1.
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The Plan and Definitions
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(a)
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“Affiliate” shall have the meaning ascribed thereto in the Securities Act (Ontario) and regulations and instruments published
and adopted pursuant thereunder;
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(b)
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“Black Out Period” means the period during which the Corporation has imposed trading restrictions on its insiders and certain other persons pursuant to its insider
trading and disclosure policies;
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(c)
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“Board” means the Board of Directors of the Corporation;
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(d)
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“control” and “controlled” shall have the meanings ascribed thereto in the Securities Act
(Ontario);
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(e)
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“Common Shares” means the common shares in the capital of the Corporation;
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(f)
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“Compensation Plans” means this Plan, the DSU Plan and the SU Plan;
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(g)
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“Disability” means any disability with respect to a Participant which the Board, in its sole and unfettered discretion, considers likely to prevent permanently the
Participant from:
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(i)
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being employed or engaged by the Corporation, its subsidiaries or another employer, in a position the same as or similar to that in which he was last employed or engaged by the Corporation or its
subsidiaries; or
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(ii)
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acting as a director or officer of the Corporation or its subsidiaries;
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(h)
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“DSU Plan” means the Deferred Share Unit Plan of the Corporation effective as of May 29, 2019;
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(i)
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“Eligible Assignee” means, in respect of a Participant, that person’s spouse, minor children or minor grandchildren, Eligible Retirement Plan, Eligible Corporation or
Eligible Family Trust;
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(j)
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“Eligible Corporation” means, in respect of a Participant, a corporation controlled by that person and all the shares of which are held by that person and/or Eligible
Assignees of that person;
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(k)
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“Eligible Family Trust” means, in respect of a Participant, a trust of which the Eligible Person is a trustee and of which all beneficiaries are that person and/or
Eligible Assignees;
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(l)
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“Eligible Retirement Plan” means, in respect of a Participant in Canada, a registered retirement savings plan or registered retirement income fund established by that
person or under which the beneficiary or annuitant is that person, and in respect of a Participant in the United States, a 401(k) plan or individual retirement account established by that person or under which the beneficiary or annuitant
is that person;
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(m)
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“Exchange” means the Toronto Stock Exchange and/or such other stock exchange upon which the Common Shares may become listed;
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(n)
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“Insider” means a “reporting insider” (as such term is defined in National Instrument 55-104 – Insider Reporting Requirements and
Exemptions) and “associates” and “affiliates” thereof (as such terms are defined in the rules of the Exchange or where they are not so defined, as such terms are defined in the Securities Act
(Ontario));
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(o)
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“Insider Participation Limit” means the number of Common Shares:
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(i)
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issued to Insiders, within any one year period, and
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(ii)
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issuable to Insiders, at any time,
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(p)
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“Option Period” shall mean the period during which an Option may be exercised;
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(q)
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“Options” shall mean options to purchase Common Shares granted under this Plan and includes Incentive Stock Options and Nonqualified Stock Options;
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(r)
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“Participant” shall have the meaning ascribed to in Section 6(a);
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(s)
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“Service Providers” shall mean persons engaged by the Corporation or by any Affiliate of the Corporation to provide services (i) where the person is in the United
States, on a continuous basis for an initial, renewable or extended period of twelve months or more and, in the United States, shall only include those persons who may participate in an “Employee Benefit Plan” as set forth in Rule 405 of
the U.S. Securities Act, or (ii) where the person is outside the United States, the said person meets the definition of a “consultant” as such term is defined in National Instrument 45-106 – Prospectus
Exemptions; provided that such persons are natural persons, provide bona fide services to the Corporation and such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not
directly or indirectly promote or maintain a market for the Corporation’s securities;
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(t)
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“SU Plan” mans the Share Unit Plan of the Corporation effective as of May 29, 2019;
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(u)
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“U.S. Securities Act” means the United States Securities Act of 1933, as amended; and
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(v)
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“VWAP” means the volume weighted average trading price of the Common Shares on the Exchange, calculated by dividing the total value by the total volume of Common Shares
traded for the relevant period.
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2.
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Purpose
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3.
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Administration
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(a)
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This Plan shall be administered by the Board.
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(b)
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Subject to the terms and conditions set forth herein, the Board is authorized to provide for the granting, exercise and method of exercise of Options, all on such terms (which may vary between Options granted
from time to time) as it shall determine. In addition, the Board shall have the authority to: (i) construe and interpret this Plan and all option agreements entered into hereunder; (ii) prescribe, amend and rescind rules and regulations
relating to this Plan and (iii) make all other determinations necessary or advisable for the administration of this Plan. All determinations and interpretations made by the Board shall be binding on all Participants (as hereinafter defined)
and on their legal, personal representatives and beneficiaries and permitted assignees hereunder.
