Documents to be filed, application for registration of pension plan
 40. The agreement listed in paragraph 1 of subsection 1 (1) is prescribed for the purpose of clause 9 (2) (f) of the Act with respect to the new pension plans. Part IV (OMITTED) 41. Omitted (provides for coming into force of provisions of this Regulation). Schedule 1 “Free Cash Flow” shall have the meaning ascribed thereto on Schedule “A” hereto and be calculated in accordance with GAAP using the formula set out on Schedule “A” hereto. “GAAP” means, as determined by Stelco in its discretion on notice to the FCF Beneficiaries (defined below) not less than 30 days prior to the date of Stelco’s first financial year end following the execution of this Agreement, one of the following three accounting standards, which Stelco shall use to prepare its audited financial statements: (a) generally accepted accounting principles in the United States of America as published by the Financial Accounting Standards Board, (b) the Accounting Standards for Private Enterprises which are in effect from time to time in Canada, as published in Part II of the Handbook of the Canadian Institute of Chartered Accountants or any successor thereof (the “Handbook”), or (c) International Financial Reporting Standards which are in effect from time to time in Canada, as published in Part I of the Handbook ((a), (b) and (c) collectively, the “Accounting Standards”), provided that if Stelco determines that it is required or preferred, based on advice of its auditor, to change the Accounting Standard it uses to prepare its audited financial statements, GAAP shall mean the Accounting Standard pursuant to which Stelco prepares its audited financial statements at such time. Schedule “A” References to Stelco’s “Free Cash Flow” mean the following: A. Consolidated net income after tax, before free cash flow sweep plus/minus B. All non-cash charges/credits (e.g. depreciation, deferred tax, etc.) included in the calculation of A above plus/minus C. Changes in working capital in the year less D. Capital expenditures incurred in the course of Stelco’s business in the year (net of any government grants or subsidies for capital expenditures) = E. Free Cash Flow _______________________________ Note: A already includes deductions for all operating costs, including payments in respect of OPEBS and any labour costs, including profit-sharing. However,
A is calculated before the calculations of the Free Cash Flow Contribution and the Free Cash Flow Payment. A
is to be calculated before Tax Savings Payments are paid or accounted for by Stelco. In addition, any interest incurred by Stelco on intercompany indebtedness provided by any non-arm’s length party in excess of available market interest rates shall be added back to consolidated net income after tax. In the event Stelco enters into or undertakes any non-arm’s length transactions that are not on a strictly cost recovery basis or that otherwise contain non-market terms the Free Cash Flow shall be adjusted to reflect such transactions; provided, however, that no adjustment shall be required in respect of, and Stelco shall be entitled to deduct, management, services, administrative, cost sharing or other fees and expenses payable by Stelco or its subsidiaries to Bedrock or any of its affiliates, to the extent that such fees do not exceed the total of: (A) 102% of the lesser of: (1) the costs of Bedrock and any of its affiliates in providing such services; and (2) $5,000,000 per fiscal year; and (B) the amount, if any, by which the costs of Bedrock and any of its affiliates in providing such services for the applicable fiscal year exceeds $5,000,000.