EXHIBIT (d)(2)
THE DUNDEE CORPORATION DEFERRED SHARE UNIT PLAN
FOR DIRECTORS AND KEY EXECUTIVES
SECTION 1. PURPOSE
The purpose of the Dundee Bancorp Inc. Deferred Share Unit Plan for Directors
and Key Executives is to significantly strengthen the link between director,
employee and shareholder interests by providing a mechanism for tying
compensation for Board members and executives to the long term performance of
the Shares.
SECTION 2. DEFINITIONS
For the purposes of the Plan:
(a) "Affiliate" means an Affiliate of the Corporation as that term is defined in
paragraph 3 of the Canada Customs and Revenue Agency's Interpretation Bulletin
IT-337R3, Retiring Allowances;
(b) "Agreement" means the agreement as it may be amended from time to time,
entered into by the Corporation and an Eligible Individual pursuant to Section 5
hereof in connection with the grant of DSUs hereunder to said Eligible
Individual and setting forth the related rights and obligations of the
Corporation and of the Eligible Individual;
(c) "Board" means the Board of Directors of the Corporation;
(d) "Broker" has the meaning assigned thereto in Section 7 hereof;
(e) "Committee" means the committee of the Board whose mandate includes all
executive compensation matters and which is currently named the Compensation
Committee;
(f) "Corporation" means Dundee Bancorp Inc.;
(g) "Director" means a member of the Board or a member of the board of directors
of any corporation related to the Corporation;
(h) "DSU" means a unit credited by means of a bookkeeping entry on the books of
the Corporation or other Employer, as specified by the Committee, to a
Participant's account which is granted in accordance with Section 5 and
administered in accordance with the terms and conditions of the Plan and the
Agreement, the value of which on a particular date shall be equal to the Market
Value;
(i) "Eligible Individual" has the meaning assigned thereto in Section 4 hereof;
(j) "Employer" means with respect to a Key Executive a company that is any of
the Corporation or a corporation related thereto and that employs such Key
Executive or that last employed such Key Executive immediately prior to his or
her Termination Date; and means with respect to a
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Director a company that is any of the Corporation or a corporation related
thereto on whose board of directors the Director serves as a member or served as
a member immediately prior to his or her Termination Date;
(k) "Entitlement Date" has the meaning assigned thereto in Section 7 hereof;
(l) "Key Executive" includes an officer or other employee of the Corporation or
of any corporation related to the Corporation who, in the opinion of the
Committee, has demonstrated a capacity for contributing in a substantial measure
to the successful performance of the Corporation or of such related corporation;
(m) "Market Value" on any particular day means the weighted average price of a
Share on The Toronto Stock Exchange for the five trading days immediately
preceding the particular day, or if the Shares are not listed on The Toronto
Stock Exchange, on such other stock exchange in Canada on which the Shares are
listed, or if the Shares are not listed on any stock exchange, then on the
over-the-counter market;
(n) "Participant" means an Eligible Individual who has been granted DSUs under
the Plan and who agrees to participate in the Plan;
(o) "Plan" means this Dundee Bancorp Inc. Deferred Share Unit Plan for Directors
and Key Executives, as amended from time to time;
(p) "Redemption Value" has the meaning assigned thereto in Section 7 hereof;
(q) "Share" means a Class A Subordinate Voting Share of the Corporation; and
(r) "Termination Date" means, with respect to a Participant, the earliest date
on which both of the following conditions are met: the Participant (1) has
ceased to be employed by the Corporation or any Affiliate for any reason
whatsoever, including termination of employment by the Employer (whether or not
wrongful or for any other reason), voluntary resignation, retirement from active
employment or death, and (2) is not a Director of the Board or of the board of
an Affiliate.
