Exhibit 10.33
DOMTAR INC.
EXECUTIVE STOCK
OPTION
AND
SHARE PURCHASE
PLAN
The Executive Stock Option and Share
Purchase Plan of Domtar Inc. was adopted by the Board of Directors
on November 5, 1987 and ratified by the shareholders on
April 27, 1988. The Plan was subsequently amended on
March 16, 1993, July 24, 1996, March 11,
1999, February 28, 2002 and February 27,
2003.
The provisions of the Plan and the
rules adopted pursuant to Section 3.1 of the Plan govern the
interpretation and administration of the Plan.
This booklet contains the Plan text,
and the Rules and Forms for use in connection with the
Plan.
(Includes all amendments - May
2003)
TABLE OF
CONTENTS
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PAGE
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1.
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DEFINITIONS
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1
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2.
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PURPOSES OF THE
PLAN
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2
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3.
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ADMINISTRATION
OF THE PLAN
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3
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4.
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SHARES SUBJECT
TO THE PLAN
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3
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5.
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OPTIONS
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3
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5.1 Grant of
Options
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3
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5.2 Payment of
Subscription Price
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3
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5.3 Option
Period
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3
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5.4 Exercise of Options
and S.A.R.s
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5
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5.5 Share Appreciation
Rights
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5
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5.6 Options and S.A.R.s
Non-Assignable
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5
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6.
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RIGHTS
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6
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6.1 Grant of
Rights
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6
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6.2 Payment of
Subscription Price
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6
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6.3 Exercise of
Rights
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6
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6.4 Bonus
Shares
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6
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6.5 Rights
Non-Assignable
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7
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7.
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FINANCIAL
ASSISTANCE
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7
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8.
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RIGHTS TO
SUBSCRIBE FOR SHARES OR OTHER SECURITIES
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8
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9.
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OFFER FOR
SHARES OF THE CORPORATION
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8
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10.
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PARTICIPANT NOT
A SHAREHOLDER
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8
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11.
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EFFECTS OF
ALTERATION OF CAPITAL STOCK
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8
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12.
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AMENDMENT AND
TERMINATION
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9
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13.
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LEGAL
REQUIREMENTS
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9
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14.
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GOVERNING
LAW
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9
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15.
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PARTICIPATION
VOLUNTARY
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9
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16.
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COMING INTO
EFFECT
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10
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DOMTAR INC.
EXECUTIVE STOCK
OPTION
AND
SHARE PURCHASE
PLAN
1. DEFINITIONS
The following words and phrases
shall have the following meanings unless there be something in the
context inconsistent therewith:
“Board”
shall mean the Board of Directors of
the Corporation as the same may be constituted from time to
time.
“Bonus
Shares” shall mean
Shares reserved for issuance on the Third Anniversary Date, or such
other date as the Committee may determine, to certain Participants
in accordance with the terms of the Plan and as described more
fully in Subsection 6.4.1.
“Committee” shall mean the Human Resources Committee
(formerly the Executive Management and Compensation Committee) of
the Board as the same may be constituted from time to
time.
“Corporation”
shall mean Domtar Inc.
“Eligible
Executive” shall
have the meaning ascribed thereto in Section 2.
“Loan”
shall mean the particular loan
incurred by a Loan Participant (other than a Senior Executive)
pursuant to Section 7 in respect of the exercise of a
Right.
“Loans”
shall mean the aggregate at any time
of all Loans incurred by a Loan Participant (other than a Senior
Executive) in respect of the exercise of Rights.
“Loan
Participant” shall
mean a Participant (other than a Senior Executive) who has
exercised a Right and applied for a Loan from the Trustee pursuant
to the provisions of the Plan.
“Market
Value” shall mean
the arithmetic average of the closing prices per share for a board
lot of Shares traded on The Toronto Stock Exchange on the last
trading day preceding the event and on which at least one board lot
of Shares was traded on each such exchange.
“Option”
shall mean, as the context requires,
either the entire option to purchase Shares granted to a
Participant pursuant to the Plan or the unexercised portion
thereof.
“Participant”
shall mean an Eligible Executive to
whom an Option, a S.A.R. or a Right has been granted pursuant to
the Plan.
“Plan”
shall mean this Executive Stock
Option and Share Purchase Plan.
“Purchase
Contract” shall
mean a non-transferable purchase contract entered into between a
Senior Executive and the Corporation in connection with the
exercise of Rights as contemplated in Section 6.1 of the
Plan.
“Right”
shall mean the right to purchase
Shares of the Corporation granted to a Participant pursuant to the
Plan.
“S.A.R.”
shall mean, as the context requires,
either the aggregate share appreciation rights granted to a
Participant pursuant to the Plan or the unexercised portion
thereof.
“S.A.R.
Period” shall mean
the period during which a S.A.R. may be exercised, being the period
commencing on the third business day and ending on the twelfth
business day following the dates of the release of the quarterly or
annual financial statements of the Corporation.
