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1.1
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Purpose.
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1.2
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Stock Purchase Plan.
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1.3
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Effective Date and Term.
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1.4
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Stock Subject to Plan.
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(a)
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The SLF Stock subject to purchase under the Plan shall be acquired in the open market by the Custodian. The
aggregate number of shares of SLF Stock that may be purchased under the Plan shall not exceed 500,000 shares. All shares of SLF Stock purchased under the Plan other than shares purchased as a result of the reinvestment of dividends will
count towards this limitation. If, on a given Exercise Date, the number of shares which are to be purchased exceeds the number of shares then available under the Plan, the Committee shall make a pro-rata allocation of the shares remaining
available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.
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(b)
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In case of a reorganization, recapitalization, stock split, reverse stock split, stock dividend, combination
of shares, merger, consolidation, offering of rights or other change in the capital structure of Sun Life Financial Inc., the Committee shall make such adjustment as it deems appropriate in the number, kind, and purchase price of shares
available for purchase under the Plan so that the aggregate consideration payable by the Employers, and the value of the benefit to Employees, shall not be changed.
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1.5
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Administrative Responsibilities.
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3.1
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Eligibility for Enrollment.
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(a)
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An Employee may enroll in the Plan for an Offering Period unless (i) on the Offering Date of the Plan’s first
Offering Period, the Employee is suspended from making employee 401(k) deferral contributions to the Company’s Sun Advantage Savings and Investment Plan because he or she previously made a hardship withdrawal from such Plan, or (ii) the
Employee would, immediately upon enrollment, own directly or indirectly, or hold options or rights to acquire, an aggregate of 5% or more of the total combined voting power or value of all outstanding shares of all classes of the
Employer, a Parent Corporation, or a Subsidiary Corporation, determined in accordance with Section 424(d) of the Code.
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(b)
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The Committee or its designee will notify an Employee that the Employee is first eligible to enroll in the
Plan within a sufficient time before the Employee must elect to participate in the Plan.
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3.2
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Enrollment Procedure.
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(a)
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To enroll in the Plan for an Offering Period, an Employee must make an election with the Employer (or its
designee) and elect to make contributions under the Plan in accordance with Section 3.3 (i) in such form and manner (including electronically through a website) as determined and communicated by the Committee and (ii) a specified number
of days (as determined and communicated by the Committee) prior to the start of an Offering Period.
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(b)
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An Employee whose enrollment in and contributions under the Plan continue throughout an Offering Period will
automatically be enrolled in the Plan for the next Offering Period unless:
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(i)
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the Employee timely elects to cease participation in the Plan with the Employer (or its designee) before the
Offering Date for the next Offering Period in accordance with Section 5.1(a)(i),
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(ii)
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the Employee elects to cease payroll contributions during a current Offering Period in accordance with Section
5.1(a)(ii),
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(iii)
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the Employee elects to withdraw payroll contributions credited to his or her Payroll Contributions Account in
accordance with Section 5.1(a)(iii), or
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(iv)
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on the Offering Date the Employee is not eligible to participate in accordance with Section 3.1.
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3.3
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Contributions.
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(a)
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To enroll for the first time in the Plan for an Offering Period, an Employee must elect to make a contribution
under the Plan, subject to the terms and conditions prescribed below, by means of payroll deduction for each payroll period within the Offering Period.
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(b)
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An Employee may elect to make payroll contributions in a whole percentage of Compensation per Offering Period
which is not less than 1% and not more than 15% (or such other maximum percentage as the Committee may establish from time to time and communicate to Employees before the Offering Date). An Employee shall not be permitted to make any
payments in cash or check or any other form which is not made through payroll deductions.
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(c)
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Payroll deductions will commence with the first payroll period that begins within the Offering Period and will
be made in conformity with the Employer’s payroll deduction schedule and practices.
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(d)
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Unless the Committee permits under uniform rules established by the Committee, and except as provided in
Section 5.1, an Employee may, by giving notice to the Employer (or its designee) a specified number of days (as determined and communicated by the Committee) prior to the start of an Offering Period, elect to (i) change the contribution
rate effective the first payroll period that begins within the Offering Period or (ii) discontinue contributions only as of the beginning of the Offering Period.
