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As filed with the Securities and
Exchange Commission on March 29, 2000 Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
MDSI MOBILE DATA SOLUTIONS INC.
(Exact name of Registrant as specified in its charter)
Canada Not Applicable
------------------------------ ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
135-10551 Shellbridge Way
Richmond, British Columbia,
Canada V6X 2W9
Address of Principal Executive Offices
MDSI Mobile Data Solutions Inc. 1999 Stock Option Plan
MDSI Mobile Data Solutions Inc. Stock Purchase Plan
(Full titles of the plans)
Evergreen Corporate Services, Inc.
31635 36th Avenue SW
Federal Way, Washington 98023
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(Name and address of agent for service)
(253) 874-2949
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
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Title of Each Class of Amount to Proposed Maximum Offering Proposed Maximum Aggregate Amount of
Securities to be Registered(1) be Registered Price Per Share Offering Price Registration Fee
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<S> <C> <C> <C> <C>
Common Shares subject to 2,065,034 shares US$ 12.92 (2)(4) US$26,680,239 US$7,044
outstanding options under the
1999 Stock Option Plan
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Common Shares not subject to 34,966 shares US$64.00 (3) US$2,237,824 US$591
outstanding options under the
1999 Stock Option Plan
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Common Shares issuable under 100,000 shares US$64.00 (3) US$6,400,000 (3) US$1,670
the MDSI Stock Purchase Plan
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Total 2,200,000 shares US$ 35,318,063 US$9,305
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</TABLE>
(1) Common Shares, without par value, offered by the Company pursuant to the
Plans described herein.
(2) Based on the average exercise price of options granted under the MDSI
Mobile Data Solutions Inc. 1999 Stock Option Plan outstanding as of the
date of the filing of this registration statement.
(3) The proposed maximum offering price per share and the registration fee were
calculated in accordance with rule 457(c) and (h) based on the average high
and low prices for the Registrant's common shares on March 23, 2000, as
quoted on the Nasdaq National Market, which was US$63.66 per share.
(4) U.S. dollar amounts are calculated based on the noon buying rate in New
York City for cable transfers payable in Canadian dollars as certified for
customs purposes by the Federal Reserve Bank of New York on March 20, 2000.
On such date the noon buying rate was Cdn.$ 1.00=US$ 0.6801.
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<PAGE>
This registration statement on Form S-8 registers common shares, without par
value, of MDSI Mobile Data Solutions Inc. (the "Registrant") previously issued
or to be issued pursuant to the exercise of options or rights granted under the
Registrant's 1999 Stock Option Plan and MDSI Stock Purchase Plan.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in (a) through (c) below are incorporated by reference in
this registration statement.
(a) The Registrant's latest Annual Report on Form 10-K filed pursuant to
Section 13(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), for the Company's fiscal year ended December 31, 1998.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the filing of the Form 10-K, as amended, referred to in
(a) above.
(c) The description of the Registrant's Common Stock set forth in the
Registration Statement on Form 8-A filed by the Registrant with the
Securities and Exchange Commission on November 7, 1996, under Section 12(g)
of the Exchange Act, including any amendment or report filed for the
purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents.
Item 4. Description of Securities.
Not Applicable
Item 5. Interests of Named Experts and Counsel.
None
Item 6. Indemnification of Directors and Officers.
The By-laws of the Registrant provide that, subject to the Canada Business
Corporation Act (the "CBCA"), the Registrant shall indemnify a director or
officer of the Registrant, a former director of officer of the Registrant or a
person who acts or acted at the Registrant's request as a director or officer of
a body corporate of which the Registrant is or was a shareholder or creditor,
and his heirs and legal representatives, against all costs, charges and expenses
reasonably incurred by him in respect of certain actions or proceedings to which
he is made a party by reason of his office, if he meets certain specified
standards of conduct and shall also indemnify any such person in such
circumstances as the CBCA or law permits or requires.
Under the CBCA, except in respect of an action by or on behalf of the Registrant
to procure a judgment in its favor, the Registrant may indemnify a present or
former director or officer or a person who acts or acted at the Company's
request as a director or officer of another corporation of which the Registrant
is or was a shareholder or creditor, and his heirs and legal representatives,
against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by him in respect to any
civil, criminal or administrative action or proceeding to which he is made a
party by reason of his position with the Registrant and provided that the
director or officer acted honestly and in good faith with a view to the best
interests of the Registrant, and, in the case of a criminal, or administrative
action or proceeding that is enforced by a monetary penalty, has reasonable
grounds for believing that his conduct was lawful. Such indemnification may be
made in connection with a derivative action only with court approval. A director
or officer is entitled to indemnification from the Registrant as a matter of
right if he was substantially successful on the merits and fulfilled the
conditions set forth above.
II-1
<PAGE>
The Registrant maintains Directors' and Officers' Liability Insurance for its
Directors.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits.
Exhibit
Number Exhibit
--------- -------
4.1 The MDSI Mobile Data Solutions Inc. 1999 Stock Option Plan.
4.2 The MDSI Mobile Data Solutions Inc. Stock Purchase Plan.
5.1 Opinion of Reid & Company
23.1 Consent of Deloitte & Touche
23.2 Consent of Reid & Company (Included in Exhibit 5.1)
24.1 Power of Attorney (See page II-5 of this registration statement)
Item 9. Undertakings.
(4) The undersigned Registrant hereby undertakes:
(5) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(6) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(7) 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 and 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 change in volume and price represents no more than
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(8) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this registration statement.
(9) That for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-2
<PAGE>
(10) 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.
(11) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement 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.
(12) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the 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.
II-3
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richmond, Province of British Columbia, on this
29th day of March, 2000.
MDSI MOBILE DATA SOLUTIONS INC.
By: /s/ Kenneth R. Miller
------------------------------------------
Kenneth R. Miller, Chief Executive Officer
II-4
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Erik
Dysthe, Kenneth R. Miller and Verne D. Pecho, or any of them, his
attorney-in-fact, with the power of substitution, for them in any and all
capacities, to sign any amendments to this registration statement, and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorneys-in-fact, or their substitute or substitutes, may do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Kenneth R. Miller
- ---------------------------
Kenneth R. Miller Chief Executive Officer and March 29, 2000
Director
(Principal Executive Officer)
/s/ Robert G. Cruickshank
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Robert G. Cruickshank President, Chief Operating March 29, 2000
Officer and Director
/s/ Verne D. Pecho
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Verne D. Pecho Vice-President, Finance and March 29, 2000
Administration and Chief
Financial Officer (Principal
Financial Officer and
Accounting Officer)
/s/ Erik Dysthe
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Erik Dysthe Chairman of the Board and March 29, 2000
Director
/s/ Gerald F. Chew
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Gerald F. Chew Director (Authorized U.S. March 29, 2000
Representative)
/s/ Bruno Ducharme
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Bruno Ducharme Director March 29, 2000
/s/ Robert C. Harris, Jr.
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Robert C. Harris, Jr. Director March 29, 2000
/s/ Terrence P. McGarty
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Terrence P. McGarty Director March 29, 2000
/s/ Marc Rochefort
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Marc Rochefort Director March 29, 2000
/s/ John T. McLennan
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John T. McLennan Director March 28, 2000
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------ -------
4.1 The MDSI Mobile Data Solutions Inc.
1999 Stock Option Plan.
4.2 The MDSI Mobile Data Solutions Inc.
Stock Purchase Plan.
