EXHIBIT 4.36
                                                                    ------------

                      EXFO ELECTRO-OPTICAL ENGINEERING INC.

                            DEFERRED SHARE UNIT PLAN

                    FOR THE MEMBERS OF THE BOARD OF DIRECTORS


1.       DEFINITIONS

         For the purpose of this Deferred Share Unit Plan,  except as otherwise
         expressly provided or unless the context otherwise requires:

         "BOARD"  means the  non-employee  members of the Board of Directors of
         the  Corporation  or such  Committee of the Board  composed  solely of
         non-employee  members,  as the Board may  select  from time to time to
         administer this DSUP;

         "BUSINESS  DAY" means any day on which banks are open for  business in
         the province of Quebec;

         "CORPORATION" means EXFO Electro-Optical Engineering Inc;

         "DEFERRED REMUNERATION" means, in respect of a Participant, the sum of
         the Portion as may be elected by such Participant under section 4;

         "DIRECTOR"  means a member of the Board who is not an  employee of the
         Corporation and who is entitled to compensation  under a resolution of
         the Board;

         "DSUP" means this Deferred Share Unit Plan for the Directors;

         "ELECTION NOTICE" has the meaning ascribed thereto in section 4.1;

         "PORTION" has the meaning ascribed thereto in section 3.2;

         "OPTIONS" has the meaning ascribed thereto in the  Corporation's  Long
         Term Incentive Plan;

         "PARTICIPANT" means any Director participating in the DSUP;

         "REDEMPTION DATE" has the meaning ascribed thereto in section 6.2;

         "REDEMPTION NOTICE" has the meaning ascribed thereto in section 6.2;

         "RSUS" has the meaning ascribed thereto in the Corporation's Long Term
         Incentive  Plan;  "SHARE"  means a  Subordinate  Voting  Share  of the
         Corporation;

         "TERMINATION DATE" in respect of a Participant means the earliest date
         on which both of the following conditions are satisfied:

         (i)      the   Participant   has  ceased  to  be  a  director  of  the
                  Corporation  by reason of his or her death or  retirement  or
                  loss of office as a director; and

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         (ii)     he or she is neither an employee nor a member of the board of
                  directors  of the  Corporation  or any person  related to the
                  Corporation for the purposes of the INCOME TAX ACT (Canada).

         "TERMINATION NOTICE" has the meaning ascribed thereto in section 4.3;

         "UNITS"  means  Deferred  Share Units that may be granted from time to
         time to Participants pursuant to the provisions of this DSUP;

         "VALUE OF A UNIT" or "VALUE OF THE  UNITS"  means,  at any  particular
         date,  the market value of the Shares at that date,  calculated as the
         greater  of the  closing  prices of the  Shares on The  Toronto  Stock
         Exchange  and the  NASDAQ  National  Market  on the last  trading  day
         preceding  such  date or,  if the  Shares  did not  trade on such last
         trading day,  the greater of the  average,  rounded off to the nearest
         cent,  of the bid and ask prices for the Shares on The  Toronto  Stock
         Exchange  and the  NASDAQ  National  Market at the close of trading on
         such last trading day preceding such date, subject to adjustments made
         pursuant to section 5.2 of this DSUP.  The closing price of the Shares
         or, as the case may be,  the  average of the bid and ask prices of the
         Shares at the close of trading on the NASDAQ  National Market shall be
         converted  into  Canadian  dollars at the noon  buying rate of Federal
         Reserve  Bank of New York on the Grant  Date when such  conversion  is
         required;

2.       ADMINISTRATION

2.1      This DSUP shall be administered  by the Board,  which may delegate its
         duties  and  powers  in whole or in part to any  subcommittee  thereof
         consisting solely of non-employee  directors.  The Board is authorized
         to interpret this DSUP, to establish,  amend and rescind any rules and
         regulations   relating   to  this   DSUP,   and  to  make  any   other
         determinations   that  it  deems   necessary  or  desirable   for  the
         administration  of this  DSUP.  The Board may  correct  any  defect or
         supply any omission or reconcile any inconsistency in this DSUP in the
         manner and to the extent the Board deems  necessary or desirable.  Any
         decision of the Board in the interpretation and administration of this
         DSUP,  as  described  herein,  shall lie within its sole and  absolute
         discretion  and shall be final,  conclusive and binding on all parties
         concerned.  Notwithstanding  the  foregoing,  all actions of the Board
         shall be such that  this DSUP  continuously  meets the  conditions  of
         paragraph  6801(d)  of  the  Regulations  under  the  INCOME  TAX  ACT
         (Canada).  Neither the Board or any member thereof, nor any officer or
         employee of the  Corporation,  shall be liable for any act,  omission,
         interpretation,  construction or  determination  made in good faith in
         connection  with  this  DSUP,  and the  members  of the  Board and the
         officers  and  employees  of the  Corporation  shall  be  entitled  to
         indemnification  by the  Corporation  in respect  of any claim,  loss,
         damage or expense  (including  legal fees and  disbursements)  arising
         therefrom  to the fullest  extent  permitted  by law.  The expenses of
         administering this DSUP shall be borne by the Corporation.

