MANITOBA TELECOM SERVICES INC. AMENDED AND RESTATED STOCK OPTION PLAN

Transcription

1 MANITOBA TELECOM SERVICES INC. AMENDED AND RESTATED STOCK OPTION PLAN TABLE OF CONTENTS Section Description Page No. Purpose... 1 Administration... 1 Selection for Participation... 2 Shares Reserved... 2 Non-Exclusivity... 3 Amendment... 3 Approval of the Stock Exchanges... 4 Compliance with Legislation... 4 Termination of Plan... 5 Right of Employment... 5 Governing Law... 5 Stock Option Grants... 5 Exercise Price... 6 Term of Option... 6 Option Agreement and Confirmation... 7 Exercise of Option... 7 Termination of Employment...10 Employer Ceasing to be Affiliate...11 Transferability...11 Board Approval...11 Schedule 1 Option Agreement and Confirmation

2 AMENDED AND RESTATED STOCK OPTION PLAN This Amended and Restated Stock Option Plan (the Plan ) of Manitoba Telecom Services Inc. (the Corporation ) amends and replaces in its entirety the Stock Option Plan of the Corporation previously adopted and deemed effective May 30, Purpose 1. The purpose of this Plan of the Corporation for key employees and directors of the Corporation and all other corporations with which the Corporation is affiliated within the meaning of The Corporations Act (Manitoba) (individually, an Affiliate and collectively, Affiliates ), is to advance the interests of the Corporation and its Affiliates by: providing such individuals with a long term performance incentive to promote sustainable increases in shareholder value, encouraging stock ownership by such individuals and increasing their proprietary interest in the success of the Corporation and its Affiliates, and encouraging such individuals to remain employees of the Corporation or any Affiliate, as applicable. Administration 2. The Plan shall be administered by the Board of Directors of the Corporation (the Board ) or any specified members or committee of the Board as the Board may from time to time designate. The Corporation shall pay all costs of administering the Plan. 3. Subject to the limitations set out in this Plan, the Board shall have the authority to: select key employees and directors of the Corporation and its Affiliates, whether full-time or part-time, who may participate in the Plan (individually, a Participant or collectively, Participants ), determine the form and amounts of grants of options under the Plan which relate to the issue of Common Shares of the Corporation and any limitations, restrictions and conditions upon such grants, interpret and construe the Plan and to adopt, amend and rescind such administration guidelines and other rules and regulations relating to the Plan as it shall from time to time deem advisable, and

3 Page 2 (d) make all other determinations and take all other actions in connection with the implementation and administration of the Plan as it may deem necessary or advisable. The Board s determinations shall be conclusive and binding upon the Corporation, its Affiliates and all other persons. Selection for Participation 4. Participants in the Plan who are employees shall be selected by the Board from those employees of the Corporation or any Affiliate who occupy responsible managerial or professional positions and who, in the opinion of the Board, after considering recommendations of the President and Chief Executive Officer, have the capacity to contribute to the long term success of the Corporation or such Affiliate, as applicable. In making any selection and in determining the form and amount of any grant, the Board may give consideration to: (d) the functions and responsibilities of an employee, the past, present and potential contributions of an employee to the profitability and sound growth of the Corporation or any Affiliate, as applicable, the long term value of the services of an employee to the Corporation or any Affiliate, as applicable, and any other factors deemed relevant. Shares Reserved 5. All shares of the Corporation issued pursuant to the Plan shall be common shares of the Corporation (the Common Shares ) or such other shares or securities determined in accordance with Section 7. The maximum number of Common Shares which may be reserved and issued for all purposes under the Plan shall be limited to 7,000,000 Common Shares of the Corporation, subject to adjustment as provided in Section Any Common Shares reserved under the Plan which are subject to a stock option (an Option ) granted to a Participant under the Plan and which, for any reason, is cancelled or terminated without having been exercised, shall again be available for grants under the Plan. No fractional shares shall be issued, and the Board shall determine the manner in which fractional share values shall be treated.