5.1 Opinion of Reid & Company
23.1 Consent of Deloitte & Touche
23.2 Consent of Reid & Company
(Included in Exhibit 5.1)
II-6
EXHIBIT 4.1
MDSI MOBILE DATA SOLUTIONS INC.
1999 STOCK OPTION PLAN
1. INTERPRETATION
1.1 Defined Terms - For the purposes of this Plan, the following terms shall
have the following meanings:
(a) "Associate" shall have the meaning ascribed to such term in the
Ontario Securities Act, as amended from time to time;
(b) "Board" means the Board of Directors of the Company;
(c) "Change in Control" means the acquisition, directly or indirectly,
through one transaction or a number of transactions, by any Person, of
an aggregate of more than fifty percent of the outstanding Shares;
(d) "Code" means the United States Internal Revenue Code of 1986, as
amended from time to time;
(e) "Committee" means a committee of the Board appointed in accordance
with this Plan, or if no such committee is appointed, the Board
itself;
(f) "Company" means MDSI Mobile Data Solutions Inc., a corporation
incorporated under the laws of Canada;
(g) "Date of Grant" means the date on which a grant of an Option is
effective;
(h) "Disability" means a medically determinable physical or mental
impairment expected to result in death or to last for a continuous
period of not less than 12 months which causes an individual to be
unable to engage in any substantial gainful activity;
(i) "Domestic Relations Successor" means a person entitled to receive
transfer of ownership of an Option pursuant to a Qualified Domestic
Relations Order;
(j) "Effective Date" means the effective date of this Plan, which is
February 25, 1999;
(k) "Exchange Act" means the United States Securities Exchange Act of
1934, as amended;
(l) "Fair Market Value" means:
(i) where the Shares are listed for trading on a stock exchange
or over the counter market, the closing price of the Shares
on the stock exchange or over the counter market which is
the principal trading market for the Company's Shares, as
may be determined for such purpose by the Committee, or
(ii) where the Shares are not listed for trading on a stock
exchange or over the counter market, the value which is
determined by the Committee to be the fair value of the
Shares, taking into consideration all factors that the
Committee deems appropriate, including, without limitation,
recent sale and offer prices of the Shares in private
transactions negotiated at arm's length;
(m) "Guardian" means the guardian, if any, appointed for an Optionee;
<PAGE>
(n) "ISO" means an Option granted to an employee of the Company or a
Related Company that qualifies as an "incentive stock option" for
purposes of section 422 of the Code and is therefore subject to
favourable tax treatment under the Code;
(o) "ISO Optionee" means an Optionee to whom an ISO has been granted;
(p) "Modification" means any change in the terms of an Option which gives
the Optionee additional benefits under the Option, but such change
shall not include a change in the terms of an Option:
(i) to make the Option not transferable other than by will or
the laws of descent and distribution,
(ii) to make the Option exercisable only by the Optionee during
his lifetime,
(iii) in the case of an Option not immediately exercisable in
full, to accelerate the time within which the Option may be
exercised, or
(iv) attributable to the issuance or assumption of an Option by
reason of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation
if the new Option or assumption of the old Option does not
give the Optionee additional benefits which he did not have
under the old Option;
(q) "Non-ISO" means an Option that is not an "incentive stock option" for
purposes of section 422 of the Code, and is therefore not subject to
favourable tax treatment under the Code;
(r) "Non-ISO Optionee" means an Optionee to whom a Non-ISO has been
granted;
(s) "Option" means an option to purchase Shares granted pursuant to the
terms of this Plan;
(t) "Option Agreement" means a written agreement between the Company and
an Optionee, specifying the terms of the Option being granted to the
Optionee under the Plan;
(u) "Option Price" means the exercise per Share for an Option which shall
be expressed in Canadian funds or in the United States dollar
equivalent thereof;
(v) "Optionee" means a person to whom an Option has been granted;
(w) "Person" means a natural person, company, government, or political
subdivision or agency of a government; and where two or more Persons
act as a partnership, limited partnership, syndicate or other group
for the purpose of acquiring, holding or disposing of securities of an
issuer, such syndicate or group shall be deemed to be a Person;
(x) "Plan" means this Stock Option Plan of the Company;
(y) "Qualified Domestic Relations Order" means a judgment or order which
relates to the provision of child support, alimony payments or marital
property rights to a spouse, former spouse, child or other dependent
of an Optionee, made pursuant to domestic relations law of a state of
the United States, and which meets all the requirements of section
414(p) of the Code;
(z) "Qualified Successor" means a person who is:
(i) entitled to ownership of an Option upon the death of an
Optionee, pursuant to a will or the applicable laws of
descent and distribution upon death, or
<PAGE>
(ii) a Domestic Relations Successor of an Optionee;
(aa) "Related Company" shall mean a company which is an affiliate of the
Company as the term "affiliate" is defined in Section 1(2) of the
Ontario Securities Act, as amended from time to time;
(bb) "Shares" means the common shares without par value in the capital of
the Company;
(cc) "Term" means the period of time during which an Option may be
exercised; and
(dd) "Terminating Event" means:
(i) the dissolution or liquidation of the Company,
(ii) a merger or consolidation of the Company with one or more
corporations as a result of which, immediately following
such merger or consolidation, the shareholders of the
Company as a group will hold less than a majority of the
outstanding capital stock of the surviving corporation,
(iii) the sale or other disposition of all or substantially all of
the assets of the Company, or
(iv) a material change in the capital structure of the Company
that is deemed to be a Terminating Event by virtue of the
last sentence of Section 11.1 of this Plan or by virtue of
Section 11.4 of this Plan.
2. STATEMENT OF PURPOSE
2.1 Principal Purposes - The principal purposes of the Plan are to provide the
Company with the advantages of the incentive inherent in share ownership on the
part of employees, officers, directors, and consultants responsible for the
continued success of the Company; to create in such individuals a proprietary
interest in, and a greater concern for, the welfare and success of the Company;
to encourage such individuals to remain with the Company; and to attract new
employees, officers, directors and consultants to the Company.
2.2 ISOs and Non-ISOs - Under this Plan, the Company may grant either ISOs or
Non-ISOs. Each ISO granted hereunder is intended to constitute an "incentive
stock option", for the purposes of section 422 of the Code, and this Plan and
each such ISO is intended to comply with all of the requirements of Section 422
of the Code and of all other provisions of the Code applicable to incentive
stock options and to plans issuing the same. Each Non-ISO granted hereunder is
intended to constitute an Option that is not an "incentive stock option" for the
purposes of section 422 of the Code, and that does not comply with the
requirements of Section 422 of the Code.
2.3 Benefit to Shareholders - The Plan is expected to benefit shareholders by
enabling the Company to attract and retain personnel of the highest caliber by
offering such personnel an opportunity to share in any increase in value of the
Shares resulting from their efforts.
3. ADMINISTRATION
3.1 Board or Committee - The Plan shall be administered by the Board or by a
Committee appointed in accordance with Section 3.2 or 3.5(b) below.
3.2 Appointment of Committee - The Board may at any time appoint a Committee,
consisting of not less than two of its members, to administer the Plan on behalf
of the Board in accordance with such terms and conditions as the Board may
prescribe, consistent with this Plan. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board. From time to time, the
Board may increase the size of the Committee and appoint additional members,
<PAGE>
remove members (with or without cause) and appoint new members in their place,
fill vacancies however caused, or remove all members of the Committee and
thereafter directly administer the Plan.
