exv10w2



 





IMAX CORPORATION




Exhibit 10.2




 




 




IMAX CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

As amended and Restated as of January 1, 2006





 









 








IMAX CORPORATION




SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN




ARTICLE I




Definitions




     For purposes of this IMAX Corporation Supplemental Executive Retirement Plan, the following
words and phrases shall have the following meanings.



     1.1  “Actuarial Equivalent” and “Actuarially Equal” mean a benefit of equal
actuarial value to another benefit determined by using the following actuarial assumptions:



     (a)  Interest



     The lesser of (x) 7% or (y) the interest rate used by the Pension Benefit Guaranty Corporation
as of the first day of the Plan year in which falls the Annuity Starting Date to value a benefit
upon termination of an insufficient trusteed single-employer plan.



     (b)  Mortality



           The UP-1984 Mortality Table.



     (c)  Cost of Living



     As of any Annuity Starting Date, a fraction, not less than one, the numerator of which shall
be the Cost-of-Living Index for the October immediately preceding such Annuity Starting Date and
the denominator of which shall be the Cost of Living Index for the immediately preceding October.



     1.2  “Affiliate” means any partnership, association, corporation, trust, limited
liability company or other business entity directly or indirectly controlling, controlled by or
under common control with the Company.



     1.3  “Annuity Starting Date” means the day specified in Article III hereof.



     1.4  “Benefit” means (i) with respect to a Participating Executive, the benefit earned
by such Participating Executive under the Plan, including without limitation, the spousal benefit
described in Section 3.6 and (ii) with respect to a Surviving Spouse, the benefit to which such
Surviving Spouse is entitled under Section 3.6 of the Plan.



     1.5  “Cause” shall have the meaning ascribed to such term under the Participating
Executive’s employment agreement with the Company dated July 1, 1998, as extended on July 12, 2000.



1









 





     1.6  “Change in Control” shall have the meaning ascribed to such term under the
Participating Executive’s employment agreement with the Company dated July 1, 1998, as extended on
July 12, 2000, provided that for purposes of Article III of the Plan only, a Change in Control will
not have been deemed to have occurred unless such circumstances would constitute a change in
control as defined by Section 409A of the Code.



     1.7  “Code” means the Internal Revenue Code of 1986, as amended.



     1.8  “Company” means IMAX Corporation and any successor thereto.



     1.9  “Cost-of-Living Adjustment” means an adjustment to the Monthly Annuity , effective
as of each January 1 following the Annuity Starting Date with respect to such Monthly Annuity, and
continuing for as long as such Benefit continues to be payable, such that the amount of the monthly
payment in respect of such Benefit shall be adjusted by adding 50% of the product of (i) the amount
of such monthly payment as in effect immediately prior to such January 1 by (ii) a fraction, not
less than one, the numerator of which shall be the Cost-of-Living Index for the October immediately
preceding such Annuity Starting Date and the denominator of which shall be the Cost of Living Index
for the immediately preceding October; provided, however, that with respect to the
adjustment on the first January 1 following the Annuity Starting Date for each Benefit, the
fraction described in the preceding clause (ii) shall be further multiplied by a fraction, the
numerator of which is the number of full months from the applicable Annuity Starting Date through
such January 1 and the denominator of which is twelve.



     1.10  “Cost-of-Living Index” means the Consumer Price Index for All Urban Consumers
(CPI-U) All Items Unadjusted published by the Bureau of Labor Statistics of the United States
Department of Labor. In the event such Index ceases to be published, the Company and each
Participating Executive (or upon the death of a Participating Executive, such Participating
Executive’s Surviving Spouse) shall agree on a comparable index to be used with respect to the
Benefit of such Participating Executive or Surviving Spouse.



     1.11  “Deferred Retirement” means a Termination of Employment after the Participating
Executive’s Normal Retirement Date other than by reason of death, Disability, or by the Company for
Cause.



