EX-4.2






Exhibit 4.2









Dividend

Reinvestment

Plan




 









 





Table of Contents




	 	 	 	 	 
	Summary
	 	 	1	 
	 
	 	 	 	 
	Questions and Answers
	 	 	2	 
	 
	 	 	 	 
	Dividend Reinvestment Plan
	 	 	5	 
	 
	 	 	 	 
	1.    The Plan
	 	 	5	 
	 
	 	 	 	 
	2.    Eligibility
	 	 	5	 
	 
	 	 	 	 
	3.    How the Plan Works
	 	 	5	 
	 
	 	 	 	 
	4.    How to Enroll
	 	 	6	 
	 
	 	 	 	 
	5.    Certain Limitations
	 	 	7	 
	 
	 	 	 	 
	6.    Statements of Account
	 	 	8	 
	 
	 	 	 	 
	7.    Certificates for Shares
	 	 	8	 
	 
	 	 	 	 
	8.    Termination of Participation
	 	 	8	 
	 
	 	 	 	 
	9.    Voting of Shares Held under the Plan
	 	 	9	 
	 
	 	 	 	 
	10.  Stock Dividends and Stock Splits
	 	 	9	 
	 
	 	 	 	 
	11.  Rights Offerings
	 	 	9	 
	 
	 	 	 	 
	12.  Death or Incompetence of a Participant
	 	 	9	 
	 
	 	 	 	 
	13.  Amendment, Suspension or Termination of the Plan
	 	 	9	 
	 
	 	 	 	 
	14.  Notices
	 	 	10	 
	 
	 	 	 	 
	15.  Income Tax Considerations Relating to the Plan
	 	 	10	 
	 
	 	 	 	 
	16.  Administration
	 	 	13	 
	 
	 	 	 	 
	17.  Liability of the Company and the Agent
	 	 	13	 
	 
	 	 	 	 
	18.  Governing Law
	 	 	18	 
	 
	 	 	 	 
	19.  Effective Date
	 	 	18	 






 









 











Brookfield Properties Corporation




Dividend Reinvestment Plan




Summary



The following describes the Dividend Reinvestment Plan of Brookfield Properties Corporation which
became effective on May 12, 2009. For further details, please read the full text of the Plan as
well as the questions and answers that follow. Shareholders should consult their tax advisers about
the tax consequences which will result from their participation in the Plan.



The Dividend Reinvestment Plan is a convenient and cost-effective way to increase your investment
in Brookfield Properties Corporation.



You have the option of either receiving cash dividends or automatically reinvesting all or a
portion of your cash dividends in our common shares.



The Plan helps you increase your investment in our common shares by offering you convenience:





	•	 	Dividends are reinvested automatically
	 
	•	 	
Your investment in our common shares is administered for you
	 
	•	 	You receive regular statements and income




tax slips and attractive cost savings:





	•

•	 	No brokerage commissions

No service charges







 









 











Brookfield Properties Corporation




Dividend Reinvestment Plan




Questions And Answers




What is the Dividend Reinvestment Plan?



The Dividend Reinvestment Plan (the “Plan”) of Brookfield Properties Corporation (the “company”)
enables holders of the company’s common shares (“common
shares”) who are residents of Canada or the United States to acquire additional common shares by
reinvesting their cash dividends.




What are the advantages of the Plan?



As common shares acquired under the Plan are treasury shares purchased directly from the company,
participants in the Plan (“participants”) do not pay brokerage commissions or service charges of
any kind. All administrative costs of the Plan are borne by the company.



Full investment of all cash dividends is possible since fractional shares will be credited to a
participant’s account.




Who is eligible to participate?



Any registered or beneficial holder of common shares who is a resident of Canada or the United
States may participate in the Plan.




How does an eligible shareholder become a participant in the Plan?



A registered shareholder may enroll in the Plan by completing the attached participation form and
returning it to CIBC Mellon Trust Company (the “Agent”). A completed participation form must be
received by the Agent no later than five business days prior to the record date for any cash
dividend (which will usually be the first business day of the month in which the dividend is
payable) in order for that dividend to be reinvested under the Plan.



