CAE INC.
EMPLOYEE STOCK PURCHASE PLAN
Effective as of April 1, 2000
CAE INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The purpose of the Plan is to provide Employees with an opportunity to
participate in the ownership of the Company on an ongoing basis through
purchases of Shares. The Plan is established effective April 1, 2000 and
shall operate as an employees profit sharing plan as defined in section 144
of the Income Tax Act (Canada) or any successor provision.
2. DEFINITIONS
As used in the Plan:
"Affiliate" means an affiliated body corporate of the Company within the
meaning of subsection 2(2) of the Canada Business Corporations Act.
Notwithstanding any other provision of the Plan, the Committee may
determine whether and as of what date employees of any particular Affiliate
may participate herein.
"Board" means the Board of Directors of the Company.
"Business Day" means any day of the year, other than a Saturday, Sunday or
any day on which banks are required or authorized to close in Toronto,
Ontario.
"Company" means CAE Inc. or a successor.
"Committee" means the Compensation Committee of the Board or such other
committee as may be designated by the Board.
"Effective Date" means April 1, 2000.
"Employee" means a permanent full-time or permanent part-time employee of
the Company or of an Affiliate. For purposes of the Plan, a transfer from
the Company to an Affiliate, from an Affiliate to the Company, or between
Affiliates shall be deemed not to constitute a resignation or termination
of employment.
"Employer Contributions" means contributions made to the Plan by the
Company or an Affiliate pursuant to section 6.
"Enrollment/Modification Form" means the Enrollment/Modification Form in
the form determined by the Committee.
"Group RRSP" means any group registered retirement savings plan
administered by the Trustee or an affiliate thereof for the benefit of
Employees that is designated by the Committee for purposes of the Plan.
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"Initial Participant Contribution" means a one-time contribution made by a
Participant in the amount of Cdn.$500, the election for which contribution
must be indicated on an Enrollment/Modification Form filed within two (2)
months after the later of the Effective Date and the first enrollment date
after the Participant qualifies as an Employee.
"Ordinary Participant Contributions" means periodic contributions made by a
Participant computed as a percentage of Salary.
"Participant" means an Employee who has enrolled in the Plan.
"Participant Contributions" means Initial Participant Contributions and/or
Ordinary Participant Contributions, as the context requires.
"Pay Period" means the Participant's pay period.
"Plan" means this Employee Stock Purchase Plan, as it may be amended from
time to time, and which is intended to constitute an employees profit
sharing plan as defined in section 144 of the Income Tax Act (Canada) or
any successor provision.
"Plan Year" means any calendar year during which the Plan is in force.
"Profits" means current profits, retained earnings, and any other amount of
or in respect of the Company or an Affiliate considered by the Canada
Customs and Revenue Agency to constitute profits for purposes of subsection
144(10) of the Income Tax Act (Canada) or any successor provision.
"Retirement" means a cessation of employment entitling the Participant to
receive an immediate pension benefit under a Company or Affiliate pension
plan, except in the case of a termination for cause (other than mental or
physical incapacity).
"Salary" means the base salary of the Employee for the relevant period,
excluding overtime, bonuses, and other special or one-time payments
received in that period.
"Shares" means common shares in the capital stock of the Company.
"Trust Fund" means the assets of the Plan held by the Trustee, consisting
of the Participant Contributions, the Employer Contributions, the Shares
purchased therewith and the income derived therefrom, the whole as more
fully set out at paragraph 7.1.
"Trustee" means such trustee as may from time to time be appointed by the
Company.
"Unvested Shares" means Shares in a Participant's account purchased with
the Employer Contributions in the current and two previous Plan Years.
"Vested Shares" means Shares in a Participant's account which are not
Unvested Shares.
"Withdrawal/Termination Form" means the Withdrawal/Termination Form in the
form determined by the Committee.
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Unless the context otherwise requires, references to the masculine shall be
deemed to include references to the feminine, and vice versa, and
references to the singular shall be deemed to include references to the
plural, and vice versa.
3. REGULATORY APPROVAL
This Plan is subject to all necessary regulatory approvals.
4. ELIGIBILITY
4.1 Eligible Employees - Each Employee shall be eligible to participate in the
Plan.
