Document:

ex41.htm

Exhibit 4.1

 

STOCK OPTION PLAN

Approved June 11, 1996, as amended on January 15, 1997, April 30, 1997, July 5, 2000, July 3, 2002, May 12, 2004, April 20, 2005, May 9, 2007, August 7, 2008 and March18, 2011.

 

	
1.

	
Purpose of the Stock Option Plan

 

The purpose of the stock option plan for directors, officers, employees, members of the Scientific Advisory Committee and service providers (the “Stock Option Plan”) of Labopharm Inc. (the “Corporation”) or one of its Subsidiaries is to secure for the Corporation and its shareholders the benefit of an incentive interest in share ownership by directors, officers and employees of the Corporation and its Subsidiaries, as the case may be, and by members of the Scientific Advisory Committee and certain designated service providers.

 

	
2.

	
Administration

 

The Stock Option Plan shall be administered by the Corporation’s Board of Directors (the “Board”) or the Compensation Committee, as the same may be constituted from time to time (the “Committee”).  The Board shall have full and complete latitude to interpret the Stock Option Plan and to establish the rules and regulations applying to it and to make all other determinations it deems necessary or useful for the administration of the Stock Option Plan, provided that such interpretations, rules, regulations and determinations are consistent with the relevant policy statements of the competent securities authorities and the rules of the stock exchanges on which the securities of the Corporation are listed.

 

	
3.

	
Shares Subject to the Stock Option Plan

 

	
3.1

	
The shares subject to the Stock Option Plan are the Common Shares (the “Shares”) of the Corporation.  The total number of Shares that may be issued under the Stock Option Plan shall not exceed 9,9% of the total issued and outstandingShares of the Corporation at any time and no Optionee (as defined hereinbelow) shall hold options to purchase more than five percent (5%) of the number of Shares issued and outstanding at any time.  For greater certainty, all of the Shares reserved foroptions that have expired, have been cancelled without being exercised or have been exercised shall become reserved Shares for the purposes of options that may be subsequently granted under the terms of the Stock Option Plan.

 

	
3.2

	
The number of securities issuable (or reserved for issuance) to insiders under all security based compensation arrangements, cannot at any time exceed 10% of issued and outstanding securities of the Corporation. Furthermore, the number of securities issued to insiders under all security based compensation arrangements, within any one year period, cannot exceed 10% of issued and outstanding securities of the Corporation. 

 

 

 

  

  

  

 

 

	
4.

	
Grant of Options

 

Upon recommendation of the Committee, the Board shall from time to time designate the directors, officers or employees of the Corporation or any of its Subsidiaries, as the case may be, or the members of the Scientific Advisory Committee or service providers to whom options shall be granted (an “Optionee”) and the number of Shares reserved for such options.  For the purposes of the Stock Option Plan, “Subsidiaries” shall mean any legal entity of which the Corporation holds or is the beneficiary, at any time, directly or indirectly, otherwise than as security only, of securities conferring over 50% of the votes enabling it to elect the majority of the directors of such entity as well as any current or future Subsidiary of such legal entity.  Any Optionee may hold more than one option.  However, no Optionee may hold options to purchase over five percent (5%) of the number of Shares issued and outstanding at any time.  The granting of each option shall be evidenced by a letter from the Corporation addressed to the Optionee setting forth the number of Shares covered by such option, the subscription price, the terms and conditions of exercise of the option and the option period.

 

	
5.

	
Subscription Price

 

The subscription price for each Share underlying an option shall be established by the Board but such price shall not be lower than the closing price of the Shares on The Toronto Stock Exchange on the option grant date.  If no transaction has been reported on such exchange on the option grant date, the closing price will be deemed to be the closing price of the Shares on The Toronto Stock Exchange on the last date on which transactions were reported preceding the option grant date (the “Subscription Price”).

 

	
6.