SECTION 3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. The Committee shall have full
and complete authority to interpret the Plan, to prescribe such rules and
regulations (including those with respect to the holding of meetings by
telephone) and to make such other determinations as it deems necessary or
desirable for the administration of the Plan. All actions taken and decisions
made by the Committee shall be final, conclusive and binding on all parties
concerned, including, but not limited to, the Participants and their
beneficiaries and legal representatives, the Corporation and its Affiliates,
their employees and shareholders. All expenses of administration of the Plan
shall be borne by the Corporation, including any reasonable brokerage fees
relating to the purchase of Shares under the Plan. The appropriate officers of
the Corporation are hereby authorized and empowered to do all things and execute
and deliver all instruments, undertakings
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and applications and writings, all in such form and containing such terms and
conditions as they, in their absolute discretion, consider necessary for the
implementation of the Plan.
SECTION 4. ELIGIBILITY
The Committee or the Board shall, from time to time, determine which Key
Executives and Directors, if any, shall be eligible to participate in the Plan
("Eligible Individuals").
SECTION 5. GRANT OF AWARDS OF DSUs
The Committee shall grant on an annual or more frequent basis DSUs to each
Eligible Individual in such number and effective as of such date as the
Committee may specify. The Committee shall base its decision to grant DSUs to
Eligible Individuals on such criteria as the Committee may determine, provided
that such criteria shall, in any event, relate to services performed or to be
performed by the Eligible Individual as an employee of the Corporation or a
corporation related thereto, or as a Director.
A Participant who has been granted DSUs under the Plan shall enter into an
Agreement with the Corporation or his or her Employer, in the form and as
specified by the Committee, which shall comply and be consistent with the terms
of the Plan set out herein, with respect to such grant of DSUs, which Agreement
shall be effective and dated as of the date specified by the Committee as the
effective date of the grant. The Committee may in its sole discretion impose one
or more additional conditions on a grant of DSUs under the Plan which must be
met by a Participant in order for the Participant to receive the Redemption
Value of the DSUs granted to the Participant under the Plan. Any such condition
shall be set out in the Agreement and shall comply with the requirements of
paragraph 6801(d) of the Regulations under the Income Tax Act (Canada) or any
successor provision thereto.
The DSUs granted to an Eligible Individual pursuant to this Section 5 shall be
credited to the account of the Eligible Individual as of the date specified by
the Committee as the effective date of the grant. Subject to any condition which
may be imposed by the Committee on the grant of DSUs to a Participant pursuant
to this Section 5, such DSUs will be fully vested upon being credited to an
Eligible Individual.
Except as provided in the Agreement, a Participant's entitlement to payment at
his or her Termination Date in respect of DSUs granted under this Section 5
shall not be subject to satisfaction, following the effective date of the grant
specified by the Committee, of any requirements as to any minimum period of
employment or membership on the Board or on the board of a corporation related
to the Corporation, as applicable.
SECTION 6. DIVIDEND-LIKE AMOUNTS
A Participant's account shall, from time to time, including the period following
the Participant's Termination Date and until the Entitlement Date referred to in
Section 7 hereof, be credited with additional DSUs, the number of which shall be
equal to the quotient rounded down to the closest whole number determined by
dividing one hundred percent (100%) of the dividends declared
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and that would have been paid to the Participant if the DSUs in his or her
account on the relevant record date for dividends on the Shares had been Shares
(excluding extraordinary dividends) by the Market Value on the payment date of
such dividends, with fractions computed to four decimal places. Subject to any
condition which may be imposed by the Committee on the grant of DSUs to a
Participant pursuant to Section 5 hereof, all additional DSUs granted pursuant
to this Section 6 will be fully vested upon being credited to a Participant's
account.
SECTION 7. REDEMPTION AND PAYMENT OF DSUs
Subject to this Section 7, a Participant or the legal representative of the
Participant's estate, as applicable, may elect the date as of which the value of
the DSUs credited to the Participant's account, as may be adjusted pursuant to
Section 16 hereof, shall be determined and payable (the "Entitlement Date") by
filing an irrevocable election, in the form and manner specified by the
Committee, with the Corporation no later than November 30 of the calendar year
commencing immediately after the Participant's Termination Date. The Entitlement
Date elected by a Participant or the legal representative of the Participant's
estate, as applicable, pursuant to this Section 7 shall not be before the later
of (i) 15 days after the date on which the election is filed with the
Corporation and (ii) 30 days after the Participant's Termination Date and shall
not be later than December 15 of the calendar year commencing immediately after
the Participant's Termination Date. Where a Participant or the legal
representative of the Participant's estate, as applicable, does not elect a
particular date within the permissible period set out above as his or her
Entitlement Date, the Entitlement Date for such Participant shall be December 15
of the calendar year commencing immediately after the Participant's Termination
Date.
