Exhibit 10.5

 

RITCHIE BROS. AUCTIONEERS INCORPORATED

 

(the “Company”)

 

NON-EXECUTIVE DIRECTOR LONG TERM INCENTIVE PLAN

 

1.Commencement of the Plan

 

This Non-Executive Director Long Term Incentive Plan (the “Plan”) commenced on
March 1, 2009 (with the first contribution relating to 2008). The purpose of the
Plan is to facilitate non-executive directors of the Company to invest in common
shares of the Company (“Common Shares”).

 

2.Eligibility

 

Any non-executive director of the Company from time to time is eligible to
become a participant of the Plan (“Eligible Person”).

 

3.Enrolment

 

In order to become a participant of the Plan (a “Participant”), an Eligible
Person must sign a participation form and other necessary documents as required
by the Company (the “Participation Documentation”). Participation Documentation
is available from the Corporate Secretary of the Company. As part of the
Participation Documentation, a Participant can specify that all Common Shares
held by the Administrator (as defined below) for him under the Plan shall be
held in a joint account for him/her and his/her spouse, as joint tenants and if
such specification is made, the Participant and the Participant’s spouse shall
both sign the Participation Documentation and be bound by the terms and
conditions of this Plan.

 

4.Contributions

 

The Company will pay part of the annual director retainer fee in an amount to be
determined by the Board of Directors in respect of the 2008 director fee for
each Participant less any source deductions as required and in the amount of
US$60,000 less any source deductions as required (with adjustments and
modifications as the Board of Directors of the Company may approve from time to
time) for each Participant (other than a Participant who is the Chairman of the
Board of Directors of the Company) every year thereafter to the Administrator as
contribution by such Participant into the Plan and the Company will pay part of
the annual retainer fee for the Chairman of the Board of Directors in an amount
to be determined by the Board of Directors in respect of the 2008 retainer fee
and in the amount of US$80,000 less any source deductions as required (with
adjustments and modifications as the Board of Directors of the Company may
approve from time to time) for a Participant who is the Chairman of the Board of
Directors of the Company every year thereafter to the Administrator as
contribution by such Participant into the Plan (in each case the “Contribution”
for the relevant Participant). Such Contribution for each Participant will be
paid by the Company to the Administrator for the accounts of the Participants
the year after such retainer as a director or the Chairman of the Board is
earned at the same time when the Company pays the annual contribution into the
Company’s Executive Long Term Incentive Plan or such other date as the Board of
Directors may from time to time approve, provided that notwithstanding the
above, the first date of payment under this Plan will be in March 2009 in
respect of retainer fee for 2008 (the “Contribution Date”).

 

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5.The Administrator and Establishment of Participants’ Accounts

 

(a)The Administrator. The administrator of the Plan will be Canadian Western
Trust (the “Administrator”). The Company may change the Administrator to any
other person at any time.

 

(b)Establishment of Accounts. The Administrator shall establish and maintain:

 

(i)an individual securities account (a “Personal Securities Account”) for each
Participant to record the number of Common Shares of the Company and other
assets held by the Administrator on behalf of the Participant (showing year of
acquisition, costs and other relevant details) as appropriate; and

 

(ii)an individual cash account (a “Personal Cash Account”) for each Participant
to record cash received from or on behalf of and distributed out to or on behalf
of each Participant by the Administrator from time to time under this Plan in
the relevant currency.

 

6.Use of Contributions

 

A Participant’s Contribution in a particular year shall be paid by the Company
to the Administrator on the Contribution Date and the Administrator shall apply
such Contribution pursuant to the Participation Documentation towards the
acquisition of Common Shares in the manner provided below during the Price
Determination Period (as defined below). The Price Determination Period
(the “Price Determination Period”) for a particular year shall commence on the
first day of the first trading window of that fiscal year under the Company’s
Policy regarding Securities Trades by Company Personnel (“Insider Trading
Policy”) that remains open for at least 5 days on which the New York Stock
Exchange is open for trading (“Business Days”) (which is usually the 4th
Business Day following the day when the Company issues the press release
relating to the results of the immediately preceding fiscal year). The Price
Determination Period shall end on the last day of the first trading window for
that year under the Company’s Insider Trading Policy that remains open for at
least 5 Business Days (the “Price Determination End Day”), which is usually the
11th Business Day prior to the first quarter end of the Company in that year.
For the purpose of this Plan, the Board of Directors shall have the absolute
authority to determine and confirm the exact commencement and end dates of the
Price Determination Period for a particular year and such determination and
confirmation shall be final and conclusive.