	
Option Period

 

	
6.1

	
Subject to the provisions of Section 6.2, each option shall be exercisable during a period and in accordance with the terms and conditions established by the Board (the “Option Period”), such period commencing no earlier than the option grant date and shall terminate no later than ten years after such date.

 

	
6.2

	
Notwithstanding the provisions of subsection 6.1, an option shall not be exercisable by an Optionee from and after each and every one of the following dates (an “Early Expiry Date”), unless otherwise determined by the Board at any time prior to the Early Expiry Date (including, without limiting the generality of the foregoing, in accordance with subsection 6.4):

 

	
  

	
6.2.1

	
(i) in the case where the Optionee is an officer or an employee, the date on which the Optionee resigns or voluntarily leaves his/her employment with the Corporation or one of its Subsidiaries, as the case may be, or the date on which the employment of the Optionee with the Corporation or one of its Subsidiaries is terminated for cause, as the case may be, or (ii) in the case where the Optionee is a director or a member of the Scientific Advisory Committee of the Corporation or one of its Subsidiaries, as the case may be, but is not employed by either the Corporation or one of its Subsidiaries, the date on which such Optionee ceases to be a member of the relevant Board or the Scientific Advisory Committee for any reason other than death; and for both situations, only for the options vested at such date.

 

 

 

  

  

  

 

 

	
  

	
6.2.2

	
(i) in the case where the Optionee is an officer or employee, six (6) months following the date on which the Optionee’s employment with the Corporation or any of its Subsidiaries, as the case may be, is terminated by reason of death or (ii) in the case where the Optionee is a director or a member of the Scientific Advisory Committee of the Corporation or any of its Subsidiaries, as the case may be, but is not employed by either the Corporation or any of its Subsidiaries, six (6) months following the date on which such Optionee ceases to be a member of the relevant Board of Directors by reason of death; and for both situations, only for the options vested at such date;

 

	
  

	
6.2.3

	
in the case where the Optionee is an officer or employee, ninety (90) days following the date on which the Optionee’s employment with the Corporation or any of its Subsidiaries, as the case may be, is terminated for any cause or reason other than those mentioned in subsections 6.2.1 and 6.2.2 after any notice of termination period (hereinafter the “Termination Date”), including, without limiting the scope of the foregoing, disability, illness or, subject to 6.4, retirement or early retirement and only for options vested on  such Termination Date; or

 

	
  

	
6.2.4

	
in the case where the Optionee is a service provider, ninety (90) days following the end of the term of the agreement or the termination of the service agreement by either party (hereinafter the “Termination of Agreement”), and only for options vested on the date of the Termination of Agreement.

 

Such rules shall not be interpreted in such a manner as to extend the Option Period beyond ten years.

 

	
6.3

	
All rights conferred by an option not exercised at the termination of the Option Period or, unless determined by the Board pursuant to subsection 6.2 or 6.4, from and after any Early Expiry Date shall be forfeited.

 

	
6.4

	
However, the Board may, in its entire discretion, at any time and upon conditions it may set, decide that the Early Expiry Date of outstanding options granted to an Optionee, where the Optionee is an officer or employee who retires permanently from his/her employment with the Corporation, will not apply and all options granted to such Optionee under the Stock Option Plan shall continue until the earlier of their original expiry date or six (6) months after the Optionee’s death and subject to their original terms and conditions.

 

	
6.5

	
The Early Expiry Date of outstanding options granted to a member of the Board who voluntarily ceases to be a member of the Board for any reason other than death (the “Retirement”), will not apply and all options granted to such member of the Board under the Stock Option Plan shall continue until the earlier of their original expiry date or six (6) months after the death of the director and subject to their original terms and conditions, provided that the member of the Board:

 

	
  

	
(i)

	
has been a member of the Board for a minimum of five (5) consecutive years at the time of Retirement:

 

	
  

	
(ii)

	
was not required to cease to be a member of the Board pursuant to a decision of a regulatory authority or a resolution of the Board; and

 

	
  

	
(iii)

	
complied with any agreement with or undertaking towards the Corporation including any confidentiality, non-solicitation and non-competition provisions.