3.3 Quorum and Voting - A majority of the members of the Committee shall
constitute a quorum, and, subject to the limitations in this Section 3, all
actions of the Committee shall require the affirmative vote of members who
constitute a majority of such quorum. No member of the Committee who is a
director to whom an Option may be granted may participate in the decision to
grant such Option (but any such member may be counted in determining the
existence of a quorum at any meeting of the Committee in which action is taken
with respect to the granting of an Option to him).
3.4 Administration of Plan upon Registration of Equity Securities -
Notwithstanding the foregoing provisions of this Section 3, in the event the
Company is or becomes subject to the provisions of Section 16 of the Exchange
Act, the Board shall attempt to provide for administration of the Plan, insofar
as it relates to the participation of officers, directors or stockholders of the
Company who are subject to the reporting and liability provisions of Section 16
of the Exchange Act, in a manner which shall qualify the grant, exercise,
expiration or surrender of Options under this Plan for the treatment afforded by
Securities and Exchange Commission Rule 16b-3, as amended from time to time, or
any successor rule or regulatory requirements.
3.5 Powers of Committee - Any Committee appointed under Section 3.2 or 3.4 above
shall have the authority to do the following:
(a) administer the Plan in accordance with its terms;
(b) determine all questions arising in connection with the administration,
interpretation, and application of the Plan, including all questions
relating to the value of the Shares;
(c) correct any defect, supply any information or reconcile any
inconsistency in the Plan in such manner and to such extent as shall
be deemed necessary or advisable to carry out the purposes of the
Plan;
(d) prescribe, amend and rescind rules and regulations relating to the
administration of the Plan;
(e) determine the duration and purpose of leaves of absence from
employment which may be granted to Optionees without constituting a
termination of employment for purposes of the Plan;
(f) do the following with respect to the granting of Options:
(i) determine the employees, officers, directors or consultants
to whom Options shall be granted, based on the eligibility
criteria set out in this Plan,
(ii) determine whether such Options shall be ISOs or Non-ISOs,
(iii) determine the terms and provisions of the Option Agreement
which shall be entered into with each Optionee (which need
not be identical with the terms of any other Option
Agreement),
(iv) amend the terms and provisions of an Option Agreement,
provided the Committee obtains:
A. the consent of the Optionee; and
B. the approval of any stock exchange on which the Company
is listed,
(v) determine when Options shall be granted,
(vi) determine the number of Shares subject to each Option, and
<PAGE>
(g) make all other determinations necessary or advisable for
administration of the Plan.
3.6 Obtain Regulatory Approvals - In administering this Plan, the Committee will
obtain any regulatory approvals which may be required pursuant to applicable
securities laws or the rules of any stock exchange or over the counter market on
which the Shares are listed.
3.7 Administration by Committee - The Committee's exercise of the authority set
out in Section 3.5 shall be consistent with the intent that ISOs issued under
the Plan be qualified under the terms of Section 422 of the Code, and that
Non-ISOs shall not be so qualified. All determinations made by the Committee in
good faith on matters referred to in Section 3.5 shall be final, conclusive and
binding upon all Persons. The Committee shall have all powers necessary or
appropriate to accomplish its duties under this Plan. In addition, the
Committee's administration of the Plan shall in all respects be consistent with
the policies and rules of any stock exchange or over the counter market on which
the Shares are listed.
4. ELIGIBILITY
4.1 Eligibility for ISOs - ISOs may be granted to any employee of the Company or
any Related Company, including directors or officers who are employees of the
Company or any Related Company. An Optionee who is not an employee of the
Company or any Related Company is not eligible to receive an ISO under the Plan.
4.2 Eligibility for Non-ISOs - Non-ISOs may be granted to any employee, officer,
director or consultant of the Company or any Related Company.
4.3 No Violation of Securities Laws - No Option shall be granted to any Optionee
unless the Committee has determined that the grant of such Option and the
exercise thereof by the Optionee will not violate the securities law of the
jurisdiction in which the Optionee resides.
5. SHARES SUBJECT TO THE PLAN
5.1 Number of Shares - The Committee, from time to time, may grant Options to
purchase an aggregate of up to 2,100,000 Shares, subject to regulatory approval,
to be made available from authorized, but unissued, Shares. In calculating the
foregoing 2,100,000 Shares, the Committee shall include all Shares subject to
options outstanding prior to the Effective Date of the Plan, which as at the
Effective Date, comprises 1,569,249 Shares. The maximum number of 2,100,000
Shares shall be adjusted, where necessary, to take account of the events
referred to in Section 11 hereof.
5.2 Decrease in Number of Shares Subject to Plan - Upon exercise of an Option,
the number of Shares thereafter available under the Plan and under the Option
shall decrease by the number of Shares as to which the Option was exercised.
5.3 Expiry of Option - If an Option expires or terminates for any reason without
having been exercised in full, the unpurchased Shares subject thereto shall
again be available for the purposes of the Plan.
5.4 Reservation of Shares - The Company will at all times reserve for issuance
and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
6. OPTION TERMS
6.1 Option Agreement - With respect to each Option to be granted to an Optionee,
the Committee shall specify the following terms in the Option Agreement between
the Company and the Optionee:
(a) whether such Option is an ISO or a Non-ISO;
<PAGE>
(b) the number of Shares subject to purchase pursuant to such Option,
provided that the number of Shares reserved for issuance to any one
person pursuant to Options does not exceed 5% of the outstanding
Shares;
(c) the Date of Grant;
(d) the Term, provided that:
(i) the length of the Term shall in no event be greater than ten
years following the Date of Grant; and
(ii) if an ISO Option is granted to an Optionee who on the Date
of Grant beneficially owns more than 10% of the total
combined voting power of all classes of shares of the
Company, the Term of the Option shall not exceed five years;
(e) the Option Price, provided that:
(i) the Option Price shall not be less than the Fair Market
Value of the Shares on the Date of Grant; and
(ii) if an ISO Option is granted to an Optionee who on the Date
of Grant beneficially owns more than 10% of the total
combined voting power of all classes of shares of the
Company or a Related Company, then the Option Price shall be
at least 110% of the Fair Market Value of the Shares on the
Date of Grant;
(f) any vesting schedule upon which the exercise of an Option is
contingent; provided that the Committee shall have complete discretion
with respect to the terms of any such vesting schedule, including,
without limitation, discretion to:
(i) allow full and immediate vesting upon the grant of such
Option,
(ii) to permit partial vesting in stated percentage amounts based
on the length of the Term of such Option, and
(iii) to permit full vesting after a stated period of time has
passed from the Date of Grant; and
(g) such other terms and conditions as the Committee deems advisable and
are consistent with the purposes of this Plan.
Amendments to Option Agreements are subject to regulatory approval, if required.
6.2 No Grant After Ten Years From Effective Date - No Option shall be granted
under the Plan later than ten years from the Effective Date of the Plan. Except
as expressly provided herein, nothing contained in this Plan shall require that
the terms and conditions of Options granted under the Plan be uniform.
6.3 No Disposition for Six Months - An Optionee who is subject to Section 16 of
the Exchange Act shall not make any disposition, as that term is used by Rule
16b-3 under the Exchange Act, of any Shares issued upon exercise of an Option
unless at least six months has elapsed between the Date of Grant of the Option
and the date of disposition of the Shares issued upon exercise of such Option.
