EXTENDICARE INC.
AMENDED AND RESTATED
SUBORDINATE VOTING SHARE STOCK OPTION PLAN
Definitions
1. In this Plan:
(a) "Shares" means Subordinate Voting Shares of the Corporation;
(b) "employment" means a service as a director or an officer of,
or full-time employment with, the Corporation or any
affiliated corporation and includes retirement from any such
service or employment and "employee" has a corresponding
meaning;
(c) "affiliated corporation" means at any time any company or
corporation at such time designated as such by the directors
of the Corporation;
(d) "termination of employment" means termination of employment
for any reason other than death or retirement, but does not
include a change of employment between the Corporation and any
affiliated corporation or between two affiliated corporations;
(e) "Offer" means an offer (whether or not approved or recommended
by the directors) to purchase Shares made to all or
substantially all holders of Shares;
(f) "option year" with respect to any option granted pursuant
hereto means any period of 12 months commencing on the date of
granting of such option or any anniversary thereof; and
(g) "grantee" means an employee to whom an option has been
granted.
Grant of Options and Option Price
2. Options to purchase Shares may be granted from time to time hereafter
in the discretion of the directors to such employees as the directors
shall from time to time determine. The number of Shares covered by each
option shall be fixed by the directors at the time of granting thereof
which aggregate number shall not exceed the number provided for in
section 3 of the Plan. Subject to regulatory approval, the price per
Share at which the Shares may be purchased shall be fixed by the
directors at the time of the grant of such option but shall be not less
than the price per Share which is equal to the closing price (or if no
closing price, the simple average of the bid ask price) per Share
quoted on The Toronto Stock Exchange on the trading day prior to the
date on which the option is granted.
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Shares Subject to Option
3. Options may be granted to purchase an aggregate of up to but not
exceeding 5,769,400 authorized but unissued Shares, provided that any
and all options which are granted shall be subject to adjustment
pursuant to the provisions of section 8 hereof. The aggregate number of
Shares reserved for issuance to any one person will not exceed 5% of
the aggregate of the issued and outstanding Shares and common shares of
the Corporation outstanding from time to time (on a non-diluted basis).
For the purposes of this section 3, reference to any "one person" shall
include associates of such person in the event such person is an
insider of the Corporation with the result that the aggregate number of
Shares reserved for issuance to any one insider together with such
insider's associates shall not exceed 5% of the aggregate of the issued
and outstanding Shares and common shares of the Corporation outstanding
from time to time (on a non-diluted basis). The terms "associate" and
"insider" shall have the meanings assigned to them in the Securities
Act (Ontario), as amended from time to time, except that persons who
fall within the definition of "insider" solely by virtue of being a
director or senior officer of a subsidiary of the Corporation shall not
be considered insiders for the purposes hereof. Shares in respect of
which options have been granted but have been terminated or expire and
are unexercised are available for subsequent options.
Term of Options
4. Every option shall be irrevocable until the expiry of:
(a) five option years commencing on the date of granting thereof;
(b) 270 days following the death of the grantee;
(c) 90 days following the termination of employment of the
grantee; or
(d) the period specified in a notice given pursuant to section 8
hereof;
whichever shall first occur.
Exercise of Options
5. Subject to the provisions of sections 3 and 4 hereof, the directors may
in their discretion determine that the maximum aggregate number of
Shares purchasable pursuant to any option on any date during the term
thereof shall depend on the number of complete option years elapsed
during such term prior to such date and shall be a percentage of the
total number of Shares covered thereby. Such determination shall be
made at the time of the grant of the option. The maximum aggregate
number of Shares purchasable pursuant to any option after the death or
termination of employment of the grantee shall not exceed the number
which were purchasable on the date of death or termination of
employment of the grantee, as the case may be.
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6. Subject to the provisions hereof, any option shall be exercisable at
any time and from time to time during the term thereof with respect to
all or any lesser number of the Shares covered thereby by written
notice given to the Corporation in the form attached to the option
agreement specifying the number of Shares in respect of which the
option is being so exercised at such time, accompanied by payment in
full for such Shares at the price per Share specified in the option.
7. No option shall be exercisable except by the grantee or the legal
personal representative or representatives of the grantee.
Corporate Reorganizations
8. If any of the following events occur:
(a) the Corporation is reorganized, liquidated or dissolved;
(b) the Corporation is amalgamated, merged or consolidated with
another corporation;
(c) the Shares are consolidated, subdivided or otherwise changed,
or further Shares are issued by way of stock dividends;
(d) the directors propose that the Corporation take steps to
complete any of the events referred to in subsections (a), (b)
or (c) of this section 8; or
(e) an Offer is made;
the directors may, in their sole discretion, subject to regulatory
approval, make any or all of the following adjustments or take any or
all of the following actions in order to preserve as nearly as may be
possible the original scope and intent of this agreement:
(A) adjust outstanding options to cover a different class and
number of shares of the Corporation or of another issuer,
adjust the number of Shares covered by the options, and/or
adjust the exercise price of the options;
(B) by written notice to each grantee, require that such grantee's
option shall be terminated after the time specified in such
notice (which in no event shall be shorter than 30 days
following the giving of such notice), unless exercised within
the time specified in such notice;
(C) advance the dates upon which any or all outstanding options
shall be exercisable, without regard to whether the options
have otherwise vested in accordance with its terms; or
(D) make any other adjustments, or take any other action, as the
directors in their sole discretion shall deem appropriate.
