Exhibit
4.1
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1.
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PREAMBLE AND
DEFINITIONS
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The Plan described in this document
shall be called the “Corporate Strategy Implementation
Recognition Program”.
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1.2
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Purposes of the
Plan .
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The purposes of the Plan
are:
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a.
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to promote a further alignment of
interests between employees and the shareholders of the Corporation
with respect to the implementation of the Corporate Strategy;
and
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b.
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to retain employees with the
knowledge, experience and expertise required by the
Corporation.
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1.3.1
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“Affiliate” means any corporation, partnership or other
entity in which the Corporation, directly or indirectly, has
majority ownership interest.
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1.3.2
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“Agent”
has the meaning as meaning set out
in Section 7.4.
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1.3.3
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“Applicable
Law” means any
applicable provision of law, domestic or foreign, including,
without limitation, applicable securities legislation, together
with all regulations, rules, policy statements, rulings, notices,
orders or other instruments promulgated thereunder, and Stock
Exchange Rules.
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1.3.4
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“Beneficiary”
means, subject to Applicable Law,
an individual who has been designated by an Eligible Employee, in
such form and manner as the Committee may determine, to receive
benefits payable under the Plan upon the death of the Eligible
Employee, or, where no such designation is validly in effect at the
time of death, the Eligible Employee’s legal
representative.
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1.3.5
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“Board”
means the Board of Directors of the
Corporation.
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1.3.6
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“Cause”
in respect of an Eligible Employee
means just cause or cause under Applicable Law and, in addition,
includes the Eligible Employee’s:
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(a)
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willful breach or neglect of the
duties of his employment or willful breach or neglect of
obligations to the Corporation or an Affiliate under the term of
his employment (whether written or unwritten), including being
absent from his place of work for four or more days in succession
without consent, except where such absence is
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permitted by Applicable Law or the
terms of the Eligible Employee’s employment;
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(b)
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failure or refusal to perform such
duties or obligations after demand for performance or to comply
with the rules, policies or practices of the Corporation or an
Affiliate, as applicable;
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(e)
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gross, serious or repeated
misconduct;
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(f)
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conduct where such conduct
endangers, or is likely to endanger, the health or safety of
others;
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(g)
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conviction of a crime constituting a
felony or indictable offence;
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(h)
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serious breach of his or her
contract of employment;
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(i)
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gross incompetence; or
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(j)
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action or failure to act which has
the effect of bringing the Corporation and/or any Affiliate into
disrepute.
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1.3.7
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“Change in
Control” means the
occurrence of any of the following events:
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(a)
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any person, partnership, entity or
group, howsoever composed hereafter acquires direct or indirect,
actual or de facto control of the Corporation. For the purposes of
this Section 1.3.7, “control” means the ability to
elect a majority of the members of the Board and
“group” refers to a combination of persons,
partnerships, or entities, or any of the foregoing that act in
concert;
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(b)
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there is any acquisition of 50% or
more of the shares of the Corporation having entitlement to vote in
the election of the directors of the Corporation;
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(c)
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the Corporation enters into an
amalgamation, arrangement, restructuring, reorganization, merger or
consolidation arrangement whereby, or the ultimate effect of which
is that, any person, partnership, entity or group, howsoever
composed, acquires direct or indirect, actual or de facto control
of the Corporation;
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(d)
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the shareholders of the Corporation
approve the liquidation, winding up or other dissolution of the
Corporation; or
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(e)
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the shareholders of the Corporation
approve the sale of all or substantially all of the assets of the
Corporation.
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1.3.8
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“Committee” means the Management Succession and Compensation
Committee of the Board or such other committee of the Board which
may be appointed by the Board to, among other things, interpret,
administer and implement the Plan and includes any delegate of the
Committee under Section 10.3 with respect to such duties and powers
as have been delegated to him or her thereunder.
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1.3.9
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“Corporate
Strategy” means the
global business strategy of Talisman as approved by the Board on
April 9, 2008, as modified by the Corporation from time to
time.
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1.3.10
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“Corporation”
means Talisman Energy Inc. and any
successor corporation whether by amalgamation, merger or
otherwise.