If a participant is a beneficial owner whose common shares are registered in the name of CDS
Clearing and Depository Services Inc. (“CDS”) or The Depository Trust Company (“DTC”) or a name
other than the participant’s own name, he or she may participate in the Plan by (i) having those
common shares transferred into his or her name directly and then enrolling such common shares in
the Plan or (ii) making appropriate arrangements with the broker, investment dealer, financial
institution or other nominee who holds the participant’s common shares to enroll in the Plan on the
participant’s behalf.




Will it be possible for participants to receive a proportion of their dividends in cash and have the remainder reinvested?



Yes. Shareholders may elect to reinvest either 50% or 100% of the cash dividends paid on all common
shares registered in their names by so indicating on the participation form. Where no preference is
indicated, 100% of a participant’s cash dividends will be reinvested.

Regular quarterly statements of account will be mailed to each participant (or, in the case of CDS
participants and DTC participants, CDS or DTC, as the case may be, will receive such statement on
behalf of beneficial owners participating in the Plan).




How will new common shares be purchased for participants?



The Company will pay to the Agent the cash dividends paid on the common shares registered in the
name of a participant, in addition to the cash dividends paid on the common shares held by the
Agent for the account of a participant under the Plan. Depending upon the election of the
participant, the Agent will apply these funds to purchase common shares from the company which will
be held by the Agent for the account of the participant.




 









 








What will be the price of new common shares purchased under the Plan?



The price of common shares purchased under the Plan will be the weighted average price at which
board lots of common shares have traded on the New York Stock Exchange during the period of five
trading days immediately preceding the relevant reinvestment date.




Will certificates be issued for the new common shares?



No. However, a registered shareholder may at any time obtain a certificate for any number of whole
common shares held for the account of the participant under the Plan by writing to the Agent. This
written notice must be received no later than five business days prior to the record date.
Certificates for less than five common shares will not be issued except upon withdrawal from or
termination of the Plan. If the request is received by the Agent between five business days prior
to the dividend record date and the dividend payment date, the certificate will not be issued until
after the dividend payment date and the reinvestment of that dividend under the Plan.




Are there restrictions on dealing with common shares purchased under the Plan?


Yes. Common shares held for a participant’s account may not be pledged, sold or otherwise
transferred. Therefore, prior to a transaction of this type, a registered holder must request that
a share certificate be issued. Certificates will not be issued for fractional shares. Participants
who are beneficial owners must make appropriate arrangements with the broker, investment dealer,
financial institution or other nominee who holds the participant’s common shares prior to such
transactions.




How does a participant terminate participation in the Plan?



Participation in the Plan may be terminated at any time by giving written notice to the Agent (or,
in the case of beneficial owners, by making arrangements to terminate participation through their
nominee).



When participation is terminated, or upon suspension or termination of the Plan by the company,
certificates for whole common shares held for participants under the Plan will be issued to
registered holders and a cash payment will be made for any fractional shares.




When is termination effective?



If notice of termination is received by the Agent between five business days prior to the dividend
record date and the dividend payment date, the participant’s account will not be closed until after
the dividend payment date and the reinvestment of that dividend under the Plan. Otherwise,
termination will be effective with respect to the next quarterly dividend.




What statements will be sent to participants?



After each dividend payment date, a statement of account will be mailed to each participant (or, in
the case of CDS participants and DTC participants, CDS or DTC, as the case may be, will receive
such statement on behalf of beneficial owners participating in the Plan). The statements are a
continuing record of purchases made under the Plan and should be retained for tax purposes. In addition, the Agent will annually
provide each participant with appropriate information for tax reporting purposes.




 









 








What are the tax consequences of participation in the Plan?



