Document:

amend4.htm

     

    
      

       

      AMENDMENT NO. 4 TO
TRANSACTION DOCUMENTS

       

       Dated
as of January 15, 2008

       

      THIS
AMENDMENT NO. 4 TO TRANSACTION DOCUMENTS (this “Amendment No.
4”) is entered into by and among MVL Film Finance LLC (the “Borrower”),
MVL Productions LLC (“MPROD”),
Marvel Studios, Inc. (“Marvel
Studios” and together with the Borrower and MPROD, collectively, the
“Marvel
Parties”) and Ambac Assurance Corporation, in its capacity as Control
Party (as defined in the Credit Agreement referred to below) (“Ambac”).  All
capitalized terms used herein without definition shall have the meanings
specified in the Credit Agreement referred to below, or, if not defined therein,
in the Master Agreement referred to below.

       

      PRELIMINARY
STATEMENTS:

       

      (1)           WHEREAS,
reference is made to (i) the Credit and Security Agreement dated as of August
31, 2005 (the “Credit
Agreement”) among the Borrower, the financial institutions and commercial
paper conduits from time to time party thereto, General Electric Capital
Corporation, as Administrative Agent, and the Collateral Agent, (ii) the Master
Development and Distribution Agreement dated as of August 31, 2005 (the “Master
Agreement”) among the Marvel Parties, (iii) Amendment No. 1 to
Transaction Documents dated as of September 29, 2006 (“Amendment No.
1”), Amendment No. 2 to Transaction Documents dated as of February 21,
2007 (“Amendment No.
2”), and Amendment No. 3 to Transaction Documents dated as of April 13,
2007 (“Amendment No.
3”) each by and between the Marvel Parties, Marvel Characters, Inc., MVL
Rights LLC, Ambac and the Collateral Agent, and (iv) Acknowledgement No. 1 to
Transaction Documents dated as of April 6, 2007 by and among Ambac and the
Marvel Parties (“Acknowledgment
No. 1”);

       

      (2)           WHEREAS,
in light of the Marvel Parties’ scheduled release of two Motion Pictures
produced pursuant to the Transaction Documents in the Summer of 2008 and the
current general conditions in the film industry related to its guilds, the
Marvel Parties have asked Ambac to extend the deadline contained in Section
8.01(n)(iii) of the Credit Agreement for the next Initial Funding that is a
Film-Related Advance for a period of twelve (12) months; and

      

      (3)           WHEREAS,
Ambac has agreed to grant such an extension provided that if the Marvel Parties
use such extension the Class A Liquidity Reserve will be increased to
$45,000,000 as further described herein;

      

      NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the undersigned hereby agree as
follows:

       

      SECTION
1.    Deadline for Third Initial
Funding which is a Film Related Advance.

       

      Section
8.01(n) is hereby amended and restated as follows (with the new text underlined
herein):

       

       

      
        
           

        

        
           

          
            

          

        

        
          2

        

      

       

      “(n) (i)
if the Release Date for the Motion Picture related to the first Initial Funding
which is a Film-Related Advance occurs in 2007, more than eighteen (18) months
has elapsed after an Initial Funding that is a Film-Related Advance before the
occurrence of a subsequent Initial Funding that is a Film-Related Advance, (ii)
if the Borrower breaches the covenant set forth in Section 7.01(j),
(iii) if the Release Date for the Motion Picture related to the first Initial
Funding which is a Film-Related Advance occurs in 2008, the third Initial Funding
which is a Film-Related Advance does not occur on or prior to June 29, 2009 and
thereafter, more than twelve (12) months has elapsed after an Initial
Funding that is a Film-Related Advance before the occurrence of a subsequent
Initial Funding that is a Film-Related Advance, or (iv) if the Release Date for
the Motion Picture related to the first Initial Funding which is a Film-Related
Advance occurs in 2009, the subsequent three Initial Fundings which are
Film-Related Advances do not occur within twenty-four (24) months of the Release
Date for the Motion Picture related to the first Initial Funding which is a
Film-Related Advance, in each case, other than due to an event of Force Majeure
(except that such
deadline shall not be extended for the strike by the Writers Guild of America
which commenced on November 5, 2007);”

       

      SECTION
2.    Class A Liquidity
Reserve

       

      (a)  The
definition of Class A Liquidity Reserve Deficit set forth in Section 1.01(b) is
hereby amended and restated as follows:

       

      ““Class A Liquidity Reserve
Deficit” means, as of any date of determination, the excess, if any, of
Class A Liquidity Reserve Amount over the balance on deposit in the Class A
Liquidity Reserve Account at such time.”