3.       ELIGIBILITY

         3.1      The   Corporation  is   establishing  a  DSUP  for  Directors
                  beginning  from the date of the approval by the  shareholders
                  of the Corporation.

         3.2      Each  Participant is entitled to receive in the form of units
                  a  percentage  of  the  annual  board  retainer  fee  payable
                  annually to a Director and may, subject to the conditions set
                  forth  herein,  elect to  receive  in the  form of Units  any
                  percentage, up to 100%, of the annual board retainer fee (the
                  "PORTION").


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4.       ELECTION TO PARTICIPATE

         4.1      Each  Participant  who elects to participate in the DSUP will
                  be  required  to file a notice  of  election,  in the form of
                  Schedule  A  hereto  (the   "ELECTION   NOTICE"),   with  the
                  Corporation's  Secretary  before  August 1st in each year and
                  for each new Director such Election  Notice must be delivered
                  not later than 7 days after the date on which his or her term
                  as a director  commenced,  indicating  the  percentage of the
                  Portion payable

                  (a)      in the  following  calendar  year  for a  continuing
                           director and

                  (b)      in the current  calendar year beginning on the first
                           day of the financial quarter of the Corporation next
                           following the date of receipt by the  Corporation of
                           the Election Notice for a new director in respect of
                           which the Participant elects to receive Units.

         4.2      The  election  of  a   Participant   (who  has  not  filed  a
                  Termination   Notice  in   respect  of  such   election)   to
                  participate  in the DSUP  shall be  effective  for the fiscal
                  year or  balance  thereof  in respect of which it is made and
                  shall  be  deemed  to  apply  to  all  fiscal  years  of  the
                  Corporation  subsequent to the filing of the Election  Notice
                  until and unless a  Termination  Notice is filed per  Section
                  4.3. If no Election  Notice is made, and no prior election is
                  deemed  effective,  the  Participant  shall be deemed to have
                  elected to be paid 100% of the Portion in Units.

         4.3      Each Participant is entitled,  at any time, to terminate such
                  Participant's future participation in the DSUP by filing with
                  the Secretary of the  Corporation a notice of  termination in
                  the form of Schedule B hereto (the "TERMINATION  Notice").  A
                  Participant  who has filed a Termination  Notice may elect to
                  participate  again  in the  DSUP  in  respect  of any  period
                  following the filing of such Termination  Notice by filing an
                  Election Notice in accordance with Section 4.1, and so on.

5.       GRANT OF UNITS

         5.1      Participants  will be  credited  for each  fiscal year of the
                  Corporation, a number of Units determined on the basis of the
                  amount of Deferred  Remuneration  payable to such Director in
                  respect of such fiscal year, divided by the Value of a Unit.

         5.2      Participants  to whose  accounts Units stand credited will be
                  credited with  additional  Units  whenever cash dividends are
                  paid on Shares.

         5.3      In the event of a stock dividend, stock split, combination or
                  exchange of shares, merger, consolidation,  spin-off or other
                  distribution  (other  than  normal  cash  dividends)  of  the
                  Corporation's  assets to  shareholders,  or any other  change
                  affecting the Shares,  including the conversion  thereof into
                  shares   of   another   entity   upon  an   amalgamation   or
                  reorganization   of  the  Corporation,   such   proportionate
                  adjustments,  if any, as the Board in its discretion may deem
                  appropriate to reflect such change, will be made with respect
                  to the number of Units outstanding under the DSUP.

6.       REDEMPTION OF UNITS

         6.1      Subject to the limitations  contained in sections 6.2 to 6.4,
                  Units will be redeemable and the value thereof  payable after
                  the Termination Date of a Participant.


