(a) | “Blackout Period” means a period during which the Corporation self imposes a prohibition on directors and certain employees trading in the Corporation’s securities, including, without limitation, trading and/or exercising the Options; |
(b) | “Board” means the board of directors of the Corporation; |
(c) | “Cause” means: |
(i) | the continued failure by the Optionholder to substantially perform his duties in connection with his employment by, or service to, the Corporation or any Subsidiary (other than as a result of physical or mental illness) after the Corporation or any Subsidiary has given the Optionholder reasonable written notice of such failure and a reasonable opportunity to correct it; |
(ii) | the engaging by the Optionholder in any act which is injurious to the Corporation or its reputation, financially or otherwise; |
(iii) | the engaging by the Optionholder in any act resulting or intended to result, directly or indirectly, in personal gain to the Optionholder at the expense of the Corporation; |
(iv) | the conviction of the Optionholder by a court of competent jurisdiction on any charge involving fraud, theft or moral turpitude by the Optionholder in connection with the business of the Corporation; or |
(v) | any other conduct that constitutes cause at common law; |
(d) | “Change of Control” means: |
(i) | the initial acquisition by any person, or any persons acting jointly or in concert (as determined by the Securities Act (Alberta)), whether directly or indirectly, of voting securities of the Corporation which, together with all other voting securities of the Corporation held by such persons, constitutes, in the aggregate, more than 20% of all outstanding voting securities of the Corporation; |
(ii) | an amalgamation, arrangement or other form of business combination of the Corporation with another corporation which results in the holders of voting securities of that other corporation holding, in the aggregate, more than 50% of all outstanding voting securities of the corporation resulting from the business combination; |
(iii) | a sale, disposition, lease or exchange to or with another person or persons (other than a Subsidiary) of property of the Corporation representing 50% or more of the net book value of the assets of the Corporation, determined as of the date of the most recently published audited annual or unaudited quarterly interim financial statements of the Corporation; or |
(iv) | a change in the composition of the Board over any twelve month period commencing after the date of this Option Agreement such that more than 50% of the persons who were directors of the Corporation at the beginning of the period are no longer directors at the end of the period, unless such change is a consequence of normal attrition; |
(e) | “Common Shares” means common shares of the Corporation; |
(f) | “Compensation Committee” means a compensation committee of the Board consisting of not less than three directors; |
(g) | “Corporation” means Canadian Pacific Railway Limited, and any successor corporation thereto; |
(h) | “Date of Termination” means the actual date of termination of employment of the Optionholder, and excludes any period during which the Optionholder is in receipt of or is eligible to receive any statutory, contractual or common law notice or compensation in lieu thereof or severance or damage payments following the actual date of termination; |
(i) | “Employment Agreement” has the meaning ascribed thereto in the recitals. |
(j) | “Exercise Price” has the meaning ascribed thereto in Section 2.1; |
(k) | “Expiry Date” has the meaning ascribed thereto in Section 2.1; |
(l) | “Family Trust” means a trust, of which at least one of the trustees is the Optionholder and the beneficiaries of which are one or more of the Optionholder and the spouse, minor children and minor grandchildren of the Optionholder; |
(m) | “Grant Date” means February 4, 2013; |
(n) | “Notice of Exercise” means a notice, (i) substantially in the form of the notice set out in Schedule A to this Option Agreement or (ii) such other form of notice as may be established by the Corporation, including by electronic means through a service provider selected by the Corporation from time to time, from the Optionholder to the Corporation giving notice of the exercise or partial exercise of the Options granted to the Optionholder pursuant to this Option Agreement; |
(o) | “Options” means the options to purchase Common Shares granted to the Optionholder pursuant to the terms of this Option Agreement; |
(p) | “Option Agreement” means this agreement, as amended from time to time; |
(q) | “Optioned Shares” has the meaning ascribed thereto in Section 2.1; |
(r) | “Optionholder” means Keith Creel; |
(s) | “Personal Holding Corporation” means a corporation that is controlled by the Optionholder and the shares of which are beneficially owned by the Optionholder and/or the spouse, minor children or minor grandchildren of the Optionholder; |