Dividend reinvestment pursuant to the Plan does not relieve participants of any liability for taxes
that may be payable on such dividends. A summary explanation of the tax implications of
participation in the Plan can be found in section 15 of the Plan, under the heading “Income Tax
Considerations Relating to the Plan.” All participants are advised to consult with their own tax
advisors to determine the particular tax consequences that may result from their participation in
the Plan and the subsequent sale by them of common shares purchased pursuant to the Plan.




Where should further inquiries be directed?



Inquiries should be addressed to the Agent as follows:




	 	 	 
	By telephone:

	 	CIBC Mellon Trust Company Shareholder Services 416-643-5500

Toll-free throughout North America 1-800-387-0825
	 
	 	 
	By fax:

	 	InvestorFax 416-643-5501
	 
	 	 
	By mail:

	 	CIBC Mellon Trust Company P.O. Box 7010 Adelaide Street
Postal Station Toronto, ON M5C 2W9 Attention: Dividend
Reinvestment Services
	 
	 	 
	By email:

	 	inquiries@cibcmellon.com





Inquiries can also be addressed to the company’s head office as follows:




	 	 	 
	By telephone:

	 	Brookfield Properties Corporation 212-417-7000
	 
	 	 
	By fax:

	 	Investor Relations 212-417-7214
	 
	 	 
	By mail:

	 	Brookfield Properties Corporation Three World Financial
Center 200 Vesey Street New York, New York 10281








 









 









Brookfield Properties Corporation




Dividend Reinvestment Plan






1. The Plan



The Dividend Reinvestment Plan (the “Plan”) of Brookfield Properties Corporation (the “company”)
provides a convenient means for eligible holders of common shares of the company (“common shares”)
to purchase additional common shares by reinvesting their cash dividends.



The declaration and payment of dividends on the company’s common shares is at the discretion of the
company’s board of directors, which supports a stable and consistent dividend policy. The company
presently pays quarterly dividends on its common shares and it is the company’s intention to
continue to review the payout of dividends quarterly on March 31, June 30, September 30 and
December 31 of each year and to adjust the amount to reflect its cash flow.



Under the Plan, common shares will be acquired at 100% of their “Market Price” (as defined below).
As these common shares will be treasury shares purchased directly from the company, no brokerage
commissions or service charges will be payable. All administrative costs of the Plan will be paid
by the company.



Through the reinvestment of cash dividends, the company will acquire additional capital funds which
will be used for its general corporate purposes.




2. Eligibility



Any beneficial or registered holder of common shares who is a resident of Canada or the United
States and meets the requirements below is eligible to become a participant in the Plan (a
“participant”).




3. How the Plan Works



A participant may elect to reinvest either 50% or 100% of the cash dividends paid on all common
shares owned by him or her. Depending upon the election, either 50% or 100% of the cash dividends
paid on the common shares owned by the participant will be applied automatically on each dividend
payment date (an “Investment Date”) to purchase additional common shares under the Plan. All
dividends paid on common shares acquired under the Plan and held for the account of the participant
will be automatically reinvested in additional common shares on each subsequent Investment Date.



The price that will be paid for common shares under the Plan on any Investment Date (the “Market
Price”) will be the weighted average price at which board lots of common shares have traded on the
New York Stock Exchange (the “NYSE”) during the period of five trading days immediately preceding
the relevant Investment Date on which at least one board lot of common shares has traded, as
reported by the NYSE.



On each Investment Date, the company will pay to CIBC Mellon Trust Company, the administrator of
the Plan, (the “Agent”) the cash dividends otherwise payable to a participant in respect to the
common shares registered in the name of the participant or held by the Agent for the account of the
participant. Any amount required under applicable tax laws to be withheld by the company from cash
dividends paid to any participant and remitted to a taxing authority will be withheld and remitted
as required, with the balance being paid to the Agent for reinvestment on behalf of the participant. Cash dividends paid on the common shares registered
in the name of the participant will be used by the Agent to purchase common shares from the company for the
account of the participant in accordance with the election




 









 







of the participant. All cash dividends paid on common shares held by the Agent for the account of the participant will be used to purchase
common shares from the company for the account of the participant.