<PAGE>
7. LIMITATION ON GRANTS OF OPTIONS
7.1 Non-ISO if Exceed $100,000 (U.S.) - If the aggregate Fair Market Value of:
(a) Shares underlying Options which are ISOs which have been granted to an
Optionee under this Plan, and
(b) Shares underlying incentive stock options which have been granted to
such Optionee under any other plan of the Company or any Related
Company,
which are exercisable for the first time during a calendar year, exceeds
$100,000 (U.S.), as such amount may be adjusted from time to time under Section
422(d) of the Code, then, to the extent of such excess, such Options shall be
treated as Non-ISOs.
7.2 ISO Optionee Owning Greater Than 10% of Voting Securities - The Committee
may grant an ISO to an employee of the Company or any Related Company who, at
the Date of Grant, owns securities of the Company or any Related Company
representing more than 10% of the total combined voting power of all classes of
shares of the Company or any Related Company, only if:
(a) the Option Price is at least 110% of the Fair Market Value of the
Shares at the Date of Grant; and
(b) the Term is five years or less.
8. EXERCISE OF OPTION
8.1 Method of Exercise - Subject to any limitations or conditions imposed upon
an Optionee pursuant to the Option Agreement or Section 6 hereof, an Optionee
may exercise an Option by giving written notice thereof to the Company at its
principal place of business.
8.2 Payment of Option Price - The notice described in Section 8.1 shall be
accompanied by full payment of the aggregate Option Price to the extent the
Option is so exercised, and full payment of any amounts the Company determines
must be withheld for tax purposes from the Optionee pursuant to the Option
Agreement. Such payment shall be:
(a) in lawful money (Canadian funds) by cheque;
(b) at the discretion of the Committee and if such form of payment is
permitted under the corporate laws then governing the Company, by
delivery of the Optionee's personal recourse note bearing interest at
a rate deemed appropriate by the Committee;
(c) at the discretion of the Committee, and subject to all applicable
securities laws, through delivery by the Optionee and/or withholding
by the Company, of Shares having a market value as of the date of
exercise equal to the cash exercise price of the Option plus any
amounts that the Company determines must be withheld from the Optionee
for U.S. or Canadian tax purposes. The market value of each of the
Shares on the date of delivery shall be determined in good faith by
the Committee, which determination shall be binding for all purposes
hereunder; or
(d) at the discretion of the Committee, by any combination of the
consideration contemplated by Sections 8.2(a) to 8.2(c) above.
8.3 Issuance of Certificates - As soon as practicable after exercise of an
Option in accordance with Sections 8.1 and 8.2 hereof, the Company shall issue a
certificate or certificates evidencing the Shares with respect to which the
Option has been exercised. Until the issuance of such certificate or
certificates, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to such Shares, notwithstanding the
exercise of the Option. No
<PAGE>
adjustment will be made for a dividend or other right for which the record date
is prior to the date the certificate is issued, except as provided by Section 11
hereof.
9. TRANSFERABILITY OF OPTIONS
9.1 Non-Transferable - Except as provided otherwise in this Section 9, Options
are non-assignable and non-transferable.
9.2 Death of Optionee - If the employment of an Optionee as an employee or
consultant of the Company or any Related Company, or the position of an Optionee
as a director or officer of the Company or any Related Company, terminates as a
result of his or her death, any Options held by such Optionee shall pass to the
Qualified Successor of the Optionee, and
(a) in the case of an ISO, shall be exercisable by the Qualified Successor
for a period of six months following such death, and
(b) in the case of a Non-ISO, shall be exercisable by the Qualified
Successor for a period of 12 months following such death,
provided that in no case shall the Term of the Option extend beyond 10 years
from the Date of Grant.
9.3 Disability of Optionee - If the employment of an Optionee as an employee or
consultant of the Company or any Related Company, or the position of an Optionee
as a director or officer of the Company or any Related Company, is terminated by
the Company or any Related Company by reason of such Optionee's Disability, any
Option held by such Optionee that could have been exercised immediately prior to
such termination of service shall be exercisable by such Optionee, or by his
Guardian, for a period of one year following the termination of service of such
Optionee.
9.4 Disability and Death of Optionee - If an Optionee who has ceased to be
employed by the Company or any Related Company by reason of such Optionee's
Disability dies within six months after the termination of such employment, any
Option held by such Optionee that could have been exercised immediately prior to
his or her death shall pass to the Qualified Successor of such Optionee, and
shall be exercisable by the Qualified Successor:
(a) in the case of an ISO, for a period of six months following the death
of such Optionee, and
(b) in the case of a Non-ISO, for a period of 12 months following the
death of such Optionee,
provided that in no case shall the Term of the Option extend beyond 10 years
from the Date of Grant.
9.5 Vesting - Options held by a Qualified Successor or exercisable by a Guardian
shall, during the period prior to their termination, continue to vest in
accordance with any vesting schedule to which such Options are subject.
9.6 Unanimous Agreement - If two or more persons constitute the Qualified
Successor or the Guardian of an Optionee, the rights of such Qualified Successor
or such Guardian shall be exercisable only upon the unanimous agreement of such
persons.
9.7 Deemed Non-Interruption of Employment - Employment shall be deemed to
continue intact during any military or sick leave or other bona fide leave of
absence if the period of such leave does not exceed 90 days or, if longer, for
so long as the Optionee's right to reemployment with the Company or any Related
Company is guaranteed either by statute or by contract. If the period of such
leave exceeds 90 days and the Optionee's reemployment is not so guaranteed, then
his or her employment shall be deemed to have terminated on the ninety-first day
of such leave.
<PAGE>
10. TERMINATION OF OPTIONS
10.1 Termination of Options - To the extent not earlier exercised or terminated
in accordance with section 9 above, an Option shall terminate at the earliest of
the following dates:
(a) the termination date specified for such Option in the Option
Agreement;
(b) where the Optionee's position as an employee, consultant or director
of the Company or any Related Company is terminated for just cause,
the date of such termination for just cause;
(c) where the Optionee's position as an employee, consultant, officer or
director of the Company or any Related Company terminates for a reason
other than the Optionee's Disability, death, or termination for just
cause, 30 days after such date of termination, or upon the Optionee
making written application to the Committee and receiving the written
consent of the Committee, which consent may be given at the discretion
of the Committee, no later than the original expiry date of such
Option when it was granted;
(d) the date of any sale, transfer, assignment or hypothecation, or any
attempted sale, transfer, assignment or hypothecation, of such Option
in violation of Section 9.1 above; and
(e) the date specified in Section 11.2 below for such termination in the
event of a Terminating Event.
10.2 Lapsed Options - If Options are surrendered, terminated or expire without
being exercised in whole or in part, new Options may be granted covering the
Shares not purchased under such lapsed Options. If an Option has been
surrendered in connection with the regranting of a new Option to the same
Optionee on different terms than the original Option granted to such Optionee,
then the new Option is subject to approval of the stock exchange on which the
Shares are listed.
11. ADJUSTMENTS TO OPTIONS
11.1 Alteration in Capital Structure - If there is a material alteration in the
capital structure of the Company resulting from a recapitalization, stock split,
reverse stock split, stock dividend, or otherwise, the Committee shall make such
adjustments to this Plan and to the Options then outstanding under this Plan as
the Committee determines to be appropriate and equitable under the
circumstances, so that the proportionate interest of the holder of each such
Option shall, to the extent practicable, be maintained as before the occurrence
of such event. Such adjustments may include, without limitation (a) a change in
the number or kind of shares of the Company covered by such Options, and (b) a
change in the Option Price payable per share; provided, however, that the
aggregate Option Price applicable to the unexercised portion of existing Options
shall not be altered, it being intended that any adjustments made with respect
to such Options shall apply only to the price per share and the number of shares
subject thereto. For purposes of this Section 11.1, neither (i) the issuance of
additional shares of stock of the Company in exchange for adequate consideration
(including services), nor (ii) the conversion of outstanding preferred shares of
the Company into Shares shall be deemed to be material alterations of the
capital structure of the Company. If the Committee determines that the nature of
a material alteration in the capital structure of the Company is such that it is
not practical or feasible to make appropriate adjustments to this Plan or to the
Options granted hereunder, such event shall be deemed a Terminating Event for
the purposes of this Plan.
