THE PLAN
3.1 The Company hereby adopts the Plan as its employee stock purchase plan
for the benefit of Eligible Employees.
3.2 The Plan will become effective November 1, 1999.
3.3 The Plan may be terminated by the Board at the conclusion of a Plan
Year provided that:
(a) all Offering Periods have closed,
(b) termination of the Plan will not affect Employee Shareholder
Shares which have not been delivered or are not yet
deliverable under the terms of the Escrow Agreement, and
(c) the Company receives the Administrator's approval to terminate
the Plan.
3.4 The aggregate number of Shares that may be issued under this Plan may
not exceed 250,000 Shares in total or 50,000 Shares in any Offering
Period provided that any Shares unsubscribed for in an
4
<PAGE>
Offering Period will not be available for issuance in the next Offering
Period. The number and class of Shares which may be issued under the
Plan, as well as the number and class of Shares and the price per share
covered by each right outstanding under the Plan which has not yet been
exercised, shall be adjusted proportionately or as otherwise
appropriate to reflect any increase or decrease in the number of issued
Shares resulting from a split-up or consolidation of shares or any like
capital adjustment, or the payment of a stock dividend, and/or to
reflect a change in the character or class of shares covered by the
Plan arising from a readjustment or recapitalization; provided that any
adjustment to the class of Shares issuable under the Plan is subject to
the consent of the Administrator.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Company represents and warrants to each Eligible Employee that:
(a) the Company is validly existing and in good standing under the
laws pursuant to which it was incorporated;
(b) the Company is eligible to register an employee stock purchase
plan under the Act;
(c) the Company is not party to any agreement which prohibits or
restricts it from adopting the Plan, completing any of the
transactions contemplated hereunder and complying with the
terms hereof;
(d) all necessary corporate action has been taken to adopt the
Plan as a valid and binding obligation of the Company;
(e) as of the date of adoption of the Plan, the authorized share
capital of the Company was as described in Appendix C;
(f) The Shares are of a class of shares of the Company that:
(i) Carry voting rights under all circumstances;
(ii) Are not directly restricted in their right
to share in the profits of the Company or in
the division of the Company's assets on
dissolution or winding up; and
(iii) Do not have any rights and restrictions
prohibited by the Regulations;
(g) the Shares to be issued under the Plan will be from the
treasury of the Company and will not have been previously
issued;
(h) the price per share at which Shares will be purchased through
Treasury Purchases by Eligible Employees will be the Purchase
Price in respect of the Offering Period for which the Shares
are purchased;
5
<PAGE>
(i) the Financial Statements were prepared in accordance with
generally accepted accounting principles, present fairly the
financial position and condition of the Company as at the date
thereof and do not omit to state any material liability or
financial obligation of the Company as of the date thereof;
(j) since the date of the Financial Statements there has been no
material adverse change in the financial position or condition
of the Company, except as disclosed in the Disclosure
Document;
(k) the Disclosure Document discloses all outstanding options,
warrants and conversion rights granted by the Company in
respect of its securities and contains no misrepresentations;
(l) the Company is in good standing with NASDAQ and with the
Toronto Stock Exchange and will advise the Administrator
within 30 days of the discontinuance of such listing; and
(m) the representations and warranties set out in paragraphs (a)
to (l) above will be true and correct on the Commitment Date.
4.2 Each Eligible Employee will be deemed to have relied on the
representations and warranties contained in paragraphs 4.1(a) to 4.1(m)
above in electing to commit to the purchase of shares under the Plan.
5. OFFERING PERIODS AND ELIGIBILITY TO SUBSCRIBE FOR SHARES
5.1 The Company hereby offers Eligible Employees the right to participate
in the Plan on the terms and conditions set out in this Plan. Should
the aggregate subscriptions for Shares by Eligible Employees in any
Offering Period exceed the Share Allotment for such Offering Period
each Participating Employee will be entitled to receive such percentage
of the Share Allotment for the Offering Period as is equal to the
percentage of the total number of shares subscribed for in such
Offering Period subscribed for by such Participating Employee provided
that the Trustee shall then return to Participating Employees all their
Employee Contributions not used in the purchase of Shares.
5.2 Each person who is an Eligible Employee at the commencement of an
Offering Period will be eligible to commit to the purchase of a dollar
value of Shares under the Plan during such Offering Period.
5.3 The Company will notify each Eligible Employee of his or her
eligibility to purchase Shares under the Plan.
6. SUBSCRIPTION ENTITLEMENT
6.1 During an Offering Period each Eligible Employee has an equal
entitlement opportunity to commit to the purchase of Shares by
delivering a completed Commitment Form that designates the amount of
his or her Employee Contribution for the coming Offering Period. This
shall be subject to a maximum contribution for Eligible Employees of
Cdn$12,500 per Plan Year provided that in circumstances where the total
amount of designated Employee Contributions (the "Total Designated
Contributions") in respect of any Offering Period is in excess of an
amount equal to the Market Price
6
<PAGE>
as at the beginning of the Offering Period multiplied by 50,000 Shares
(the "Aggregate Market Price") each Participating Employee's Employee
Contribution will be decreased by a percentage equal to the figure
arrived at by expressing the formula 1-(Total Designated
Contributions/Aggregate Market Price) as a percentage.
6.2 The Company will deliver a Disclosure Document to an Eligible Employee
before he or she enters into an agreement to commit to the purchase of
Shares under the Plan.
7. CONTRIBUTIONS
7.1 Employee Contributions will be deducted from Participating Employees'
salary on a bi-monthly basis and delivered by the Company to the
Trustee within five Business Days of the end of each month.
7.2 Alternatively, Participating Employees may elect to deliver their
Employee Contributions in respect of any Offering Period in full to the
Trustee by way of cash, certified cheque or money order provided that
such delivery is effected within five Business Days of the commencement
of the Offering Period.
8. SHARE ENTITLEMENT
8.1 A Participating Employee's Share Entitlement in respect of any Offering
Period will be determined at the beginning of an Offering Period by
dividing the Employee Contribution for each Participating Employee
(adjusted in accordance with section 6.1) by the Market Price at the
beginning of the Offering Period.
8.2 The Company will, within five Business Days of the end of any Offering
Period, notify the Trustee and all Participating Employees of the
Purchase Price for such Offering Period, following which a
Participating Employee may, by notice in writing, delivered to the
Trustee within five Business Days following receipt of such notice,
notify the Trustee of their election to rollover their Employee
Contributions to the next Offering Period, provided that, in respect of
any one Participating Employee, only one such rollover is available in
respect of any particular Offering Period's Employee Contributions and
in no event will such rollover increase an Employee Contribution beyond
the maximum allowable for a Plan Year.
8.3 The Trustee will hold all Employee Contributions for each Offering
Period in one pool, will apply such Employee Contributions to the
purchase of the aggregate Share Entitlement for all Participating
Employees for such Offering Period and will refund any unused Employee
Contributions to the Participating Employees pro rata in accordance
with their Employee Contributions, subject to the right of a
Participating Employee to elect to have such amount applied to the next
Offering Period provided that in no event will such application
increase an Employee Contribution beyond the maximum allowable for a
Plan Year.
8.4 All interest earned on Funds held by the Trustee from time to time will
accrue to the benefit of the Company and will be paid to the Company by
the Trustee at the end of each Offering Period.
9. ISSUANCE AND HOLDING OF SHARE CERTIFICATES
9.1 Upon receipt of the Employee Contributions and the aggregate Share
Entitlement for all Participating Employees from the Trustee, the
Company will issue Share Certificates representing those Shares either
in the name of the Eligible Employee or, if the Shares are to be held
in Trust for the benefit of the Eligible Employee, in the name of the
trustee of the Trust. Such Share Certificates will be delivered within
15 Business Days of the end of each Offering Period to the Trustee in
respect of Tax Credit Eligible Employees and otherwise to the Eligible
Employees.