Common shares purchased under the Plan will be registered in the name of the Agent, as agent for
the participant, and the participant’s account maintained by the Agent will be credited with the
number of common shares, including fractions computed to three decimal places, equal to the cash
dividends (or relevant percentage) paid on the participant’s common shares divided by the relevant
Market Price.




4. How to Enroll




Registered Shareholders



Eligible registered shareholders may enroll in the Plan at any time by completing a participation
form and sending it to the Agent. Copies of the Plan and participation forms can be obtained from
the Agent at any time. Shareholders should not send share certificates or dividend cheques to the
Agent or the company.



The participation form must be signed by all registered holders of common shares which are
registered in more than one name. Also, if a shareholder’s total holding is registered in different
names (e.g., full name on some share certificates and initials and surname on other share
certificates), a separate participation form must be completed for each different registration
name. If dividends from all shareholdings are to be reinvested under one account, registration must
be identical.



A completed participation form must be received by the Agent no later than five business days prior
to the record date for any cash dividend (which will usually be the first business day of the month
in which the dividend is payable) in order for that dividend to be reinvested under the Plan.



Once a registered shareholder has enrolled in the Plan, participation will continue until the
participant terminates his or her participation (as set forth below) or until the Plan is suspended
or terminated or until the participant changes his or her residence to a country other than Canada
or the United States.




Beneficial Owners of Common Shares



If a shareholder is a beneficial owner of common shares, he or she should contact his or her
broker, investment dealer, financial institution or other nominee who holds his or her common
shares to provide instructions regarding his or her participation in the Plan and to inquire about
any applicable deadlines that the nominee may impose or be subject to and to confirm what fees, if
any, the nominee may charge to enroll all or any portion of such shareholder’s common shares in the
Plan on his or her behalf or whether the nominee’s policies might result in any costs otherwise
becoming payable by the shareholder.



If a participant is a beneficial owner whose common shares are registered in the name of CDS
Clearing and Depository Services Inc. (“CDS”) or The Depository Trust Company (“DTC”) or a name
other than the participant’s own name, he or she may participate in the Plan by (i) having those common shares transferred into his or her name
directly and then enrolling such common shares in the Plan or (ii) making appropriate arrangements
with the broker, investment dealer, financial institution or




 









 







other nominee who holds the participant’s common shares to enroll in the Plan on the participant’s behalf, either as a nominee
that delivers a completed and executed participation form to the Agent in the manner provided in
the Plan, or, if applicable, as a CDS participant or a DTC participant through enrollment by CDS or
DTC, respectively.



If a participant is a beneficial owner of common shares and wishes to enroll in the Plan through a
CDS participant or a DTC participant in respect to his or her common shares registered through CDS
or DTC, appropriate instructions must be received by CDS or DTC, as applicable, from the CDS
participant or DTC participant not later than such deadline as may be established by CDS or DTC, in
order for the instructions to take effect on the Investment Date to which that dividend record date
relates.



Instructions received by CDS or DTC after their internal deadline will not take effect until the
following Investment Date. CDS participants and DTC participants holding common shares on behalf of
beneficial owners of common shares registered through CDS or DTC must arrange for CDS or DTC, as
applicable, to enroll such common shares in the Plan on behalf of such beneficial owners in respect
to each dividend payment date.



CDS or DTC, as applicable, will provide instructions to the Agent regarding the extent of its
participation in the Plan, on behalf of beneficial owners of common shares, in respect to every
Investment Date on which cash dividends otherwise payable to CDS or DTC, as applicable, as
shareholder of record, are to be reinvested under the Plan.



Any common shares acquired outside of the Plan which are not registered in exactly the same name or
manner as common shares enrolled in the Plan will not be automatically enrolled in the Plan. If a
participant purchases additional common shares outside the Plan, he or she is advised to contact
the Agent to ensure that all common shares the participant owns are enrolled in the Plan.




5. Certain Limitations



A participant may not transfer the right to participate in the Plan to another person.