4.2 No Effect on Employment - The terms of employment of an Employee by the
Company or an Affiliate shall not be affected by his participation in the
Plan. Nothing contained in the Plan or in any documentation pertaining
thereto shall confer upon any Participant any right with respect to
continuance of employment by the Company or any Affiliate or interfere in
any way with the right of the Company or any Affiliate to terminate the
employment of any Participant. Under no circumstances shall any person who
is or has at any time been a Participant be able to claim from the Company
or an Affiliate or any related person any sum or other benefit to
compensate him for loss of any rights or benefits under or in connection
with this Plan or by reason of his participation herein.
4.3 Enrollment Modification Form - Each Employee may elect to participate in
the Plan as of the Effective Date or any subsequent July 1, October 1,
January 1, or April 1, by completing and delivering to the Company the
Enrollment/Modification Form. Delivery of a duly completed and executed
Enrollment/Modification Form shall constitute acceptance by the Employee of
all the terms and conditions of the Plan and of any regulations adopted or
to be adopted pursuant to paragraph 13.1.
5. PARTICIPANT CONTRIBUTIONS
5.1 Amount of Contributions - The Employee shall indicate in the
Enrollment/Modification Form whether he wishes to make an Initial
Participant Contribution and/or the amount of any Ordinary Participant
Contributions he wishes to make. Such amount of Ordinary Participant
Contributions must be equal to any whole percentage of the Participant's
Salary from 1 percent to 10 percent. In the event that the Salary of a
Participant varies at any time in the course of a Plan Year, the Ordinary
Participant Contributions of such Participant shall be automatically
adjusted accordingly in order to remain equal to the selected percentage of
the Participant's Salary.
5.2 Manner of Payment - Each Participant shall make Participant Contributions
to the Plan by regular scheduled payroll deductions at the end of each Pay
Period. Each payroll deduction in respect of Ordinary Participant
Contributions shall be in an amount equal to the percentage of such
Participant's Salary for such Pay Period selected by the Participant on his
Enrollment/Modification Form. Each payroll deduction in respect of the
Initial
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Participant Contribution shall be in the same percentage, provided,
however, that such Participant may instead make such Initial Participant
Contribution by way of cheque payable to the Trustee no later than two
months after the later of the Effective Date and the first enrollment date
after he qualifies as an Employee. The Participant Contributions in any
given Plan Year shall be made on the basis of the year of receipt of the
Salary from which such Participant Contributions are deducted. Participant
Contributions shall commence as soon as practicable but in no event later
than the first Pay Period following the Pay Period in which the
Enrollment/Modification form is received.
5.3 Modification of Contributions - A Participant may modify the amount of his
Ordinary Participant Contributions to the Plan up to twice in any Plan
Year, by completing and delivering to the Company an
Enrollment/Modification Form. Such modification shall take effect as soon
as practicable but in no event later than the first Pay Period following
the Pay Period in which the Enrollment/Modification Form is received, at
which time the Ordinary Participant Contributions shall be adjusted
accordingly, provided such adjustment conforms with paragraph 5.1.
5.4 No Retroactive Contributions - A Participant may not make retroactive
Participant Contributions to the Plan, unless the Committee determines
otherwise.
5.5 No Lump Sum Contributions - Subject to paragraph 5.2, a Participant may not
make lump sum Participant Contributions to the Plan, unless the Committee
determines otherwise.
5.6 Paid Leave of Absence - A Participant on authorized Company-paid or
Affiliate-paid leave of absence shall continue to make Participant
Contributions through payroll deduction, as provided for in paragraph 5.2,
unless such Participant has completed and delivered to the Company an
Enrollment/Modification form stating that he wishes that his Participant
Contributions be suspended during the period of such absence, in which
event paragraph 5.8 shall become applicable with such modifications as the
context requires.
5.7 Maternity Leave - A Participant on maternity leave shall continue to make
Participant Contributions by way of post-dated cheques, unless such
Participant has completed and delivered to the Trustee an
Enrollment/Modification Form stating that she wishes that her Participant
Contributions be suspended during the period of such absence, in which
event paragraph 5.8 shall become applicable with such modifications as the
context requires.