       

      (b) 
Section 1.01(b) is hereby amended to add the following definition:

       

      “Class A Liquidity Reserve
Amount” Shall mean: (i) if the third Initial Funding which is a
Film-Related Advance occurs on or prior to June 29, 2008 as such date is
extended by any event of Force Majeure (the length of such extension being the
number of calendar days during which the Force Majeure event existed e.g., in
the case of a union strike, the number of calendar days that the union members
are on strike), $25,000,000; and (ii) if the third Initial Funding which is a
Film-Related Advance occurs thereafter, $45,000,000 provided however, in the event
that the initial Class A Liquidity Reserve Amount funded in accordance with
Section 2.02(d)(ii) on the last Business Day of the Capitalization Period is
$45,000,000 then the Control Party will evaluate, in its good faith discretion,
throughout the term of the Agreement and at least once annually, whether the
Class A Liquidity Reserve Amount may be reduced by up to $20,000,000 or any
partial amount thereof based on the timing and performance of the Pictures and
the Facility as a whole.  The Class A Liquidity Reserve Amount shall
be reduced by any amount up to $20,000,000 that Control Party determines is no
longer necessary pursuant to the evaluation set forth in the preceding
sentence.  The Control Party shall 

       

       

      
        
           

        

        
           

          
            

          

        

        
          3

        

      

       

      provide written notice of any such reduction to the Borrower and
the Administrative Agent.”

       

      (c)
Section 2.02(d)(ii)(C) is hereby amended and restated as follows:

       

      “(C) on
the last Business Day of the Capitalization Period, to fund the Class A
Liquidity Reserve Account up to the amount of the Class A Liquidity Reserve
Amount.”

       

      (d)
Section 2.02(e) is hereby amended and restated as follows:

       

      “Class A Liquidity Reserve
Account.  On the last Business Day of the Capitalization
Period, the Borrower shall request a Borrowing pursuant to Section 2.02(a) in
the amount of the Class A Liquidity Reserve Amount at such time, and instruct
the Administrative Agent, upon receipt of such funds from the Lenders, to direct
such funds to the Class A Liquidity Reserve Account.”

       

      (e)
Section 5.02(xviii) is hereby amended and restated as follows:

       

      “The sum
of (a) the excess of the aggregate Class A Lender Commitments over the aggregate
outstanding Class A Advances, plus (b) the excess
of the balance on deposit in the Borrower Blocked Account over the Minimum
Interest Reserve, exceeds the sum of (x) the aggregate unfunded Direct Negative
Cost for all Motion Pictures in production, plus (y) the Direct
Negative Cost for the Motion Picture related to the proposed Initial Funding
plus (z) solely
during the Capitalization Period, $45,000,000”

       

      SECTION
3.    Representations and
Warranties of the Marvel Parties.

       

      3.1       The
Marvel Parties each hereby represents and warrants to Ambac as
follows:

       

      (a)   It is a
corporation or limited liability company, as applicable, duly organized, validly
existing and in good standing under the laws of the State of
Delaware.

       

      (b)           The
execution, delivery and performance by it of this Amendment No. 4 and each
Transaction Document to which it is a party, and the transactions contemplated
hereby and thereby, are within its limited liability company or corporate
powers, have been duly authorized by all necessary limited liability company or
corporate action, and do not (i) contravene, or constitute a default under,
its constitutive documents, (ii) violate any Law or applicable writ,
judgment, injunction, decree, determination or award except where such
violations, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect, (iii) conflict with or result in the
breach of, or constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on it or
any of its properties, in each case which breach or default has not been
permanently waived in accordance therewith or (iv) result in or require the
creation or imposition of any Adverse Claim upon or with respect to any of its
properties, other than Permitted Liens.

       

       

      
        
           

        

        
           

          
            

          

        

        
          4

        

      

       

      (c)           No
consent of any other Person and no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
or any other third party that has not been obtained is required for the due
execution, delivery or performance by it of this Amendment No. 4 or any
Transaction Document to which it is or is to be a party.

       

      (d)           This
Amendment No. 4 has been, and each Transaction Document to which it is a party
has been, duly executed and delivered by it and is its legal, valid and binding
obligation, enforceable against it in accordance with the terms of such
document, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles.

       

      3.2           In
addition, the Marvel Parties each hereby represents and warrants to Ambac as
follows:

       

      No Event
of Default, Potential Event of Default, MSI Default Event, MEI Event of Default
or Acceleration Event has occurred and is continuing or would result from the
execution, delivery and performance by it of this Amendment No. 4 and the
transactions contemplated hereby.

       

      SECTION
4.    Reference to and Effect on
the Transaction Documents, Etc.

       

      (a)           This
Amendment No. 4 shall pertain only to the matters expressly referred to above
and is effective only for the limited purposes set forth above, and shall not be
deemed to authorize any other action or non-compliance on the Borrower’s,
MPROD’s or Marvel Studio’s part.

