Document:

Exhibit

 Exhibit 10.5

Bauer Performance Sports Ltd.
Second Amended and Restated 2011 Stock Option Plan
 April 9, 2013

 

Bauer Performance Sports Ltd.
Second Amended and Restated 2011 Stock Option Plan 
Article 1 
PURPOSE
		
	1.1
	Purpose

The purpose of this Plan is to advance the interests of Bauer Performance Sports Ltd. (the “Corporation”) by enhancing the ability of the Corporation and any corporations owned or controlled by the Corporation (each a “Subsidiary”) to attract and retain employees, managers and directors, to reward such individuals for their sustained contributions and to encourage such individuals to take into account the long-term corporate performance of the Corporation and the creation of shareholder value through their participation in the Corporation’s share capital by receiving Common Shares.
ARTICLE 2     
INTERPRETATION
		
	2.1
	Definitions

When used herein the following terms have the following meanings, respectively:
“Affiliate” or “Affiliated”, with respect to any Person, means any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person other than a natural Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise).
“Associate”, where used to indicate a relationship with an individual, means (i) any partner of that individual, and (ii) the spouse of that individual and that individual’s children, as well as that individual’s relatives and that individual’s spouse’s relatives, if they share that individual’s residence.
“Black-Out Period” means the period during which designated directors, officers, employees and consultants of the Corporation and, if applicable, any Subsidiary, cannot trade Common Shares pursuant to the Corporation’s insider trading policy which is in effect and has not been otherwise waived by the Board at that time (which, for greater certainty, does not include the period during which a cease trade order is in effect to which the Corporation, or in respect of an Insider, that Insider, is subject).
“Board” means the board of directors of the Corporation.
“Cause” with respect to any Participant (a) has the meaning, if any, set forth in the employment agreement then in effect, if any, between such Participant and the Corporation or any Subsidiary, or (b) if there is no such meaning set forth in such employment agreement or there is no such employment agreement then in effect, means the following events or conditions, as determined by the Board in its reasonable judgment: (i) willful misconduct of the Participant with regard to the Corporation and its Affiliates which constitutes a material breach of any of his or her obligations set forth in any 

 

- 2 -

written agreement governing the terms of the Participant’s service with the Corporation and the Subsidiaries as the same may then be in effect and such breach, if curable, has not been cured within fifteen (15) days after written notice by the Corporation or a Subsidiary to the Participant; (ii) fraud, embezzlement, theft or other material dishonesty by the Participant with respect to the Corporation or any of its Affiliates; (iii) the Participant’s material breach of his or her fiduciary duties as an officer or manager of the Corporation or any of its Affiliates, or as an officer, trustee, director or other fiduciary of any pension or benefit plan of the Corporation or its Affiliates or willful misconduct which has, or could reasonably be expected to have, a material adverse effect upon the business, interests or reputation of the Corporation or any of its Affiliates and such breach or conduct, if curable, has not been cured within fifteen (15) days after written notice by the Corporation or a Subsidiary to the Participant; (iv) the Participant’s indictment for, or a plea of nolo contendere to, any felony or an analogous provision under the laws of a local jurisdiction; or (v) refusal or failure by the Participant to attempt in good faith to follow or carry out the reasonable written instructions of the Board which failure, if curable, does not cease within fifteen (15) days after written notice of such failure is given to the Participant by the Board.  For purposes of this paragraph, no act, or failure to act, on the Participant’s part shall be considered “willful” unless done or omitted to be done by him or her not in good faith and without reasonable belief that his or her action or omission was in the best interests of the Corporation.  Notwithstanding the foregoing, to the extent that (x) the Participant is a party to a service agreement with the Corporation or any Subsidiary which includes an alternative definition of Cause or (y) an alternative definition of Cause is provided in the Participant’s Option Agreement, “Cause” shall have the meaning assigned thereto in such service agreement or Option Agreement; provided that any alternative definition of Cause in the Option Agreement shall govern and supersede any alternative definition of Cause in such service agreement to the extent of any inconsistencies between such definitions.
“Change of Control” means the occurrence of (i)  any transaction or series of related transactions, whether or not the Corporation is a party thereto, after giving effect to which in excess of fifty percent (50%) of the Corporation’s voting power is owned directly, or indirectly through one or more entities, by any Person and its Affiliates, other than Kohlberg Stockholders and their Affiliates or (ii) a sale, lease or other disposition of all or substantially all of the assets of the Corporation other than in connection with an internal reorganization.
“Committee” has the meaning set forth in Section 3.2 of this Plan.
“Common Shares” means the common shares of the Corporation.
“Corporation” has the meaning set forth in Section 1.1 of this Plan.
“Date of Grant” means, for any Option, the date specified by the Board at the time it grants the Option or, if no such date is specified, the date upon which the Option was granted.
“Director” means a member of the Board.
“Exercise Notice” means a notice in writing, in the form set out in Schedule B, signed by an Optionee and stating the Optionee’s intention to exercise a particular Option.
“Exercise Period” means the period of time during which an Option granted under this Plan may be exercised, provided, however, that the Exercise Period may not exceed 10 years from the relevant Date of Grant.

 

- 3 -

“Exercise Price” means the price at which a Common Share may be purchased pursuant to the exercise of an Option.
“Fair Market Value” means, with respect to any particular date, the weighted average trading price of a Common Share on the TSX for the five business days immediately prior to that date, or as applicable in Appendix 1.
“Insider” has the meaning given to such term in the Securities Act (Ontario), as such legislation may be amended, supplemented or replaced from time to time.
“Kohlberg Stockholders” means Kohlberg Investors VI, L.P. and Affiliates.
 “Officer” means an officer of the Corporation.
“Option” means a non-assignable, non-transferable (other than as contemplated in Section 3.6 of this Plan) right to purchase Common Shares under this Plan.
“Option Agreement” means a signed, written agreement between an Optionee and the Corporation evidencing the terms and conditions on which an Option has been granted substantially in the form attached hereto at Schedule A.
“Optionee” means a Participant who has been granted one or more Options.
“Original Optionee” has the meaning set forth in Section 3.6 of this Plan.
“Participant” means a Director, an Officer, a director or an officer of any Subsidiary, or a current or past full-time or part-time employee or consultant of the Corporation or any Subsidiary and includes Registered Retirement Savings Plans or Registered Retirement Income Funds of which any such director, officer or individual employee or consultant is the annuitant, any corporation of which any such director, officer or individual employee or consultant is the sole shareholder and any family trust which such director, officer or individual employee or consultant is a trustee or beneficiary.
“Performance Vesting Condition” means any condition established by the Board, from time to time, which may include conditions based on the Participant’s personal performance and the financial performance of the Corporation, and that is to be used to determine the vesting of the Options.
“Person” means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.
“Plan” means this Second Amended and Restated 2011 Stock Option Plan as it may be further amended or amended and restated from time to time.
“Proportionate Voting Shares” means the proportionate voting shares of the Corporation.
“Share Compensation Arrangement” means a stock option, stock option plan, employee stock purchase plan, long-term incentive plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares to one or more Directors, Officers, directors or officers of any Subsidiary, current or past full-time or part-time employees of the Corporation or any Subsidiary, Insiders or service providers or consultants of the Corporation or any Subsidiary 

 

- 4 -

including a share purchase from treasury by one or more Directors, Officers, directors or officers of any Subsidiary, current or past full-time or part-time employees of the Corporation or any Subsidiary, Insiders or service providers or consultants of the Corporation or any Subsidiary which is financially assisted by the Corporation or any Subsidiary by way of a loan, guarantee or otherwise.
“Subsidiary” has the meaning set forth in Section 1.1 of this Plan.
“Successor Corporation” means, for purposes of Section 5.3, the issuer of the shares or other securities into which the Common Shares are reclassified or reorganized, or otherwise changed into or exchanged for, or the Person resulting or continuing from a consolidation, merger or amalgamation as contemplated in Section 5.3.
“Termination Date” means in the case of an Optionee whose employment or term of office with the Corporation or any Subsidiary terminates in the circumstances set out in Subsection 4.8(a) or 4.8(b), the date that is designated by the Corporation or any Subsidiary, as the last day of the Optionee’s employment or term of office with the Corporation or such Subsidiary, provided that in the case of termination of employment or term of office by voluntary resignation by the Optionee, such date shall not be earlier than the date notice of resignation was given, and “Termination Date” specifically does not mean the date on which any period of reasonable notice that the Corporation or any Subsidiary may be required at law to provide to the Optionee would expire.
“Time Vesting Condition” has the meaning set forth in Section 4.4 of this Plan.
“Trading Day” means any day on which the TSX is opened for trading.
“TSX” means the Toronto Stock Exchange.
		