“Senior
Executive” shall
mean an Eligible Executive who is also a member of the
Corporation’s Management Committee, an Executive Officer as
defined under the United States Securities Exchange Act of 1934, as
amended, or such other person designated as a senior executive by
the Committee from time to time.
“Shares”
shall mean common shares of the
capital stock of the Corporation as from time to time
constituted.
“Specified
Price” shall mean
the Market Value on the day of the grant of an Option or Right,
less such discount, if any, not exceeding the maximum permitted by
regulatory authorities, which shall have been set by the Committee
at the time of the grant.
“Subscription
Price” shall mean
an amount equal to the number of Shares in respect of which an
Option, a S.A.R. or a Right is exercised multiplied by the
Specified Price.
“Third Anniversary
Date” shall mean
the date which is 36 months after the date of grant of any Right,
provided that such Right was exercised as prescribed in section 7
of the Rules.
“Trustee”
shall mean such financial
institution as is appointed Trustee under the Plan by the
Committee, and any successor Trustee appointed by the
Committee.
Words importing the masculine gender
shall include the feminine gender.
2. PURPOSES OF THE
PLAN
The purposes of the Plan are
(i) to encourage the productivity of officers and full-time
executives of the Corporation and its subsidiaries as well as of
those corporations in which the Corporation or any of its
subsidiaries holds at least 50% of the voting shares (“
Eligible Executives ”) in furthering the development,
growth and profitability of the Corporation and to encourage
participation of such Eligible Executives in the ownership of the
Corporation, (ii) to contribute in providing such Eligible
Executives with a total compensation and reward package that is
comparable to industry practice and is tax effective, and
(iii) to assist the Corporation in retaining and attracting
executives with experience and ability.
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3. ADMINISTRATION OF THE PLAN
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3.1
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The Plan is
under the direction of the Committee which, in addition to the
specific powers conferred upon it hereunder, has full and complete
authority to interpret the Plan and, subject to Sections 11
and 12, to prescribe such rules and regulations and make such other
determinations as it deems necessary or desirable to meet the
objectives of and to administer the Plan.
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3.2
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The Corporation
shall pay all administrative costs of the Plan.
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4. SHARES SUBJECT TO THE
PLAN
The number of Shares that may be
issued pursuant to the exercise of Options, S.A.R.s and Rights
shall not exceed 16,000,000 Shares, subject to adjustment pursuant
to Section 11. All Shares subject to Options, S.A.R.s and
Rights that have expired, terminated or have been cancelled without
having been exercised shall be available for any subsequent
Options, S.A.R.s and Rights under the Plan.
5. OPTIONS
5.1 Grant of
Options
The Committee, after considering the
recommendation of the Chief Executive Officer of the Corporation,
shall designate from among the Eligible Executives those to whom
Options and S.A.R.s shall be granted, the number of Shares to be
covered by each Option, the number of S.A.R.s, if any, to be
allotted by virtue of each such Option, the period during which the
same may be exercised and the other terms and conditions attaching
thereto. Any Participant, at the time of the grant of an Option and
S.A.R., may hold more than one Option. The grant of each Option and
S.A.R. shall be evidenced by a letter from the Corporation
addressed to the Participant setting forth the number of Shares
covered by such Option, the Specified Price, the option period and
any other terms and conditions attaching thereto, any financial
assistance provided in respect thereof pursuant to Section 7
and the number of S.A.R.s included therewith.
5.2 Payment of Subscription
Price
The Subscription Price for the
Shares covered by an Option granted under this Plan shall be paid
in full at the time of exercise of such Option.
5.3 Option Period
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5.3.1
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Subject to Section 5.4, each
Option and each S.A.R., if any, shall be exercisable during a
period established by the Committee provided that, unless otherwise
determined by the Committee, this period shall commence
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not earlier than 12 months after
the date of the grant in respect of the exercise of an Option and
24 months in respect of the exercise of a S.A.R. and shall expire
no later than 10 years after the date of grant, provided
further that unless otherwise determined by the
Committee:
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(a)
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in the event of
the retirement of the Participant, no further portions of the
Options or S.A.R.s held by such Participant shall become
exercisable, and any Options and S.A.R.s then exercisable by such
Participant, shall terminate on the earlier of the termination date
of the Option or S.A.R., as the case may be, first established by
the Committee and three years after the date of the
Participant’s retirement where the Participant is 60 years of
age or older at the date of retirement and otherwise one year after
the date of the Participant’s retirement, except, in either
case, for the first Option and related S.A.R. allotted to the
Participant which have not been fully exercised because of any
limitations imposed by the Committee as to the rate of exercise
pursuant to Subsection 5.4.1 or the commencement of the
exercise period pursuant to the foregoing paragraph of this
Subsection 5.3.1, in which event the Participant will be
entitled to exercise such first Option and related S.A.R. up to 48
months from the date of the grant of the first Option and related
S.A.R., and provided further that during such period the
Participant shall not be restricted in the rate of exercise of the
first Option and related S.A.R. by any limitations imposed by the
Committee pursuant to Subsection 5.4.1;
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