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1.3.11
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“Disability” means the Eligible Employee’s physical or
mental incapacity that prevents him from substantially fulfilling
his duties and obligations on behalf of the Corporation or, if
applicable, an Affiliate, and in respect of which the Eligible
Employee commences receiving, or is eligible to receive, disability
benefits under the Corporation’s or an Affiliate’s
short-term or long-term disability plan.
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1.3.12
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“Dividend Equivalent
PSU” has the
meaning set out in Section 5.2.
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1.3.13
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“Effective
Date” has the
meaning set out in Section 3.1.
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1.3.14
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“Eligible
Employee” means any
permanent non-unionized employee of the Corporation or an Affiliate
who is classified by the Corporation or Affiliate for payroll
purposes as being in any pay band below M2/T2.
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1.3.15
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“Employed”
means, with respect to an Eligible
Employee, that:
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(a)
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he is performing work at a workplace
of the Corporation or an Affiliate; or
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(b)
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he is not actively at work at a
workplace of the Corporation or an Affiliate due to an approved
leave of absence, maternity or parental leave or
Disability.
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For greater certainty, except as
expressly provided herein, an individual whose employment has been
terminated without Cause by the Corporation or an Affiliate shall
not be considered to be “Employed” for purposes of the
Plan during any statutory, contractual or common law notice
period.
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1.3.16
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“Grant”
means a grant of PSUs made to an
individual pursuant to Section 4.1.
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1.3.17
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“Grant Agreement”
means an agreement between the
Corporation or an Affiliate and an Eligible Employee under which a
PSU is granted, as contemplated by Section 4.2, together with such
schedules, amendments, deletions or changes thereto as are
permitted under the Plan.
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1.3.18
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“Grant
Date” means the
effective date of a Grant.
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1.3.19
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“Market
Value” means, with
respect to any particular date, the average closing price per Share
on the Stock Exchange over the immediately preceding 10 Trading
Days.
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1.3.20
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“Minimum
Award” means fifty
per cent (50%) of the PSUs included in a Grant, together with any
Dividend Equivalent PSUs related thereto, provided that where the
number of PSUs included in a Grant to an Eligible Employee is
adjusted pursuant to Section 6.6 or Section 6.9, the Eligible
Employee’s Minimum Award and related Dividend Equivalent PSUs
shall be adjusted accordingly so as to represent 50% of the PSUs
credited to the Eligible Employee’s PSU Account immediately
following such adjustment.
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1.3.21
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“Performance
Condition” means
such measure of Talisman’s performance in implementing the
Corporate Strategy as may be determined by the Committee with
respect to a Grant pursuant to Section 4.4.
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1.3.22
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"Plan" means this Corporate Strategy Implementation
Recognition Program, including any schedules or appendices hereto,
as amended from time to time.
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1.3.23
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“Pro Rated
PSUs” has the
meaning ascribed thereto in Sections 6.4, 6.5, 6.6, 6.7 or 6.8, as
applicable.
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1.3.24
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“ PSU”
means a unit granted to an Eligible
Employee that is represented by a bookkeeping entry on the books of
the Corporation, the value of which on any particular date shall be
equal to the Market Value.
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1.3.25
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“PSU
Account” has the
meaning set out in Section 5.1.
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1.3.26
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“Retirement” means the Eligible Employee’s retirement
from the Corporation or an Affiliate, as applicable, provided that
such retirement is accepted by the Corporation or Affiliate
pursuant to a letter from the Corporation or Affiliate granting the
Eligible Employee retirement status and confirming the Eligible
Employee’s date of retirement.
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1.3.27
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“Settlement
Value” means, with
respect to a Vested PSU, the closing price per Share on the Stock
Exchange on the Vesting Date of such Vested PSU.
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1.3.28
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“Share”
means a common share of the
Corporation and such other share as may be substituted for it as a
result of amendments to the articles of the Corporation,
arrangement, reorganization or otherwise, including any rights that
form a part of the common share or substituted share.
