CELESTICA INTERNATIONAL INC.
AND
CELESTICA INC.
--------------------------------------------
CELESTICA INC. EMPLOYEE SHARE PURCHASE
AND OPTION PLAN
(1997)
--------------------------------------------
MARCH 24, 1997
AS AMENDED AND RESTATED ON NOVEMBER 8, 2000
CELESTICA INTERNATIONAL INC.
AND
CELESTICA INC.
CELESTICA INC. EMPLOYEE SHARE PURCHASE AND OPTION PLAN (1997)
STATEMENT OF PURPOSE
The purpose of this Celestica Inc. Employee Share Purchase and Option Plan
(1997) (the "Plan") is to provide a means whereby Celestica International Inc.
(the "Corporation") and its indirect holding corporation, Celestica Inc.
("Celestica"), may, through the sale of Subordinate Voting Shares and the grant
of options to acquire Subordinate Voting Shares to certain full-time employees
of Celestica's direct and indirect Subsidiaries, including the Corporation,
motivate those employees to exert their best efforts on behalf of Celestica and
its Subsidiaries and to closely align the personal interests of employees with
those of the shareholders of Celestica.
Participation in the Plan is entirely voluntary. No employee of the
Corporation or any of Celestica's other direct and indirect Subsidiaries is
obligated, as a term or condition of employment or otherwise, to participate in
the Plan, and failure to participate shall not in any way affect employment.
The Corporation, Celestica, Onex Corporation and a wholly owned subsidiary
of the Corporation, Celestica Employee Nominee Corporation (the "Nominee"), have
entered into an agreement (the "Nominee Agreement") pursuant to which, among
other things, the Nominee has agreed to act as nominee holder of Subordinate
Voting Shares and options to acquire Subordinate Voting Shares issued pursuant
to this Plan.
ARTICLE I
INTERPRETATION
1.1 DEFINITIONS. The following capitalized terms when used in
the Plan shall have the respective meanings set forth below in this
Section 1.1 unless the context otherwise requires.
"ADMINISTRATOR" has the meaning set out in Section 2.2.
"APPROVED TRANSFEREE" has the meaning set out in Section 6.1(c).
"AUDITED FINANCIAL STATEMENTS" means the audited consolidated annual
financial statements of Celestica, prepared in accordance with
generally accepted accounting principles.
"AUDITORS" means the firm of chartered accountants appointed from time
to time as the auditors of Celestica.
"BASE OPTION" means an option granted pursuant to Section 5.3(a) to
purchase one or more Subordinate Voting Shares from Celestica pursuant
to the terms of this Plan, and includes the agreement setting forth the
same.
"BASE OPTION EXERCISE PRICE" has the meaning set out in Section 5.3(a).
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"BOARD" means the board of directors of the Corporation or any
committee of the same charged with responsibility of administering the
Plan.
"CELESTICA" means Celestica Inc. and any successor thereof.
"CELESTICA BOARD" means the board of directors of Celestica or any
committee of the same charged with the responsibility of administering
the Plan.
"CELESTICA EMPLOYEE" means a person who is employed in a full time
capacity by any Subsidiary of Celestica.
"ELIGIBLE PERSONS" means full-time employees of any direct and indirect
Subsidiaries of Celestica, including the Corporation.
"EMPLOYMENT TERMINATION DATE" means the date on which a Participant
ceases to be a Celestica Employee.
"GAAP" means generally accepted accounting principles which have been
established in Canada, including those approved from time to time by
the Canadian Institute of Chartered Accountants or any successor bodies
thereto.
"IMMEDIATE FAMILY MEMBER" means, in respect of a Participant, such
Participant's spouse (including a common law spouse), such
Participant's children and such Participant's parents.
"LIBOR RATE" means, in respect to any amount of money owed by a party
to another party pursuant to the terms of this Plan, for each 30 day
period or part thereof during which such amount is outstanding, the
rate of interest in effect as of the first day of such 30 day period
for 30 day LIBOR U.S. Dollar loans.
"MANAGEMENT REPRESENTATIVES" means the persons appointed from time to
time as the Chief Executive Officer of the Corporation and the Chief
Financial Officer of the Corporation.
"MARKET PRICE" as at any date in respect of Subordinate Voting Shares
shall be the per Subordinate Voting Share weighted average closing
price of such Subordinate Voting 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 stock exchange in North America or
national dealer quotation system on which such Shares are listed and
posted for trading or quoted, as applicable, as may be selected for
such purpose by the Celestica Board) for the ten trading days
immediately preceding such date. In the event that such Subordinate
Voting Shares did not trade on any such trading day, the Market Price
shall be the average of the averages of the bid and ask prices in
respect of such Subordinate Voting Shares at the close of trading on
each such trading day.
"NOMINEE SUBSCRIPTION" means a subscription by the Nominee for Plan
Shares, or an offer by the Nominee to purchase Plan Shares from Onex,
in each case as provided for in Section 3.3.
"ONEX" means Onex Corporation or its successors.
"OPTIONS" means, collectively, the Target Options and the Base Options.
"PARTICIPANT" means any Eligible Person for the benefit of whom the
Nominee acquires and holds Subordinate Voting Shares pursuant to and in
accordance with this Plan and, upon the death of such Eligible Person,
shall include any such Eligible Person's estate.
"PARTICIPANT DIRECTION AND AGREEMENT" means a direction and agreement
by a Participant, accompanied by the necessary payment, agreeing to
participate in the Plan and directing the Nominee to execute and
deliver a Nominee Subscription pursuant to and in accordance with this
Plan.
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"PARTICIPANT LOAN" means any loan or loans made by a financial
institution at any time or from time to time to a Participant who is a
Senior Employee in connection with the purchase by the Nominee, as
agent for and for the benefit of such Participant, of Plan Shares
pursuant to Section 3.3 which are guaranteed by the Corporation or any
of its Subsidiaries in accordance with Section 3.6, and shall include
any interest from time to time accrued and unpaid thereon.
"PERMITTED TRANSFEREE" has the meaning set out in Section 6.1.