	2.2
	Interpretation

		
	(a)
	Whenever the Board or, where applicable, the Committee is to exercise discretion in the administration of the terms and conditions of this Plan, the term “discretion” means the sole and absolute discretion of the Board or the Committee, as the case may be.

		
	(b)
	As used herein, the terms “Article”, “Section”, “Subsection” and “clause” mean and refer to the specified Article, Section, Subsection and clause of this Plan, respectively.

		
	(c)
	Words importing the singular include the plural and vice versa and words importing any gender include any other gender.

		
	(d)
	The words “including” and “includes” mean “including (or includes) without limitation”.

		
	(e)
	Unless otherwise specified, all references to money amounts are to Canadian currency.

		
	(f)
	In the case of an individual who was granted Options and who has transferred such Options to the Registered Retirement Savings Plan or the Registered Retirement Income Fund of which he is the annuitant, or to a corporation of which he is the sole shareholder, or to a family trust of which he is the trustee or beneficiary, such individual shall be the Participant or the Optionee for the purposes of the definitions “Disabled”, “Disability” and “Termination Date” and also for the purpose of the death of the Participant or Optionee.

 

- 5 -

ARTICLE 3     
ADMINISTRATION
		
	3.1
	Administration

Subject to Section 3.2, this Plan will be administered by the Board and the Board has sole and complete authority, in its discretion, to:
		
	(a)
	determine the individuals (from among the Participants) to whom Options may be granted;

		
	(b)
	grant Options in such amounts and, subject to the provisions of this Plan, on such terms and conditions as it determines including:

		
	(i)
	the time or times at which Options may be granted;

		
	(ii)
	the Exercise Price;

		
	(iii)
	the time or times when each Option vests and becomes exercisable and, subject to Section 4.3, the duration of the Exercise Period;

		
	(iv)
	whether any Option is subject to any Performance Vesting Condition;

		
	(v)
	whether restrictions or limitations are to be imposed on the Options and the nature of such restrictions or limitations (including the conditions of exercise set forth in Article 4); and

		
	(vi)
	any acceleration of exercisability or waiver of termination regarding any Option, based on such factors as the Board may determine;

		
	(c)
	interpret this Plan and adopt, amend and rescind administrative guidelines and other rules and regulations relating to this Plan; and

		
	(d)
	make all other determinations, settle all controversies and disputes that may arise under this Plan and take all other actions necessary or advisable for the implementation and administration of this Plan.

The Board’s determinations and actions under this Plan are conclusive and binding on the Corporation and all other Persons.  The day-to-day administration of this Plan may be delegated to such officers and employees of the Corporation as the Board determines.
		
	3.2
	Delegation to Committee

To the extent permitted by applicable law, the Board may, from time to time, delegate to a committee of the Board (the “Committee”) all or any of the powers conferred on the Board under this Plan.  In such event, the Committee will exercise the powers delegated to it by the Board in the manner and on the terms authorized by the Board.  Any decision made or action taken by the Committee arising out of or in connection with the administration or interpretation of this Plan in this context is final and conclusive.
No member of the Board or of the Committee shall be liable for any action or determination taken or made in good faith in the administration, interpretation, construction or application of this Plan or any Options 

 

- 6 -

granted hereunder, nor shall any member of the Board be liable for any action or determination taken or made in good faith by the Committee or a member thereof.
		
	3.3
	Eligibility

All Participants are eligible to participate in this Plan, subject to Section 4.8. Eligibility to participate does not confer upon any Participant any right to be granted Options pursuant to this Plan.  The extent to which any Participant is entitled to be granted Options pursuant to this Plan will be determined in the sole and absolute discretion of the Board.
		
	3.4
	Total Common Shares Subject to Options

		
	(a)
	The maximum number of Common Shares reserved for issuance under this Plan, together with all other Share Compensation Arrangements other than the Bauer Performance Sports Ltd. Rollover Stock Option Plan, at any time shall be no greater than 12% of the total issued and outstanding Common Shares of the Corporation outstanding from time to time (assuming the conversion of all Proportionate Voting Shares to Common Shares).  If any Option granted under this Plan is exercised, terminates, expires or is cancelled, new Options may thereafter be granted covering such Common Shares, subject to any required prior approval by any applicable stock exchange. At all times, the Corporation will reserve and keep available a sufficient number of Common Shares to satisfy the requirements of all outstanding Options granted under this Plan. 

		
	(b)
	No Option may be granted if such grant would have the effect of causing the total number of Common Shares subject to Options to exceed the total number of Common Shares reserved for issuance pursuant to the exercise of Options and set forth in Subsection 3.4(a).

		
	3.5
	Option Agreements

All grants of Options under Section 4.1 of this Plan will be evidenced by Option Agreements.  Such Option Agreements will be subject to the applicable provisions of this Plan and will contain such provisions as are required by this Plan, applicable law and the rules of the TSX or other stock exchange upon which the Common Shares are listed and any other provisions that the Board may, in its discretion, determine.  Any one Director or Officer is authorized and empowered to execute and deliver, for and on behalf of the Corporation, an Option Agreement to each Optionee.
		
	3.6
	Non-transferability

Subject to Section 4.8 and except as specifically provided in an Option Agreement approved by the Board, Options granted under this Plan may only be exercised during the lifetime of the Optionee by such Optionee personally. No sale, assignment, encumbrance or other transfer of Options, whether voluntary, involuntary, by operation of law or otherwise (other than upon the death of the Optionee), vests any interest or right in such Options whatsoever in any assignee or transferee (except that an Optionee may transfer Options to Registered Retirement Savings Plans or Registered Retirement Income Funds of which he is the annuitant, to a corporation in respect of which the Optionee is the sole shareholder or to a family trust for bona fide estate planning purposes, in each case, with the prior written approval of the Corporation) and immediately upon any assignment or transfer, or any attempt to make the same, such Options will terminate and be of no further force or effect. If any Optionee (the “Original Optionee”) has transferred Options to a Registered Retirement Savings Plan or a Registered Retirement Income Fund or a corporation or a family trust pursuant to this Section 3.6, such Options will terminate and be of no further force or effect if at any time the Original 

 

- 7 -

Optionee should cease to be the annuitant of such Registered Retirement Savings Plans or Registered Retirement Income Funds or cease to own all of the issued shares of such corporation or cease to be a trustee or a beneficiary of the family trust, as the case may be, other than by reason of death, in which case the provisions of Section 4.8 shall apply, mutatis mutandis.
ARTICLE 4     
GRANT OF OPTIONS
		
	4.1
	Grant of Options

The Board may, from time to time by resolution, subject to the provisions of this Plan (including Appendix 1 hereto which is applicable to Participants whose compensation is subject to Section 409A of the United States Internal Revenue Code of 1986, as amended, notwithstanding the other provisions of this Plan) and such other terms and conditions as the Board may prescribe, grant Options to any individual from among the Participants. 
		
	4.2
	Exercise Price

The Exercise Price for Common Shares that are the subject of any Option shall be fixed by the Board or the Committee, as the case may be, when such Option is granted, but shall not be less than the Fair Market Value of such Common Shares at the time of the grant.  
		