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1.3.29
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“Share Purchase
Trust” means a
trust established pursuant to Section 7.1 hereof with a bank or
trust company that is independent of and unaffiliated with the
Corporation as Trustee, to acquire and hold Shares for delivery
from time to time to Eligible Employees upon settlement of Vested
PSUs.
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1.3.30
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“Stock
Exchange” means
The Toronto Stock Exchange, or if the Shares are not listed on
The Toronto Stock Exchange, such other stock exchange on which the
Shares are listed, or if the Shares are not listed on any stock
exchange, then on the over-the-counter market.
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1.3.31
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“Stock Exchange
Rules” means the
applicable rules of any stock exchange upon which shares of the
Corporation are listed.
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1.3.32
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“Talisman”
means the Corporation and its
Affiliates, collectively.
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1.3.33
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“Trading
Day” means any
date on which the Stock Exchange is open for the trading of Shares
and on which Shares are actually traded.
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1.3.34
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“Trustee”
means such person or persons as may
from time to time be appointed by the Committee as trustee of a
Share Purchase Trust.
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1.3.35
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“Vested
PSUs” has the
meaning set out in Section 6.1.
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1.3.36
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“Vesting
Date” means the
date on which a PSU becomes a Vested PSU in accordance with Section
6.2, Section 6.4, Section 6.5, Section 6.7, Section 6.8 or the
terms of a Grant Agreement.
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1.3.37
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“Vesting
Period” means,
with respect to a Grant, the period commencing on the Grant Date
and ending on January 31, 2010.
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2.
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CONSTRUCTION AND
INTERPRETATION
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2.1
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Gender, Singular,
Plural . In
the Plan, references to the masculine include the feminine; and
references to the singular shall include the plural and vice versa,
as the context shall require.
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2.2
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Governing Law
. The Plan shall be governed and interpreted in
accordance with the laws of the Province of Alberta and any
actions, proceedings or claims in any way pertaining to the Plan
shall be commenced in the courts of the Province of
Alberta.
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2.3
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Severability
. If any provision or part of the Plan is
determined to be void or unenforceable in whole or in part, such
determination shall not affect the validity or enforcement of any
other provision or part thereof.
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2.4
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Headings,
Sections . Headings wherever used herein are for reference
purposes only and do not limit or extend the meaning of the
provisions herein contained. A reference to a section or schedule
shall, except where expressly stated otherwise, mean a section or
schedule of the Plan, as applicable.
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3.
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EFFECTIVE DATE AND EMPLOYMENT
RIGHTS
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3.1
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Effective Date
. The Corporation is establishing the Plan
effective on August 1, 2008.
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3.2
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No Employment
Rights . Nothing contained in the Plan shall be deemed to
give any person the right to be retained as an employee of the
Corporation or of an Affiliate.
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4.
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PSU GRANTS AND VESTING
PERIODS
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4.1
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Grant of PSUs
. Each individual who:
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a.
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is an Eligible Employee on the
Effective Date; or
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b.
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becomes an Eligible Employee after
the Effective Date and before August 1, 2009
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shall receive a grant of PSUs in
such number as may be specified by the Committee with effect, in
the case of an Eligible Employee described in Section 4.1a., from
the Effective Date and, in the case of an Eligible Employee
described in Section 4.1b., from the effective date on which the
individual becomes an Eligible Employee.
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4.2
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Grant
Agreement. Each Grant
and the participation of an Eligible Employee in the Plan shall be
evidenced by a written Grant Agreement issued by the Corporation or
an Affiliate containing such terms and in such form as may be
prescribed by the Committee.
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The Committee may prescribe terms
for Grant Agreements in respect of Eligible Employees who are
subject to the laws of a jurisdiction other than Canada in
connection with their participation in the Plan that are different
than the terms of the Grant Agreements for Eligible Employees who
are subject to the laws of Canada in connection with their
participation in the Plan, and/or deviate from the terms of the
Plan set out herein, for purposes of compliance with Applicable Law
in such other jurisdiction or where in the Committee’s
opinion such terms or deviations are necessary or desirable to
obtain more advantageous treatment for the Corporation, an
Affiliate or the Eligible Employees in respect of the Plan under
the Applicable Law of the other jurisdiction.