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3.4
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Payroll Contribution Accounts.
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4.1
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Grant of Option; Terms.
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(a)
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The option price will be as specified in Section 4.2.
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(b)
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The option will be exercised automatically as of the Exercise Date for the Offering Period.
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(c)
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The payment by an Employee for the SLF Stock purchased under an option will be made only from amounts credited
to the Employee’s Payroll Contribution Account as a result of payroll deductions in accordance with Section 3.3.
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(d)
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No Employee shall be granted an option which permits his or her right to purchase shares of SLF Stock under
all Code Section 423 employee stock purchase plans of the Employer, Parent Corporations, and Subsidiary Corporations to accrue at a rate which exceeds $25,000 of fair market value of such shares (determined at the time such option is
granted) for each calendar year in which such option is outstanding at any time. Any contribution election in effect that would otherwise exceed such limitation shall be given effect only to the maximum extent such limitation would not be
violated.
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(e)
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No Employee shall be granted an option for an Offering Period which permits his or her right to purchase
shares of SLF Stock to exceed 5,000 shares. Any contribution election in effect that would otherwise exceed such limitation shall be given effect only to the maximum extent such limitation would not be violated.
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4.2
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Purchase of SLF Stock; Price.
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(a)
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Subject to Section 4.1, as soon as administratively reasonable on or following the Exercise Date, the
Custodian will apply the aggregate amount credited to each Employee’s Payroll Contribution Account as of such Exercise Date to purchase in the open market a number of shares of SLF Stock equal to such amount divided by the discounted
purchase price for each share that is set forth in Section 4.2(b). The Employer shall pay to the Custodian on behalf of an Employee any additional amount required to purchase the shares in accordance with Section 4.2(b). The shares so
purchased for each Employee shall be allocated to the Custodial Account for the Employee. The shares shall be held by the Custodian on behalf of the Employee and registered in the name of a nominee.
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(b)
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The option price of each share of SLF Stock purchased as of an Exercise Date shall be 90% of the Fair Market
Value of the share on such Exercise Date; or such other price designated by the Committee in its sole discretion; provided that such
other price may not be lower than 85% of the Fair Market Value of the share on the Exercise Date.
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4.3
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Custodial Accounts.
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4.4
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No Interest on Account Balances.
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5.1
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Cessation of Enrollment.
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(a)
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Subject to Section 5.2, an Employee’s enrollment in the Plan will cease under the following circumstances:
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(i)
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An Employee’s enrollment will cease as of the beginning of the next Offering Period that is a specified number
of days (as determined and communicated by the Committee) after the Employee makes an election specifying such future cessation of enrollment in the form and manner (including electronically through a website) determined and communicated
by the Committee.
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(ii)
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In the Committee’s discretion, based on uniform rules and procedures established from time to time by the
Committee, an Employee’s enrollment will cease during a current Offering Period and for future Offering Periods if the Employee makes an election specifying the cessation of payroll contributions for such current Offering Period and such
election is made more than three months prior to the next Exercise Date. As of the Exercise Date of such Offering Period, SLF Stock
shall be purchased with payroll contributions made prior to such cessation of payroll contributions.
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(iii)
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In the Committee’s discretion, based on uniform rules and procedures established from time to time by the
Committee during an Offering Period, an Employee may at any time that is more than three months prior to the next Exercise Date, elect to withdraw all (i.e., 100%) of the payroll contributions credited to his or her Payroll Contribution
Account and not yet used to purchase SLF Stock. In such case, the Employee’s enrollment will cease during such Offering Period and all cash credited to the Employee’s Payroll Contribution Account shall be paid to the Employee as soon as
is administratively reasonable.
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(iv)
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(A) Except as provided in Sections 5.1(a)(iv)(B), (C) and (D) below, an Employee’s enrollment will cease on termination of employment with the Employer
for any reason, including death.
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(B)
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If the Employee transfers employment from one Participating Subsidiary to another Participating Subsidiary,
the Employee’s enrollment in the Plan will not cease.
