A summary of the principal provisions of the 2019 Plan is set forth below. The summary is qualified by reference to the full text of the Plan Amendment, a copy of which is included as Appendix A to this Proxy Statement, as well as to the 2019 Plan, a copy of which was included as Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on March 31, 2019.
Administration
The 2019 Plan is administered by the Compensation Committee or other committee designated by the Board (as applicable, “Committee”). To the extent required to comply with Rule 16b-3 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), it is intended that each member of the Committee will be a “non-employee director” within the meaning of Rule 16b-3. Non-Employee Director awards are administered by the Board. The Committee or our Board may delegate its powers under the 2019 Plan to one or more members of the Board or one or more directors, officers or managers of the Company or any subsidiary, provided that no officer may be delegated the authority to grant awards to or amend awards held by executives of the Company who are subject to Section 16 of the Exchange Act or any officer or director to whom authority to grant or amend awards has been delegated. The Board, Committee or delegate thereof, as applicable, are referred to herein as the “plan administrator.” The Compensation Committee is currently the plan administrator.
The plan administrator has the authority to administer the 2019 Plan, including, notwithstanding any other provision of the 2019 Plan, the power to determine eligibility, the types and sizes of awards, the price and vesting schedule of awards, the methods for settling awards, the method of payment for any exercise or purchase price, any rules and regulations the plan administrator deems necessary to administer the 2019 Plan, and the acceleration or waiver of any vesting restriction.
Eligibility
Persons eligible to participate in the 2019 Plan include all employees (approximately 4,300, including seven executive officers as of February 28, 2021), approximately 550 consultants of the Company and its subsidiaries as of February 28, 2021, and our 10 Non-Employee Directors as of the conclusion of the Annual Meeting, in each case, as determined by the plan administrator. However, with respect to employees and consultants, under the Company’s current policies and practices, only employees at a Director-level and above (consisting of approximately 360 employees) are regularly eligible for equity grants, and no consultants are currently eligible for grants.
Limitation on Awards and Stock Available
If our stockholders approve the Plan Amendment, the number of shares of our common stock authorized for issuance under the 2019 Plan will equal the sum of (i) 7,075,000 shares, representing 9.9% of the issued and outstanding shares as of the date of this Proxy Statement, and (ii) any shares subject to issued and outstanding awards under the Prior Plans that expire, are cancelled or otherwise terminate following March 27, 2019, the effective date of the original 2019 Plan; provided, that no more than 7,075,000 shares may be issued pursuant to the exercise of ISOs. The shares distributed pursuant to an award under the 2019 Plan may be authorized but unissued shares, shares purchased by the Company on the open market or treasury shares.
If any shares of our common stock subject to an award under the 2019 Plan or any award under the Prior Plans are forfeited, expire, converted to shares of another entity in connection with a corporate transaction or are settled for cash, any shares deemed subject to such award may, to the extent of such forfeiture, expiration, conversion or cash settlement, be used again for new grants under the 2019 Plan. However, the following shares of our common stock may not be used again for grant under the 2019 Plan: (1) shares tendered or withheld to satisfy the exercise price of an option or a SAR; (2) shares tendered or withheld to satisfy the tax withholding obligations with respect to an award; (3) shares subject to a SAR that are not issued in connection with the stock settlement of the SAR on its exercise; and (4) shares purchased on the open market with the cash proceeds from the exercise of options. Awards granted under the 2019 Plan in connection with the assumption or substitution of outstanding equity awards previously granted by a company or other entity in the context of a corporate acquisition or merger will not reduce the shares of our common stock authorized for grant under the 2019 Plan, except as may be required by reason of Section 422 of the Code.
In addition, for so long as our common stock is listed and traded on the TSX, the number of shares of common stock issuable to “reporting insiders” of the Company (as defined in National Instrument 55-104-Insider Reporting Requirements and Exemptions) at any time, and issued in any one year, under the 2019 Plan, or when combined with all of the Company’s other equity-based compensation plans, may not exceed 10% of the Company’s issued and outstanding shares of common stock as of any date of determination. Additionally, notwithstanding any provision to the contrary in the 2019 Plan, the sum of the grant date fair value of equity-based awards and the amount of any cash-based awards granted to a Non-Employee Director in respect of such director’s service as a member of our Board or any Board committee during any calendar year shall not exceed $500,000 (the “Director Limit”). With respect to the Plan Amendment, we are seeking confirmation from the TSX that we are entitled to rely on an exemption from the various requirements of the TSX Company Manual relating to security based compensation arrangements since we are an “Eligible Interlisted Issuer” as defined in Section 602.1 of the TSX Company Manual
The closing price of our common stock on February 26, 2021, the last trading day of February, was $47.85.
The award agreement governing an award granted under the 2019 Plan will provide that such award (or any portion thereof) shall vest no earlier than one year measured from the date of grant. In addition, up to an aggregate of 5% of the number of shares of our common stock available for issuance under the 2019 Plan as of its effective date may be granted without regard to the foregoing minimum vesting requirement. Awards to Non-Employee Directors may vest on the earlier of the one year anniversary of the date of grant or the next annual meeting of the Company’s stockholders, so long as the period between such meetings is not less than 50 weeks.
Awards
The 2019 Plan provides for the grant of ISOs, NQSOs, SARs, restricted stock, RSUs, deferred stock, DSUs, cash-based awards and dividend equivalents. All awards under the 2019 Plan will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. No fractional shares of our common stock shall be issued or delivered pursuant to the 2019 Plan or any award thereunder.