(t) | “Person” has the meaning ascribed to such term in the Securities Act (Alberta); |
(u) | “Retirement Trust” means a trust governed by a registered retirement savings plan or a registered retirement income fund established by and for the benefit of the Optionholder; and |
(v) | “Subsidiary” means any corporation that is a subsidiary of the Corporation as defined in the Securities Act (Alberta). |
(a) | 25% on the first anniversary of the Grant Date; and |
(b) | 25% on the second anniversary of the Grant Date; and |
(c) | 25% on the third anniversary of the Grant Date; and |
(d) | the remaining 25% on the fourth anniversary of the Grant Date. |
(a) | if the Optionholder resigns from his employment (other than in the circumstances described in Section 3.3(c)), then only the portion of the Options that is exercisable at the date of resignation or termination may be exercised by the Optionholder and any such exercise must be during the period ending on the earlier of: |
(i) | 30 days after the Date of Termination; and |
(ii) | the Expiry Date, |
(b) | subject to Section 3.7, if the Optionholder’s employment is terminated by the Corporation without Cause, including a constructive dismissal, then the Options will continue to become exercisable by the Optionholder pursuant to Section 3.1 after the Date of Termination and any exercise of the Options must be during the period ending on the earlier of: |
(i) | six months after the Date of Termination; and |
(ii) | the Expiry Date, |
(c) | if the Optionholder’s employment is terminated by the Corporation for Cause, including where the Optionholder resigns from his employment after being requested to do so by the Corporation as an alternative to being terminated for Cause, then the Options will expire on the Date of Termination; |
(d) | if the Optionholder’s employment ceases due to permanent disability, then the Options will continue to become exercisable pursuant to Section 3.1 and will expire on the Expiry Date; |
(e) | if the Optionholder retires upon attaining the mandatory or early retirement age established by the Corporation from time to time (“Retires”) and gives notice of retirement (the “Retirement Notice”) to the Corporation in accordance with policy established by the Corporation from time to time, then the Options will continue to become exercisable pursuant to Section 3.1 and will expire on the earlier of: |
(i) | the date that is five (5) years after the Optionholder Retires; and |
(ii) | the Expiry Date, |
(f) | if the Optionholder dies, the Options will vest immediately after the death of the Optionholder, any exercise of the Options must be effected by a legal representative of the Optionholder’s estate or by a person who acquires the Optionholder’s rights under the Options by bequest or inheritance, and any such exercise must be during the period ending on the earlier of: |
(i) | 12 months after the death of the Optionholder; and |
(ii) | the Expiry Date, |
(a) | the Optionholder’s Family Trust, Personal Holding Corporation or Retirement Trust (if permitted by applicable securities laws) (or between such entities or from either of such entities to the Optionholder); or |
(b) | a legal representative of the Optionholder’s estate or a person who acquires the Optionholder’s rights under the Options by bequest or inheritance on death of the Optionholder; |
(a) | upon (i) a subdivision of the Common Shares into a greater number of Common Shares, (ii) a consolidation of the Common Shares into a lesser number of Common Shares or (iii) the issue of a stock dividend to holders of the Common Shares (excluding a stock dividend paid in lieu of a cash dividend in the ordinary course), the Exercise Price will be adjusted accordingly and the Corporation will deliver upon exercise of the Options, in addition to or in lieu of the number of Optioned Shares in respect of which the right to purchase is being exercised, such greater or lesser number of Common Shares as result from the subdivision, consolidation or stock dividend; |
(b) | upon (i) a capital reorganization, reclassification or change of the Common Shares, (ii) a consolidation, amalgamation, arrangement or other form of business combination of the Corporation with another person or corporation or (iii) a sale, lease or exchange of all or substantially all of the property of the Corporation, the Exercise Price will be adjusted accordingly and the Corporation will deliver upon exercise of the Options, in lieu of the Optioned Shares in respect of which the right to purchase is being exercised, the kind and amount of shares or other securities or property as results from such event; |