Subject to applicable law and regulatory policy, the company reserves the right to determine, from
time to time, a minimum number of common shares that a participant must hold in order to be
eligible to participate in, or continue to participate in, the Plan. Without limitation, the
company further reserves the right to refuse participation in the Plan to, or terminate the
participation of, any person who, in the company’s sole opinion, is participating in the Plan
primarily with a view to arbitrage trading, whose participation in the Plan is part of a scheme to
avoid applicable legal requirements or engage in unlawful behavior or has been artificially
accumulating the company’s securities, for the purpose of taking undue advantage of the Plan to the
company’s detriment. The company may also deny the right to participate in the Plan to any person
or terminate the participation of any participant in the Plan if the company deems it advisable
under any laws or regulations.




 









 








6. Statements of Account



As soon as reasonably practicable after each Investment Date, a statement of account will be mailed
to each participant setting out the amount of the relevant cash dividend reinvested, the applicable
Market Price, the number of common shares purchased under the Plan on the Investment Date and the
total number of common shares, computed to three decimal places, held for the account of the
participant under the Plan (or, in the case of CDS participants and DTC participants, CDS or DTC,
as the case may be, will receive such statement on behalf of beneficial owners participating in the
Plan).



The statements are a continuing record of the cost of the common shares purchased under the Plan
and should be retained for income tax purposes. In addition, the Agent will annually provide each
participant with appropriate information for tax reporting purposes.




7. Certificates for Shares



A registered holder may, at any time, obtain share certificates for any number of whole common
shares held for the participant’s account under the Plan by writing to the Agent. This written
notice must be received no later than five business days prior to the record date. In no event will
certificates be issued for fractional shares. Certificates for common shares acquired under the
Plan will not be issued to participants unless specifically requested. Certificates for less than
five common shares will not be issued except upon withdrawal from or termination of the Plan.



If a request for a share certificate is received by the Agent on or after a dividend record date
but before the related dividend payment date, the requested action will not be taken until after
the dividend payment date.



Common shares held for the account of a participant under the Plan may not be pledged, sold or
transferred. Consequently, a participant or nominee who wishes to effect a transaction of this type
must request that certificates for his or her common shares be issued by the Agent.



Accounts under the Plan are maintained in the names in which the common shares of the participants
were registered at the time they enrolled in the Plan. Consequently, certificates for shares will
be similarly registered when issued.




8. Termination of Participation



A participant may terminate his or her participation in the Plan at any time by giving written
notice to the Agent (or in the case of beneficial owners, by making arrangements to terminate
participation through their nominee). The notice of termination must be received no later than five
business days prior to the record date for a cash dividend in order for the notice to be effective
with respect to that dividend. If notice of termination is received on or after a record date, the
cash dividends payable on the relevant Investment Date will be invested under the Plan and the
termination will be effective only with respect to cash dividends subsequently declared. The notice
of termination must be signed by all registered holders of common shares which are registered in
more than one name.



Upon termination, a registered holder will receive a share certificate for the number of whole
common shares held for his or her account under the Plan and a cash
payment for any fractional share. The cash payment will be calculated on the basis of the closing
price of the common shares on the NYSE on the business day immediately preceding the date of
termination. All subsequent dividends will be paid directly to the shareholder. Participation in
the Plan may be renewed by registered holders at any time by signing a new participation form and
returning it to the Agent.




 









 








9. Voting of Shares Held under the Plan



Whole common shares held for the account of a participant under the Plan on any record date for a
vote of shareholders (as with common shares not subject to the Plan) may be voted by the
participant, either in person or by proxy. Common shares for which instructions are not received
will not be voted. Fractional common shares may not be voted.




10. Stock Dividends and Stock Splits



Stock dividends declared on the common shares and any shares resulting from the subdivision of the
common shares will be credited to the account of the participant based on whole and fractional
shares held for the account of the participant under the Plan.




11. Rights Offering



If the company makes available to holders of common shares of record any right to subscribe for
additional common shares or other securities, rights certificates in respect to the number of whole
common shares then held for the account of the participant under the Plan will be forwarded to each
participant. Where practicable, rights in respect to fractional shares held for the account of a
participant will be sold by the Agent for the participant’s account and the net proceeds forwarded
to the participant.