The value of the DSUs redeemed by or in respect of a Participant shall be
determined as at the Entitlement Date and shall be the product of (i) the number
of DSUs then credited to the Participant's account and (ii) the Market Value
(the "Redemption Value"). The Redemption Value shall, as specified by the
Committee in its sole discretion, after deduction of any applicable taxes and
other required source deductions, be satisfied in its entirety through or as a
combination of (i) a conversion into and issuance from treasury by the
Corporation of Shares to the Participant or the Participant's estate, as
applicable, (ii) a cash payment by the Employer to the Participant or to the
legal representative of the Participant's estate; or (iii) a cash payment by the
Employer used to purchase on behalf of the Participant or the Participant's
estate, as applicable, Shares on the open market in accordance with the
provisions of this Section 7. The maximum number of Shares reserved for issuance
under the Plan from treasury is 500,000.
If Shares are issued by the Corporation to settle DSUs under the Plan to a
Participant who was, immediately prior to the Termination Date, an employee or
director of the Corporation, the amount of money the Corporation would have
received if the Shares had been issued for money is equal to the number of such
DSUs granted under the Plan multiplied by the Market Value of the Shares on the
date of grant of the DSUs. Shares, if issued by the Corporation to settle DSUs
under the Plan to a Participant who, immediately prior to his or her Termination
Date, was an employee or director of the Corporation, shall be considered fully
paid in consideration of past
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service provided prior to the date of grant that is no less in value than the
fair equivalent of the money the Corporation would have received if the Shares
had been issued for money.
If Shares are issued by the Corporation to settle DSUs under the Plan to a
Participant who was, immediately prior to the Termination Date, an employee or
director of an Employer other than the Corporation, such Employer agrees, prior
to or on the date the Shares are issued to the Participant, to pay to the
Corporation, an amount equal to the fair market value of the Shares determined
as at the date they are issued on behalf of the Participant in consideration of
the Shares issued and in addition, to reimburse the Corporation. Such Shares
will be considered fully paid in consideration of such amounts paid on the
Participant's behalf to the Corporation.
The maximum number of Shares issuable to Insiders (as defined in section 627 of
the Toronto Stock Exchange Company Manual) pursuant to the Plan and any other
Share Compensation Arrangement (as defined in section 627 of the Toronto Stock
Exchange Company Manual), within a one-year period, shall not exceed 10% of the
total number of Shares then outstanding. The maximum number of Shares issuable
to any one Insider and such Insider's associates (as defined in section 627 of
the Toronto Stock Exchange Company Manual) pursuant to the Plan and any other
Share Compensation Arrangement, within a one-year period, shall not exceed 5% of
the total number of Shares then outstanding. For purposes of this provision, the
number of Shares then outstanding shall mean the number of Shares and Class B
Common Shares outstanding as calculated for this purpose under section 630 of
the Toronto Stock Exchange Company Manual.
If a Participant's Entitlement Date would otherwise fall between the record date
for a dividend on the Shares and the related dividend payment date then
notwithstanding the above in this Section 7, the Entitlement Date shall be the
day immediately following the date of payment of such dividend for purposes of
recording in the account of the Participant amounts referred to in Section 6
hereof and making the calculation of the value of DSUs contemplated by this
Section 7. In the event that the Corporation is unable, by a Participant's
Entitlement Date, to compute the final number of DSUs credited to such
Participant's account by reason of the fact that any data required in order to
compute the Market Value has not been made available to the Corporation, then
the Entitlement Date shall be the next following trading day on which such data
is made available to the Corporation.