7
<PAGE>
9.2 In accordance with section 4(1)(d) of the Act, each Share Certificate
representing Shares acquired by a Tax Credit Eligible Employee will be
held in the custody of an authorized depository on the terms set forth
in Appendix E for a period of three years from the date of the Share
Certificate.
9.3 Within 30 days of issuance of a Share Certificate under paragraph 9.1,
the Trustee will deliver to a Tax Credit Eligible Employee an
investment confirmation setting out the information required by the Act
and the Regulations.
10. WITHDRAWAL FROM PARTICIPATION
10.1 A Participating Employee may withdraw from participation in the
purchase of shares under the Plan by delivering notice of such to the
Company and the Trustee on or before the 10th Business Day prior to the
end of any month in which case no further Employee Contributions will
be deducted from such Participating Employee for such Offering Period.
Any Employee Contributions already deducted or otherwise contributed
will, subject to section 5.1, be applied to the purchase of Shares
under the Plan.
10.2 Upon the issue of notice of termination of employment with the Company
or a Participating Employer, an employee will be deemed to have
withdrawn from participation in the purchase of shares under the Plan.
The Company will deliver such notice to the Trustee.
10.3 A notice of withdrawal pursuant to paragraph 10.1 and a notice of
termination pursuant to paragraph 10.2 will be effective upon delivery
of such to the Trustee.
11. RELATIONSHIP WITH EMPLOYMENT
Notwithstanding any provision of any other provision in this Plan whatsoever:
11.1 The rights and obligations of any individual under the terms of his
office or employment with the Company or any Affiliated Corporation
shall not be affected by his participation in the Plan or any right
which he may have to participate in the Plan, and an individual who
participates in the Plan shall waive all and any rights to compensation
or damages in consequence of the termination of his office or
employment with any such company for any reasons whatsoever insofar as
those rights arise or may arise from his ceasing to have rights under
or be entitled to acquire any shares under the Plan as a result of such
termination, or from the loss or diminution in value of such rights or
entitlements (whether or not such termination amounts to wrongful or
unfair dismissal).
11.2 The participation in the Plan by a Participating Employee does not form
part of the Participating Employee's entitlement to remuneration or
benefits pursuant to his contract of employment nor does the existence
of a contract of employment between any persons and the Company or any
Affiliated Company give such person any right or entitlement to
participate in the Plan whether subject to any conditions or at all.
12. TRANSFERABILITY
12.1 The rights of a Participating Employee under this Plan are not
assignable or transferable and may only be exercised during the
Participating Employee's lifetime by the Participating Employee.
8
<PAGE>
13. APPLICATION FOR TAX CREDIT CERTIFICATES
13.1 If the Company has received from a Tax Credit Eligible Employee who
subscribed for Shares under the Plan:
(a) all required information, and
(b) payment in full of the Employee Contribution for the Shares,
then the Company will, on behalf of such person, apply to the
Administrator in accordance with the Act and Regulations for a tax
credit certificate in respect of the purchase of the Shares.
14. USE OF FUNDS
14.1 Subject to paragraph 14.2, the Company will not use any funds received
from the issue of Shares under the Plan for any purpose prohibited by
the Act or the Regulations.
14.2 The Company may use funds received from the issue of Shares under the
Plan for one or more of the uses specified in section 6(a) of the Act
if such uses are listed and described in detail in Appendix B.
15. REPORTS TO EMPLOYEE SHAREHOLDERS
15.1 To allow Employee Shareholders to monitor their investment in the
Company, the Company will, within 140 days of the end of each Report
Period, provide to each Employee Shareholder:
(a) disclosure with respect to major decisions made by the Company
during the Report Period which materially affected the Market
Price; and, if applicable,
(b) a summary (including price information) of all new shares
issued and options, warrants or conversion rights granted by
the Company during the Report Period; and
(c) the most recent Market Price.
15.2 Upon request by a Shareholder, the Company will provide the Shareholder
with access to or copies of the Plan and Constitution.
16. OTHER COVENANTS OF THE COMPANY
16.1 The Company covenants with the Eligible Employees that:
(a) the Company will comply at all times with the Plan, the Act
and the Regulations;
9
<PAGE>
(b) the Company will not enter into any agreement which would
prohibit or restrict it from completing any of the
transactions contemplated hereunder or complying with the
terms hereof;
(c) in any 2-year period, the amount of equity capital raised
under the Plan on which tax credits are payable under the Act
will not exceed $5 million or such other amount as may be
permitted by the Act from time to time; and
(d) all required corporate action will be taken to duly allot and
issue Shares purchased under this Plan from the treasury of
the Company and, upon receipt by the Company of payment in
full for Shares subscribed for hereunder, the Shares will be
validly issued as fully-paid and non- assessable shares in the
capital of the Company.
17. PURCHASE BY OR TRANSFER TO TRUSTS
17.1 Notwithstanding any other provision of this Plan, an Eligible Employee
may:
(a) purchase Shares under the Plan through a Trust; and
(b) transfer Shares purchased under the Plan to a Trust.
17.2 Where an Eligible Employee purchases Shares under the Plan through a
Trust, the provisions of the Plan shall apply to the purchase by the
Trust as if the purchase was being made by the Eligible Employee.
18. TAX LIABILITY
18.1 By electing to participate in the Plan a Participating Employee shall
agree to indemnify:
(a) The Participating Employee's employer; and
(b) any other person who is or becomes liable to account for tax,
social security contributions or any other regulatory or
statutory contributions on behalf of that Participating
Employee
against any amount, of or representing, tax (including without
limitation, income tax and PAYE), social security contributions or any
other regulatory or statutory contributions for which the employer (or
any such other person) is liable to account in respect or in
consequence of the acquisition of sale of any Shares for the benefit of
such Participating Employee and which (as between the Participating
Employee and the employer or such other person) is the liability of the
Participating Employee but which the employer or such other person
cannot otherwise lawfully recover from the Participating Employee
(whether by way of deduction from payroll or otherwise). For the
avoidance of doubt, the
10
<PAGE>
Participating Employee shall authorize his employer to make such
deductions from his salary as may be necessary to meet such liability.
18.2 The Company shall have the right to withhold any Share Certificates to
be issued to a Participating Employee pursuant to this Plan, to the
extent permitted by applicable law, until the Participating Employee
has agreed to such arrangements for giving effect to the indemnity in
Section 18.1 (which, if appropriate may include the giving of authority
by the Participating Employee to the Company to arrange, or the
Participating Employer on the Participating Employee's behalf for the
sale of some or all of the Shares acquired pursuant to the Plan in
order to raise such funds as the Company considers sufficient to meet
such liability).
19. AMENDMENTS
19.1 Subject to paragraphs 19.2 and 19.3, no alteration will be made to the
Plan without prior approval of the Administrator, The Toronto Stock
Exchange, if applicable, and a majority of Employee Shareholders.
19.2 With the approval of the Administrator and The Toronto Stock Exchange,
if applicable, but without the approval of the Employee Shareholders,
the Company may amend the offering parameters set out in Appendix A and
the Plan to:
(a) provide for the raising of equity capital in addition to that
specified therein;
(b) specify the Offering Periods within which the equity capital
may be raised; and
(c) increase the total number of Shares or the number of Shares in
any Offering Period that may be issued under this Plan.
19.3 Notwithstanding any other provision of this Plan, if the Shares cease
to be listed on a recognized Canadian public stock exchange, or on
NASDAQ the Company and the Shareholders will forthwith appoint a single
arbitrator in accordance with the provisions of the Commercial
Arbitration Act. The arbitrator's mandate will be to forthwith specify
all such amendments to the Plan as are necessary for the Plan to comply
with the requirements of the Act and Regulations, including (but
without limiting the generality of the foregoing):
(a) provision of a new method for determining Market Price;
(b) provision of redemption/repurchase rights in accordance with
sections 4(1)(h),(i) and (j) of the Act;
(c) inclusion of price and dilution protections acceptable to the
Administrator.