	4.3
	Expiration of Options

Subject to any accelerated termination as set forth in this Plan (including, without limitation, as provided in Sections 4.8 and 4.9), each Option expires on the 10th anniversary of the Date of Grant.  Unless otherwise determined by the Board or the Committee, all unexercised Options shall be cancelled at the expiry of such Options.
Should the expiration date for an Option fall within a Black-Out Period or within nine Trading Days following the expiration of a Black-Out Period, such expiration date shall be automatically extended without any further act or formality to that date which is the tenth Trading Day after the end of the Black-Out Period, such tenth Trading Day to be considered the expiration date for such Option for all purposes under this Plan. Notwithstanding Article 6 hereof, the ten Trading Day period referred to in this Section 4.3 may not be extended by the Board.
		
	4.4
	Vesting

Unless otherwise specified in the Option Agreement entered into in connection with the grant of such Option, Options will vest over a four-year period, as to twenty-five percent (25%) of the Options on each anniversary of the Date of Grant, commencing on the first anniversary of the Date of Grant (the “Time Vesting Condition”).  The Options may also be subject to Performance Vesting Conditions.  Unless otherwise specified in the Option Agreement entered into in connection with the grant of such Option, an Option will be capable of exercise on vesting.  
		
	4.5
	Conditions of Exercise and Exercise Period

An Option remains exercisable until expiration or termination of the Option in accordance with the Plan, unless otherwise specified by the Board in the Option Agreement.  Each Option may be exercised at any time or from time to time, in whole or in part, for up to the total number of Common Shares with respect to 

 

- 8 -

which it is then exercisable.  For greater certainty, no Option shall be exercised by a Participant during a Black-Out Period.  Subject to the provisions of this Plan and any Option Agreement, Options shall be exercised by the Participant delivering to the Corporation a fully completed Exercise Notice together with a bank draft or certified cheque in an amount equal to the aggregate Exercise Price of the Common Shares to be purchased plus an amount sufficient to cover the withholding taxes payable on the exercise of such Options.  
		
	4.6
	Payment of Exercise Price

No Common Shares will be issued or transferred until full payment for the Common Shares to be purchased and an amount sufficient to cover any withholding taxes payable on the exercise of such Options (to the extent required to be withheld by the Corporation) has been received by the Corporation.  As soon as practicable after receipt of any Exercise Notice, along with such full payment, the Corporation will forthwith cause the transfer agent and registrar of the Common Shares to deliver to the Optionee a certificate or certificates in the name of the Optionee or a statement of account, at the discretion of the Optionee, representing in the aggregate the purchased Common Shares.
		
	4.7
	Use of an Administrative Agent and Trustee

The Board may in its sole discretion appoint from time to time one or more entities to act as administrative agent to administer the Options granted under this Plan and to act as trustee to hold and administer the assets that may be held in respect of Options granted under this Plan, the whole in accordance with the terms and conditions determined by the Board in its sole discretion.  The Corporation and the administrative agent will maintain records showing the number of Options granted to each Optionee under this Plan as well as records showing any assignments or transfers of Options by an Optionee as permitted under Section 3.6. The administrative agent shall be permitted to arrange a broker assisted “cashless exercise”, including a “short sale” for such number of Common Shares to be sold as is necessary to raise an amount equal to the amount specified in Section 4.6, and to cause the proceeds from the sale of such Common Shares to be delivered to the Corporation along with the Exercise Notice, promptly following which the Corporation shall issue the Common Shares underlying the number of Options exercised to the account designated by the administrative agent, acting on the instructions of the Participant. 
		
	4.8
	Termination of Service

		
	(a)
	All Options held by the Participant (whether vested or unvested) shall terminate automatically upon the termination of the Participant’s service with the Company or any of its Subsidiaries for any reason other than as set forth in Section 4.8(b).

		
	(b)
	In the case of a termination of the Participant’s service by reason of (A) termination by the Company or any of its Subsidiaries other than for Cause, (B) the Participant’s death, or (C) voluntary resignation or for ceasing to be a Director or a director of a Subsidiary, only the Participant’s unvested Options shall terminate automatically as of such date, and any time during the ninety (90) day period commencing on the date of such termination of service (or, if earlier, the Termination Date), the Participant (or his or her executor or administrator, or the Person or Persons to whom the Participant’s Share Options are transferred by will or the applicable laws of descent and distribution) will be eligible to exercise his vested Options and upon the 90th day following such termination of service (or, if earlier, the Termination Date) any Options that have not been exercised shall automatically terminate.

		
	(c)
	For greater certainty, where an Optionee’s employment or term of office terminates by reason of termination by the Corporation or any Subsidiary for Cause then any Options held by the 

 

- 9 -

Optionee, whether or not vested at the Termination Date, immediately expire and are cancelled on the Termination Date or at a time as may be determined by the Board, in its sole discretion.
		
	(d)
	An Optionee’s eligibility to receive further grants of Options under this Plan ceases as of the date that the Corporation or any Subsidiary provides the Optionee with written notification that the Optionee’s employment or term of office, as the case may be, is terminated, notwithstanding that such date may be prior to the Termination Date.

		
	(e)
	For the purposes of the Plan, an Optionee shall not be deemed to have terminated service where: (i) the Optionee remains in employment or office within or among the Corporation or any Subsidiary or (ii) the Optionee is on a leave of absence approved by the Board.

		
	4.9
	Discretion to Permit Exercise

Notwithstanding the provisions of Sections 4.3, 4,4, 4.5, 4.8 and 4.9 the Board may, in its discretion, at any time prior to or following the events contemplated in such Sections and in any Option Agreement, permit the exercise of any or all Options held by the Optionee in the manner and on the terms authorized by the Board, provided that, subject to an extension pursuant to Section 4.3 resulting from a Black-Out Period, the Board will not, in any case, authorize the exercise of an Option pursuant to this Section beyond the 10-year expiration of the Exercise Period of the particular Option.
		
	4.10
	Change of Control 

Except as otherwise set forth in any Option Agreement, in the event of any Change of Control transaction, the Board may provide for substitute or replacement options of similar value from, or the assumption of outstanding Options by, the acquiring or surviving entity, any such substitution, replacement or assumption to be on such terms as the Board in good faith determines; provided, however, that in the event of a Change of Control transaction the Board may take, as to any outstanding Option, any one or more of the following actions: 
		
	(a)
	provide that any or all Options shall thereupon terminate; provided that any such outstanding Options that have vested shall remain exercisable until consummation of such Change of Control; and

		
	(b)
	terminate any Option where the Exercise Price of such Option is equal to or greater than the fair market value of a Common Share, as determined in the sole discretion of the Board.

		
	4.11
	Conditions of Exercise

Each Optionee will, when requested by the Corporation, sign and deliver all such documents relating to the granting or exercise of Options which the Corporation deems necessary or desirable.
ARTICLE 5     
SHARE CAPITAL ADJUSTMENTS
		
	5.1
	General

The existence of any Option does not affect in any way the right or power of the Corporation or its shareholders to make, authorize or determine any adjustment, recapitalization, reorganization or any other change in the 

 

- 10 -

Corporation’s capital structure or its business, or any amalgamation, combination, plan of arrangement, merger or consolidation involving the Corporation, to create or issue any bonds, debentures, Proportionate Voting Shares, Common Shares or other securities of the Corporation or to determine the rights and conditions attaching thereto, to effect the dissolution or liquidation of the Corporation or any sale or transfer of all or any part of its assets or business, or to effect any other corporate act or proceeding, whether of a  similar character or otherwise, whether or not any such action referred to in this Section would have an adverse effect on this Plan or any Option granted hereunder.
		
