LIPO INVESTMENTS
(USA) INC.
AMENDED AND RESTATED
STOCK OPTION PLAN
ARTICLE 1
DEFINITIONS AND INTERPRETATION
As used herein,
unless anything in the subject matter or context is inconsistent
therewith, the following terms shall have the meanings set forth
below:
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(a)
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“Award Date”
means the date on which
the Board grants a particular Option;
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(b)
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“Board”
means the board of
directors of the Company;
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(c)
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“Call Purchase
Price” has the meaning set forth in
Section 4.2;
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(d)
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“Call Right”
has the meaning set
forth in Section 4.2;
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(e)
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“Class A
Option” means a Class A option to
acquire Shares, awarded to an Eligible Person pursuant to the
Plan;
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(f)
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“Class B
Option” means a Class B option to
acquire Shares, awarded to an Eligible Person pursuant to the
Plan;
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(g)
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“Company”
means LIPO Investments
(USA) Inc.;
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(h)
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“Consultant”
means any person engaged
as a consultant to the Company or any company in which the Company
is a direct or indirect shareholder or with which the Company does
not act at arm’s length;
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(i)
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“Director”
means any individual
holding the office of director of the Company or any company in
which the Company is a direct or indirect shareholder;
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(j)
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“Eligible
Person” means a Director, an Employee or a
Consultant;
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(k)
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“Employee”
means any individual
regularly employed on a full-time or part-time basis by the Company
or any company in which the Company is a direct or indirect
shareholder or with which the Company does not act at arm’s
length or other persons who perform management or consulting
services for the Company or any company in which the Company is a
direct or indirect shareholder or with which the Company does not
act at arm’s length in any such case on an ongoing
basis;
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(l)
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“Exercise
Notice” means the notice respecting the
exercise of an Option in the form set out as Schedule
“B” hereto, duly executed by the Option
Holder;
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(m)
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“Exercise
Period” means the period during which a
particular Option may be exercised and is the period from and
including the Award Date (subject to Section 3.8) through to
and including the Expiry Date;
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(n)
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“Exercise
Price” means the price at which an Option
may be exercised as determined in accordance with
Section 3.5;
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(o)
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“Expiry Date”
means the date
determined in accordance with Section 3.3 and after which a
particular Option cannot be exercised;
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(p)
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“Fair Market
Value” means the fair market value
determined by the Board in good faith, from time to time and for
greater certainty when determining the fair market value of a Share
or an Option the Board can take into account the income and other
taxes to be paid by the Company in regard to a distribution of
Lululemon Shares to the Employee in satisfaction of that Share or
Option pursuant to the terms of this Plan;
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(q)
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“Forfeitable Shares
” has the meaning
set forth in Section 3.9;
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(r)
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“Lululemon
Shares” means shares of common stock of
Lululemon Corp.;
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(s)
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“Option”
means a Class A
Option or a Class B Option;
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(t)
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“Option
Certificate” means the certificate, substantially
in the form set out as Schedule “A” hereto, evidencing
an Option;
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(u)
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“Option
Holder” means a person who holds an
unexercised and unexpired Option or, where applicable, the Personal
Representative of such person;
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(v)
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“Plan”
means this stock option
plan;
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(w)
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“Personal
Representative” means:
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(i)
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in
the case of a deceased Option Holder, the executor or administrator
of the deceased duly appointed by a court or public authority
having jurisdiction to do so; and
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(ii)
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in
the case of an Option Holder who for any reason is unable to manage
his or her affairs, the person entitled by law to act on behalf of
such Option Holder;
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(x)
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“Share”
or
“Shares” means, as the case may be, one or more
common shares without par value in the capital of the
Company;
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(y)
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“Shareholder”
means a person who
acquires beneficial title to Shares upon the exercise of one or
more Options;
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(z)
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“Termination for
Cause” means termination for cause pursuant
to the applicable laws in the jurisdiction in which an Employee is
ordinarily employed; and
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(aa)
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“Trustee”
means Dennis Wilson or
such other person as the Company shall, pursuant to
Section 5.1, appoint, from time to time, to act as trustee
hereunder.
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The Plan is
established under and the provisions of the Plan shall be
interpreted and construed in accordance with the laws of the
Province of British Columbia.
The headings
used herein are for convenience only and are not to affect the
interpretation of the Plan.
ARTICLE 2
PURPOSE AND PARTICIPATION
The purpose of
the Plan is to provide the Company with a share-related mechanism
to reward such Eligible Persons as may be awarded Options under the
Plan by the Board from time to time and to enable and encourage
such Eligible Persons to acquire Shares as long term
investments.
The Board
shall, from time to time, in its sole discretion determine those
Eligible Persons, if any, to whom Options are to be awarded. If the
Board elects to award an Option to an Eligible Person, the Board
shall, in its sole discretion but subject to Section 3.2,
determine the number of Shares to be acquired on the exercise of
such Option.
2.3
Notification of Award
Following the
approval by the Board of the awarding of an Option, the Company
shall notify the Option Holder in writing of the award and shall
enclose with such notice the Option Certificate representing the
Option so awarded.
Each Option
Holder, concurrently with the notice of the award of the Option,
shall be provided with a copy of the Plan. A copy of any amendment
to the Plan shall be promptly provided by the Company to each
Option Holder.
The Plan does
not give any Option Holder that is a Director the right to serve or
continue to serve as a Director of the Company or any company in
which the Company is a direct or indirect shareholder nor does it
give any Option Holder that is an Employee the right to be or to
continue to be employed by the Company or any company in which the
Company is a direct or indirect shareholder.
