Amended and Restated 2000 Stock Incentive Plan

 

Section 1. General Provisions

 

1.1. PURPOSE

 

The purpose of the Corporation’s Amended and Restated 2000 Stock Incentive Plan is to advance the interests of the Corporation by enabling grants of stock options and other equity-based awards to be made to selected Participants so as to provide an additional incentive to such Participants, encourage stock ownership by them and thereby increase their proprietary interest in the Corporation’s success and their desire to remain with TOC. The Plan will also assist TOC in attracting and retaining key Employees.

 

1.2. DEFINITIONS

 

The following capitalized terms used in the Plan have the respective meanings set forth in this Section 1.2:

 

(a)               “Administrator” means any person or group of persons to whom the Committee delegates any or all of its powers pursuant to Section 1.3(c)(v).

 

(b)              “Associate” means “associate” as defined by the Toronto Stock Exchange from time to time in its rules and regulations governing stock option plans, stock purchase plans and other related matters.

 

(c)               “Award” means an Option, SAR, RSU or other award granted pursuant to this Plan.

 

(d)              “Board” means the board of directors of the Corporation.

 

(e)               “Code” means the United States Internal Revenue Code of 1986, as amended, including all regulations thereunder.

 

(f)                 “Committee” means the Human Resources Committee of the Board, any successor committee of the Board, or any subcommittee established by the Committee to administer the Plan or person or group of persons to whom the Committee has delegated any or all of its powers to administer the Plan and to perform the functions set forth herein.

 

(g)              “Common Shares” means common shares in the capital of the Corporation, provided that “Common Shares” shall include all shares or other securities issued in substitution for the Common Shares as provided for in Section 1.6.

 

(h)              “Corporation” means The Thomson Corporation, and any successor thereto.

 

(i)                  “Disability” means an injury or disability occurring to a Participant who by reason thereof is determined by the Committee to be unable to perform the services to be performed by him or her for his or her Employer; provided, however, that in the case of ISOs, “Disability” means a disability within the meaning of Section 22(e)(3) of the Code.

 

(j)                  “Early Retirement” means retirement of the Participant under the retirement plans and policies applicable to the Participant prior to Normal Retirement.

 

(k)               “Employee” means any employee or officer of TOC or such other person as may be determined from time to time by the Committee.

 

(l)                  “Employer” means the Corporation or the Subsidiary which employs a Participant and, if more than one, such entity as determined for this purpose by the Committee.

 

(m)            “Fair Market Value” on any day means the closing price in U.S. dollars of a Common Share on the New York Stock Exchange on the immediately preceding trading day, or if not so traded on such date, the average of the closing bid and asked prices on such exchange for that date; provided, however, that (i) if the Common Shares are not traded on the New York Stock Exchange or (ii) in the discretion of the Committee, such exchange does not reflect the fair market value of the Common Shares, then “Fair Market Value” shall mean the closing price of a Common Share on the other primary trading market for the Common Shares, which as of the date of this Plan is the Toronto Stock Exchange, such closing price to be converted into U.S. dollars or other applicable currency in accordance with Section 2.2(b) hereof, in each case using such closing price reported in The Wall Street Journal or such other source as the Committee deems to be reliable. If the Common Shares are not traded on the New York Stock Exchange or the Toronto Stock Exchange, the Committee shall determine in its sole discretion in good faith a method for determining “Fair Market Value” as of a particular date.

 

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(n)              “Insider” means an “insider” as defined by the Toronto Stock Exchange from time to time in its rules and regulations governing Security Based Compensation Arrangements and other related matters.

 

(o)              “ISO” means an Option that qualifies as an incentive stock option within the meaning of Section 422 of the Code and is designated as such by the Committee at the date of its grant.

 

(p)              “Non-U.S. Participant” means a Participant who is not a “United States person” within the meaning of Section 7701(a)(30) of the Code, as either a citizen or resident.

 

(q)              “Normal Retirement” means (i) retirement of the Participant at or after the normal retirement time as provided for in the retirement plans and policies applicable to the Participant, and (ii) retirement of the Participant before the normal retirement time as provided for in such plans and policies in circumstances whereunder the retirement benefits of the Participant are not diminished.

 

(r)                 “Option” means an option granted under the Plan to purchase Common Shares.

 

(s)               “Participant” means any Employee selected by the Committee to participate in the Plan.

