-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KM2Y16S0ELG0FH20xgz292kI+aK/8/QmCotEjXZEJbGpOzraJNr3v1QPGhFRhPTi PaJHI8ImMM3tGH6JNKA6UA== 0001095811-01-504529.txt : 20010823 0001095811-01-504529.hdr.sgml : 20010823 ACCESSION NUMBER: 0001095811-01-504529 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010822 EFFECTIVENESS DATE: 20010822 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUN MICROSYSTEMS INC CENTRAL INDEX KEY: 0000709519 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 942805249 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-68140 FILM NUMBER: 1721245 BUSINESS ADDRESS: STREET 1: 901 SAN ANTONIO RD CITY: PALO ALTO STATE: CA ZIP: 94303 BUSINESS PHONE: 6509601300 MAIL ADDRESS: STREET 1: 901 SAN ANTONIO ROAD CITY: PALO ALTO STATE: CA ZIP: 94303 S-8 1 f75257ors-8.txt FORM S-8 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 2001 REGISTRATION NO. ___________ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------- SUN MICROSYSTEMS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 94-2805249 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification Number)
901 SAN ANTONIO ROAD PALO ALTO, CA 94303 (650) 960-1300 (ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) --------------------------- ISOPIA INC. STOCK OPTION PLAN (FULL TITLE OF THE PLAN) ------------------------------------- SCOTT G. MCNEALY CHIEF EXECUTIVE OFFICER SUN MICROSYSTEMS, INC. 901 SAN ANTONIO ROAD PALO ALTO, CA 94303 (650) 960-1300 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) ------------------------------------- COPY TO: KATHARINE A. MARTIN, ESQ. WILSON SONSINI GOODRICH & ROSATI PROFESSIONAL CORPORATION 650 PAGE MILL ROAD PALO ALTO, CA 94304 (650) 493-9300 2
CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------------- Proposed Proposed Maximum Maximum Amount Offering Aggregate Amount of to be Price Per Offering Registration Title of Securities to be Registered Registered Share (1) Price Fee - ------------------------------------------------- ---------------- --------- ---------- ------------ Common Stock, par value $0.00067 per share, to be issued upon exercise of options granted under the ISOPIA Inc. Stock Option Plan (the "Plan") 134,305 shares $18.80 $2,524,934 $631.23 - -------------------------------------------------------------------------------------------------------------------
(1) The Proposed Maximum Offering Price Per Share was computed pursuant to Rule 457(h) under the Securities Act of 1933, as amended (the "Securities Act") solely for the purpose of calculating the registration fee. Computation based on the weighted-average per share exercise price (rounded to the nearest cent) of outstanding options under the Plan, the underlying shares of which are registered hereby. 3 PART II: INFORMATION REQUIRED IN REGISTRATION STATEMENT ITEM 3. INFORMATION INCORPORATED BY REFERENCE. There are hereby incorporated by reference into this Registration Statement the following documents and information heretofore filed with the Securities and Exchange Commission (the "Commission") by Sun Microsystems, Inc. (the "Registrant"): 1. The Registrant's Annual Report on Form 10-K for the year ended June 30, 2000, filed pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 2. The Registrant's Quarterly Reports on Form 10-Q for the quarters ended October 1, 2000, December 31, 2000 and April 1, 2001, respectively, filed pursuant to Section 13(a) of the Exchange Act. 3. The Registrant's Current Report on Form 8-K filed on December 8, 2000, pursuant to Section 13(a) of the Exchange Act. 4. The Registrant's Registration Statement on Form 8-A relating to the Registrant's Common Stock filed pursuant to Section 12(g) of the Exchange Act on October 24, 1986, as amended. 5. The Registrant's Registration Statement on Form 8-A/A Amendment No. 9 relating to the Registrant's Common Share Purchase Rights filed pursuant to Section 12(g) of the Exchange Act on December 20, 2000. All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement 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 in this Registration Statement and to be 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. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the General Corporation Law of the State of Delaware, as amended, provides that under certain circumstances a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative, by reason of the fact that 4 he or she is or was a director, officer, employee or agent of the Registrant or is or was serving at its request in such capacity in another corporation or business association, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Registrant and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Section 11 of the Restated Certificate of Incorporation of the Registrant provides in effect that, subject to certain limited exceptions, the Registrant shall indemnify its directors and officers to the extent authorized or permitted by the General Corporation Law of the State of Delaware. The directors and officers of the Registrant are insured under policies of insurance maintained by the Registrant, subject to the limits of the policies, against certain losses arising from any claims made against them by reason of being or having been such directors or officers. Like indemnification and insurance is also provided to those employees of the Registrant who serve as administrators of the Plan. In addition, the Registrant has entered into contracts with certain of its directors providing for indemnification of such persons by the Registrant to the full extent authorized or permitted by law, subject to certain limited exceptions. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS.
