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 long form stock options agreement template identified as TR0307 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.

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Agreement
0.01.02 Breach
0.01.03 Claim
0.01.04 Confidential Information
0.01.05 Dispute
0.01.06 Employment Agreement
0.01.07 Force Majeure
0.01.08 Incentive Plan
0.01.09 Intellectual Property
0.01.10 Law
0.01.11 Legal Representatives
0.01.12 Loss
0.01.13 PARTY
0.01.14 Person
0.01.15 Prime Rate
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 and Days
a) Time of the Essence
b) Computation of Time
c) Delays
0.05.04 Financial References
0.05.05 Gender and Number
0.05.06 Headings
0.05.07 Knowledge
0.05.08 Approval
0.05.09 Accounting Standards
1.00 PURPOSE
1.01 Options Granted
1.02 Conditions
1.02.01 Required by EMPLOYER
1.02.02 Required by EMPLOYEE
1.02.03 Election
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 Purchase Price
3.04 Certificate
3.05 Interest
3.06 Waiver of Compensation
3.07 Loss of Term
4.00 SECURITY
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Authority
5.02 Binding Agreement
5.03 Canadian Resident
5.04 Canadian Status
5.05 Commission
5.06 Insurance
5.07 Nominee
5.08 Informed Decision
5.09 Fundamental Provisions
5.10 Disclosure
5.11 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
8.01.04 Penalty
8.02 Continuation of Representations and Warranties
8.03 Indemnification
8.03.01 Scope
8.03.02 Procedure
8.03.03 Third-Party Claim
8.03.04 Duration of Representations and Warranties
8.03.05 Deductible
8.03.06 Limitation
8.04 Disclosure of Agreement
8.04.01 Undertaking
8.04.02 Public Announcement
8.04.03 Exception
8.04.04 Default
8.05 Further Assurances
8.06 Tax Implications
8.07 Value of Shares
9.00 DUTIES AND OBLIGATIONS OF EMPLOYER
9.01 Capital Stock
9.02 Assignment
9.03 Amalgamation
10.00 DUTIES AND OBLIGATIONS OF EMPLOYEE
10.01 Shareholder Agreement
11.00 SPECIFIC PROVISIONS
11.01 Assignment
11.01.01 Prohibition
11.01.02 Reasonable Cause
11.01.03 Effect of Breach
11.01.04 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 Good Faith Negotiations
a) Written Notice
b) Meeting
c) Legal Proceedings
d) Protective Measures
12.02.02 Mediation
a) Process
b) Settlement
c) Arbitration
12.02.03 Arbitration
a) Notice
b) Reply
c) Appointment of a Third Arbitrator
d) Subcontracts
e) Confidentiality
f) Hearing
g) Ruling
h) Costs
i) Supplementary Rules
12.03 Choice of Forum
12.04 Counterparts
12.05 Amendment
12.06 No Waiver of Rights
12.07 Electronic Transmission and Signature
12.08 Language
13.00 TERMINATION
14.00 EFFECTIVE DATE
14.01 [Title]
14.02 Exceptions (if applicable)
14.02.01 Retroactive
14.02.02 Deferred
15.00 DURATION
15.01 Indefinite Duration
15.02 Maximum Duration
16.00 SCOPE
16.01 PARTIES
16.02 Previous Agreements

SCHEDULE A – EXCERPT OF A RESOLUTION OF EMPLOYER
SCHEDULE 0.01.08 – INCENTIVE PLAN
SCHEDULE 3.01 – NOTICE OF INTENT TO EXERCISE OPTION