Document:

Exhibit 4.2a

 

IPSCO
Inc.

2005
Form 10-K

 

FIRST SUPPLEMENTAL
INDENTURE

 

FIRST
SUPPLEMENTAL INDENTURE, dated as of February
13, 2006 (this “First Supplemental Indenture”), by and between IPSCO
Inc., (the “Company”) and Wells Fargo Bank, N.A. (as successor by merger
with Wells Fargo Bank Minnesota N.A.), as trustee (the “Trustee”).

 

W I T N E S S E T H:

 

WHEREAS,
the Company and the Trustee have entered into that certain Indenture, dated as
of June 18, 2003, providing for the issuance and delivery by the Company
of the Company’s 8.75% Senior Notes ( the “Securities” and each a “series”
of Securities); and

 

WHEREAS,
there is currently outstanding under the Indenture an aggregate principal
amount of $143,855,000;
and

 

WHEREAS,
Section 8.01 of the Indenture provides that the Company, when authorized
by Board Resolution, and the Trustee may, amend or supplement the Indenture
with respect to such Securities, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
which does not materially adversely affect any rights of any Holder without the
consent of the Securities Holders; and

 

WHEREAS,
the Company has received and delivered to the Trustee an Officers’ Certificate
to effect the Proposed Amendment under the Indenture so certifying; and

 

WHEREAS,
the Company has been authorized by a resolution of its Board of Directors to
enter into this First Supplemental Indenture.

 

NOW,
THEREFORE, in
consideration of the premises and the mutual agreements contained herein and
for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows for the benefit of
each other party and for the equal and ratable benefit of the Holders of each series of
the Securities:

 

AMENDMENT

 

1.1                               Amendment of Section 1.01

 

The definition of  “GAAP” shall be deleted and replaced with the
following definition;

 

 

“GAAP” means, the generally accepted
accounting principals which are in effect from time to time in the United
States applied on a consistent basis.

 

MISCELLANEOUS

 

1.2                               EFFECTIVE DATE The effective
date of this amendment will be December 31, 2005.

 

1.3                               INTERPRETION Upon execution
and delivery of this First Supplemental Indenture, the Indenture shall be
modified and amended in accordance with this First Supplemental Indenture, and
all the terms and conditions of both shall be read together as though they
constitute one instrument, except that, in case of conflict, the provisions of
this First Supplemental Indenture will control. The Indenture, as modified and
amended by this First Supplemental Indenture, is hereby ratified and confirmed
in all respects and shall bind every holder of Securities. In case of conflict
between the terms and conditions contained in the Securities and those
contained in the Indenture, as modified and amended by this First Supplemental
Indenture, the provisions of the Indenture, as modified and amended by this
First Supplemental Indenture, shall control.

 

1.4                               CONFLICTS WITH THE TRUST INDENTURE ACT If
any provision of this First Supplemental Indenture limits, qualifies or
conflicts with any provision of the Trust Indenture Act of 1939 (the “TIA”)
that is required under the TIA to be part of and govern any provision of
this First Supplemental Indenture, the provision of the TIA shall control. If
any provision of this First Supplemental Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the provision of
the TIA shall be deemed to apply to the Indenture as so modified or to be
excluded by this First Supplemental Indenture.

 

1.5                               SEVERABILITY In case any
provision in this First Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.

 

1.6                               TERMS DEFINED IN THE INDENTURE All
capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Indenture.

 

1.7                               HEADINGS The Article and
Section headings of this First Supplemental Indenture have been inserted
for convenience of reference only, are not to be considered a part of this
First Supplemental Indenture and shall in no way modify or restrict any of the
terms or provisions hereof.

 

 

1.8                               BENEFITS UNDER THE FIRST SUPPLEMENTAL INDENTURE
Nothing in this First Supplemental Indenture or the Securities, express or
implied, shall give to any Person, other than the parties hereto and thereto
and their successors hereunder and thereunder and the holders of the
Securities, any benefit of any legal or equitable right, remedy or claim under
the Indenture, this First Supplemental Indenture or the Securities.

 

1.9                               SUCCESSORS All agreements
of the Company in this First Supplemental Indenture shall bind their respective
successors. All agreements of the Trustee in this First Supplemental Indenture
shall bind its successors.

 

1.10                        THE TRUSTEE The Trustee
shall not be responsible in any manner whatsoever for or in respect of the
validity or sufficiency of this First Supplemental Indenture or for or in
respect of the recitals contained herein, all of which are made solely by the
Company.

 

1.11                        CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE In
entering into this First Supplemental Indenture, the Trustee shall be entitled
to the benefit of every provision of the Indenture relating to the conduct or
affecting the liability or affording protection to the Trustee, whether or not
elsewhere herein so provided.

 

1.12                        GOVERNING LAW THIS FIRST
SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Each of the parties hereto agrees to submit to the jurisdiction of the courts
of the State of New York in any action or proceeding arising out of or relating
to this First Supplemental Indenture.