12. Death or Incompetence of a Participant



Participation in the Plan will not be affected by a participant’s death or incompetence and
participation will remain effective until it is terminated in accordance with the provisions of the
Plan.




13. Amendment, Suspension or Termination of the Plan



The company reserves the right to amend, modify, suspend or terminate the Plan at any time, but
such actions shall have no retroactive effect that would prejudice a participant’s interests. Any
amendments to the Plan are subject to prior approval by the Toronto Stock Exchange. The Agent will
notify participants in writing of any modifications made to the Plan that in the company’s opinion
may materially prejudice participants. Generally, no notice will be given to participants regarding
any amendments to the Plan intended to cure, correct or rectify any ambiguities, defective or
inconsistent provisions, errors, mistakes or omissions.



If the Plan is suspended or terminated by the company, each participant will receive a certificate
for the number of whole common shares held for his or her account and a cash payment for any
fractional share based upon the closing price of the common
shares on the NYSE on the trading day immediately preceding the effective date of termination or
suspension of the Plan.




 









 







If the Plan is suspended or terminated by the company, no investment will be made under the Plan on
any subsequent Investment Date. Dividends that are paid after the effective date of any suspension
or termination of the Plan will be remitted by the company or the Agent, as the case may be,
directly to each participant.




14. Notices



All notices required to be given to a participant will be mailed to the participant at his or her
latest address shown on the records of the Agent. All notices to the Agent and the company should
be mailed to the address shown on page 4 of this brochure.




15. Income Tax Considerations Relating to the Plan



THE FOLLOWING SUMMARY OF TAX CONSEQUENCES IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE
LEGAL OR TAX ADVICE TO ANY PARTICULAR PARTICIPANT. IT IS THE RESPONSIBILITY OF PARTICIPANTS IN THE
PLAN TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF PARTICIPATION IN THE
PLAN IN THEIR RESPECTIVE COUNTRIES OF RESIDENCE.




Canadian Federal Income Tax Considerations



The following is a summary of the principal Canadian federal income tax considerations generally
applicable to participants under the Plan. This summary is based on the current provisions of the
Income Tax Act (Canada) (the “ITA”), the regulations thereunder, all specific proposals to amend
the ITA or the regulations publicly announced by the Minister of Finance (Canada) prior to the date
hereof, and an understanding of the current published administrative practices of the Canada
Revenue Agency. This summary does not take into account Canadian provincial or territorial income
tax laws or those of any country other than Canada.




Participants Resident in Canada



This portion of the summary is applicable only to participants who, for purposes of the ITA, and at
all relevant times, are resident in Canada, hold their common shares as capital property, deal at
arm’s length with the company and are not subject to “mark-to-market” rules relating to securities
held by certain “financial institutions” as defined for purposes of those rules.



Participants will be subject to tax under the ITA on all dividends which are reinvested in common
shares in the same manner as they would have been if they had received the dividends in cash.



The cost to a participant of common shares acquired under the Plan will be the amount paid for the
common shares by the Agent. For the purpose of computing the adjusted cost base of such common
shares to the participant, the cost of the common shares will be averaged with the adjusted cost
base of all common shares held by the participant as capital property. A participant may realize a
capital gain or loss on the disposition of common shares acquired through the Plan.





Participants Resident in the United States



This portion of the summary is applicable only to participants who, for purposes of the ITA, and at
all relevant times, are not resident or deemed to be resident in Canada, do not use or hold and are
not deemed to use or hold their common shares in carrying on business in Canada and do not carry on
an insurance business in Canada and elsewhere.