     1.12  “Disability Retirement” means a Termination of Employment due to a “disability”
entitling the Participating Executive to benefits under the long-term disability policy of the
Company in which he is entitled to participate. If there is no such policy, then “disability”
means a physical or mental condition which a physician selected by the Company determines has
prevented the Participating Executive from substantially performing his responsibilities for the
Company for a period of at least 180 consecutive days.



     1.13  “Final Average Compensation” means the Participating Executive’s average annual
compensation from the Company and its Affiliates determined by considering the sixty (60)
consecutive months which afford the highest such average during the Participating Executive’s
employment by the Company and its Affiliates. For this calculation, compensation shall include
only base salary and regular annual bonus, including amounts deferred as before tax contributions
to plans maintained under Sections 401(k) or 125 of the Code. Compensation does



2









 




not include the value of any awards under any long-term incentive plan, any benefits in the
nature of severance pay, or any amounts of additional W-2 income representing taxable employee
benefits and employer payments of additional withholding (commonly referred to as “grossed up”
compensation). Final Average Compensation is determined without regard to transfers between or
among the Company and any Affiliate.




     1.14  “Involuntary Retirement” means a Termination of Employment that is directed by
the Company or its Affiliates and is involuntary on the part of the Participating Executive prior
to the Participating Executive’s Normal Retirement Date for any reason other than for Cause or by
reason of Disability Retirement or death.



     1.15  “Lump Sum Payment” means, with respect to any Benefit, a payment which is the
Actuarial Equivalent of all, or the remaining portion, of such Benefit (including, for a
Participating Executive, the survivor portion of the Benefit earned by him), which payment shall
serve to discharge any and all obligations of the Company to provide such Benefit. For purposes of
clarity, (x) the value of a Participant’s Benefit shall be determined at the Participant’s Annuity
Starting Date and shall not be redetermined thereafter (including following the death of the
Participant) and (y) the Lump Sum Payment shall reflect the projected Cost-of-Living Adjustment.



     1.16  “Monthly Annuity” means a monthly annuity payable for the life of the
Participating Executive with a survivor benefit payable for the life of the Participating
Executive’s Surviving Spouse in monthly amounts initially equal to 50% of the amount payable to the
Participating Executive immediately prior to his death (determined without regard to Section 3.3(c)
hereof), such amounts to be adjusted to reflect the Cost of Living Adjustment.



     1.17  “Normal Retirement” means a Termination of Employment on the Participating
Executive’s Normal Retirement Date other than by reason of death, Disability, or by the Company for
Cause.



     1.18  “Normal Retirement Date” means, with respect to each Participating Executive, the
first day of the calendar month coincident with or next following such Participating Executive’s
55th birthday.



     1.19  “Participating Executive” means a key employee of the Company or any of its
Affiliates who has been designated as a participant by the Company as provided in Section 2.1
hereof.



     1.20  “Plan” means the IMAX Corporation Supplemental Executive Retirement Plan, as it
may be amended from time to time.



     1.21  “Rabbi Trust” means a trust in form and substance as agreed by the Company and
the Participating Executives.



     1.22  “Surviving Spouse” means the person to whom a Participating Executive is married
on the earlier of the date of his death or his Annuity Starting Date. A spouse of a Participating
Executive shall not be considered a Surviving Spouse if, at the time that spouse’s right to a
Benefit otherwise would be determined, it is established to the satisfaction of the



3









 




Committee that (a) the spouse cannot be located; or (b) the Participating Executive is legally
separated or the Participating Executive has been abandoned (as determined in accordance with the
local law) and the Participating Executive has a court order to such effect.




     1.23  “Termination of Employment” means circumstances which would constitute a
“separation from service” with the Company and its Affiliates for purposes of Section 409A of the
Code. In the case of Disability Retirement, Termination of Employment shall be deemed to occur (i)
upon the commencement of disability payments under the Company’s long-term disability policy or
(ii) upon the determination described in Section 1.12 hereof, as the case may be.



     1.24  “Vesting Percentage” shall have the same meaning ascribed to it in Section 4.1
hereof.



     1.25  “Voluntary Retirement” means a Termination of Employment that is directed by such
Participating Executive and is voluntary on the part of the Participating Executive prior to his
Normal Retirement Date other than by reason of his death or Disability.