4 Page 3 7. In the event of any change of the outstanding Common Shares by reason of any stock dividend or split, rights offering, recapitalization, merger, amalgamation, subdivision, consolidation, combination or exchange of shares or reclassification, or in the event the outstanding Common Shares are substituted in any way for securities or property of the Corporation or of any other Company, or other corporate change, the Board shall make appropriate substitution or adjustment in: the number or kind of shares or other securities reserved for issuance pursuant to the Plan, and the number and kind of shares subject to unexercised Options previously granted and in the option price of such shares; provided, however, that no substitution or adjustment shall obligate the Corporation to issue or sell fractional shares. Non-Exclusivity 8. Nothing contained herein shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if required, and such arrangements may be either generally applicable or applicable only in specific cases. Amendment 9. The Board, at any time and without the approval of shareholders but subject to any necessary approval of the Stock Exchanges on which the Common Shares are listed, may suspend or terminate the Plan or any portion thereof. The Board, at any time and without the approval of shareholders but subject to any necessary approval of the Stock Exchanges on which the Common Shares are listed, may amend the Plan in any way whatsoever, provided, however, that approval of shareholders will be required for the following types of amendments: any amendment that would increase the number of Common Shares that may be reserved and issued under the Plan (including an amendment that would increase a fixed maximum number of securities or that would change a fixed maximum number of securities to a fixed maximum percentage, but excluding an amendment that would change a fixed maximum percentage that previously was approved by shareholders); any amendment that would decrease the exercise price of an Option held by a Participant below the original exercise price of such Option; any amendment that would extend the term of an Option held by a Participant beyond the original expiry date of such Option;

5 Page 4 (d) (e) (f) (g) any amendment that would increase, beyond 10% of the total issued and outstanding securities of the Corporation, the aggregate number of Common Shares (i) that may be issued in any one-year period to insiders of the Corporation pursuant to the Plan and all other security based compensation arrangements of the Corporation; or (ii) that may be issuable at any time to insiders of the Corporation pursuant to the Plan and all other security based compensation arrangements of the Corporation; any amendment that would add a cashless exercise feature, payable in cash or securities, that does not provide for a full deduction of the number of underlying Common Shares from the Plan reserve; any amendment that would permit the grant of Options to non-employee directors of the Corporation; and any amendment to section 31 of the Plan that would permit Options to be transferable or assignable other than by will or the laws of descent and distribution. No such amendment, suspension or termination shall alter or impair, without the consent of such Participant, any right previously granted to any Participant. 10. With the consent of the Participant affected thereby, and, as applicable, the consent of any stock exchange upon which the Common Shares are listed and posted for trading, the Board may amend or modify any outstanding Option, in any manner to the extent that the Board would have had the authority to initially make such grant as so modified or amended, including without limitation, to change the date or dates as of which an Option becomes exercisable. Approval of the Stock Exchanges 11. The adoption of the previous Stock Option Plan was approved by an ordinary resolution of the shareholders of the Corporation. This Plan will be effective only following the approval of the Stock Exchanges on which the Common Shares are listed. Compliance with Legislation 12. The Board may postpone any exercise of any Option or the issue of any Common Shares or other securities pursuant to the Plan for such time as the Board in its discretion may deem necessary in order to permit the Corporation to operate the Plan in compliance with the securities and other laws of all applicable jurisdictions. The Corporation shall not grant Options, nor shall it be obligated by any provision of the Plan or grant thereunder to sell or issue Common Shares, in violation of any applicable law or the regulations of applicable stock exchanges.

6 Page The participation in the Plan by directors or employees of a foreign Affiliate of the Corporation is subject to the additional requirements of the securities laws of the jurisdiction in question and the states thereof and the tax implications resulting from participation in the Plan by these employees are governed by the tax laws of the applicable jurisdiction. Termination of Plan 14. The Board may terminate the Plan at any time in its discretion. If the Plan is so terminated, no further Options shall be granted but the Options then outstanding shall continue in full force and effect in accordance with the provisions set out above. Right of Employment 15. Nothing contained in this Plan or in any Option granted under this Plan shall confer upon any person any right to continued employment with the Corporation or interfere in any way with the rights of the Corporation in connection with the employment or termination of employment of any such person. Governing Law 16. The Plan, and the determinations made and actions taken in connection with the Plan, shall be governed by the laws of the Province of Manitoba and construed in accordance therewith and the courts of Manitoba shall have sole jurisdiction in connection with any action or proceeding arising out of or relating to this Plan. Stock Option Grants 17. Subject to the provisions of the Plan, the Board shall have the absolute authority and discretion to determine: the Participants to whom Options shall be granted, except that as and from June 15, 2004, the Board shall not grant any Options to a non-employee director of the Corporation, the number of Common Shares available by each Option, and the conditions and limitations, if any, in addition to those set forth in this Plan, applicable to the exercise of an Option, including, without limitation, the nature and duration of the restrictions, if any, to be imposed upon the sale or other disposition of Common Shares acquired upon exercise of the Option.