The amendments specified by the arbitrator will be binding on the
Company and all Shareholders and implemented forthwith.
20. GENERAL
20.1 The Plan will be construed and enforced in accordance with the laws of
British Columbia.
20.2 Time will be of the essence in respect of this Plan.
20.3 The Plan will be binding upon the Company, its successors and assigns
and will enure to the benefit of each Eligible Employee and Shareholder
and their respective personal representatives and assignees.
11
<PAGE>
IN WITNESS WHEREOF the Company has adopted the Plan under its seal as
of the day and year first written above.
The common seal of the Company )
was hereto affixed in the presence of: )
)
) c/s
- --------------------------------------------)
Authorized Signatory )
)
)
- --------------------------------------------)
Authorized Signatory )
12
<PAGE>
Appendix A
Plan Data
<TABLE>
<CAPTION>
Share Offering Period Number of Shares to Price Per Share Total Proceeds
be Offered
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
November 1, 1999 to April 30, 2000 50,000 (Note 1) $135,000 (2)
- --------------------------------------------------------------------------------------------------------------------
May 1, 2000 to October 31, 2000 50,000 Note 1 $250,000 (2)
- --------------------------------------------------------------------------------------------------------------------
November 1, 2000 to April 30, 2001 50,000 Note 1 $250,000 (2)
- --------------------------------------------------------------------------------------------------------------------
May 1, 2000 to October 31, 2001 50,000 Note 1 $250,000 (2)
- --------------------------------------------------------------------------------------------------------------------
November 1, 2001 to April 30, 2002 50,000 Note 1 $250,000 (2)
====================================================================================================================
</TABLE>
Notes:
1. The Price Per Share is the lesser of the closing price of the
Company's shares on the Toronto Stock Exchange at the
beginning and the end of the Share Offering Period less 15%.
2. This figure is an approximation. The Total actual Proceeds
will be determined by multiplying the Price Per Share X the
Number of Shares subscribed for.
The Report Period is the Company's fiscal year (January 1 to December 31).
Name or Designation of Class of Shares Offered under the Plan:
Common shares with no par value.
Estimated Number of Eligible Employees Covered by the Plan: 142
<PAGE>
Appendix B
Use of Funds
Funds raised will be used for general corporate purposes. In the
foreseeable future the Company does not intend to use any of the funds
raised from the sale of Shares under the Plan for any of the purposes
described in section 6(a) of the Act.
<PAGE>
Appendix C.
General Form of Disclosure Document
<PAGE>
Disclosure Document
Eligible employees (and/or their professional advisors) should carefully review
the information contained in this document before making an investment decision.
Spectrum Signal Processing Inc.
One Spectrum Court
2700 Production Way, Suite 200
Burnaby, BC
V5A 4X1
(the "Company")
<TABLE>
<CAPTION>
Share Offering Period Maximum Individual Estimated Total Estimated Share
$ Contribution Proceeds Allotment
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
November 1, 1999 to April 30, 2000 $6,250 $135,000 50,000
======================================================================================================
</TABLE>
PURPOSE OF THE PLAN
The Company adopted its employee share purchase plan (the "Plan") on
November 1, 1999. The purpose of the Plan is to:
o facilitate the purchase of the Company's shares by employees at
prevailing Market Prices;
o continue the Company's efforts to share Company success with all staff;
o reward participants on the success of the whole Company as a complement
to the branch oriented profit-sharing plan;
o improve the Company's ability to retain a skilled work force; and
o encourage teamwork and cooperation among all members and units of the
Company.
The Plan was registered under the Employee Investment Act of British Columbia so
that Tax Credit Eligible Employees could receive a 20% employee investment tax
credit on share purchases under the Plan. See the section headed "Summary of EIA
Tax Assistance" on page 3 for details. The offering and transfer of shares
issued under the Plan is governed by the Employee Investment Act.
ELIGIBLE EMPLOYEES
Employees of the Company or its affiliates who fall into one of the following
two groups are eligible to purchase shares under the Plan as follows:
1
<PAGE>
21. "Tax Credit Eligible Employees" are those employees who, at the time of
subscribing for shares are:
(a) British Columbia residents,
(b) employed by the Company, or a predecessor or an affiliate of
the Company, on a continuing basis for an average of at least
20 hours each week, and
(Note: employment on a "continuing basis" includes part time
employment for not less than three months each year for two or
more consecutive years);
(c) not already "major shareholders" of the Company.
(A "major shareholder" basically means a person who, together
with his or her relatives, trusts or companies, holds 10% or
more of the shares of the Company. Employees who think they
might be a "major shareholder" should check the precise legal
definition in section 1 of the Employee Investment Act to be
sure).
2. "Other Eligible Employees" are employees who for one reason or
another do not qualify as Tax Credit Eligible Employees but
have been defined by the Company's Board as Eligible Employees
for the purpose of participating under the Plan.
An employee who is either a Tax Credit Eligible Employee or is an Other Eligible
Employee is referred to in this disclosure document as an "Eligible Employee".
See the Section headed "Summary of EIA Tax Assistance" below for details
concerning the investment tax credits available to Tax Credit Eligible
Employees.
SUBSCRIPTION ENTITLEMENT
The Plan allows the Company to offer Eligible Employees the right to participate
in the Plan from time to time. The size and period of the current share offering
to Eligible Employees are shown on the face page. The characteristics of the
shares offered are described in the section headed "Share and Loan Capital"
below.
The Plan provides that each Eligible Employee has an equal right to commit to
the purchase of shares.
The maximum permitted participation by an employee in the offering is $6,250.
Eligible Employees can commit to the purchase of shares by committing bi-monthly
payroll deductions up to this maximum. Eligible Employees who want to commit to
the purchase of shares in this Offering Period must complete the Commitment Form
accompanying this Disclosure Document and return it to Lori Whieldon.
Share Price Valuation
The Plan uses the Market Price as the share price, which is defined as the
lesser of the trading price for the Shares on the Toronto Stock Exchange on the
trading days closest to the beginning and the end of an Offering Period less
15%.
A copy of the Company's most recent annual financial statements is attached as
Appendix 1 to this disclosure document.
2
<PAGE>
Indemnity
The Plan provides that a Participating Employee shall indemnify the Company or
any other party who becomes liable to account for tax, social security
contributions or any other contributions which are the liability of the
Participating Employee.
Right to Review Plan
The Plan itself is a detailed legal document. Any Eligible Employee who wishes
to examine the Plan may obtain a copy from the Company upon request.
3
<PAGE>
SUMMARY OF EIA TAX ASSISTANCE
(Tax Credits are only available to those employees who meet the criteria set for
Tax Credit Eligible Employees.)
The Plan is registered under the Employee Investment Act of British Columbia
(referred to from this point forward as the "EIA"). The Province enacted the EIA
to encourage employee investment for the purposes of job creation, job
protection and employee participation in corporate ownership. The EIA encourages
employee investment by providing for employee investment tax credits to be
issued to Tax Credit Eligible Employees who purchase shares under registered
employee share ownership plans.