 

 

 

  

  

  

 

 

	
7.

	
Exercise of Options

 

	
7.1

	
Subject to the provisions of Section 6, an option may be exercised in whole, at any time, or in part, from time to time, during the Option Period, but in all cases in accordance with the exercise frequency established by the Board and applicable at the time of the grant.

 

	
7.2

	
An option may be exercised by written notice to the Chief Financial Officer, the Director Human Resources or the Corporate Secretary, of the Corporation.  Such notice shall set forth the number of Shares subscribed and the address to which the certificate evidencing such Shares is to be delivered.  Such notice shall also be accompanied by a bank draft or proof of wire transfer (net of all bank fees) made payable to the Corporation in the amount of the Subscription Price for each Share subscribed to.  The Corporation shall cause a certificate for the number of Shares specified in the notice to be issued in the name of the Optionee and delivered to the address specified in the notice no later than ten (10) business days following the receipt of such notice and bank draft of proof of wire transfer.

 

	
8.

	
No Assignment

 

No option or interest therein shall be assignable by the Optionee other than by testamentary disposition or the operation of the law of successions.

 

	
9.

	
Not a Shareholder

 

No rights shall be conferred on an Optionee as a shareholder of the Corporation with respect to any Shares underlying his/her option until he/she becomes the holder of record of such Shares.

 

	
10.

	
Offer for Shares of the Corporation

 

In the event that, at any time, an offer to purchase is made to all holders of Shares, notice of such offer shall be given by the Corporation to each Optionee and all unexercised options will become exercisable immediately at the Subscription Price, but only to the extent necessary to enable an Optionee to tender his/her Shares in response to the offer should the Optionee so desire.

 

	
11.

	
Effects of Alteration of Share Capital

 

In the event of any change in the number of issued and outstanding Shares of the Corporation by reason of any stock dividend, stock split, recapitalization, amalgamation, business combination, or a consolidation exchange of Shares or other similar change, an equitable adjustment shall be made by the Board in the maximum number or kind of Shares issuable under the Stock Option Plan or subject to outstanding options and in the Subscription Price of such Shares.  Such adjustment will be final and enforceable for the purposes of the Stock Option Plan.

 

	
12.

	
Amendment and Termination

 

	
12.1

	
The Board bears full responsibility with regard to the Stock Option Plan, which includes, but not limited to, the power and authority to adopt, amend, suspend or terminate the Stock Option Plan. Any such adoption, amendment, suspension or termination is subject to the rules set forth by the regulatory authorities.

 

 

  

  

  

 

 

	
12.2

	
Subject to the provisions of Section 12.3, shareholder approval is not required for amendments to the Stock Option Plan or options.

 

	
12.3

	
Approval by a majority of the voting shareholders present at a duly called shareholder meeting is required for the following amendments:

 

	
  

	
12.3.1

	
an increase of the total number of Shares that may be issued under the Stock Option  Plan;

 

	
  

	
12.3.2

	
a reduction in the exercise price with respect to an option granted under the Stock Option Plan or a cancellation of such an option for the purposes of re-issuing new options in replacement thereof;

 

	
  

	
12.3.3

	
an extension to the term of an option granted under the Stock Option Plan beyond its original expiry date;

 

	
  

	
12.3.4

	
an amendment to the class of persons eligible for grants of options under the Stock Option Plan; and

 

	
  

	
12.3.5

	
an amendment to allow options granted under the Stock Option Plan to become transferable or assignable other than for estate settlement purposes.

 

	
12.4

	
No amendment of the Stock Option Plan or options may contravene the requirements of any competent regulatory authority to which the Stock Option Plan or the Corporation is now or may hereafter be subject to.

 

	
12.5

	
The shareholders’ approval of an amendment may be given by way of confirmation at the next meeting of shareholders after the amendment is made, provided that no Shares are issued pursuant to the amended terms.

 

	
13.