	5.2
	Reorganization of the Corporation’s Capital

		
	(a)
	In the event of any subdivision of the Common Shares into a greater number of Common Shares at any time after the grant of an Option to a Optionee and prior to the expiration of the Exercise Period of such Option, the Corporation will deliver to such Optionee at the time of any subsequent exercise of such Option in accordance with the terms hereof in lieu of the number of Common Shares to which such Optionee was theretofore entitled upon such exercise, but for the same aggregate consideration payable therefor, such number of Common Shares as such Optionee would have held as a result of such subdivision if on the record date thereof the Optionee had been the registered holder of the number of Common Shares to which such Optionee was theretofore entitled upon such exercise.

		
	(b)
	In the event of any consolidation of Common Shares into a lesser number of Common Shares at any time after the grant of an Option to any Optionee and prior to the expiration of the Exercise Period of such Option, the Corporation shall deliver to such Optionee at the time of any subsequent exercise of such Option in accordance with the terms hereof in lieu of the number of Common Shares to which such Optionee was theretofore entitled upon such exercise, but for the same aggregate consideration payable therefor, such number of Common Shares as such Optionee would have held as a result of such consolidation if on the record date thereof the Optionee had been the registered holder of the number of Common Shares to which such Optionee was theretofore entitled upon such exercise.

		
	5.3
	Other Events Affecting the Corporation

If, at any time prior to the expiration of the Exercise Period of such Option, the Common Shares shall be reclassified, reorganised or otherwise changed into or exchanged for a different number or class of shares or other securities of the Corporation or of a Successor Corporation (otherwise than as specified in Section 5.1 and Section 5.2 hereof), or the Corporation shall consolidate, merge or amalgamate with or into another Person, the Optionee will, subject to the provisions of Article 6 hereof, be entitled to receive at the time of any subsequent exercise of such Option in accordance with the terms hereof and will accept in lieu of the number of Common Shares then subscribed for an aggregate consideration payable therefor, adjusted, if necessary, to preserve proportionately the rights and obligations of the Optionee, the aggregate number of shares of the appropriate class or other securities of the Corporation or the Successor Corporation (as the case may be) or other consideration from the Corporation or the Successor Corporation (as the case may be) that such Optionee would have been entitled to receive as a result of such reclassification, reorganization or other change or exchange of shares or, subject to the provisions of Article 6 hereof, as a result of such consolidation, merger or amalgamation, if on the record date of such reclassification, reorganization or other change or exchange of shares or the effective date of such consolidation, merger or amalgamation, as the case may be, such Optionee had been the registered holder of the number of Common Shares to which such Optionee was immediately theretofore entitled upon such exercise.

 

- 11 -

		
	5.4
	Distribution to Securityholders

If, at any time prior to the expiration of the Expiration Period of such Option, the Corporation makes a distribution to all holders of Common Shares of shares or other securities, cash, evidences of indebtedness or other assets in the capital of the Corporation (excluding a regular ordinary course dividend in cash or Common Shares, but including common shares or equity interests in a subsidiary or business unit of the Corporation or one of its Subsidiaries or cash proceeds of the disposition of such a subsidiary or business unit), or should the Corporation effect any transaction or change having a similar effect, then the Exercise Price, or the number of Common Shares to which the Optionee is entitled upon exercise of Options, or any combination thereof, will be adjusted to take into account such distribution, transaction or change.  Subject to the TSX approval, the Board will determine the appropriate adjustments to be made in such circumstances in order to maintain the Optionee’s economic rights in respect of their Options in connection with such distribution, transaction or change.
		
	5.5
	Immediate Exercise of Options

Where the Board determines that the steps provided in Sections 5.1 and 5.2 would not preserve proportionately the rights and obligations of the Optionees in the circumstances or otherwise determines that it is appropriate, the Board may permit the immediate exercise of any outstanding Options that are not otherwise exercisable.
		
	5.6
	Issue by Corporation of Additional Common Shares or Proportionate Voting Shares

Except as expressly provided in this Article 5, neither the issue by the Corporation of shares of any class or securities convertible into or exchangeable for shares of any class, nor the conversion or exchange of such shares or securities, affects, and no adjustment by reason thereof is to be made with respect to: (i) the number of Common Shares that may be acquired on the exercise of any outstanding Options, or (ii) the Exercise Price of any outstanding Options.
		
	5.7
	Fractions

No fractional Common Shares will be issued on the exercise of an Option.  Accordingly, if, as a result of any adjustment pursuant to this Article 5, an Optionee would become entitled to a fractional Common Share, the Optionee has the right to acquire only the adjusted number of whole Common Shares and no payment or other adjustment will be made with respect to the fractional Common Shares so disregarded.
		
	5.8
	Conditions of Exercise

The Plan and each Option are subject to the requirement that if at any time the Board determines that the listing, registration or qualification of the Common Shares subject to such Option upon any stock exchange or under any provincial, state or federal law, or the consent or approval of any governmental body or stock exchange or of the holders of the Common Shares generally, is necessary or desirable, as a condition of, or in connection with, the granting of such Option or the issue or purchase of Common Shares thereunder, no such Option may be granted or exercised in whole or in part unless such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Board.  The Optionees shall, to the extent applicable, cooperate with the Corporation in relation to such listing, registration, qualification, consent or other approval and shall have no claim or cause of action against the Corporation or any of its directors or officers as a result of any failure by the Corporation to obtain or to take any steps to obtain any such registration, qualification or approval.

 

- 12 -

ARTICLE 6     
AMENDMENT OR DISCONTINUANCE OF THE PLAN
Subject to compliance with the applicable rules of the TSX, the Board may from time to time amend, suspend or terminate this Plan, or the terms of any previously granted Option, without obtaining the approval of shareholders of the Corporation, provided that no such amendment to the terms of any previously granted Option may, except as expressly provided in the Plan, or with the written consent of the Optionee, adversely alter or impair the terms or conditions of such Option previously granted to such Optionee under this Plan.
Any amendment to this Plan, or to the terms of any Option previously granted, is subject to compliance with all applicable laws, rules, regulations and policies of any applicable governmental entity or stock exchange, including receipt of any required approval from such governmental entity or stock exchange.
If this Plan is terminated, the provisions of this Plan and any administrative guidelines or other rules adopted by the Board and in force at the time of such termination shall continue in effect as long as any Options under the Plan or any rights pursuant thereto remain outstanding. Notwithstanding such termination of the Plan, the Board may make any amendments to the Plan or to the terms of any outstanding Options that it would be entitled to make if the Plan were still in effect.
ARTICLE 7     
MISCELLANEOUS PROVISIONS
		
	7.1
	Legal Requirement

This Plan, and the Options granted under this Plan, shall at all times be subject to the ongoing requirements of applicable law and the rules of the TSX or other stock exchange upon which the Common Shares are listed.
The Corporation is not obligated to grant any Options, issue any Common Shares or other securities, make any payments or take any other action if, in the opinion of the Board, in its sole discretion, such action would constitute a violation by a Participant or the Corporation of any provision of any applicable statutory or regulatory enactment of any government or government agency.
		
	7.2
	Conformity to Plan

In the event that an Option is granted or an Option Agreement is executed which does not conform in all particulars with the provisions of this Plan, or purports to grant Options on terms different from those set out in this Plan, the Option, or the grant of such Option shall not be in any way void or invalidated, but the Option so granted will be adjusted to become, in all respects, in conformity with this Plan.
		
	7.3
	Optionee’s Entitlement

Except as otherwise provided in this Plan, Options previously granted under this Plan, whether or not then vested or exercisable, are not affected by any change in the ownership of the Corporation.
		
	7.4
	Expenses

All fees and expenses incurred by the Corporation in connection with this Plan shall be borne by the Corporation.  All expenses incurred by a Participant in connection with a grant or exercise of Options, 

 

- 13 -

including all fees and expenses of financial or legal advisors retained by such Participant in connection therewith, shall be borne by the Participant.
		