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(c)
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The Board’s authority to make amendments to this Plan without shareholder approval shall be in accordance with Section 18 below.
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(d)
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Notwithstanding the foregoing or any other provision contained herein, the Board shall have the right to delegate the administration and operation of this Plan, in whole or in part, to a committee of the
Board or to the Chief Executive Officer or any other officer of the Corporation. Whenever used herein, the term “Board” shall be deemed to include any committee or officer to which the Board has, fully or partially, delegated responsibility
and/or authority relating to the Plan or the administration and operation of this Plan pursuant to this Section 3.
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(e)
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Options shall be evidenced by (i) an agreement, signed on behalf of the Corporation and by the person to whom an Option is granted, which agreement shall be in such form as the Board shall approve, or (ii) a
written notice or other instrument, signed by the Corporation, setting forth the material attributes of the Options.
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(f)
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The Board shall not grant Options to residents of the United States unless such Options are registered under the U.S. Securities Act or are issued in compliance with an available exemption from the
registration requirements of the U.S. Securities Act.
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4.
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Shares Subject to Plan
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(a)
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Subject to Section 15 below, the securities that may be acquired by Participants upon the exercise of Options shall be deemed to be fully authorized and issued Common Shares. Whenever used herein, the term
“Common Shares” shall be deemed to include any other securities that may be acquired by a Participant upon the exercise of an Option the terms of which have been modified in accordance with Section 15 below.
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(b)
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The aggregate number of Common Shares reserved for issuance under this Plan and all of the other Compensation Plans of the Corporation, shall not, at the time of the stock option grant, exceed fifteen percent
(15%) of the total number of issued and outstanding Common Shares (calculated on a non-diluted basis) unless the Corporation receives the permission of the stock exchange or exchanges on which the Shares are then listed to exceed such
limit.
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(c)
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If any Option granted under this Plan shall expire or terminate for any reason without having been exercised in full, any un-purchased Common Shares to which such Option relates shall be available for the
purposes of the granting of Options under this Plan.
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5.
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Maintenance of Sufficient Capital
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6.
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Eligibility and Participation
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(a)
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The Board may, in its discretion, select any of the following persons to participate in this Plan and to receive Options under this Plan:
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(i)
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directors of the Corporation and of any Affiliate of the Corporation;
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(ii)
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officers of the Corporation and of any Affiliate of the Corporation;
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(iii)
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employees of the Corporation and of any Affiliate of the Corporation; and
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(iv)
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Service Providers;
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(b)
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The Board may from time to time, in its discretion, grant an Option to any Participant, upon such terms, conditions and limitations as the Board may determine, including the terms, conditions and limitations
set forth herein, provided that Options granted to any Participant shall be approved by the shareholders of the Corporation if the rules of any stock exchange on which the Shares are listed require such approval.
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7.
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Exercise Price
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8.
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Number of Optioned Shares
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9.
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Term
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(a)
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no Option shall be exercisable for a period exceeding ten (10) years from the date that the Option is granted unless the Corporation receives the required approval of the stock exchange or exchanges on which
the Common Shares are then listed and as specifically provided by the Board and as permitted under the rules of any stock exchange or exchanges on which the Shares are then listed;
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(b)
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no Option in respect of which shareholder approval is required under the rules of any stock exchange or exchanges on which the Common Shares are then listed shall be exercisable until such time as the Option
has been approved by the shareholders of the Corporation;
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(c)
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the Board may, subject to the receipt of any necessary regulatory approvals, in its sole discretion, accelerate the time at which any Option may be exercised, in whole or in part; and
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(d)
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notwithstanding the expiration date applicable to any Option, if an Option would otherwise expire during a Black Out Period or during the period of ten business days immediately following the last day of a
Black Out Period, the expiration date of such Option shall be the tenth business day following the expiration of the Black Out Period, provided that in no event shall the period during which said Option is exercisable be extended beyond
10 years from the date such Option is granted to the Participant.
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10.
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Method of Exercise of Option
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(a)
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Except as set forth in Sections 11 and 12 below or as otherwise determined by the Board, no Option may be exercised unless the holder of such Option is, at the time the Option is exercised, a director,
officer, employee or Service Provider of the Corporation or an Eligible Assignee.
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(b)
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Options that are otherwise exercisable in accordance with the terms thereof may be exercised in whole or in part from time to time.