EXHIBIT NUMBER DOCUMENTS - ------- --------- 4.1 ISOPIA Inc. Stock Option Plan 4.2 Form of Stock Option Agreement 5.1 Opinion of Counsel with respect to the legality of the securities being registered 23.1 Consent of Counsel (Contained in Exhibit 5.1) 23.2 Consent of Ernst & Young LLP, Independent Auditors 24.1 Power of Attorney (Contained at page II-3)
ITEM 9. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 5 (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The 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 this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act 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 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 whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-1 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, Sun Microsystems, Inc., 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 Palo Alto, State of California, on this 22nd day of August, 2001. SUN MICROSYSTEMS, INC. By: /s/ Michael E. Lehman ------------------------------------- Michael E. Lehman, Executive Vice President, Corporate Resources and Chief Financial Officer II-2 7 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Scott G. McNealy and Michael E. Lehman, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Registration Statement on Form S-8 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 each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------- ----- ---- /s/ Scott G. McNealy Chairman of the Board of Directors, August 22, 2001 - ------------------------------------ and Chief Executive Officer Scott G. McNealy (Principal Executive Officer) /s/ Michael E. Lehman Executive Vice President, Corporate August 22, 2001 - ------------------------------------ Resources and Chief Financial Officer Michael E. Lehman (Principal Financial Officer) /s/ Michael L. Popov Vice President, Corporate Controller August 22, 2001 - ------------------------------------ (Principal Accounting Officer) Michael L. Popov /s/ James L. Barksdale Director August 22, 2001 - ------------------------------------ James L. Barksdale /s/ L. John Doerr Director August 22, 2001 - ------------------------------------ L. John Doerr /s/ Judith L. Estrin Director August 22, 2001 - ------------------------------------ Judith L. Estrin /s/ Robert J. Fisher Director August 22, 2001 - ------------------------------------ Robert J. Fisher /s/ Robert L. Long Director August 22, 2001 - ------------------------------------ Robert L. Long /s/ M. Kenneth Oshman Director August 22, 2001 - ------------------------------------ M. Kenneth Oshman /s/ Naomi O. Seligman Director August 22, 2001 - ------------------------------------ Naomi O. Seligman
II-3 8 SUN MICROSYSTEMS, INC. REGISTRATION STATEMENT ON FORM S-8 INDEX TO EXHIBITS
EXHIBIT NUMBER DOCUMENTS - ------- --------- 4.1 ISOPIA Inc. Stock Option Plan 4.2 Form of Stock Option Agreement 5.1 Opinion of Counsel with respect to the legality of the securities being registered 23.1 Consent of Counsel (Contained in Exhibit 5.1) 23.2 Consent of Ernst & Young LLP, Independent Auditors 24.1 Power of Attorney (Contained at page II-3)
II-4 EX-4.1 3 f75257orex4-1.txt EXHIBIT 4.1 1 EXHIBIT 4.1 ISOPIA INC. (FORMERLY ISOPIA INTERACTIVE NETWORK INC.) STOCK OPTION PLAN January 1, 2000 Prepared by: SMITH LYONS Suite 5800 Scotia Plaza 40 King Street West Toronto, Ontario M5H 3Z7 2 TABLE OF CONTENTS PAGE ARTICLE 1 DEFINITIONS AND CONSTRUCTION .................................... 1 1.1 Definitions ...................................................... 1 1.2 Construction of this Stock Option Plan ........................... 2 ARTICLE 2 ADMINISTRATION OF STOCK OPTION PLAN ............................. 2 2.1 Stock Option Plan Established .................................... 2 2.2 Board to Determine Participants and Extent of Options ............ 3 2.3 Option Agreement ................................................. 3 2.4 Board to Interpret, Change or Terminate Stock Option Plan ........ 3 2.5 Restrictions on Change or Termination of Stock Option Plan ....... 4 2.6 Effect of Board Actions; Liability of Board Members .............. 4 2.7 Total Number of Shares Issuable Under Stock Option Plan .......... 4 2.8 Lapsed Options ................................................... 5 2.9 Stock Option Plan Register ....................................... 5 2.10 Shareholders Agreement ........................................... 5 2.11 No Duty to Issue Fractional Shares ............................... 5 ARTICLE 3 NATURE OF OPTIONS ............................................... 5 3.1 Option Price ..................................................... 5 3.2 Option Period .................................................... 5 3.3 Vesting .......................................................... 6 3.4 Limit on Purchase of Shares Subject to Option .................... 6 3.5 Exercise of Option ............................................... 6 3.6 Cashless Exercise Rights ......................................... 6 3.7 Employment or Engagement Ends .................................... 7 3.8 Death, Mental Disability or Physical Disability of Optionee ...... 7 3.9 Regulatory Approvals and Regulatory Requirements ................. 8 3.10 Issuance of Shares ............................................... 8 3.11 Call Right on Termination ........................................ 8 ARTICLE 4 GENERAL ......................................................... 9 4.1 Rights of Optionees Not Assignable ............................... 9 4.2 Restriction on Residents of Foreign Jurisdiction ................. 9 4.3 No Rights as a Shareholder ....................................... 10 4.4 No Contract of Employment Rights ................................. 10 4.5 Effect of Right to Purchase Pro Rata Additional Shares ........... 10 4.6 Consolidation, Merger, etc ....................................... 10 4.7 Adjustment in Number of Shares, Etc .............................. 10 4.8 Take-Over Bid .................................................... 11 4.9 Acceleration on Sale ............................................. 11 4.10 No Representation or Warranty .................................... 11 4.11 Compliance with Applicable Law ................................... 12 4.12 Modifications to Stock Option Plan ............................... 12 4.13 Interpretation ................................................... 12
3 ISOPIA INC. (FORMERLY ISOPIA INTERACTIVE NETWORK INC.) STOCK OPTION PLAN ARTICLE 1 DEFINITIONS AND CONSTRUCTION 1.1 DEFINITIONS The following terms shall have the following meanings for the purposes of this Stock Option Stock Option Plan, except where the context or subject matter is inconsistent therewith: "BOARD" means the board of directors of the Corporation or, if established and authorized to act, means a committee of the Board specifically designated by the Board to be responsible for the Stock Option Plan; "BUSINESS DAY" means any day, other than a Saturday, Sunday or statutory holiday observed in Ontario; "CONSULTANT" means a person with whom the Corporation or a Subsidiary has a contract for substantial personal services; "CORPORATION" means ISOPIA Interactive Network Inc., a corporation incorporated pursuant to the laws of Ontario, and includes any successor corporation thereto; "OPTION" means an option to purchase Shares issued pursuant to, or governed by, this Stock Option Plan; "OPTION PERIOD" has the meaning attributed to it in Section 3.2; "OPTION PRICE" has the meaning attributed to it in Section 3.1; "OPTIONEE" means a Participant to whom an Option has been issued pursuant to this Stock Option Plan; "PARTICIPANT" means a person designated under Section 2.2 and "PARTICIPANTS" means all persons designated under that Section; 1 4 "PERSONNEL CONTRACT" means a contract between the Corporation and an employee or Consultant or a contract between a Subsidiary and an employee or Consultant, relating to the employment or engagement of the employee or Consultant, as the case may be; "SHARES" means common shares in the capital stock of the Corporation as adjusted in accordance with Sections 4.6 and 4.7, and all substitutions for common shares of the Corporation under Sections 4.6 and 4.7; "STOCK EXCHANGE" means any stock exchange upon which the Shares are listed for trading; "STOCK OPTION AGREEMENT" means an agreement with an Optionee setting out the terms and conditions to which any grant of Options to that Optionee is subject; "STOCK OPTION PLAN" means this Stock Option Plan; "SUBSIDIARY" means a subsidiary corporation of the Corporation; and "TAKE-OVER BID" means a take-over bid within the meaning of applicable securities legislation. 