11.2 Terminating Events - Subject to Section 11.3, all Options granted under the
Plan shall terminate upon the occurrence of a Terminating Event.
11.3 Notice of Terminating Event - The Committee shall give notice to Optionees
not less than thirty days prior to the consummation of a Terminating Event. Upon
the giving of such notice, all Options granted under the Plan shall become
immediately exercisable, notwithstanding any contingent vesting provision to
which such Options may have otherwise been subject.
<PAGE>
11.4 Corporate Reorganization - In the event of a reorganization as defined in
this Section 11.4 in which the Company is not the surviving or acquiring
corporation, or in which the Company is or becomes a wholly-owned subsidiary of
another corporation after the effective date of the reorganization, then unless
provision is made by the acquiring corporation for the assumption of each Option
granted under this Plan, or the substitution of an option therefor, such that no
Modification of any such Option occurs, all Options granted under this Plan
shall terminate and such event shall be deemed a Terminating Event. For purposes
of this Section 11.4, reorganization shall mean any statutory merger, statutory
consolidation, sale of all or substantially all of the assets of the Company, or
sale, pursuant to an agreement with the Company, of securities of the Company
pursuant to which the Company is or becomes a wholly-owned subsidiary of another
corporation after the effective date of the reorganization.
11.5 Acceleration on Change of Control - Upon a Change in Control, all Options
shall become immediately exercisable, notwithstanding any contingent vesting
provisions to which such Options may have otherwise been subject.
11.6 Acceleration of Date of Exercise - The Committee shall have the right to
accelerate the date of exercise of any installment of any Option; provided that,
without the consent of the Optionee with respect to any Option, the Committee
shall not accelerate the date of any installment of any Option granted to an
employee as an ISO (and not previously converted into a Non-ISO pursuant to
Section 13 below) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Section 7.1
above.
11.7 Determinations to be Made By Committee - Adjustments and determinations
under this Section 11 shall be made by the Committee, whose decisions as to the
adjustments or determination which shall be made, and the extent thereof, shall
be final, binding, and conclusive.
11.8 Effect of a Take-over If a bona fide offer (the "Offer") for Shares is made
to an Optionee or to shareholders generally or to a class of shareholders which
includes the Optionee, which Offer, constitutes a take-over bid within the
meaning of section 89(1) of the Ontario Securities Act, as amended from time to
time, the Company shall, immediately upon receipt of notice of the Offer, notify
each Optionee of full particulars of the Offer, whereupon any Option held by an
Optionee may be exercised in whole or in part by the Optionee so as to permit
the Optionee to tender the Shares received upon such exercise (the "Optioned
Shares") to the Offer. If:
(a) the Offer is not completed within the time specified therein; or
(b) all of the Optioned Shares tendered by the Optionee pursuant to the
Offer are not taken up and paid for by the offeror pursuant thereto;
the Optioned Share or, in the case of clause (b) above, the optioned Shares that
are not taken up and paid for, may be returned by the Optionee to the Company
and reinstated as authorized but unissued shares and with respect to such
returned Optioned Shares, the Option shall be reinstated as if it had not been
exercised. If any Optioned Shares are returned to the Company under this
Section, the Company shall refund the exercise price to the Optionee for such
Optioned Shares.
12. TERMINATION AND AMENDMENT OF PLAN
12.1 Termination of Plan - Unless earlier terminated as provided in Section 11
above or in Section 12.2 below, the Plan shall terminate on, and no Option shall
be granted under the Plan on or after, the date which is ten years from the
Effective Date of the Plan.
12.2 Power of Committee to Terminate or Amend Plan - Subject to the approval of
any stock exchange on which the Company is listed, the Committee may terminate,
suspend or amend the terms of the Plan; provided, however, that, except as
provided in Section 11 above, the Committee may not do any of the following
without obtaining, within 12 months either before or after the Committee's
adoption of a resolution authorizing such action, approval by the affirmative
votes of the holders of a majority of the voting securities of the Company
present, or represented, and entitled to vote at a meeting duly held in
accordance with the applicable corporate laws, or by the written consent of the
holders of a majority of the securities of the Company entitled to vote:
<PAGE>
(a) increase the aggregate number of Shares which may be issued under the
Plan;
(b) materially modify the requirements as to eligibility for participation
in the Plan, or change the designation of the employees or class of
employees eligible to receive ISOs under the Plan;
(c) materially increase the benefits accruing to participants under the
Plan; or
(d) make any change in the terms of the Plan that would cause the ISOs
granted hereunder to lose their qualification as "incentive stock
options" under Section 422 of the Code;
however, the Committee may amend the terms of the Plan to comply with the
requirements of any applicable regulatory authority, without obtaining the
approval of its shareholders.
12.3 No Grant During Suspension of Plan - No Option may be granted during any
suspension, or after termination, of the Plan. Amendment, suspension or
termination of the Plan shall not, without the consent of the Optionee, alter or
impair any rights or obligations under any Option previously granted.
13. CONVERSION OF ISOs INTO NON-ISOs
13.1 Conversion of ISOs into Non-ISOs - At the written request of any ISO
Optionee, the Committee may in its discretion take such actions as may be
necessary to convert such Optionee's ISOs (or any installments or portions of
installments thereof) that have not been exercised on the date of conversion
into Non-ISOs at any time prior to the expiration of such ISOs, regardless of
whether the Optionee is an employee of the Company or a Related Company at the
time of such conversion. Such actions include, but shall not be limited to,
extending the exercise period of such ISOs, provided, however, that such
exercise period shall in no event exceed 10 years following the Date of Grant
without approval of The Toronto Stock Exchange. At the time of such conversion,
the Committee, with the consent of the Optionee, may impose such conditions on
the exercise of the resulting Non-ISOs as the Committee in its discretion may
determine, provided that such conditions are consistent with this Plan. Nothing
in the Plan shall be deemed to give any Optionee the right to have such
Optionee's ISOs converted into Non-ISOs, and no such conversion shall occur
until and unless the Committee takes appropriate action. The Committee, with the
consent of the Optionee, may also terminate any portion of any ISO that has not
been exercised at the time of such conversion.
14. CONDITIONS PRECEDENT TO ISSUANCE OF SHARES
14.1 Compliance with Laws - Shares shall not be issued pursuant to the exercise
of any Option unless the Shares are fully paid and non-assessable and the
exercise of such Option and the issuance and delivery of such Shares comply with
all relevant provisions of law, including, without limitation, the United States
Securities Act of 1933, as amended, any applicable state or provincial
securities or corporate laws, the rules and regulations promulgated thereunder,
and the requirements of any stock exchange upon which the Shares may then be
listed or otherwise traded.
14.2 Representations by Optionee - As a condition precedent to the exercise of
any Option, the Company may require the Optionee to represent and warrant, at
the time of 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 representations and warranties are
required by any applicable law.
