Exhibit 4.3


 


PETRO-CANADA

EMPLOYEE

STOCK OPTION PLAN

(Amended July 31, 2009)


 

















 


TABLE OF CONTENTS


 


	
  1.

  	
  PURPOSE

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  3.

  	
  ELIGIBILITY

  	
  3

  
	
   

  	
   

  	
   

  
	
  4.

  	
  PARTICIPATION

  	
  3

  
	
   

  	
   

  	
   

  
	
  5.

  	
  OPTIONS

  	
  3

  
	
   

  	
   

  	
   

  
	
  6.

  	
  OTHER EVENTS AFFECTING ENTITLEMENT

  	
  6

  
	
   

  	
   

  	
   

  
	
  7.

  	
  CASH PAYMENT ALTERNATIVE

  	
  7

  
	
   

  	
   

  	
   

  
	
  8.

  	
  PARTICIPANT’S RIGHT NOT TRANSFERABLE

  	
  8

  
	
   

  	
   

  	
   

  
	
  9.

  	
  NOTICES

  	
  8

  
	
   

  	
   

  	
   

  
	
  10.

  	
  REGULATIONS AND AMENDMENT

  	
  9

  
	
   

  	
   

  	
   

  
	
  11.

  	
  COSTS

  	
  10

  
	
   

  	
   

  	
   

  
	
  12.

  	
  APPLICABLE LAW

  	
  10

  



 

















 


1.             PURPOSE


 


The intention of the
Employee Stock Option Plan is:


 


(a)           to promote employee commitment
to Petro-Canada;


 


(b)           to encourage employees to
further the development of Petro-Canada; and


 


(c)           to retain the key employees
necessary for Petro-Canada’s long term success.


 


2.             INTERPRETATION


 


2.1          Definitions.


 


As hereinafter used
in the Plan:


 


“Cash Payment
Alternative” means the right of an Option holder to elect to receive
cash equal to the amount by which the Market Price of the Share covered by a
surrendered Option exceeds the Option Price of the Share to be acquired subject
to such Option.


 


“Committee”
means the Management Resources and Compensation Committee of the board of
directors of the Company, or such other committee of the board of directors as
may be given the responsibility to act on behalf of the board of directors with
respect to the Plan, or, in the absence of any such committee, the board of
directors itself.


 


“Company”
means Petro-Canada, a company incorporated under the laws of Canada.


 


“Eligible
Party” means an Employee or an estate entitled to participate in the
Plan pursuant to Paragraph 6.1.


 


“Employee”
means any person who is an employee of the Company or a Subsidiary of the
Company.


 


“Market Price”
means with
respect to all Options approved by the Committee, the closing price of the
Shares on the Relevant Stock Exchange on the Trading Day immediately preceding
the day on which the Options are granted or the Cash Payment Alternative is
exercised, as applicable, or, if the Shares did not trade on the Relevant Stock
Exchange on such date, the Market Price shall be the average of the bid and ask
prices in respect of the Shares at the close of trading on such date;


 


and for the purposes
of the foregoing:


 


(i)            “Trading Day”,
with
respect to a stock exchange, means a day on which such stock exchange is open
for business;


 


(ii)           “Relevant
Stock Exchange” means the Toronto Stock Exchange or, if the shares are
not then listed on the Toronto Stock Exchange, such stock exchange on which the
Shares are listed as may be selected by the Committee for such purpose.


 

















 


“Option”
means an option to purchase Shares granted in accordance with the terms of the
Plan, as described more fully in Paragraph 5.


 


“Option Price”
means the price per Share at which Shares may be purchased under an Option, as
the same may be adjusted from time to time in accordance with Paragraph 5.12.


 


“Plan”
means this employee stock option plan as amended from time to time.


 


“Shares”
means the common shares without nominal or par value in the capital of the
Company, or any successor corporation.


 


2.2          Subsidiary


 


In the Plan a body corporate is a “Subsidiary” of another body corporate if:


 


(a)           it is controlled by


 


(i)            that other body corporate,


 


(ii)           that other body corporate and one or more
bodies corporate each of which is controlled by that other body corporate, or


 


(iii)          two or more bodies corporate each of which
is controlled by that other body corporate; or


 


(b)           it is a Subsidiary
of a body corporate that is a Subsidiary
of that other body corporate.