ARTICLE II




Participants




     2.1  Designation of Participating Executives.



     The Company, in its sole discretion, shall designate those key employees of the Company or its
Affiliates who are eligible to participate in the Plan.



     2.2  Effectiveness.



     The designation of an employee as a Participating Executive shall be effective from the date
of such designation. A Participating Executive shall cease to be a Participating Executive (a)
upon his death, (b) upon the payment of his entire nonforfeitable Benefit under the Plan or (c)
upon his Termination of Employment for Cause.



ARTICLE III




Benefits




     3.1  Normal Retirement.



     (a)  Subject to Section 3.8 and 3.9 herein, upon Normal Retirement, a Participating Executive
will be entitled to receive a Benefit that has a value that is Actuarially Equal to the value of a
Monthly Annuity providing annual payments to him equal to 75% of his Final Average Compensation
increased to reflect the Cost-of-Living Adjustment and payments to his Surviving Spouse as set
forth herein. If the Participating Executive’s Normal Retirement occurs prior to August 1, 2010,
then the Benefit shall be paid in monthly installments, each of which shall be equal to the amount
of the Monthly Annuity payments, until the earlier of (i) a Change in Control or (ii) August 1,
2010, at which time the Participating Executive shall receive



4









 




the Lump Sum Payment that has an Actuarially Equivalent value to the excess, if any, of (i)
the value of the Benefit earned by such Participating Executive (including the survivor portion
thereof) determined as of his Annuity Starting Date over (ii) the value, adjusted for interest at
the rate of 7% per annum, of such installment payments previously paid, provided that, if a
Change in Control occurs after the Participating Executive’s Normal Retirement and prior to January
1, 2007, then (x) on the date of the consummation of the Change in Control, the Lump Sum Payment
will be deposited into a Rabbi Trust and (y) the amount held in the Rabbi Trust will be distributed
to the Participating Executive on January 2, 2007. If the Participating Executive’s Normal
Retirement occurs on or after August 1, 2010, then the Benefit shall be paid in its entirety as a
Lump Sum Payment the value of which is Actuarially Equal to the value of the Benefit earned by such
Participating Executive.




     (b)  The Participating Executive’s Annuity Starting Date shall be his Normal Retirement Date.



     (c)  Upon the death of the Participating Executive, the Participating Executive’s Surviving
Spouse will be entitled to receive a Benefit as specified in Section 3.6 herein.



     3.2  Deferred Retirement.



     (a)  Subject to Section 3.8 and 3.9 herein, upon Deferred Retirement, a Participating Executive
will be entitled to receive a Benefit that has a value that is Actuarially Equal to the value of a
Monthly Annuity providing annual payments to him initially equal to the product of (i) 75% of his
Final Average Compensation, and (ii) a fraction, not less than one, the numerator of which shall be
the Cost-of-Living Index for the month that is two months prior to the Participating Executive’s
Annuity Starting Date and the denominator of which shall be the Cost-of-Living Index for the month
that is two months prior to the month in which occurs the Participating Executive’s Normal
Retirement Date, and payments to his Surviving Spouse as set forth herein. Such annual payments
shall be adjusted after the Annuity Starting Date by the Cost of Living Adjustment. If the
Participating Executive’s Deferred Retirement occurs prior to August 1, 2010, then the Benefit
shall be paid in monthly installments, each of which shall be equal to the amount of the Monthly
Annuity payments, until the earlier of (i) a Change in Control or (ii) August 1, 2010, at which
time the Participating Executive shall receive the Lump Sum Payment that has an Actuarially
Equivalent value to the excess, if any, of (i) the value of the Benefit earned by such
Participating Executive (including the survivor portion thereof) determined as of his Annuity
Starting Date over (ii) the value, adjusted for interest at the rate of 7% per annum, of such
installment payments previously paid, provided that, if a Change in Control occurs after
the Participating Executive’s Deferred Retirement and prior to January 1, 2007, then (x) on the
date of the consummation of the Change in Control, the Lump Sum Payment will be deposited into a
Rabbi Trust and (y) the amount held in the Rabbi Trust will be distributed to the Participating
Executive on January 2, 2007. If the Participating Executive’s Deferred Retirement occurs on or
after August 1, 2010, then the Benefit shall be paid in its entirety as a Lump Sum Payment the
value of which is Actuarially Equal to the value of the Benefit earned by such Participating
Executive.