1.2 CONSTRUCTION OF THIS STOCK OPTION PLAN The headings of all articles, sections, and paragraphs in this Stock Option Plan are inserted for convenience of reference only and shall not affect the construction or interpretation of this Stock Option Plan. Whenever the singular or masculine are used in this Stock Option Plan, the same shall be construed as being the plural or feminine or neuter or vice versa where the context so requires. All references to currency in this Stock Option Plan are references to Canadian currency. "Hereby", "hereunder", and similar expressions refer to this Stock Option Plan as a whole and not to any particular article, section, paragraph or other part of this Stock Option Plan. ARTICLE 2 ADMINISTRATION OF STOCK OPTION PLAN 2.1 STOCK OPTION PLAN ESTABLISHED (a) The Stock Option Plan is hereby established with the intent of advancing the interests of the Corporation by encouraging and enabling the acquisition of an equity interest in the Corporation by key employees, directors, officers and Consultants. All options issued to such persons are governed by the Stock Option Plan. (b) The general purpose and intent of this Stock Option Plan shall be to encourage and reward the services and loyalty of those persons who are employees, officers, directors and Consultants of the Corporation, and any Subsidiary, from time to time and to attract new key persons to serve in such positions, thus furthering the management and growth of the Corporation. 2 5 (c) The officers and directors of the Corporation designated by the Board are hereby authorized and empowered to do all things and execute and deliver all instruments, undertakings and applications and writings as they, in their absolute discretion, consider necessary for the implementation of this Stock Option Plan and any regulations or administrative policies under this Stock Option Plan. (d) This Stock Option Plan shall become effective upon a date to be determined by the Board. 2.2 BOARD TO DETERMINE PARTICIPANTS AND EXTENT OF OPTIONS (a) The Board may from time to time by resolution designate key employees, directors, officers and Consultants of the Corporation or a Subsidiary as Participants in this Stock Option Plan. Each Participant may be issued an Option or Options, with the terms (including the number of Shares subject to the Option, the Option Price and the Option Period) as determined by the Board in accordance with this Stock Option Plan. (b) In determining the terms of any Option, the Board may consider the present and future contributions of the Participant and any other factors the Board deems appropriate. The judgment of the Board in designating Participants and in determining the terms of any Option shall be final, conclusive and binding for all purposes under this Stock Option Plan. (c) For the purposes hereof, any person who is both a director and an employee or Consultant of the Corporation, if such person participates in this Stock Option Plan, shall be deemed to participate as an employee or Consultant, and not as a director, for all the purposes hereof. 2.3 OPTION AGREEMENT Each Option issued under this Stock Option Plan shall be evidenced by an option agreement in such form as shall be determined by the Board. 2.4 BOARD TO INTERPRET, CHANGE OR TERMINATE STOCK OPTION PLAN Subject to Section 2.5, the Board shall have the unfettered power, where consistent with the general purpose and intent of the Stock Option Plan as set out in Section 2.1: (a) to interpret the provisions of this Stock Option Plan and to make regulations and formulate administrative policies for carrying this Stock Option Plan into effect; (b) to make such changes to this Stock Option Plan, any Options issued pursuant to this Stock Option Plan and this Stock Option Plan's regulations and administrative policies as, from time to time, the Board deems appropriate in the best interests of the Corporation; and (c) to rescind or terminate this Stock Option Plan as the Board shall deem advisable, at any time. 3 6 2.5 RESTRICTIONS ON CHANGE OR TERMINATION OF STOCK OPTION PLAN A change to this Stock Option Plan, to any Options or to any regulations or administrative policies under this Stock Option Plan shall be subject to approval, if required, by a Stock Exchange and any other regulatory authority having jurisdiction over the securities of the Corporation. If a change to this Stock Option Plan, to any Options or to any regulations or administrative policies under this Stock Option Plan would: (a) materially increase the benefits under this Stock Option Plan or any Options issued pursuant to this Stock Option Plan; (b) increase the number of Shares, other than by virtue of Sections 4.6 and 4.7 of this Stock Option Plan, which may be issued pursuant to this Stock Option Plan; or (c) materially modify the requirements as to eligibility for participation in this Stock Option Plan, and the Stock Exchange or any other regulatory authority having jurisdiction over the securities of the Corporation requires such a change to be approved by the shareholders of the Corporation, then such a change shall not be effective until it is approved by the shareholders of the Corporation. No rescission or termination of this Stock Option Plan shall impair or change any rights and Options without the written consent of the Optionees affected. 2.6 EFFECT OF BOARD ACTIONS; LIABILITY OF BOARD MEMBERS (a) All actions taken and interpretations or determinations made by the Board shall be final, conclusive and binding on the Participants and the Corporation. No member of the Board shall be personally liable for any action taken or determination or interpretation made in connection with this Stock Option Plan. (b) All members of the Board shall be fully protected, indemnified and held harmless by the Corporation with respect to any action taken or determination or interpretation made. (c) All costs incurred in connection with the creation and administration of this Stock Option Plan, not including commissions, if any, on exercise of any Options, shall be for the account of the Corporation. 2.7 TOTAL NUMBER OF SHARES ISSUABLE UNDER STOCK OPTION PLAN The maximum number of Shares made available for this Stock Option Plan shall be determined from time to time by the Board but shall not, in any event, exceed ten (10%) percent of the total issued and outstanding Shares of the Corporation. No one employee or Consultant shall have more than 5 percent of the Options at any time. 4 7 2.8 LAPSED OPTIONS If an Option issued under this Stock Option Plan is surrendered, terminates or expires without being exercised in whole or in part, the Shares which were reserved for issue pursuant to such Option but which were not issued shall become available for issue pursuant to the exercise of other Options under this Stock Option Plan. 2.9 STOCK OPTION PLAN REGISTER The Corporation shall maintain a register containing the name and address of each Optionee, the material information relating to each Option (including the term, number of Shares, purchase price of Shares, the extent to which each Option has been exercised and the extent to which each Option is available to be exercised) and the total number of authorized but unissued Shares allocated to and made available to be issued to Participants under this Stock Option Plan. 2.10 SHAREHOLDERS AGREEMENT If there is an agreement of any kind among shareholders of the Corporation relating to the Corporation or to dealing in shares of the Corporation's capital stock, each Optionee shall execute such agreement as a pre-condition to the allotment and issuance of Shares by the Corporation to such Optionee. 