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         6.2      In the case where a Participant  ceases to act as a Director,
                  the Participant (or in the case of death,  the beneficiary of
                  the  Units)  may,  after the  Termination  Date,  subject  to
                  section  6.3,  cause the  Corporation  to redeem the Units by
                  filing a notice  of  redemption  in the  form of  Schedule  C
                  hereto  (the  "REDEMPTION  NOTICE")  with  the  Corporation's
                  Secretary  specifying the redemption  date, which shall be at
                  least  five  Business  Days  following  the date on which the
                  Redemption Notice is filed with the Corporation, but no later
                  than December 15 of the first calendar year commencing  after
                  the year of the Termination Date (the "REDEMPTION DATE").

                  Within ten  Business  Days after the  Redemption  Date but no
                  later than December 31 of the first calendar year  commencing
                  after the year of the Termination  Date (the "PAYMENT DATE"),
                  the  Participant  shall  receive,  at the  discretion  of the
                  Corporation,  in satisfaction of the number of Units credited
                  to his or her account on such date, any of the following:

                  (a)      a number of Shares  purchased  on the open market by
                           the Broker  having a Value of the Units,  net of any
                           applicable  withholdings,  equal  to the  Value of a
                           Unit on the Redemption Date multiplied by the number
                           of Units credited to his or her notional  account on
                           the Payment Date,  in  accordance  with the terms of
                           Section 7 hereof,

                  (b)      a number of Shares issued by the  Corporation  equal
                           to  the  number  of  Units  credited  to  his or her
                           notional account on the Payment Date,

                  (c)      any combination of clauses (a) and (b).


                  The Corporation will pay all brokerage commissions arising in
                  connection  with the  purchase of Shares by the Broker on the
                  open  market  and. A  Participant  shall not be  entitled  to
                  require payment of any amount on account of Units credited to
                  such  Participant's  account prior to his or her  Termination
                  Date nor later than the last  business day in December of the
                  first calendar year commencing after the Termination Date.

         6.3      If  the   Participant   or  his/her   beneficiary   or  legal
                  representative,   as  the  case  may  be,  fails  to  file  a
                  Redemption  Notice with the Corporation  before the Deadline,
                  the    Participant   or   his/her    beneficiary   or   legal
                  representative, shall be deemed to have filed on the Deadline
                  a   Redemption   Notice   with  the   Corporation   for  such
                  Participant's  Units  specifying  December 15 of such year as
                  the Redemption Date.

         6.4      If a Participant dies after ceasing to act as a Director, but
                  before  filing a  Redemption  Notice  with  the  Corporation,
                  sections 6.2 and 6.3 shall apply with such  modifications  as
                  the circumstances require.

         6.5      A  Redemption  Notice  shall  apply to all Units  held by the
                  Participant or his/her  beneficiary or legal  representative,
                  as the case may be, at the time it is filed.

7.       PURCHASE OF SHARES ON THE OPEN MARKET

         7.1      Purchase of Shares pursuant to Section 6 hereof shall be made
                  on  the  open  market  by  a  broker   independent  from  the
                  Corporation and who is a member of The Toronto Stock Exchange
                  or  NASDAQ  National  Market or if the  Shares  are no longer
                  listed or  traded on The  Toronto  Stock  Exchange  or NASDAQ


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<PAGE>

                  National Market or both, then of such other stock exchange or
                  quotation service as the Board may determine  constitutes the
                  principal  market for the  Shares  (the  "Broker").  Any such
                  designation   may  be  changed   from  time  to  time.   Upon
                  designation  of a  broker  or at  any  time  thereafter,  the
                  Corporation  may elect to provide the Broker with a letter of
                  agreement  to be executed by the Broker and entered into with
                  the Participant and to which the Corporation  would also be a
                  party,   setting   forth,   inter  alia,   (i)  the  Broker's
                  concurrence  to  being  so  designated,  to  acting  for  the
                  Participant's  account in accordance  with customary usage of
                  the trade with a view to  obtaining  the best share price for
                  the  Participant  and to delivering to the Participant or his
                  or her  representative  the share  certificate for the Shares
                  purchased  upon  payment by the  Corporation  of the purchase
                  price and the related reasonable brokerage  commissions,  and
                  (ii) the Corporation's  agreement to notify the Broker of the
                  number  of  Shares to be  purchased  and to pay the  purchase
                  price  and  the  related  reasonable  brokerage  commissions,
                  provided however that no terms of such letter agreement shall
                  have the effect of making the Broker or deeming the broker to
                  be an affiliate of (or not independent  from) the Corporation
                  for purposes of any applicable corporate, securities or stock
                  exchange requirement.