"PERSONAL ENTITY" means, in respect of a Participant, a trust,
partnership, corporation or other entity established by or for the
benefit of the Participant and/or any of such participant's Immediate
Family Members, all of the voting and equity interests of which or all
of the assets or other ownership interests in which are, directly or
indirectly, beneficially owned or controlled by, or under common
control with, or for the benefit of, the foregoing person or persons.
"PLAN SECURITIES" means, collectively, Plan Shares and Options.
"PLAN SHARES" means, collectively, (i) any Subordinate Voting Shares
that are acquired and held by the Nominee as agent for and for the
benefit of Participants pursuant to Section 3.3 in accordance with the
terms of this Plan, (ii) so long as a "black-out" period has been
imposed by Celestica on sales by Participants of Plan Shares, including
Subordinate Voting Shares acquired upon the exercise of Options, and
such "black-out" period is continuing, any Subordinate Voting Shares
that are acquired upon the exercise of Options while Celestica has
imposed such a "black-out" period and, accordingly, are held by the
Nominee as agent for and for the benefit of Participants in accordance
with Section 5.6, and (iii) any Subordinate Voting Shares issued by
Celestica to the Nominee as a stock dividend or other stock
distribution in respect of any Plan Shares held by the Nominee as agent
for and for the benefit of Participants.
"POST-TERMINATION OPTION EXERCISE DEADLINE" with respect to any
Participant who ceases to be a Celestica Employee, means the earlier of
(i) the date on which all Options held by the Nominee as agent for such
Participant are cancelled pursuant to Section 6.7 and (ii) the date
following such Participant's Employment Termination Date on which no
further Plan Shares could be purchased upon the exercise of Options
held by the Nominee as agent for such Participant prior to their
cancellation pursuant to Section 6.7.
"REGISTER OF PARTICIPANT HOLDINGS" means the Register maintained by or
on behalf of the Nominee in accordance with Section 4.3.
"SALE", "TO SELL", when used to refer to the sale of Plan Shares by a
Participant or by the Nominee on behalf of such Participant, shall be
deemed to include the withdrawal of Plan Shares by such Participant
from the Plan.
"SENIOR EMPLOYEE" means an Eligible Person who belongs to the
management or senior technical staff of the Corporation or any of its
Subsidiaries and who is designated as such by the Board.
"SUBORDINATE VOTING SHARES" means Subordinate Voting Shares in the
capital of Celestica and includes any securities into which such
Subordinate Voting Shares may be converted, reclassified, redesignated,
subdivided, consolidated or otherwise changed from time to time and any
securities of any successor or continuing corporation to the
Corporation that may be received in respect of Subordinate Voting
Shares on a reorganization, amalgamation, consolidation or merger,
statutory or otherwise.
"SUBSIDIARY", with respect to a corporation, shall mean any subsidiary
of that corporation within the meaning of the BUSINESS CORPORATIONS ACT
(Ontario), as amended from time to time.
"TARGET OPTION" means an option granted pursuant to Section 5.1 to
purchase one or more Subordinate Voting Shares from Celestica pursuant
to the terms of this Plan, and includes the agreement setting forth the
same.
"TARGET OPTION EXERCISE PRICE" has the meaning set out in Section 5.1.
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"TRANSFER" of any security means any sale, exchange, transfer,
assignment, gift, pledge, encumbrance, hypothecation, alienation or
other transaction, whether voluntary, involuntary or by operation of
law, by which the legal or beneficial ownership of, or any security or
other interest in, such security passes from one person to another
person or to the same person in a different capacity, whether or not
for value.
"UNAUDITED FINANCIAL STATEMENTS" means the unaudited consolidated
quarterly financial statements of Celestica, prepared in accordance
with generally accepted accounting principles.
1.2 NUMBER AND GENDER. Words importing the singular number
only shall include the plural and VICE VERSA and words importing gender
shall include all genders, unless the context clearly requires
otherwise.
1.3 SECTION AND HEADINGS. The division of this Plan into
Sections and the insertion of headings are for reference purposes only
and shall not affect the construction or interpretation of this Plan.
The terms "this Plan", "hereof", "herein", "hereunder" and similar
expressions refer to this Plan and not to any particular Section or
other portion hereof and include any agreement or instrument
supplemental or ancillary hereto. Unless otherwise indicated, any
reference in this Plan to a Section or Schedule refers to the specified
Section of or Schedule to this Plan.
1.4 ENTIRE PLAN. This Plan constitutes the entire Celestica
Inc. Employee Share Purchase and Option Plan (1997). There are no
conditions, covenants, agreements, representations, warranties or other
provisions, express or implied, collateral, statutory or otherwise,
relating to the subject matter hereof except as expressly provided in
this Plan or any agreement or instrument supplemental or ancillary
hereto.
1.5 TIME OF ESSENCE. Time shall be of the essence of this Plan
and any agreement or instrument supplemental or ancillary hereto.
1.6 APPLICABLE LAW. This Plan is established under, and this
Plan and any agreement or instrument supplemental or ancillary hereto
shall be construed, interpreted and enforced in accordance with, and
the respective rights and obligations of all parties and the
construction and effect of each and every provision of the Plan shall
be governed by, the laws of the Province of Ontario and the federal
laws of Canada applicable in such province, and all parties attorn to
the non-exclusive jurisdiction of the courts of such province and all
courts competent to hear appeals therefrom.
1.7 SEVERABILITY. If any provision of this Plan is determined
by a court of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such determination shall not impair or
affect the validity, legality or enforceability of the remaining
provisions hereof and the Plan shall be construed, administered and
enforced as if such illegal or invalid provision had never been
included herein and in a manner that fulfills the original intent
hereof.
ARTICLE II
ELIGIBILITY AND ADMINISTRATION
2.1 ELIGIBILITY TO PARTICIPATE IN PLAN. All Eligible Persons
shall be eligible to become Participants under the Plan.