 


For this purpose a body corporate is
controlled by a person or by two or more bodies corporate if:


 


(a)           securities of the body corporate to which
are attached more than fifty per cent of the votes that may be cast to elect
directors of the body corporate are held, other than by way of security only,
by or for the benefit of that person or by or for the benefit of those bodies
corporate; and


 


(c)           the votes attached to those securities are sufficient,
if exercised, to elect a majority of the directors of the body corporate.


 


2.3          Words,
etc.


 


In this Plan; unless
the context otherwise dictates, references to the masculine include the
feminine and references to the singular include the plural and vice versa; the
inclusion of headings is for convenience of reference only and shall not affect
the construction hereof; and all money references are to Canadian currency.


 


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3.             ELIGIBILITY


 


All Eligible Parties
may participate in the Plan on the basis described herein, subject to
applicable legal, timing and other constraints which may preclude or limit
participation. However no Eligible Party has the right to participate in the
Plan and the Committee may decide on those Eligible Parties who may participate
in the Plan and the extent of participation.


 


4.             PARTICIPATION


 


Participation in the
Plan is voluntary and any decision not to participate shall not affect an
Employee’s or other Option holder’s employment with the Company or a Subsidiary
of the Company.  Nothing contained in
this Plan shall give any Employee or other Option holder the right to be
retained in the services of the Company or a Subsidiary of the Company, nor
shall it interfere with the right of the Company or any Subsidiary of the
Company, to discharge an Employee or other Option holder.  An Option holder shall have no entitlement by
way of compensation or damages resulting from the termination of the office or
employment by virtue which he is or may be eligible to participate in, or to
exercise Options or a Cash Payment Alternative under the Plan for the loss of
any right or benefit or prospective right or benefit under the Plan which he
might otherwise have enjoyed whether the compensation is claimed for wrongful
dismissal or otherwise.  Participation in
the Plan will not give any Employee or other Option holder any right or claim
to any benefit except to the extent provided in the Plan.


 


5.             OPTIONS


 


5.1          Shares
Subject to, and Maximum Number of Shares Issuable Under, the Plan


 


Options may be granted in respect of
authorized and unissued Shares.  The
maximum number of Shares (the “Specified Maximum”)
which may be issued upon exercise of Options granted under the Plan is twenty-nine million, nine-hundred and three thousand, one-hundred and
seventy-three (29,903,173). 
For the purpose of this Paragraph 5.1 and the applicable rules of
the stock exchanges on which the Shares are listed:


 


(a)           Shares which have been purchased or issued
under the Plan prior to August 1, 2009 pursuant to share purchases made or
Options which have been exercised prior to such date shall not be counted as
Shares which have been purchased or issued under the Specified Maximum; and


 


(b)           Options which expire or are otherwise
cancelled or terminated unexercised and the Shares which were issuable under
such Options shall not be available for issuance under the Specified Maximum.


 


No fractional Shares may be purchased or
issued under the Plan.


 


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5.2          Grant of
Options


 


Options may be
granted to any Employee.  Options may be
granted by the Company pursuant to the decisions of the Committee provided and
to the extent that such decisions are approved by the board of directors of the
Company.  Options shall not be granted to
non-executive directors of the Company.


 


5.3          Terms of
Options


 


Subject as herein and
otherwise specifically provided in this Paragraph 5, the number of Shares
subject to each Option, the Option Price, the expiration date of each Option,
the extent to which each Option is exercisable from time to time during the
term of the Option and other terms and conditions relating to each such Option
shall be determined by the Committee; provided, however, that if no specific
determination is made by the Committee with respect to any of the following
matters, each Option shall, subject to any other specific provisions of the
Plan, contain the following terms and conditions:


 


(a)           the period during which the
Option shall be exercisable shall be seven years from the date the Option is
granted to the Optionee; and


 


(b)           not more than one-fourth of the
Shares covered by the Option may be taken up during any one of the first four
years of the term of the Option; provided, however, that if the number of
Shares taken up under the Option in any of such years is less than one-fourth
of the Shares covered by the Option, the Option holder shall have the right, at
any time or from time to time during the remainder of the term of the Option,
to purchase such number of shares subject to the Option which were purchasable,
but not purchased by him, during such year; and provided further that in the
event that, at any time, an offer is made to all holders of Shares to purchase
some or all of their Shares, the Company will give notice of such offer to
Option holders and all Options will become immediately exercisable.