 

The Administrator shall use the Participant’s Contribution in a particular year
to purchase Common Shares during the Price Determination Period on the New York
Stock Exchange and such purchases are made by the Administrator as agent for and
on behalf of the Participants. The Administrator shall have sole discretion over
the timing and quantum of individual trades needed to accumulate the shares
necessary to invest the combined Contributions of all Participants for the
relevant year towards purchase of Common Shares. The Administrator will, to the
extent reasonably practicable, attempt to make the purchases in a manner that
does not disrupt the orderly market for the Common Shares. The Administrator may
in its discretion choose to have the Common Shares purchased under this Plan
registered in the name of the Canadian Depository for Securities Ltd or a
comparable depository company in the United States of America.

 

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7.Allocation of Common Shares to Personal Securities Accounts

 

Each year, following the full application of all Participant’s Contributions in
purchasing Common Shares, the Administrator shall allocate the Common Shares
acquired each day during the Price Determination Period by allocating and
crediting to the Personal Securities Accounts of each of the Participants, the
number of Common Shares that is equal to the product of (a) the quotient
obtained by dividing such Participant’s aggregate Contribution for that year by
the sum of the Contributions of all Participants for that year, and (b) the
total number of Common Shares purchased by the Administrator on that day
(partial share to be rounded at the Administrator’s sole discretion). Payment
for such Common Shares will be made by the Administrator using Contributions
received from the Participants pursuant to section 4 above. Subject to following
the provisions relating to allocation under this section, the Administrator
shall have absolute discretion in allocating the Common Shares acquired under
this Plan among the Participants, notwithstanding that the Common Shares subject
to allocation may have different acquisition costs and the allocation by the
Administrator of such Common Shares shall be final and binding on all
Participants unless there are manifest calculation errors. The Administrator
shall record the number of Common Shares so purchased and allocated, the cost
base and the date of acquisition in such Participant’s Personal Securities
Account. The Administrator shall hold all Common Shares and other assets
recorded in the Participants’ Personal Securities Account and Personal Cash
Account in accordance with and subject to the terms and conditions of this Plan.

 

8.Dividends and Distributions

 

All cash dividends and distributions on the Common Shares held by the
Administrator on behalf of the Participants shall be credited to such
Participant’s Personal Cash Account and all non-cash dividends or distributions
on the Common Shares held by the Administrator on behalf of each of the
Participants shall be credited to such Participants’ Personal Securities
Account. All cash or other distributions received and held by the Administrator
and credited to the Participant’s Personal Cash Account or Personal Securities
Account shall be paid or transferred to the Participant by the Administrator as
soon as practicable after receipt of the same in accordance with the
Administrator’s records, subject to deduction or satisfaction of any applicable
withholding tax as determined to be necessary in the sole discretion of the
Administrator.

 

9.Share Withdrawal

 

(a)Notice of Withdrawal. Subject to the provisions hereunder, a Participant (or
his legal representative) may elect to make withdrawals from his or her Personal
Securities Account and receive all or part of the Common Shares in his or her
Personal Securities Account at the end of any month by providing at least one
month’s notice to the Company’s Corporate Secretary in the prescribed form as
from time to time specified by the Administrator and delivered in accordance
with section 22 hereunder (the “Withdrawal Election”), provided that at least
one of the following conditions is satisfied:

 

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(i)the Participant has for any reason (including but not limited to resignation,
death or termination for cause) ceased to be a director of the Company; or

 

(ii)the Chief Executive Officer and Chairman of the Board of Directors have
approved such withdrawal by a Participant, whether for extreme hardship or
otherwise.