 

1.13                        COUNTERPART ORIGINALS The parties may sign
any number of copies of this First Supplemental Indenture. Each signed copy
shall be an original, but all of them together represent one and the same
agreement.

 

IN WITNESS WHEREOF,
the parties hereto have caused this First Supplemental Indenture to be duly
executed, all as of the date first above written.

 

	
   

  	
  Wells Fargo Bank, N.A., as

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/
  Lynn M. Steiner

  
	
   

  	
  Per:

  

 

 

	
   

  	
  IPSCO Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Vicki L. Avril

  
	
   

  	
  Per:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Leslie T. Lederer

  
	
   

  	
  Per:Exhibit 10.1

 

IPSCO Inc.

2005 Form 10-K

 

INCENTIVE
SHARE PLAN

 

IPSCO
INC.

 

INCENTIVE
SHARE PLAN

(amended and restated as of March 3, 2005)

 

1.             Purpose of the Plan

 

The
purpose of the Incentive Share Option Plan (the “Plan”) is to assist Ipsco Inc.
(the “Corporation”) and its Subsidiaries in attracting, retaining and
motivating individuals of outstanding ability by offering stock-based incentive
rewards. The Plan is intended to motivate and reward individuals who contribute
to the Corporation’s profitability and to give those individuals a proprietary
interest in the Corporation’s growth and financial success.

 

2.             Definitions

 

As used
in the Plan, the following words shall have the following meanings:

 

(a)           “affiliate”has the meaning assigned by the Securities Act.

 

(b)           “associate”
has the meaning assigned by the Securities Act.

 

(c)           “Award”
means an award granted to any Participant in accordance with the provisions of
the Plan in the form of Stock Options, Restricted Shares or Performance Units,
or any combination of the foregoing.

 

(d)           “Award
Agreement” has the meaning ascribed thereto in Section 6(b).

 

(e)           “Beneficiary”
means the beneficiary or beneficiaries designated pursuant to Section 11 of the
Plan to receive, upon the death of a Participant, Awards of Stock Options,
Restricted Shares or Performance Units issued or payable to the Participant
under the Plan.

 

(f)            “Board of
Directors” means the Board of Directors of the Corporation.

 

(g)           “Committee”
means the committee described in Section 4 of the Plan.

 

(h)           “Common
Shares” means the Common Shares of the Corporation.

 

(i)            “Corporation”
means IPSCO Inc. and its successors and assigns.

 

(j)            “date of
ceasing to be an officer or employee” or “date of
termination of service” and all such similar expressions mean the
last date of active employment of the officer or employee and for the purposes
of this Plan:

 

(i)            any period after the date
on which an officer or employee has received a notice of termination of
employment; or

 

(ii)           any period during which
an officer or employee is in receipt of 

or eligible to receive severance pay or compensation in lieu of notice,

 

is
deemed to be after the date of termination of employment.

 

1

 

(k)           “Disability”
has the meaning ascribed thereto in Section 7(j)(i).

 

(l)            “Eligible
Director” means a person who is a “non-employee director” within the
meaning of Rule 16-b3 under the Exchange Act, or a person meeting any similar
requirement under any successor rule or regulation.

 

(m)          “Exchange Act”
means the United States Securities Exchange Act of 1934,
as amended.

 

(n)           “Exercise
Price” means the price at which a holder of a Stock Option may
purchase the Common Shares issuable upon exercise of the Stock Option.

 

(o)           “Fair Market
Value” means, as of any date, the last sale price per share of a
board lot of the Common Shares on the Toronto Stock Exchange (the “TSE”) for
such date, or if there was no such sale price reported for such date, the price
on the next preceding date on which there was such a sale reported.

 

(p)           “insider” has the meaning assigned by the Securities Act and also includes
associates and affiliates of an insider for only includes a director or senior
officer of a Subsidiary or an affiliate of the Corporation if such director or
senior officer (a) in the ordinary course receives or has access to information
as to material facts or material changes concerning the Corporation before the
material facts or materials changes are generally disclosed; (b) is a director
or senior officer of a Major Subsidiary of the Corporation; or (c) is an
insider of the Corporation in a capacity other than as a director or senior
officer of the Subsidiary or affiliate.

 

(q)           “Major Subsidiary” has the meaning assigned
by Canadian Securities Administrators’ National Instrument 55-101 – “Exemption from Certain Insider Reporting
Requirements,” as amended.

 

(r)            “outstanding
issue” means the number of common shares of the Company issued and
outstanding on a non-diluted basis.

 

(s)           “Participant”
has the meaning ascribed thereto in Section 5.

 

(t)            “Performance
Objective” has the meaning ascribed thereto in Section 9(a).

 

(u)           “Performance
Period” has the meaning ascribed thereto in Section 9(a).