 









 







Dividends paid or credited to a participant resident in the United States on the common shares,
including dividends reinvested under the Plan, will be subject to Canadian withholding tax at the
rate of 25%, subject to the application of the Canada-U.S. Income Tax Convention (1980), as amended
(the “Treaty”). If the participant is entitled to benefits under the Treaty, the applicable rate of
Canadian withholding tax is generally reduced to 15%. Under the Treaty, dividends paid to certain
religious, scientific, charitable and similar tax-exempt organizations and certain pension
organizations that are resident in, and exempt from tax in, the United States are exempt from
Canadian withholding tax. The amount of dividends to be reinvested under the Plan will be reduced
by the amount of tax withheld.



Gains on the disposition of common shares by a participant resident in the United States are
generally not subject to Canadian income tax unless such shares are or are deemed to be “taxable
Canadian property” within the meaning of the ITA and the participant is not entitled to relief
under the Treaty. Provided the common shares are listed on a designated stock exchange (which
includes the Toronto Stock Exchange and the NYSE), such shares will generally not be taxable
Canadian property to a participant resident in the United States unless, at any time during the
five-year period immediately preceding a disposition, the participant, persons with whom the
participant did not deal at arm’s length or the participant and persons with whom the participant
did not deal at arm’s length owned or had an interest in or option to acquire 25% or more of the
issued shares of any class or series of shares of company.




United States Federal Income Tax Considerations



Notice Pursuant to U.S. Internal Revenue Service Circular 230: You are hereby advised that: (i) any
discussion of U.S. federal tax issues set forth herein, including attachments, is not intended or
written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that
may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended; (ii) such
discussion is written to support the promotion or marketing of the transactions or matters
addressed herein; and (iii) each taxpayer should seek advice based on the taxpayer’s particular
circumstances from an independent tax advisor.




* * * * *



The following is a summary of certain U.S. federal income tax considerations generally applicable
to U.S. participants (as defined below) who reinvest cash dividends in additional common shares
under the Plan. The summary is based upon the Internal Revenue Code of 1986, as amended (the
“Code”), existing and proposed regulations promulgated thereunder, and judicial decisions and
administrative interpretations, all of which are subject to change, possibly with retroactive
effect. As used in this summary, “U.S. participant” means a beneficial owner of common shares held
as capital assets and purchased pursuant to the Plan, if such beneficial owner is, for U.S. federal
income tax purposes:




•     a citizen or resident of the United States;



•     a corporation created or organized in or under the laws of the United States or any political
subdivision thereof;



•     an estate whose income is subject to U.S. federal income taxation regardless of its source; or



•     a trust if (i) a U.S. court can exercise primary jurisdiction over such trust’s administration
and one or more U.S. persons have the authority to control all substantial decisions of such trust
or (ii) such trust has made a valid election to be treated as a U.S. person for U.S. federal income
tax purposes.



 









 




This summary does not address all aspects of the U.S. federal income tax laws that may be relevant
to U.S. participants subject to special treatment under such laws (including but not limited to
banks, dealers in securities or currencies, tax-exempt organizations, insurance companies,
regulated investment companies, financial institutions, persons that beneficially own 5% or more of
the common shares, persons whose functional currency is not the U.S. dollar, and persons that
beneficially own common shares as part of a straddle, hedging, or conversion transaction).



If an entity treated as a partnership for U.S. federal income tax purposes participates in the
Plan, the tax treatment of such partnership and each partner thereof generally will depend upon the
status and activities of the partnership and the partner. Any such partnership or partner thereof
should consult its own tax advisor regarding the U.S. federal income tax considerations relating to
participation in the Plan.



A U.S. participant will be treated for U.S. federal income tax purposes as having received a
distribution in an amount equal to the fair market value of the common shares acquired pursuant to
the Plan plus the amount of any Canadian income tax withheld therefrom. The fair market value of
the common shares so acquired will be equal to the average of the high and low sale prices of the
common shares on the Investment Date as reported on the principal securities exchange on which the
shares are traded, which amount may be higher or lower than the Market Price used to determine the
number of common shares acquired under the Plan. The distribution will be includible in a U.S.
participant’s income as a taxable dividend to the extent of the company’s current and accumulated
earnings and profits as determined for U.S. federal income tax purposes. The amount of any such
dividend will not be eligible for the dividends received deduction generally available to U.S. corporate shareholders on dividends received from a U.S. corporation. Subject to certain
limitations under the Code, U.S. participants may be entitled to a U.S. federal income tax credit
or deduction for Canadian income taxes withheld from such dividends.