The directors shall give notice to the grantee designating such
adjustments or actions whereupon this agreement shall, without further
act or formality, be amended accordingly. Any adjustments or actions
taken by the directors under this section 8 shall be final and binding
for all purposes of this agreement.
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Evidence of Options
9. Every option granted pursuant hereto shall be embodied in a written
instrument substantially in the form of the option agreement annexed
hereto as Exhibit I which agreement is incorporated into this Plan.
Amendment or Discontinuance of Plan
10. Subject to regulatory approval, the directors may amend or discontinue
the Plan at any time but, subject to section 8, no such amendment may
increase the aggregate maximum number of Shares that may be subject to
option under the Plan, change the manner of determining the minimum
option price, extend the option period under any option beyond 10
years, extend the period during which options may be granted or,
without the consent of the grantee, alter or impair any option
previously granted to a grantee under the Plan.
Interpretation
11. The Plan shall be construed according to the laws of the Province of
Ontario. The Plan shall also comply with the requirements of The
Toronto Stock Exchange and the Montreal Exchange (collectively, the
"Exchanges"). In the event of any differences arising between the
provisions of the Plan and the requirements of the Exchanges, the
requirements of the Exchanges shall apply.
Liability
12. No director, officer or employee of the Corporation or any affiliate or
associated company shall be personally liable for any act taken or
omitted in good faith in connection with the Plan.
Effective Date
13. The Plan, as amended to give effect to articles of amendment of the
Corporation dated April 25, 1996, shall be effective from December 13,
1995.
WITNESS the adoption of this Plan by the Corporation.
By: _______________________________
By: _______________________________
EXHIBIT 1
OPTION AGREEMENT
SUBORDINATE VOTING SHARES
AGREEMENT made as of the [DAY] day of [MONTH, YEAR].
B E T W E E N:
EXTENDICARE INC., a company incorporated under the laws of
Canada,
(hereinafter called the "Corporation")
OF THE FIRST PART
- and -
[GRANTEE'S NAME HERE]
of the City of [CITY], in the State/Province of [STATE/PROVINCE]
(hereinafter called the "Grantee")
OF THE SECOND PART
WHEREAS:
(a) the directors of the Corporation have provided for the granting to
directors, officers and employees of the Corporation or any designated
affiliated corporation thereof of options to purchase Subordinate
Voting Shares of the Corporation; and
(b) pursuant to a resolution dated [MONTH, DAY, YEAR] (the "date of
grant"), the directors of the Corporation have granted to the Grantee
an option to purchase the number of Subordinate Voting Shares of the
Corporation hereinafter referred to and have fixed the times when and
the price per Subordinate Voting Share at which such Subordinate Voting
Shares may be purchased;
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WITNESSETH as follows:
Definitions
1. In this agreement:
(a) "Shares" means Subordinate Voting Shares of the Corporation;
(b) "employment" means service as a director or an officer of, or
full-time employment with, the Corporation or any affiliated
corporation and includes retirement from any such service or
employment;
(c) "affiliated corporation" means at any time any company or
corporation at such time designated as such by the directors
of the Corporation;
(d) "termination of employment" means termination of employment
for any reason other than death or retirement, but does not
include a change of employment between the Corporation and any
affiliated corporation or between two affiliated corporations;
(e) "Offer" means an offer (whether or not approved or recommended
by the directors) to purchase Shares made to all or
substantially all holders of Shares; and
(f) "option year" means any period of 12 months commencing on the
date of the grant or any anniversary thereof.
Grant of Option and Option Price
2. The Corporation hereby confirms the grant to the Grantee of an option
(the "Option") to purchase from the Corporation up to [# OF SHARES]
presently unissued Shares, at the price of [$XX] per Share being not
less than the price per Share which is equal to the closing price (or
if no closing price, the simple average of the bid and ask price) per
Share quoted on The Toronto Stock Exchange on the trading day prior to
the date of grant, upon and subject to the terms and conditions
hereinafter set out.
Term of Option
3. The term of the Option shall be from the date hereof until the expiry
of:
(a) five option years commencing on the date of grant of the
Option;
(b) 270 days following the death of the Grantee;
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(c) 90 days following the termination of employment of the
Grantee; or
(d) the period specified in a notice given pursuant to section 7;
whichever shall first occur.