In any event and notwithstanding any other provision of the Plan, all amounts
payable to, or in respect of, a Participant hereunder shall be paid on or before
December 31 of the year commencing immediately after the year in which the
Participant's Termination Date occurred.
Where the Committee has determined with respect to a Participant that the
Redemption Value is to be satisfied in whole or in part, after deduction of
applicable taxes and other source deductions, by a cash payment used to purchase
on behalf of the Participant Shares on the open market, the following provisions
of this Section 7 shall apply. Prior to 11:00 a.m. on the Entitlement Date or,
where the Entitlement Date is not a trading day for Shares on The Toronto Stock
Exchange on the next such trading day, the Corporation shall notify a broker
designated by the Participant who shall be independent from the Corporation (the
"Broker") as to (i) the number of whole Shares to be purchased by the Broker on
behalf of the Participant or the
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Participant's estate, as applicable, on the open market, to be determined by
dividing the Redemption Value after deduction of applicable taxes and other
source deductions as provided in this Section 7, by the Market Value as
determined on the Entitlement Date; or (ii) the amount available to purchase
Shares on behalf of the Participant or the Participant's estate, as applicable,
to be equal to the Redemption Value after deduction of applicable taxes and
other source deductions as provided in this Section 7. As soon as practicable
thereafter, the Broker shall purchase on the open market the number of whole
Shares which the Corporation has requested the Broker to purchase or apply the
amount specified by the Corporation to purchase whole Shares.
If, after the Broker applies the Redemption Value, net of applicable
withholdings, to the purchase of whole Shares as provided for herein, an amount
remains payable under the Plan to the Participant or his or her estate, as
applicable, such amount shall be paid in cash to the Participant or his or her
estate, as applicable.
SECTION 8. PARTICIPANT'S ACCOUNT
The Corporation or other Employer, as specified by the Committee, shall maintain
in its books an account for each Participant recording at all times the number
of DSUs standing to the credit of the Participant. Upon payment in satisfaction
of DSUs credited to a Participant in the manner described herein, such DSUs
shall be cancelled. A written confirmation of the balance in a Participant's
account hereunder shall be mailed by the Corporation to the Participant at least
annually.
SECTION 9. EFFECTIVE DATE OF THE PLAN
The effective date of the Plan shall be June 19, 2002.
SECTION 10. AMENDMENTS TO, SUSPENSION OR TERMINATION OF, THE PLAN
The Board may from time to time amend, suspend or terminate the Plan in whole or
in part including, without limitation, such amendments as the Board may consider
appropriate in respect of an anticipated or actual change of control of the
Corporation. However, unless such amendment, suspension or termination is
required by law, it shall not adversely affect the rights accrued to any
Participant under the Plan existing at the time of such amendment, suspension or
termination without the consent of the affected Participant and shall be subject
to obtaining any required regulatory approval, including any required stock
exchange approval. Notwithstanding the foregoing, any amendment or termination
of the Plan shall be such that the Plan continuously meets the requirements of
paragraph 6801(d) of the Regulations under the Income Tax Act (Canada) or any
successor provision thereto.
If the Board terminates the Plan, prior grants of DSUs shall remain outstanding
and in effect and shall be paid in due course upon the Participant's Termination
Date for purposes of the Plan in accordance with the terms and conditions
applicable to such DSUs immediately prior to the termination of the Plan.
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SECTION 11. RIGHTS OF PARTICIPANTS
Except as specifically set out in the Plan or an Agreement, no Eligible
Individual, Participant or other person shall have any claim or right to any
Shares or other benefit in respect of DSUs granted pursuant to the Plan.
Neither the Plan nor any award thereunder shall be construed as granting a
Participant a right to be retained as an employee or Director of the Corporation
or of any of its Affiliates including any related corporation or a claim or
right to any future grants of DSUs. Neither the Plan nor any action taken
thereunder shall interfere with the right of an Employer to terminate the
employment of such Key Executive or Participant at any time. For greater
certainty, the payment of any sum of money in cash in lieu of notice of the
termination of employment shall not be considered as extending the period of
employment for the purposes of the Plan.