2.11 NO DUTY TO ISSUE FRACTIONAL SHARES The Corporation shall not be obligated to issue fractional Shares in satisfaction of any of its obligations under this Stock Option Plan. Rather than issue a fractional Share in satisfaction of any of its obligations under this Stock Option Plan, the Corporation shall round down the number of Shares to be issued to an Optionee to the nearest full Share. ARTICLE 3 NATURE OF OPTIONS 3.1 OPTION PRICE The price per share at which a Share that is the subject of an Option may be purchased (the "OPTION PRICE") shall be determined by the Board at the time the Option is issued. 3.2 OPTION PERIOD The Option Period for each Option shall be such period of time as shall be determined by the Board, provided that no Option Period shall exceed five (5) years. If the Option is not exercised prior to the expiry of the Option Period, the Option shall expire and be of no further force or effect. 5 8 3.3 VESTING The Board shall determine when Options shall vest and over what period of time and to what extent Optionees may exercise their Options. Such determinations shall be contained in the relevant Stock Option Agreements or Personnel Contracts with the individual Optionees. Where the Board makes no such determination, then Section 3.4 shall apply. 3.4 LIMIT ON PURCHASE OF SHARES SUBJECT TO OPTION (a) Unless otherwise determined by the Board or unless otherwise provided in a Personnel Contract, Shares subject to the Option may be purchased by exercising the Option on the first anniversary date of its issue, and on each later anniversary date during the Option Period, with respect to twenty per cent (20%) of the total number of Shares subject to the Option (rounded down in each case to the nearest full Share). For clarity, at the end of each of 5 anniversaries of the date of granting Options, twenty (20%) of the Options so granted vest and may be exercised in the manner set out in this Plan. On the 5th anniversary, all Options will have vested. (b) Subject to Section 4.9, unless otherwise determined by the Board or as provided in any relevant agreement to which the Corporation is a party (including, without limitation, a Personnel Contract or Stock Option Agreement), all or any part of the Shares that may (owing to vesting and/or the effluxion of time) be purchased on a particular anniversary date of the grant of Options may be purchased either at that time or any time thereafter during the Option Period. 3.5 EXERCISE OF OPTION Subject to the provisions of this Stock Option Plan and any regulations or administrative policies established by the Board under this Stock Option Plan, an Option may be exercised by the Optionee delivering to the Corporation at its registered office a written notice specifying the number of Shares with respect to which the Option is being exercised and, at the same time, payment in full of the purchase price of the Shares then being purchased by way of cash or certified cheque in favour of the Corporation. 3.6 CASHLESS EXERCISE RIGHTS Subject to Section 3.9 and provided the Shares are listed on a Stock Exchange, and with the consent of the Board, an Optionee may, rather than exercise an Option which the Optionee is entitled to exercise under this Stock Option Plan, elect to terminate the Option in whole or in part and, in lieu of receiving the Shares to which the terminated Option relates, receive the number of Shares, disregarding fractions, which, when multiplied by the fair market value of the Shares to which the terminated Option relates, has a value equal to the product of the number of Shares to which the terminated Option relates multiplied by the difference between the fair market value and the Option Price of the Shares to which the terminated Option relates, less any amount withheld on account of income taxes, which withheld income taxes will be remitted by the Corporation. The fair market value of the Shares shall be the closing price of the Shares on the 6 9 Stock Exchange on the last trading day immediately preceding the date of exercise of rights under this Section 3.6. 3.7 EMPLOYMENT OR ENGAGEMENT ENDS (a) Subject to Section 3.8 or any relevant agreement (including a stock option agreement with an employee or Consultant) or any express resolution passed by the Board with respect to an Option, an Option and all rights to purchase pursuant thereto shall expire and terminate: (i) if the Optionee's employment or engagement is terminated by the Corporation without cause, sixty (60) days after the date the Optionee ceases to be a director, officer, employee or Consultant of the Corporation or of any Subsidiary; or (ii) if the Optionee resigns, thirty (30) days after the date the Optionee ceases to be a director, officer, employee or Consultant of the Corporation or of any Subsidiary; or (iii) if the Optionee's employment or engagement is terminated by the Corporation with cause, on the date the Optionee ceases to be a director, officer, employee or Consultant of the Corporation or of any Subsidiary. (b) Options shall not be affected by any change of employment of the Optionee or by the Optionee ceasing to be a director where the Optionee continues to be employed by the Corporation or continues to be a director of a Subsidiary or an officer of the Corporation or a Subsidiary. 3.8 DEATH, MENTAL DISABILITY OR PHYSICAL DISABILITY OF OPTIONEE If, before the expiry of an Option in accordance with the Option's terms, the Optionee's employment with the Corporation or a Subsidiary terminates by reason of: (a) the death of the Optionee; (b) the mental disability of the Optionee; or (c) the physical disability of the Optionee, such Option may, subject to the terms of the Option and the Stock Option Plan, be exercised by (d) the legal representative of the Optionee's estate; (e) the legal representative of the Optionee; or (f) the Optionee, as the case may be, at any time during the first twelve (12) months following the Optionee's termination, provided that the exercise occurs prior to the expiry of the 7 10 Option in accordance with the Option's terms and that the exercise is limited to the extent that the Optionee was entitled to exercise the Option at the date of the Optionee's termination. 3.9 REGULATORY APPROVALS AND REGULATORY REQUIREMENTS (a) The obligation of the Corporation to issue and deliver any Shares in accordance with this Stock Option Plan shall be subject to any necessary approval of the Stock Exchange and any other regulatory authority having jurisdiction over the securities of the Corporation. If any Shares cannot be issued to any Optionee for whatever reason, the obligation of the Corporation to issue such Shares shall terminate and any Option Price paid to the Corporation shall be returned to the Optionee. (b) If at any time the Corporation determines, in its sole discretion, that it is necessary or desirable to comply with the legal or other requirements of a Stock Exchange or any other regulatory authority as a condition of, or in connection with, the exercise of an Option or the issue of Shares under an Option, then the Optionee's exercise of the Option shall not be effective unless the Optionee complies with such legal or other requirements in a manner satisfactory to the Corporation. 