         7.2      Prior to 11:00 a.m.  (Montreal time) on the Payment Date, the
                  Corporation  shall  notify  the  Broker  as to the  number of
                  Shares  to be  purchased  by  the  Broker  on  behalf  of the
                  Participant  on the  open  market.  As  soon  as  practicable
                  thereafter,  the Broker shall purchase on the open market the
                  number of Shares  which the  Corporation  has  requested  the
                  Broker to purchase and shall notify the  Participant  and the
                  Corporation of (a) the aggregate  purchase price  ("AGGREGATE
                  PURCHASE  PRICE") of the Shares,  (b) the purchase  price per
                  Share or, if the Shares were  purchased at different  prices,
                  the average  purchase price  (computed on a weighted  average
                  basis) per Share,  (c) the amount of any  related  reasonable
                  brokerage  commissions  and (d) the  settlement  date for the
                  purchase of the Shares.  On the settlement date, upon payment
                  of  the  Aggregate  Purchase  Price  and  related  reasonable
                  commissions by the  Corporation,  the Broker shall deliver to
                  the  Participant  or  to  his  or  her   representative   the
                  certificate representing the Shares. No settlement date shall
                  be after  the last  business  day in  December  of the  first
                  calendar year commencing after the Termination Date.

         7.3      The Units,  that may be delivered  under this DSUP,  have not
                  been  registered  under the U.S.  Securities  Act of 1933, as
                  amended,  as of the  effective  date  of  this  DSUP  and the
                  Corporation has no obligation to register such units.

8.       SHARES SUBJECT TO THIS DEFERRED SHARE UNIT PLAN

         8.1      The total number of Shares that may be issued under this DSUP
                  shall  not  exceed   6,306,153  Shares  of  the  Corporation,
                  including  such Shares that may be issued under the Long Term
                  Incentive Plan of the Corporation,  subject to the adjustment
                  under  Section  9,  and no  Participant  shall  hold in total
                  Options,  RSUs and Units which may be redeemed  for more than
                  5% of the number of Shares issued and  outstanding  from time
                  to time.

                  For greater  clarity,  the issuance of Shares under this DSUP
                  shall be subject to the following:

                  (i)      the number of Shares reserved for issuance  pursuant
                           to  Options,  RSUs and Units  granted to insiders of
                           the  Corporation  shall not  exceed 10% of the total
                           issued and outstanding Shares;


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<PAGE>

                  (ii)     the issuance to insiders,  within a one-year period,
                           of a number of  Options,  RSUs and  Units  shall not
                           exceed  10%  of the  total  issued  and  outstanding
                           Shares; and

                  (iii)    the  issuance to any one insider and such  insider's
                           associates, within a one-year period, of a number of
                           Options,  RSUs and Units  shall not exceed 5% of the
                           total issued and outstanding Shares.

9.       ADJUSTMENTS AND REORGANIZATIONS

         9.1      In the  event of any  change  in the  number  of  outstanding
                  Shares of the  Corporation  by reason of any stock  dividend,
                  stock   split,   recapitalization,   merger,   consolidation,
                  combination  or exchange of Shares or other  similar  change,
                  subject to the prior  approval  of the  competent  regulatory
                  authorities,  an  equitable  adjustment  shall be made by the
                  Board in the maximum number or kind of Shares  issuable under
                  this DSUP.  Such  adjustment will be definitive and mandatory
                  for the purposes of this DSUP.

10.      AMENDMENT OR TERMINATION OF THE DSUP

         10.1     The DSUP may be  amended  or  terminated  (including  without
                  limitation to suspend or limit the right of a Participant  to
                  elect to  participate  in the DSUP) at any time and from time
                  to  time  by  the  Board,  with  the  prior  approval  of the
                  competent  regulatory  authorities,  provided  that  any such
                  amendment or  termination  does not in any way infringe  upon
                  any rights of  Participants  in  respect of Units  previously
                  credited to the account of Participants.

11.      GENERAL

         11.1     The DSUP will be  administered by the Board or, if determined
                  by the Board,  by a  committee  of the  Board,  and all costs
                  related to the  implementation and administration of the DSUP
                  will be paid by the Corporation.

         11.2     A Participant  may not sell,  assign or otherwise  dispose of
                  Units or any  rights in  respect  thereof,  except by will or
                  other   testamentary   document  or  according  to  the  laws
                  respecting the devolution and allotment of estates.

         11.3     Unless  otherwise  determined by the Board,  no funds will be
                  set aside to  guarantee  the  payment of the Units and future
                  payment of Units will remain an unfunded  liability  recorded
                  on the books of the Corporation.