 

(t)                 “Plan” means this 2000 Amended and Restated Stock Incentive Plan of the Corporation, as amended, including any supplements, schedules, guidelines, rules and regulations adopted by the Committee, from time to time.

 

(u)              “Reduction Factor” means the difference between (i) 1.00, and (ii) the product of (A) 0.05, and (B) the number of full periods and partial period of twelve months remaining until the Participant would qualify for Normal Retirement.

 

(v)              “Retirement” means Normal Retirement or Early Retirement.

 

(w)            “RSU” means a restricted share unit granted under the Plan.

 

(x)                “Stand Alone SAR” means a SAR not granted in tandem with an Option.

 

(y)              “SAR” means a stock appreciation right, and includes a Tandem SAR or a Stand Alone SAR granted under the Plan.

 

(z)                “Security Based Compensation Arrangement” means a “security based compensation arrangement” as defined by the Toronto Stock Exchange from time to time in its rules and regulations governing stock option plans, stock purchase plans, stock appreciation rights and other related matters.

 

(aa)         “Subsidiary” means any corporation of which at least a majority of the voting shares are at the time, directly or indirectly, owned by the Corporation, and includes any corporation in like relationship to a Subsidiary, whether or not such entity now exists or is hereafter organized or acquired directly or indirectly by the Corporation.

 

(bb)       “Tandem SAR” means a SAR granted in connection with an Option.

 

(cc)         “TOC” means the Corporation or any of its Subsidiaries, as the context requires.

 

(dd)       “U.S. Participant” means a Participant who is a “United States person” within the meaning of Section 7701(a)(30) of the Code, as either a citizen or resident.

 

1.3. ADMINISTRATION

 

(a)               The Plan shall be administered by the Committee.

 

(b)              Subject to the limitations of the Plan, the Committee shall have the responsibility and authority to:

 

(i)                  select those Employees who shall participate in the Plan; and

 

(ii)               grant Awards under the Plan to Participants and determine the timing of such Awards.

 

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(c)               Subject to the limitations of the Plan, the Committee shall be empowered to:

 

(i)                  establish any limitations, restrictions, terms and conditions upon any Awards under the Plan;

 

(ii)               interpret the Plan;

 

(iii)            adopt, amend and rescind such administrative guidelines and other rules and regulations relating to the Plan as it shall from time to time deem advisable, including, without limitation, special guidelines and provisions for persons who are residing in, or subject to, the taxes and currencies of, countries other than the United States and Canada;

 

(iv)           make any other determination and take any other action in connection with the implementation and administration of the Plan as it may deem necessary or advisable or as the Board may direct, including, without limitation, correcting any defect or omission or reconciling any inconsistency in the Plan or an Award; and

 

(v)              delegate to any person or committee of persons any or all of its powers and authorities under the Plan, including, without limitation, authorizing any person to execute on behalf of the Corporation or any Subsidiary any instrument required to effectuate the grant of an Award previously approved by the Committee and maintaining records relating to Awards, vesting, exercises, forfeitures and expiration of Awards.

 

(d)              All decisions, determinations and interpretations of the Committee on matters within its authority shall be final, conclusive and binding upon TOC and all Participants, except as otherwise determined by the Board.

 

(e)               Each of TOC, the Board, the Committee and any Administrator may consult with professional advisors, including, without limitation, legal counsel, who may be counsel for TOC, the Board, the Committee, the Administrator or other counsel, with respect to its obligations or duties hereunder or with respect to any action or proceeding or any question of law and neither TOC nor any member of the Board or the Committee or any Administrator shall be liable with respect to any action taken or omitted by it pursuant to the advice of such counsel or any other action taken or omitted by it in good faith.

 

(f)                 To the fullest extent permitted by law, the Corporation shall indemnify and hold harmless each person who is a member of the Board, the Committee, or an Administrator with respect to any action, proceeding or claim of any kind made against such person resulting from any action taken or omitted by him or her in connection with the administration of the Plan unless, in each case, such action was taken or made by such person in bad faith and without reasonable belief that it was in the best interests of the Corporation.

 

1.4. PARTICIPATION

 

(a)               In selecting Participants and in granting Awards, the Committee may give consideration to:

 

(i)                  the functions and responsibilities of the Participant;

 

(ii)               his or her past, present and potential contributions to the profitability and growth of TOC;

 

(iii)            the value of his or her services to TOC; and

 

(iv)           other factors deemed relevant by the Committee.

