30 November 1997 Administrative Letter 980982A - PHANTOM STOCK PLAN

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.

Principal Issues: E9733773 - Change in Proposed Transactions

Position: Nothing unusual - Rulings apply as given

Reasons: Change does not affect previous position

XXXXXXXXXX
XXXXXXXXXX
		3-980982
Attention:  XXXXXXXXXX 

XXXXXXXXXX, 1998

Dear Sirs:

Re: Advance Tax Ruling
XXXXXXXXXX ("Opco") - XXXXXXXXXX
Phantom Stock Plan

We are writing in response to your letter of XXXXXXXXXX, wherein you requested certain amendments to advance income tax ruling #973377 (the "Ruling") dated XXXXXXXXXX, 1998.

We understand that the proposed transactions have not been completed and accordingly, we confirm that the Ruling is hereby amended as follows:

Paragraph 3(d) of the Ruling is revised to read as follows:

The number of Phantom Stock to be granted and credited to a Director's Account will be calculated by dividing the ABR by the twenty day simple average of the closing prices of an Opco Share on the XXXXXXXXXX Stock Exchange on the days preceding the specific grant date (the "Stock Price"). This will be done each time a portion of the ABR is scheduled to be paid. Where a Director's ABR is denominated in other than Canadian currency it will be converted to Canadian currency at the date of each grant.

Paragraph 2 of the Ruling is revised to read as follows:

Opco is proposing to establish a new arrangement (the "Plan") to provide benefits to its directors ("Directors") in respect of their services on the board of directors of Opco ("Board") after XXXXXXXXXX. The new arrangement would apply in respect of service after XXXXXXXXXX, both by current Directors and by individuals who become Directors after XXXXXXXXXX.

When a Director first becomes eligible to participate in the Plan, he/she will be required to complete an addendum (the “Addendum”) as to confirm the Director’s participation in the Plan. The Plan and the Addendum are considered an arrangement in writing between Opco and the Director under the terms of the Plan.

We confirm that the rulings given in Ruling letter #973377, as amended by this letter, will continue to be binding in the manner set forth therein, provided that the Proposed Transactions described in the Ruling and as amended by this letter, are completed on or before XXXXXXXXXX.

Yours truly,

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