EMPLOYEE STOCK PURCHASE PLANS

EMPLOYEE STOCK PURCHASE PLANS: EMPLOYMENT

Labor Concerns

To reduce the risk of potential claims from employees that they have entitlements under a Plan, the Plan and related agreements must be carefully drafted to ensure that the employer retains the right to amend or terminate the Plan. In addition, enrollment forms should clearly provide that purchase rights expire upon a termination of employment.

The Plan should be drafted to limit rights during a notice period in respect of the termination of employment. It should be clearly stated that the termination of employment occurs on the last day of active employment with the Canadian Subsidiary and that vesting rights will not be influenced by a period of notice that is given, or ought to have been given, under statute, contract or at common law.

It is also important that the Plan be drafted so as not to unintentionally result in a discrimination complaint. For example, if the Plan is more beneficial to employees of a specific age, then it may be at risk of a discrimination complaint

Communications

For employees in Quebec, documents related to the Plan must generally be remitted to employees in the French language, unless an employee expressly agrees to receive documents in English.

Electronic execution of award agreements may be acceptable under certain conditions.

EMPLOYEE STOCK PURCHASE PLANS: REGULATORY

Securities Compliance

The offer of securities under the Plan to employees in Canada is generally exempt from the prospectus and registration requirements of Canadian securities laws based on exemptions contained in National Instrument 45-106. Any disclosure documents delivered to employees in Quebec must be filed with the Autorité des Marchés Financiers ("AMF"). There are no fees payable in connection with this filing and there is no formal review of the documents by the AMF.

Foreign Exchange

There are no foreign exchange restrictions applicable to the Plan.

Data Protection

Employee consent for the processing and transfer of personal information is the recommended method of compliance with existing data privacy requirements. Quebec has additional data protection requirements.

EMPLOYEE STOCK PURCHASE PLANS: TAX

Employee Tax Treatment

Employees are taxed on the spread in the year the purchase right is exercised. The employee will also be subject to tax on one half of any capital gain realized upon subsequent sale of the Stock.

Social Insurance Contributions

Social insurance obligations are generally levied on an employee's earnings, including Plan benefits, up to an earnings cap.

Tax Favored Program

None.

Withholding and Reporting

The employer has a reporting and withholding obligation with respect to income received by an employee under the Plan.

Employer Tax Treatment

The Canadian Subsidiary may not claim a local tax deduction for the cost of Plan benefits, unless it makes a contribution for the purchase of Stock on the open market.

Tax Rates

Income tax is charged at rates of up to 53.3%.

Social taxes are levied on the employee in the year of settlement at varying rates of up to 5.325% on the amount recognized as income under the Plan.

There is a ceiling on the employment income subject to social taxes which varies from Cdn.$50,800 to US$71,500 per year.

Social taxes arise for the employer at rates varying depending on the relevant provinces.

Any gain made on the sale of shares is taxed at rates of up to 26.65%.

All rates and amounts above are for the Province of Quebec and may vary from province to province.

RESTRICTED STOCK and RSUs

RESTRICTED STOCK and RSUs: EMPLOYMENT

Labor Concerns

To reduce the risk of potential claims from employees that they have entitlements under a Plan, the Plan and related agreements must be carefully drafted to ensure that the employer retains the right to amend or terminate the Plan. The award agreements should include provisions stating that vesting related to the restricted stock or RSU plan will cease upon termination of employment.

The Plan should be drafted to limit rights during a notice period in respect of the termination of employment. It should be clearly stated that the termination of employment occurs immediately after the last day of active employment with the Canadian Subsidiary and that vesting rights will not be influenced by a period of notice that is given, or ought to have been given, under statute, contract or at common law.

It is also important that the Plan be drafted so as not to unintentionally result in a discrimination complaint. For example, if the Plan is more beneficial to employees of a specific age, then it may be at risk of a discrimination complaint.

Communications

For employees in Quebec, documents related to the Plan must generally be remitted to employees in the French language, unless an employee expressly agrees to receive documents in English.

Electronic execution of award agreements may be acceptable under certain conditions.

RESTRICTED STOCK and RSUs: REGULATORY

Securities Compliance

The offer of restricted stock or RSUs to employees in Canada is generally exempt from the prospectus and registration requirements of Canadian securities laws based on exemptions contained in National Instrument 45-106. Any disclosure documents delivered to employees in Quebec must be filed with the Autorité des Marchés Financiers ("AMF"). There are no fees payable in connection with this filing and there is no formal review of the documents by the AMF.