	7.5
	Withholding Taxes

The exercise of each Option granted under this Plan is subject to the condition that if at any time the Corporation determines, in its discretion, that the satisfaction of withholding tax or other withholding liabilities is necessary or desirable in respect of such exercise, such exercise is not effective unless such withholding has been effected to the satisfaction of the Corporation.  In such circumstances, the Corporation may require that an Optionee pay to the Corporation, in addition to and in the same manner as the Exercise Price for the Common Shares, or such other manner as the Board may specify, such amount as the Corporation is obliged to remit to the relevant taxing authority in respect of the exercise of the Option.  Any such additional payment is due no later than the date as of which any amount with respect to the Option must be withheld by the Corporation.
		
	7.6
	Rights of Participant/Optionee

No Participant has any claim or right to be granted an Option (including an Option granted in substitution for any Option that has expired pursuant to the terms and conditions of this Plan), and the granting of any Option is not to be construed as giving an Optionee a right to remain in the employ of the Corporation or any Subsidiary.  No Optionee has any rights as a shareholder of the Corporation in respect of Common Shares issuable on the exercise of rights to acquire Common Shares under any Option (including the payment of dividends or other distributions) until the allotment and issuance to the Optionee of a certificate or certificates in the name of the Optionee or a statement of account, at the discretion of the Optionee, representing such Common Shares.  The loss of existing or potential profit in Options granted under this Plan will not constitute an element of damages in the event of termination of an Optionee’s employment or service in any office or otherwise.
		
	7.7
	Indemnification

Every Director or member of the Committee will at all times be indemnified and saved harmless by the Corporation from and against all costs, charges and expenses whatsoever including any income tax liability arising from any such indemnification, that such Director or member of the Committee may sustain or incur by reason of any action, suit or proceeding, taken or threatened against such Director or member of the Committee, otherwise than by the Corporation, for or in respect of any act done or omitted by such Director or member of the Committee in respect of this Plan, such costs, charges and expenses to include any amount paid to settle such action, suit or proceeding or in satisfaction of any judgment rendered therein.  This shall be in addition to any indemnification agreement between the Corporation and the Directors.
		
	7.8
	Participation in this Plan

The participation of any Participant in this Plan is entirely voluntary and not obligatory and shall not be interpreted as conferring upon such Participant any rights or privileges other than those rights and privileges expressly provided in this Plan.  In particular, participation in this Plan does not constitute a condition of employment nor a commitment on the part of the Corporation or any Subsidiary to ensure the continued employment of such Participant or Optionee.  The Plan does not provide any guarantee against any loss which may result from fluctuations in the market value of the Common Shares.  Neither the Corporation nor any Subsidiary assumes any responsibility for the income or other tax consequences resulting to the Optionees and they are advised to consult with their own tax advisors.

 

- 14 -

		
	7.9
	Effective Date

This Plan was initially adopted by the Board on March 10, 2011 and amended on May 25, 2012 and further amended on April 9, 2013.  Should any changes to this Plan be required by any securities commission or other governmental body of any jurisdiction of Canada to which this Plan has been submitted or by any stock exchange on which the Common Shares may from time to time be listed, such changes will be made to this Plan as are necessary to conform with such requests and, if such changes are approved by the Board, this Plan, as amended, will remain in full force and effect in its amended form as of and from that date.
		
	7.10
	Governing Law

This Plan is created under and is to be governed, construed and administered in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

 

APPENDIX 1
US TAXPAYER EMPLOYEES
The terms of the Plan are hereby modified with respect to those Participants who are subject to income taxation under the laws of the U.S.:
SPECIAL APPENDIX 
to the  
Bauer Performance Sports Ltd. 
Second Amended and Restated 2011 Stock Option Plan  
 
Special Provisions Applicable to Participants Subject to  
Section 409A of the United States Internal Revenue Code
This Appendix sets forth special provisions of the Bauer Performance Sports Ltd. Second Amended and Restated 2011 Stock Option Plan (the “Plan”) that apply to Participants whose compensation is subject to section 409A of the United States Internal Revenue Code of 1986, as amended.  Terms defined in the Plan and used herein and in any Option Agreement applicable to any Option issued under the Plan shall have the meanings set forth in the Plan document, as amended from time to time.
1.    Definitions.
For purposes of this Appendix:
(a)    “Code” means the United States Internal Revenue Code of 1986, as amended, and any applicable United States Treasury Regulations and other binding regulatory guidance thereunder.
(b)    “Section 409A” means section 409A of the Code.
(c)    “Separation From Service” shall have the meaning as set forth in United States Treasury Regulation Section 1.409A 1(h).
(d)    “US Taxpayer” means a Participant whose compensation from the Corporation or any of its Affiliates is subject to Section 409A.
2.    Non-qualified stock options; Exemption from Section 409A.
Options granted to US Taxpayers are not intended to satisfy the requirements of Code Section 422 as “incentive stock options”.  Notwithstanding any provision of the Plan to the contrary, it is intended that Options granted under the Plan to US Taxpayers be exempt from Section 409A, and all provisions of the Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  Each US Taxpayer is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or for the account of such US Taxpayer in connection with the Plan (including any taxes and penalties under Section 409A), and neither the Corporation nor any Affiliate of the Corporation shall have any obligation to indemnify or otherwise hold such US Taxpayer (or any beneficiary) harmless from any or all of such taxes or penalties.
3.    Exercise Price.  

 

- 2 -

Notwithstanding any other provision of the Plan, so long as at the time of the grant of an Option the Common Shares are “readily tradable” as determined under United States Treasury Regulation Section 1.409A-1(b)(5)(vi)(G), the Exercise Price shall be the closing sale price of the Common Shares reported on the primary securities exchange on which the Common Shares are listed on the last business day on which such exchange is open for trading prior to the date of grant of such Option, and if at the time of grant the Common Shares are not “readily tradable” as determined under United States Treasury Regulation Section 1.409A‐1(b)(5)(vi)(G), the Exercise Price shall be determined by the reasonable application of a reasonable valuation method in accordance with Treasury Regulation Section 1.409A‐1(b)(5)(iv)(B).
4.    Expiry of Option/Trading Blackouts.  
Notwithstanding any other provision of the Plan and any provisions of the Option Agreement to the contrary, Options granted to US Taxpayers may not be exercised under any circumstance following the 10th anniversary of the Date of Grant.
5.     Use of Trust
Notwithstanding Section 4.7 of the Plan, no trust shall be established or funded with respect to Options granted to US Taxpayers if such trust would cause such Options to be treated as other than a stock right described in Treasury Regulation Section 1.409A-1(b)(5)(i)(A) or (B).  
6.    Adjustments to Options. 
Notwithstanding Article IV and Article V of the Plan or any provision of the Option Agreement to the contrary, in connection with any adjustment to the Options, the number of Common Shares deliverable on the exercise of an Option held by a US Taxpayer and the Exercise Price of an Option held by a US Taxpayer shall be adjusted in a manner intended to keep the Options exempt from Section 409A.  
7.      Amendment of Appendix
The Board shall retain the power and authority to amend or modify this Appendix to the extent the Board in its sole discretion deems necessary or advisable to comply with any guidance issued under Section 409A.  Such amendments may be made without the approval of any US Taxpayer.
8.    Non-transferability of Awards.  
Notwithstanding Section 3.6 or 4.8 or any other provision of the Plan, except as otherwise set forth in the applicable Option Agreement, no Option or any interest or participation therein may be transferred (other than by will or by the laws of descent and distribution) if such transfer would be treated as a “modification” of such Option for purposes of the Code.