5









 





     (b)  The Participating Executive’s Annuity Starting Date shall be the first day of the month
following the effective date of his Termination of Employment.



     (c)  Upon the death of the Participating Executive, the Participating Executive’s Surviving
Spouse will be entitled to receive a Benefit as specified in Section 3.6 herein.



     3.3.  Disability Retirement.



     (a)  Subject to Section 3.8 and 3.9 herein, upon Disability Retirement, a Participating
Executive will be entitled to receive a Benefit that has a value that is Actuarially Equal to the
value of a Monthly Annuity providing annual payments to him equal to 75% of his Final Average
Compensation increased to reflect the Cost-of-Living Adjustment, and payments to his Surviving
Spouse as set forth herein. If the Participating Executive’s Disability Retirement occurs prior to
August 1, 2010, then the Benefit shall be paid in monthly installments, each of which shall be
equal to the amount of the Monthly Annuity payments, until the earlier of (i) a Change in Control
or (ii) August 1, 2010, at which time the Participating Executive shall receive the Lump Sum
Payment that has an Actuarially Equivalent value to the excess, if any, of (i) the value of the
Benefit earned by such Participating Executive (including the survivor portion thereof) determined
as of his Annuity Starting Date over (ii) the value, adjusted for interest at the rate of 7% per
annum, of such installment payments previously paid, provided that, if a Change in Control
occurs after the Participating Executive’s Disability Retirement and prior to January 1, 2007, then
(x) on the date of the consummation of the Change in Control, the Lump Sum Payment will be
deposited into a Rabbi Trust and (y) the amount held in the Rabbi Trust will be distributed to the
Participating Executive on January 2, 2007. If the Participating Executive’s Disability Retirement
occurs on or after August 1, 2010, then the Benefit shall be paid in its entirety as a Lump Sum
Payment the value of which is Actuarially Equal to the value of the Benefit earned by such
Participating Executive.



     (b)  The Participating Executive’s Annuity Starting Date shall be the first day of the month
following the effective date of his Termination of Employment.



     (c)  The amount of the payments payable pursuant to Section 3.3(a) shall be reduced on an
after-tax basis by the Actuarially Equivalent value of the benefit payable to a Participating
Executive pursuant to any disability insurance policy maintained by the Company or its Affiliates.



     (d)  Upon the death of the Participating Executive, the Participating Executive’s Surviving
Spouse will be entitled to receive a Benefit as specified in Section 3.6 herein.



     3.4  Involuntary Retirement.



     (a)  Subject to Section 3.8 and 3.9 herein, upon Involuntary Retirement, a Participating
Executive will be entitled to receive a Benefit that has a value that is Actuarially Equal to the
value of a Monthly Annuity providing annual payments to him equal to 75% of his Final Average
Compensation increased to reflect the Cost-of-Living Adjustment, and payments to his Surviving
Spouse as set forth herein. If the Participating Executive’s Involuntary



6









 




Retirement occurs prior to August 1, 2010, then the Benefit shall be paid in monthly
installments, each of which shall be equal to the amount of the Monthly Annuity payments, until the
earlier of (i) a Change in Control or (ii) August 1, 2010, at which time the Participating
Executive shall receive the Lump Sum Payment that has an Actuarially Equivalent value to the
excess, if any, of (i) the value of the Benefit earned by such Participating Executive (including
the survivor portion thereof) determined as of his Annuity Starting Date over (ii) the value,
adjusted for interest at the rate of 7% per annum, of such installment payments previously paid,
provided that, if a Change in Control occurs after the Participating Executive’s
Involuntary Retirement and prior to January 1, 2007, then (x) on the date of the consummation of
the Change in Control, the Lump Sum Payment will be deposited into a Rabbi Trust and (y) the amount
held in the Rabbi Trust will be distributed to the Participating Executive on January 2, 2007. If
the Participating Executive’s Involuntary Retirement occurs on or after August 1, 2010, then the
Benefit shall be paid in its entirety as a Lump Sum Payment the value of which is Actuarially Equal
to the value of the Benefit earned by such Participating Executive.