7 Page A Participant may receive Options on more than one occasion under the Plan. Options may not be pledged or otherwise encumbered. 19. The maximum number of Common Shares reserved for issuance to any one Participant pursuant to Options may not exceed 2.5% of the fully diluted, issued and outstanding Common Shares of the Corporation, subject to adjustment as provided in Section 7. The aggregate number of Common Shares that may be issued in any one-year period to insiders of the Corporation pursuant to the Plan and all other security based compensation arrangements of the Corporation shall not exceed 10% of the total issued and outstanding securities of the Corporation. The aggregate number of Common Shares that may be issuable at any time to insiders of the Corporation pursuant to the Plan and all other security based compensation arrangements of the Corporation shall not exceed 10% of the total issued and outstanding securities of the Corporation. 20. No person shall enjoy any of the rights or privileges of a holder of Common Shares subject to Options until that person becomes the holder of record of those Common Shares. Exercise Price 21. The Board shall establish the price of the Common Shares subject to option ( exercise price ) at the time each Option is granted, which shall in all cases be not less than the Fair Market Value of the Common Shares covered by such Option at the date of grant. The exercise price shall be subject to adjustment in accordance with the provisions of Section 7 hereof. Fair Market Value means the weighted average of the prices at which the Common Shares traded on all exchanges on which the same were posted and listed for trading on the five days immediately preceding the date of grant of an Option. Term of Option 22. Except as otherwise determined by the Board, each Option granted pursuant to the Plan shall be exercisable as follows: as to 20% of the Option grant, not earlier than one year following the date of the grant of the Option, as to a further 20% of the Option grant, not earlier than two years following the date of the grant of the Option, as to a further 20% of the Option grant, not earlier than three years following the date of the grant of the Option,

8 Page 7 (d) (e) as to a further 20% of the Option grant, not earlier than four years following the date of the grant of the Option, and as to the final 20% of the Option grant, not earlier than five years following the date of the grant of the Option; provided, however, that in the event that a current Participant ceases to be a Participant under the Plan, and the next vesting date under to (e) above is less than 180 days following the date the Participant ceases to be a Participant under the Plan, then: in the case of a non-employee Participant, such next vesting date will be accelerated to the day immediately prior to the date on which the Participant ceases to be a Participant; and in the case of an employee Participant, at the discretion of the Board, such next vesting date may be accelerated to the day immediately prior to the date on which the Participant ceases to be a Participant. Each Option granted pursuant to the Plan shall terminate not later than 10 years after the date of grant, subject to applicable laws in effect from time to time and subject to any limitations herein or any earlier termination set out in the option agreement between the Participant and the Corporation, herein sometimes referred to as the term of the Option. 23. All rights conferred by an Option not exercised on or before the expiration of the term thereof or such earlier date which may be applicable shall be forfeited. Option Agreement and Confirmation 24. All Options granted shall be evidenced by an agreement and confirmation between the Corporation and the Participant substantially in the form of Schedule 1. Exercise of Option 25. A Participant electing to exercise an Option shall give written notice of his or her election to the Corporate Secretary and Treasurer of the Corporation. An Option may be exercised in whole or in part from time to time within the term of the Option but not after two weeks before, or prior to two days after, the date when the Corporation publicly releases any material information or at a time during which a Participant is otherwise prohibited from trading in the Corporation s securities under the Corporation s insider trading policy. The exercise price for the Common Shares to be acquired pursuant to the exercise of an Option, and if required by the Corporation, the amount necessary to satisfy any