14.3 Regulatory Approval to Issuance of Shares - The Company's inability to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability with
respect to the failure to issue or sell such Shares.
<PAGE>
15. USE OF PROCEEDS
15.1 Use of Proceeds - Proceeds from the sale of Shares pursuant to the Options
granted and exercised under the Plan shall constitute general funds of the
Company and shall be used for general corporate purposes.
16. NOTICES
16.2 Notices - All notices, requests, demands and other communications required
or permitted to be given under this Plan and the Options granted under this Plan
shall be in writing and shall be either served personally on the party to whom
notice is to be given, in which case notice shall be deemed to have been duly
given on the date of such service; telefaxed, in which case notice shall be
deemed to have been duly given on the date the telefax is sent; or mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, return receipt requested, postage prepaid, and addressed to the party
at his or its most recent known address, in which case such notice shall be
deemed to have been duly given on the tenth postal delivery day following the
date of such mailing.
17. MISCELLANEOUS PROVISIONS
17.1 No Obligation to Exercise - Optionees shall be under no obligation to
exercise Options granted under this Plan.
17.2 No Obligation to Retain Optionee - Nothing contained in this Plan shall
obligate the Company or any Related Company to retain an Optionee as an
employee, officer, director, or consultant for any period, nor shall this Plan
interfere in any way with the right of the Company or any Related Company to
reduce such Optionee's compensation.
17.3 Binding Agreement - The provisions of this Plan and each Option Agreement
with an Optionee shall be binding upon such Optionee and the Qualified Successor
or Guardian of such Optionee.
17.4 Use of Terms - Where the context so requires, references herein to the
singular shall include the plural, and vice versa, and references to a
particular gender shall include either or both genders.
17.5 Headings - The headings used in this Plan are for convenience of reference
only and shall not in any way affect or be used in interpreting any of the
provisions of this Plan.
17.6 No Representation or Warranty - The Company makes no representation or
warranty as to the future market value of any Shares issued in accordance with
the provisions of this Share Option Plan.
Date approved by the Board of Directors of the Company: February 25, 1999
-----------------
/s/ M. Greg Beniston
M. Greg Beniston, Secretary
EXHIBIT 4.2
MDSI MOBILE DATA SOLUTIONS INC.
1999 Stock Purchase Plan
Part A - Introduction
1. Purpose
The purpose of the Plan is to provide an incentive to employees and senior
officers from time to time to acquire a proprietary interest in MDSI, to
encourage their long term commitment and continued employment or involvement
with MDSI, and to increase their individual and combined efforts on behalf of
MDSI.
The Plan consists of the following two separate components as described below:
(a) the MDSI Purchase Plan; and
(b) the Employee Share Ownership Program.
2. Definitions
In this Plan, the following words have the following meanings:
(a) "Board" means the Board of Directors of MDSI;
(b) "Committee" means the Compensation Committee of MDSI;
(c) "Employee" means any full or part-time employee or Senior Officer of MDSI
who works on average at least 20 hours per week, has completed at least
three months of their probationary period and qualifies to purchase Shares
under the Plan, and such other persons as may be considered to be employees
or the equivalent thereof by the applicable regulatory authorities for the
purposes of this Plan;
(d) "Effective Date" means February 25, 1999;
(e) "ESOP" or "Employee Share Ownership Program" means the program administered
by the Province of British Columbia under the Employee Investment Act
(British Columbia) to provide employees with provincial tax credits to
invest in their employers.
(f) "MDSI" means MDSI Mobile Data Solutions Inc. and its subsidiaries.
(g) "ME" means the Montreal Exchange; and
(h) "Plan" means this Stock Purchase Plan;
(i) "President" means the president of MDSI;
(j) "Rules" means the rules adopted by MDSI from time to time for the
administration of the Plan in accordance with the Employee Investment Act
of British Columbia;
(k) "Senior Officer" means the President, a vice-president, the secretary, and
any such other person as is designated as an officer by the Board, provided
such person is an employee of MDSI;
(l) "Shares" means common shares without par value in the capital of MDSI to be
issued from treasury which Employees are entitled to purchase pursuant to
this Plan;
(m) "Subscription Price" means the greater of: (i) the TSE weighted average of
MDSI shares for the first five (5) business days in the third month of the
most recently completed fiscal quarter of MDSI prior to the
<PAGE>
commencement date of the quarterly subscription period, less fifteen
percent (15%), or (ii) the average of the highest and lowest quoted selling
prices of MDSI shares on the TSE on the fifth business day in the third
month of the most recently completed fiscal quarter of MDSI prior to the
commencement date of the quarterly subscription period, less fifteen
percent (15%); and
(n) "TSE" means the Toronto Stock Exchange.
3. Administration
The Plan shall be effective as of the Effective Date and shall terminate on the
earlier of (a) the date which is ten years from the Effective Date; and (b) such
other date as the Board may determine. The Plan shall be administered by the
Committee which shall be appointed by the Board from among its own members and
shall consist of not less than three (3) members. All decisions of the Committee
shall be approved by its members on a majority vote basis and shall be binding
and conclusive for all purposes and upon all persons.
Subject to any express direction by resolution of the Board and to the rules of
the TSE and ME from time to time, the Committee shall have full authority to:
(a) determine and designate from time to time Employees, as defined above, who
are eligible to participate under the Plan;
(b) determine the time or times when, and the manner in which, Shares may be
purchased under the Plan;
(c) determine from time to time the Subscription Price, as defined above, of
the Shares; and
(d) interpret the Plan and to make such rules and regulations and establish
such procedures as it deems appropriate for the administration of the Plan.
Part B -MDSI Purchase Plan
4. Contributions
(a) Employees who are eligible to purchase Shares may do so through payroll
deduction and are permitted to contribute up to $10,000 annually. Payroll
deduction authorizations will continue indefinitely at the rate selected
(the "Contribution") unless the Employee changes or suspends the designated
deduction or terminates participation in the Plan.
(b) An Employee may change the designated payroll deduction quarterly by giving
MDSI thirty (30) days advance notice of such change on the appropriate form
provided by MDSI. If the Employee changes the designated percentage of
payroll deduction no further change shall be permitted until the start of
the next quarter following the effective date of such change.
(c) An Employee may suspend payroll deductions at any time by completing and
submitting the appropriate form provided by MDSI. If the Employee suspends
Contributions, further Contributions shall not be permitted to the Plan
until the start of the next quarter following the effective date of such
suspension.
(d) The MDSI Purchase Plan is intended to qualify as an "employee stock
purchase plan" within the meaning of Section 423 of the United States
Internal Revenue Code of 1986, as amended (the "Code"), and shall be
interpreted and administered in accordance with that intent.
5. Method of Operation
In accordance with section 2(m) hereof, a Subscription Price for Shares will be
established by MDSI. An Employee wishing to participate in the Plan must enter
into a subscription agreement for Shares with MDSI prior to the start of the
<PAGE>
year or the quarter, as the case may be. Employees may also enter into an annual
or balance of year subscription agreement with MDSI at the start of the MDSI
fiscal year or any quarter, provided that the subscription price for the Shares
subscribed will be determined at the start of each quarter.
Notwithstanding any other provision to the contrary, no Employee shall be
permitted to subscribe for any shares under the MDSI Purchase Plan if such
Employee, immediately after such subscription, owns shares that account for
(including all Shares that may be purchased under outstanding subscriptions
under the MDSI Purchase Plan and any other outstanding options to purchase
shares) five percent (5%) or more of the total combined voting power or value of
all classes of shares of MDSI or its subsidiaries, taking into account the stock
ownership rules in Code Section 424(d).