SCHEDULE A
NOTICE OF GRANT OF STOCK OPTIONS

[Name & Address]     [Date]
Dear [Name]:
This is to advise you that you have been selected to participate in the Bauer Performance Sports Ltd. Second Amended and Restated 2011 Stock Option Plan (the “Plan”).  
Effective ______________, you will be granted          Options to acquire Common Shares  at a price of Cdn.$______ per Common Share.
 Your Options will vest as to one-quarter of the total number of Options granted to you, or         , on each of the first four anniversaries following the Date of Grant.  
Your Options are subject to the provisions of the Plan, a copy of which is enclosed.  Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Plan.  In the event of any discrepancy or conflict between this Notice of Grant and the Plan text, as amended from time to time in accordance with the terms thereof, the Plan text shall govern.
Subject to earlier termination in accordance with the Plan, the Expiry Date of your Options is the 10th anniversary of the Date of Grant. 
You should carefully review the terms and conditions of the Plan and seek advice from your legal and other advisors, prior to exercising your Options.
The Option grant described above is strictly confidential and the information concerning the number or price of Common Shares granted under this Option Agreement should not be disclosed to anyone.
If you have any questions about the Plan or your Options, please contact l.
Please sign and return a copy of this Notice of Grant.
Yours sincerely,

*     *     *     *     *
I acknowledge receipt of this Notice of Grant, a copy of the Plan (including all the schedules to the Plan), and agree to be bound by the terms thereof. By accepting this grant, I represent and warrant to the Corporation that my participation in the Plan is voluntary and has not been 

 

induced by expectation of engagement, appointment, employment, continued engagement, continued appointment or continued employment, as applicable.
DATED this _____ day of _______________, 20__.
_________________________________
 
Name (please print)
_________________________________
 
Signature

SCHEDULE B
Stock Option Plan Exercise Notice Form
I, __________________________________________________________, hereby exercise the option
(print name)
to purchase _____________________ Common Shares of Bauer Performance Sports Ltd. (the ”Corporation”) at a purchase price of Cdn.$_____________ per Common Share of the Corporation.  This Exercise Notice is delivered in respect of the option to purchase _________________ Common Shares of the Corporation that was granted to me on _______________________________________ pursuant to the Option Agreement entered into between the Corporation and me.
In connection with the foregoing, I either (check one): 
(  )    (i) enclose cash, a certified cheque, bank draft or money order payable to the Corporation in the amount of $____________________ as full payment for the Common Shares to be received upon exercise of the Option and the applicable withholding taxes; or
(  )    (ii) requests that the board of directors of the Corporation (the “Board”) authorizes the exercise of the Option in another manner and on such other terms in accordance with the Board’s discretion under the Plan.

	
		
	

Date
	

Optionee’s Signature

	 
	

(Print name)Exhibit

Exhibit 10.6 

PERFORMANCE SPORTS GROUP LTD.

AMENDED AND RESTATED DIRECTORS’ DEFERRED SHARE UNIT PLAN
October 14, 2014

 

Performance Sports Group Ltd.  
Amended and Restated Directors’ Deferred Share Unit Plan

	
	
	TABLE OF CONTENTS

SECTION  1.GENERAL PROVISIONS    1
 1.1Purpose    1
 1.2Definitions    1
 1.3Administration    3
 1.4Governing Law    3
 1.5Common Shares Reserved for Issuance    3
SECTION  2.ELECTION UNDER THE PLAN    3
 2.1Payment and Deferral of Director’s Remuneration    3
 2.2Termination of Service    4
SECTION  3.GENERAL    5
 3.1Capital Adjustments    5
 3.2Non-Exclusivity    6
 3.3Unfunded Plan    6
 3.4Successors and Assigns    6
 3.5Transferability of Deferred Share Units    6
 3.6Amendment and Termination    6
 3.7Tax Consequences    7
 3.8Withholding Taxes    7
 3.9US Participants    7
 3.10No Liability    7
 3.11No Right to Continued Board Membership    8
 3.12Effective Date    8

( 1 )

-2-

Section  1. General Provisions
		
	 1.1
	Purpose

The purpose of the Performance Sports Group Ltd. Amended and Restated Directors’ Deferred Share Unit Plan is to promote a greater alignment of interests between Eligible Directors (defined below) of the Company and the shareholders of the Company.
		
	 1.2
	Definitions

As used in the Plan, the following terms have the following meanings:
		
	(a)
	“Board” means the Board of Directors of the Company;

		
	(b)
	“Business Day” means any day, other than a Saturday or a Sunday, on which the Toronto Stock Exchange or New York Stock Exchange, as applicable, is open for trading;

		
	(c)
	“Code” means the United States Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder.

		
	(d)
	“Committee” means the Compensation Committee of the Board, as the same may be renamed or constituted from time to time;

		
	(e)
	“Common Share” means a common share in the capital of the Company;

		
	(f)
	“Company” means Performance Sports Group Ltd.;

		
	(g)
	“Conversion Date” means, with respect to any Fiscal Year quarter, the date used to determine the Market Price of a Common Share for the purposes of determining the number of Deferred Share Units to be credited in respect of that Fiscal Year quarter to an Eligible Director’s account; which shall be the date approved by the Committee which shall be, unless otherwise determined by the Committee, the first Business Day of the Fiscal Year quarter in respect of which the Deferred Share Unit is credited, but which shall not be earlier than the first Business Day or later than the last Business Day of the Fiscal Year quarter in respect of which the election is made;

		
	(h)
	“Deferred Share Unit” means a right granted by the Company to an Eligible Director to receive upon redemption, on a deferred basis, a Common Share or the cash equivalent thereof on the terms contained herein;

		
	(i)
	“Director’s Remuneration” means all cash director fees (i.e, retainers, meeting fees) and other cash compensation payable for services as an independent contractor by the Company in respect of the services provided to the Company by the Eligible Director in any Fiscal Year;

		
	(j)
	“Effective Date” has the meaning set out in section 3.12;

		
	(k)
	“Eligible Director” means each director of the Company who is not an employee of the Company (or any subsidiary of the Company) or an employee of a shareholder who is an insider of the Company (as that term has meaning in the Toronto Stock Exchange Company Manual);

-3-

		
	(l)
	“Filing Date” has the meaning set out in section 2.2(a);

		
	(m)
	“Fiscal Year” means the fiscal year of the Company, which as of the Effective Date is the annual period commencing June 1 and ending the following May 31.

		
	(n)
	“Market Price” means the volume weighted average trading price of Common Shares on the New York Stock Exchange (or, if such shares are not then listed and posted for trading on the New York Stock Exchange, on such other stock exchange in Canada or in the United States on which Common Shares are listed and posted for trading as may be selected for such purpose by the Committee) for the five Business Days on which Common Shares traded on such exchange preceding the applicable date; provided that, (i) the “Market Price” cannot be less than the U.S. dollar equivalent, if applicable, of the volume weighted average trading price of Common Shares on the primary exchange (based on the greatest trading volume for the Fiscal Year quarter immediately preceding the Conversion Date) for each of the five Business Days, as applicable, on which Common Shares traded on such exchange preceding the applicable date (using the noon rate of exchange as published by the Bank of Canada on each of the five Business Days); and (ii) in the event that Common Shares are not listed and posted for trading on any stock exchange, at the applicable date, the Market Price in respect thereof shall be the fair market value of a Common Share as determined by the Committee in its sole discretion; 

		
	(o)
	“Participant” means an Eligible Director who has made an election to receive Deferred Share Units;

		
	(p)
	“Plan” means the Performance Sports Group Ltd. Directors’ Deferred Share Unit Plan, as amended from time to time; 

		
	(q)
	“Proportionate Voting Share” means a proportionate voting share in the capital of the Company; and

		
	(r)
	“US Participant” means each Participant who is a United States citizen or resident or whose compensation under the Plan is subject to income taxation under the Code.

Where the context so requires, words importing the singular number include the plural and vice versa, and words importing the masculine gender include the feminine and neuter genders.
		
	 1.3
	Administration

Subject to the Committee reporting to the Board on all matters relating to this Plan and obtaining approval of the Board for those matters required by the Committee’s mandate, this Plan will be administered by the Committee which has the sole and absolute discretion to: (i) interpret and administer the Plan; (ii) establish, amend and rescind any rules and regulations relating to the Plan; and (iii) make any other determinations that the Committee deems necessary or desirable for the administration of the Plan.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems, in its sole and absolute discretion, necessary or desirable. Any decision of the Committee with respect to the administration and interpretation of the Plan shall be conclusive and binding on the Eligible Director. The Board may establish policies respecting minimum ownership of Common Shares of the Company by Eligible Directors and the ability to elect Deferred Share Units to satisfy any such policy.