 

(b)              Participation in the Plan is entirely discretionary. Neither the Plan nor any Award hereunder shall give any Participant any right with respect to continuance of employment or appointment by TOC, nor shall the Plan or any Award hereunder impose a limitation in any way on the right of TOC to terminate any Participant’s employment or appointment at any time. TOC does not assume responsibility for the income and other tax consequences for the Participants and each Participant is advised to consult with the Participant’s own tax advisors.

 

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1.5. SHARES AVAILABLE, RESTRICTIONS AND FRACTIONS

 

(a)               The maximum number of Common Shares which may be issued under the Plan is 40,000,000 (provided that not more than 4,000,000 Common Shares or other awards based on Common Shares shall be granted under Section 5.1), subject to adjustment as provided in Section 1.6. The Common Shares may consist, in whole or in part, of authorized and unissued Common Shares held in treasury or Common Shares purchased on the open market or a combination thereof.

 

(b)              The maximum number of Common Shares which may be issued under Awards held by a Participant may not at any time exceed 5% of the number of outstanding Common Shares of the Corporation at such time determined on a non-diluted basis.

 

(c)               The maximum number of Common Shares for which Awards may be granted and which may be otherwise awarded under the Plan to a Participant during any one year period is 2,000,000 Common Shares, subject to adjustment as provided in Section 1.6.

 

(d)              The maximum number of Common Shares which may be issued under Awards held by a Participant and which may be issued under any other Security Based Compensation Arrangement of TOC:

 

(i)                  to all Insiders may not at any time exceed 10% of the number of outstanding Common Shares at such time determined on a non-diluted basis; and

 

(ii)               to an Insider and such Insider’s Associates during any one year period may not exceed 5% of the number of outstanding Common Shares at such time determined on a non-diluted basis.

 

(e)               The maximum number of Common Shares which may be issued under the Plan through ISOs is 4,000,000, subject to adjustment as provided for in Section 1.6.

 

(f)                 Any Common Share which could have been issued pursuant to an Award which Award that is, for any reason, cancelled, expired, forfeited or terminated without having been exercised in full shall again be available for Awards under the Plan.

 

(g)              No fractional shares shall be issued under the Plan, and the Committee shall determine, in its sole discretion, the manner in which fractional share values shall be treated for any purpose.

 

1.6. ADJUSTMENTS

 

In the event of any change in the number of outstanding Common Shares by reason of any stock dividend or split, recapitalization, reorganization, merger, amalgamation, consolidation, combination or exchange of Common Shares, or other corporate change affecting the Common Shares, the Board or the Committee shall make appropriate adjustment in or substitution for:

 

(a)               the number or kind of shares or other securities reserved for issuance pursuant to the Plan;

 

(b)              the number or kind of shares or other securities subject to outstanding Awards;

 

(c)               the exercise price of shares or other securities subject to outstanding Awards; and

 

(d)              the number or kind of shares subject to any other Awards under the Plan;

 

provided, however, that no adjustment or substitution shall obligate the Corporation to issue or sell fractional shares and that all such adjustments or substitutions shall be subject to any required regulatory approval.

 

1.7. WITHHOLDING

 

TOC has the right to deduct from all amounts paid in cash, or to require, prior to the issuance or delivery of any Common Shares, payment by the Participant of an amount in cash equal to any taxes required by law to be withheld. In the case of issuance or delivery of Common Shares, TOC also has the right to retain, or sell without notice or to permit the Participant to elect to have TOC retain or sell, a sufficient number of Common Shares to cover the amount required to be withheld, or to withhold any such amount from the Participant’s salary. The Committee, in its sole discretion, may authorize, on such terms and conditions as it determines, that any such withholding obligation with regard to any Participant may also be satisfied by delivery by such Participant of Common Shares already owned.

 

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1.8. EXPENSES

 

The expenses of administering the Plan shall be borne by TOC, except that brokerage fees or expenses associated with the sale or transfer of Common Shares by a Participant shall be borne by the Participant.