5.8 Lay-off, Unpaid Leave of Absence - In the case of lay-off or authorized
unpaid leave of absence, and subject to paragraph 5.10, the Participant
Contributions of the Participant shall be automatically suspended. Such
suspension shall apply until the Participant returns to work, in which case
the Participant may resume his Participant Contributions by completing and
delivering to the Company an Enrollment/Modification Form. Participant
Contributions shall resume as soon as practicable but in no event later
than the first Pay Period following the Pay Period in which the
Enrollment/Modification Form is received.
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During any suspension of Participant Contributions by a Participant on
lay-off or unpaid leave of absence, the Participant shall remain eligible
for Company Contributions earned prior to such suspension, subject to
section 6.
5.9 Long-Term Disability - In the event that a Participant becomes disabled and
entitled to benefits under a recognized long-term disability program, and
subject to paragraph 5.10, the Participant Contributions of the Participant
shall be automatically suspended. Such suspension shall apply until the
Participant returns to work, in which case the Participant may resume his
Participant Contributions by completing and delivering to the Company an
Enrollment/Modification Form. Participant Contributions shall resume as
soon as practicable but in no event later than the first Pay Period
following the Pay Period in which the Enrollment/Modification Form is
received.
During any suspension of Participant Contributions by a Participant on
long-term disability, the Participant shall remain eligible for Employer
Contributions earned prior to such suspension, subject to section 6.
5.10 Continuing Contributions - A Participant to whom paragraph 5.8 or 5.9
applies may continue to contribute to the Plan by way of post-dated cheques
until the earlier of his return to work or the end of the Plan Year in
which the event described in such applicable paragraph occurs.
5.11 Voluntary Suspension of Contributions - A Participant may at any time, by
completing and delivering to the Company an Enrollment/Modification Form,
request that his Ordinary Participant Contributions be suspended. The
Participant will have the option of resuming his Ordinary Participant
Contributions at any time by completing and delivering to the Company a new
Enrollment/Modification Form. Ordinary Participant Contributions shall
resume as soon as practicable but in no event later than the first Pay
Period following the Pay Period in which the new Enrollment/Modification
Form is received. However, in the event of a second such suspension in the
same Plan Year, the Participant shall not be allowed to resume making
Participant Contributions until the next enrollment date.
During any suspension of Participant Contributions, the Participant shall
remain eligible for Employer Contributions earned prior to such suspension,
subject to section 6, and shall be considered a Participant in the Plan for
all purposes other than the making of Participant Contributions.
5.12 Remittance of Contributions - Participant Contributions withheld through
payroll deduction by the Company and each Affiliate in each Pay Period
shall be remitted by the Company and each Affiliate to the Trustee as soon
as practicable but not later than the fifth Business Day following the date
such withholding is effected. Participant Contributions described in
paragraph 5.7 or 5.10 shall be remitted by the Participant directly to the
Trustee by way of post-dated cheque.
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6. EMPLOYER CONTRIBUTIONS
Simultaneous with the relevant Participant Contribution or as soon as
practicable thereafter, the Company or the relevant Affiliate, as the case
may be, shall remit to the Trustee for the benefit of each Participant an
Employer Contribution out of Profits. Such Employer Contribution shall be
equal to: (a) 100 percent of the amount of the Participant's Initial
Participant Contribution, if any, and (b) 33.3 percent of the amount of the
relevant Ordinary Participant Contributions up to (i) 6 percent of Salary
less (ii) any amount described in (a); provided, however, that if there are
insufficient Profits to make an Employer Contribution computed according to
the preceding formula in a particular Plan Year, the Employer Contribution
for that Plan Year shall be reduced to Cdn.$100 per Participant. For the
avoidance of doubt, the Employer Contribution described in (b) for the
benefit of any Participant in respect of a Plan Year shall not exceed 2
percent of his Salary in that Plan Year.
7. TRUST FUND; ALLOCATIONS TO PARTICIPANTS
7.1 Assets of the Trust Fund - The Trustee shall receive from the Company and
the Affiliates the Participant Contributions of all the Participants made
in accordance with section 5 and the Employer Contributions made to the
Plan in accordance with section 6. Such contributions, the Shares acquired
therewith and the income thereon from the date of receipt by the Trustee
shall constitute the Trust Fund of the Plan and shall be held, invested,
managed, administered and dealt with by the Trustee pursuant to the terms
of the Plan. The Trustee shall, as soon as reasonably practicable, convert
into Canadian dollars any Participant Contributions and Employer
Contributions paid in another currency.
