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EXHIBIT 4.06
COREL CORPORATION
STOCK OPTION PLAN 2000
1. Purpose of the Plan
The purpose of the Stock Option Plan 2000 is to develop the interest and
incentive of eligible participants of Corel Corporation and its
subsidiaries (the "Company") in the Company's growth and development by
giving eligible participants an opportunity to purchase Common Shares on
a favourable basis, thereby advancing the interests of the Company and
its shareholders and increasing the ability of the Company to attract and
retain skilled and motivated individuals in the service of the Company.
The Board of Directors has approved the terms of this Plan.
2. Definitions
In this Plan:
(a) "Associate" has the meaning assigned by the Securities Act
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(Ontario), as amended from time to time;
(b) "Board of Directors" means the board of directors of the Company;
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(c) "Committee" means the appropriate compensation committee of three or
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more members appointed by the Board of Directors to administer the
Plan. All references in the Plan to the Committee means the Board of
Directors if no Committee has been appointed;
(d) "Common Shares" means the Common Shares of the Company or in the
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event of an adjustment contemplated in Section 9 hereof, such other
Common Shares to which a Participant may be entitled upon the
exercise of an option as a result of such readjustment;
(e) "Date of Grant" means the date a Participant is granted an option to
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purchase Option Shares;
(f) "Director" means a person occupying the position of director on the
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Board of Directors;
(g) "Employee" means a full time permanent employee of the Company or
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its subsidiaries;
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(h) "Exchange" means The Toronto Stock Exchange;
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(i) "Exercise Date" means the last Friday of any calendar month during
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the Option Period or such other date designated from time to time by
the Chief Executive Officer with respect to any Participant provided
that on any such date, the Company receives from the Participant a
completed Stock Option Purchase Form with payment for the Option
Shares being purchased;
(j) "Former Plan" means the Corel Corporation Stock Option Plan dated
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January 25, 1990 as amended on September 17, 1992, November 22,
1993. March 31, 1994, March 30, 1995, March 12, 1996, April 18,
1997; and January 31, 2000.
(k) "Insider" means:
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(i) an insider of the Company as defined by the Securities Act
(Ontario) as amended from time to time, other than a person who
falls within such definition solely by virtue of being a
director or senior officer of a subsidiary of the Company; and
(ii) an Associate of any person who is an insider by virtue of
clause (a) of this definition;
(l) "Market Price" per Common Share at any date shall be the closing
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price of the Common Shares on the Exchange (or, if the Common Shares
are not then listed or posted for trading on the Exchange, on such
stock exchange in Canada on which such shares are listed and posted
for trading as may be selected for such purposes by the Committee)
on the trading date immediately preceding the Date of Grant. In the
event that the Common Shares are not listed and posted for trading
in any stock exchange in Canada, the market price shall be the last
trading price of the Common Shares on National Association of
Securities Dealers Quotations Systems ("NASDAQ") on the trading day
immediately preceding the Date of Grant. In the event that the
Common Shares are not trading on NASDAQ, the market price shall be
determined by the Committee in its sole discretion;
(m) "Officer" means a person appointed as an officer of the Company by
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the Board of Directors;
(n) "Option Period" means the period set forth in Section 6 during which
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a Participant may purchase Option Shares;
(o) "Option Price" means the price per share at which a Participant may
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purchase Option Shares denominated in Canadian or United States
currency;
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(p) "Outstanding Issue" means the number of Common Shares that are
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outstanding immediately prior to any issuance of options under this
Plan or any issuance of Option Shares, as the case may be, excluding
Option Shares issued pursuant to the Plan or the Former Plan during
the preceding one year period;
(q) "Option Shares" means the Common Shares of the Company which a
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Participant is entitled to purchase under the Plan;
(r) "Participants" means Employees, Directors and Officers to whom
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options to purchase Option Shares are granted pursuant to the Plan
and which remain unexercised; and
(s) "Plan" means the Corel Corporation Stock Option Plan 2000.
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3. Eligibility
Participation in the Plan shall be limited to Participants who are
designated from time to time by the Committee. Participation shall be
voluntary and the extent to which any Participant shall be entitled to
participate in the Plan shall be determined by the Committee.
4. Number of Option Shares and Limitations on Issuance
The aggregate number of Option Shares which may be reserved for issuance
hereunder shall not exceed 4,000,000. The following restrictions shall
also apply to this Plan:
(a) the number of Option Shares reserved for issuance pursuant to
options granted to insiders shall not exceed 10% of the Outstanding
Issue;
(b) insiders shall not be issued, within any one year period, a number
of Option Shares which exceeds 10% of the Outstanding Issue;
(c) no insider and such insider's Associates shall be issued, within any
one year period, a number of Option Shares which exceeds 5% of the
Outstanding Issue; and
(d) the aggregate number of Option Shares reserved for issuance pursuant
to options granted to any one Participant shall not exceed 5% of the
Outstanding Issue.