 

(b)Withdrawal Election - Personal Securities Account. No Participant shall be
entitled to elect to make a Withdrawal Election more than once in a calendar
year unless specifically approved in writing by the Chief Executive Officer and
Chairman of the Board of Directors. Upon receipt of a valid Withdrawal Election,
the Administrator and the Company will cause to be issued a share certificate
representing the number of whole Common Shares in the Participant’s Personal
Securities Account specified in the Withdrawal Election registered in the name
of the Participant or as otherwise directed by the Participant and shall deliver
such certificate to the Participant at an address specified in the Withdrawal
Election. Alternatively, if a Participant specifies in the Withdrawal Election
that the Common Shares withdrawn shall be issued to a depository agent for his
account, the Company will cause such Common Shares to be issued in accordance
with such instructions on the Withdrawal Election and evidence of such issuance
shall constitute full discharge of the obligations of the Company to the
Participant under this section.

 

10.Termination of Directorship

 

(a)Unless specified otherwise in writing by the Chief Executive Officer and the
Chairman of the Board of Directors, if a Participant ceases to be a director of
the Company, including but not limited to, resignation, failure to be re-elected
or retirement, the Participant shall be deemed to have ceased to be a
Participant in the Plan effective from the date when the Participant ceases to
be a director of the Company (the “Cessation Date”). Upon receipt of
notification from the Company that such cessation occurs and if the
Administrator does not receive a Participant’s Withdrawal Election pursuant to
section 9, the Administrator shall within a reasonable time send to the
Participant a share certificate registered in the Participant’s name
representing all Common Shares recorded in the Participant’s Personal Securities
Account and any other cash or assets recorded in the Participant’s Personal Cash
Account, all as of the Cessation Date. If a Participant’s Withdrawal Election
pursuant to section 9 is received by the Administrator from such Participant
within 30 days of the Cessation Date, the Administrator shall carry out the
instructions contained therein within 10 Business Days of receipt of same and
transfers shall be made to that Participant or as he directs within 10 Business
Days.

 

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(b)Settlement in the manner provided in subparagraph 10(a) shall serve as full
discharge of all obligations of the Company and the Administrator to a
Participant under the Plan.

 

11.Death of a Participant

 

If a Participant should die during any period of directorship, subject to
requirements of applicable law (as determined by the Company), the beneficiary
designated by a Participant in the Participation Documentation or the estate of
the deceased Participant, as the case may be, shall be entitled to receive all
Common Shares, assets and cash recorded in the Participant’s Personal Securities
Account and Personal Cash Account, respectively. A married Participant’s
designation of a non-spouse beneficiary shall be effective only to the extent
that the Participation Documentation includes the spouse’s consent to such
designation, in a form acceptable to the Company, where such consent is required
by applicable law. Nothing herein shall require the Company or the Administrator
to transfer any Common Shares or assets in a Participant’s Personal Securities
Account or Personal Cash Account to any person if in the sole opinion of the
Company, such transfer may be in breach of applicable laws or would result in
liabilities to the Company.

 

12.Plan Administrator Duties

 

No amendment, change or modification shall be made to the Plan which will,
without the Administrator’s written consent, alter the duties of the
Administrator under the Plan.

 

13.Administrator and Costs

 

The Company shall appoint the Administrator and shall enter into an agreement
with such Administrator as the Company deems appropriate. The Administrator
shall not be liable to any Participant for any loss resulting from a decline in
the market value of any securities held by the Administrator on behalf of the
Participants under this Plan. The Company shall be responsible for all costs and
administration fees relating to the design, set up, implementation and
administration of this Plan.

 

14.Conclusive Records

 

The Administrator shall keep or cause to be kept such records and open and
maintain accounts in the names of the Participants as may be necessary or
appropriate for the efficient and effective administration of the Plan. Records
of the Administrator and the Company shall be conclusive as to all matters
involved in the administration of the Plan.

 

15.Account Statements

 

Each Participant shall receive a statement of account detailing all transactions
recorded in the Participant’s Personal Securities Account and Personal Cash
Account by the Administrator semi-annually as at June 30 and December 31 of each
year. The Administrator shall issue to all Participants, on a timely basis, the
income tax reporting information which is required by applicable tax
legislation. A tax form reflecting investment income shall be sent annually to
each Participant.