	
Final Provisions

 

	
13.1

	
The Corporation’s obligation to issue options granted or Shares under the terms of the Stock Option Plan is subject to all of the applicable laws, regulations or rules of any governmental agency or other competent authority in respect of the issuance or distribution of securities and to the rules of any stock exchange on which the Shares of the Corporation are listed.  Each Optionee shall agree to comply with such laws, regulations and rules and to provide to the Corporation any information or undertaking required to comply with such laws, regulations and rules.

 

	
13.2

	
The participation in the Stock Option Plan of a director, an officer, an employee, a member of the Scientific Advisory Committee or a service provider of the Corporation or any of its Subsidiaries shall be entirely optional and shall not be interpreted as conferring upon a director, an officer, an employee, a member of the Scientific Advisory Committee or a service provider of the Corporation or any of its Subsidiaries any right or privilege whatsoever, except for the rights and privileges set out expressly in the Stock Option Plan.  Neither the Stock Option Plan nor any act that is done under the terms of the Stock Option Plan shall be interpreted as restricting the right of the Corporation or any of its Subsidiaries to terminate the employment of an officer or employee at any time.  Any notice of dismissal given to an officer or employee at the time his/her employment is terminated, or any payment in the place and stead of such notice, or any combination of the two, shall not have the effect of extending the duration of the employment for purposes of the Stock Option Plan.

 

 

 

  

  

  

 

	
13.3

	
No director, officer, employee, member of the Scientific Advisory Committee or service provider of the Corporation or any of its Subsidiaries shall acquire the automatic right to be granted one or more options under the terms of the Stock Option Plan by reason of any previous grant of options under the terms of the Stock Option Plan.

 

	
13.4

	
The Stock Option Plan does not provide for any guarantee in respect of any loss or profit which may result from fluctuations in the price of the Shares.

 

	
13.5

	
The Corporation and its Subsidiaries shall assume no responsibility as regards the tax consequences that participation in the Stock Option Plan will have for a director, an officer, an employee or a member of the Scientific Advisory Committee or a service provider of the Corporation or any of its Subsidiaries, and such persons are urged to consult their own tax advisors in such regard.

 

	
13.6

	
The Stock Option Plan and any option granted under the terms of the Stock Option Plan shall be governed and interpreted according to the laws of the province of Quebec and the laws of Canada applicable therein.

 

	
13.7

	
The Shares to be issued upon the exercise of an option will constitute qualifying shares under a stock savings plan pursuant to the provisions of the Taxation Act (Quebec), provided certain conditions set out therein are met.

 

	
13.8

	
The Stock Option Plan is dated as of June 11, 1996 modified on January 15, 1997, on April 30, 1997, on July 5, 2000, on July 3, 2002, on May 12, 2004, on April 20, 2005 and on May 9, 2007, August 7, 2008 and March 18, 2011.

* * *EX-10.1

EXHIBIT 10.1

FOURTH AMENDMENT TO LOAN AGREEMENT

ENTERED INTO by and between HEALTHSTREAM, INC., a Tennessee corporation (the
“Borrower”), and SUNTRUST BANK, a Georgia state banking corporation (the “Lender”),
as of this 30th day of March, 2011.

RECITALS:

1. The Borrower and the Lender entered into a Loan Agreement dated July 21, 2006, as amended
by that certain First Amendment to Loan Agreement dated February 16, 2007, as amended by that
certain Second Amendment to Loan Agreement dated July 23, 2007, and as amended by that certain
Third Amendment to Loan Agreement dated July 17, 2009 (as amended, the “Loan Agreement”).

2. The Borrower and the Lender desire to amend the Loan Agreement as provided in this
amendment.

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the Borrower and the
Lender agree as follows:

1. Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as
follows:

1.1 Loan Facility. Subject to the Conditions Precedent and the other terms and
conditions contained in this Agreement and the other Loan Documents, and in reliance upon
the representations, warranties and covenants in this Agreement and the other Loan
Documents, Lender agrees to make Advances to Borrower on a revolving credit basis up to
$20,000,000 from time to time until the Revolving Note Maturity Date, as evidenced by and
pursuant to the Revolving Note.

