Exhibit 2.3
FANTOM TECHNOLOGIES INC.
AMENDED AND RESTATED
KEY EMPLOYEES' SHARE OPTION AND
SHARE APPRECIATION RIGHTS PLAN - JULY 1, 2000
1. Purposes of the Plan
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The principal purposes of this Key Employees' Share Option and Share
Appreciation Rights Plan (the "Plan") are to promote a proprietary interest in
the Corporation among Employees, to attract and retain Employees and to provide
an incentive to Employees who are in a position to contribute to the long-term
growth and success of the Corporation.
2. Definitions and Interpretation
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2.1 In and for the purposes of the Plan:
"Act" means the Securities Act (Ontario) and the regulations thereto, as
the same may be amended or re-enacted from time to time;
"associate" has the meaning ascribed in the Act;
"Award" has the meaning ascribed in section 5.1;
"Award Date" means the date on which an Award is made by the directors to a
Recipient;
"Common Shares" means the common shares of the capital of the Corporation
as constituted at the effective date of the Plan, or any shares or
securities into which such shares may have been changed, reclassified,
subdivided, consolidated or converted;
"Corporation" means Fantom Technologies Inc. and any continuing corporation
resulting from the amalgamation of it and any other corporation or
resulting from any other form of corporate reorganization;
"directors" means the board of directors of the Corporation, and reference
to any action by the directors means action taken by them by resolution as
a board;
"Employee" means and includes any full-time employee of the Corporation or
any subsidiary;
"employment" means full-time employment with the Corporation or any
subsidiary;
"formal bid" has the meaning ascribed in the Act;
"insider" has the meaning ascribed in the Act;
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"Option" means an option to purchase Common Shares granted to a Recipient
pursuant to the Plan;
"Option Fair Market Value" of a Common Share on any date means the closing
board lot sale price per share of Common Shares on the Toronto Stock
Exchange on the trading day prior to such date, provided that if there was
not a board lot sale thereon on such day then the immediately preceding
board lot sale price per share on such Exchange, provided that if there has
not been a board lot sale on the Toronto Stock Exchange within a period of
two trading days prior thereto then the average of the mean between the bid
and ask prices per share for the Common Shares on such Exchange on each of
the five trading days prior to such date;
"Option Price" has the meaning ascribed in section 5.2;
"Recipient" means an Employee to whom an Award has been made, or the legal
personal representative of the Employee, as the context requires;
"SAR Fair Market Value" of a Common Share on any date means the average of
the high and low trading price per share of Common Shares on the Toronto
Stock Exchange on each of the five trading days prior to such date on which
the Common Shares traded on such Exchange;
"Share Appreciation Rights" has the meaning ascribed in section 5.3;
"Share Compensation Arrangement" means a share option, share option plan,
employee share purchase plan, or any other compensation or incentive
mechanisms involving the issuance or potential issuance of shares of the
Corporation to one or more service providers, including a share purchase
from treasury which is financially assisted by the Corporation by way of a
loan, guarantee or otherwise;
"subsidiary" has the meaning ascribed in the Act;
"take-over bid" has the meaning ascribed in the Act, and includes a take-
over bid which is defined in the Act as an exempt take-over bid; and
"termination of employment" means termination of employment for any reason
other than death or retirement but does not include a mere change in
employment between the Corporation and any subsidiary or between two
subsidiaries.
2.2 The masculine gender shall include the feminine gender and the
singular shall include the plural and vice versa, unless the context otherwise
requires.
3. Administration
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The Plan shall be administered by the directors who shall have full
authority to interpret the Plan, to establish, amend and rescind rules and
regulations
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with regard thereto, and to make all other determinations necessary for its
administration.
4. Common Shares Reserved for the Plan
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Subject to adjustment under the provisions of section 10.2, an
aggregate of 532,700 Common Shares continue to be reserved for issuance under
the Plan. If an Award expires without being exercised for all of the Common
Shares and/or the corresponding Share Appreciation Rights comprising the Award,
the remaining Common Shares shall again be made available for the purposes of
the Plan.
5. Grant of Options and Share Appreciation Rights
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5.1 The directors may, in their discretion, from time to time grant to an
Employee an award (the "Award") consisting of (i) an Option to purchase a stated
number of Common Shares from the Corporation, as may be determined by the
directors, and (ii) an equal number of Share Appreciation Rights. A Recipient
may hold more than one Award at any time. Upon the exercise of an Option under
an Award to purchase a number of Common Shares, an equal number of Share
Appreciation Rights granted as part of the Award shall automatically terminate.