(c) | upon the distribution by the Corporation to holders of the Common Shares of (i) shares of any class (whether of the Corporation or another corporation) other than Common Shares, (ii) rights, options or warrants, (iii) evidences of indebtedness or (iv) cash (excluding a cash dividend paid in the ordinary course), securities or other property or assets, the Exercise Price will be adjusted accordingly but no adjustment will be made to the number of Optioned Shares to be delivered upon exercise of the Options; |
(d) | adjustments to the Exercise Price of the Options will be rounded up to the nearest one cent and adjustments to the number of Common Shares delivered to the Optionholder upon exercise of the Options will be rounded down to the nearest whole Common Share; and |
(e) | an adjustment will take effect at the time of the event giving rise to the adjustment, and the adjustments provided for in this Section are cumulative. |
(a) | the Corporation will promptly notify the Optionholder of the take-over bid and the rights of the Optionholder under this Section; |
(b) | the Optionholder may exercise the Options (including, for greater certainty, the Options that had vested as at the Date of Termination and the Options that had not yet vested as at the Date of Termination), during the period ending on the earlier of the expiration of the take-over bid and the Expiry Date; |
(c) | the exercise of the Options (including, for greater certainty, the Options that had vested as at the Date of Termination and the Options that had not yet vested as at the Date of Termination) shall only be for the purpose of depositing the Optioned Shares pursuant to the take-over bid; and |
(d) | if the Optioned Shares are not deposited by the Optionholder pursuant to the take-over bid or, if deposited, are subsequently withdrawn by the Optionholder or not all taken up and paid for by the offeror, then the Optionholder shall promptly return the Optioned Shares (or the portion that are not taken up and paid for) to the Corporation for cancellation, the Options respecting such Optioned Shares shall be deemed not to have been exercised, the Optioned Shares shall be deemed not to have been issued and the Corporation shall refund to the Optionholder the aggregate Exercise Price for the Optioned Shares. |
(e) | a completed Notice of Exercise; and |
(f) | subject to Section 4.3, a cheque (which need not be a certified cheque) or bank draft payable to the Corporation for the aggregate Exercise Price of the Optioned Shares being acquired. |
(f) | the Optionholder will instruct a broker selected by the Optionholder to sell through the Toronto Stock Exchange the Common Shares issuable on exercise of the Options, as soon as possible and at the then applicable bid price for the Common Shares; |
(g) | on the settlement date for the trade, the Corporation will direct its registrar and transfer agent to issue a certificate in the name of the broker (or as the broker may otherwise direct) for the number of Common Shares issued on exercise of the Options, against payment by the broker to the Corporation of the Exercise Price for such Common Shares; and |
(h) | the broker will deliver to the Optionholder the remaining proceeds of sale, net of brokerage commission. |
(a) | the Board would have had the authority to initially grant the Options under terms as so amended; and |
(b) | the consent of the Optionholder is obtained if the amendment would prejudice the rights of the Optionholder under the Options. |
CANADIAN PACIFIC RAILWAY LIMITED | ||
By: | /s/ E. Hunter Harrison____________ | |
Name: E. Hunter Harrison | ||
Title: Chief Executive Officer | ||
By: | /s/ Peter Edwards______________________ | |
Name: Peter Edwards | ||
Title: Vice President, Human Resources and Industrial Relations | ||
Number of Optioned Shares for which Options are being exercised: | |||||
Exercise Price per Common Share: | $ | ||||
Total Exercise Price: | $ | ||||
Check here for exercise of the Options if a cheque (which need not be a certified cheque) or bank draft is tendered with this Notice of Exercise: | Ÿ | ||||
Check here for cashless exercise of the Options (in which case the shares will be sold and no cheque or bank draft needs to be tendered with this Notice of Exercise):1 | Ÿ | ||||
Name of Optionholder as it is to appear on share certificate (except for cashless exercise): | |||||
Address of Optionholder as it is to appear on the register of Common Shares and to which a certificate representing the Common Shares being purchased is to be delivered or, in the case of cashless exercise, to which a cheque is to be delivered: | |||||
Name of Optionholder |
Signature of Optionholder |
1 | An optionholder electing cashless exercise will be required to submit a completed Cashless Exercise Instruction Form (or such other form of cashless exercise instruction as may be established by the Corporation, including by electronic means through a service provider selected by the Corporation from time to time) at the same time as this Notice of Exercise. The Form may be obtained from the Corporation’s human resources department. |