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No fractional shares may be purchased or issued hereunder. Subject to the
foregoing, the number of Option Shares that a Participant is entitled to
purchase under the Plan will be determined by the Committee.
5. Price for Option Shares
The Committee shall advise each Participant designated to participate in
the Plan of the number of Option Shares such Participant is entitled to
purchase, the Option Price at which the Option Shares may be purchased
and the Exercise Date(s) upon which the Option Shares may be purchased.
The Option Price at which Option Shares may be purchased under the Plan
shall be fixed by the Committee and confirmed by the Board of Directors
based upon the Market Price of the Common Shares of the Company at the
Date of Grant.
6. Exercise
Subject to the requirements of applicable regulatory authorities and the
discretion of the Committee, each option granted under the Plan may be
exercised as follows:
Percentage of Total Number of
Option Shares which may be Purchased Option Period
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100% For a period of four years from
the Date of Grant.
The exercise period and vesting period of any option shall be determined
by the Committee and set forth in the notice of grant of such option. In
the event that no exercise or vesting period is specified, the current
practice of immediate vesting and four year limitation shall govern. Any
Option Shares not purchased by a Participant during the Option Period
shall lapse and such Participant shall have no further right to purchase
such shares.
7. Payment
The Participant from time to time and at any time during the Option
Period, may elect to purchase all or a portion of the Option Shares
available for purchase during the Option Period by lump sum payment by
delivering to the Company on the relevant Exercise Date a completed
Participant Stock Option Purchase Form. Such Form shall specify the
number of Option Shares the Participant desires to purchase and shall be
accompanied by payment in full of the purchase price for such Option
Shares. Payment may be made by cash, certified cheque, bank draft, money
order or the equivalent payable to the order of the Company.
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8. Share Certificates
Upon exercise of the option and payment in full of the Option Price, the
Company shall cause to be delivered to the Participant within a reasonable
period of time a certificate or certificates in the name of the Participant
representing the number of Option Shares the Participant has purchased.
9. Adjustments in Shares
The number of Common Shares subject to the Plan, the number of Common
Shares available under options granted and the Option Price shall be
adjusted automatically from time to time to reflect adjustments in the
number of Common Shares arising as a result of subdivision, stock
dividends, consolidations or reclassification of the Common Shares or other
relevant changes in the authorized or issued capital of the Company. In the
event that the Company proposes to amalgamate, merge or consolidate with
any other corporation or to liquidate, dissolve or wind-up, the Company
shall give written notice thereof to each Participant holding options under
the Plan and such Participants shall be entitled to purchase all or a
portion of the Option Shares granted to such Participants, whether or not
such Option Shares have previously vested, within the 30 day period next
following the giving of such notice. Upon the expiration of such 30 day
period, all rights of the Participants to the Option Shares or to the
exercise of same shall terminate and cease to have any further force and
effect.
10. Termination of Employment for Any Reason Other Than Death
(a) Subject to the provisions of Section 10(b) hereof, in the event that:
(i) an Employee's employment with the Company or any of its
subsidiaries is terminated;
(ii) a Director shall cease to hold office as a Director on the
Board of Directors; or
(iii) an Officer who is not also an Employee shall cease to hold
office as an Officer of the Company,
in each case, during the Option Period for any reason other than death,
such Participant may elect to purchase all or a portion of the remaining
Option Shares that such Participant is entitled to purchase at the time
such employment is terminated or such Participant ceases to hold office as
a Director or Officer at any time during the 30 day period commencing on
the later of (i) the date of termination of employment or ceasing to hold a
board or office position, and (ii) the date of expiry
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of any contractual restriction on the resale of the Option Shares to which
the Participant is subject (and to which the Participant had consented at
the request of the Company) at the date of termination of employment or
ceasing to hold a board or office position, but in no event, after the
expiration of the Option Period. For the purposes of this Plan, the
transfer of the Employee's employment to the Company or to any subsidiary
of the Company shall not be considered a termination of employment and the
Employee's rights under the option shall be the same as if such transfer
had not occurred.
(b) At any time before or after the relevant period set forth in Section
10(a), the Chief Executive Officer may extend such period as it
applies to any former Director, Officer or Employee, to a date which
shall not be later than the expiration of the Option Period.
11. Termination by Reason of Death
In the event the Participant dies during the Option Period, the
Participant's legal representative will be permitted to exercise any
previously unexercised vested options granted under the Plan prior to the
Participant's death and take delivery of all Option Shares previously
purchased but not delivered, at any time during the 12 month period
commencing on the later of (i) the date of death of the Participant and
(ii) the date of expiry of any contractual restriction on the resale of the
Option Shares to which the Participant was subject (and to which the
Participant had consented at the request of the Company) at the date of
death, but in no event after the expiration of the Option Period.