 

(v)           “Performance
Unit” means a performance unit awarded under Section 9 of the Plan.

 

(w)          “reserved for
issuance” refers to shares which may be issued in the future upon
the exercise of Stock Options which have been granted (shares are considered “reserved
for issuance” commencing when the Stock Options are granted, regardless of when
they can be exercised).

 

(x)            “Restricted
Shares” means one or more Common Shares awarded under Section 8 of
the Plan, subject to such restrictions as the Committee deems appropriate or
desirable.

 

(y)           “Restriction
Period” has the meaning ascribed thereto in Section 8(a).

 

(z)            “Retirement”
has the meaning ascribed thereto in Section 7(j)(ii).

 

(aa)         “Securities Act” means
the Securities Act (Ontario), as amended.

 

(bb)         “Stock
Option” means a stock option awarded
under Section 7 of the Plan.

 

2

 

(cc)         “Stock Option
Agreement” means an Award Agreement relating to Stock Options.

 

(dd)         “Subsidiary”
means a subsidiary of the Corporation within the meaning of the Canada Business Corporations Act.

 

3.             Shares Subject to the Plan

 

(a)           Since the inception of
the Plan, a maximum of Six Million One Hundred Seventy-Five Thousand
(6,175,000) Common Shares have been authorized for issuance under and in
accordance with the Plan. As at March 3, 2005, Four Million Three Hundred
Eighty-Four Thousand Eight Hundred Twenty-Seven (4,384,827) of such Common
Shares have been issued and Nine Hundred Fourteen Thousand Three Hundred
Fifty-Four (914,354) Common Shares are issuable upon the exercise of all
currently outstanding Stock Options and Performance Units, and Eight Hundred
Seventy-Five Thousand Eight Hundred Nineteen (875,819) Common Shares are
available for issuance in connection with subsequent grants of Awards. No
fractional common shares may be purchased or issued under the Plan. If any
Stock Option expires unexercised or is terminated, surrender or cancelled
without being exercised in whole or in part for any reason, or any Performance
Units payable in Common Shares or Restricted Shares are forfeited, then the
number of Common Shares issued or issuable, as applicable, under such
forfeited, terminated or expired Awards shall again become available for award
under the Plan.

 

(b)           In no event shall the
aggregate number of Common Shares reserved for issuance under the Plan for any
one person exceed two percent (2%) of the issued and outstanding Common Shares.

 

(c)           In no event shall:

 

(i)            the number of Common
Shares issuable and issued pursuant to this Plan and when combined with any
other security based compensation arrangement of the Corporation insiders
exceed 10% of the issued and outstanding Common Shares;

 

(ii)           the number of Common
Shares issuable to any one insider exceed 2% of the total issued and
outstanding Common Shares; and

 

(iii)          the number of Common Shares issuable and issued
under the Plan to non-employee members of the Board of Directors exceed 0.25%
of the issued and outstanding Common Shares of the Corporation,

 

without obtaining the approval
of a majority of the votes cast at a shareholders’ meeting.

 

4.             Administration of the Plan

 

The Plan shall be administered by the Board of
Directors which shall, without limitation, have full and final authority in its
discretion, but subject to the express provisions of the Plan, to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to it and
to make all other determinations deemed necessary or dvisable for the
administration of the Plan. The Board of Directors may delegate any or all of
its authority with respect to the administration of the Plan and any or all of
the rights, powers and discretions with respect to the Plan granted to it
hereunder to the Management Resources and Compensation Committee or such other
committee of directors of the Company as the Board of Directors may designate
(the “Committee”) and upon such delegation, the Committee, as well as the Board
of Directors, shall be entitled to exercise any or all of such authority,
rights, powers and discretions with respect to the Plan. The directors of the
Company may fully participate in voting and in other deliberations or
proceedings of the Board of Directors in respect of the Plan, notwithstanding:
(i) the eligibility of the directors to participate in the Plan; and (ii) that
the directors may hold Stock Options granted pursuant to the Plan. On and after
the time that the Corporation ceases to qualify as a “foreign private issuer”
within the meaning of the Exchange Act, unless the Board of Directors is acting
as the Committee or the Board of Directors specifically determines otherwise,
each member of the Committee shall, at the time he or she takes any action with
respect to an Award under the Plan, be an Eligible Director, provided that the
mere fact that a Committee member shall fail to

 

3

 

qualify as an Eligible Director shall not
invalidate any Award granted by the Committee which Award is otherwise validly
made under the Plan.

 

(a)           The Committee shall have
full power, discretion and authority to interpret, construe and administer the
Plan and any part thereof and to make and amend rules for carrying out the
Plan, and its interpretations and constructions thereof and actions taken
thereunder shall be, except as otherwise determined by the Board of Directors,
final, conclusive and binding on all persons for all purposes.