 

1.9. SALE OR MERGER

 

Notwithstanding any other provision of the Plan, if the Board or the Committee at any time determines it advisable to do so in connection with any proposed sale or conveyance of all or substantially all of the property and assets of the Corporation or any proposed merger, consolidation, amalgamation or offer to acquire all or any portion of the outstanding Common Shares of the Corporation or other transaction of a like nature, TOC may give written notice to all Participants advising that, subject to such terms and conditions as determined by the Board or the Committee, (a) their respective Awards may be exercised only within a specified period not to be less than 20 days after such date of the notice and not thereafter and that all rights of the Participants under any Awards not exercised will terminate at the expiration of the specified period and (b) with respect to any other Awards granted under this Plan, will advise whether any restrictions or limitations will continue to remain in effect.

 

1.10. NON-EXCLUSIVITY

 

Nothing contained herein shall prevent TOC, the Board or the Committee from adopting other compensation arrangements, subject to regulatory and shareholder approval if required, and such arrangements may be either generally applicable or applicable only in specific cases. No Award or other benefit under the Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of TOC nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation, except as specifically provided in any such plan.

 

1.11. AMENDMENT

 

(a)               The Board may amend, suspend or terminate the Plan or any portion thereof at any time in accordance with applicable legislation. In addition, to the extent necessary to comply with any applicable law, regulation or stock exchange requirement, the Corporation shall obtain shareholder approval in such a manner and to such a degree as so required. No such amendment, suspension or termination shall materially and adversely affect any right granted under the Plan to any Participant without the consent of such Participant, except as required by law.

 

(b)              With the consent of the Participant affected thereby, the Committee may amend or modify the terms of any outstanding Option or SAR or any terms and conditions of any grant of other Awards in any manner to the extent that the Committee would have had the authority to make an initial grant of such Option, SAR or other Award as so modified or amended, and without limitation the Committee may change the date or dates on which an Option or a SAR becomes exercisable or for which any restrictions applicable with respect to any grants of other Awards apply.

 

1.12. LAWS

 

(a)               The Plan and all matters to which reference is made herein shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

 

(b)              Notwithstanding any other provision of the Plan or Award thereunder:

 

(i)                  the Committee may postpone any exercise of any Option, or the issue or delivery of any Common Shares pursuant to the Plan for such time as the Committee in its discretion may deem necessary in order to permit the Corporation to obtain shareholder approval, if required under applicable laws, or to effect or maintain registration of the Plan or the Common Shares issuable pursuant thereto under the securities laws of any applicable jurisdiction, or to determine that such shares and the Plan are exempt from such registration;

 

(ii)               TOC shall not be obligated by any provision of the Plan or Award thereunder to sell or issue Common Shares in violation of any laws, rules, regulations and policies of any governmental authority in any applicable jurisdiction; and

 

(iii)            the Corporation shall have no obligation to reserve or issue any Common Shares unless such shares shall have been duly listed, upon official notice of issuance, with each stock exchange on which the Common Shares are listed for trading.

 

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1.13. PARTICIPANT NOT A SHAREHOLDER

 

A Participant shall have no rights as a shareholder of the Corporation with respect to any Common Shares covered by any Award until such time as and to the extent only that such Award has been (a) exercised, in the case of Options, SARs and related Awards or (b) vested, in the case of RSUs and related Awards.

 

1.14. EFFECTIVE DATE

 

The Plan, as amended and restated, was adopted by the Board on February 23, 2005 and shall become effective upon the subsequent approval by the shareholders of the Corporation.

 

Section 2. Options

 

2.1.  OPTION GRANTS

 

The Committee may, from time to time, grant Options to any Participant. At the time of granting an Award, the Committee may designate an Option as an ISO for purposes of the Code. Any ISOs granted by the Committee shall be subject to the requirements of Section 422 of the Code. No ISOs may be granted under the Plan after February 23, 2015.

 

2.2. EXERCISE PRICE

 

The Committee shall establish the exercise price at the time each Option is granted which exercise price:

 

(a)               may be in Canadian dollars, U.S. dollars or such other currency as determined by the Committee, and

 

(b)              shall in all cases be not less than 100% of the Fair Market Value of the Common Shares at the date of the Award (provided that where the exercise price of an Option is established in a currency other than U.S. dollars, the Fair Market Value of the Common Shares at the date of the Award shall be converted into the currency of the exercise price of the Option at the mid-market noon spot rate for exchange of such currency for U.S. dollars on the business day immediately preceding such date).

 

2.3. EXERCISE OF OPTIONS

 

(a)               Options shall not be exercisable later than ten (10) years after the date of granting an Award.