A summary of the key characteristics of the tax credit is set out below:
the credit is equal to 20% of the share subscription proceeds received by the
Company from the Tax Credit Eligible Employee.
the maximum credit is $2,000 for a calendar year (per person) ( = $10,000 of
investment per year).
lifetime maximum of $10,000 in credits (= $50,000 of investment).
credit towards British Columbia income tax otherwise payable.
unused credits cannot be carried forward or back or be refunded in cash.
if a Share purchase under the Plan is made during the first 60 days of a
calendar year, the Tax Credit Eligible Employee may claim the tax credit for
that calendar year or the previous calendar year or allocate the Shares
purchased between both years.
the value of the tax credit will not be included in the Tax Credit Eligible
Employee's income for tax purposes or reduce the adjusted cost base of the
shares acquired.
the tax credit is only available to the first purchaser of the Shares.
tax credits will be reduced if an employee has disposed of any shares of the
Company within two years of the subscription.
The Company will apply to the Province for tax credit certificates on behalf of
Tax Credit Eligible Employees. The tax credit certificate may then be claimed on
and filed with a Tax Credit Eligible Employee's income tax return.
An employee investment tax credit must be repaid to the Province if a Tax Credit
Eligible Employee sells Shares purchased under the Plan within three years of
buying them. The EIA seeks to encourage longer term, committed investment.
Therefore, tax assistance is withdrawn in the case of investments, which prove
to be short term. The buyer of the Shares is also jointly and severally liable
with the seller to repay the credits. The EIA, however, does not require
repayment of the tax credit if the sale or transfer of the Shares is made as a
result of the Tax Credit Eligible Employee's permanent disability, bankruptcy,
or death, and in some cases involuntary loss of employment. Additionally, no
repayment is necessary if the sale was consequent upon the permanent retirement
of the Tax Credit Eligible Employee, provided the Shares were held for at least
two years. After expiry of the three-year period, the Shares may be sold without
repayment of the tax credit.
4
<PAGE>
To enable monitoring of share transactions, the EIA requires that the
certificates representing Shares issued under the Plan to Tax Credit Eligible
Employees be held in the custody of an authorized depository during the three
year hold period. Royal Trust will be the authorized depository. Purchasers will
receive an investment confirmation within thirty days of paying for the Shares.
The share certificates (or equivalents) will be released to Tax Credit Eligible
Employees after expiry of the three year period.
The extent of the Province's involvement in the Plan has been to register it
under the EIA to allow Tax Credit Eligible Employees to receive the tax
assistance described above. The province has not reviewed the investment merit
of the Shares being offered by the Company and in no way guarantees an
investment in the Shares. Assessment of investment merit, adequacy of the Plan,
and due diligence review is entirely the responsibility of the investor.
If the legislation governing the Employee Share Ownership program is amended or
repealed, any approval provided by the Ministry in connection with the Company's
Plan, including any approval relating to payment of Tax Credits to Tax Credit
Eligible Employees who purchased Shares under the Plan, could be subject to
variation or cancellation by the Administrator.
Cost Sharing for Employee Groups
The EIA allows for Provincial cost sharing assistance to employee groups that
obtain independent professional advice relating to the negotiation, evaluation
and implementation of a registered employee share ownership plan. Reimbursement
of 50% of eligible costs up to $5,000 may be applied for. For more information
about cost sharing for employee groups, contact the Business Equity Branch of
the Ministry of Small Business, Tourism and Culture at toll free 1-800-665-5457.
Share and Loan Capital
Share Capital
The authorized share capital of the Company consists of:
(i) 50,000,000 common shares without par value, of which 10,393,954 shares
are issued and outstanding.
Common Shares
The holders of common shares are entitled to one vote for each share held at all
meetings of shareholders of the Company (other than special class meetings at
which only holders of another class of shares are entitled to vote) and, subject
to the rights attached to the preferred shares, are entitled to receive, pro
rata with all other holders of common shares, such dividends as may be declared
by the directors of the Company on the common shares and the remaining assets of
the Company in the event of its liquidation, dissolution or winding-up. This is
the class of share being offered to Eligible Employees under the Plan.
5
<PAGE>
Outstanding Options
The Company has granted the following rights to acquire common shares:
Number of Shares Exercise Prices Expiry Dates
- --------------------------------------------------------------------------------
Incentive Stock Option 1,825,364 $4.50 -- $7.50 up to 2009
================================================================================
Use of Proceeds
The net proceeds of the offering will be used by the company for general
corporate purposes.
Prospectus Exemption
The issuance of securities for the Company is subject to the Securities Act
(British Columbia) (the Securities Act) which normally requires a prospectus to
be prepared and delivered to the purchaser. Sections 42(2)(10) and 74(2)(9) of
the Securities Act provide a registration and prospectus exemption,
respectively, where the purchaser is an Eligible Employee, so long as the
purchaser is not induced to purchase securities by the expectation of employment
or continued employment.
Shareholder Communication
Under the Plan, the Company has committed to provide the following information
to its employee shareholders within 140 days of the end of each fiscal year:
(i) disclosure with respect to major decisions made by the Company
during the Report Period which materially affected the Market
Price; if applicable,
(ii) a summary (including price information) of all new shares
issued, and options, warrants or conversion rights granted by
the Company during the Report Period; and
(iii) the most recent Market Price of the shares.
The Company also intends to meet with the employees on a regular basis to review
results and solicit suggestions on improving the Company's performance.
Subscribers will receive all information sent to public shareholders.
6
<PAGE>
Board of Directors
The Company's constitution provides that the Board of Directors of the Company
has authority over management of the Company. The Board of Directors is elected
each year by the shareholders at the Company's annual general meeting. There are
seven positions on the Board presently filled by the following persons:
<TABLE>
<CAPTION>
===================================================================================================================
Name, Country of Ordinary Principal Occupation Approx. No. of Date on which the
Residence and Position Held or Employment and, if Voting Shares Nominee became a
with the Company not an Elected Beneficially Director of the
Director, Occupation Owned, Company
During the Past Five Directly or
Years Indirectly, or
Controlled or
Directed
===================================================================================================================
<S> <C> <C> <C>
BARRY JINKS(1)(2) Businessman 26,428 July 27, 1990
Canada
DIRECTOR
- -------------------------------------------------------------------------------------------------------------------
KENNETH A. SPENCER Chair of the Board of 10,000 November 3, 1997
Canada the Company
CHAIR OF THE BOARD and
DIRECTOR
- -------------------------------------------------------------------------------------------------------------------
PASCAL SPOTHELFER Businessman April 21, 1999
- -------------------------------------------------------------------------------------------------------------------
ANDREW HARRIES V.P. Marketing for April 21, 1999
Sierra Wireless, Inc.
- -------------------------------------------------------------------------------------------------------------------
JOHN E. BRENNAN President and Director 64,000 December 14, 1995
United States of Activated
DIRECTOR Communications Inc.
- -------------------------------------------------------------------------------------------------------------------
SAMUEL ZNAIMER(1)(3) Senior Vice-President 4,000 July 27, 1990
Canada of Ventures West
DIRECTOR Capital Ltd.
===================================================================================================================
(1) Member of Audit Committee
(2) Member of Compensation Committee
(3) Member of Acquisition Committee
===================================================================================================================
</TABLE>
7
<PAGE>
Principal Shareholders
The following persons, directly or indirectly, hold more than 20% of the
Company's outstanding voting securities:
None.
Adverse Material Changes
There have been no adverse material changes in the financial position of the
Company that has occurred since the date of the financial statements contained
in Appendix 1.
Recent Information Releases
The Company is listed on the Toronto Stock Exchange and the NASDAQ. Copies of
press releases and financial information recently filed on public record are
contained in Appendix 2 to this Disclosure Document.
Eligible Employees who wish to examine the whole of the Company's public file
may do so by visiting the listings department of the Toronto Stock Exchange or
the filings department of the British Columbia or Ontario Securities
Commissions.
Risk Factors
Persons considering purchasing shares of the Company under the Plan should
consider the following:
1. The Company is dependent on two significant customers for a significant
portion of its sales (44% in 1997 and 32% in 1998).