3.10 ISSUANCE OF SHARES No Optionee or legal representative of an Optionee shall be, or shall be deemed to be, a holder of any Shares, until the Corporation issues a certificate (or certificates) for such Shares. Subject to Sections 2.10 and 3.9, upon an Optionee exercising an Option and paying the Corporation the purchase price for the Shares in respect of which the Option has been exercised, the Corporation shall as soon as practicable issue and deliver a certificate (or certificates) representing the Shares so purchased, registered in the name of the Optionee or the Optionee's estate, as the case may be. 3.11 CALL RIGHT ON TERMINATION (a) If any Optionee who acquired an Option or Options as an employee or Consultant of the Corporation (for the purpose of this Section 3.11, (a "NON-DIRECTOR PARTICIPANT") ceases to be an employee or Consultant of the Corporation and of any Subsidiary, the Corporation shall be entitled to purchase the Shares owned or acquired by the Non-Director Participant, or his estate or legal representative, as the case may be, at the fair market value thereof. (b) For the purposes of this Section 3.11, the fair market value shall be determined by the Board as a purchase price equal to the price per share determined by the Board at which shares of the Corporation have most recently been sold by the Corporation, other than pursuant to the exercise of an Option, or the most recent Option Price so determined prior to the date upon which the Non-Director Participant ceases to be an employee or Consultant of the Corporation, multiplied by the number of Shares held by the Non-Director Participant (the "PURCHASE PRICE"). 8 11 (c) The right of the Corporation to purchase Shares pursuant to this Section 3.11 may be exercised by the Corporation, at the direction of the Board, by giving written notice to the Non-Director Participant within one hundred and twenty (120) days of the date such Non-Director Participant ceased to hold his or her respective role. The Non-Director Participant and a representative of the Corporation shall meet on the date specified in such notice, which date shall be a business day in Toronto and shall be not more than fifteen (15) days following the expiry of the aforementioned one hundred and twenty (120) day notice period, at 10:00 a.m. at the offices of counsel for the Corporation. The Non-Director Participant shall attend with all of his or her share certificates duly endorsed for transfer and a representative of the Corporation shall attend prepared to tender the fair market value of such Shares in the form of a promissory note bearing simple interest at the rate of ten (10%) percent per annum until paid and having a term of one (1) year from the date specified in the notice. The parties agree to execute all such other documentation as may reasonably be required to conclude the transfers of Shares. If the Non-Director Participant does not attend within one hour of the appointed time, the Corporation's obligations to the Non-Director Participant may be satisfied by depositing the promissory note in trust with counsel for the Corporation for the benefit of the Non-Director Participant, following which the Corporation shall duly register the transfer of the Shares of the Non-Director Participant or their cancellation, as the case may require. (d) The Non-Director Participant shall be deemed to have agreed, by his or her execution of any Option, to have granted to the officers of the Corporation from time to time a power of attorney to effect all such transfers and execute all such documents as are required to give effect to the intentions of this Section 3.11, which power of attorney, being a power coupled with an interest, shall not be terminable. ARTICLE 4 GENERAL 4.1 RIGHTS OF OPTIONEES NOT ASSIGNABLE Except as provided in Section 3.8 hereof or by the laws of descent and distribution, the rights of any Optionee and any Options under this Stock Option Plan are personal to the Optionee and are not assignable. 4.2 RESTRICTION ON RESIDENTS OF FOREIGN JURISDICTION No resident of a foreign jurisdiction may be an Optionee in this Stock Option Plan unless such participation can be accomplished pursuant to or in accordance with and without violating any securities or other legislation of the foreign jurisdiction. 4.3 NO RIGHTS AS A SHAREHOLDER No Optionee shall have any rights as a shareholder of the Corporation with respect to any Shares that are the subject of an Option. No Optionee shall be entitled to receive, and no adjustment 9 12 shall be made for, any dividends, distributions or other rights declared for shareholders of the Corporation for which the record date is prior to the date of exercise of the Optionee's Option. 4.4 NO CONTRACT OF EMPLOYMENT RIGHTS Nothing contained in this Stock Option Plan shall confer or be deemed to confer upon an Optionee the right to continue in the employment of, or to provide services to, the Corporation, nor interfere or be deemed to interfere in any way with any right of the Corporation to discharge an Optionee at any time for any reason whatsoever, with or without cause. Participation in this Stock Option Plan by an Optionee shall be voluntary. 4.5 EFFECT OF RIGHT TO PURCHASE PRO RATA ADDITIONAL SHARES If at any time the Corporation grants to the holders of its capital stock rights to subscribe for and purchase pro rata additional securities of the Corporation or of another entity, no adjustment shall be made to the number of Shares or other securities subject to an Optionee's Option and the Shares subject to the Option shall remain unaffected. 4.6 CONSOLIDATION, MERGER, ETC. Without limiting the generality of Section 4.7, if there is a consolidation, merger or statutory amalgamation or arrangement of the Corporation with or into another corporation or a separation of the business of the Corporation into two or more entities, then the Optionees shall be entitled to replacement Options having substantially the same economic value, on a pre-tax basis, as the Options existing prior to such event. 4.7 ADJUSTMENT IN NUMBER OF SHARES, ETC. (a) In the event there is any change in the Shares, whether by reason of a stock dividend, consolidation, subdivision, reclassification or otherwise, an appropriate adjustment, to create substantially the same economic value, on a pre-tax basis, shall be made by the Board in: (i) the number of Shares available under this Stock Option Plan; (ii) the number of Shares subject to any Option; and (iii) the exercise price of the Shares subject to any Option, provided that, if necessary, the prior written consent of the Stock Exchange and any other regulatory authority having jurisdiction over the securities of the Corporation has been obtained. (b) If an adjustment under this Section 4.7 would result in a fractional Share, the fraction shall be disregarded and the Optionee shall have the right only to acquire the number of full Shares. All adjustments under this Section 4.7 shall be final, conclusive and binding for all purposes of this Stock Option Plan. 10 13 4.8 TAKE-OVER BID (a) Where the Corporation becomes the subject of a Take-Over Bid pursuant to which 100% of the issued and outstanding Shares are acquired by the offeror, either directly or as a result of the compulsory acquisition provisions of the incorporating statute, and whether or not the consideration is paid in whole or in part in equity securities of the offeror, the Board may send notice to all Optionees requiring them to surrender their Options within ten (10) days of the mailing of such notice. (b) In such a case, the Optionees shall be deemed to have surrendered such Options ten (10) Business Days after the mailing of the notice without further formality, provided that: (i) the offeror delivers with such notice an irrevocable and unconditional offer to issue replacement options to the Optionees on the equity securities, if any, offered as consideration; and (ii) the Board has determined, in good faith, that such replacement options have substantially the same economic value as the Options being surrendered; and (iii) if the continuing corporation is listed on a Stock Exchange, the prior written consent of the Stock Exchange has been obtained, if necessary. 