2.2 ADMINISTRATION OF PLAN. The Plan shall be administered
under the supervision of the Celestica Board. Celestica and the Nominee
shall have the power to jointly appoint a trust company or other
qualified corporation (the "Administrator") to carry out the day-to-day
administration of the Plan and the Nominee shall be permitted to
delegate any of its responsibilities under the Plan to such
Administrator, in each case subject to the approval of the Celestica
Board.
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2.3 POWERS OF THE ADMINISTRATOR. Subject to the approval of
the Celestica Board and to the specific terms and conditions set forth
in this Plan, Celestica and the Nominee shall be permitted to grant to
the Administrator any of the rights, privileges and benefits conferred
on the Nominee pursuant to this Plan and such additional powers as may
be required to permit the Administrator to carry out its duties as
Administrator, including without limitation, the power to retain stock
brokers, to arrange for transfers, withdrawals and sales on behalf of
Participants of Plan Shares and Subordinate Voting Shares acquired upon
the exercise of Options, to make arrangements to permit the cashless
exercise of Options by Participants, and to adopt procedures and rules
in connection with the foregoing.
2.4 INTERPRETATION OF PLAN. The Celestica Board, after
consultation with the Management Representatives, may interpret the
Plan as may be necessary or appropriate for the administration of the
Plan and shall, where consistent with the general purpose and intent of
the Plan and subject to the specific provisions of the Plan, make such
other determinations and take such other actions as it deems necessary
or advisable, including, without limitation:
(a) establish policies and adopt rules and regulations for carrying out
the purposes, provisions and administration of the Plan;
(b) interpret and construe the Plan and determine all questions arising
out of the Plan and any Plan Shares issued and any Option granted
pursuant to the Plan;
(c) determine on behalf of which Eligible Persons Subordinate Voting
Shares are offered and Target Options granted to the Nominee and
offer Subordinate Voting Shares and grant Target Options;
(d) determine the number of Subordinate Voting Shares covered by each
Target Option;
(e) determine the purchase price for any Plan Shares issued pursuant to
Section 3.3;
(f) determine the time or times when Options will be granted and
exercisable;
(g) determine if the Subordinate Voting Shares which are subject to an
Option will be subject to any restrictions upon the exercise of
such Option; and
(h) prescribe the form of the instruments relating to the offer and
purchase of Subordinate Voting Shares and grant, exercise and other
terms of any Options.
2.5 CELESTICA BOARD TO GIVE NOTICE OF INTERPRETATION. The
Celestica Board shall give the Management Representatives notice of any
interpretation or determination formally made by the Celestica Board in
accordance with Section 2.3 hereof not less than 14 days prior to the
effective date thereof. Any such interpretation or determination so
made shall be final, binding and conclusive for all purposes.
ARTICLE III
ISSUE AND SALE OF SHARES UNDER PLAN
3.1 ISSUE AND SALE OF SHARES UNDER PLAN. Within such limits as
are imposed from time to time by the Celestica Board, the Nominee will
be offered the opportunity from time to time to subscribe for
Subordinate Voting Shares or to purchase them from Onex, in either
case, as agent for and for the benefit of Eligible Persons identified
by the Corporation for such purpose.
3.2 BOARD TO ALLOCATE SHARES TO PARTICIPANTS. The Corporation
may from time to time undertake to identify Eligible Persons for the
benefit of whom Celestica shall make available Subordinate Voting
Shares for purchase by the Nominee pursuant to this Plan and may
allocate to each such Eligible Person
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a particular number of Subordinate Voting Shares that will be made
available for purchase by the Nominee, as agent for and for the
benefit of that Eligible Person, during a specified period of time and
at a specified price. The total number of Subordinate Voting Shares
that may be made available for purchase by the Nominee under this Plan
shall not exceed the number of Subordinate Voting Shares allotted for
that purpose from time to time by the Celestica Board.
3.3 MANNER OF SUBSCRIPTION. Subscriptions for Subordinate
Voting Shares by the Nominee should be substantially in the form and on
the terms of the form of Nominee Subscription appended hereto as
Schedule A or such other form acceptable to Celestica and the Nominee.
For each subscription by the Nominee there shall be a corresponding
direction and agreement (accompanied by the required payment) from an
Eligible Person substantially in the form and on the terms of the form
of Participant Direction and Agreement appended hereto as Schedule B or
such other form acceptable to Celestica and the Nominee. Should Plan
Shares be acquired by the Nominee for the benefit of Eligible Persons
from Onex Corporation rather than from the Celestica treasury,
appropriate changes to the forms of the Nominee Subscription and
Participant Direction and Agreement, in each case as acceptable to the
Nominee and to Celestica, shall be made.
3.4 MINIMUM SUBSCRIPTION. Celestica and Onex reserve the right
to accept or reject Nominee Subscriptions, and shall reject Nominee
Subscriptions for less than 200 Subordinate Voting Shares or that are
for more Subordinate Voting Shares than have been allocated to the
particular Participant under Section 3.2 hereof, or that are made on
terms or for a price that are inconsistent with this Plan.
3.5 CERTIFICATES REPRESENTING PLAN SHARES. Certificates
representing Plan Shares issued to the Nominee as agent for and for the
benefit of a Participant shall be registered and issued in the name of
the Nominee and shall be delivered to and, unless pledged to the
Corporation in accordance with Section 3.6, held by the Nominee in
accordance with the terms of this Plan.
3.6 FINANCIAL ASSISTANCE TO SENIOR EMPLOYEES. The Board may
from time to time undertake to identify Participants who are to be
designated as Senior Employees for the purpose of this Plan and may
provide financial assistance to any such Senior Employee in connection
with the acquisition by the Nominee, as agent for and on behalf of such
Senior Employee, of any Plan Shares pursuant to Section 3.3 (i) by
helping to arrange for a Participant Loan to be used by such Senior
Employee in connection with the payment for the Plan Shares to be so
acquired and (ii) by guaranteeing or causing one of its Subsidiaries to
guarantee such Participant Loan for such period of time and on such
other terms as the Corporation may determine, provided that:
(a) the amount of the Participant Loan shall not exceed 66-2/3% of the
aggregate purchase price payable with respect to such Plan Shares;
and
(b) the Nominee, as agent for and on behalf of such Senior
Employee shall pledge to the Corporation as security for such
Participant Loan a number of Plan Shares equal to 3/2 of the number
of Plan Shares acquired with the proceeds of such Participant Loan.