A U.S. participant’s tax basis per share for common shares purchased pursuant to the Plan will
equal the fair market value per common share on the Investment Date. A U.S. participant’s holding
period for common shares purchased with dividends will begin on the day following the Investment
Date.



U.S. participants generally will recognize a taxable gain or loss when they sell or exchange
common shares and when they receive cash payments for fractional shares credited to their accounts
upon withdrawal from or termination of the Plan or otherwise. The amount of such gain or loss will
be the difference between the amount a U.S. participant receives for such common shares or fraction
thereof and the adjusted tax basis therefor. The gain or loss will be a capital gain or loss and will be a
long-term capital gain or loss if the holding period for such common shares or fraction thereof exceeds one year. For taxable years beginning on or
before December 31, 2010, long-term capital gain of a non-corporate U.S. holder generally is taxed
at a maximum rate of 15%. The deductibility of capital losses is subject to limitations. Gain or
loss recognized by a U.S. participant generally will be treated as gain or loss from sources within
the U.S. for foreign tax credit limitation purposes.




 









 







The tax considerations set forth above may differ materially if the company is regarded as a
“passive foreign investment company” (“PFIC”). The company believes that it was not a PFIC in 2008,
and it does not expect to become one in 2009. However, because this determination is made annually
at the end of each taxable year and is dependent upon a number of factors (some of which are beyond
the company’s control), including the value of its assets and the amount and type of its income,
there can be no assurance that the company will not be treated as a PFIC in any taxable year or
that the Internal Revenue Service will agree with the company’s conclusion regarding its PFIC
status. If the company is a PFIC in any taxable year, U.S. participants could suffer adverse
consequences under the PFIC rules, including the possible treatment of gain from the sale, exchange
or other disposition of common shares as ordinary income and the imposition of an interest charge
on a portion of the resulting tax liability.




16. Administration



The Agent will act as administrator of the Plan for the company and will maintain an account for
each participant. The Agent will keep all records necessary for the administration of the Plan.



The company reserves the right to interpret and regulate the Plan as it deems necessary or
desirable.



Unless the context requires otherwise, words importing only the singular number shall include the
plural and vice versa, words importing the masculine gender shall include feminine and neuter
genders and vice versa, and works importing persons shall include individuals, partnerships,
associations, trusts, unincorporated organizations and corporations.




17. Liability of the Company and the Agent



The company and the Agent, in administering the Plan, are not liable for any act or omission to
act, including, without limitation, any claims of liability: (a) with respect to receipt or
non-receipt of any payment, form or other writing purported to have been sent to the company or the
Agent; (b) actions taken as a result of inaccurate and incomplete information or instructions; (c)
in respect to any decision to amend, suspend, terminate or replace the Plan in accordance with the
terms hereof; (d) in respect to the involuntary termination of a participant’s participation in the
Plan in the circumstances described herein; (e) with respect to the prices at which common shares
are purchased for a participant’s account and the times such purchases are made; or (f) in respect
to income taxes or other liabilities payable by any participant or beneficial owner in connection
with their participation in the Plan.



Participants should recognize that neither the company nor the Agent can assure profit or protect
against a loss on common shares acquired under the Plan.



Both the company and the Agent shall have the right to reject any request regarding enrollment in,
withdrawal from or termination of the Plan if such request is not received in proper form. Any such
request will be deemed to be invalid until any irregularities have been resolved to the company’s
satisfaction and/or the Agent’s satisfaction. Neither the company nor the Agent is under any
obligation to notify any shareholder of an invalid request.




 









 








18. Governing Law



The Plan shall be governed and construed in accordance with the laws in force of the province of
Ontario, Canada.




19. Effective Date




The effective date of the Plan is May 12, 2009.