     (b)  The Participating Executive’s Annuity Starting Date shall be the first day of the month
following the effective date of his Termination of Employment.



     (c)  Upon the death of the Participating Executive, the Participating Executive’s Surviving
Spouse will be entitled to receive a Benefit as specified in Section 3.6 herein.



     3.5  Voluntary Retirement.



     (a)  Subject to Section 3.8 and 3.9 herein, upon Voluntary Retirement, a Participating
Executive will be entitled to receive a Benefit that has a value that is Actuarially Equal to the
value of a Monthly Annuity providing annual payments to him equal to the product of (x) his Vesting
Percentage and (y) 75% of his Final Average Compensation increased to reflect the Cost-of-Living
Adjustment, and payments to his Surviving Spouse as set forth herein. If the Participating
Executive’s Voluntary Retirement occurs prior to August 1, 2010, then the Benefit shall be paid in
monthly installments, each of which shall be equal to the amount of the Monthly Annuity payments,
until the earlier of (i) a Change in Control or (ii) August 1, 2010, at which time the
Participating Executive shall receive the Lump Sum Payment that has an Actuarially Equivalent value
to the excess, if any, of (i) the value of the Benefit earned by such Participating Executive
(including the survivor portion thereof) determined as of his Annuity Starting Date over (ii) the
value, adjusted for interest at the rate of 7% per annum, of such installment payments previously
paid, provided that, if a Change in Control occurs after the Participating Executive’s
Voluntary Retirement and prior to January 1, 2007, then (x) on the date of the consummation of the
Change in Control, the Lump Sum Payment will be deposited into a Rabbi Trust and (y) the amount
held in the Rabbi Trust will be distributed to the Participating Executive on January 2, 2007. If
the Participating Executive’s Voluntary Retirement occurs on or after August 1, 2010, then the
Benefit shall be paid in its entirety as a Lump Sum Payment the value of which is Actuarially Equal
to the value of the Benefit earned by such Participating Executive.



     (b)  The Participating Executive’s Annuity Starting Date shall be the first day of the month
following the effective date of his Termination of Employment.



7









 





     (c)  Upon the death of the Participating Executive, the Participating Executive’s Surviving
Spouse will be entitled to receive a Benefit as specified in Section 3.6 herein.



     3.6  Death Benefit.



     (a)  The Surviving Spouse of a Participating Executive who dies while an employee of the
Company or its Affiliates shall be entitled to receive a Benefit that has an Actuarially Equivalent
value to the Monthly Annuity earned by such Participating Executive (including the survivor portion
thereof) determined as if the Participating Executive had a Termination of Employment (treated as
set forth in the following sentence) on the day preceding the date of his death (and determined
without regard to the Participating Executive’s actual death). For purposes of clarity, such
Benefit shall be Actuarially Equivalent to the 50% joint and survivor annuity that constitutes the
Monthly Annuity, determined as if the Participating Executive had a Termination of Employment on
the day preceding the date of his death. If the Participating Executive’s death occurs on or prior
to his Normal Retirement Date, then such Termination of Employment shall be treated as if it was a
Normal Retirement and otherwise such Termination of Employment shall be treated as if it was a
Deferred Retirement.



     (b)  The Surviving Spouse of a Participating Executive who dies after a Termination of
Employment and prior to the Participating Executive having received a Lump Sum Payment of his
entire Benefit shall be entitled to receive a Benefit that has a value equal to the excess, if any,
of (i) the Actuarially Equivalent value of the Monthly Annuity earned by such Participating
Executive (including the survivor portion thereof) determined as of his Annuity Starting Date (and
determined without regard to the Participating Executive’s actual death) over (ii) the value,
adjusted for interest at the rate of 7% per annum, of the payments made pursuant to the Plan to the
Participating Executive during his life.