Under no circumstances shall DSUs be considered Shares nor shall they entitle
any Participant to exercise voting rights or any other rights attaching to the
ownership of Shares, nor shall any Participant be considered the owner of Shares
by virtue of this Plan until after the date of the issue or purchase of such
Shares pursuant to Section 7 hereof, as applicable. Notwithstanding any other
provision of the Plan, no amount will be paid to, or in respect of, a
Participant under the Plan or pursuant to any other arrangement, and no DSU will
be granted nor will any credit be made to such Participant's account under the
Plan to compensate for a downward fluctuation in the price of Shares, nor will
any other form of benefit be conferred upon, or in respect of, a Participant for
such purpose.
SECTION 12. DEATH OF PARTICIPANT
In the event of a Participant's death, any and all DSUs then credited to the
Participant's account shall become payable to the Participant's estate in
accordance with Section 7 hereof.
SECTION 13. COMPLIANCE WITH APPLICABLE LAWS
Any obligation of the Corporation with respect to its Shares pursuant to the
terms of the Plan is subject to compliance with all applicable laws. The
Participant shall comply with all such laws and furnish the Corporation with any
and all information and undertakings as may be required to ensure compliance
therewith. Without limiting the generality of the foregoing, any obligation of
the Corporation to issue Shares in accordance with the terms of the Plan is
subject to compliance with the laws, rules and regulations of all public
agencies and authorities applicable to the issuance and distribution of such
Shares and to the listing of such Shares on any stock exchange on which any of
the Shares may be listed. As a condition of becoming a Participant, each
Eligible Individual will agree to comply with all such laws, rules and
regulations and to furnish to the Corporation all information and undertakings
as may be required to permit compliance with such laws, rules and regulations.
The Shares which may be issued under the Plan or purchased on the open market
have not been registered under the United States Securities Act of 1933, as
amended (the "U.S. Act"), nor under any securities law of any state of the
United States of America. Accordingly, any
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Participant who is issued Shares or for whom Shares are purchased on the open
market which are subject to the U.S. Act or the securities laws of any state of
the United States of America may be required to represent, warrant, acknowledge
and agree that:
(a) the Participant is acquiring the Shares as principal and for the
account of the Participant;
(b) in issuing the Shares to the Participant, the Corporation is relying
on the representations and warranties of the Participant to support
the conclusion of the Corporation that the issue of Shares does not
require registration under the U.S. Act or qualification under the
securities laws of any state of the United States of America;
(c) each certificate representing Shares issued may be required to have
the following legends:
"THE CLASS A SUBORDINATE VOTING SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
SECURITIES ACT"), AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES
ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR
(C) WITH THE PRIOR WRITTEN CONSENT OF THE CORPORATION, PURSUANT TO
ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS."
"THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER
HEREOF TO EFFECT GOOD DELIVERY OF THE CLASS A SUBORDINATE VOTING
SHARES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE. A
CERTIFICATE WITHOUT A LEGEND MAY BE OBTAINED FROM THE REGISTRAR AND
TRANSFER AGENT FOR THE CLASS A SUBORDINATE VOTING SHARES OF THE
CORPORATION IN CONNECTION WITH A SALE OF THE CLASS A SUBORDINATE
VOTING SHARES REPRESENTED HEREBY UPON DELIVERY OF THIS CERTIFICATE
AND AN EXECUTED DECLARATION BY THE SELLER, IN A FORM SATISFACTORY TO
THE REGISTRAR AND TRANSFER AGENT AND THE CORPORATION, TO THE EFFECT
THAT SUCH SALE IS BEING MADE IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S. SECURITIES ACT.";
provided that if such Shares are being sold outside the United States of America
in compliance with the requirements of Rule 904 of Regulation S under the U.S.