3.7 USE OF PROCEEDS FROM SALE OF PLAN SHARES. Any cash
proceeds from the sale of Plan Shares issued by Celestica under the
Plan shall be added to the general funds of Celestica and shall
thereafter be used from time to time for such corporate purposes as the
Celestica Board may determine.
ARTICLE IV
GENERAL PROVISIONS GOVERNING
PLAN SECURITIES ACQUIRED AND HELD BY NOMINEE UNDER PLAN
4.1 NOMINEE TO HOLD PLAN SECURITIES IN ACCORDANCE WITH PLAN.
All Plan Securities acquired by the Nominee, as agent for and for the
benefit of Participants, shall be held by the Nominee in accordance
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with the provisions of this Plan. All rights and obligations of the
Nominee and of the Participants relating to any Plan Securities,
including, without limitation, all rights and obligations relating to
the holding, assignment, pledge, transfer, sale or other disposition of
Plan Securities, shall be governed by the provisions of this Plan.
Neither the Nominee nor any Participant shall have any rights with
respect to any Plan Securities except as specifically provided by this
Plan.
4.2 GENERAL RESTRICTION ON TRANSFERS. Except as specifically
permitted or required in this Plan, the Nominee shall not Transfer any
Plan Securities held by it, and no Participant shall Transfer such
Participant's beneficial interest in any Plan Securities held by the
Nominee as agent for and on behalf of such Participant. Any purported
Transfer in violation of this Section shall be invalid and void and
shall not be registered in the books of the Corporation or otherwise
recognized by Celestica, the Corporation, the Nominee or Onex for any
purpose.
4.3 REGISTER OF PARTICIPANT HOLDINGS. The Nominee shall
maintain or cause to be maintained a Register of all Participants and
their respective holdings of Plan Securities (the "Register of
Participant Holdings"). All issuances and transfers of Plan Shares and
all grants and exercises of Target Options and Base Options shall be
reflected in such Register of Participant Holdings.
4.4 DIVIDENDS ON SUBORDINATE VOTING SHARES. The Nominee shall
pay and transfer all dividends (other than stock dividends) received by
it in respect of the Plan Shares held by it as agent for and on behalf
of any Participant to or to the order of such Participant.
4.5 VOTING OF PLAN SHARES. All Plan Shares may only be voted
by Onex and the Nominee shall do all things necessary to enable Onex to
vote such Plan Shares including, without limitation, executing any
required forms of proxy.
4.6 MANAGEMENT REPRESENTATIVES TO MAKE ELECTIONS. Subject to
Section 4.5, all decisions and elections to be made by the Nominee as
the registered holder of any Plan Shares shall be made by the
Management Representatives in their sole discretion.
ARTICLE V
GRANT OF OPTIONS AND GENERAL TERMS AND CONDITIONS THEREOF
5.1 GRANT OF TARGET OPTIONS. In connection with the acquisition
by the Nominee pursuant to Section 3.3 hereof of Plan Shares, as agent
for and for the benefit of any Participant, the Celestica Board may,
in its discretion and upon the recommendation of the Corporation, grant
to the Nominee, as agent for and for the benefit of such Participant,
one or more Target Options to acquire Subordinate Voting Shares. The
Target Options granted to the Nominee, as agent for and for the
benefit of any Participant, shall be exercisable for the purchase of a
number of Subordinate Voting Shares determined by the Celestica Board,
which number shall not exceed the number of Subordinate Voting Shares
acquired by the Nominee, as agent for and for the benefit of such
Participant, at or prior to the time of the grant of the Target Option
or Target Options. The purchase price for each Subordinate Voting Share
subject to a Target Option (as adjusted in accordance with Section 5.9
hereof, the "Target Option Exercise Price") shall be set out in the
Target Option and shall be the price at which the Nominee purchased the
corresponding Plan Shares pursuant to Section 3.3, as agent for and for
the benefit of the Participant for whom the Nominee holds such Target
Option.
5.2 VESTING OF TARGET OPTIONS. Each Target Option granted under
this Plan shall become exercisable in instalments on each of December
31, 1998, 1999, 2000, 2001 and 2002 with respect to the following
percentage of Subordinate Voting Shares subject to such Target Option:
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PERCENTAGE OF NUMBER OF SUBORDINATE
VOTING SHARES
DATE ON WHICH SUBJECT TO TARGET OPTIONS WITH RESPECT TO
TARGET OPTIONS BECOME EXERCISABLE WHICH TARGET OPTIONS MAY BE EXERCISED
December 31, 1998 10%
December 31, 1999 15%
December 31, 2000 20%
December 31, 2001 25%
December 31, 2002 30%
In the event that on any of the foregoing dates a Target Option would become
exercisable with respect to a fractional number of Subordinate Voting Shares
subject to such Target Option, then the number of Subordinate Voting Shares
subject to such Target Option with respect to which such Target Option shall
become exercisable on such date shall be rounded down to the nearest whole
number and the remaining fractional Subordinate Voting Share shall be added to
the Subordinate Voting Shares with respect to which such Target Option will
become exercisable on December 31 of the immediately following year.
5.3 GRANT OF BASE OPTIONS.
(a) In connection with the acquisition by the Nominee pursuant to
Section 3.3 hereof of Plan Shares, as agent for and for the benefit of any
Participant, the Celestica Board shall grant to the Nominee, as agent for and
for the benefit of such Participant, a Base Option to purchase a number of
Subordinate Voting Shares equal to 60.22% of the number of Plan Shares acquired
by the Nominee pursuant to Section 3.3 hereof, as agent for and for the benefit
of such Participant, rounded down to the nearest whole number. Each Base Option
will have an exercise price per Subordinate Voting Share (as adjusted in
accordance with Section 5.9 hereof, the "Base Option Exercise Price") equal to
the price at which the Nominee purchased the corresponding Plan Shares pursuant
to Section 3.3, as agent for and for the benefit of such Participant. A Base
Option shall become exercisable in the manner and for the number of Subordinate
Voting Shares set forth in Section 5.2(b).