Exercise of Option
4. The maximum aggregate number of Shares which may be purchased pursuant
to the Option on any date during the term thereof shall depend on the
number of complete option years elapsed during such term prior to such
date, and shall be a percentage of the total number of Shares referred
to in section 2 ascertained by reference to the following table:
Option Years Elapsed Percentage
-------------------- ----------
1 25
2 50
3 75
4 100
provided, however, that:
(a) the maximum aggregate number of Shares which may be purchased pursuant
to the Option after the death or termination of employment of the
Grantee shall in no event exceed the number which could be so purchased
in accordance with the foregoing provisions of this section 4 on the
date of such death or termination, as the case may be; and
(b) except as provided in subsection (a) of this section 4, there shall be
no restriction on the number of the Shares referred to in section 2
which may be purchased during the period specified in a notice given
pursuant to section 7.
5. Subject to the provisions hereof, the Option shall be exercisable at
any time and from time to time during the term thereof with respect to
all or any lesser number of the Shares referred to in section 2 by
written notice given to the Corporation in the form attached to this
agreement specifying the number of Shares in respect of which the
Option is being so exercised at such time, accompanied by payment in
full for such Shares at the price per Share specified in section 2,
whereupon the purchase pursuant to the Option of the Shares so
specified shall be deemed for all purposes to have been completed and
the Option exercised to such extent.
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6. The Option shall be exercisable only by the Grantee or the legal
personal representative or representatives of the Grantee.
Corporate Reorganizations
7. If any of the following events occur:
(a) the Corporation is reorganized, liquidated or dissolved;
(b) the Corporation is amalgamated, merged or consolidated with
another corporation;
(c) the Shares are consolidated, subdivided or otherwise changed,
or further Shares are issued by way of stock dividends;
(d) the directors propose that the Corporation take steps to
complete any of the events referred to in subsections (a), (b)
or (c) of this section 7; or
(e) an Offer is made;
the directors may, in their sole discretion, subject to regulatory
approval, make any or all of the following adjustments or take any or
all of the following actions in order to preserve as nearly as may be
possible the original scope and intent of this agreement:
(A) adjust the Option to cover a different class and number of
shares of the Corporation or of another issuer, adjust the
number of Shares covered by the Options and/or adjust the
exercise price of the Option;
(B) by written notice to the Grantee (or the legal personal
representative of the Grantee, as appropriate), require that
the Option shall be terminated after the time specified in
such notice (which in no event shall be shorter than 30 days
following the giving of such notice), unless exercised within
the time specified in such notice;
(C) advance the dates upon which the Option shall be exercisable,
without regard to whether the Option has otherwise vested in
accordance with its terms; or
(D) make any other adjustments, or take any other action, as the
directors in their sole discretion shall deem appropriate.
The directors shall give notice to the Grantee (or the legal personal
representative of the Grantee, as appropriate), designating such
adjustments or actions whereupon this agreement shall, without further
act or formality, be amended accordingly. Any adjustments or actions
taken by the directors under this section 7 shall be final and binding
for all purposes of this agreement.
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Notices
8. Any notice to be given pursuant to the provisions hereof shall be
deemed to have been validly given if reduced to writing and either
mailed by prepaid ordinary post or delivered to the party to whom the
same is to be given at the following applicable address:
the Corporation Extendicare Inc.
Suite 700
3000 Steeles Ave. East
Markham, Ontario
L3R 9W2
Attention: Secretary
the Grantee or
the legal personal
representative or
representative of
the Grantee
or at such other address as the party to whom the same is to be given
shall have theretofore designated by notice given in the manner
specified in this section; and any such notice shall be deemed to have
been given on the day of delivery thereof or on the day following the
day of mailing thereof in Canada, as the case may be.
Applicable Law
12. This agreement and the provisions hereof shall be governed by and
construed according to the laws of the Province of Ontario.
The next page is page 6.
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Signature page for the Option Agreement for [# OF SHARES] Subordinate Voting
Shares at [$XX] per share, made as of the [DAY] day of [MONTH, YEAR], to expire
[MONTH, DAY, YEAR]. Options vest over four years at 25% each year.
The agreement is between: Extendicare Inc. and [NAME OF GRANTEE] of the City of
[CITY], in the State/Province of [STATE/PROVINCE].
IN WITNESS WHEREOF the parties hereto have executed the Option Agreement.
EXTENDICARE INC.
By: ______________________
______________________
)
)
_______________________________ ) ______________________
Witness to Grantee's Signature ) Grantee
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Signature page for the Option Agreement for [# OF SHARES] Subordinate Voting
Shares at [$XX] per share, made as of the [DAY] day of [MONTH, YEAR], to expire
[MONTH, DAY, YEAR]. Options vest over four years at 25% each year.
The agreement is between: Extendicare Inc. and [NAME OF GRANTEE] of the City of
[CITY], in the State/Province of [STATE/PROVINCE].
IN WITNESS WHEREOF the parties hereto have executed the Option Agreement.
EXTENDICARE INC.
By: ______________________
______________________
)
)
_______________________________ ) ______________________
Witness to Grantee's Signature ) Grantee
PLEASE DETACH AND RETURN IN THE SELF-ADDRESSED ENVELOPE TO [NAME],
VICE-PRESIDENT, HUMAN RESOURCES.