 

(b)              On granting an Option, the Committee may determine when any Option shall become exercisable and may determine that the Option shall be exercisable in installments and may impose such other restrictions as it shall deem appropriate. If the Committee determines that any Option is exercisable subject to certain limitations (including, without limitation, that such Option is exercisable only in installments or within certain time periods), the Committee may, in its sole discretion, waive such limitations on the exercisability at any time at or after grant in whole or in part (including, without limitation, waiving the installment exercise provisions or accelerating the time at which such Option may be exercised).

 

2.4. OTHER TERMS

 

(a)               Options shall be exercisable only during the lifetime of a Participant by the Participant or his or her legal guardian or representative and after death of a Participant only by the Participant’s legal representative.

 

(b)              Options shall not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant otherwise than by will or the laws of descent and distribution, provided that the Committee may determine at the time of grant or thereafter that an Option (other than an ISO) is transferable, to the extent permitted by applicable law, in whole or in part and in such circumstances and under such conditions as specified by the Committee.

 

(c)               Except as otherwise determined by the Committee:

 

(i)                  in the event that a Participant ceases to be an Employee for any reason other than death, Retirement, Disability or the Employer of such Participant ceasing to be a Subsidiary, each of the Options held by the Participant shall cease to be exercisable after such date;

 

(ii)               in the event that a Participant ceases to be an Employee as a result of death, each of the Options held by the Participant shall thereupon become fully exercisable and remain exercisable for a period of one year after such date, whether or not otherwise fully exercisable on that date;

 

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(iii)            in the event that a Participant ceases to be an Employee as a result of Disability, Normal Retirement or by reason of the Participant’s Employer ceasing to be a Subsidiary, each of the Options held by the Participant shall thereupon become fully exercisable and shall remain exercisable for a period of six months after such date, whether or not otherwise fully exercisable on that date, provided that, in such circumstances other than in the case of Disability, all of the Participant’s Options that are ISOs shall only remain exercisable for a period of three months after such date;

 

(iv)           in the event that a Participant ceases to be an Employee as a result of Early Retirement, each of the Options held by the Participant that are not fully exercisable at such time shall thereupon become fully exercisable, provided that, each such Option shall become exercisable for a reduced number of Common Shares equal to the sum of (A) the number of Common Shares for which such Option was exercisable immediately prior to the Early Retirement, and (B) the product of (x) the number of Common Shares for which such Option has become exercisable as a result of this Section 2.4(c)(iv), and (y) the Reduction Factor. No such adjustment shall obligate the Corporation to issue or sell fractional shares. All of the Options held by a Participant who ceases to be an Employee as a result of Early Retirement which are exercisable prior to such Early Retirement as adjusted as provided in this Section 2.4(c)(iv), shall remain exercisable for a period of six months after the date of Early Retirement, provided that all of the Participant’s Options that are ISOs (adjusted as provided in this Section 2.4(c)(iv)) shall only remain exercisable for a period of three months after such date; and

 

(v)              in the event that a Participant shall die after ceasing to be an Employee and the Options held by the Participant shall be exercisable as provided in Sections 2.4(c)(iii) or 2.4(c)(iv), such Options shall be exercisable by his or her legal representative for a period of one year after such death notwithstanding the exercise periods provided in Sections 2.4(c)(iii) or 2.4(c)(iv), provided that all of the Participant’s Options that are ISOs (adjusted as provided in Section 2.4(c)(iv), if applicable) shall only remain exercisable for a period of three months after the Participant ceases to be an Employee.

 

Notwithstanding the above, no Option may be exercised beyond the stated termination or expiry date and the Committee may, in its absolute discretion, extend the exercise period of any Options (other than ISOs) held by a Participant that are vested at the time such Participant ceases to be an Employee, but only if: (A) such exercise period does not extend beyond the earlier of (i) 36 months after the Participant ceases to be an Employee and (ii) the stated termination or expiration date; and (B) such extension of the exercise period could not reasonably be expected to cause adverse tax consequences to any Participant under Section 409A of the Code and the regulations and guidance issued by the Department of the Treasury thereunder.

 

(d)              Each Award of Options shall be confirmed by an agreement executed by the Corporation and by the Participant, and such agreement shall specify the terms and conditions applicable to the Award.