Foreign Exchange

There are no foreign exchange restrictions applicable to restricted stock or RSU plans.

Data Protection

Employee consent for the processing and transfer of personal information is a recommended method of compliance with existing data privacy requirements. Quebec has additional data protection requirements.

RESTRICTED STOCK and RSUs: TAX

Employee Tax Treatment

The employee is subject to tax on the value of the Stock when the restricted stock is granted. The employee is generally subject to tax on the value of the Stock when the RSU award is settled. The employee is also subject to tax on one-half of any capital gain realized upon subsequent sale of the Stock.

Social Insurance Contributions

Social insurance obligations are levied on an employee's earnings, including Plan benefits, up to an earnings cap.

Tax Favored Program

None.

Withholding and Reporting

The employer has a reporting and withholding obligation that applies to the proceeds received by employees through the Plan.

Employer Tax Treatment

The Canadian Subsidiary may not claim a local tax deduction for the costs of the Plan, unless it makes a contribution for the purchase of Stock on the open market.

Tax Rates

Income tax is charged at rates of up to 53.3%.

Social taxes are levied on the employee in the year of settlement at varying rates up to 5.325% on the amount recognized as income under the Plan.

There is a ceiling on the employment income subject to social taxes which varies from Cdn.$50,800 to US$71,500 per year.

Social taxes arise for the employer at rates varying depending on the relevant provinces.

Any gain made on the sale of shares is taxed at rates of up to 26.65%.

All rates and amounts above are for the Province of Quebec and may vary from province to province.

STOCK OPTIONS PLANS

STOCK OPTIONS PLANS: EMPLOYMENT

Labor Concerns

To reduce the risk of potential claims from employees that they have entitlements under a Plan, the Plan and agreements must be carefully drafted to ensure that the employer retains the right to amend or terminate the Plan. In addition, option agreements should provide that options would cease to vest upon a termination of employment.

The Plan should be drafted to limit rights during a notice period in respect of the termination of employment. It should be clearly stated that the termination of employment occurs on the last day of active employment with the Canadian Subsidiary and that vesting rights will not be influenced by a period of notice that is given, or ought to have been given, under statute, contract or at common law.

It is also important that the Plan be drafted so as not to unintentionally result in a discrimination complaint. For example, if the Plan is more beneficial to employees of a specific age, then it may be at risk of a discrimination complaint.

Communications

For employees in Quebec, documents related to the Plan must generally be remitted to employees in the French language unless an employee expressly agrees to receive documents in English.

Electronic execution of award agreements may be acceptable under certain conditions.

STOCK OPTIONS PLANS: REGULATORY

Securities Compliance

The offer of stock options to employees in Canada is generally exempt from the prospectus and registration requirements of Canadian securities laws based on exemptions contained in National Instrument 45-106. Any disclosure documents delivered to employees in Quebec must be filed with the Autorité des Marchés Financiers ("AMF"). There are no fees payable in connection with this filing and there is no formal review of the documents by the AMF.

Foreign Exchange

There are no foreign exchange restrictions imposed on option plans.

Data Protection

Employee consent for the processing and transfer of personal information is the recommended method of compliance with existing data privacy requirements. Quebec has additional data protection requirements.

STOCK OPTIONS PLANS: TAX

Employee Tax Treatment

Employees are taxed on the spread in the year the option is exercised. Employees may reduce such taxable benefit if the underlying Stock is characterized as "prescribed shares" and the exercise price is not less than the Stock's fair market value on the grant date. The employee will also be subject to tax on one-half of any capital gain realized upon the subsequent sale of the Stock.

Social Insurance Contributions

Social insurance obligations are generally levied on an employee's earnings, including Plan benefits, up to an earnings cap.

Tax Favored Program

See Employee Tax Treatment above.

Withholding and Reporting

The employer has a reporting and withholding obligation with respect to income received by employees under the Plan.

Employer Tax Treatment

The Canadian Subsidiary may not claim a tax deduction for the cost of Plan benefits.

Tax Rates

Income tax is charged at rates of up to 53.3%.

Social taxes are levied on the employee in the year of settlement at varying rates of up to 5.325% on the amount recognized as income under the Plan.

There is a ceiling on the employment income subject to social taxes which varies from Cdn.$50,800 to US$71,500 per year.

Social taxes arise for the employer at rates varying depending on the relevant provinces.

Any gain made on the sale of shares is taxed at rates of up to 26.65%.

All rates and amounts above are for the Province of Quebec and may vary from province to province.