2. The Company generally does not obtain long-term purchase orders from
its customers and thus cancellation, reductions or delays in orders by
customers could significantly affect the Company's financial condition.
3. A significant component of the Company's strategy is to increase high
volume product sales to OEMs (Original Equipment Manufacturers) and
there are no assurances that its OEM customers will continue to rely on
the Company for their DSP solutions.
4. The Company purchases DSP microprocessors and certain other components
from Analog Devices, Motorola and Texas Instruments each of which is
the sole supplier of the microprocessors on which certain of the
Company's products have been developed and thus shortages of components
could delay the Company's ability to ship its products.
5. The market for the Company's products is characterized by changing
technologies and frequent new products. The Company's continued success
will be dependent upon its ability to adopt such changes and there are
no assurances it will be able to do so.
6. The market for the Company's products is intensely competitive and
certain of the Company's competitors have greater financial and other
resources than the Company.
8
<PAGE>
7. The Company's success is dependent in large part on certain key
management and technical personnel, the loss of one or more of whom
could affect the Company's business.
8. There are no assurances that all of the Company's suppliers are Y2K
compliant.
9. The market prices for shares of high technology companies have been
volatile and these broad market fluctuations could adversely affect the
price of the Company's shares independent of the Company's operating
results.
Certificate
This document contains no untrue statement of a material fact and does not omit
to state a material fact that is necessary to prevent a statement that is made
from being false or misleading in the circumstances in which it was made.
Dated:
------------------------------------------------
--------------------------------------------
(Signature of )
------------------------------
--------------------------------------------
(Signature of Chief Financial Officer)
9
<PAGE>
Appendix 1
The Company's Most Recent Annual Financial Statements
<PAGE>
Appendix 2
Quarterly Reports and Press Releases
Appendix D.
<PAGE>
Commitment Form
Additional Form for Tax Credit Eligible Employees
Tax Credit Questionnaire
<PAGE>
SPECTRUM SIGNAL PROCESSING INC.
EMPLOYEE STOCK PURCHASE PLAN COMMITMENT FORM
This commitment form must be completed and signed by Eligible Employees of
Spectrum Signal Processing Inc. ("the Company") who wish to purchase shares
under the Company's employee stock purchase plan (the "Plan") during the
offering period from November 1, 1999 to April 30, 2000.
Employee Information
<TABLE>
<CAPTION>
Employee Information
=============================================================================================================
<S> <C> <C>
Participant: Mr./Mrs./Ms. __________________________________________ __________________________
____________
(circle) Last Name First Name Initial
Address: __________________________________________________________________________________________________
No. and Street Name Apt. Town/City Province/State Postal Code/ZIP
_______________________________ _______________________________ Date of Birth ________________________
SIN / SSN Employee Number (YY / MM / DD)
=============================================================================================================
</TABLE>
I received and read the Disclosure Document the Company gave me. I agree to
commit $___________________ for the purchase of common shares (the "Shares") of
the Company under the Plan, paid in accordance with the terms of the Plan, for
which, if applicable, I authorize the Company to make the appropriate deductions
from my wages and salary in equal semi-monthly installments. My contributions
will be invested as indicated in my instructions below until such time as a
request for change is made. My contributions will be invested in Spectrum Signal
Processing Inc. shares as subscribed for in the Employee Share Purchase Plan.
================================================================================
Tax Credit Election (B.C. Residents Only)
- --------------------------------------------------------------------------------
I do [ ] do not [ ]
wish to have my share purchases under the Plan eligible for tax credits under
the Employee Investment Act (British Columbia) (employees wishing to participate
under the Employee Investment Act (British Columbia) must complete the form and
questionnaire attached).
================================================================================
Designation of Beneficiary (where permitted by law)
- --------------------------------------------------------------------------------
In the event of my death, I hereby designate ________________________________ as
my beneficiary, if living, to receive benefits payable under the Plan, otherwise
such benefits shall be payable to my estate. I hereby revoke all prior
beneficiary designations. I assume full responsibility for ensuring that this
designation is valid under applicable law.
- --------------------------------------------------------------------------------
Caution
- --------------------------------------------------------------------------------
In some provinces/states, designation of a beneficiary by means of a designation
form will not be revoked or changed automatically by any future marriage or
divorce. Should you wish to change your beneficiary in the event of a future
marriage or divorce, you will have to do so by means of new designation.
Note: I agree with full knowledge, to permit The Royal Trust Company and the
Company to use the information collected about me in relation to the Plan, or
otherwise, for any purpose relating to the Plan. I also hereby authorize them to
communicate the information held on me to any person deemed necessary for the
administration of the Plan. I acknowledge that my "plan participant file" will
be held at the employer's and The Royal Trust Company's offices or at any other
location as indicated from time to time on the understanding that I will be
given access to examine and correct such information as prescribed by law.
Further, in accordance with UK Data Protection Law, 3L Limited will hold the
personal information provided by me and will process such personal information
for purposes relating to the Plan. I acknowledge that 3L Limited may from time
to time make such personal information available to the Company, other
Affiliated Corporations and the Trustee, some of which are situated outside the
European Union
================================================================================
<PAGE>
Acceptance of Terms and Conditions
I hereby accept all the terms and conditions of the Employee Stock Purchase
Plan, a copy of which I have received and read. I declare all of the above
information is accurate and I confirm that I am an Eligible Employee in
accordance with the terms and conditions of the Plan.
- ----------------------------------------- ------------------------------------
Employee Signature Date
================================================================================
For Office Use Only
Approved by Employer Representative: _______________________ Date: ___________
Authorized Signature
================================================================================
<PAGE>
SPECTRUM SIGNAL PROCESSING Inc.
Employee Stock Purchase Plan
Additional Form for Tax Credit Eligible Employees
(Only Tax Credit Eligible Employees need complete this Additional Form)
This additional form must be completed and signed by Tax Credit Eligible
Employees of Spectrum Signal Processing Inc. (the "Company") who wish to
purchase shares under the Company's employee stock purchase plan (the "Plan").
Employee Information (Please type or print clearly)
Name (first, initials, last name):
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Social Insurance Number: Phone:
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Address:
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Note: Tax credit certificates will only be issued at the end of each calendar
year after the last payment is made and the shares are issued.
Tax Credit Matters (This only applies to Tax Credit Eligible Employees. Check
Yes below, if applicable.)
Yes, I meet the criteria for a "Tax Credit Eligible Employee" set out
on page 1 of the Plan share disclosure document.
I authorize the Company to apply for tax credit certificates for me and to
provide the Administrator under the Act with all necessary information. I have
attached my completed Tax Credit Questionnaire and confirm it is accurate. I
acknowledge that under the Employee Investment Act (British Columbia) share
certificates issued to Tax Credit Eligible Employees under the Plan must be held
by an authorized depository (currently Royal Trust) for three years after
purchase. I direct the company to deliver the share certificate for the Shares
to the depository and agree to be bound by the terms of the escrow agreement
with the depository about holding of the share certificates under the Plan. I
irrevocably appoint the Company as my attorney for the sole purpose of matters
related to the escrow agreement.
I understand that it is my responsibility to notify the Ministry of Small
Business, Tourism and Culture (the "Ministry") immediately of any name or
address changes. I am also aware that the following information may be shared
with Revenue Canada Taxation:
Name:___________________
Address:____________________________________
S.I.N.:_________________
Amount and Date of Investment, Investee Company and Tax Credit Amount: _________
________________________________________________________________________________
Dated the ________ day of _____________________, _____.
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Employee Signature
Attached: Tax Credit Questionnaire
ESPP Purchase Form
A FALSE OR MISLEADING STATEMENT IS AN OFFENSE UNDER THE
EMPLOYEE INVESTMENT ACT.
<PAGE>
SPECTRUM SIGNAL PROCESSING INC.