A plan account will be established in the name of each Employee. All
Contributions to the MDSI Purchase Plan shall be held in trust by MDSI. MDSI
will not be required to segregate the Contributions under the Plan from its own
corporate funds or to pay interest thereon.
At the end of each MDSI fiscal quarter in which an Employee has subscribed for
Shares, the Employee will have the following options with respect to his
Contributions:
(a) Authorize MDSI to convert the total Contribution to Shares at the
previously established Subscription Price for that quarter, and issue such
Shares to the Employee;
(b) Authorize MDSI to continue to hold the total Contribution in trust for that
Employee to be applied against future purchases of Shares at the
Subscription Price to be established for the MDSI fiscal quarter in which
the Employee elects to purchase the Shares, as instructed by the Employee
from time to time.
In addition to the foregoing, each Employee's total Contribution may be refunded
to such Employee in any of the following circumstances:
(c) on the death of an Employee, in which case such Employee's total
Contribution may be refunded to such Employee's lawful heirs, executors or
administrators at their option;
(d) if the employment of an Employee is terminated for any reason other than
death, in which case such Employee's total Contribution may be refunded to
the Employee, at the Employee's option; or
(e) in the event of any statutory merger, plan of arrangement, amalgamation,
consolidation, sale of all or substantially all of the assets of MDSI, or
sale, pursuant to an agreement with MDSI, of securities of MDSI pursuant to
which MDSI is or becomes a wholly-owned subsidiary of another corporation
after the effective date of such transaction, such Employee's total
Contribution may be refunded to the Employee, at the Employee's option.
During an Employee's lifetime, an Employee's right to purchase Shares under the
MDSI Purchase Plan is exercisable only by the Employee, and an Employee's rights
under the MDSI Purchase Plan, including rights to accumulated payroll
deductions, may not be pledged, assigned, encumbered or otherwise transferred
for any reason other than by will or the laws of descent and distribution.
6. Issue of Shares
Thirty (30) days after the end of each of MDSI fiscal quarter, unless instructed
otherwise by the Employee in writing, MDSI will issue from its treasury and
deliver to each Employee, Shares equal in the value to the Contribution held in
trust on such date by MDSI for such Employee converted at the Subscription Price
for such quarter. If such conversion would otherwise result in the issue to an
Employee of a fraction of a share, MDSI will issue only such whole shares as are
issuable. MDSI shall hold any unused balance of the Contribution in trust for an
Employee until used in accordance with the MDSI Purchase Plan.
<PAGE>
7. Hold Period
All Shares issued to Employees under the MDSI Purchase Plan will be subject to a
180 day hold period.
8. RSP Option
An Employee may make an agreement with a trustee selected by him or her, on
terms complying with the Income Tax Act (Canada), to create a retirement savings
plan (RSP) which would receive and hold shares purchased under the MDSI Purchase
Plan. An Employee must specify both the maximum amount and the proportion of his
or her Contributions that may be paid into the RSP annually. Each Employee
should ascertain the advantages and disadvantages or an RSP for himself or
herself. Information is available from a number of sources including Revenue
Canada.
Part C- Employee Share Ownership Program
9. Method of Operation
Unless expressly stated otherwise, all provisions contained in the MDSI Purchase
Plan with respect to Contributions from Employees will apply to this Part C.
10. Provincial Tax Incentives
The Government of British Columbia will provide tax incentives under certain
conditions to Employees who invest in MDSI through the Employee Investment Act
and the Rules. The provincial tax credit is equal to 20% of the amount invested,
subject to a maximum of $2,000 per year and a lifetime exemption of $10,000.
Shares fully paid for in the first sixty (60) days of the year can have the tax
credit applied against income for that year or the previous year. The provincial
tax credits do not have any carry forward or carry back provisions.
11. Maximum Individual Contributions
The maximum value of Shares that an Employee may purchase and receive provincial
tax credits on is $10,000 annually and $50,000 lifetime. (i.e. 20% credit of
$10,000 = $ 2000 tax credit annually) The maximum aggregate value of Shares that
an Employee can purchase under the MDSI Purchase Plan and the ESOP is $10,000
per year. These Shares may also be put into an RSP for an additional federal tax
deduction.
12. Hold Period
All Shares issued to Employees and used for provincial tax credits under the
ESOP are subject to a three year hold period with an escrow agent, subject to
exceptions for the sale of the Shares in situations of hardship.
13. Purchase Method
Shares must be purchased by Employees either through payroll deduction or lump
sum to be eligible for tax credits under this Part C of the Plan.
14. Residency Requirement
An Employee must be a resident of the Province of British Columbia to be
eligible to participate in the ESOP.
Part D - General
15. Payment
At the discretion of the Committee and with sufficient advance notice, the full
purchase price for each of the Shares may be paid by all or none of the
Employees in cash or by certified cheque. An Employee shall have none of the
rights of a shareholder in respect of the Shares until the shares are issued to
such Employee.
<PAGE>
16. Employment/Appointment
Nothing contained in the Plan shall confer upon any Employee any right with
respect to employment or to continue in the service of MDSI, or interfere in any
way with the right of MDSI or its directors to terminate such Employee's
employment or service at any time. Participation in any part of the Plan is
voluntary.
17. Termination of Employment or Service
If an Employee shall cease to be employed by or provide services to MDSI or any
of its subsidiaries for any reason or shall receive notice from MDSI of the
termination of his employment or involvement, the Employee shall be deemed to be
no longer eligible to participate under the Plan. All applicable hold periods on
the Shares will remain after the cessation of employment with MDSI or provision
of services to it. Upon termination of employment or involvement with MDSI, an
Employee who has fully completed his/her probationary period or any extension
thereof may only elect to deal with his/her unconverted Contribution in
accordance with section 5(a) or (d) hereof. Any Employee who does not fully
complete his/her probationary period or any extension thereof may only elect to
deal with his/her unconverted Contribution in accordance with section 5(d)
hereof.
18. Tax Matters
All Employees participating under the Plan are encouraged to seek advice from
their professional advisors with respect to the tax implications of the Plan.
19. Record Keeping
MDSI shall maintain a register in which shall be recorded:
(a) the name and address of each Employee participating under the Plan;
(b) the parts of the Plan in which he or she participates;
(c) any Contributions made by such persons;
(d) the number of Shares issued and the number of Shares outstanding.
20. Effective Date and Term
Subject to any longer period of time which may be authorized by regulatory
approval, the Plan shall be effective as of the Effective Date and shall
terminate on the earlier of:
(a) the date which is ten years from the Effective Date; and
(b) such other date as the Board may determine.
21. Plan Subject to Regulatory & Shareholder Approval
Any rights granted by MDSI prior to the date of the first annual general meeting
of the shareholders of MDSI duly convened following the introduction of the Plan
will be subject to the approval of the TSE, the ME, the Employee Investment Act
administrator and shareholders of MDSI. If such approvals are not obtained, each
and every right granted under the Plan shall be null and void and shall convey
no rights to the Employee and all funds held in trust will be returned.
22. Risk
The Plan offers no guarantee against loss due to market declines. Each Employee
participating in the Plan must accept the risks of market fluctuations as well
as the benefits of share ownership.
23. Expenses of Plan
MDSI will pay all administrative costs of the Plan.