Upon the exercise of a number of Share Appreciation Rights under an Award, the
Option granted as part of the Award shall automatically terminate as to an equal
number of Common Shares.
5.2 The subscription price ("Option Price") for each Common Share which
may be purchased on the exercise of an Option shall be an amount determined by
the directors in respect of a particular Award, which shall not be less than the
Option Fair Market Value of the Common Shares on the Award Date.
5.3 Share Appreciation Rights under an Award are a right in the Recipient,
upon the exercise of a stated number of such rights, to surrender the Option
granted as part of the Award unexercised as to an equal number of Common Shares
and to receive, without payment to the Corporation, an amount equal to the
excess of (i) the aggregate SAR Fair Market Value, on the effective date of
exercise of such rights, of that number of Common Shares in respect of which the
Option is surrendered, over (ii) the aggregate Option Price of such Common
Shares.
6. Limitations on Grant
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The aggregate number of Common Shares in respect of which Awards have
been granted and remain outstanding under the Plan shall not at any time:
(a) when taken together with all of the Corporation's Share Compensation
Arrangements then either in effect or proposed, be such as could
result, within a one-year period, in the issuance:
(i) to insiders of a number of Common Shares exceeding 10%; or
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(ii) to any one insider and such insider's associates of a number of
Common Shares exceeding 5%;
of the number of issued and outstanding Common Shares (on a non-
diluted basis) as at the commencement of such one-year period;
(b) in the case of any one person, exceed 5% of the number of issued and
outstanding Common Shares (on a non-diluted basis) at that time; or
(c) when taken together with all of the Corporation's Share Compensation
Arrangements then either in effect or proposed, exceed 10% of the
issued and outstanding Common Shares (on a non-diluted basis) at that
time.
7. Term of Awards
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7.1 An Award may be exercised, in whole or in part, at any time and from
time to time, to the extent vested and exercisable in accordance with section
8.1, during the period commencing on the Award Date of such Award and ending at
the close of business on the fifth anniversary of the Award Date of such Award;
provided that:
(a) if the employment of a Recipient as an Employee of the Corporation or
a subsidiary terminates by reason of his death, the legal personal
representative of the Recipient will be entitled to exercise, during
the period ending 180 days after the date of the Recipient's death,
any unexercised Awards which were exercisable at the date of death,
failing which exercise the Award shall terminate;
(b) if the employment of a Recipient as an Employee of the Corporation or
a subsidiary terminates by reason of retirement in accordance with
then-prevailing retirement policy of the Corporation or a subsidiary,
the Recipient will be entitled to exercise, during the period ending
on the first anniversary of the date of retirement, any unexercised
Awards which were exercisable at the date of retirement, failing which
exercise the Award shall terminate; provided that if a retired
Recipient dies prior to such first anniversary, the provisions of the
preceding clause (a) shall govern except that such right to exercise
shall end on the earlier such first anniversary and the expiry of 180
days from the date of the Recipient's death;
(c) if the employment of a Recipient as an Employee of the Corporation or
a subsidiary terminates for any reason other than as provided in the
preceding clauses (a) or (b), the Recipient will be entitled to
exercise, during the period ending 90 days following the date on which
such employment terminated, any unexercised Awards which were
exercisable at such termination date, failing which exercise the Award
shall terminate; and
(d) if a notice is given pursuant to section 10.1 of the Plan, the
Recipient will be entitled to exercise, during the period specified in
such notice, any unexercised
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Awards which were exercisable at the date of delivery of such notice,
failing which exercise the Award shall terminate.
7.2 Nothing contained in clauses (a), (b), (c) or (d) of section 7.1 shall
extend the period during which an Award may be exercised beyond the five years
first referred to in section 7.1.
8. Exercise of Award
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8.1 An Award shall be exercisable only to the extent that the Award has
vested. Subject to article 7 and to the following provisions of this article 8,
each Award granted pursuant to section 5.1 shall become fully vested and
exercisable, provided the Recipient continues to be an Employee at the relevant
time, on the first anniversary of the Award Date of such Award as to one-half
(1/2) of the number of Common Shares (or the number of Share Appreciation
Rights) comprising the Award, and on the second anniversary of the Award Date as
to the balance of the number of Common Shares (or the number of Share
Appreciation Rights) comprising the Award.