EMPLOYEE TREASURY SHARE PURCHASE PLAN
TAX CREDIT QUESTIONNAIRE
(Only Tax Credit Eligible Employees need complete this Questionnaire)
Employee Name:________________________________________________ SIN:____________
Previous Tax Credit Related Share Transactions
I confirm that as a result of this Share purchase I will not receive
credit certificates under the Act totaling more than:
(i) $2,000 in value in respect of any one calendar year; and
(ii) $10,000 in value in grand total over all years.
Note: Provincial tax credits received as a result of investments in the
Working Opportunity Fund are included in the above calculation.
During the two-year period preceding the date on which the Shares will
be paid for in full (__________), I have disposed of (or will dispose
of) other shares of the Company as follows:
Date Number of Price Received Tax Credit Originally
Shares Received on those Shares?
- --------------------- ------------- ------------------ -------------------------
===================== ============= ================== =========================
Dated the ____________ day of ______________________, _____.
--------------------------------
Employee Signature
A FALSE OR MISLEADING STATEMENT IS AN OFFENSE UNDER THE EMPLOYEE INVESTMENT ACT
<PAGE>
Appendix E.
Escrow Agreement
<PAGE>
ESCROW AGREEMENT
THIS AGREEMENT is made as of the _____ day of ____________, _____
AMONG: MONTREAL TRUST COMPANY OF CANADA, a trust company incorporated under
the laws of Canada
(hereinafter called "Montreal Trust")
OF THE FIRST PART,
AND: ROYAL TRUST CORPORATION OF CANADA, a trust company incorporated under
the laws of Canada
(hereinafter called "Royal Trust")
OF THE SECOND PART,
AND: SPECTRUM SIGNAL PROCESSING INC., a corporation incorporated under the
laws of British Columbia.
(hereinafter called the "Corporation")
OF THE THIRD PART.
WHEREAS:
A. The Corporation has adopted an employee share ownership plan (the
"Plan") registered under the Employee Investment Act (British Columbia)
under which employees of the Corporation and its affiliates will
acquire shares of the Corporation and will, in certain circumstances,
be eligible to obtain tax credits with respect thereto;
B. The Act requires that shares in respect of which tax credits are
obtained, are to be held under the control of an authorized depository
for a period of three years after acquisition, and Royal Trust is
authorized to act as an authorized depository;
C. While shares are held as contemplated by Recital B, no certificates
representing such shares shall be issued under the terms of the Plan;
D. The employees referred to in Recital A have authorized all or will
authorize the Corporation to execute and deliver this agreement on
their behalf.
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NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the mutual covenants and conditions herein contained, Montreal Trust, Royal
Trust and the Corporation covenant and agree each with the other as follows:
1. Interpretation
1.1 In this agreement:
(a) "Act" means the Employee Investment Act, as amended from time
to time, including the Regulations and written policies made
thereunder;
(b) "Administrator" means the administrator designated under the
Act;
(c) "permanently disabled" means the Shareholder being disabled
and permanently unfit to work;
(d) "Plan" means the employee share ownership plan referred to in
Recital A;
(e) "Shareholder" means an eligible employee of the Corporation
and its affiliates who has acquired Shares, or on whose behalf
a Trust has acquired Shares, pursuant to the Plan;
(f) "Shares" means shares in the capital of the Corporation
acquired by shareholders under the Plan;
(g) "Trust" means a trust governed by a registered retirement
savings plan under the Income Tax Act (Canada) for which an
eligible employee is the annuitant;
(h) words and phrases defined in the Act have the meanings
ascribed to them by the Act; and
(i) whenever the singular or masculine are used in this agreement,
the same shall be construed as including the plural or
feminine or neuter.
2. Registration of Shares
2.1 Upon acquisition of Shares under the Plan by a Shareholder or by a
Trust on behalf of a Shareholder, which acquisition will occur upon
payment in full being made therefor, the Corporation will request and
Montreal Trust will enter such Shareholder or Trust as the holder of
such Shares in the register of shareholders of the Corporation
maintained by Montreal Trust. Such Shares shall be registered the day
upon which payment in full is received by the Corporation.
3. Notification to Royal Trust
3.1 Within five business days of a Shareholder or Trust being entered in
the register of Shareholders as the holder of Shares as provided for in
section 2.1 herein, Montreal Trust will provide to Royal Trust the
following information:
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(a) the number, price paid for and date of acquisition of Shares
purchased by or on behalf of such Shareholder or Trust;
(b) the name and address of such Shareholder or Trust; and
(c) any other information required by Royal Trust in connection
with its functions under this agreement or the Act or for the
purpose of processing applications for tax credit
certificates.
(d) Such information shall be provided in a form which is mutually
acceptable to Montreal Trust and Royal Trust.
4. Escrow Provisions
4.1 From the date of acquisition of Shares notified to Royal Trust pursuant
to paragraph 3.1 until the Shares are to be released from escrow in
accordance with this agreement;
(a) no share certificates representing such Shares will be issued
by the Corporation or by Montreal Trust on behalf of the
Corporation;
(b) Shares will be deemed to be held in escrow with, and will be
under the control of, Royal Trust.
4.2 The Corporation covenants with Montreal Trust and Royal Trust that
prior to the registration of a Shareholder, or a Trust on behalf of a
Shareholder pursuant to paragraph 2.1 and notification thereof pursuant
to subparagraph 3.1(a), the Corporation will have been authorized by
the Shareholder to enter into this agreement.
5. Release of Shares
5.1 The Corporation, on its own behalf and on behalf of each Shareholder,
Montreal Trust and Royal Trust, each covenant and agree that, except as
permitted by this Agreement or with, and as directed by, the written
consent or direction of the Administrator, none of the Corporation,
Montreal Trust or Royal Trust shall do or cause anything to be done to
permit the release of certificates representing the Shares or to permit
the disposition (as defined in the Act) of the Shares or of the
beneficial ownership of or any interest in the Shares.
5.2 Subject to compliance with paragraph 5.3 or 5.4, the Shares may be
released from escrow upon the earliest of:
(a) the date which is three years after the acquisition of the
Shares by the Shareholder under the Plan upon payment in full
therefor, in which event a certificate representing the Shares
shall be released to the Shareholder upon his or her request;
(b) the date the Shareholder's personal representative, or if the
Shareholder is a Trust the personal representative of the
annuitant of the Trust, delivers to Royal Trust a death
certificate for the Shareholder or the annuitant of the Trust,
as the case may be, and proof
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of the authority of the personal representative, in which
event a certificate representing the Shares shall be released
to the personal representative;
(c) the date the trustee in bankruptcy of the Shareholder, or if
the Shareholder is a Trust the trustee in bankruptcy of the
annuitant of the Trust, delivers to Royal Trust copies of the
court order or assignment in bankruptcy and the instrument
appointing the trustee, in which event a certificate
representing the Shares shall be released to the trustee;
(d) the date the Shareholder delivers to Royal Trust a certificate
from a qualified medical practitioner that the Shareholder, or
if the Shareholder is a Trust the annuitant of the Trust, has
been permanently disabled, in which event a certificate
representing the Shares shall be released to the Shareholder;
(e) the date on which Royal Trust receives a copy of a court order
directing the Shares to be transferred as part of a court
ordered property settlement, in which event a certificate
representing the Shares will be delivered in accordance with
the court order;
(f) the date upon which Royal Trust receives proof that the
Shareholder, or if the Shareholder is a Trust the annuitant of
the Trust, has permanently retired and the Shares were issued
not less than two years before the date of such proposed
release, in which event a certificate representing the Shares
shall be released to the Shareholder;
(g) the date upon which Royal Trust receives proof satisfactory to
it that the Shareholder, or if the Shareholder is a Trust the
annuitant of the Trust, has suffered a bona fide involuntary
loss of employment (as defined in the Act), in which event a
certificate representing the Shares shall be released to the
Shareholder;
(h) the date on which Royal Trust has received confirmation:
(i) from the Shareholder, or if the Shareholder is a
Trust the annuitant of the Trust, that a disposition
of the Shares has been made; and
(ii) from the Administrator that the amount, if any,
required by the Act has been repaid;
(iii) in which event the certificate representing the
Shares shall be released to or to the order of the
person to whom the disposition was made;
(i) the date upon which the Administrator advises Royal Trust that
he has consented to the release in circumstances other than
those set out in subparagraphs 5.2(a) to (h) in which event a
certificate representing the Shares shall be released in
accordance with the direction of Royal Trust to Montreal
Trust;
(j) the date upon which Royal Trust receives notice of a trust
disposition (as defined in the Act), in which event a
certificate representing the Shares may, upon request by the
trustee, be released to the trustee or annuitant thereof, as
the case may be; and
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(k) if Montreal Trust has received a notice pursuant to
subparagraph 6.2(b), the date on which Montreal Trust receives
notice from the savings institution that it has commenced
enforcement of its security for the indebtedness referred to
in the notice, in which event a certificate representing the
Shares shall be released to the savings institution.