     (c)  The benefits payable under this Section 3.6 shall be paid in the form of a Lump Sum
Payment payable as soon as practicable, but not more than 30 days following, the Participating
Executive’s death.



     3.7  Termination of Employment Due to Cause.



     Upon a Participating Executive’s Termination of Employment by the Company or its Affiliates
for Cause prior to a Change in Control, the Participating Executive (and his Surviving Spouse)
shall forfeit any and all Benefits to which he may have been entitled, whether or not vested.



3.8  Change in Control




     (a)  Notwithstanding anything to the contrary herein, in the event of a Change in Control
coincident with or prior to the Participating Executive’s Termination of Employment, the
Participating Executive shall be entitled to receive a Benefit (payable in the form of a Lump Sum
Payment as set forth below) that has an Actuarially Equivalent value to the sum of (i) the
Actuarially Equivalent value of the Benefit earned by such Participating Executive (including the
survivor portion thereof) determined as if the Participating Executive had a Termination of
Employment (treated as set forth in the following sentence) on the date of the Change in Control



8









 




(the “Adjusted Amount”) and (ii) the Actuarially Equivalent value of 60% of the excess of the
Prior Amount (as defined below) over the Adjusted Amount. If the Change in Control occurs on or
prior to the Participating Executive’s Normal Retirement Date, then such Termination of Employment
shall be treated as if it was a Normal Retirement and if the Change in Control occurs after the
Participating Executive’s Normal Retirement Date then such Termination of Employment shall be
treated as if it was a Deferred Retirement. For purposes of this paragraph, the term “Prior
Amount” means the Adjusted Amount determined by replacing “50%” in the definition of the term
“Monthly Annuity” herein with “100%” and by replacing “50%” in the definition of the term
“Cost-of-Living Adjustment” herein with “100%.” The Benefit shall be payable in the form of an
Actuarially Equivalent Lump Sum Payment on the date of the Change in Control, provided
that, if the Change in Control occurs prior to January 1, 2007, then (x) on the date of the
consummation of the Change in Control, the Lump Sum Payment will be deposited into a Rabbi Trust
and (y) the amount held in the Rabbi Trust will be distributed on January 2, 2007.




     (b)  Subject to Section 3.7 hereof, in the event of a Change in Control after the
Participating Executive’s Termination of Employment and prior to January 1, 2016, the Participating
Executive (or if the Change in Control occurs after the Participating Executive’s death, the
Participating Executive’s Surviving Spouse or her heirs or assigns) shall be entitled to receive an
amount that is Actuarially Equivalent to the product of (x) amount determined under clause (ii) of
paragraph (a) above, with the Prior Amount and Adjusted Amount determined as of the date of the
Change in Control but based on the date of the Participating Executive’s actual Termination of
Employment and (y) the Participating Executive’s Vesting Percentage. Such amount shall be payable
in an Actuarially Equivalent Lump Sum Payment on the date of the Change in Control, provided
that, if the Change in Control occurs prior to January 1, 2007, then (x) on the date of the
consummation of the Change in Control, the Lump Sum Payment will be deposited into a Rabbi Trust
and (y) the amount held in the Rabbi Trust will be distributed on January 2, 2007. The amount
payable pursuant to this paragraph 3.8(b) shall be in addition to, and not in lieu of, any other
amount payable under the Plan.



     3.9  Section 409A Six Month Rule



     Notwithstanding anything herein to the contrary, to the extent required by Section
409A(a)(2)(B) of the Code, in event that a Participating Executive is a “specified employee” within
the meaning of such Section any distribution hereunder resulting from a Termination of Employment
that is required to be made prior to six months following such Termination of Employment shall
instead be made deferred and paid on the first day of the seventh month following such Termination
of Employment, in which case the Participating Executive shall be entitled to receive interest on
the deferred amount credited at the applicable federal rate for short-term obligations (determined
pursuant to Section 7872 of the Code in effect as of the date of such Termination of Employment).