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(C)
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If the Employee transfers employment from a Participating Subsidiary to a Parent Corporation or to a
Subsidiary Corporation which is not a Participating Subsidiary, the Employee’s enrollment will cease, provided however, if the next Exercise Date is three months or less after the date of such transfer, any amounts previously contributed
to the Employee’s Payroll Contribution Account will be used to purchase SLF Stock in accordance with Section 4.2.
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(D)
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If the Employee transfers employment from the Employer to Sun Life Investments LLC, the Employee’s enrollment
will cease, provided, however, any amounts previously contributed to the Employee’s Payroll Contribution Account will be used to purchase SLF Stock in accordance with Section 4.2.
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(v)
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An Employee’s enrollment will cease as of the date on which the Employee would own directly or indirectly, or
hold options or rights to acquire, an aggregate of 5% or more of the total combined voting power or value of all outstanding shares of all classes of the Employer, any Parent Corporation, or any Subsidiary Corporation, determined in
accordance with Sections 424(d) of the Code.
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(vi)
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An Employee’s enrollment will cease upon termination of the Plan.
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(b)
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An Employee whose enrollment in the Plan ceases under this Section other than by reason of termination of the
Plan may again enroll in the Plan as of any subsequent Offering Date if the Employee satisfies the eligibility conditions of Section 3.1 as of such date.
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5.2
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Distributions to Employee.
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(a)
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At such time as determined by the Committee, after an Employee’s enrollment in the Plan ceases under Section
5.1(a)(iv)(A) other than as a result of death, the Committee will direct the Employer to distribute to the Employee cash equal to the total cash held in the Payroll Contribution Account, provided however, if the Employee’s termination of
employment occurs after the 15th day of the last month of an Offering Period, an amount equal to the cash held in the Employee’s Payroll Contribution Account will be used to purchase SLF Stock in accordance with Section 4.2.
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(b)
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At such time as determined by the Committee, after the later of (i) the date an Employee’s enrollment in the
Plan ceases under Section 5.1(a)(iv)(A) other than as a result of death and (ii) the second anniversary of that Employee’s most recent Offering Date, the Committee will direct the Custodian to distribute to the Employee the whole shares
of SLF Stock then credited to the Employee’s Custodial Account plus cash equal to the fair market value of any fractional shares then credited to the Employee’s Custodial Account.
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(c)
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At such time as determined by the Committee, after the date an Employee’s enrollment in the Plan ceases under
Section 5.1(a)(iv)(A) as a result of death, (i) the Committee will direct the Employer to distribute to the Employee’s estate cash equal to the total cash held in the Payroll Contribution Account, and (ii) the Committee will direct the
Custodian to distribute to the Employee’s estate the whole shares of SLF Stock then credited to the Employee’s Custodial Account plus cash equal to the fair market value of any fractional shares then credited to the Employee’s Custodial
Account.
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(d)
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At such time as determined by the Committee, after an Employee’s enrollment in the Plan ceases under Section
5.1(a)(vi) (provided that a successor plan is not established), (i) the Committee will direct the Employer to distribute to the Employee cash equal to the total cash held in the Payroll Contribution Account, and (ii) the Committee will
direct the Custodian to distribute to the Employee the whole shares of SLF Stock then credited to the Employee’s Custodial Account plus cash equal to the fair market value of any fractional shares then credited to the Employee’s Custodial
Account.
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(e)
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An Employee may from time to time request a cash or in-kind distribution of the shares of SLF Stock then
credited to the Employee’s Custodial Account, provided that an in-kind distribution may not include any shares that were credited to the Employee’s Custodial Account on the Exercise Date of an Offering Period if that Offering Period’s
Offering Date is less than two years ago. Such distribution will be made as soon as is administratively reasonable.
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(f)
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Section 5.1(a)(iii) above permits an Employee to request a withdrawal of cash equal to the total amount
credited to the Employee’s Payroll Contribution Account.