4.9 ACCELERATION ON SALE (a) In the event of a sale of the issued and outstanding Shares to any person or group of persons the result of which will be a change in control of the Corporation, each unexpired Option held by Directors (who are not employees or Consultants), whether vested or not yet vested, may be exercised no later than ten (10) days prior to the closing of the sale for all the Shares subject to that Option, in order to permit the Shares subject to such unexpired Option to be tendered in response to such a sale. (b) If there is an offer to purchase all the issued and outstanding shares of the Corporation, the Board may, in its discretion, require all Options (whether or not vested) to be exercised in order to permit the Shares subject to Options to be sold as part of the purchase transaction, and the Board may send a notice in writing to the Optionees informing them that their Options are deemed to have been terminated, and the Optionees shall be entitled to such portion of the price payable pursuant to the purchase transaction as the Board, acting reasonably, may allocate to such Optionees. 4.10 NO REPRESENTATION OR WARRANTY The Corporation makes no representation or warranty as to the future market value of any Shares issued in accordance with the provisions of this Stock Option Plan or as to the tax consequences of any actions taken pursuant to this Plan or any relevant agreement made pursuant hereto. 11 14 4.11 COMPLIANCE WITH APPLICABLE LAW If a provision of this Stock Option Plan or an Option contravenes any law or any order, policy, by-law or regulation of any regulatory body having jurisdiction, then such provision shall be deemed to be amended to the extent necessary to bring such provision into compliance therewith. 4.12 MODIFICATIONS TO STOCK OPTION PLAN Subject to the approval, if necessary, of the Stock Exchange and to the by-laws of the Corporation, the Board shall have the right, in its unfettered discretion, to alter, amend or discontinue the Stock Option Plan from time to time and at any time. No such amendment or discontinuation, however, may, without the consent of each Optionee, alter or impair such Optionee's rights or increase such Optionee's financial obligations to the Corporation under the Stock Option Plan. 4.13 INTERPRETATION This Stock Option Plan shall be governed by and construed in accordance with the laws of the Province of Ontario. APPROVED by the Board of Directors on January 1, 2000 and ratified, approved and confirmed by the shareholders of the Corporation on January 1, 2000. 12 EX-4.2 4 f75257orex4-2.txt EXHIBIT 4.2 1 EXHIBIT 4.2 ISOPIA INTERACTIVE NETWORK INC. - and - [ ] STOCK OPTION AGREEMENT Prepared by: SMITH LYONS Suite 5800 Scotia Plaza 40 King Street West Toronto, Ontario M5H 3Z7 2 TABLE OF CONTENTS
PAGE ----- ARTICLE 1 DEFINITIONS AND CONSTRUCTION............................................................................2 1.1 Definitions..............................................................................................2 1.2 Construction.............................................................................................2 ARTICLE 2 OPTION AND EXERCISE OF OPTION...........................................................................2 2.1 Issuance of Option.......................................................................................2 2.2 When Option May Be Exercised.............................................................................2 2.3 Exercise on Take-Over Bid or Change in Control...........................................................3 2.4 Manner of Exercise of Option.............................................................................3 2.5 Compliance with Requirements.............................................................................4 2.6 Termination of Employment or Engagement..................................................................4 2.7 Death, Mental Disability or Physical Disability of Optionee..............................................5 ARTICLE 3 ISSUANCE OF SHARES......................................................................................5 3.1 Regulatory Approvals and Regulatory Requirements.........................................................5 3.2 Issuance of Shares.......................................................................................6 3.3 Extent of Liability for Non-Issue of Shares..............................................................6 ARTICLE 4 SHARE APPRECIATION RIGHTS...............................................................................6 4.1 Share Appreciation Rights................................................................................6 ARTICLE 5 OTHER MATTERS...........................................................................................7 5.1 No Fractional Shares.....................................................................................7 5.2 Rights Not Assignable....................................................................................7 5.3 Restriction on Participation by Residents of Foreign Jurisdiction........................................7 5.4 Other Matters............................................................................................7 5.5 Compliance with Applicable Law...........................................................................7 5.6 Governing Law............................................................................................7 5.7 Priority of Stock Option Plan............................................................................7
3 SIGNING STOCK OPTION AGREEMENT THIS SIGNING STOCK OPTION AGREEMENT made as of (todays date), B E T W E E N: ISOPIA INTERACTIVE NETWORK INC., an Ontario corporation, (hereinafter referred to as the "Corporation") - and - [ ], (hereinafter referred to as "Optionee") WHEREAS the Board of Directors of the Corporation established a Stock Option Plan (the "Plan") effective January 1, 2000, which was approved by the shareholders of the Corporation on January 1, 2000, and the Corporation now wishes to issue the Optionee Options under the Stock Option Plan; AND WHEREAS, in order to induce the Optionee to join the Corporation as an employee, the Corporation promised the Optionee Options (as herein defined); AND WHEREAS this Agreement is the instrument pursuant to which the Corporation is carrying out its promise to grant options to the optionee for joining the Corporation as an employee. NOW THEREFORE in consideration of the mutual covenants herein contained, the parties agree as follows: 1 4 ARTICLE 1 DEFINITIONS AND CONSTRUCTION 1.1 DEFINITIONS In this Agreement, capitalized terms shall have the meanings set out in Section 1.1 of the Stock Option Plan attached as Schedule A, except where the context or subject matter is inconsistent therewith. 1.2 CONSTRUCTION The headings of all sections and subsections in this Agreement are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement. Whenever the singular or masculine are used in this Agreement, the same shall be construed as being the plural or feminine or neuter or vice versa where the context so requires. All references to currency in this Agreement are references to Canadian currency. "Hereby," "hereunder", and similar expressions refer to this Agreement as a whole and not to any particular article, section, subsection or other part of this Agreement. In the event of any conflict between this Agreement or any predecessor agreement and the Stock Option Plan, the terms of this Agreement shall govern. ARTICLE 2 OPTIONS AND EXERCISE OF OPTIONS 2.1 ISSUANCE OF OPTIONS In accordance with its promise to grant "signing" Options to the Optionee, the Corporation hereby issues to the Optionee Options to purchase up to g Shares in the capital stock of the Corporation, as presently constituted, for cash, at a price of g US Dollars (US$g) per Share, upon the terms and conditions set out in this Agreement. 