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(c)
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Any Participant (or his legal, personal representative) or Eligible Assignee wishing to exercise an Option shall deliver to the Corporation, at its principal office in the City of Toronto, Ontario:
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(i)
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a written notice expressing the intention of such Participant (or his legal, personal representative) or Eligible Assignee to exercise the Option and specifying the number of Common Shares in respect of which
the Option is exercised; and
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(ii)
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a cash payment, certified cheque or bank draft, representing the full purchase price of the Common Shares in respect of which the Option is exercised.
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(d)
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Upon the exercise of an Option as aforesaid, the Corporation shall use reasonable efforts to forthwith deliver, or cause the registrar and transfer agent of the Common Shares to deliver, to the relevant
Participant (or his legal, personal representative) or to the order thereof, a certificate representing the aggregate number of fully paid and non-assessable Common Shares in respect of which the Option has been duly exercised.
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(e)
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No Option holder who is resident in the United States may exercise Options unless the Common Shares to be issued upon exercise are registered under the U.S. Securities Act or are issued in compliance with an
available exemption from the registration requirements of the U.S. Securities Act.
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(f)
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The Corporation shall be entitled to take all steps necessary to ensure that sufficient funds are provided to the Corporation by the Participant or Eligible Assignee to enable the Corporation to satisfy all
withholding tax and other source deduction requirements in respect of the exercise of an Option by the Participant or Eligible Assignee that are imposed by any applicable law, including:
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(i)
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deducting and withholding any amount from any payments made to the Participant or Eligible Assignee, whether hereunder or otherwise;
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(ii)
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requiring from the Participant or Eligible Assignee a cash payment, certified cheque or bank draft in the amount specified by the Corporation; and
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(iii)
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requiring that the Participant or Eligible Assignee enter into a same-day sale in respect of some or all of the Common Shares received on the exercise of an Option, with a portion of the sale proceeds being
remitted directly to the Corporation.
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11.
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Ceasing to be a Director, Officer, Employee or Service Provider
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(a)
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if a Participant is dismissed for cause as a director, officer or employee of, or Service Provider to, the Corporation or one of its subsidiaries, all unexercised Option rights of that Participant or such
Participant’s Eligible Assignee (where the Participant has assigned the Option to such Eligible Assignee) under this Plan shall immediately become terminated and shall lapse notwithstanding the original term of the Option granted to such
Participant under this Plan; and
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(b)
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if any Participant shall cease to hold the position or positions of director, officer, employee or Service Provider of the Corporation (as the case may be) as a result of (i) retirement at the normal
retirement age prescribed by the Corporation, if any; (ii) resignation; or (iii) termination other than for cause; such Participant or such Participant’s Eligible Assignee (where the Participant has assigned the Option to such Eligible
Assignee) shall have the right for a period to be determined by the Board not exceeding 90 days, or such longer period determined by the Board at its discretion in respect of a specific Option on a date after such Option is granted
notwithstanding an earlier determination by the Board, from the date of the Participant ceasing to be a director, officer, employee or Service Provider to exercise his Options under this Plan with respect to all Common Shares issuable
thereunder to the extent that the Options were exercisable on the date of such Participant ceasing to hold any such position with the Corporation, or until the normal expiry date of the Option, whichever is earlier. Upon the expiration of
such period, all unexercised Option rights of that Participant and any Eligible Assignee thereof under this Plan shall immediately become terminated and shall lapse notwithstanding the original term of the Option granted to such Participant
under this Plan.
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12.
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Death or Disability of a Participant
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(a)
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by the person or persons to whom the Participant’s rights under the Option shall pass by the Participant’s will or applicable law; and
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(b)
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to the extent that he was entitled to exercise the Option as at the date of his death.
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13.
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Rights of Participants
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14.
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Proceeds from Exercise of Options
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15.
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Adjustments
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(a)
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The number of Common Shares subject to the Plan shall be increased or decreased proportionately in the event of the subdivision or consolidation of the outstanding Common Shares of the Corporation, and in any
such event a corresponding adjustment shall be made to the number of Common Shares deliverable upon the exercise of any Option granted prior to such event without any change in the total price applicable to the unexercised portion of the
Option, but with a corresponding adjustment in the price for each Common Share that may be acquired upon the exercise of the Option. In case the Corporation is reorganized or merged or consolidated or amalgamated with another corporation,
appropriate provisions shall be made for the continuance of the Options outstanding under this Plan and to prevent any dilution or enlargement of the same.
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(b)
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Adjustments under this Section 15 shall be made by the Board, whose determination as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive. No fractional Common
Shares shall be issued upon the exercise of an Option following the making of any such adjustment.