(b) A Base Option shall become exercisable:
(A) on July 7, 1998, being the date on which Celestica became
a public company, with respect to 50% of the number of
Subordinate Voting Shares subject to such Base Option;
(B) with respect to the remaining 50% of Subordinate Voting
Shares subject to such Base Option, in instalments on each
of December 31, 1998, 1999, 2000, 2001 and 2002 with
respect to the following percentage of Subordinate Voting
Shares subject to such Base Option:
PERCENTAGE OF NUMBER OF SUBORDINATE
VOTING SHARES
DATE ON WHICH SUBJECT TO BASE OPTIONS WITH RESPECT TO
BASE OPTIONS BECOME EXERCISABLE WHICH BASE OPTIONS MAY BE EXERCISED
December 31, 1998 5.0%
December 31, 1999 7.5%
December 31, 2000 10.0%
December 31, 2001 12.5%
December 31, 2002 15.0%
In the event that on any of the foregoing dates a Base Option would become
exercisable with respect to a fractional number of Subordinate Voting Shares
subject to such Base Option, then the number of Subordinate Voting Shares
subject
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to such Base Option with respect to which such Base Option shall become
exercisable on such date shall be rounded down to the nearest whole number
and the remaining fractional Subordinate Voting Share shall be added to the
Subordinate Voting Shares with respect to which such Base Option will become
exercisable on December 31 of the immediately following year.
5.4 TERMS AND CONDITIONS OF OPTIONS. Each Option granted under
this Plan shall be subject to the terms and conditions set forth in
this Plan and in such Option, and to such other terms and conditions as
the Celestica Board may, after consultation with the Management
Representatives, deem appropriate at the time of grant of such Option
or such other terms as the Celestica Board may thereafter impose with
the approval of the Management Representatives and Onex. Options shall
be exercisable only in accordance with the terms of this Plan and in
accordance with their own terms.
5.5 EXPIRY OF OPTIONS. All Options shall cease to be
exercisable with respect to all Subordinate Voting Shares that then
remain thereunder on the earlier of (i) the date on which the Option
ceases to be exercisable in respect of such Subordinate Voting Shares
under any other provisions of this Plan or the particular Option, and
(ii) April 8, 2007.
5.6 PAYMENT OF OPTION EXERCISE PRICE. The Target Option
Exercise Price or the Base Option Exercise Price, as the case may be,
of any Subordinate Voting Share in respect of which an Option is
exercised shall be paid by bank draft, certified cheque or money order
payable to Celestica at the time of exercise.
5.7 TREATMENT OF SUBORDINATE VOTING SHARES ACQUIRED UPON
EXERCISE OF OPTIONS.
(a) Any Subordinate Voting Shares acquired upon the exercise of an
Option by a Participant (other than Subordinate Voting Shares acquired upon the
exercise of an Option at a time when Celestica has imposed a "black-out" period
during which no Plan Shares, including Subordinate Voting Shares acquired upon
the exercise of any Option, may be sold by Participants) will be issued to the
Participant and shall not be subject to any sale restrictions under this Plan
other than restrictions imposed by applicable laws and the rules, regulations
and published policies of governmental and regulatory authorities and applicable
stock exchanges.
(b) Any Subordinate Voting Shares acquired upon the exercise of an
Option by a Participant at a time when a "black-out" period has been imposed as
aforesaid will be issued to Nominee, as agent for and on behalf of such
Participant, to be held by the Nominee as though they were Plan Shares acquired
pursuant to Section 3.3 hereof. Upon the expiry of the "black-out" period, as
applicable, any such Subordinate Voting Shares will be transferred by the
Nominee to the Participant for the benefit of whom such Subordinate Voting
Shares are held and will cease to be subject to any sale restrictions applicable
to Plan Shares under this Plan other than restrictions imposed by applicable
laws and the rules, regulations and published policies of governmental and
regulatory authorities and applicable stock exchanges.
5.8 ACCELERATED VESTING ON CHANGE OF CONTROL. In the event that
Onex ceases to hold, directly or indirectly, or exercise voting control
over a sufficient number of any securities of Celestica to elect a
majority of the directors of Celestica, each Option held by the
Nominee, as agent for and for the benefit of a Participant, shall
become exercisable in respect of all Subordinate Voting Shares then
remaining thereunder.
5.9 ADJUSTMENTS IN EVENT OF CHANGE IN SUBORDINATE VOTING
SHARES. In the event of any change in the issued Subordinate Voting
Shares occasioned by reason of a stock dividend, recapitalization,
reclassification, reorganization, amalgamation, arrangement,
consolidation, subdivision, combination, continuance, other amendment
of the articles of Celestica, exchange of shares, rights offering below
fair market value or any similar change affecting the issued
Subordinate Voting Shares, the number and/or the class or series of
shares subject to outstanding Options and the Target Option Exercise
Price or Base Option Exercise Price, as the case may be, per share (as
then in effect) thereof shall be appropriately adjusted in such manner
as the Celestica Board in its sole discretion deems in good faith to be
equitable to prevent substantial dilution or enlargement of the rights
granted to, or available to, Participants, and any such adjustment
shall be binding on all persons. Without fettering the Celestica
Board's discretion, prior to making any determination as to any
adjustment to the Options and the Target Exercise Price and Base Option
Exercise Price pursuant to this Section
9
5.9, the Celestica Board shall consult with the Management
Representative and shall consider any consequences under applicable
income tax legislation that may arise as a result of such adjustment.
5.10 TERMINATION OF OPTIONS UPON DEATH OR TERMINATION OF
EMPLOYMENT. In the event of the death of a Participant or the
termination of the Participant's employment with the Corporation or any
Subsidiary of the Corporation (if the Participant is not immediately or
continuously thereafter employed by the Corporation, another Subsidiary
of the Corporation or a Subsidiary of Celestica), the Options held by
the Nominee as agent for and for the benefit of that Participant shall
be terminated in accordance with the provisions of Article VI.
