8 October 2010 Roundtable, 2010-0373471C6 F - Actions fictives -- summary under Salary Deferral Arrangement

As consideration for bringing new employees to a Canadian corporation (“Opco”), Serviceco is issued phantom shares of Opco which generate cash payments equaling the dividends paid on corresponding common shares of Opco and which, on a change of control, are convertible into common shares of Opco. When asked to comment on the tax consequences respecting the phantom shares, CRA indicated that the relevant facts were set out in insufficient detail to comment.