-4-

		
	 1.4
	Governing Law

The Plan shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
		
	 1.5
	Common Shares Reserved for Issuance

The Company hereby reserves 100,000 Common Shares for issuance under this Plan, provided that Common Shares reserved for issuance pursuant to Deferred Share Units which are cancelled, terminated or settled without having been redeemed for Common Shares issued from treasury will again be available for issuance under this Plan.
Section  2.    Election Under the Plan
		
	 2.1
	Payment and Deferral of Director’s Remuneration

Subject to such rules, approvals and conditions as the Committee may impose and subject to Annex 1 in respect of US Participants, an Eligible Director may elect to receive the Director’s Remuneration, in whole or in part, in the form of Deferred Share Units.
		
	(s)
	Method of Electing for Director’s Remuneration. Unless otherwise permitted by the Committee, to elect to receive Deferred Share Units, the Eligible Director shall complete and deliver to the Chief Financial Officer of the Company, or other officer of the Company designated by the Committee, a written irrevocable election by no later than the last day of the Fiscal Year preceding the Fiscal Year respecting which the Director’s Remuneration becomes payable. The Eligible Director’s written election shall, subject to any minimum amount that may be required by the Committee, designate the portion or percentage of the Director’s Remuneration for the applicable Fiscal Year that is to be deferred into Deferred Share Units, with the remaining portion or percentage to be paid in cash in accordance with the Company’s regular practices of paying such cash compensation. In the absence of a designation to the contrary, the Eligible Director’s election for the most recently ended Fiscal Year with respect to the portion or percentage of the Director’s Remuneration that is to be deferred into Deferred Share Units shall continue to apply to all subsequent Director’s Remuneration payments until the Eligible Director submits another written election in accordance with this paragraph.  An Eligible Director shall only file one election in respect of the Director’s Remuneration payable in any Fiscal Year and the election shall be irrevocable for that Fiscal Year.  If no election is made, and no prior election remains effective, with respect to any Fiscal Year, the Eligible Director shall be deemed to have elected to defer any minimum amount that may be required by the Committee into Deferred Share Units and to receive the balance of the Director’s Remuneration for the applicable Fiscal Year quarter in cash.

		
	(t)
	Payment of Director’s Remuneration. The portion or percentage of the Director’s Remuneration credited as Deferred Share Units, as elected by the Participant, shall be determined on the first Business Day following the last day of each Fiscal Year quarter for which the Director’s Remuneration is payable.

		
	(u)
	Deferred Share Units. Deferred Share Units elected by a Participant pursuant to the Plan shall be credited to an account maintained for the Participant by the Company. The number of Deferred Share Units (including fractional Deferred Share Units) to be credited on the date prescribed by paragraph 2.1(b) shall be determined by dividing the 

-5-

amount of the Director’s Remuneration to be deferred into Deferred Share Units on such date by the Market Price per Common Share on the Conversion Date.
		
	(v)
	Dividends. When dividends are paid on Common Shares, a Participant shall be credited with dividend equivalents in respect of the Deferred Share Units credited to the Participant’s account as of the record date for payment of dividends. Such dividend equivalents shall be converted into additional Deferred Share Units (including fractional Deferred Share Units) based on the Market Price per Common Share on the date credited.

		
	 2.2
	Termination of Service

		
	(a)
	Termination of Service. Subject to Annex I in respect of US Participants,  a Participant who has retired from all positions as a director of the Company, or who, except as a result of death, has otherwise ceased for any reason to hold any such positions with the Company, may redeem the Deferred Share Units credited to the Participant’s account by filing with the Chief Financial Officer of the Company, or other officer of the Company designated by the Committee, one or more notices of redemption of Deferred Share Units in the prescribed form on or before December 15 of the first calendar year commencing after the date the Participant retires from or otherwise ceases to hold such positions (other than as a result of the Participant’s death). If the Participant fails to file a notice of redemption of the Deferred Share Units on or before such December 15, the Participant shall be deemed to have filed with the Chief Financial Officer of the Company a notice of redemption on such December 15 to redeem all Deferred Share Units credited to such Participant’s account. Each date on which a notice of redemption is filed or deemed to be filed with the Chief Financial Officer of the Company, or other officer of the Company designated by the Committee, is the “Filing Date”. Each notice of redemption filed by the Participant shall specify the number of Deferred Share Units to be redeemed and if such number is not so specified, it shall be deemed to be all the Deferred Share Units credited to the Participant’s account.

		
	(b)
	Death of Eligible Director. In the event of the death of a Participant while serving as a director of the Company, the Company shall redeem all Deferred Share Units credited to the Participant’s Account (without any action on the part of the deceased Participant’s estate).

		
	(c)
	Subject to Annex I in respect of US Participants, within the earlier of 5 Business Days following the Filing Date or 90 days following the Participant’s death, as applicable, the Company shall redeem, subject to Section  3.8, the Deferred Share Units (including fractional Deferred Share Units) required to be redeemed pursuant to section 2.2(a) or  2.2(b) by, in the discretion of the Company;

		
	(i)
	issuing from treasury or by market purchase one Common Share for each full Deferred Share Unit to be redeemed and making a lump sum cash payment (net of any applicable withholdings) in respect of any partial Deferred Share Unit to be redeemed, determined in the same manner as set out in section  2.2(c)(ii),

		
	(ii)
	making a lump sum payment (net of any applicable withholdings) in respect of all full and partial Deferred Share Units to be redeemed, equal to the number of Deferred Share Units (including fractional Deferred Share Units) to be 

-6-

redeemed on such Filing Date or date of death, as applicable, multiplied by the Market Price per Common Share determined as at such applicable date, or
		
	(iii)
	a combination of (i) and (ii). 

Section  1.     General
		
	 1.6
	Capital Adjustments

In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off or other distribution (other than normal cash dividends) of the Company’s assets to shareholders, or any other change in the capital of the Company affecting Common Shares, the Committee will make such proportionate adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change, with respect to (i) the number or kind of shares or other securities on which the Deferred Share Units are based; and (ii) the number of Deferred Share Units credited to any Eligible Director’s account and the number of Common Shares reserved for issuance hereunder.
		
	 1.7
	Non-Exclusivity

Nothing contained herein will prevent the Board from adopting other additional compensation arrangements for the benefit of Eligible Directors, subject to any required regulatory or shareholder approval.
		
	 1.8
	Unfunded Plan

Deferred Share Units shall be credited to an unfunded bookkeeping account established and maintained by the Company in the name of each Participant.  Notwithstanding any other provision of the Plan to the contrary, a Deferred Share Unit shall not be considered or construed as an actual investment in Common Shares.  To the extent any individual holds any rights under the Plan, such rights (unless otherwise determined by the Committee) shall be no greater than the rights of an unsecured general creditor of the Company.
		
	 1.9
	Successors and Assigns

The Plan shall be binding on all successors and assigns of the Company and each Eligible Director, including without limitation, the legal representatives of each Eligible Director, or any receiver or trustee in bankruptcy or representative of the Company or an Eligible Director.
		
	 1.10
	Transferability of Deferred Share Units

Rights respecting Deferred Share Units shall not be transferable or assignable other than by will or the laws of descent and distribution.
		
	 1.11
	Amendment and Termination

		
	(a)
	The Board may amend, suspend or terminate this Plan, or any portion thereof, at any time, subject to those provisions of applicable rules, regulations and policies of the Toronto Stock Exchange and the New York Stock Exchange, as applicable, if any, that require the approval of shareholders. 

		
	(b)
	No amendment, suspension or termination may materially adversely affect any Deferred Share Units, or any rights pursuant thereto, granted previously to any Participant without the consent of that Participant.

-7-

		
	(c)
	Notwithstanding the foregoing, any amendment of the Plan shall ensure that the Plan is continuously excluded from the salary deferral arrangements rules under the Income Tax Act (Canada) or any successor rules.