 


5.4          Option
Price


 


The Option Price on
Shares which are the subject of Options shall not be lower than the Market
Price.


 


5.5          Maximum
Option Period


 


In no event may the
term of an Option exceed ten years from the time of the grant of the Option.


 


5.6          Limit on
Options to any Person


 


The total number of
Shares to be optioned to any optionee under the Plan together with any Shares
reserved for issuance under options for services and employee stock purchase
plans to such optionee shall not exceed 5% of the issued and outstanding Shares
at the date of the grant of the Option.


 


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5.7                               Limits
with Respect to Insiders


 


The maximum number of Shares which may be issuable to
insiders, as insiders is defined by the Securities Act (Alberta)
and their associates, under the Plan when combined with any other share
compensation arrangement shall be 10% of the Shares issued and outstanding (on
a non-diluted basis).


 


5.8                               Options
Non-Assignable


 


Each Option is
personal to the Option holder and is non-assignable.


 


5.9                               Change
of Employment


 


Notwithstanding any
other provisions of the Plan, Options shall not be affected by any change of
employment of the Option holder where the Option holder continues to be
employed by the Company or a Subsidiary of the Company.


 


5.10                        Exercise
of Options


 


Subject to the
provisions of the Plan, an Option may be exercised from time to time, in the
manner specified by the Company from time to time.  Certificates for such Shares shall be issued
within a reasonable time following the receipt of such notice and payment.  The Shares which are issued on the exercise
of an Option will be the same in all respects as shares of the same class
already issued and outstanding.


 


5.11                         Conditions
Precedent to Issuance of Shares


 


Notwithstanding any
of the provisions contained in the Plan or in any Option, the Company’s
obligation to issue Shares to an Option holder pursuant to the exercise of an
Option shall be subject to:


 


(a)                                  completion of such
registration or other qualification of such Shares or obtaining approval of
such governmental authority as the Company shall determine to be necessary or
advisable in connection with the authorization, issuance or sale thereof;


 


(b)                                 the admission of such
Shares to listing on any stock exchange on which the Shares may then be listed;
and


 


(c)                                  the receipt from the
Option holder of such representations, agreements and undertakings as to future
dealings in such Shares as the Company determines to be necessary or advisable
in order to safeguard against the violation of the securities laws of any
applicable jurisdiction.  In this
connection the Company shall, to the extent necessary, take all reasonable
steps to obtain such approvals, registrations and qualifications as may be
necessary for issuance of such Shares in compliance with applicable securities
laws and for the listing of such Shares on any stock exchange on which the
Shares are then listed.


 


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5.12                        Adjustments


 


Appropriate
adjustments in the number of Shares subject to the Plan, and as regard Options
or a Cash Payment Alternative granted or to be granted, in the number of Shares
subject to an Option and the Option Price of such Options, and the calculation
of the amount payable upon exercise of the Cash Payment Alternative,
respectively, shall be made by the board of directors of the Company to give
effect to adjustments in the number of Shares resulting from subdivisions,
consolidations or reclassifications of the Shares, the payment of stock
dividends by the Company (other than dividends in the ordinary course) or other
relevant changes in the capital stock of the Company, subsequent to the
approval of the Plan by the board of directors of the Company, the purpose of
such adjustments being to put the Option holder upon exercising an Option in
the same position as he would have been in if he had exercised the Option prior
to the relevant change, except with respect to the receipt of income on the
Shares.


 


6.                                      OTHER
EVENTS AFFECTING ENTITLEMENT


 


6.1                               Death of
Participant


 


Unless otherwise
provided at the time the Option is granted, in the event the Option holder dies
before all of the Shares purchased under the Plan by the holder of Options have
been delivered to him or the cash payment has been made to him and/or all of
the Options granted to the Option holder under the Plan have been exercised, the
Option holder’s executors or heirs shall be entitled to participate in the Plan
to the extent the Option holder would have been entitled to, provided that all
Options granted to the Option Holder vest immediately on the death of the
Option Holder and shall expire on the earlier of:


 


(a)                                  the first anniversary
of the date of death; and


 


(b)                                 the normal expiry
date.