7.2 Allocations to Participants - The Trustee shall maintain a separate account
for each Participant. The Trustee shall credit to the account of a
Participant all Employer Contributions made for the benefit of the said
Participant, all Participant Contributions made by such Participant, and
all Shares acquired therewith. The Trustee shall allocate either absolutely
or contingently to each Participant all income received, capital gains
realized, and capital losses sustained by the Trust Fund on his account at
such time or times as the Trustee may determine but in any event, at least
annually. The Trustee shall credit to the Plan reserve all Unvested Shares
forfeited by Participants in accordance with paragraph 8.4.
8. SALE, WITHDRAWAL, TRANSFER, OR FORFEITURE OF SHARES
8.1 Right to Sell, Withdraw or Transfer - Upon completion and delivery to the
Company of a Withdrawal/Termination Form, a Participant may direct the
Trustee to sell, withdraw, or transfer some or all of the Vested Shares in
his account. In the first case, the Trustee shall pay to the Participant an
amount equal to the net proceeds of sale of those Shares which have been
sold at the Participant's direction. In the second case, the Trustee shall
transfer title and deliver to the Participant those Shares which have been
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withdrawn at the Participant's direction. In the third case, the Trustee
shall proceed in accordance with paragraph 8.3.
8.2 Exception for Unvested Shares - A Participant may not direct the Trustee to
sell or withdraw any Unvested Shares in his account. For purposes of this
paragraph 8.2, the Trustee shall track each Participant's Unvested Shares
separately from his Vested Shares.
8.3 Group RRSP Transfer - Beginning on such date as the Committee determines, a
Participant may direct the Trustee to transfer some or all of the Vested
Shares in his account into the Group RRSP. A Participant may not request
Share transfers to the Group RRSP more than once in any Plan Year. It is
the responsibility of the Participant to ensure that the aggregate of such
Group RRSP contributions and any contributions he makes to other registered
retirement savings plans does not exceed the allowable limit under the
Income Tax Act (Canada).
8.4 Termination for Cause; Resignation - In the event that the employment of a
Participant is terminated for cause or the Participant resigns, the
Participant's participation in the Plan shall be terminated. The Trustee
shall either transfer and deliver to the Participant or sell all of the
Vested Shares in the Participant's account, at the option of the
Participant. The transfer and delivery of the Shares or payment of the net
proceeds of sale, as the case may be, shall be effected as soon as
practicable but in no event later than five (5) days from the date the
Trustee receives notification of such termination.
The Participant shall not be entitled to acquire title to or receive
proceeds from the sale of his Unvested Shares. Such Shares shall be
forfeited and credited to the Plan reserve and may be utilized to satisfy
future Employer Contribution obligations.
8.5 Termination in Other Circumstances - In the event of the death, Retirement,
or involuntary termination without cause of a Participant, the Trustee
shall transfer and deliver or sell all of the Vested Shares and Unvested
Shares in the Participant's account to the Participant or the legal
representatives of the deceased Participant's estate, as the case may be.
The transfer and delivery or payment of the net proceeds of sale, as the
case may be, shall be effected as soon as practicable but in no event later
than five (5) days from the date the Trustee receives notification of such
termination.
9. INVESTMENTS
9.1 Contributions to Be Invested Solely in Shares - All Participant
Contributions and all Employer Contributions, as well as all income
thereon, shall be invested solely in the acquisition of Shares.
Notwithstanding the foregoing, all Participant Contributions and Employer
Contributions remitted to the Trustee shall, prior to the acquisition of
Shares therewith pursuant to paragraph 9.2, earn interest for the account
of the Participants.
9.2 Acquisition of Shares by Trustee - In the case of Participant
Contributions, Shares shall be purchased by the Trustee as soon as
reasonably practicable following receipt of the Participant Contributions
by the Trustee, as determined by the Trustee. In the case of Employer
Contributions, Shares shall be purchased by the Trustee as soon as
reasonably
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practicable following receipt of such Contributions from the Company or any
such longer period required by securities legislation, stock exchange
rules, or other relevant rules.