Notwithstanding the foregoing, the
terms of any Grant Agreement shall be consistent with the Plan to
the extent practicable having regard to the Applicable Law of the
jurisdiction in which such Grant Agreement is
applicable.
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4.3
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PSUs
. Each PSU will give an Eligible Employee the
right to receive one Share from a Share Purchase Trust, or where
the Committee so specifies in the Grant Agreement applicable to the
PSU, a cash payment in an amount determined in accordance with the
Plan and such Grant Agreement, provided such PSU becomes a Vested
PSU in accordance with the terms of the Plan and the applicable
Grant Agreement. For greater certainty, an Eligible Employee or
Beneficiary shall have no right to receive any Shares or payment,
and no payment shall be made as compensation, damages, or
otherwise, with respect to any PSUs that are forfeited or otherwise
do not become Vested PSUs.
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4.4
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Performance Conditions and
Minimum Award. For
purposes of each Grant to an Eligible Employee the Committee shall
establish the Performance Conditions applicable to such Grant,
other than the Minimum Award, which Performance Conditions shall be
set out in the Grant Agreement relating to such Grant. No
Performance Conditions shall apply to a Minimum Award.
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4.5
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Waiver or Change of
Performance Conditions. The Committee may, without the consent of any
Eligible Employee, subsequent to the making of a Grant:
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a.
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waive any Performance Condition
applicable to the such Grant, or determine that it has been
satisfied;
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b.
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change or replace any Performance
Condition or modify the weighting as between difference Performance
Conditions applicable to a particular Grant as the Committee sees
fit in the event of a material change affecting Talisman including
a material acquisition, disposition, change in Applicable Law or
change in accounting standards applicable to Talisman provided that
the Committee reasonably determines that (i) the change or
replacement is required to preserve the rights of the Eligible
Employees under the Plan on a basis substantially proportionate to
that which existed prior to the event giving rise to the change or
replacement, or (ii) that the change or replacement will not
materially adversely affect the likelihood of vesting or amount of
any Grant.
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4.6
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Other Terms and
Conditions . Subject to the terms of the Plan, the Committee
may, in its sole discretion, determine other terms or conditions of
any PSUs, including any additional conditions with respect to the
vesting of PSUs, in whole or in part, which other terms or
conditions shall be set out in the applicable Grant Agreement. In
addition, the Committee may, in its sole discretion, authorize the
vesting of PSUs granted or credited to an Eligible Employee
hereunder that would, in the absence of such authorization, be
forfeited pursuant to Section 6.1.
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For greater certainty, no term or
condition imposed under a Grant Agreement may have the effect of
causing payment of the value of a PSU to an Eligible Employee, or
his or her Beneficiary, to occur after December 31 of the third
calendar year following the calendar year in respect of which such
PSU was granted.
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5.
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ACCOUNTS, DIVIDEND EQUIVALENTS
AND REORGANIZATION
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5.1
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PSU Account
. An account, called as an “PSU
Account”, shall be maintained by the Corporation, or an
Affiliate, as specified by the Committee, for each Eligible
Employee and will be credited with the Grants received by an
Eligible Employee pursuant to Section 4.1 and Dividend Equivalent
PSUs in respect of the PSUs included in such Grant. Where Section
6.4, Section 6.5, Section 6.6, Section 6.7 or Section 6.8 applies
with respect to an Eligible Employee’s PSUs, effective at the
time the calculation of Pro Rated PSUs is made under any such
Section, the number of PSUs recorded in the Eligible
Employee’s PSU Account will be increased or decreased
accordingly to equal the Eligible Employee’s Pro Rated PSUs.
An Eligible Employee’s PSU Account shall separately identify
those PSUs, including related Dividend Equivalent PSUs, that
comprise his or her Minimum Award and those PSUs, including related
Dividend Equivalent PSUs, that are subject to Performance
Conditions. PSUs that fail to vest in an Eligible Employee pursuant
to Section 6, or that are paid out to the Eligible Employee or his
or her Beneficiary, shall be cancelled and shall cease to be
recorded in the Eligible Employee’s PSU Account as of the
date on which such PSUs are forfeited or cancelled under the Plan
or are paid out, as the case may be.