<PAGE>
24. Maximum Number of Shares
Without further approval by the shareholders of MDSI, the maximum number of
Shares to be reserved for issuance by MDSI under the MDSI Purchase Plan and the
Employee Share Ownership Program will not exceed 100,000 shares in the
aggregate.
Notwithstanding any other provision of this Plan, in any MDSI fiscal year, the
maximum aggregate amount that an Employee may contribute under this Plan is
$10,000 per annum.
25. Securities Law Requirements
MDSI shall use all reasonable efforts but shall not be obligated to issue any
Shares pursuant to the Plan, if such issuance would, in the opinion of counsel
for MDSI, violate the Securities Act of British Columbia (or any other
applicable statute), as it may be in effect at that time. Each Share shall be
subject to the further requirement that if at any time the Committee determines
that the listing or qualification of the Share under any securities legislation
or other applicable law, or the consent or approval of any governmental or other
regulatory body (including any applicable stock exchange), is necessary as a
condition of, or in connection with, the issue of the Share hereunder, such
Share shall not be issued unless such listing, qualification, consent or
approval has been effected or obtained free of any conditions not acceptable to
the Committee.
26. Amendment of the Plan
(a) The Board may subject to regulatory approval, amend the Plan if such
amendment is in compliance with the rules of the TSE, the ME and the ESOP.
The Committee may correct any defect or supply any omission or reconcile
any inconsistency in the Plan in the manner and to the extent it deems
desirable to carry the Plan into effect without action on the part of the
shareholders of MDSI; provided, however, that except as provided for
adjustment in this Section 26, unless the shareholders of MDSI shall have
first approved thereof the total number of Shares to be issued shall not be
increased beyond those contemplated in the Plan.
(b) The Board shall have the power, in the event of:
(i) any disposition of substantially all of the assets of MDSI,
dissolution or any merger, amalgamation or consolidation of MDSI,
with or into any other corporation, or the merger, amalgamation
or consolidation of any other corporation with or into MDSI; or
(ii) any acquisition pursuant to a public tender offer of a majority
of the then issued and outstanding common shares without par
value of MDSI;
to, subject to compliance with the rules of the Employee Investment Act,
the TSE and the ME, amend all outstanding subscription agreements with its
Employees to permit the issuance of all such Shares subscribed and paid for
in full prior to the effectiveness of any such transaction, and to
terminate such subscription agreements as of such effectiveness in the case
of transactions referred to in subsection (i) above, and as of the
effectiveness of such tender offer or such later date as the Board may
determine in the case of any transaction described in subsection (ii)
above. If the Board exercises such power, all Employee subscription
agreements then outstanding and subject to such requirements shall be
deemed to have been amended to permit the issuance of the exercise thereof
in whole or in part by the Employee at any time or from time to time as
determined by the Board prior to the effectiveness of such transaction, and
such subscription agreements shall also be deemed to have terminated as
provided above.
EXHIBIT 5.1
Reid & Company
Barristers & Solicitors
Suite 1040, Guinness Tower
1055 West Hastings Street
Vancouver, British Columbia,
Canada V6E 2E9
Telephone: (604) 687-5267
Facsimile: (604) 687-5872
David R. Reid Law Corporation
Reply attention of Don Collie
Direct Line: (604) 687-2404
Our File No.: 951058
March 27, 2000
MDSI Mobile Data Solutions Inc.
10271 Shellbridge Way
Richmond, British Columbia
Canada
V6X 2W8
Dear Sirs and Mesdames:
RE: MDSI Mobile Data Solutions Inc.: Registration Statement Relating to
1999 Stock Option Plan and Stock Purchase Plan
We are Canadian solicitors to MDSI Mobile Data Solutions Inc. (the
"Corporation"). We have been requested by the Corporation to provide the opinion
expressed herein in connection with the preparation and filing with the United
States Securities and Exchange Commission of a Registration Statement ("the
Registration Statement") on Form S-8 under the United States Securities Act of
1993 ("the Act"). The purpose of the Registration Statement is to register a
total of 2,200,000 Common shares (the "Shares") of the Corporation which are
issuable pursuant to exercises of stock options ("Options") which have been
granted or may be granted under the Corporation's 1999 Stock Option Plan, or
which are issuable pursuant to the Corporation's Stock Purchase Plan (the
"Purchase Plan").
The Shares consist of 2,100,000 Shares (the "Option Shares") which are issuable
pursuant to future exercises of stock options, and 100,000 Shares (the "Purchase
Plan Shares") which are issuable under the terms and conditions of the Purchase
Plan.
We express no opinion as to laws other than the laws of the Province of British
Columbia and the federal laws of Canada applicable therein, and we have assumed
that there is nothing in any other law which affects our opinions expressed
herein.
<PAGE>
2
For the purpose of the opinions expressed herein, we have examined the Articles
and By-Laws of the Corporation and originals or copies authenticated or
identified to our satisfaction of records of the Corporation, of certificates or
records of public officials and governmental bodies and authorities, of
certificates of officers or representatives of the Corporation and of other
records, contracts and instruments and we have made such investigations and
searches and considered such questions of law, all as we have deemed necessary
as a basis for the opinions hereinafter expressed. In such examinations we have
assumed the genuineness of all signatures and the authenticity of all documents
submitted to us as authenticated copies and the authenticity of the originals of
such authenticated copies.
In particular, we have examined a copy of, and rely upon, a certificate of an
officer of the Corporation, a copy of which is attached hereto.
Based and relying on the foregoing, we are of the opinion that:
1. the Option Shares have been duly authorized by the Corporation and
will, upon the due exercise of the Options relating to such Option
Shares and receipt by the Corporation of the issue price for the number
of Option Shares issuable pursuant to such exercises, be validly issued
by the Corporation and outstanding as fully paid and non-assessable
Shares; and
2. the Purchase Plan Shares have been duly authorized by the Corporation
and will, upon receipt by the Corporation of the established
subscription price for the number of Purchase Plan Shares issuable
pursuant to elections by participants under the Purchase Plan to have
such participants' contributions under the Purchase Plan converted to
Purchase Plan Shares, be validly issued by the Corporation and
outstanding as fully paid and non-assessable Shares.
Consent is hereby given to the use of our name in the Registration Statement,
and to the filing, as an exhibit to the Registration Statement, of this opinion.
In giving such consent, we do not admit that we come within the category of
persons whose consent is required under Section 7 of the Act.
Yours truly,
/s/ Reid & Company
EXHIBIT 23.1
Deloitte &
Touche -------------------------------------------------
Deloitte & Touche LLP Telephone: (604) 669-4466
Suite 2100 Facsimile: (604) 685-0395
1055 Dunsmuir Street
P.O. Box 49279
Four Bentall Centre
Vancouver, British Columbia
V7X 1P4
March 27, 2000
MDSI Mobile Data Solutions Inc.
3rd Floor Reception
10271 Shellbridge Way
Richmond, BC
V6X 2W8
Ladies & Gentlemen:
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of MDSI Mobile Data Solutions Inc. (the "Company"), of our
report dated February 25, 1999 relating to the consolidated balance sheets of
the Company and subsidiaries as at December 31, 1998 and 1997 and the related
consolidated statements of income (loss), shareholders' equity and cash flows
for each of the years' ended December 31, 1998 and 1997.
The above mentioned reports appear in the Company's Annual Report on Form 10-K
filed on March 31, 1999
/s/Deloitte & Touche LLP
CHARTERED ACCOUNTANTS
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Deloitte Touche
Tohmatsu
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