2. Section 1.3 of the Loan Agreement is hereby amended and restated in its entirety to
read as follows:

1.3 Interest. Interest shall accrue on all amounts advanced under the
Revolving Note at the Applicable Rate, except that interest shall accrue at the Default Rate
following the occurrence of an Event of Default (regardless of whether notice thereof has
been given to Borrower).

3. Section 4.1(c) of the Loan Agreement is hereby amended and restated in its entirety
to read as follows:

(c) Compliance Certificate. Simultaneously with the financial statements
described in subparts (a) and (b) above, a compliance certificate executed by Borrower’s
Chief Financial Officer setting forth in reasonable detail calculations showing compliance
(or lack thereof) with the provisions of Section 5.8 herein; and

4. Section 7.1 of the Loan Agreement is hereby amended to restated the notice address
of the Lender to read as follows:

SunTrust Bank

401 Commerce Street

4th Floor, Suite 4400

Nashville, TN 37219

Attn: Jason Reierson

1

5. Section 8.1 of the Loan Agreement is amended to include the definition of
“Applicable Rate” to read as follows:

“Applicable Rate” means a variable rate of interest equal to the 30 Day LIBOR
Rate, plus the number of basis points depicted on the pricing grid set forth below;
provided that the Applicable Rate as of March 30, 2011 shall be equal to the
30 Day LIBOR Rate, plus 175 basis points per annum (the “Initial Applicable Rate”).
The Initial Applicable Rate shall remain effective until the Lender receives the Borrower’s
calculation of the Funded Debt to EBITDA Ratio as required by Section 4.1(c) herein
for the quarter ending December 31, 2010. Thereafter and on a quarterly basis, the
Applicable Rate shall be adjusted to reflect changes to the Funded Debt to EBITDA Ratio as
such changes are reported to Lender pursuant to Section 4.1(c) herein. Calculation
of the Funded Debt to EBITDA Ratio shall be made on a rolling four quarter basis. Interest
for each year shall be computed on the basis of a year of 360 days for the actual number of
days elapsed.

APPLICABLE RATE PRICING GRID

	 	 	 
	BASIS POINTS	 	FUNDED DEBT TO EBITDA RATIO
	175 basis points per annum
	 	Equal to or less than 1.00 to 1.00

	 
	 	 

	200 basis points per annum
	 	Greater than 1.00 to 1.00, but no more than 2.00

to 1.00

	 
	 	 

6. The definition of “Guaranty” as used in Section 8.1 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:

“Guaranty” means the Guaranty executed by each Existing Subsidiary Guarantor,
and any Subsidiary of Borrower created by Permitted Acquisitions.

7. The definition of “Permitted Acquisitions” as used in Section 8.1 of the Loan
Agreement is hereby amended and restated in its entirety to read as follows:

“Permitted Acquisitions” means an acquisition by Borrower of the assets or
capital stock of any Person provided, that, (i) Borrower delivers written
notice to Lender fifteen (15) days prior to the completion of the intended acquisition,
which notice shall provide general details about the acquisition, (ii) together with such
written notice, Borrower provides Lender with pro forma calculations detailing the
post-acquisition effect that the acquisition will have on the Borrower’s consolidated
financial statements and the Financial Covenants set forth in Section 5.8 of this
Loan Agreement, (iii) the information provided by the Borrower and identified in subpart (i)
and (ii) above confirms that the Borrower will be in compliance with the Financial Covenants
set forth in Section 5.8 herein after giving effect to the acquisition, (iv) the
information provided by the Borrower and identified in subparts (i) and (ii) above confirms
that no Material Adverse Effect will occur as a result of the acquisition, (v) in the event
that the acquisition results in the acquisition of any new Subsidiary, such new Subsidiary
executes a Guaranty Agreement in form and substance required by Lender substantially similar
to the Guaranty executed by the Guarantors, and (vi) shall include only those Person(s)
operating substantially in the same industry or servicing a similar client base.