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ARTICLE 3
TERMS AND CONDITIONS OF OPTIONS
3.1 Board to
Allot Shares
The Shares to
be issued to Option Holders upon the exercise of Options shall be
allotted and reserved for issuance by the Board prior to the
exercise thereof.
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(a)
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The
maximum number of Shares that may be issued upon the exercise of
Options is 28,156,365.
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(b)
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If
any Option expires or otherwise terminates in accordance with the
terms of the Plan without having been exercised in full, the number
of Shares in respect of which the Option expired or terminated
shall not be available for reissuance for the purposes of the
Plan.
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Subject to
Section 3.4, the Expiry Date of an Option shall be the date so
fixed by the Board at the time the particular Option is awarded,
provided that such date shall not be later than the tenth
anniversary of the Award Date of such Option.
3.4
Termination of Option
Any Option or
part thereof not exercised within the Exercise Period shall
terminate and become null, void and of no effect as of 5:00 p.m.
local time in Vancouver, British Columbia, on the Expiry Date. The
Expiry Date of an Option shall be the earlier of the date so fixed
by the Board at the time the Option is awarded and:
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(a)
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in
the event that the Option Holder holds his or her Option as a
Director, the date on which such Option Holder ceases to be a
Director, other than by reason of death; unless the Option Holder
ceases to be a Director but continues to be engaged as an Employee,
in which case the Expiry Date shall remain unchanged;
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(b)
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in
the event that the Option Holder holds his or her Option as an
Employee, the date on which such Option Holder ceases to be an
Employee, other than by reason of death or as set forth in
Section 3.4(c); or
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(c)
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in
the event that the Option Holder holds his or her Option as an
Employee, the date on which such Option Holder resigns his or her
employment or is Terminated for Cause;
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Upon the
occurrence of one of the events described in Sections 3.4(a),
(b) or (c), the Company will, notwithstanding the termination
of such Options, repurchase all vested Options held by the Option
Holder for a price equal to the Fair Market Value, which payment
may be satisfied by the Company causing to be delivered to such
Option Holder such number of Lululemon Shares as have an equivalent
Fair Market Value.
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The Exercise
Price shall be that price per Share, as determined by the Board in
its sole discretion and announced as of the Award Date, at which an
Option Holder may purchase a Share upon the exercise of an
Option.
3.6
Assignment of Options
Options may not
be assigned or transferred, provided however that the Personal
Representative of an Option Holder may, to the extent permitted by
Section 4.1, exercise the Option within the Exercise
Period.
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(a)
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If
prior to the complete exercise of any Option the Shares are
consolidated, subdivided, converted, exchanged or reclassified or
in any way substituted for (collectively the “Event"
), an Option, to the extent that it has not been exercised, shall
be adjusted by the Board in accordance with such Event in the
manner the Board deems appropriate. No fractional Shares shall be
issued upon the exercise of the Options and accordingly, if as a
result of the Event, an Option Holder would become entitled to a
fractional share, such Option Holder shall have the right to
purchase only the next lowest whole number of shares and no payment
or other adjustment will be made with respect to the fractional
interest so disregarded.
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(b)
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The
Board may, in its sole discretion at the time the Option is
granted, but will not be required to, provide for additional
adjustment provisions such that if, while any Option is
outstanding, there is an increase in the number of Shares in the
capital of the Company issued and outstanding, except if such
increase is the result of the exercise of an Option, the number of
Shares issuable upon the exercise of an outstanding Option will be
increased on a proportionate basis so that the percentage of the
aggregate issued Shares of the Company represented by the Option as
of the Award Date will remain unchanged.
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The Board may,
in its sole discretion at the time the Option is granted, but will
not be required to, impose conditions relating to the vesting of
the right to exercise an Option granted to any Option Holder. The
Option Certificate representing any such Option will disclose any
vesting conditions. Upon the death of an Option Holder, such Option
shall forthwith cease vesting as to such portion of the Option
which has not previously vested.
The Board may,
in its sole discretion at the time a Class A Option is
granted, declare that Shares issuable upon exercise of such
Class A Option are “Forfeitable Shares“ .
Shares which are designated as Forfeitable Shares will be entitled
to become non-forfeitable in accordance with the conditions set out
in the Option Certificate representing any such Option.
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ARTICLE 4
EXERCISE OF OPTION
An Option may
be exercised only by the Option Holder or the Personal
Representative of any Option Holder. An Option Holder or the
Personal Representative of any Option Holder may exercise an Option
in whole or in part (provided that no exercise will be effective as
to any part of the Option which has not vested at the time of such
exercise) at any time or from time to time during the Exercise
Period up to 5:00 p.m. local time in Vancouver, British Columbia
(or such other place as may be designated by the Board) on the
Expiry Date by delivering to the Company an Exercise Notice, the
applicable Option Certificate including a completed form of
exercise notice and a cheque or bank draft payable to the Company
in an amount equal to the aggregate Exercise Price of the Shares to
be purchased pursuant to the exercise of the Option. With respect
to the exercise of part of an Option, the Board may at any time and
from time to time fix a minimum or maximum number of Shares in
respect of which an Option Holder may exercise part of any Option
held by such Option Holder.
4.2 Company
Purchase of Options
Upon the
receipt by the Company, from time to time, of an Exercise Notice
with respect to a Class B Option or any part thereof in
accordance with Section 4.1, the Company may, notwithstanding
such purported exercise, offer to purchase from the exercising
Option Holder all but not less than all of the Class B Options
or part thereof such Option Holder is pur
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