2.2 WHEN OPTION MAY BE EXERCISED (a) One-quarter of the Options vest on the first anniversary of the commencement of the Optionee's grant date, and the Optionee may exercise them on or after that date. The remaining Options vest on, and may be exercised on or after, the following dates: (i) one-quarter of the Options vest on g [Insert second anniversary of date of grant] and the Optionee may exercise them on or after that date; (ii) one-quarter of the Options vest on g [Insert third anniversary of date of grant] and the Optionee may exercise them on or after that date; (iii) the remaining one-quarter of the Options vest on g [Insert fourth anniversary of date of grant] and the Optionee may exercise them on or after that date. 2 5 (b) Options that have not vested are not exercisable and do not confer any rights upon the Optionee. (c) When Options are exercised, the number of Shares allotted and issued will be rounded down to the nearest full Share. (d) All or part of the Shares for which the Options have become exercisable may be purchased at any time after the particular anniversary date, until the expiration or termination of the Options. (e) The Options shall expire at 5:00 p.m. five years from the date of vest, after which the Options shall be of no further force or effect. In addition, the Options shall expire and all rights hereunder shall be of no further force or effect at such time or upon the happening of certain events as provided elsewhere in this Agreement. (f) Any amount paid to the Corporation for the Options shall be considered the property of the Corporation and shall not be refunded to the Optionee for any reason, including without limitation if the Options expire without having been exercised. 2.3 EXERCISE ON TAKE-OVER BID OR CHANGE IN CONTROL Notwithstanding the percentage limitations contained in Section 2.2, if: (a) there is a Take-Over Bid made for all or part of the issued and outstanding Shares, the Options (if unexpired and not terminated) may be exercised immediately for all the Shares subject to the Options, in order to permit the Shares subject to the Options to be tendered to such a Take-Over Bid; or (b) there is an offer to purchase all the issued and outstanding Shares, the Board may, in its discretion, require the Options (whether or not vested) to be exercised in order to permit the Shares subject to the Options to be sold as part of the purchase transaction, and the Board may send a notice in writing to the Optionee informing the Optionee that his or her Options are deemed to have been terminated in accordance with Section 4.1, and the Optionee shall be entitled to such portion of the price payable pursuant to the purchase transaction as is calculated in accordance with Section 4.1. 2.4 MANNER OF EXERCISE OF OPTIONS The Options may be exercised only by the Optionee, or by the person or persons entitled to exercise the same pursuant to the provisions of Section 2.7. Subject to the Stock Option Plan and any regulations and administrative policies under the Stock Option Plan, the Options may be exercised only by the delivery to the Corporation at its registered office of written notice of election to exercise the Options, specifying the number of Shares for which the Options are being exercised and accompanied by payment in full of the purchase price of the Shares then purchased by cash or certified cheque in favour of the Corporation. 3 6 2.5 COMPLIANCE WITH REQUIREMENTS (a) The notice under Section 2.4 shall constitute the Optionee's acknowledgement of, and undertaking to comply with, to the satisfaction of the Corporation and its counsel, all applicable legal or other requirements of a Stock Exchange and of any applicable regulatory authority. Such requirements may include: (i) the placement of legends on share certificates restricting transfer of such Shares; (ii) the making of representations by the Optionee that the Optionee is acquiring such Shares for investment and not with a view to distribution; (iii) the filing of any required information or statements with a Stock Exchange or any applicable regulatory authority; and (iv) the making of arrangements with the Optionee's employer (if the Optionee provides his services through a personal services corporation) to withhold income taxes that may become payable pursuant to the Optionee's exercise of Options under this Agreement. (b) The Corporation may at its election require that this Agreement be presented for endorsement upon the exercise of the Options. 2.6 TERMINATION OF EMPLOYMENT OR ENGAGEMENT (a) Subject to Section 2.7 and any express resolution passed by the Board with respect to the Options, the Options and all rights to purchase pursuant thereto, shall expire and terminate: (i) if the Optionee's employment or engagement is terminated by the Corporation without cause, sixty (60) days after the date that the Optionee ceases to be a director, officer or employee of the Corporation or of any subsidiary of the Corporation ("SUBSIDIARY"); or (ii) if the Optionee resigns, within thirty (30) days after the date the Optionee ceases to be a director, officer or employee of the Corporation or of any Subsidiary. (b) If the Optionee is a Consultant, the termination of the Options shall be in accordance with the Optionee's Personnel Contract or, if the termination of the Options is not specifically dealt with in the Personnel Contract, then the Options shall be terminated as though the Consultant were an employee. (c) The Options shall not be affected by any change of employment of the Optionee or by the Optionee's ceasing to be a director where the Optionee continues to be employed by the Corporation or continues to be a director of a Subsidiary or an officer of the Corporation or a Subsidiary. 4 7 2.7 DEATH, MENTAL DISABILITY OR PHYSICAL DISABILITY OF OPTIONEE If, before the expiry of the Options in accordance with the Options' terms, the Optionee's employment or engagement terminates by reason of: (a) the death of the Optionee; (b) the mental disability of the Optionee; or (c) the physical disability of the Optionee, such Options may, subject to the terms of the Options and the Stock Option Plan, be exercised by: (d) the legal representative of the Optionee's estate; (e) the legal representative of the Optionee; or (f) the Optionee, as the case may be, at any time during the first twelve (12) months following the Optionee's termination, provided that the exercise occurs prior to the expiry of the Options in accordance with the Options' terms and that the exercise is limited to the extent that the Optionee was entitled to exercise the Options at the date of the Optionee's termination. ARTICLE 3 ISSUANCE OF SHARES 3.1 REGULATORY APPROVALS AND REGULATORY REQUIREMENTS (a) The obligation of the Corporation to issue and deliver any Shares in accordance with this Agreement shall be subject to any necessary approval of the Stock Exchange and any other regulatory authority having jurisdiction over the securities of the Corporation. If any Shares cannot be issued to the Optionee for whatever reason, the obligation of the Corporation to issue such Shares shall terminate and any Option Price paid to the Corporation shall be returned to the Optionee. (b) If at any time the Corporation determines, in its sole discretion, that it is necessary or desirable to comply with the legal or other requirements of a Stock Exchange or any other regulatory authority as a condition of, or in connection with, the exercise of Options or the issue of Shares under Options, then the Optionee's exercise of the Options shall not be effective unless the Optionee complies with such legal or other requirements in a manner satisfactory to the Corporation. 