         11.4     This Plan will be effective as of January 12, 2005.



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                                   SCHEDULE A


                                Election Notice

                     EXFO ELECTRO-OPTICAL ENGINEERING INC.

       DEFERRED SHARE UNIT PLAN FOR THE MEMBERS OF THE BOARD OF DIRECTORS
                 (THE "DEFERRED SHARE UNIT PLAN" OR THE "PLAN")

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NOTE:    ALL CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
         MEANING ASCRIBED THERETO IN THE DEFERRED SHARE UNIT PLAN.
-------------------------------------------------------------------------------

PLEASE TICK THE APPROPRIATE BOX AND COMPLETE AS APPROPRIATE:

[_]  I hereby elect to  participate  in the  Corporation's  Deferred Share Unit
     Plan and my elected percentage is ________%.

[ ]  I hereby elect not to participate in the Corporation's Deferred Share Unit
     Plan.

I CONFIRM THAT:

I have  received and reviewed a copy of the Deferred  Share Unit Plan and agree
to be  bound  by it.  I  understand  that  I will  not be  able  to  cause  the
Corporation to redeem Units until I cease to act as a Director.

I recognize that, when Units credited pursuant to this election are redeemed in
accordance with the terms of the Deferred Share Unit Plan after I cease to be a
Director,  income tax and other  withholdings  will  arise at that  time.  Upon
redemption of Units, the Corporation will make the appropriate  withholdings as
required by law at that time. These may include deductions at source on account
of federal and provincial  income taxes,  Canada  Pension Plan,  Quebec Pension
Plan,  Quebec Health Insurance Plan, etc. and, with respect to U.S.  residents,
on account of applicable federal, state and local taxes.

I will respect any applicable  limitation imposed by the Corporation's  insider
trading  policies and any applicable  laws and  regulations  regarding  insider
trading.

THE  FOREGOING  INCLUDES  A BRIEF  OUTLINE  OF CERTAIN  KEY  PROVISIONS  OF THE
DEFERRED SHARE UNIT PLAN. FOR MORE COMPLETE  INFORMATION,  REFERENCE  SHOULD BE
MADE TO THE TEXT OF THE DEFERRED SHARE UNIT PLAN.


-------------------------------         ---------------------------------------
Date                                          (Signature of Participant)



                                        ---------------------------------------
                                         (Name of Participant in Block Letters)


<PAGE>

                                   SCHEDULE B


                               Termination Notice


                     EXFO ELECTRO-OPTICAL ENGINEERING INC.


       DEFERRED SHARE UNIT PLAN FOR THE MEMBERS OF THE BOARD OF DIRECTORS
                        (THE "DEFERRED SHARE UNIT PLAN")


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NOTE:    ALL CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
         MEANING ASCRIBED THERETO IN THE DEFERRED SHARE UNIT PLAN.
-------------------------------------------------------------------------------

I hereby advise the Corporation  that I wish to terminate my  participation  in
the  Deferred  Share Unit  Plan.  I  understand  that my  participation  in the
Deferred  Share Unit Plan shall be  terminated  as of and from the first fiscal
year of the Corporation  following the filing of this Termination  Notice.  Any
Units  credited  to my  account  shall  remain  in  such  account  and  will be
redeemable only in accordance with the terms of the Deferred Share Unit Plan.




-------------------------------         ---------------------------------------
Date                                          (Signature of Participant)



                                        ---------------------------------------
                                         (Name of Participant in Block Letters)


<PAGE>

                                   SCHEDULE C


                               Redemption Notice


                     EXFO ELECTRO-OPTICAL ENGINEERING INC.


       DEFERRED SHARE UNIT PLAN FOR THE MEMBERS OF THE BOARD OF DIRECTORS
                        (THE "DEFERRED SHARE UNIT PLAN")


-------------------------------------------------------------------------------
NOTE:    ALL CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
         MEANING ASCRIBED THERETO IN THE DEFERRED SHARE UNIT PLAN.
-------------------------------------------------------------------------------

I hereby advise the  Corporation  that I wish the Corporation to redeem all the
Units  credited  to my account  under the  Deferred  Share Unit Plan on (INSERT
REDEMPTION  DATE,  WHICH SHALL BE AT LEAST FIVE (5) BUSINESS DAYS FOLLOWING THE
DATE ON WHICH SUCH REDEMPTION NOTICE IS FILED WITH THE CORPORATION but no later
than December 15 of the first  calendar year  commencing  after the year of the
Termination Date).



-------------------------------         ---------------------------------------
Date                                          (Signature of Participant)


                                        ---------------------------------------
                                         (Name of Participant in Block Letters)