 

(e)               Except as otherwise provided in an Award agreement, a Participant shall pay the exercise price in full for Options:

 

(i)                  in cash or by certified check, bank draft or money order payable to the order of the Corporation;

 

(ii)               with the consent of the Committee, through the delivery of Common Shares having an aggregate Fair Market Value on the date of payment equal to the aggregate exercise price, provided that any Common Shares delivered by a Participant hereunder must have been held by the Participant for a period of not less than six months if received by the Participant on the exercise of an Option and such Common Shares shall not be subject to any pledge or security interest;

 

(iii)            with the consent of the Committee, through the delivery of irrevocable instructions to a broker to deliver promptly to the Corporation an amount equal to the aggregate exercise price; or

 

(iv)           by any other method approved by the Committee or as specified in an Award agreement.

 

The Committee shall determine acceptable methods for providing notice of exercise, for tendering Common Shares or for delivering irrevocable instructions to a broker and may impose such limitations and conditions on the use of Common Shares or irrevocable instructions to a broker to exercise an Option as it deems appropriate.

 

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Section 3. Stock Appreciation Rights

 

3.1. GRANTS OF SARS

 

The Committee may, from time to time, grant SARs to any Participant. Each grant of SARs shall be confirmed by an agreement executed by the Corporation and the Participant and such agreement shall specify the terms and conditions applicable to the Award. SARs shall not be exercisable later than ten (10) years after the date of granting an Award. Non-U.S. Participants may be granted Tandem SARs and/or Stand Alone SARs. U.S. Participants may only be granted Stand Alone SARs. Any such grant of Tandem SARs shall be included in the agreement referred to in Section 2.4(d) hereof.

 

3.2. EXERCISE

 

(a)               If a Participant exercises a Stand Alone SAR, such Participant shall be entitled to receive such number of Common Shares that in the aggregate have a Fair Market Value equal to the excess, if any, of: (i) the Fair Market Value of the Common Shares underlying the exercised Stand Alone SAR as of the date of exercise over (ii) the Fair Market Value of such Common Shares as of the date that the applicable Award was granted.

 

(b)              A Participant may only exercise a Tandem SAR at the same time, and to the same extent, that the Option related thereto is exercisable. Upon the exercise by a Participant of any Tandem SAR, the corresponding portion of the related Option shall be surrendered to the Corporation. On the exercise of a Tandem SAR, the Participant shall be entitled to receive an amount equal to the excess, if any, of (i) the Fair Market Value of such Option as of the date of exercise of the Option over (ii) the exercise price of such Option.

 

3.3. OTHER TERMS

 

(a)               Except as otherwise determined by the Committee, for Stand Alone SARs:

 

(i)                  in the event that a Participant ceases to be an Employee for any reason other than death, Retirement, Disability or the Employer of such Participant ceasing to be a Subsidiary, each of the SARs held by the Participant shall cease to be exercisable after such date;

 

(ii)               in the event that a Participant ceases to be an Employee as a result of death, each of the SARs held by the Participant shall thereupon become fully exercisable and remain exercisable for a period of one year after such date, whether or not otherwise fully exercisable on that date;

 

(iii)            in the event that a Participant ceases to be an Employee as a result of Disability, Normal Retirement or by reason of the Participant’s Employer ceasing to be a Subsidiary, each of the SARs held by the Participant shall thereupon become fully exercisable and shall remain exercisable for a period of six months after such date, whether or not otherwise fully exercisable on that date;

 

(iv)           in the event that a Participant ceases to be an Employee as a result of Early Retirement, each of the SARs held by the Participant that are not fully exercisable at such time shall thereupon become fully exercisable, provided that, each such SAR shall become exercisable for a reduced number of Common Shares equal to the sum of (i) the number of Common Shares for which such SAR was exercisable immediately prior to the Early Retirement, and (ii) the product of (A) the number of Common Shares for which such SAR has become exercisable as a result of this Section 3.3(a)(iv), and (B) the Reduction Factor. No such adjustment shall obligate the Corporation to issue or sell fractional shares. All of the SARs held by a Participant who ceases to be an Employee as a result of Early Retirement which are exercisable prior to such Early Retirement as adjusted as provided in this Section 3.3(a)(iv), shall remain exercisable for a period of six months after the date of Early Retirement; and

 

(v)              in the event that a Participant shall die after ceasing to be an Employee and the SARs held by the Participant shall be exercisable as provided in Sections 3.3(a)(iii) or 3.3(a)(iv), such SARs shall be exercisable by his or her legal representative for a period of one year after such death notwithstanding the exercise periods provided in Sections 3.3(a)(iii) or 3.3(a)(iv).