5.11 RIGHT TO EXERCISE OPTIONS SUBJECT TO LEGAL RESTRICTIONS.
Each Option shall be subject to the requirement that if at any time
the Celestica Board determines, in its sole discretion, that the
registration or qualification of any Subordinate Voting Shares, or any
other approval of any governmental or regulatory body, is required,
necessary or desirable under any applicable law, rule, regulation or
published policy of such body in connection with this Plan or the grant
or exercise of any Option, then such Option may not be exercised, in
whole or in part, unless and until such registration, qualification or
approval is obtained free of any condition not acceptable to the
Celestica Board. Each Participant shall cooperate with Celestica and
the Corporation in relation thereto and shall have no claim or cause of
action against Celestica or the Corporation or any Subsidiary of any of
them or any of their officers or directors, as a result of any failure
by Celestica or the Corporation to obtain or to take any steps to
obtain any such registration, qualification or approval.
5.12 OPTIONS TO BE GRANTED IN ACCORDANCE WITH LAWS. The grant of
Options and the issuance of Subordinate Voting Shares under the Plan
shall be carried out in compliance with applicable law and with the
rules, regulations and published policies of governmental and
regulatory authorities and applicable stock exchanges.
5.13 PARTICIPANTS TO DELIVER WRITTEN REPRESENTATIONS PRIOR TO
EXERCISE OF OPTIONS. Each Participant shall deliver to the Celestica
Board, upon demand, at the time of any exercise of any Option in whole
or in part, a written representation that the Subordinate Voting Shares
to be acquired upon such exercise are to be acquired for investment and
by the Nominee as agent for and for the benefit of the Participant as
principal and not with a view to the distribution thereof and not for
the benefit of or on behalf of any other person. The delivery of such
representation shall be a condition precedent to the right of the
Nominee to acquire any Subordinate Voting Shares, as agent for and for
the benefit of any Participant, pursuant to any Options.
5.14 NO RIGHTS AS A SHAREHOLDER. Neither the Nominee nor any
Participant shall have any right as a shareholder with respect to any
Subordinate Voting Share that is subject to an Option granted hereunder
unless and until the date of issuance of such Subordinate Voting Share
in accordance with this Plan and such Option and the delivery to the
Nominee, as agent for and for the benefit of such Participant, of a
certificate or certificates representing such Subordinate Voting
Shares.
5.15 REDUCTION IN NUMBER OF SHARES SUBJECT TO OPTIONS IN EVENT
OF PROLONGED LEAVE. If during any of the 1998 through 2002 calendar
years a Participant is absent from work on personal leave, educational
leave, extended parental leave or due to long-term disability (as these
terms are defined from time to time under the personnel policies of the
Subsidiary of Celestica by which such Participant is employed)
("Prolonged Leave"), then, unless otherwise determined by Celestica in
its sole discretion, the total number of Subordinate Voting Shares with
respect to which any Option held by the Nominee, for and on behalf of
such Participant, may be exercised as of December 31 of any such
calendar year shall be reduced by a number of Subordinate Voting
Shares, rounded down to the nearest whole number, determined in
accordance with the following formula:
OR = OT x N
-----
365
where:
10
OR = the amount of the reduction in the number of Subordinate
Voting Shares with respect to which the Option may be
exercised for any particular calendar year;
OT = the total number of Subordinate Voting Shares which would
otherwise be subject to the Participant's Option as at
December 31 of such year; and
N = the number of elapsed calendar days in such year during
which the Participant was absent from work.
ARTICLE VI
PERMITTED AND REQUIRED TRANSFERS OF PLAN SECURITIES
6.1 PERMITTED TRANSFERS OF PLAN SHARES TO IMMEDIATE FAMILY
MEMBERS AND PERSONAL ENTITIES.
(a) A Participant may transfer such Participant's interest in any of
the Plan Shares held from time to time by the Nominee, as agent for and for the
benefit of such Participant, to an Immediate Family Member or a Personal Entity
of the Participant (a "Permitted Transferee"), provided that prior to such
Transfer such Permitted Transferee shall agree to be bound by the provisions of
this Plan and shall execute such documents as Celestica may request for this
purpose.
(b) Notwithstanding any Transfer by a Participant to a Permitted
Transferee as provided by Section 6.1(a), any Plan Shares held by the Nominee as
agent for and for the benefit of such Permitted Transferee shall continue to be
subject to, and shall be held by the Nominee in accordance with, the provisions
of this Plan, including, without limitation, the requirements of this Article VI
and Article VII, as though such Plan Shares were still held by the Nominee as
agent for and on behalf of such Participant. In addition, all notices or other
communications relating to the Plan and Plan Securities shall continue to be
given to the Participant and not to such Participant's Permitted Transferee.
(c) A Participant may transfer such Participant's interest in any of
the Plan Shares held from time to time by the Nominee, as agent for and for the
benefit of such Participant, to a person, company, partnership or other entity
approved by the Celestica Board (an "Approved Transferee") provided that such
Plan Shares or any other securities or interests received by such Participant or
by the Nominee, as agent for and for the benefit of such Participant, in
exchange for such Plan Shares shall be subject to terms and conditions
(including with respect to the holding and Transfer thereof) which are
determined by the Celestica Board, after consultation with the Management
Representatives, to be substantially equivalent to the terms and conditions
applicable to such Plan Shares (including the provisions governing the holding
and Transfer thereof) under this Plan prior to their transfer to such Approved
Transferee.
6.2 PERMITTED SALES OF PLAN SHARES.
(a) Subject to Section 6.2(b) and 6.2(c), a Participant shall be
entitled to sell at any time any or all Plan Shares held on behalf of the
Participant by the Nominee.