 

(b)           The Committee’s decisions
and determinations under the Plan need not be uniform and may be made
selectively among Participants, whether or not such Participants are similarly
situated.

 

(c)           The Committee may adopt
its own rules of procedure and the action of a majority of the Committee, taken
at a meeting or taken without a meeting by a writing signed by such majority,
shall constitute action by the Committee.

 

5.             Eligibility

 

Awards
may be granted under the Plan to such directors and full-time or part-time
officers and employees of the Corporation and its Subsidiaries as the Committee
may from time to time designate as participants (the “Participants”) under the
Plan.

 

6.             Grant of Awards and Award Agreements

 

(a)           Subject to the provisions
of the Plan and applicable law, the Committee shall (i) determine and designate
from time to time those Participants or groups of Participants to whom Awards
are to be granted; (ii) determine the form or forms of Award to be granted to
any Participant; (iii) determine the amount or number of Stock Options,
Restricted Shares or Performance Units subject to each Award; and (iv)
determine the terms and conditions of each Award.

 

(b)           Each Award granted under
the Plan shall be evidenced by a written award agreement (“Award Agreement”). The
Award Agreement shall be subject to and incorporate the express terms and
conditions, if any, required under the Plan or otherwise provided by the
Committee. Subject to Section 6(c), such terms may, at the discretion of the
Committee, include provisions to the effect that upon a change of control,
conditions or restrictions applicable to some or all of the Stock Options,
Restricted Shares or Performance Units shall be waived in whole or in part and the
vesting of all or some of the Stock Options, Restricted Shares or Performance
Units shall be accelerated.

 

(c)           All Awards that may
involve the issuance of Shares in settlement of the Award shall have a minimum
vesting period of one year following the grant of the Award.

 

7.             Terms of Stock Options

 

All
Stock Options shall be granted upon and subject to the terms and conditions
hereinafter set forth.

 

(a)           Exercise
Price. The
exercise price for each Common Share pursuant to the exercise of a Stock Option
shall be as determined by the Committee, but shall in no event be less than one
hundred percent (100%) of the last sale price per share of a board lot of the
Common Shares on The Toronto Stock Exchange on the last business day on which
there was a trade of a board lot, prior to the day the Stock Option is granted
to such Participant.

 

(b)           Vesting. Subject
to Section 6(c), the Stock Options shall vest and become exercisable in
accordance with the terms and conditions determined by the Committee at the
time of the grant as set out in the Stock Option Agreement.

 

(c)           Length of
Grant. Any
Stock Options granted shall expire not later than the tenth anniversary of the
date such Stock Options were granted.

 

4

 

(d)           Non-Assignability
of Stock Options. Subject to Section 11, Stock Options shall not be transferable or
assignable (whether absolutely or by way of mortgage, pledge or other charge)
by a Participant other than by will or other testamentary instrument, the laws
of succession or other laws of general application and may be exercisable
during the lifetime of the Participant only by such Participant.

 

(e)           Right to
Postpone Exercise. Each Participant, upon becoming entitled to exercise a Stock Option in
respect of any Common Shares in accordance with the Stock Option Agreement,
shall thereafter be entitled to exercise the Stock Option to purchase any such
Common Shares at any time prior to the expiration or other termination of the
Stock Option Agreement or the Stock Option rights granted thereunder in
accordance with the Plan or Stock Option Agreement.

 

(f)            Exercise of
Payment. Any
Stock Option may be exercised by a Participant or the legal representative of a
Participant giving notice to the Corporation specifying the number of Common
Shares in respect of which such Stock Option is being exercised, accompanied by
payment (by certified cheque, bank draft or other instrument acceptable to the
Corporation, to be payable to the Corporation) of the entire exercise price (determined
in accordance with the Stock Option Agreement) for the number of shares
specified in the notice. Upon any such exercise of a Stock Option by a
Participant the Corporation shall cause the transfer agent of Common Shares of
the Corporation to promptly deliver to such Participant or the legal
representative of such Participant, as the case may be, a share certificate in
the name of such Participant or the legal representative of such Participant,
as the case may be, representing the number of shares specified in the notice.

 

(g)           Rights of
Participants. The Participants shall have no rights whatsoever as shareholders in
respect of any of the Common Shares subject to the Stock Option (including,
without limitation, any right to receive dividends or other distributions,
voting rights, warrants or rights under any rights offering) other than Common
Shares in respect of which Participants have exercised their Stock Option to
purchase and which have been issued by the Corporation.

 

(h)           Third Party
Offer. If
at any time when a Stock Option remains unexercised with respect to any Common
Shares, a general offer to purchase all of the issued shares of the Corporation
is made by a third party, the Corporation shall use its best efforts to bring
such offer to the attention of the Participants as soon as practicable and the
Corporation may, at its option, require the acceleration of the time for the
exercise of the Stock Options granted under the Plan and of the time for the
fulfillment of any conditions or restrictions on such exercise.