9.3 Source of Shares - The Trustee shall use the Participant Contributions and
the Employer Contributions to purchase Shares only on the open market,
through the facilities of The Toronto Stock Exchange or such other stock
exchange on which the Shares are listed as the Board shall from time to
time prescribe.
9.4 Registration of Shares - All the Shares purchased by the Trustee on behalf
of a Participant pursuant to the provisions hereof shall be registered in
the name of the Trustee, on behalf of such Participant. As long as such
Shares have not been forfeited pursuant to paragraph 8.4 and are governed
by the provisions of the Plan, they shall be held by the Trustee on behalf
of the Participant. However, all rights and privileges with respect to the
Shares, including voting rights, shall be exercised by the Participant
through the Trustee, and any dividends shall be credited to the
Participant's account.
9.5 Dividends - All dividends paid on Shares held by the Trustee on a
Participant's behalf shall be reinvested by the Trustee in the acquisition
of additional Shares as soon as practicable but in no event later than ten
(10) days following payment of the dividends, which Shares shall be
credited to the account of the Participant.
9.6 Shareholder Information; Right to Vote - The Trustee shall forward to each
Participant all the shareholder information, documentation and reports sent
by the Company to its shareholders. Prior to all meetings of the Company's
shareholders, the Trustee shall provide to the Participant a voting
instruction card so that the Participant may indicate thereon his
directions to the Trustee as to how he wishes the Trustee to vote on his
behalf and the Participant shall return such voting instruction card to the
Trustee. Should the Participant fail to provide the Trustee with the voting
instruction card, the Trustee shall refrain from voting the Shares credited
to the account of the Participant.
9.7 Discretion of Trustee - Notwithstanding paragraph 9.2, the Trustee, in its
discretion, may limit the daily volume of its purchases and sales of Shares
or make such purchases and sales over several trading days to the extent
that such action is deemed by it to be in the best interests of the
Participants. Should the purchase or sale of Shares by the Trustee in any
given month pursuant hereto be at various prices, the Trustee shall
establish an average purchase or sale price, as the case may be, applicable
for each Share in the relevant month.
9.8 Fractions of Shares - A Participant shall not be allowed in any
circumstances to withdraw or transfer a fraction of a Share pursuant to any
provision of the Plan. The value of any such fraction will be paid in cash.
9.9 No Share Value Guarantee - Neither the Company nor any Affiliate makes any
representation or warranty as to the future market value of any Shares
acquired in accordance with the provisions of the Plan.
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10. STATEMENTS OF ACCOUNT
10.1 Quarterly Statements - The Trustee will provide, on a quarterly basis, a
statement of account to each Participant setting out the activity relating
to the Participant's account for those periods ending at the end of March,
June, September and December of each Plan Year.
10.2 Up-to-Date Statements - Should a Participant request an up-to-date
statement of account, such statement may be made available at such other
time as may be agreed upon between the Company and the Trustee.
11. THE TRUSTEE
11.1 Change of Trustee - The Company as agent for each Participant may at any
time or times after providing ninety (90) days' written notice remove the
Trustee and appoint a successor or successors to fill any vacancy arising
for any reason whatever.
11.2 Delegation by Trustee - The Trustee may delegate to the Company or to any
corporation authorized to carry on the business of a trust company in
Canada the duty to maintain records and to furnish statements in connection
with all aspects of the Plan.
11.3 Indemnification - The Trustee shall be indemnified and held harmless by the
Company against and from any and all loss, cost, liability or expense
resulting from any claim, action, suit or proceeding to which it may be a
party or in which it may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid
by it in settlement thereof (with the Company's written approval) or paid
by it in satisfaction of a judgment in any such action, suit or proceeding,
except a judgment in favor of the Company based upon a finding of the
Trustee's wilful misconduct, negligence, or bad faith; subject, however, to
the condition that, upon the assertion or institution of any such claim,
action, suit or proceeding against it, the Trustee shall in writing give
the Company a reasonable opportunity, at the latter's expense, to handle
and defend the same within a time frame to be specified by the Trustee,
before the Trustee undertakes to handle and defend such claim, action, suit
or proceeding on its own behalf. The Company and the Participants shall be
indemnified and held harmless by the Trustee against and from any and all
loss, cost, liability or expense resulting from the wilful misconduct,
negligence or bad faith of the Trustee or of any person (other than the
Company) to which the Trustee has delegated any of its duties hereunder.