(b) A Participant's ability to sell Plan Shares pursuant to Sections
6.2(a) shall be subject to the following restrictions:
(i) any such sale of Plan Shares may only be made to the
extent and in the manner permitted under applicable
securities laws and under any requirements imposed by
any securities regulatory authorities or any stock
exchanges on which the Subordinate Voting Shares are
listed or are to be then listed and any requirement
imposed by any underwriters in connection with any
public distribution of securities by Celestica;
(ii) in connection with any public distribution of its
securities, Celestica may impose a "black-out" period
(not to exceed six months) during which no Plan
Shares may be sold pursuant to the provisions of this
Section 6.2; and
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(iii) no Plan Shares which have been pledged to Celestica
or one of its Subsidiaries pursuant to Section 3.6(b)
may be sold pursuant to Section 6.2(a) or 6.2(b)
unless arrangements satisfactory to Celestica have
been made for the repayment of the Participant Loan,
or portion thereof, as applicable, relating to such
pledged Plan Shares prior to such sale being
effected.
(c) A Participant wishing to sell Plan Shares pursuant to Section
6.2(a) shall give written notice thereof (including the exact number of Plan
Shares proposed to be sold or withdrawn) in accordance with the procedures
implemented by Celestica or, if applicable, the Administrator for this purposes
from time to time.
6.3 INTENTIONALLY DELETED
6.4 INTENTIONALLY DELETED
6.5 REQUIRED SALES UPON PARTICIPANT LOAN DEFAULT. If a
Participant defaults on a Participant Loan, Celestica shall have the
option, exercisable upon notice to the Participant at any time
following any such default, to purchase all or any portion of the Plan
Shares acquired pursuant to Section 3.3 and pledged by the Nominee, as
agent for such Participant, to the Corporation in connection with such
Participant Loan at a purchase price per Plan Share equal to 85% of the
Market Price at the time of purchase by Celestica.
6.6 CLOSING OF SALES. The closing of any purchase by Celestica
or a party designated by it of Plan Shares pursuant to Sections 6.3,
6.4 or 6.5 shall be held at the principal offices of the Corporation on
a date designated by the purchaser but in any event not later than the
last day upon which such purchase is permitted or required to be made.
At the closing, the Nominee, as agent for and for the benefit of the
Participant selling Plan Shares, shall deliver to the purchaser the
share certificates and other instruments representing such Plan Shares,
together with share transfer powers and other instruments transferring
such Plan Shares, duly endorsed for transfer and free and clear of
claims, liens, encumbrances and security interests, and, subject to
Section 6.8, the purchaser shall deliver to the Participant the
consideration payable upon closing.
6.7 CANCELLATION OF OPTIONS UPON TERMINATION OF EMPLOYMENT. If
a Participant ceases to be a Celestica Employee:
(a) no Option held by the Nominee, as agent for and for the
benefit of such Participant, shall thereafter become exercisable
with respect to any Subordinate Voting Shares in addition to the
Subordinate Voting Shares with respect to which such Option is
exercisable as of such Participant's Employment Termination Date;
and
(b) unless previously exercised, all Options held by the Nominee, as
agent for and for the benefit of such Participant, shall be
automatically cancelled as follows:
(i) if the Participant ceases to be a Celestica
Employee as a result of such Participant's death or disability
(as determined by Celestica in its sole discretion), the
Options shall be cancelled one year following such
Participant's Employment Termination Date or on such later
date as is determined by Celestica in its sole discretion;
(ii) if the Participant ceases to be a Celestica
Employee as a result of such Participant being terminated
without cause or as a result of such Participant's retirement,
the Options shall be cancelled 30 days following such
Participant's Employment Termination Date;
(iii) if the Participant ceases to be Celestica
Employee as a result of such Participant being terminated for
cause, the Options shall be cancelled immediately on such
Participant's Employment Termination Date; and
12
(iv) if such Participant ceases to be a Celestica
Employee for any reason not listed in Section 6.7(b)(i),
Section 6.7(b)(ii) or Section 6.7(b)(iii), the Options shall
be cancelled 30 days following such Participant's Employment
Termination Date.
6.8 ALL PAYMENTS TO BE APPLIED FIRST TO REPAYMENT OF
PARTICIPANT LOANS. Any amount payable to a Participant by Celestica or
by a party designated by it in connection with its purchase of any Plan
Shares pursuant to Section 6.3, 6.4 or 6.5 shall be reduced by any
amount paid by the Corporation or any of its Subsidiaries to discharge
any outstanding Participant Loan of such Participant.
ARTICLE VII
AMENDMENT AND TERMINATION OF PLAN
7.1 AMENDMENT OF PLAN. The consent of Onex, Celestica and the
Management Representatives is needed to amend the Plan, except that,
subject to Section 7.2, Celestica may, without the consent of any other
person, amend or terminate this Plan at any time as and if so required
by applicable law, the rules, regulations or published policies of any
governmental or regulatory authority or any stock exchange on which
securities of Celestica are listed or to which an application for
listing of any securities of Celestica has been made.
7.2 TERMINATION NOT TO AFFECT OUTSTANDING PLAN SECURITIES.
Notwithstanding any termination of the Plan pursuant to Section 7.1,
such termination shall not affect any Plan Securities (including, for
greater certainty, any right to exercise any Option) then held by the
Nominee, as agent for and on behalf of any Participant, and the
provisions of this Plan shall continue to apply to any such Plan
Securities (including the provisions relating to the transfers of Plan
Securities and the provisions relating to the vesting of Options) and
to the Participants on whose behalf the Nominee holds such Plan
Securities. No Plan Shares shall be issued pursuant to Section 3.2 or
Target Options and Base Options granted pursuant to Section 5.1 and
Section 5.2, respectively, following the effective date of termination
of the Plan.
7.3 TERMINATION OF PLAN. No further Plan Shares shall be issued
pursuant to Section 3.2 or Target Options granted pursuant to Section
5.1 following July 7, 1998, being the date on which Celestica became a
public company.