 

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16.Reports to Participants and Voting

 

The Administrator and the Company will arrange for each Participant to receive
all communications provided to shareholders of the Company, including notices of
meetings of holders of Common Shares. A Participant may vote by proxy at a
meeting of shareholders of the Company in respect to those Common Shares held on
his behalf by the Administrator in his Personal Securities Account at the record
date for such meeting and the Administrator shall arrange for appropriate
proxies to be executed and delivered to the Participant or the Company to effect
this. For any offer, proposal or arrangement made in respect of the Common
Shares, the Administrator shall send to the Participants all notices,
information circulars and other documents received by it relating thereto and
shall seek and carry out the instructions from the Participant in relation
thereto, except that if any such instruction involves the withdrawal of Common
Shares from the Participant’s Personal Securities Account, the provisions under
this Plan including but not limited to section 9, will apply and such
instructions will be carried out to the extent consistent therewith.

 

17.Change or Termination of the Plan

 

The terms of the Plan are subject to various regulatory and other approvals,
consents or requirements as may be applicable from time to time. Accordingly,
the Plan may be amended or suspended to comply with such approvals, consents or
requirements without prior consultation or approval from the Participants. While
the Company has every intention of continuing the Plan, the Board of Directors
may at any time, subject to regulatory approval and applicable laws, amend or
discontinue the Plan in any manner it deems advisable. If the Plan is
discontinued, Common Shares and cash held by the Administrator on behalf of each
Participant in the Participant’s Personal Securities Account and Personal Cash
Account shall be distributed to each Participant as if termination of each
Participant’s directorship had occurred.

 

18.No Entitlement

 

This Plan and participation in this Plan will not give any Participant any right
or claim to any benefit except to the extent specifically provided for in the
Plan and for clarification purpose, this Plan and participation therein does not
confer on any Participant any right or entitlement to any bonus payment from the
Company.

 

19.Applicable Law

 

The Plan shall be governed, construed and administered in accordance with the
laws of the Province of British Columbia.

 

20.Assignment and Enurement

 

(a)Any benefits payable under the terms of this Plan are for the Participant’s
own use and benefit, are not capable of assignment, alienation or surrender
without the prior written consent of the Company or as provided for under this
Plan, and do not confer upon any Participant, his beneficiary, personal
representative, dependent, or any other person, any right or interest in the
benefits, if any, capable of being assigned, surrendered, or otherwise
alienated.

 

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(b)The rights and obligations of the Company, the Administrator and the
Participants pursuant to this Plan shall be binding upon and shall enure to the
benefit of each Company, the Administrator and the Participants, respectively,
and each of their permitted successor and assigns. The rights and obligations of
the Administrator and the Participants under this Plan may not be assigned
without the consent of the Company. The rights and obligations of the
Administrator and the Participants under this Plan may be assigned by the
Company to a successor in the business of the Company or to a corporation with
which the Company may amalgamate or merge or a corporation resulting from any
reconstruction or reorganization of the Company.

 

21.Severability and Extended Meaning

 

If any provisions of this Plan or the application thereof to any person or
circumstances shall be invalid or unenforceable to any extent, the remainder of
the Plan and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law. In this Plan, words importing the singular
number only include the plural and vice versa and words importing any gender
includes all genders.

 

22.Notice

 

Any Withdrawal Election or any other notice to be given by the Company, the
Administrator or any Participant shall be in writing signed by an authorized
signatory of the party giving the notice. Any such notice shall be addressed to
the relevant party at its address set out below or at such other address as may
be notified from time to time in accordance with section 22 and delivered or
sent by facsimile to such party:

 

(a)If to the Company:

 

6500 River Road
Richmond, British Columbia
V6X 4G5

 

Facsimile: 604-273-2405
Attention: Corporate Secretary

 

(b)If to the Administrator:

 

Suite 2200, 666 Burrard Street
Vancouver, British Columbia
V6C 2X8

 

Facsimile: 604-669-6069
Attention: Managing Director, Fiduciary Operations and Risk Management

 

(c)If to a Participant:

 

As set out in the Participation Documentation.

 

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Any such notice shall be deemed to have been received at the time of delivery,
or time of sending if by facsimile (provided complete transmission is
confirmed), provided that any delivery made or facsimile shall be deemed to have
been received at 9:00 a.m. (Vancouver time) on the next following Business Day.
Any facsimile shall be followed by a delivery of the same document by hand,
courier or by mail, provided that notice shall be deemed to have been validly
sent by facsimile notwithstanding inadvertent failure to deliver the same
document by hand, courier or mail.

 

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