 


6.2                               Termination


 


Unless otherwise
provided at the time the Option is granted, and subject to the other provisions
hereof, in the event that after the grant of Options to an Option holder an
Option holder’s employment with the Company or a Subsidiary of the Company , is
terminated (such term to include involuntarily retirement), other than
termination because of death or voluntary retirement:


 


(a)                                  in the case of the
termination of the Option holder’s employment at the option of the Company or a
Subsidiary of the Company, and without cause, any Options granted to the Option
holder under the Plan and vested on the effective date of the termination (such
date to be defined in the notice of termination or notice of involuntary
retirement) may be exercised by the Option holder at any time until the earlier
of 90 days after the effective date of termination, or until the normal expiry
date.  Unless the Committee decides
otherwise prior to the grant of any Option, termination without cause shall
include termination of an Option holder’s 


 


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employment with (i) the
Company or a Subsidiary of the Company by reason of the transfer of the
business or part of the business of the Company or a Subsidiary of the Company
to a person other than the Company or a Subsidiary of the Company and (ii) a
Subsidiary of the Company by which an Option holder is employed ceasing to be a
Subsidiary of the Company; and


 


(b)                                 in any other case not
covered by Clause 6.2(a), any Options granted to the Option holder under the
Plan shall immediately expire and be of no further effect, whether or not such
Options had become exercisable by the time of termination.


 


6.3                               Voluntary
Retirement


 


Unless otherwise
provided at the time the Option is granted, and subject to the other provisions
hereof, in the event that after the grant of Options to an Option holder an
Option holder’s employment with the Company or a Subsidiary of the Company,
ceases due to voluntary retirement:


 


(a)                                  all options held by
the Option holder vest immediately upon the effective date of the voluntary
retirement; and


 


(b)                                 any Options which are
exercisable by the Option holder may be exercised at any time within three
years after the date of the voluntary retirement.


 


6.4                               Other
Disruption of Employment


 


Unless otherwise
provided at the time the Option is granted, in the event that after the grant
of Options to an Option holder an Option holder:


 


(a)                                  takes a Company
approved leave of absence without pay; or


 


(b)                                 becomes disabled and
entitled to benefits under a long-term disability program,


 


the Option holder shall be
entitled to continue his participation in the Plan.


 


7.                                      CASH
PAYMENT ALTERNATIVE


 


7.1                               Grant of Cash Payment Alternative


 


Unless otherwise determined by the
Committee at the time an Option is granted, a Cash Payment Alternative shall be
granted in connection and in conjunction with the grant of each Option under
the Plan after January 1, 2004.


 


Subject to Paragraph 7.4, a Cash Payment
Alternative shall be subject to the same terms, conditions and limitations as
the related Option.


 


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7.2                               Exercise of Cash Payment Alternative


 


A Cash Payment Alternative shall be
exercisable only at the same time by the same person, to the same extent and in
the same manner that the Option related thereto is exercisable.  Upon exercise of a Cash Payment Alternative,
the related Option shall be transferred and surrendered to the Company and the
Share and related Option shall be available for issuance under the Specified
Maximum.  Payment of the amount to which
an Option holder is entitled upon the exercise of a Cash Payment Alternative,
less any amount necessary to ensure compliance with laws relating to
withholding of tax or other deductions, shall be made to such person, in the
form of a cheque or money order or by wire transfer of immediately available
funds to an account designated by the Option holder, in Canadian currency, or
any other currency at the option of the Company, made payable to such person or
his estate, as applicable, within a reasonable time following the election of
the holder.


 


7.3                               Non-Transferable


 


A Cash Payment Alternative shall be
transferable only in the manner and to the extent that the related Option is
transferable.


 


7.4                               Discretion of Committee


 


A Cash Payment Alternative shall be subject
to such other terms, conditions and limitations as the Committee shall
determine.


 


7.5                               Reference


 


Every reference in the Plan to an Option
shall, unless the context required otherwise, be deemed to include reference to
a Cash Payment Alternative.


 


8.                                      PARTICIPANT’S
RIGHT NOT TRANSFERABLE


 


Except as provided herein, the
rights of an Option holder under the Plan are non-transferable, in whole or in
part, either directly or by operation of law or otherwise in any manner.


 


9.                                      NOTICES


 


Any notice or other
document to be delivered to an Option holder shall be validly sent, given or
delivered if it is delivered by hand to the Option holder or is mailed by first
class prepaid mail to the latest address shown on the records of the Company
for the Option holder for purposes of the Plan or, in the absence of such
address for purposes of the Plan, for general purposes.  Any notice or document so mailed shall be
deemed to have been received by the Option holder in the ordinary course of
mail.


 


Any notice or other
document to be delivered to the Company shall be validly sent, given or
delivered if it is delivered by hand or mailed by first class mail to the
Secretary of the 


 


8

















 


Company at the
Company’s head office or if it is electronically sent to the Company or its
authorized agent for this purpose, the receipt of which has been confirmed.


 


10.                               REGULATIONS
AND AMENDMENT


 


10.1                        Regulations


 


The Committee may
make, amend and repeal at any time and from time to time such resolutions not
inconsistent herewith as it may deem necessary or advisable for the administration
and operation of the Plan.  In
particular, the Committee may delegate to any person, group of persons or
corporation, any administrative duties and powers under the Plan.  All decisions and interpretations of the
Committee respecting the Plan and all rules and regulations made from time
to time pursuant thereto, shall be binding and conclusive on the Company, on
all Eligible Parties, on all Option holders and on their respective legal
representatives.


 


10.2                        Amendment
to Plan


 


The Committee may amend
the Plan:


 


(a)                                  to make formal, minor
or technical modifications to any of the provisions of the Plan;


 


(b)                                 to change any of the
provisions of the Plan provided the change is not materially prejudicial to the
interests of the Option holders; or


 


(c)                                  to correct any
ambiguity, defective provisions, error or omissions in the provisions of the
Plan provided that the rights of the Option holders are not prejudiced by the
correction.


 


Subject to the
obtaining of any required regulatory or other approvals any other amendment to
the Plan shall be effective only after it has been approved by a resolution of
the Option holders signed by the Option holders having rights to acquire a
majority of the Shares to be issued under the Plan or passed at a meeting of
Option holders (held after at least 14 days notice to all Option holders and
attended in person or by proxy by at least two Option holders) by the
affirmative vote of Option holders having rights to acquire a majority of the
Shares subject to rights to acquire by the Option holders who are present or
represented at the meeting.


 


10.3                        Amendment
to Outstanding Options


 


The Committee may
from time to time amend the terms of Options granted under the Plan, subject to
the obtaining of any required regulatory or other approvals and, if any such
amendment will materially adversely affect the rights of Option holders with
respect to outstanding Options, the obtaining of the consent of Option holders
holding a majority of the outstanding Options to such amendment. Such consent
may be obtained by written resolution signed by Option holders holding a
majority of the outstanding Options or passed at a meeting of Option holders
(held after at least 14 days notice to all Option 


 


9

















 


holders and attended
in person or by proxy by at least two Option holders) by the affirmative vote
of Option holders holding a majority of the Options who are present or
represented at the meeting. 
Notwithstanding the foregoing, the obtaining of the consent of Option
holders to an amendment which materially adversely affects the rights of such
Option holders with respect to outstanding Options shall not be required if
such amendment is required to comply with applicable laws, regulations, rules,
orders of governmental or regulatory authorities or the requirements of any
stock exchange on which Shares of the Company are listed.


 


11.                                COSTS


 


The Company shall not
charge any Option holder for any part of the cost of administering and
operating the Plan.  Option holders may
be required to pay fees charged by third party service providers retained by
the Company to assist in the administration of the Plan.


 


12.                               APPLICABLE
LAW


 


The Plan shall be
governed by and construed in accordance with the laws of the Province of
Alberta and the courts of such province shall have non-exclusive jurisdiction
over any dispute under the Plan.


 


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