5 8 3.2 ISSUANCE OF SHARES Neither the Optionee nor the legal representative of the Optionee shall be, nor shall be deemed to be, a holder of any Shares until the Corporation issues a certificate (or certificates) for such Shares. Subject to Section 3.1, upon the Optionee's exercising the Options and paying the Corporation the purchase price for the Shares in respect of which the Options have been exercised, the Corporation shall as soon as practicable issue and deliver a certificate (or certificates) representing the Shares so purchased, registered in the name of the Optionee or the Optionee's estate, as the case may be. 3.3 EXTENT OF LIABILITY FOR NON-ISSUE OF SHARES If for any reason other than the failure or default of the Optionee, the Corporation is unable to issue and deliver the Shares as contemplated in this Agreement to the Optionee upon the exercise by the Optionee of the Options to purchase any of the Shares covered by the Options, the Corporation will pay, in complete satisfaction of its obligations hereunder, to the Optionee, in cash, an amount equal to the difference between the Option exercise price and the fair market value of such Shares on the date that the Optionee gave notice of such exercise in accordance with Section 2.4, as though the Shares were listed on a Stock Exchange and the Options had been terminated in accordance with Section 4.1. If the Shares are not listed on a Stock Exchange, the fair market value of the Shares shall be as determined by the Board, acting reasonably. If the Shares are listed on a Stock Exchange, then the fair market value of the Shares shall be the closing price of the Shares on the Stock Exchange on the last trading day immediately preceding the date of exercise of rights. ARTICLE 4 SHARE APPRECIATION RIGHTS 4.1 SHARE APPRECIATION RIGHTS Provided the Shares are listed on a Stock Exchange, and with the consent of the Board, an Optionee may, rather than exercise an Option which the Optionee is entitled to exercise under this Stock Option Plan, elect to terminate the Option in whole or in part and, in lieu of receiving the Shares to which the terminated Option relates, receive the number of Shares, disregarding fractions, which, when multiplied by the fair market value of the Shares to which the terminated Option relates, has a value equal to the product of the number of Shares to which the terminated Option relates multiplied by the difference between the fair market value and the Option Price of the Shares to which the terminated Option relates, less any amount withheld on account of income taxes, which withheld income taxes will be remitted by the Corporation. The fair market value of the Shares shall be the closing price of the Shares on the Stock Exchange on the last trading day immediately preceding the date of exercise of rights under this Section 4.1. 6 9 ARTICLE 5 OTHER MATTERS 5.1 NO FRACTIONAL SHARES The Corporation shall not be obligated to issue fractional Shares in satisfaction of its obligations under this Agreement. 5.2 RIGHTS NOT ASSIGNABLE Except as provided in Section 2.7 or by the laws of descent and distribution, the rights of the Optionee under this Agreement are personal to the Optionee and are not assignable. 5.3 RESTRICTION ON PARTICIPATION BY RESIDENTS OF FOREIGN JURISDICTION If the Optionee is a resident of a foreign jurisdiction, the Optionee represents and warrants that the Optionee's participation in the Stock Option Plan pursuant to this Agreement is in accordance with and does not violate any securities or other legislation of the Optionee's resident jurisdiction. 5.4 OTHER MATTERS The Options and the rights of the Optionee shall be subject to all the terms, conditions and restrictions set out in the Stock Option Plan attached as Schedule A. Without limiting the generality of the foregoing, the Options and the rights of the Optionee are subject to the provisions of the Stock Option Plan relating to: when rights as a shareholder arise; the lack of a contract of employment rights; the effect of the right to purchase pro rata additional shares; the substitution of Shares on consolidation, merger, etc.; the adjustment of Shares by reason of a stock dividend, consolidation, etc.; and Take-Over Bids, etc. 5.5 COMPLIANCE WITH APPLICABLE LAW If a provision of this Agreement or the Options contravene any law or any order, policy, by-law or regulation of any regulatory body having jurisdiction, then such provision shall be deemed to be amended to the extent necessary to bring such provision into compliance therewith. 5.6 GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario. 5.7 PRIORITY OF AGREEMENT The Optionee acknowledges that a copy of the Stock Option Plan has been attached as Schedule A to this Agreement. The Optionee acknowledges that upon any conflict between the terms of the Stock Option Plan and this Agreement the terms of this Agreement shall prevail. 7 10 IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be signed, sealed and delivered by their respective authorized signatories as of the date first written above. ISOPIA INTERACTIVE NETWORK INC. Per: President Per: Director WITNESS TO SIGNATURE OF OPTIONEE: - --------------------------------- Signature of Optionee - --------------------------------- Signature of Witness 8 EX-5.1 5 f75257orex5-1.txt EXHIBIT 5.1 1 EXHIBIT 5.1 WILSON SONSINI GOODRICH & ROSATI 650 PAGE MILL ROAD PALO ALTO, CA 94304 (650) 493-9300 August 22, 2001 Sun Microsystems, Inc. 901 San Antonio Road Palo Alto, CA 94303 RE: REGISTRATION STATEMENT ON FORM S-8 Ladies and Gentlemen: We have acted as counsel to Sun Microsystems, Inc., a Delaware corporation (the "Company") and have examined the Registration Statement on Form S-8 (the "Registration Statement") to be filed by the Company with the Securities and Exchange Commission on or about August 22, 2001 in connection with the registration under the Securities Act of 1933, as amended (the "1933 Act") of 134,305 shares of the Company's Common Stock, par value $0.00067 per share (the "Shares"), reserved for issuance under the ISOPIA Inc. Stock Option Plan (the "Plan"). As your legal counsel, we have examined the Restated Certificate of Incorporation, as amended, and Bylaws of the Company, the Plan and such other documents of the Company as we have deemed necessary or appropriate for the purposes of the opinion expressed herein, and are familiar with the proceedings proposed to be taken by the Company in connection with the operation and administration of the Plan and the sale and issuance of the Shares pursuant to the Plan. It is our opinion that the Shares, when issued and sold in the manner referred to in the Plan and pursuant to the agreements which accompany the Plan, will be legally and validly issued, fully paid and nonassessable. We consent to the use of this opinion as an Exhibit to the Registration Statement and further consent to the use of our name wherever appearing in the Registration Statement and any subsequent amendment thereto. Sincerely, WILSON SONSINI GOODRICH & ROSATI Professional Corporation /s/ WILSON SONSINI GOODRICH & ROSATI EX-23.2 6 f75257orex23-2.txt EXHIBIT 23.2 1 EXHIBIT 23.2 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8) of Sun Microsystems, Inc. pertaining to the ISOPIA Inc. Stock Option Plan of our reports dated July 19, 2000, with respect to the consolidated financial statements of Sun Microsystems, Inc. incorporated by reference in its Annual Report (Form 10-K) for the year ended June 30, 2000 and the related financial statement schedule included therein, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP Palo Alto, California August 21, 2001 -----END PRIVACY-ENHANCED MESSAGE-----