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(g)
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If an Employee dies before receiving a distribution under Section 5.2(a), (b), (d), (e), or (f), all shares of
SLF Stock and cash amounts payable under that Section to the Employee will be distributed to the Employee’s estate as soon as is administratively reasonable.
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(h)
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If a distribution of certificates representing the Employee’s shares of SLF Stock is distributed to the
Employee (or the Employee’s estate), he or she shall pay the Custodian a reasonable fee determined by the Committee.
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(i)
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If an Employee (or the Employee’s estate) elects that a distribution be made in cash instead of certificates
representing shares of SLF Stock, he or she shall pay and authorizes the Custodian or Employer to withhold any brokerage fee or expense to sell the shares on his or her behalf.
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6.1
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Committee.
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6.2
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Committee Powers.
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(a)
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The Committee will have all powers appropriate to administer the Plan including, but not limited to, the
following:
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(i)
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To determine all questions that may arise under the Plan, including the power to determine the rights or
eligibility of an Employee or the Employee’s estate;
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(ii)
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To construe the terms of the Plan and to remedy ambiguities, inconsistencies or omissions;
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(iii)
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To adopt such rules of procedure and prescribe such forms as it considers appropriate for the proper
administration of the Plan and are consistent with the Plan;
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(iv)
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To enforce the Plan provisions and any rules of procedure which it adopts;
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(v)
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To employ agents, attorneys, accountants, actuaries, or other persons, and to allocate or delegate to them
such powers, rights, and duties as it considers appropriate for the proper administration of the Plan.
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(b)
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The Committee will have such further powers and duties as may be elsewhere specified in the Plan.
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6.3
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Committee Actions.
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(a)
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The Committee may allocate authority to a specific member(s) of the Committee to carry out such duties as the
Committee may assign;
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(b)
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A member of the Committee may by writing delegate any or all of such member’s rights, powers, and duties to
any other member of the Committee, with the consent of the latter; and
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(c)
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The Committee may delegate to any agents such duties and powers, as it deems appropriate, by an instrument in
writing which specifies which duties are so delegated and to whom each such duty is so delegated.
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6.4
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Member Who is Participant.
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6.5
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Information Required from Employer.
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6.6
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Information Required from Employees.
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6.7
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Uniform Rules and Administration.
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7.1
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Amendment.
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(a)
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The Company reserves the right to amend the Plan from time to time subject to the following limitations:
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(i)
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No amendment will be made without the prior approval of the stockholders of the Company if the amendment will
(1) increase the number of shares of SLF Stock that may be purchased under the Plan, or (2) materially modify the eligibility conditions or increase the benefits available to Employees under the Plan.
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(ii)
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No amendment will make any change in an option granted previously and outstanding which adversely affects the
rights of an Employee with respect to such option.
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(iii)
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No amendment will reduce the amount of an Employee’s Payroll Contribution Account or Custodial Account
balance.
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(iv)
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No amendment will be made which will cause the Plan to not satisfy the requirements under Section 423 of the
Code.
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(b)
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The Company hereby delegates to the President of the Company the power to amend the Plan, subject to the
limitations of this Section.
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7.2
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Termination.
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7.3
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Rights Upon Termination.
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(a)
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If the Plan terminates, the Committee may elect to terminate all outstanding options to purchase shares of SLF
Stock under the Plan either immediately or upon completion of the purchase of shares as of the next following Exercise Date.
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(b)
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If the Committee terminates an option to purchase shares prior to the expiration of the option, an amount
equal to all amounts contributed to the Plan which remain in an Employee’s Payroll Contribution Account will be returned to the Employee as soon as is administratively reasonable.
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8.1
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No Transfer or Assignment.
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8.2
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Equal Rights and Privileges.
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8.3
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Rights as Stockholder.
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8.4
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Rights as Employee.
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8.5
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Costs.
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8.6
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Liability for Taxes.
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8.7
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Reports.
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8.8
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Governmental Approval.
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8.9
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Stockholder Approval.
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8.10
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Conditions Upon Purchase of Shares.
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8.11
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Sun Life Financial Securities Trading Policy
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8.12
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Applicable Law.
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8.13
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Number.
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8.14
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Headings.
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