2

8. The definition of “Revolving Note” as used in Section 8.1 of the Loan Agreement
shall be amended and restated in its entirety as follows:

“Revolving Note” means that certain Revolving Credit Note dated July 21, 2006
issued by the Borrower to the order of Lender in the original principal amount of up to
$7,000,000, as amended and increased to $10,000,000 pursuant to that certain First Amendment
to Revolving Credit Note dated February 16, 2007, as amended and increased to $15,000,000
pursuant to that certain Second Amendment to Revolving Credit Note dated July 23, 2007, as
amended pursuant to that certain Third Amendment to Revolving Credit Note dated July 17,
2009, and as amended and increased to $20,000,000 pursuant to that certain Fourth Amendment
to Revolving Credit Note dated March 30, 2011, as such may be amended from time to time.

9. The definition of “Revolving Note Maturity Date” shall be amended and restated as follows:

“Revolving Note Maturity Date” means the earlier of: (a) July 21, 2012, (b) the
occurrence of any event described in Section 6.1(d) or Section 6.1(e)
hereof; or (c) Lender’s acceleration of the Indebtedness following the occurrence of an
Event of Default.

10. The Loan Agreement is not amended in any other respect.

11. The Borrower affirms its obligations under the Loan Agreement, as amended hereby, and the
Borrower agrees that such obligations are its valid and binding obligations, enforceable in
accordance with its terms, subject to no objection, counterclaim, or defense.

12. The Borrower affirms that no Default or Event of Default exists. The Borrower reaffirms
all of the representations and warranties contained in Article II of the Loan Agreement,
and the Borrower affirms that each of such representations and warranties remain true and correct
in all material respects as of the date of this Fourth Amendment to Loan Agreement, excluding
representations and warranties that by their express terms are limited to a specific date.

3

13. Lender’s obligations to enter into this Fourth Amendment to Loan Agreement are subject to
receipt by Lender of the following: (i) fully executed Fourth Amendment to Loan Agreement, (ii)
fully executed Fourth Amendment to Revolving Credit Note, (iii) a resolution of the Borrower in
form and substance satisfactory to Lender, (iv) a certificate of good standing of Borrower and the
Existing Subsidiary Guarantors containing no matter objectionable to Lender, (v) amendments to the
Guaranties executed by the Guarantors in form and substance satisfactory to Lender, and (vi)
payment by Borrower to Lender of a non-refundable commitment fee of $10,000 and payment of all of
Lender’s costs and expenses incurred in connection with the transaction evidenced hereby.

ENTERED INTO as of the date first written above.

BORROWER:

HEALTHSTREAM, INC.

By: /s/ Gerard M. Hayden, Jr.

Gerard M. Hayden, Jr.

Senior Vice President and

Chief Financial Officer

LENDER:

SUNTRUST BANK

By: /s/ Jason Reierson

Title: FVP

4

AGREED TO AND ACCEPTED BY:

GUARANTORS (by signing below

the Guarantors affirm that each

Guarantor has consented to and

approved the Loan Agreement, as

defined herein, and as amended

hereby):

THE JACKSON ORGANIZATION,

RESEARCH CONSULTANTS, INC.

By: /s/ Gerard M. Hayden, Jr.

Title: Senior Vice President and Chief Financial Officer

HEALTHSTREAM ACQUISITION I, INC.

By: /s/ Gerard M. Hayden, Jr.

Title: Senior Vice President and Chief Financial Officer

HEALTHSTREAM ACQUISITION II, INC.

By: /s/ Gerard M. Hayden, Jr.

Title: Senior Vice President and Chief Financial Officer

DATA MANAGEMENT & RESEARCH, INC.

By: /s/ Gerard M. Hayden, Jr.

Title: Senior Vice President and Chief Financial Officer

5

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