ARTICLE VIII
MISCELLANEOUS
8.1 NOTICES. Any notice required to be given pursuant to the
terms of the Plan may be given by personal delivery, facsimile
transmission or prepaid mail to the place, facsimile number or address
provided by the Participant to the Corporation or Celestica in
connection with this Plan or as maintained in the personnel records of
the Corporation. Any notice to be provided to the Corporation or
Celestica shall be provided to it at its principal business address and
principal facsimile number from time to time, to the attention of its
Secretary. All notices delivered personally shall be deemed to have
been received on the date so delivered, all notices sent by facsimile
transmission shall be deemed to be received on the date transmitted
unless it is not a business day, in which case they shall be deemed to
have been received on the next business day, and all notices sent by
mail shall be deemed to have been received on the fourth business day
after mailing unless a labour dispute or other disruption of postal
service has occurred during such four-day period, in which case receipt
will be deemed to have occurred on the fourth business day following
the termination of such disruption.
8.2 FINANCIAL INFORMATION. Celestica shall make available to
each Participant, so long as the Nominee holds Plan Shares as agent for
and for the benefit of such Participant, copies of the Audited
Financial Statements within 135 days after the end of each fiscal year
of Celestica and copies of the Unaudited Financial Statements within 60
days of each of the first three quarters of each fiscal year of
Celestica.
13
8.3 NO RIGHTS TO CONTINUED EMPLOYMENT. Neither the Plan, nor
the acquisition of any Plan Securities shall confer upon any person any
right with respect to continuance of employment or continuance as a
director or officer of the Corporation or of Celestica or any
Subsidiary of either of them, or interfere in any way with the right of
the Corporation or Celestica or any Subsidiary of either of them to
terminate the employment or office of any such person at any time in
accordance with applicable law.
8.4 ASSIGNMENT. Except as specifically provided under this
Plan, or unless otherwise provided by applicable law, no rights or
interests of a Participant under this Plan or any Plan Shares or
Options held by the Nominee, as agent for or for the benefit of such
Participant, shall be given as security or assigned by any Participant
and no portion of any Subordinate Voting Shares reserved for issuance
under the Plan shall be subject to attachment, charge, anticipation,
execution, garnishment, sequestration or other seizure under any legal
or other process. Any transaction purporting to effect such a
prohibited result is void.
ARTICLE IX
EFFECTIVE DATE
9.1 EFFECTIVE DATE. Subject to the prior approval of the
Celestica Board, this amended and restated Plan came into effect on
March 24, 1997.
14
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION
1.1 Definitions............................................ 1
1.2 Number and Gender...................................... 4
1.3 Section and Headings................................... 4
1.4 Entire Plan............................................ 4
1.5 Time of Essence........................................ 4
1.6 Applicable Law......................................... 4
1.7 Severability........................................... 4
ARTICLE II
ELIGIBILITY AND ADMINISTRATION
2.1 Eligibility to Participate in Plan..................... 4
2.2 Administration of Plan................................. 4
2.3 Powers of the Administrator............................ 5
2.4 Interpretation of Plan................................. 5
2.5 Celestica Board to Give Notice of Interpretation....... 5
ARTICLE III
ISSUE AND SALE OF SHARES UNDER PLAN
3.1 Issue and Sale of Shares Under Plan.................... 5
3.2 Board to Allocate Shares to Participants............... 6
3.3 Manner of Subscription................................. 6
3.4 Minimum Subscription................................... 6
3.5 Certificates Representing Plan Shares.................. 6
3.6 Financial Assistance to Senior Employees............... 6
3.7 Use of Proceeds from Sale of Plan Shares............... 6
ARTICLE IV
GENERAL PROVISIONS GOVERNING
PLAN SECURITIES ACQUIRED AND HELD BY NOMINEE UNDER PLAN
4.1 Nominee to Hold Plan Securities in Accordance with Plan. 7
4.2 General Restriction on Transfers....................... 7
4.3 Register of Participant Holdings....................... 7
4.4 Dividends on Subordinate Voting Shares................. 7
4.5 Voting of Plan Shares.................................. 7
4.6 Management Representatives to Make Elections........... 7
ARTICLE V
GRANT OF OPTIONS AND GENERAL TERMS AND CONDITIONS THEREOF
5.1 Grant of Target Options................................ 7
i
5.2 Vesting of Target Options.............................. 8
5.3 Grant of Base Options.................................. 8
5.4 Terms and Conditions of Options........................ 9
5.5 Expiry of Options...................................... 9
5.6 Payment of Option Exercise Price....................... 9
5.7 Treatment of Subordinate Voting Shares Acquired Upon
Exercise of Options.................................. 9
5.8 Accelerated Vesting on Change of Control............... 9
5.9 Adjustments in Event of Change in Subordinate
Voting Shares........................................ 10
5.10 Termination of Options Upon Death or Termination
of Employment........................................ 10
5.11 Right to Exercise Options Subject to Legal Restrictions 10
5.12 Options to be Granted in Accordance with Laws.......... 10
5.13 Participants to Deliver Written Representations
Prior to Exercise of Options......................... 10
5.14 No Rights as a Shareholder............................. 10
5.15 Reduction in Number of Shares Subject to Options
in Event of Prolonged Leave.......................... 10
ARTICLE VI
PERMITTED AND REQUIRED TRANSFERS OF PLAN SECURITIES
6.1 Permitted Transfers of Plan Shares to Immediate Family
Members and Personal Entities.......................... 11
6.2 Permitted Sales of Plan Shares......................... 11
6.3 Intentionally deleted.................................. 12
6.4 Intentionally deleted.................................. 12
6.5 Required Sales Upon Participant Loan Default........... 12
6.6 Closing of Sales....................................... 12
6.7 Cancellation of Options Upon Termination of Employment. 12
6.8 All Payments to be Applied First to Repayment of
Participant Loans.................................... 13
ARTICLE VII
AMENDMENT AND TERMINATION OF PLAN
7.1 Amendment of Plan...................................... 13
7.2 Termination Not to Affect Outstanding Plan Securities.. 13
7.3 Termination of Plan.................................... 13
ARTICLE VIII
MISCELLANEOUS
8.1 Notices................................................ 13
8.2 Financial Information.................................. 14
8.3 No Rights to Continued Employment...................... 14
8.4 Assignment............................................. 14
ARTICLE IX
EFFECTIVE DATE
9.1 Effective Date......................................... 14
ii