5.3 Royal Trust will notify Montreal Trust of the number of Shares which
become capable of release from escrow by reason of subparagraph 5.2(a)
at least 30 days prior to such possible release. Certificates
representing such Shares may thereafter be released by Montreal Trust
Company upon request of the Shareholder without any further approval or
consent from Royal Trust.
5.4 Upon being satisfied as to any of the circumstances set out in
subparagraphs 5.2(b) to (j) and upon receipt of the applicable fee, if
any, Royal Trust shall notify Montreal Trust which will forthwith issue
a certificate representing the Shares in the name of the Shareholder
or, if the Shares are registered in the name of a Trust on behalf of
the Shareholder, in the name of the trustee of the trust. Montreal
Trust will forthwith deliver the certificate to Royal Trust, which will
deliver the certificate to the person entitled to receive it in
accordance with paragraph 5.2 or, if the Shares are registered in the
name of a Trust, to the trustee of the Trust.
5.5 If the Corporation, Montreal Trust or Royal Trust receives from any
person, other than the Administrator, notification that any Shares, or
the beneficial ownership thereof or any interest therein, have been
disposed of, the Corporation, Montreal Trust or Royal Trust, as the
case may be:
(a) shall notify the Administrator thereof unless Montreal Trust
is at that time permitted to release the Shares under
paragraph 5.3; and
(b) shall not be obliged to recognize any right of the person to
whom the disposition was alleged to be made to give the
certificate representing the Shares and shall, upon release of
the certificate in accordance with paragraph 5.2, deliver it
to the person entitled to receive it in accordance with
paragraph 5.3 or 5.4.
6. Release - General
6.1 The release from escrow of some or all of the Shares governed by this
agreement shall terminate this agreement only in respect of the Shares
so released.
6.2 Notwithstanding paragraph 5.1:
(a) upon the request of a Shareholder, Shares held by the
Shareholder will be registered by Montreal Trust in the name
of a Trust that will hold the Shares for the benefit of the
Shareholder, Montreal Trust will advise Royal Trust of any
such registration as part of the information provided under
paragraph 3.1, and the Shares so registered shall continue to
be held pursuant to this agreement. The provisions of this
section 6.2 shall not apply to a trust disposition (as defined
in the Act);
(b) a Shareholder and a savings institution (as defined in the
Interpretation Act) may provide written notice to Montreal
Trust that the Shareholder has hypothecated or granted a
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security interest in its Shares to the savings institution as
security for indebtedness incurred by the Shareholder to
permit the purchase of its Shares, in which event Montreal
Trust shall acknowledge to the savings institution its receipt
of such notice and shall, notwithstanding any other provision
of this agreement, deliver a certificate representing the
Shares to the savings institution upon their release from
escrow in accordance with the terms hereof, unless otherwise
directed by the savings institution.
7. Dividends and Voting
7.1 If any shares or other securities are distributed by the Corporation as
a result of any subdivision of the shares of the Corporation or any
amalgamation, merger, plan of arrangement, winding-up or similar
transaction involving the Corporation, the shares or other securities
which Shareholders and Trusts are entitled as a result thereof will be
held pursuant to this agreement on the same terms as the Shares in
respect of which they are distributed.
7.2 Except as provided in paragraph 7.1, if any dividend (including a stock
dividend) or other distribution is received by Montreal Trust or Royal
Trust in respect of the Shares, such dividend or distribution shall be
paid or transferred forthwith to the respective Shareholders and Trusts
entitled thereto.
7.3 All voting rights attached to the shares may at all times be exercised
by the respective registered owners thereof.
8. Indemnification
8.1 If Montreal Trust releases certificates representing any Shares without
the approval of Royal Trust in circumstances where such release would
not have been permissible in accordance with paragraph 5.2, Montreal
Trust covenants and agrees with Royal Trust, as agent for the Minister
of Finance and Corporate Relations for the Province of British Columbia
(the "Minister"), to pay forthwith to the Minister an amount equal to
the tax credits obtained under the Act in respect of such Shares
provided that:
(a) the payment by Montreal Trust shall be reduced by any amount
of the tax credits which is repaid by any of the persons
required under the Act to repay such amount; and
(b) if Montreal Trust demonstrates to the satisfaction of the
Administrator that no person could be required under the Act
to repay all or a portion of the tax credits, Montreal Trust
shall not be required to pay such portion of the tax credits
and, if it has previously paid such portion, shall be entitled
to recover it from the Minister.
8.2 If Montreal Trust releases certificates representing any Shares without
the approval of Royal Trust, Montreal Trust will indemnify and save
Royal Trust harmless from and against any and all liabilities, costs
and expenses which Royal Trust incurs as a result of such release.
9. Concerning Montreal Trust and Royal Trust
9.1 Montreal Trust and Royal Trust each accepts the functions and
responsibilities placed on it by this agreement and agrees to perform
the same in accordance with the terms hereof.
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9.2 This agreement is entered into for the purposes of providing a security
arrangement relating to the repayment of tax credits in accordance with
the Act. This agreement shall in no way be construed as constituting
either Montreal Trust or Royal Trust as a trustee for the Shareholders
or the Corporation.
9.3 The Corporation hereby covenants and agrees from time to time and at
all times hereafter well and truly to save, defend and keep harmless
and fully indemnify Montreal Trust, Royal Trust and their respective
successors and assigns from and against all loss, costs, charges,
suits, demands, claims, damages and expenses which they or their
respective successors or assigns, may at any time or times hereafter
bear, sustain, suffer or be put to for or by reason or on account of
performing their respective functions under this agreement or anything
in any manner relating thereto or by reason of their compliance in good
faith with the terms hereof. Without restricting the foregoing
indemnity, in case proceedings should hereafter be taken in any court
respecting the Shares, neither Montreal Trust nor Royal Trust shall be
obliged to defend any such action or submit its rights to the court
until it shall have been indemnified by other good and sufficient
security in addition to the indemnity herein before given against its
costs of such proceedings.
9.4 the Corporation shall pay fees to Royal Trust and Montreal Trust in
respect of their services hereunder. Such fees and the fees, if any,
payable upon release of Shares from escrow will be calculated:
(a) in accordance with the agreements from time to time of the
Corporation, with Montreal Trust and Royal Trust respectively;
or
(b) if Royal Trust is a party to an agreement with the
Administrator providing a schedule of fees for services
hereunder and no fees are provided for such services by
agreement between the Corporation and Royal Trust, in
accordance with such schedule.