8.2 An Option shall be exercised by the Recipient by written notice given
to the Vice President, Chief Financial Officer of the Corporation specifying the
number of Common Shares in respect of which the Option is being exercised at
such time, accompanied by a certified cheque (payable at par in Welland, Canada)
in payment for such Common Shares at the Option Price per share specified in
such Option, whereupon the purchase pursuant to such Option of the Common Shares
so specified shall be deemed for all purposes to have been completed and such
Option exercised to such extent. Upon receipt of a notice of exercise of an
Option and payment of the Option Price, the Corporation shall, within 10 days
thereafter, issue to the Recipient the number of Common Shares in respect of
which the Option is exercised.
8.3 Share Appreciation Rights shall be exercised by the Recipient by
written notice given to the Vice President, Chief Financial Officer of the
Corporation specifying the number of Share Appreciation Rights being exercised
at such time. Upon receipt of a notice of exercise of Share Appreciation Rights,
the Corporation shall, within 10 days thereafter, pay to the Recipient an amount
equal to the excess of (i) the aggregate SAR Fair Market Value, on the effective
date of exercise of such rights, of that number of Common Shares in respect of
which the Option is surrendered over (ii) the aggregate Option Price of such
Common Shares in respect of which the Option is surrendered.
8.4 Any notice delivered under this article 8 may relate in part to the
exercise of an Option and in part to the exercise of Share Appreciation Rights.
8.5 Notwithstanding any other provision of the Plan, no Options may be
exercised during the period (i) commencing with the announcement of an offeror's
intention to make a formal bid which is a take-over bid for the Corporation and
(ii) ending on the expiry of such take-over bid, unless the directors issue a
directors' circular which recommends acceptance of the take-over bid.
8.6 Notwithstanding any other provision of the Plan, no Share Appreciation
Rights may be exercised during the period (i) commencing with the announcement
of an offeror's
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intention to make a formal bid which is a take-over bid for the Corporation and
(ii) ending on the expiry of such take-over bid, unless the directors pass a
resolution expressly authorizing the exercise of Share Appreciation Rights
during such period or issue a directors' circular which recommends acceptance of
the take-over bid.
9. Non-Assignability
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No Award shall be assignable, negotiable or otherwise transferable
other than by will or the laws relating to intestacy. An Award may be exercised
during a Recipient's lifetime only by the Recipient and, after his death, only
by his legal personal representative.
10. Miscellaneous
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10.1 Notwithstanding anything herein contained, in the event of a proposed
reconstruction, reorganization or recapitalization of the Corporation, or its
consolidation, amalgamation or merger into or with another corporation, or the
sale of all or substantially all of the assets of the Corporation, the
Corporation shall have the right to give written notice to the Recipient
specifying the period (not shorter than 30 days following the delivery of such
notice) at the expiry of which the Recipient's Award shall terminate, whereupon
such Award shall terminate accordingly at the expiry of such period.
10.2 Appropriate adjustments in the number of Common Shares to which Awards
relate under the Plan, and/or in the Option Price per share, both as to Awards
granted or to be granted, may be made by the directors in their discretion to
give effect to adjustments in the number of Common Shares which result from
subdivisions, consolidations or reclassifications of the Common Shares, the
payment of share dividends by the Corporation, or other relevant changes in the
capital of the Corporation.
10.3 The directors may amend or discontinue the Plan at any time but,
subject to sections 10.1 and 10.2, no such amendment may (without all necessary
regulatory approvals) increase the aggregate maximum number of Common Shares to
which the Award relates, change the manner of determining the Option Price or
extend the term of any Award beyond five years or, without the consent of the
Recipient, alter (except as contemplated by the agreement entered into pursuant
to section 10.8) or impair any Award previously granted to a Recipient under the
Plan.
10.4 Nothing contained herein shall restrict or limit or be deemed to
restrict or limit the rights or powers of the directors in connection with any
allotment and issuance of shares in the capital of the Corporation which are not
allotted and issued under the Plan.
10.5 The Plan is established under the laws of the Province of Ontario and
the rights of all parties and the construction and effect of each and every
provision of the Plan shall be according to the laws of the Province of Ontario.
10.6 The Plan shall be binding upon the Corporation and its successors and
assigns and shall enure to the benefit of a Recipient and his personal
representative.
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10.7 Upon the communication to a Recipient of the granting of an Award, he
shall be given a copy of the Plan as the same may have been amended to that
time.
10.8 Each Award shall be evidenced by a written agreement between the
Corporation and the Recipient, which agreement shall be consistent with the
terms of the Plan as the same may have been amended to that time.
11. Effective Date
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This Plan shall have an effective date of July 1, 2000.