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5.2
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Dividend Equivalent
PSUs .
Whenever during the Vesting Period
applicable to an Eligible Employee’s PSUs cash dividends are
paid on the Shares, additional PSUs will be credited to the
Eligible Employee’s PSU Account in accordance with this
Section 5.2 (“ Dividend Equivalent PSUs ”). The
number of Dividend Equivalent PSUs will be calculated by dividing
the cash dividends that would have been paid to the Eligible
Employee if the PSUs recorded in the Eligible Employee’s PSU
Account as at the record date for the cash dividend had been Shares
by the Market Value on the date on which the dividends are paid on
the Shares.
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5.3
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Adjustments
. In the event of any stock dividend, stock split,
combination or exchange of shares, capital reorganization,
consolidation, spin-off or other distribution (other than normal
cash dividends) of the Corporation’s assets to shareholders,
or any other similar changes affecting the Shares, a proportionate
adjustment to reflect such change or changes shall be made with
respect to the number of PSUs outstanding under the Plan, or
securities into which the Shares are changed or are convertible or
exchangeable may be substituted for Shares under this Plan, on a
basis proportionate to the number of PSUs in the Eligible
Employee’s PSU Account or some other appropriate basis, all
as determined by the Committee in its sole discretion.
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5.4
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No Certificates
. No certificates shall be issued with respect to
any PSUs.
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6.1
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Vested PSUs
. PSUs granted to an Eligible Employee shall vest
in accordance with Section 6.2, Section 6.4, Section 6.5, Section
6.7, or Section 6.8, as applicable. PSUs which vest shall be
redeemable for Shares or a cash payment in accordance with Section
7.3 or Section 7.4, as applicable, and are referred to herein as
“Vested PSUs”. PSUs which have been granted to an
Eligible Employee and which do not become Vested PSUs shall be
forfeited by the Eligible Employee and the Eligible Employee will
have no further right, title or interest in such PSUs.
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6.2
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Continued
Employment . Subject
to Section 6.3, Section 6.4, Section 6.5, Section 6.6, Section 6.7
and Section 6.8:
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a.
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PSUs that are the subject of a Grant
to an Eligible Employee and Dividend Equivalent PSUs credited to
the Eligible Employee’s PSU Account in respect of such PSUs,
other than the PSUs and Dividend Equivalent PSUs comprising the
Eligible Employee’s Minimum Award, shall vest on January 31,
2010 in such number as may be determined in accordance with the
Grant Agreement applicable to such Grant and having regard to the
extent to which applicable Performance Conditions have been
satisfied, and
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b.
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the PSUs comprising an Eligible
Employee’s Minimum Award in respect of a Grant referred to in
clause (a) above shall vest on January 31, 2010 irrespective of the
extent to which any Performance Conditions have been satisfied,
provided that the Eligible Employee remains employed throughout
such Vesting Period.
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For greater certainty, an Eligible
Employee shall not be considered to have ceased being Employed for
purposes of this Section 6.2 where, during a Vesting Period, he or
she ceases employment with the Corporation and immediately
commences employment with an Affiliate or ceases employment with an
Affiliate and immediately commences employment with the Corporation
or another Affiliate.
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6.3
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Termination of Employment for
Cause or Resignation . In the event an Eligible Employee’s
employment is terminated for Cause by the Corporation, or an
Affiliate, as applicable, or the Eligible Employee resigns from his
or her employment with the Corporation or an Affiliate, as
applicable, prior to the end of the Vesting Period relating to a
Grant received by such Eligible Employee, none of the PSUs relating
to such Grant, nor any Dividend Equivalent PSUs in respect of such
PSUs, shall vest, and all such PSUs shall be forfeited in
accordance with Section 6.1.
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6.4
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Termination without
Cause. In the event
an Eligible Employee’s employment is terminated without
Cau
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