Act, and in compliance with applicable local laws and regulations, the foregoing
legends may be removed by providing a
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written declaration by the holder addressed to the Corporation and the registrar
and transfer agent for the Shares to the following effect:
"The undersigned (a) represents and warrants that the sale of the
securities of Dundee Bancorp Inc. (the "Corporation") to which this
declaration relates is being made in compliance with Rule 904 of
Regulation S under the United States Securities Act of 1933, as amended
(the "U.S. Securities Act"), and (b) certifies that (1) the undersigned is
not an affiliate of the Corporation as that term is defined in the U.S.
Securities Act, (2) the offer of such securities was not made to a person
in the United States and either (a) at the time the buy order was
originated, the buyer was outside the United States, or the undersigned
and any person acting on behalf of the undersigned reasonably believe that
the buyer was outside the United States or (b) the transaction was
executed on or through the facilities of The Toronto Stock Exchange and
neither the undersigned nor any person acting on behalf of the undersigned
knows that the transaction has been prearranged with a buyer in the United
States, and (3) neither the undersigned nor any affiliate of the
undersigned nor any person acting on any of their behalf has engaged or
will engage in any directed selling efforts in the United States in
connection with the offer and sale of such securities. Terms used herein
have the meanings given to them by Regulation S under the U.S. Securities
Act.";
(d) other than as contemplated by paragraph (c) above, prior to making any
disposition of any Shares acquired pursuant to the Plan which might be
subject to the requirements of the U.S. Act, the Participant shall give
written notice to the Corporation describing the manner of the proposed
disposition and containing such other information as is necessary to
enable counsel for the Corporation to determine whether registration under
the U.S. Act or qualification under any securities laws of any state of
the United States of America is required in connection with the proposed
disposition and whether the proposed disposition is otherwise in
compliance with such legislation and the regulations thereto;
(e) other than as contemplated by paragraph (c) above, the Participant
will not attempt to effect any disposition of the Shares owned by the
Participant and acquired pursuant to the Plan or of any interest therein
which might be subject to the requirements of the U.S. Act in the absence
of an effective registration statement relating thereto under the U.S. Act
or an opinion of counsel satisfactory in form and substance to counsel for
the Corporation that such disposition would not constitute a violation of
the U. S. Act and then will only dispose of such Shares in the manner so
proposed;
(f) the Corporation may place a notation on the records of the Corporation
to the effect that none of the Shares acquired by the Participant pursuant
to the Plan shall be transferred unless the provisions of the Plan have
been complied with; and
(g) the effect of these restrictions on the disposition of the Shares
acquired by the Participant pursuant to the Plan is such that the
Participant may not be able to sell or otherwise dispose of such Shares
for a considerable length of time in a transaction which
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is subject to the provisions of the U.S. Act other than as contemplated by
paragraph (c) above.
SECTION 14. WITHHOLDING TAXES
The Corporation and any other Employer shall be entitled to deduct any amount of
withholding taxes and other withholdings from any amount paid or credited
hereunder.
SECTION 15. TRANSFERABILITY
In no event may the rights or interests of a Participant under the Plan be
assigned, encumbered, pledged, transferred or alienated in any way, except to
the extent that certain rights may pass to a beneficiary or legal representative
upon death of a Participant, by will or by the laws of succession and
distribution.
SECTION 16. ALTERATION OF NUMBER OF DSUS SUBJECT TO THE PLAN
In the event of any stock dividend, stock split or consolidation affecting the
number of Shares, the DSUs credited to a Participant's account under the Plan
will be adjusted in the same manner as if each DSU were a Share. In the event of
any exchange of shares or other change in the Shares into a different number or
kind of shares of the Corporation or of any corporation related thereto, or of
any other change in the Shares or shares into which Shares have been changed or
for which they have been exchanged, such equitable adjustments, as the Committee
may reasonably determine, shall be made with respect to the number of DSUs then
recorded in the Participant's account under the Plan.
SECTION 17. GOVERNING LAW
The Plan shall be governed by and interpreted in accordance with the laws in
force in the Province of Ontario.