 

Notwithstanding the above, no Stand Alone SAR may be exercised beyond the stated termination or expiry date.

 

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(b)              Tandem SARs shall terminate and cease to be exercisable on the termination of the related Option.

 

(c)               Stand Alone SARs shall be exercisable only during the lifetime of the Participant by the Participant or his or her legal guardian or representative and after death of a Participant only by the Participant’s legal representative.

 

(d)              Stand Alone SARs shall not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant otherwise than by will or the laws of descent and distribution, provided that the Committee may determine at the time of grant or thereafter that a Stand Alone SAR is transferable, to the extent permitted by applicable law, in whole or in part and in such circumstances and under such conditions as specified by the Committee.

 

(e)               Tandem SARs shall not be transferable, other than in the case of a surrender to the Corporation on exercise, except in the manner and to the extent that the related Option is transferable and any transfer of an Option shall be deemed to provide for a corresponding transfer of the related Tandem SAR.

 

Section 4. Restricted Share Units

 

4.1. RSU AWARDS

 

The Committee may, from time to time, grant RSUs to a Participant. Each grant of RSUs shall be confirmed by an agreement executed by the Corporation and the Participant and such agreement shall specify the terms and conditions applicable to the Award. For purposes of the Plan, each RSU is a right granted to a Participant to receive one Common Share upon specified vesting dates, subject to any additional terms and conditions set forth in the agreement between the Participant and the Corporation.

 

4.2. OTHER TERMS

 

(a)               Except as otherwise determined by the Committee:

 

(i)                  in the event that a Participant ceases to be an Employee as a result of Early Retirement or for any reason other than death, Normal Retirement, Disability or his/her Employer ceasing to be a Subsidiary, all rights, title and interest with respect to unvested RSUs shall be forfeited effective immediately upon the occurrence of such event; and

 

(ii)               if a Participant ceases to be an Employee as a result of death, Normal Retirement, Disability or by reason of his/her Employer ceasing to be a Subsidiary, all unvested RSUs shall vest in full effective immediately upon the occurrence of such event.

 

(b)              RSUs shall not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant otherwise than by will or the laws of descent and distribution, provided that the Committee may determine at the time of grant or thereafter that an RSU is transferable, to the extent permitted by applicable law, in whole or in part and in such circumstances and under such conditions as specified by the Committee.

 

Section 5. Other Awards

 

5.1. OTHER AWARDS

 

The Committee may also grant awards of Common Shares and other awards that are valued in whole or in part by reference to, or are otherwise based on the Fair Market Value at the day of the grant of, Common Shares. Such awards shall be in such form, and dependent on such conditions, as the Committee shall determine, including, without limitation, the right to receive one or more Common Shares, or the equivalent cash value of such Common Shares, upon the completion of a specified period of service, the occurrence of an event or the attainment of specified performance objectives. Such awards may be granted alone or in addition to any other awards granted under the Plan. The Committee shall determine to whom and when such awards will be made, the number of Common Shares to be awarded under (or otherwise related to) such awards, whether such awards shall be settled in cash, Common Shares or a combination of cash and Common Shares, the currency in which any payments shall be made or any awards shall be denominated and all other terms and conditions of such awards.

 

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The Committee may grant certain awards under this Section 5.1 expressed in terms of, or based on, one or more pre-established and objective TOC, market group, business unit or divisional financial or operational criteria or measures, including, without limitation, revenues, operating earnings, earnings per share, operating income, cash flows, return on equity or invested capital, market share, stock price, operating ratios, capital expenditures, costs or expenses, productivity improvement, working capital targets, or the accomplishment of mergers, acquisitions, dispositions, securities offerings, new product development, implementation or completion of critical projects or processes or similar extraordinary business transactions or events. Performance goals may be based on the performance of TOC or a market group, business unit or division generally, in the absolute or in relation to peers, or the performance of a particular Participant. In establishing performance goals, the Committee may establish different performance goals for individual Participants or groups of Participants. Performance goals may be weighted to reflect relative significance for the performance period. Such criteria or measures may be, but are not required to be, calculated in accordance with generally accepted accounting principles (“GAAP”) applicable to TOC. However, as applicable, any non-GAAP criteria or measures shall be calculated in a manner consistent with the methods used for the purpose of preparing the annual consolidated financial statements of, and other public disclosures made by, TOC.