30 November 1996 Ruling 9705793 - CHANGE IN FACTS, XXXXXXXXXX

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX							970579
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1997

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling 970302, dated XXXXXXXXXX, 1997

This is in reply to your facsimile dated XXXXXXXXXX, wherein you advised us of certain amendments to the facts and proposed transactions described in the above-referenced Advance Income Tax Ruling (hereinafter referred to as the "Ruling Letter").

Any reference herein to paragraphs are references to those contained in the Ruling Letter and any defined terms used in this letter have the meanings assigned to them in the Ruling Letter.

The Ruling Letter is hereby amended as follows:

The first sentence of paragraph 2 is deleted and replaced by:

"Until XXXXXXXXXX, XXXXXXXXXX provided its key employees with options to acquire its common shares under the "XXXXXXXXXX" (the "Plan")."

The third sentence of paragraph 2 is deleted and replaced by:

"The principle features of the Plan were as follows:"

Subparagraph (k) of paragraph 2 is deleted and replaced by:

"(k)No option granted after XXXXXXXXXX under the Plan can be designated as an "Incentive Stock Option" within the meaning of section 422 of the United States Internal Revenue Code."

Paragraphs 4 and 5 are recharacterized as facts and not proposed transactions.

Paragraph 4 is deleted and replaced by:

"4.At its meeting held on XXXXXXXXXX, the Board of Directors approved several amendments to the Plan (hereinafter referred to as the "Amended Plan") with respect to options issued under the Amended Plan to an employee after the date of this advance income tax ruling (hereinafter referred to as the "New Optionee"). The changes to the Plan include the following:

(a)Until otherwise determined by the Board of Directors, XXXXXXXXXX of the Board of Directors shall constitute the Committee.

(b)All full-time employees of XXXXXXXXXX and its subsidiary companies are eligible to receive options under the Amended Plan.

(c)An option granted under the Amended Plan cannot be exercised or surrendered before the first anniversary of the date of grant, unless the Committee otherwise determines, or after the expiration of XXXXXXXXXX years from the date of grant.

(d)The maximum number of shares of XXXXXXXXXX that may be reserved for issuance to any one New Optionee will be limited to the maximum allowed under The XXXXXXXXXX Stock Exchange Rules and Regulations.

(e)The exercise price under the options granted under the Amended Plan will be equal to the closing board lot sale price per share of XXXXXXXXXX on The XXXXXXXXXX Stock Exchange on the trading day immediately preceding the date on which such option is granted or, if there were no trades on that particular day, the exercise price will be the last board lot sale price per share prior thereto.

(f)The Amended Plan will allow the Committee to include, at its sole discretion, with any option to acquire shares of XXXXXXXXXX the right for the holder thereof to surrender to XXXXXXXXXX all or any part of such option which could be exercised at that time in exchange for a cash payment from XXXXXXXXXX equal to the excess of the fair market value of the shares under the option surrendered at that time over the aggregate exercise price for such shares (the "New Cash Out Right").

(g)The Amended Plan will no longer entitle any New Optionees to interest-free loans to purchase shares under an option.

(h)If the employment of a New Optionee with XXXXXXXXXX or a subsidiary company is terminated due to retirement or permanent disability in accordance with the then applicable disability policy or plan of XXXXXXXXXX or the subsidiary corporation while holding an option which has not been fully exercised or surrendered, such option shall immediately vest and become exercisable.

(i)The Board of Directors may, subject to regulatory approval, amend, suspend or terminate the Amended Plan, provided that certain amendments will require shareholder approval and no action may be taken which would materially and adversely affect the rights of an New Optionee without such New Optionee's consent.

(j)No option granted after XXXXXXXXXX under the Amended Plan can be designated as an "Incentive Stock Option" within the meaning of section 422 of the United States Internal Revenue Code.

The following new paragraph 5A will be added under the heading of "Proposed Transaction":

"5A.After Revenue Canada has issued a favourable advance income tax ruling to XXXXXXXXXX, XXXXXXXXXX will grant New Cash Out Rights to employees under the Amended Plan."

The heading "Purpose of the Proposed Transactions" is changed to "Purpose of the Proposed Transaction".

Paragraph 6 is deleted and replaced by:

"6.The purpose of the Amended Plan is to provide that the New Cash Out Rights only permit a New Optionee to surrender to XXXXXXXXXX all or any part of an option which will then be exercised for cash rather than the cash or shares or a combination of cash and shares allowed under the Plan and to ensure compliance with the rules and policies of The XXXXXXXXXX Stock Exchange."

Notwithstanding the above changes, we confirm that, subject to the conditions set out therein, the rulings given in the Ruling Letter will continue to be binding on the Department in accordance with the practice outlined in Information Circular 70-6R3, dated December 30, 1996, provided that the New Cash Out Rights are granted within six months of the date of the Ruling Letter.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch