underline;">: Election. Executives, who otherwise would be entitled to receive annual cash award under the short-term incentive plan (STIP) of the Corporation, which is a listed public corporation, may elect to participate in the Corporation's deferred share unit plan (the Plan) by giving a written notice by the last day of the fiscal year preceding the fiscal year to which the election is applicable. The election specifies the fixed dollar amount, or fixed percentage of the STIP cash awards otherwise receivable by the Executive for the applicable fiscal year which (subject to the discretion of the Compensation Committee not to award DSUs) will be applied to credit DSUs to the Executive's DSU account, based on the "Market Value" (5-day trailing VWAP) of the Corporation's shares on the 10th business day following the release of the Corporation's financial statements for the particular fiscal year. The election may be changed or revoked on the same prospective basis.
Dividends
The DSU account will be credited with additional DSUs for cash distributions that would have been received if the DSUs were shares, based on the Market Value on the payment date.
Settlement
No amount is payable to an Executive prior to his or her "Termination Date" (ceasing with the Corporation or any affiliate). Settlement (by the Executive or a Beneficiary) is permitted within the following year. "The Market Value of the DSUs credited to the Executive's DSU Account as at the Settlement Date will be paid to the Executive as a lump sum in cash, after deduction of any applicable… source deductions… ." Beneficiary" is defined as "a dependant or relation of an Executive who, on… the Executive's death, is the individual who has been designated as the Executive's beneficiary under the Plan in accordance with applicable law, or [otherwise]… the Executive's legal representative."
Rulings
- The Plan will not constitute a salary deferral arrangement… pursuant to paragraph 6801(d)… .
- Provided that the Plan remains unfunded, the Plan will not constitute a "retirement compensation arrangement"… .
- No amount will be included in the income of any Executive…solely as a result of the crediting of DSUs to an Executive's Account… .
- Amounts received under the Plan by an Executive who is a resident of Canada at the time of receipt, including any… source deductions, will be included…pursuant to subsection 5(1)… in the year of receipt.
- Amounts received under the Plan, by an Executive who is not a resident of Canada at the time of the receipt, to the extent the amount is attributable to services performed in Canada and, if the Executive was resident in Canada at the time he or she performed the services, outside Canada, including any amounts withheld in respect of taxes and other source deductions, will be included in the income of the Executive pursuant to subsection 5(1) and subparagraph 115(1)(a)(i)… .
- All amounts payable under the Plan to the Beneficiary… will constitute a right or thing… for purposes of subsections 70(2) and 70(3)… .
- …[P]ayments by the Corporation or an Affiliate…will be deductible… for the year in which the payment is made… .