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16.
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Change of Control
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(a)
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the acceptance by the holders of Common Shares of the Corporation, representing in the aggregate, more than 50 percent (50%) of all issued Common Shares of the Corporation, of any offer, whether by way of a
takeover bid or otherwise, for all or any of the outstanding Common Shares of the Corporation; or
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(b)
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the acquisition, by whatever means, by a person (or two or more persons who, in such acquisition, have acted jointly or in concert or intend to exercise jointly or in concert any voting rights attaching to
the Common Shares acquired), directly or indirectly, of beneficial ownership of such number of Common Shares or rights to Common Shares of the Corporation, which together with such person’s then owned Common Shares and rights to Common
Shares, if any, represent (assuming the full exercise of such rights to voting securities) more than fifty percent (50%) of the combined voting rights of the Corporation’s then outstanding Common Shares; or
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(c)
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the entering into of any agreement by the Corporation to merge, consolidate, amalgamate, initiate an arrangement or be absorbed by or into another corporation; or
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(d)
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the passing of a resolution by the Board or shareholders of the Corporation to substantially liquidate the assets or wind-up the Corporation’s business or significantly rearrange its affairs in one or more
transactions or series of transactions or the commencement of proceedings for such a liquidation, winding-up or re-arrangement (except where such re-arrangement is part of a bona fide reorganization of the Corporation in circumstances where
the business of the Corporation is continued and where the shareholdings remain substantially the same following the re-arrangement); or
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(e)
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individuals who were members of the Board immediately prior to a meeting of the shareholders of the Corporation involving a contest for or an item of business relating to the election of directors, not
constituting a majority of the Board following such election.
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17.
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Transferability
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(a)
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Subject to sub-Section 17(b), all Options and all benefits, interests and rights accruing to any Participant (or such Participant’s Eligible Assignee) in accordance with the terms and conditions of this Plan
may only be exercised by the Participant (or such Participant’s Eligible Assignee) during the lifetime of a Participant and shall be non-transferrable and non-assignable and may not be made subject to execution, attachment or similar
process, save and except with the prior written permission of the Board, or in the event of the death of a Participant, by the person or persons to whom the Participant’s rights under the Option pass by the Participant’s will or applicable
laws of descent and distribution.
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(b)
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Notwithstanding sub-Section 17(a) but subject to obtaining any necessary approvals in advance from the Corporation and from each Exchange on which the Common Shares are listed and which reserves the right to
approve such assignments, a Participant may assign Options granted to him under the Plan to Eligible Assignees and Eligible Assignees may, in turn, assign such Options to the original Participant or to other Eligible Assignees of the
original Participant. Notwithstanding any such assignment, (i) all Options granted under the Plan shall be deemed to be the Option of the original Participant for the purposes of applying the rules and policies of the Exchange on which the
Common Shares are listed and (ii) the Corporation shall continue to treat the original Participant as the holder of the assigned Options unless and until such time as the Corporation is provided with notice in writing from the original
Participant or its legal representative and the Eligible Assignee, together with such other documentation as the Corporation may require, confirming that the assignee is an Eligible Assignee.
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18.
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Amendment and Termination of Plan
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(a)
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minor changes of a “housekeeping nature”;
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(b)
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amending Options under this Plan, including with respect to the Option Period (provided that the period during which an Option is exercisable does not exceed 10 years from the date the Option is granted and
that such Option is not held by an Insider), vesting period, exercise method and frequency, subscription price (provided that such Option is not held by an Insider) and method of determining the subscription price, assignability and effect
of termination of a Participant’s employment or cessation of the Participant’s directorship;
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(c)
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changing the class of Participants eligible to participate under this Plan;
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(d)
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accelerating the vesting of any Option;
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(e)
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extending the expiration date of any Option provided that the period during which an option is exercisable does not exceed 10 years from the date the Option is granted and provided that such Option is not
held by an Insider, and where such Option is held by an Insider in such case, shareholder approval shall be obtained in connection with the extension;
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(f)
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changing the terms and conditions of any financial assistance which may be provided by the Corporation to Participants to facilitate the purchase of Common Shares under this Plan; and
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(g)
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adding a cashless exercise feature, payable in cash or securities, which provides for a full deduction of the number of underlying Common Shares from this Plan reserve.
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19.
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Necessary Approvals
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20.
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Stock Exchange Rules
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21.
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Market Fluctuations
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22.
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Right to Issue Other Shares
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23.
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Notice
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24.
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Gender
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25.
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Interpretation
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26.
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Effective Date of Plan
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