12. Transfer and Assignment
The Participant's rights under options granted under the Plan are not
assignable or transferable by the Participant or subject to any other
alienation, sale, pledge or encumbrance by the Participant during the
Participant's lifetime and, therefore, the options are exercisable during
the Participant's lifetime only by the Participant. The obligations of each
Participant shall be binding on his or her heirs, executors and
administrators.
13. Employment, Office and Board Position Non-Contractual
The granting of an option to a Participant under the Plan does not confer
upon the Participant any right to continue in the employment of the Company
or any subsidiary of the Company, to continue as an Officer of the Company
or as a member of the Board of Directors, as the case may be, nor does it
interfere in any way with the rights of the Employee or of the Company's
right to terminate the Employee's employment
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at any time, the Board of Directors' right to appoint Officers or of the
shareholders' right to elect directors.
14. Rights as Shareholders
Participants shall not have any rights as a shareholder with respect to
Option Shares until full payment has been made to the Company and a share
certificate or share certificates have been duly issued.
15. Participant Loan
The Committee may authorize the Company to lend or cause to be lent to
Participants such portion of the purchase price of the Option Shares under
the Plan as a Participant may request and the Committee administering the
Plan may approve. The terms and conditions of such loan which may be
interest bearing or interest free shall be determined by the Committee in
its discretion and need not be the same in respect of all Participants.
16. Administration of the Plan
The Plan shall be administered by the Board of Directors or the Committee.
The Board of Directors or the Committee shall have the power to interpret
and construe the terms and conditions of the Plan and the options. Any
determination by the Board of Directors shall be final and conclusive on
all persons affected thereby. Any determination by the Committee shall be
final and conclusive on all persons affected thereby unless otherwise
determined by the Board of Directors. The day-to-day administration of the
Plan may be delegated to such officers and employees of the Company or any
subsidiary of the Company as the Board of Directors or the Committee shall
determine.
17. Notices
All written notices to be given by the Participant to the Company may be
delivered personally or by registered mail, postage prepaid, addressed as
follows:
Corel Corporation
1600 Carling Avenue
Ottawa, Ontario
KIZ 7M5
Attention: Secretary.
Any notice given by the Participant pursuant to the terms of the option
shall not be
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effective until actually received by the Company at the above address.
Any notice to be given to the Participant shall be sufficiently given if
delivered personally or by postage prepaid mail to the last address of
the Participant on the records of the Company and shall be effective
seven days after mailing.
18. Corporate Action
Nothing contained in the Plan or in any option shall be construed so as
to prevent the Company or any subsidiary of the Company from taking
corporate action which is deemed by the Company or the subsidiary to be
appropriate or in its best interest, whether or not such action would
have an adverse effect on the Plan.
19. Amendment
The Board of Directors of the Company shall have the right, in its sole
discretion, to alter or amend the Plan from time to time and at any time.
No such amendment, however, may, without the consent of the Participant,
alter or impair his or her rights or increase his or her obligations
under the Plan.
20. Governing Law
The Plan is established under the laws of the Province of Ontario and the
rights of all parties and the construction and effect of each provision
of the Plan shall be according to the laws of the Province of Ontario.
21. Government Regulation
The Company's obligation to issue and deliver Common Shares under any
option is subject to:
(a) satisfaction of all requirements under applicable securities law in
respect thereof and obtaining all regulatory approvals as the
Company shall determine to be necessary or advisable in connection
with the authorization, issuance or sale thereof;
(b) the admission of such Common Shares to listing on any stock exchange
on which the Common Shares may then be listed; and
(c) the receipt from the Participant of such representations, agreements
and undertakings as to future dealings in the Common Shares as the
Company determines to be necessary or advisable in order to
safeguard against the violation of the securities law of any
jurisdiction.
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In this connection the Company shall take all reasonable steps to obtain
such approvals and registrations as may be necessary for the issuance of
such Common Shares in compliance with applicable securities law and for
the listing of such Common Shares on any stock exchange on which the
Common Shares are then listed.
22. Approval
The Plan shall be subject to acceptance by the Exchange in compliance
with all conditions imposed by the Exchange. Any options granted prior to
such acceptance shall be conditional upon such acceptance being given and
any condition complied with. No such options may be exercised unless such
acceptance is given and such conditions are complied with.
As amended and restated the 2nd day of February, 2000.
COREL CORPORATION
/s/ Michael C. J. Cowpland
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Chairman of the Board, President and
Chief Executive Officer
/s/ Eric J. Smith
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Secretary