11.4 Certificates, Reports, Opinions - The Trustee shall be entitled to rely on
all certificates, reports, opinions and other documents furnished by any
broker, accountant, auditor or counsel to the Company and shall be fully
protected and indemnified by the Company in respect of any acts done in
good faith and in reliance on such certificates, reports, opinions or
documents.
11.5 Resignation of Trustee - The Trustee may resign its trust and be discharged
from all further duties and liabilities hereunder upon ninety (90) days'
written notice to the Company and each Participant or such shorter notice
as may be agreed upon.
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12. PARTICIPANT'S RIGHTS NOT TRANSFERABLE
Except as provided herein, the rights of a Participant pursuant to the
provisions of the Plan are non-assignable and non-transferable, in whole or
in part. No attempted assignment or transfer thereof, otherwise than in
accordance with the provisions hereof, shall be effective.
13. INTERPRETATION, REGULATIONS, AMENDMENT AND TERMINATION
13.1 Regulation and Delegation - The Committee may make, amend and repeal at any
time and from time to time such regulations not inconsistent herewith, as
it may deem necessary or advisable generally for the proper administration
and operation of the Plan. In particular, the Committee may delegate to any
person, group of persons or corporation such administrative duties and
powers as it sees fit, and the Committee may take such actions as are
necessary not to penalize a Participant moving to or from Canada at the
Company's request.
13.2 Interpretation - The Committee shall have the power to interpret the
provisions of the Plan from time to time. All decisions and interpretations
of the Committee respecting the Plan and all rules and regulations made
from time to time pursuant hereto shall be binding and conclusive on the
Company, the Affiliates, and all Participants and their respective legal
representatives and on all Employees eligible under the Plan to participate
herein.
13.3 Amendment - The Committee may amend at any time the provisions of the Plan
at its sole and complete discretion, except that no such amendment shall
operate so as to deprive a Participant of any rights acquired prior to the
date thereof or to relieve the Company of the obligation to make such
unremitted Employer Contributions as it would have been obliged to make in
respect of that Participant pursuant to section 6. Notwithstanding the
foregoing, if any provision of the Plan contravenes any applicable laws or
regulations or any rules, regulations, by-laws or policies of any
regulatory authority or stock exchange having jurisdiction or authority
over the Company, an Affiliate or the Plan, then the Committee may amend
such provision to the extent required to bring such provision into
compliance therewith.
13.4 Termination - The Company hopes and expects to maintain the Plan
indefinitely. However, the Committee reserves the right to terminate the
Plan at any time, in which event the Participants' rights will be governed
by paragraph 8.5 as if the Participants' Retirements had all occurred on
the date of the termination of the Plan.
14. COSTS
Except as otherwise provided for in this section 14, the Company shall pay
all costs of administering the Plan, including without limitation all the
fees and expenses of the Trustee. All brokerage fees relating to the
acquisition of Shares shall be borne by the Company. All brokerage and
other fees relating to the sale, transfer to the Group RRSP
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or withdrawal of Shares shall be paid by the relevant Participants, except
that the Company shall pay the said fees in respect of one (1) such
transaction per Participant in each Plan Year.
15. APPLICABLE LAW
The laws of the Province of Ontario and the laws of Canada applicable
therein shall apply to the Plan, any amendments thereto, and the
administration thereof, and all rights and obligations thereunder shall be
governed, construed and determined in accordance with such laws.
16. NON-CANADIAN EMPLOYEES
The Plan shall apply to Employees outside Canada as of the times and to the
extent determined by the Committee. The terms and conditions offered to
non-Canadian Employees may vary and be more limited than those set forth
above, depending on local regulations and restrictions. For greater
certainty, the application to non-Canadian Employees of the foregoing Plan
provisions shall be determined: (a) in accordance with any schedules added
to the Plan at the Committee's discretion; and (b) as the context requires.