 

(i)            Termination.
If a
Participant is dismissed as an officer or employee by the Corporation or any of
its subsidiaries for cause, all unexercised Stock Options of that Participant
under the Plan shall immediately become terminated and shall lapse
notwithstanding the original term of any Stock Option granted to such
Participant under the Plan.

 

(j)            Disability
or Retirement. If a Participant ceases to be an employee (and if such Participant is an
officer, such Participant ceases to be an officer) of the Corporation (and, if
such Participant is an employee or officer of any Subsidiary of the
Corporation, such Participant also ceases to be an employee or officer of any
such Subsidiary) as a result of:

 

(i)            disability or illness
preventing the Participant from performing the duties routinely performed by
such Participant (“Disability”);

 

(ii)           retirement at the normal
retirement age prescribed by the Corporation pension plan of which the
Participant is a member (“Retirement”); or

 

(iii)          such other circumstances
as may be approved by the Committee,

 

such
Participant shall have the right for a period of three (3) years (or until the
normal expiry date of any Stock Options of such Participant if earlier) from
the date of ceasing to be an officer or employee to exercise any unexpired
Stock Options to the extent they were exercisable on the date of ceasing to be
an officer or employee. Upon the expiration of such three (3) year period (or
such shorter period, if applicable), all unexercised Stock Options of that
Participant shall immediately become terminated and shall lapse notwithstanding
the original term of

 

5

 

any
Stock Options granted to such Participant. This Section 7(j) shall not apply to
any officer or employee that is a director of the Corporation or any of its
subsidiaries after the time that such officer or employee ceases to be an
officer or employee of the Corporation and of its subsidiaries.

 

(k)           Deceased
Participant. In the event of the death of any Participant (other than a director of
the Corporation or any of its subsidiaries who is not an officer or employee of
the Corporation or any of its subsidiaries), the legal representative of such
deceased Participant shall have the right for a period of three (3) years (or
until the normal expiry date of any Stock Options of such deceased Participant
if earlier) from the date of death of such deceased Participant to exercise any
unexpired Stock Options of such deceased Participant to the extent they were
exercisable on the date of death. Upon the expiration of such three (3) year
period (or such shorter period, if applicable), all unexercised Stock Options
of such deceased Participant shall immediately become terminated and shall
lapse notwithstanding the original term of any Stock Options granted to such
deceased Participant under the Plan.

 

In the event of the death of
any Participant who is a director of the Corporation or any of its Subsidiaries
and who is not an officer or employee of the Corporation or any of its
subsidiaries, the legal representative of such deceased Participant shall have
the right for a period of one (1) year (or until the normal expiry date of any
Stock Options of such deceased Participant if earlier) from the date of death
of such deceased Participant to exercise any unexpired Stock Options of such
deceased Participant to the extent they were exercisable on the date of death. Upon
the expiration of such one (1) year period (or such shorter period, if
applicable), all unexercised Stock Options of such deceased Participant shall
immediately become terminated and shall lapse notwithstanding the original term
of any Stock Options granted to such deceased Participant under the Plan.

 

(l)            Other
Termination. If a Participant ceases to be an employee (and if such Participant is an
officer, such Participant ceases to be an officer) of the Corporation (and, if
such Participant is an employee or officer of any Subsidiary of the
Corporation, such Participant also ceases to be an employee or officer of any
such Subsidiary) for a reason other than those specified in Section 7(i), 7(j)
or 7(k) hereof, such Participant shall have the right for a period of sixty
(60) days (or until the normal expiry date of any Stock Options of such Participant
if earlier) from the date of ceasing to be an officer or employee to exercise
any unexpired Stock Options to the extent they were exercisable on the date of
ceasing to be an officer or employee. Upon the expiration of such sixty (60)
day period (or such shorter period, if applicable), all unexercised Stock
Options of that Participant shall immediately become terminated and shall lapse
notwithstanding the original term of any Stock Options granted to such
Participant under the Plan. This Section 7(l) shall not apply to any officer or
employee that is a director of the Corporation or any of its Subsidiaries after
the time that such officer or employee ceases to be an officer or employee of
the Corporation and its Subsidiaries.

 

(m)          Ceasing to
be a Director. If a Participant ceases to be a director (and, if such Participant is a
director of any of the subsidiaries of the Corporation, such Participant also
ceases to be a director of any such Subsidiary) of the Corporation for any
reason other than as specified in Section 6(k) hereof, such Participant shall
have the right for a period of one (1) year (or until the normal expiry date of
the Stock Option rights of such Participant if earlier) from the date of
ceasing to be a director to exercise any outstanding Stock Options to the
extent they were exercisable on the date of ceasing to be a director of the
Corporation and its Subsidiaries. Upon the expiration of such one (1) year
period (or such shorter period, if applicable), all unexercised Stock Options
of that Participant shall immediately become terminated and shall lapse
notwithstanding the original term of any Stock Options granted to such
Participant under the Plan. This Section 7(m) shall not apply to any director
of the Corporation or any of its Subsidiaries that is an officer or employee of
the Corporation or any of its Subsidiaries after the time such person ceases to
be a director of the Corporation and its Subsidiaries.