		
	(d)
	If this Plan is terminated, the provisions of this Plan and any administrative guidelines, and other rules adopted by the Committee and in force at the time of this Plan, will continue in effect as long as a Deferred Share Unit or any rights pursuant thereto remain outstanding. However, notwithstanding the termination of the Plan, the Committee may make any amendments to the Plan or the Deferred Share Units it would be entitled to make if the Plan were still in effect.

		
	(e)
	With the consent of the Participant affected thereby, the Committee may amend or modify any outstanding Deferred Share Unit in any manner to the extent that the Committee would have had the authority to initially grant the Deferred Share Units so modified or amended.

		
	 1.12
	Tax Consequences

It is the responsibility of the Participant to complete and file any tax returns which may be required under Canadian and U.S. tax laws within the periods specified in those laws as a result of the Participant’s participation in the Plan. The Company shall not be held responsible for any tax consequences to a Participant as a result of the Participant’s participation in the Plan.
		
	 1.13
	Withholding Taxes

The Company may take such steps as are considered necessary or appropriate for the withholding of any taxes which the Company is required by any law or regulation of any governmental authority whatsoever to withhold in connection with any payment under the Plan including, without limiting the generality of the foregoing, the withholding of all or any portion of any payment or the withholding of the issue of Common Shares to be issued upon the redemption of any Deferred Shares Units, until such time as the Participant has paid the Company for any amount which the Company is required to withhold with respect to such taxes.
		
	 1.14
	US Participants

Compensation payable under the Plan to US Participants is intended to be exempt from taxes and penalties under Section 409A of the Code and the regulations issued thereunder, and the Plan (including Annex I) and all Deferred Share Units shall be construed, interpreted and administered in compliance with such intent. If the Committee determines that any amounts payable hereunder may be taxable to a Participant under Section 409A, the Committee may (i) subject to Section 3.6, adopt such amendments to the Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and/or (ii) take such other actions as the Committee determines necessary or appropriate to avoid or limit the imposition of an additional tax under Section 409A; provided, that neither the Company nor any of its subsidiaries nor any other person or entity shall have any liability to a Participant (or any beneficiary thereof) with respect to any tax imposed by Section 409A.  Annex I sets forth special terms of the Plan applicable to US Participants.
		
	 1.15
	No Liability

The Company shall not be liable to any Participant for any loss resulting from a decline in the market value of any Common Shares.

-8-

		
	 1.16
	No Right to Continued Board Membership

Nothing contained herein shall (i) be construed as conferring upon any Participant the right to continue as a member of the Board, (ii) affect in any way the right of the Company or shareholders to terminate such membership, or (iii) affect in any way the rights of any party contained in any agreement governing a Participant’s service as a member of the Board or other agreement governing the Participant’s non-employee services to the Company.
		
	 1.17
	Effective Date

This Plan was initially adopted by the Board on September 18, 2012 (the “Effective Date”) and amended and restated on October 14, 2014. Should any changes to this Plan be required by any securities commission or other governmental body of any jurisdiction of Canada or the United States to which this Plan has been submitted or by any stock exchange on which the Common Shares may from time to time be listed, such changes will be made to this Plan as are necessary to conform with such requests and, if such changes are approved by the Board, this Plan, as amended, will remain in full force and effect in its amended form as of and from that date.

ANNEX I TO PERFORMANCE SPORTS GROUP LTD. DIRECTORS’ DEFERRED 
 SHARE UNIT PLAN FOR US PARTICIPANTS
The following additional or special terms and conditions shall apply to all Eligible Directors who are US Participants.
In the event that there is any conflict between the terms and conditions of the Plan and the provisions of this Annex I, this Annex I shall govern.
		
	Section 2.
	Election Under the Plan.  With respect to US Participants, notwithstanding any other provision of the Plan to the contrary,

2.1    Payment and Deferral of Director’s Remuneration
		
	(e)
	Method of Electing for Director’s Remuneration.  Each Participant’s irrevocable written deferral election with respect to Director Remuneration otherwise payable to him for services rendered in a Fiscal Year must be provided to the Company in the manner set forth in Section  2.1(a) no later than the last day of the Fiscal Year immediately preceding the Fiscal Year with respect to which such deferral election relates; provided, however, that with respect to Director Remuneration related to the first Fiscal Year in which an Eligible Director becomes eligible to participate in the Plan (including the 2013 Fiscal Year), the Eligible Director’s completed election form must be received by the Company within 30 days following the date on which such Eligible Director first becomes eligible to participate in the Plan (provided that such election shall relate only to amounts payable for services performed after the date such Election Form is so received).

2.2    Termination of Service
		
	(d)
	Redemption of Deferred Share Units.  Each Participant’s Deferred Share Units shall be redeemed in full on the earlier to occur of (A) the Participant’s separation from service 

-1-

with the Company for any reason and (B) a Change in Control (such earlier date, the “Redemption Date”).
		
	(a)
	Deferred Share Units (including fractional Deferred Share Units) to be redeemed pursuant to section 2.2(d) on the Redemption Date shall be redeemed by, in the discretion of the Company,

		
	(i)
	issuing to the Participant one Common Share for each full Deferred Share Unit to be redeemed and making a lump sum cash payment (net of any applicable withholdings) determined in the same manner as set out in section 2.2(e)(ii) in respect of any partial Deferred Share Unit to be redeemed;

		
	(ii)
	making a lump sum payment (net of any applicable withholdings) in respect of all full and partial Deferred Share Units to be redeemed, equal to the number of Deferred Share Units (including fractional Deferred Share Units) to be redeemed on such Payment Designation Date multiplied by the closing market price Common Share on the Toronto Stock Exchange on the trading date immediately preceding the Redemption Date (or, if such shares are not then listed and posted for trading on the Toronto Stock Exchange, on such other stock exchange in Canada on which Common Shares are listed and posted for trading as may be selected for such purpose by the Committee); provided that, in the event that Common Shares are not listed and posted for trading on any stock exchange at the applicable date, the price in respect thereof for purposes of this Section 2.2(e) shall be the fair market value of a Common Share as determined by the Committee in its sole discretion, or

		
	(iii)
	a combination of (i) and (ii). 

		
	(f)
	“Change in Control” for purposes of this Annex I means a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Code.

		
	(g)
	“Separation from service” for purposes of this Annex I has the meaning given to such term under Section 409A(a)(2)(A)(i) of the Code and U.S. Treasury regulation section 1.409A-1(h).

		
	(h)
	Advanced Redemption.  Notwithstanding anything herein to the contrary, if any portion of a Participant’s Deferred Share Units is required to be included in income by the Participant prior to the Redemption Date due to a violation of the requirements of Code Section 409A, the Participant may petition the Committee for the redemption of those portions of his or her Deferred Share Units that are required to be so included in income. As soon as reasonably practicable following the grant of such a petition, which grant shall not be unreasonably withheld, the Company shall redeem a portion of such Participant’s Deferred Share Units equal to the amount required to be included in income as a result of the failure of the Plan to meet the requirements of Code Section 409A; provided, however, that in no event may the number of Deferred Share Units redeemed exceed the total number of Deferred Share Units credited to such Participant under the Plan.

-2-

		
	(i)
	No Acceleration or Other Change.  Except as provided in Section 2.2(e) of this Annex I, no acceleration or other change as to the time and form of payment in respect of Deferred Share Units shall be permitted following the date on which the Participant’s deferral election becomes irrevocable as provided under Section 2.1 of this Annex I except to the extent permitted and in the manner specified under Treasury Regulations promulgated under Section 409A of the Code; provided that if the Participant is a “specified employee” within the meaning of Code Section 409A, payments in respect of his or her Deferred Share Units in connection with such Participant’s separation from service shall be subject to any delay required under Code Section 409A(a)(2)(B)(i) and the regulations thereunder.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00249-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00249-of-00352.parquet"}]]