10. Amendment and Termination
10.1 The Corporation may at any time amend this agreement by instrument in
writing delivered to each of Montreal Trust and Royal Trust provided
that no amendment shall:
(a) affect the Shares unless previously consented to in writing by
Royal Trust with the prior consent of the Administrator;
(b) affect the Shares acquired under the Plan prior to the date of
delivery of such amendment unless such change is beneficial to
the shareholder; and
(c) increase the responsibilities of either Montreal Trust or
Royal Trust without its prior written consent.
10.2 The Corporation and Montreal Trust may each at any time, upon 90 days'
written notice to the other and to Royal Trust, terminate this
agreement, provided that arrangements satisfactory to the Administrator
are made to provide for the continued holding in escrow of the Shares
for the period and on the terms required by this agreement.
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10.3 If any person other than Royal Trust is an authorized depository under
the Act, Royal Trust may be replaced in the performance of its duties
and functions hereunder:
(a) by Royal Trust at any time upon 90 days' written notice to the
Corporation; and
(b) by the Corporation at any time after the first anniversary of
the initial issuance of Shares under the Plan upon 90 days'
written notice to Royal Trust.
Royal Trust shall be replaced by another authorized depository under
the Act designated in writing by the Corporation at the time after
termination, failing which designation Royal Trust is hereby
specifically authorized to request the Administrator to designate an
authorized depository and, upon the termination date, or at such other
date as is mutually agreed upon by Royal Trust and the Corporation in
writing, to transfer to the authorized depository designated by the
Administrator all records and other information maintained by Royal
Trust concerning the Plan for the purpose of fulfilling its duties and
functions hereunder.
11. Notice
11.1 All certifications, requests and instructions (collectively
"communications") given hereunder shall be in writing and signed by the
appropriate person.
11.2 Communications of the Corporation shall be signed by an authorized
officer or other representative of the Corporation. The Corporation
shall from time to time furnish Montreal Trust and Royal Trust with a
certificate signed by the Chairman, the President, a Vice-President,
the Treasurer or the Secretary of the Corporation stating the names of
the officers and other representatives so authorized, together with
specimen signatures of all such officers or representatives.
11.3 Montreal Trust and Royal Trust shall be entitled to rely upon the
identification of such persons as specified in such certificate, shall
act in accordance with communications given in accordance with this
paragraph 11.3 and shall, in acting in accordance with same, be fully
protected and absolved from any and all liability howsoever arising.
11.4 Communications signed as aforesaid may be delivered or given by telefax
or letter and, when so given, shall be deemed to have been sufficiently
given for all purposes of this agreement.
11.5 All communications required or permitted hereunder shall be validly
given if delivered personally, sent by prepaid ordinary mail or
transmitted by telefax, as follows:
(a) in the case of Montreal Trust Company:
Montreal Trust Company
4th floor, 510 Burrard Street
Vancouver, B.C. V6C 3B9
Telefax: (604) 683-3694
Attention: Manager Client Services
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(b) In the case of Royal Trust:
Royal Trust Corporation of Canada
Global Securities Services
Pacific Region
P.O. Box 11124
Suite 600, 1055 West Georgia Street
Vancouver, B.C. V6E 4P3
Telefax: (604) 257-2581
Attention: Employee Investment Program Coordinator
(c) in the case of the Corporation:
Spectrum Signal Processing Inc.
One Spectrum Court
2700 Production Way, Ste 200
Burnaby, B.C. V5A 4V7
Telefax: (604) 421-1764
Attention: General Counsel
(d) or to such other address and number as the party to whom such
communication is to be given shall have last notified in the
same manner provided in this section, the party giving the
communication.
12. Miscellaneous
12.1 This agreement shall be governed by and construed in accordance with
the laws of the Province of British Columbia.
12.2 This agreement shall enure to the benefit of and be binding upon the
Corporation, Montreal Trust and Royal Trust and the Shareholders, and
their heirs, executors, administrators, successors and permitted
assigns.
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IN WITNESS WHEREOF the parties hereto have executed these presents the day and
year first above written.
THE COMMON SEAL OF MONTREAL TRUST
COMPANY OF CANADA C/S
was hereunto affixed in the presence of:
- -----------------------------
Authorized Signatory
- -----------------------------
Authorized Signatory
THE COMMON SEAL OF ROYAL TRUST C/S
CORPORATION OF CANADA was hereunto affixed in
the presence of:
- -----------------------------
Authorized Signatory
- -----------------------------
Authorized Signatory
THE COMMON SEAL OF SPECTRUM SIGNAL C/S
PROCESSING INC. was hereunto affixed in the presence of:
- -----------------------------
Authorized Signatory
- -----------------------------
Authorized Signatory
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Appendix A.
Constitution
<PAGE>
1. PURPOSE OF THE PLAN.......................................................1
2. DEFINITIONS...............................................................1
3. ADOPTION, COMMENCEMENT AND TERMINATION OF THE PLAN........................4
4. REPRESENTATIONS AND WARRANTIES............................................5
5. OFFERING PERIODS AND ELIGIBILITY TO SUBSCRIBE FOR SHARES..................6
6. SUBSCRIPTION ENTITLEMENT..................................................6
7. CONTRIBUTIONS.............................................................7
8. SHARE ENTITLEMENT.........................................................7
9. ISSUANCE AND HOLDING OF SHARE CERTIFICATES................................7
10. WITHDRAWAL FROM PARTICIPATION.............................................8
11. RELATIONSHIP WITH EMPLOYMENT..............................................8
12. TRANSFERABILITY...........................................................8
13. APPLICATION FOR TAX CREDIT CERTIFICATES...................................9
14. USE OF FUNDS..............................................................9
15. REPORTS TO EMPLOYEE SHAREHOLDERS..........................................9
16. OTHER COVENANTS OF THE COMPANY............................................9
17. PURCHASE BY OR TRANSFER TO TRUSTS........................................10
18. TAX LIABILITY............................................................10
19. AMENDMENTS...............................................................11
20. GENERAL..................................................................11
Exhibit 5
[Letterhead of Clark, Wilson]
February 11, 2000
Spectrum Signal Processing Inc.
One Spectrum Court
200-2700 Production Way
Burnaby, British Columbia, Canada V5A 4X1
Ladies and Gentlemen:
We refer to the 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 (the "Act"), on behalf of Spectrum Signal
Processing Inc. (the "Company"), (i) relating to an aggregate of 3,050,000 of
the Company's Common Shares, without par value, issuable under the Spectrum
Signal Processing Inc. 1995 Stock Option Plan, as amended and (ii) relating to
an aggregate of 250,000 of the Company's Common Shares, without par value,
issuable under the Spectrum Signal Processing Inc. Employee Stock Purchase Plan,
together (the "Plans").
As counsel for the Company, we have examined such corporate records,
other documents, and such questions of law as we have considered necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examination, advise you that in our opinion, all necessary corporate proceedings
by the Company have been duly taken to authorize the issuance of the Common
Shares pursuant to the Plans, and that such Common Shares being registered
pursuant to the Registration Statement, when issued and paid for under the in
accordance with the terms of the Plans, will be duly authorized, validly issued,
fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. This consent is not to be construed as an admission that
we are a person whose consent is required to be filed with the Registration
Statement under the provisions of the Act.
Very truly yours,
/s/Clark, Wilson
----------------
Clark, Wilson
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in this Registration of
Spectrum Signal Processing Inc. (the "Company") on Form S-8 of our report dated
February 4, 1999 on the audited consolidated financial statements of the Company
as at December 31, 1998 and 1997 and for the years ended December 31, 1998,
December 31, 1997, and December 31, 1996 included in Form F-3 as filed by the
Company with the Securities and Exchange Commission (Registration number
333-58115) on July 26, 1999.
Chartered Accountants
/s/ KPMG LLP
- ------------
Richmond, British Columbia
February 11, 2000