 

(n)           Discretion
to Extend Exercise Period. In the case of any Stock Option Agreement in respect of
Stock Options which have been granted previously and are outstanding and which
are held by any Participant (other than a director of the Company or any of its
subsidiaries who is not an officer or employee of the Company or any of its subsidiaries),
the Board of Directors shall have the authority to determine in its sole
discretion to extend any exercise period of one (1) year that is specified in
such Stock Option Agreement to apply following Disability, Retirement, other
special circumstances, or the death of the Participant as described in sections
7(j) and 7(k) herein, by up to an additional two (2) years (or until the normal
expiry date of the Stock Option if earlier).

 

6

 

8.             Restricted Shares

 

(a)           Restricted Shares shall
be subject to a restriction period (after which restrictions shall lapse),
which period shall be determined by the Committee at its sole discretion (the “Restriction
Period”) provided that the Restriction Period shall not be less than one year.
The Committee may provide for the lapse of restrictions in installments where
deemed appropriate. The Committee may, at its discretion, provide that the
Restricted Shares shall be subject to Performance Objectives (as such term is defined
in Section 9).

 

(b)           Except when the Committee
determines otherwise pursuant to Section 8(d), if a Participant terminates
employment with the Corporation and all Subsidiaries for any reason before the
expiration of the Restriction Period or the achievement of the specified
Performance Objectives, if any, all Restricted Shares still subject to
restriction shall be forfeited by the Participant and shall be reacquired by
the Corporation.

 

(c)           Except as otherwise
provided in this Section 8, no Restricted Shares received by a Participant
shall be sold, exchanged, transferred, pledged, hypothecated or otherwise
disposed of during the Restriction Period.

 

(d)           Subject to the minimum
Restriction Period of one year, in cases of death, Disability or Retirement of
a Participant or other special circumstances, the Committee may, in its sole
discretion when it finds that a waiver would be in the best interests of the
Corporation, elect to waive any or all remaining restrictions or extend the
Restriction Period applicable to the Restricted Shares held by that
Participant.

 

(e)           The Committee may
require, under such terms and conditions as it deems appropriate or desirable,
that the certificates for Restricted Shares delivered under the Plan may be
held in custody by a bank or other institution, or that the Corporation may
itself hold such shares in custody until the Restriction Period expires or
until restrictions thereon otherwise lapse, and may require, as a condition of
any Award of Restricted Shares that the Participant shall have delivered a
stock power endorsed in blank relating to the Restricted Shares.

 

(f)            Nothing in this Section 8
shall preclude a Participant from exchanging any Restricted Shares subject to
the restrictions contained herein for other Common Shares that are similarly
restricted.

 

(g)           Subject to Section 8(e)
and Section 10, each Participant entitled to receive Restricted Shares under
the Plan shall be issued a certificate for such shares. Such certificate shall
be registered in the name of the Participant, and shall bear an appropriate
legend reciting the terms, conditions and restrictions, if any, applicable to
such Award and shall be subject to appropriate stop-transfer orders.

 

(h)           Except for the
restrictions on Restricted Shares under this Section 8, each Participant who
receives Restricted Shares shall have the rights of a shareholder with respect
to such shares, including the right to vote the shares and receive dividends
and other distributions.

 

9.             Performance Units

 

(a)           Subject to the provisions
of the Plan, the Committee shall (i) determine and designate from time to time
those Participants or groups of Participants to whom Awards of Performance
Units are to be made; (ii) determine the Performance Period (the “Performance
Period”) and Performance Objectives (the “Performance Objectives”) applicable
to such Awards; (iii) determine the form of settlement of a Performance Unit
pursuant to Section 9(f); and (iv) generally determine the terms and conditions
of each such Award. The Award Agreement covering such Performance Units shall
specify a value for each Performance Unit or a formula for determining the
value of each Performance Unit at the time of settlement.

 

(b)           The Committee shall
determine a Performance Period at its sole discretion, provided that the
Performance Period for any Award that may involve the issuance of Shares shall
not be less than one year. Performance Periods may overlap and Participants may
participate simultaneously with respect to Performance Units for which
different Performance Periods are prescribed.

 

(c)           The Committee shall
determine the Performance Objectives of Awards of Performance Units.
Performance Objectives may vary from Participant to Participant and between
groups of Participants and shall be

 

7

 

based upon such performance criteria or
combination of factors as the Committee may deem appropriate, including, but
not limited to, minimum earnings, earnings per share, earnings growth, earnings
per share growth, return on equity or share price appreciation. If during the
course of a Performance Period, there shall occur significant events that the
Committee expects to have a substantial effect on the applicable Performance
Objectives during such period, the Committee may revise such Performance
Objectives.

