A stock option is generally used by a business corporation to encourage a person's interest in the future profits of the corporation. It allows the beneficiary to acquire shares that will continue to increase in value as long as the corporation continues to earn profits. As such, beneficiaries of a stock option, who are often employees of the corporation, will have a true interest in the growth and success of the corporation, which should lead to increased employee motivation.

It should be noted that this template is the same as the short form stock options agreement template identified as TR0308 that is part of our Corporate Documents collection.

Moreover, you may wish to consult our document entitled, Notes - Stock Options (C05005) that provides an overview of the most pertinent points regarding stock option plans.

RECITALS
0.00 INTERPRETATION
0.01 Definitions
0.01.01 Agreement
0.01.02 Breach
0.01.03 Confidential Information
0.01.04 Employment Agreement
0.01.05 Force Majeure
0.01.06 Incentive Plan
0.01.07 Loss
0.02 Entire Agreement
0.03 Applicable Law
0.04 Non-Compliance
0.04.01 Severability
0.04.02 Substitute Provision
0.05 Miscellaneous
0.05.01 Cumulative Rights
0.05.02 No Waiver
0.05.03 Time Limits
0.05.04 Financial References
1.00 PURPOSE
1.01 Options Granted
1.02 Conditions
1.02.01 Required by EMPLOYER
1.02.02 Required by EMPLOYEE
2.00 CONSIDERATION
2.01 Exercise Price
3.00 TERMS OF PAYMENT
3.01 Exercising Options
3.02 Deferring Right to Exercise
3.03 Payment of Exercise Price
3.04 Certificate
3.05 Loss of Term
4.00 SECURITY
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Authority
5.02 Binding Agreement
5.03 Nominee
5.04 Independent Legal Advice
5.05 Legal Proceedings
6.00 REPRESENTATIONS AND WARRANTIES OF EMPLOYER
6.01 Status
7.00 REPRESENTATIONS AND WARRANTIES OF EMPLOYEE
7.01 Legal Status
7.02 Employment Status
8.00 MUTAL DUTIES AND OBLIGATIONS
8.01 Confidential Information
8.01.01 Undertaking
8.01.02 Duration of Undertaking
8.01.03 End of Agreement
a) Request for Return
b) Destruction
8.02 Continuation of Representations and Warranties
8.03 Indemnification
8.03.01 Scope
8.03.02 Procedure
8.03.03 Duration of Representations and Warranties
8.04 Disclosure of Agreement
8.04.01 Undertaking
8.04.02 Default
8.05 Further Assurances
8.06 Tax Implications
8.07 Value of Shares
9.00 DUTIES AND OBLIGATIONS OF EMPLOYER
9.01 Share Capital
9.02 Assignment
10.00 DUTIES AND OBLIGATIONS OF EMPLOYEE
10.01 Shareholder Agreement
11.00 SPECIAL PROVISIONS
11.01 Assignment
11.01.01 Prohibition
11.01.02 Effect of Breach
11.01.03 Exception
11.02 Force Majeure
11.02.01 Limitation on Liability
11.02.02 Duty
11.02.03 Right of Other PARTY
11.03 Relationship Between the PARTIES
11.04 Remedies
11.04.01 Choice
11.04.02 No Limitations
12.00 GENERAL PROVISIONS
12.01 Notice
12.02 Dispute Resolution
12.02.01 Written Notice
12.02.02 Mediation
12.02.03 Arbitration
12.03 Choice of Forum
12.04 Amendment
12.05 No Waiver of Rights
12.06 Electronic Transmission and Signature
12.07 Language
13.00 TERMINATION
14.00 EFFECTIVE DATE
15.00 DURATION
15.01 Indefinite Duration
15.02 Maximum Duration
16.00 SCOPE

SCHEDULE 0.01.06 – INCENTIVE PLAN
SCHEDULE 3.01 – NOTICE OF INTENT TO EXERCISE OPTION