9









 





ARTICLE IV




Vesting




     4.1  Vesting Percentage.



     (a)  The Vesting Percentage of a Participating Executive who undergoes a Termination of
Employment other than by reason of Voluntary Retirement shall be 100%.



     (b)  The Vesting Percentage of a Participating Executive whose employment terminates by
Voluntary Retirement shall be the sum of (i) 50% plus (ii) the product of (x) a fraction (not to
exceed one), the numerator of which is the Participating Executive’s number of whole years of
service for the Company or its Affiliates from the date such Participating Executive became a
Participating Executive in the Plan to the date of his Termination of Employment, and the
denominator of which is the number of whole years from the date such Participating Executive became
a Participating Executive in the Plan to such Participating Executive’s Normal Retirement Date and
(y) 50%; provided, that the Vesting Percentage shall be 100% if the Participating Executive’s
Termination of Employment occurs after the occurrence of a Change in Control.



ARTICLE V




Plan Administration




     5.1  Amendment and Termination.



     The Plan may be amended with respect to a Participating Executive only by an instrument in
writing signed by such Participating Executive and the Company.



     5.2  Funding.



     The Company shall be solely responsible for the payment of such Participating Executive’s or
Surviving Spouse’s Benefit. The Plan shall be unfunded. Benefits under the Plan shall be paid
from the general assets of the Company and each Participating Executive’s and Surviving Spouse’s
rights against the Company shall be those of an unsecured general creditor.



     5.3  Benefits Not Assignable.



     Benefits provided under the Plan may not be anticipated, assigned (either at law or in
equity), alienated or subject to attachment, garnishment, levy, execution or other legal or
equitable process.



     5.4  Plan Not a Contract of Employment.



     The Plan is not a contract of employment, and the terms of employment of any Participating
Executive shall not be affected in any way by the Plan or related instruments except as
specifically provided in the Plan or such related instruments. The establishment of the Plan shall
not be construed as conferring any legal rights upon any Participating Executive for a



10









 




continuation of employment, nor shall it interfere with the right of the Company to discharge
any employee and to treat him without regard to the effect which such treatment might have upon him
as a Participating Executive. Each Participating Executive and all persons who may have or claim
any right by reason of his participation shall be bound by the terms of the Plan and all agreements
entered into pursuant thereto.




     5.5  Construction.



     (a)  The Plan is intended to qualify as a plan maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly compensated employees as
referred to in Section 201(2) of the Employee Retirement Income Security Act of 1974, as amended,
and its terms shall be interpreted accordingly. Otherwise, the laws of the State of New York shall
control the interpretation and performance of the terms of the Plan.



     (b)  If any provision of the Plan, or the application of any such provision to any person or
circumstances, shall be invalid under any federal or state law, neither the application of such
provision to persons or circumstances other than those as to which such provision is invalid nor
any other provisions of the Plan shall be affected thereby.



     (c)  The headings and subheadings in the Plan have been inserted for convenience of reference
only, and are to be ignored in any construction of the provisions thereof.



     (d)  The Plan is intended not to give rise to tax under Section 409A of the Code. In the event
that the Company and a Participating Executive determine that any provision of the Plan would be
expected to give rise to tax under Section 409A, then the Plan shall be construed (as to such
Participating Executive) in a manner that the Company and such Participating Executive agree would
avoid such tax, or the Plan shall be amended in a manner and to the extent that the Company and
such Participating Executive agree is necessary to avoid such tax.



     5.6  Taxes.



     The Company shall not be responsible for the tax consequences under federal, state or local
law of any election made by any Participating Executive under the Plan. All payments under the
Plan shall be subject to withholding and reporting requirements to the extent applicable law
requires.



	 	 	 	 	 
	 	IMAX CORPORATION 



 	 
	 	By:  	“Garth M. Girvan”
 	 
	 	 	Garth M. Girvan 	 
	 	 	Title:  	Director
 	 
	 	 	Date:  	May 4, 2007 	 
	 




11