 

(d)           At the beginning of a
Performance Period, the Committee shall determine for each Participant or group
of Participants the number of Performance Units in respect of which the
Participant or member of the group of Participants shall be entitled to payment
if the applicable Performance Objectives are met in whole or in part during the
Performance Period.

 

(e)           If a Participant
terminates service with the Corporation and all Subsidiaries during a
Performance Period because of death, Disability, Retirement, or under other
circumstances where the Committee in its sole discretion finds that a waiver
would be in the best interests of the Corporation, that Participant may, as
determined by the Committee, be entitled to a payment in respect of an Award of
Performance Units at the end of the Performance Period based upon the extent to
which the Performance Objectives were satisfied during such period, and such
other factors as the Committee deems relevant, and, if the Committee deems
appropriate, prorated for the portion of the Performance Period during which
the Participant was employed by the Corporation or any Subsidiary, provided,
however, the Committee may provide for an earlier payment in settlement of such
Performance Units in such amount and under such terms and conditions as the
Committee deems appropriate or desirable; or alternatively, the Committee may
extend the Performance Period for such Participant. If a Participant terminates
service with the Corporation and all Subsidiaries during a Performance Period
for any reason, other than death, Disability or Retirement, then such
Participant shall not be entitled to any payment in respect of an Award of
Performance Units for that Performance Period unless the Committee shall otherwise
determine.

 

(f)            Each payment in respect
of an Award of a Performance Unit to which a Participant becomes entitled upon
satisfying the applicable Performance Objectives during the Performance Period
shall be settled in whole Common Shares, or cash, or a combination of Common
Shares and cash either as a lump sum payment or in annual installments, all as
the Committee shall determine, with payment to commence as soon as practicable
after satisfaction of the relevant Performance Objective or at the end of the
relevant Performance Period as set out in the Award Agreement.

 

(g)           Where Common
Shares are issued in settlement of Performance Units, such shares shall be
valued at their Fair Market Value on the date the relevant Performance
Objective is achieved or on the last day of the relevant Performance Period as
set out in the Award Agreement and the value of the Performance Units to which
the Participant is entitled shall be divided by such Fair Market Value of a
common Share in order to determine the number of Common Shares to which the
Participant is entitled in settlement of such Performance Units.

 

(h)           No Participant awarded a
Performance Unit shall have any right as a shareholder with respect to any
shares covered by the Award prior to the date such shares have been recorded on
the Corporation’s official shareholder records as having been issued or
transferred to the Participant.

 

10.          Certificates for Common Shares

 

(a)           The Corporation shall not
be required to issue or deliver any
certificates for Common Shares pursuant to any Award prior to: (i) the listing
of such shares on any stock exchange on which the Common Shares may then be
listed; and (ii) the completion of any registration
or qualification of such shares under any Canadian or United States federal,
provincial or state law, or any ruling or regulation of any government body
which the Corporation shall, in its sole discretion, determine to be necessary
or advisable or the Corporation being satisfied that appropriate exemptions are
available.

 

(b)           All certificates for
Common Shares delivered under the Plan shall also be subject to such
stop-transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of applicable securities
regulatory authorities, any stock exchange upon which the Common Shares are
then listed and any applicable federal, state or local securities laws, and the
Committee may cause a legend or legends to be placed on any such certificates
to make appropriate reference to such restrictions.

 

8

 

11.          Beneficiary Designation

 

(a)           Each Participant may file
with the Corporation a written designation of one or more persons as the
Beneficiary or Beneficiaries who shall be entitled upon the Participant’s death
to receive the benefits of any Award payable or granted to the Participant
under the Plan. Subject to the requirements of law, a Participant may from time
to time revoke or change the Beneficiary designation without the consent of any
prior Beneficiary by filing a new designation with the Corporation. The last
such designation received by the Corporation shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be
effective unless received by the Corporation prior to the Participant’s death,
and in no event shall it be effective as of a date prior to such receipt.

 

(b)           If no such Beneficiary
designation is in effect at the time of a Participant’s death, or if no
designated Beneficiary survives the Participant or if such designation
conflicts with applicable law, the Participant’s estate shall be entitled to
receive the benefits of any Award held by the Participant, as such benefits are
determined in accordance with this Plan, upon the Participant’s death. If the
Committee is in doubt as to the right of any person to receive the benefits of
such Award, the Corporation may retain such benefits, without liability for any
interest thereon, until the Committee determines the rights thereto, or the
Corporation may pay such benefits into any court of appropriate jurisdiction
and such payment shall be a complete discharge of the liability of the
Corporation therefor.