9 Page 8 applicable tax withholding or remittance obligations under applicable law, shall be payable in cash or by certified cheque and shall accompany the notice The Corporation may withhold from any amount payable by it or any of its Affiliates to a Participant, either under the Plan or otherwise, such amounts as are required by law to be withheld or deducted as a consequence of his or her exercise of Options or other participation in this Plan (the Withholding Obligations ). The Corporation shall have the right to satisfy any Withholding Obligations by requiring the Participant, as a condition of exercise under Section 25, to remit the amount of any such Withholding Obligations to the Corporation in advance and, in any case, not later than the date of the payment of the exercise price of the Options by the Participant. If the Participant fails to remit, in accordance with Section 25.1, all or any part of the Withholding Obligations at the time he or she exercises the Options, the Corporation shall have the right, in its discretion, to satisfy any Withholding Obligations by: (i) (ii) (iii) selling or causing to be sold, on behalf of any Participant, such number of Common Shares issued to the Participant on the exercise of Options as is sufficient to fund the Withholding Obligations; retaining the amount necessary to satisfy the Withholding Obligations from any amount which would otherwise be delivered, provided or paid to the Participant by the Corporation or any of its Affiliates, whether under this Plan or otherwise; and/or making such other arrangements as the Corporation may reasonably require. The sale of Common Shares by the Corporation, or by a broker engaged by the Corporation (the Broker ) under Section 25.1(i), will be made on the exchange on which the Common Shares are then listed for trading. The Participant consents to such sale and grants to the Corporation an irrevocable power of attorney to effect the sale of such Common Shares on his or her behalf and acknowledges and agrees that (i) the number of Common Shares sold shall, at a minimum, be sufficient to fund the Withholding Obligations net of all selling costs, which costs are the responsibility of the Participant and which the Participant hereby authorizes to be deducted from the proceeds of such sale; (ii) in effecting the sale of any such shares, the Corporation or the Broker will exercise its sole judgment as to the timing and the manner of sale and will not be obligated to seek or obtain a minimum price; and (iii) neither the Corporation nor the Broker will be liable for any loss arising out of any sale of such Common Shares including any loss relating to the pricing,

10 Page 9 manner or timing of such sales or any delay in transferring any Common Shares to a Participant or otherwise. The Participant further acknowledges that the sale price will fluctuate with the market price of the Corporation s Common Shares and no assurance can be given that any particular price will be received upon any sale. (d) For purposes of this Section 25.1, the Corporation shall be entitled to estimate the amount of any Withholding Obligations required to be made in connection with any exercise of Options by a Participant, and to make all withholdings and take all such actions contemplated by this Section 25.1 on the basis of such estimate. In such event, the Corporation shall, reasonably promptly after the exercise of Options by a Participant, determine the actual amount of the Withholding Obligations required to be made in connection with the exercise of such Options, and within five (5) business days of such determination either: (i) (ii) if requested by the Participant in writing, the Corporation shall pay to the Participant any amount received or withheld from the Participant by the Corporation in excess of the actual amount of the Withholding Obligations, provided that such excess amount is more than $500.00; or if requested by the Corporation in its discretion, the Participant shall pay to the Corporation any shortfall between the amount received or withheld by the Corporation and the actual amount of the Withholding Obligations. 26. Upon actual receipt by the Corporation of notice and payment of the exercise price and the amount necessary to satisfy any applicable tax withholding or remittance obligations under applicable law, the person exercising the Option shall be registered on the books of the Corporation as the holder of the appropriate number of Common Shares. 27. In the event of takeover bid (within the meaning given to such expression in The Securities Act (Manitoba) for the Common Shares of the Corporation, or any other change of control transaction affecting the Common Shares of the Corporation, the Board may, if it deems appropriate, decide that all or part of the Options then issued can be immediately exercised. Moreover, and without limiting the generality of the foregoing, in the event of a takeover bid, the Board may decide, if it deems it appropriate that the holders of Options will have the right to notify the depositary of the bid of their intent to tender their Common Shares resulting from the exercise of their Options, if the offeror under the bid takes up and pays for the Common Shares pursuant to its offer, without having to exercise their Option before the offeror becomes committed to take up and pay for Common Shares pursuant to its bid. If the Board makes that decision, it can take all necessary measures and, acting together with the registrar of the Common

11 Page 10 Shares of the Corporation, can put into place the provisions required to give effect to the foregoing. Further, and again without restricting the generality of the foregoing, the Board may, when it awards options, determine that all or part of such Options may become exercisable upon the occurrence of a takeover bid or other change of control transaction. Termination of Employment 28. With respect to Options granted to a director prior to February 9, 2000, to the extent exercisable or vested on the date of ceasing to be a director, Options may be exercised before the expiration of the term of the Option in the case of a director retiring from the Board. Retiring from the Board means a director ceasing to be a director due to him or her reaching the mandatory retirement age specified by the Board from time to time, Subject to Section 28, Options granted to a non-employee Participant, to the extent exercisable or vested on the date of ceasing to be such a Participant, may be exercised: (i) before the later of six (6) years after the date of grant of the Option and one (1) year from the date of her or his termination, in the case of a non-employee Participant: (A) (B) ceasing to be such a Participant as a result of retiring from the Board (as defined in Section 28), ceasing to be such a Participant as a result of death or physical or mental incapacity, or (C) after having served on the Board for a period of two (2) years, ceasing to be such a Participant for any reason other than in Section 28(i)(A) or (B) (including, without limitation, resignation or failure to be re-elected), and (ii) before the earlier of the expiration of the term of the Option and one (1) year from the date of his or her termination, in the case of a non-employee Participant ceasing to be such a Participant in circumstances other than in Section 28(i). 29. Options granted to an employee Participant, to the extent exercisable or vested on the date of ceasing to be such a Participant, may be exercised:

12 Page 11 before the later of six (6) years after the date of grant of the Option and one (1) year from the date of his or her termination, in the case of such a Participant ceasing to be Participant as a result of mandatory retirement or physical or mental incapacity on or after February 9, 2000, before the earlier of the expiration of the term of the Option and one (1) year from the date of his or her termination, in the case of such a Participant ceasing to be a Participant in circumstances other than in Section 29 on or after February 9, 2000, and in accordance with the provisions of the Plan as they were then in effect, in the case of such a Participant ceasing to be a Participant prior to February 9, Employer Ceasing to be Affiliate 30. If the employer of a Participant is an Affiliate of the Corporation and such employer ceases to be an Affiliate of the Corporation, the Option held by such Participant may be exercised, to the extent exercisable, at any time during the 180 day period after the date that the Corporation notified such Participant that the participant s employer has ceased to be an Affiliate of the Corporation, but in event after the expiration of the term of the Option held by the Participant. Transferability 31. Options shall not be transferable by the Participant otherwise than by will or the laws of descent and distribution, and shall be exercisable during the lifetime of a Participant only by the Participant or his or her personal representative and after the death of the Participant only by the Participant s legal representative. Board Approval 32. This Plan was approved by a resolution of the Board dated June 9, 2011, and shall be deemed to be effective as of and on June 9, 2011, subject to receipt of any necessary approvals of the Stock Exchanges on which the Common Shares are listed, and for greater certainty, shall apply to all Options under the Plan (whether issued on, after or prior to such date).

13 SCHEDULE 1 OPTION AGREEMENT AND CONFIRMATION Pursuant to the Amended and Restated Stock Option Plan (the Plan ) implemented by Manitoba Telecom Services Inc. (the Corporation ) and in consideration of services provided to the Corporation and its Affiliates by the Participant, the Corporation hereby grants to the Participant an option (the Option ) to acquire Common Shares of the Corporation at an exercise price of $ per Common Share. The Option shall be exercisable as follows: as to 20% of the Option grant, not earlier than one year following the date of the grant of the Option, as to a further 20% of the Option grant, not earlier than two years following the date of the grant of the Option, as to a further 20% of the Option grant, not earlier than three years following the date of the grant of the Option, as to a further 20% of the Option grant, not earlier than four years following the date of the grant of the Option, and as to the final 20% of the Option grant, not earlier than five years following the date of the grant of the Option; until (the term ), and the Common Shares subject to the Option may be purchased, to the extent exercisable, at any time during the term of the Option; provided, however, that in the event that the Participant ceases to be a Participant under the Plan, and the next vesting date under to (e) above is less than 180 days following the date the Participant ceases to be a Participant under the Plan, then: in the case of a non-employee Participant, such next vesting date will be accelerated to the day immediately prior to the date on which the Participant ceases to be a Participant; and in the case of an employee Participant, at the discretion of the Board, such next vesting date may be accelerated to the day immediately prior to the date on which the Participant ceases to be a Participant.

14 The Corporation and the Participant understand and agree that the granting and exercise of this Option and the issue of Common Shares are subject to the terms and conditions of the Plan, all of which are incorporated into and form a part of this agreement. This Option may not be transferred or assigned other than in accordance with the terms and conditions of the Plan. This agreement shall be binding upon and enure to the benefit of the Corporation, its successors and assigns and the Participant and the legal representatives of his or her estate and any other person who acquires the Participant s rights in respect of the Option by bequest or inheritance. By executing this agreement, the Participant confirms and acknowledges that he or she has not been induced to enter into this agreement to acquire any Option by expectation of employment or continued employment with the Corporation or any of its Affiliates. Dated this day of,. MANITOBA TELECOM SERVICES INC. Per: Per: Witness (Signature of Participant) (Print Name and Address of Participant)