 

12.          Transfers and Leaves of Absence

 

Solely
for the purposes of the Plan: (a) a transfer of a Participant’s employment
without an intervening period from the Corporation to a Subsidiary or vice
versa, or from one Subsidiary to another, shall not be deemed a termination of
employment; and (b) a Participant who is granted in writing a leave of absence
in accordance with the applicable policies of the Corporation shall be deemed
to have remained in the employ of the Corporation or a Subsidiary, as the case
may be, during such leave of absence.

 

13.          Stock Adjustments

 

In the
event of a share dividend, share split, issuance of shares or instruments
convertible into shares (other than pursuant to the Plan) for less than market
value, share consolidation, share reclassification, exchange of shares,
recapitalization, amalgamation, merger, consolidation, corporate arrangement,
reorganization, liquidation or the like of or by the Corporation, the Committee
may make such adjustment, if any, of the number of Common Shares, or of the
exercise price, or both, as it shall deem appropriate to give proper effect to
such event, including to prevent, to the extent possible, substantial dilution
or enlargement of rights granted to Participants under the Plan. In any such
event, the maximum number of shares available under the Plan may be
appropriately adjusted by the Committee subject to obtaining all necessary
regulatory approvals. If because of a proposed merger, amalgamation or other
corporate arrangement or reorganization, the exchange or replacement of shares
in the Corporation for those in another company is imminent, the Committee may,
in a fair and equitable manner, determine the manner in which all unexercised
Stock Option rights and other Awards granted under the Plan shall be treated
including, for example, requiring the acceleration of the time for the exercise
of such rights by the Participants and of the time for the fulfilment of any
conditions or restrictions on such exercise or waiving conditions or
restrictions on such Awards in whole or in part. The determination by the
Committee as to the terms of any of the foregoing adjustments shall be
conclusive and binding.

 

14.          Withholding

 

The
Corporation shall have the right to deduct from any cash payment made under the
Plan any federal, provincial, state or other taxes required by law to be withheld
with respect to such payment. It shall be a condition to the obligation of the
Corporation to deliver Common Shares upon the exercise of any Stock Option,
upon payment of a Performance Unit or upon delivery of Restricted Shares that
the Participant pay to the Corporation such amount as may be requested by the
Corporation for the purpose of satisfying any liability for such withholding
taxes. Any Award Agreement may provide that the Participant may elect, in
accordance with any conditions set forth in such Award Agreement, to pay a
portion or all of such withholding taxes in Common Shares in such manner as the
Corporation may specify.

 

9

 

15.          Amendment and Termination

 

(a)           Subject to paragraph (b),
the Committee may amend, suspend, or discontinue the Plan at any time, provided
that all necessary regulatory approvals are obtained and no such action shall
adversely affect any Awards already granted to a Participant without the
consent of that Participant, except to the extent, if any, provided in the Plan
or in the Award. If any law, agreement or exchange on which Common Shares of
the Corporation are traded requires shareholder approval for an amendment to
become effective, no such amendment shall become effective unless approved by
vote of the Corporation’s shareholders.

 

(b)           Notwithstanding paragraph
(a), any amendment to the Plan involving a fundamental change to the Plan shall
become effective only upon approval by vote at a meeting of shareholders of the
Corporation. For greater certainty, an amendment involving a fundamental change
to the Plan includes an amendment which may lead to significant dilution in the
number of the Corporation’s outstanding Common Shares or may provide additional
benefits to eligible insider participants, such as (i) any amendment involving
an increase in the maximum number of Common Shares issuable under the Plan;
(ii) any amendment involving a change to the eligible participants which would
have the potential of broadening or increasing insider participation; (iii) any
amendment involving the addition of any form of financial assistance; (iv) any
amendment involving the addition of a cashless exercise feature, payable in
cash or securities, which does not provide for a full deduction of the number
of underlying Common Shares; and (v) any amendment involving a reduction in the
pricing of an option, restricted share or performance unit, other than in
connection with a Common Share split, subdivision or other similar Common Share
reorganization. Amendments to the Plan involving, (x) any amendment of an
administrative or a “housekeeping” nature; (y) any amendment involving a change
in the vesting provisions under the Plan; and (z) an amendment involving a
change to the termination provisions to the Plan which does not entail an
extension beyond the original expiry date, may be made by the Committee in
accordance with paragraph (a).

 

16.          Effective Date

 

This
amendment and restatement of the Plan shall be effective as of March 3, 2005,
subject to its approval by the shareholders of the Corporation. No Restricted
Shares or Common Shares in payment of Performance Units may be issued under the
Plan until such shareholder approval is obtained. If shareholder approval is not obtained, the
Incentive Share Option Plan, in its form prior to this amendment and
restatement, shall continue in effect. Stock Options granted prior to March 3,
2005 shall continue to be governed by the terms and conditions in effect
immediately prior to this amendment and restatement of the Plan.

 

10

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