       

      (b)           The
Transaction Documents, as specifically modified by Amendment No. 1, Amendment
No. 2, Amendment No. 3, Acknowledgment No. 1 and this Amendment No. 4 are and
shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed.  This Amendment No. 4 constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, there
being no other agreements or understandings, oral, written or otherwise,
respecting such subject matter, any such agreement or understanding being
superseded hereby.

       

      SECTION
5.    Execution in
Counterparts.  This
Amendment No. 4 may be executed in any number of counterparts and by any
combination of the parties hereto in separate counterparts, each of which
counterparts shall be an original and all of which taken together shall
constitute one and the same Amendment No. 4.  Delivery of an executed
counterpart of a signature page to this Amendment No. 4 by facsimile shall be
effective as delivery of a manually executed counterpart of this Amendment No.
4.

       

      SECTION
6.    Governing
Law.  This
Amendment No. 4 shall be governed by, and construed in accordance with, the
internal laws of the State of New York.

       

      [Signature
pages follow]

       

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      IN WITNESS WHEREOF, the undersigned
have caused this Amendment No. 4 to be executed by their respective officers
thereunto duly authorized, as of the date first above written.

       

      

      

      AMBAC
ASSURANCE CORPORATION

      

      

      By: /s/ Kevin
Graham                                     

      Name:
Kevin Graham

      Title:  Vice
President

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      MVL FILM
FINANCE LLC

      

      

      By:  /s/ Tim
Connors                                           
                                                                           

      Name: Tim
Connors

      Title:   Executive
Vice President, Business Affairs and Operations

      

      

      MVL
PRODUCTIONS LLC

      

      

      By  /s/ Tim
Connors                                            
                                                                           

      Name: Tim
Connors

      Title:  Executive
Vice President, Business Affairs and Operations

      

      

      MARVEL
STUDIOS, INC.

      

      

      By  /s/ Tim
Connors                                            
                                                                           

      

      Name: Tim
Connors

      Title:
Executive Vice President, Business Affairs and Operationsexv10wn

 

Exhibit 10(n)

	 	 	 
	 

	 	Adopted March 15, 2000
	 

	 	Amended January 1, 2008
	 
	 	 
	 

	 	Short-Term
	 

	 	Incentive Plan
	 
	 	 
	 

	 	Effective January 1,
	 

	 	2000 
	 
	 	 
	 

	 	Potash Corporation of
	 

	 	Saskatchewan Inc.

 

 

 

Contents

	 	 	 	 	 
	 
	Section 1—Establishment of the Plan
	 	 	1	 
	1.01     Purpose
	 	 	1	 
	1.02     Effective Date
	 	 	1	 
	Section 2—Definitions
	 	 	1	 
	2.01     Accrued Incentive Awards
	 	 	1	 
	2.02     Adjusted Cash Flow Return (ACFR)
	 	 	1	 
	2.03     Average Accumulated Amortization
	 	 	1	 
	2.04     Average Accumulated Depreciation
	 	 	2	 
	2.05     Average Assets
	 	 	2	 
	2.06     Average Non-Interest Bearing Current Liabilities
	 	 	2	 
	2.07     Award Payment
	 	 	3	 
	2.08     Award Percentage
	 	 	3	 
	2.09     Board
	 	 	3	 
	2.10     Cash Flow Return (CFR)
	 	 	3	 
	2.11     Current Taxes
	 	 	4	 
	2.12     CEO
	 	 	4	 
	2.13     Committee
	 	 	4	 
	2.14     Corporation
	 	 	4	 
	2.15     Depreciation and Amortization
	 	 	4	 
	2.16     Eligible Employee
	 	 	4	 
	2.17     Entitled Employee
	 	 	4	 
	2.18     Hourly Employee
	 	 	4	 
	2.19     Non-recurring/Unusual Items
	 	 	4	 
	2.20     Operating Income
	 	 	5	 
	2.21     PCS Inc.
	 	 	5	 
	2.22     Plan
	 	 	5	 
	2.23     Salary
	 	 	5	 
	2.24     Target CFR
	 	 	5	 
	2.25     Target Percentage
	 	 	5	 
	2.26     Year
	 	 	5	 
	Section 3—Participation
	 	 	5	 
	3.01     Participation Requirements
	 	 	5	 
	Section 4—Award Payments
	 	 	6	 
	4.01     Eligibility
	 	 	6	 
	4.02     Calculation of Award Payment
	 	 	6	 
	4.03     Entitled Operations Employees
	 	 	6	 
	4.04     Limitation of Award Payments and General Discretion
	 	 	7	 
	4.05     Timing of Award Payments
	 	 	8	 
	Section 5—Administration of the Plan
	 	 	8	 
	5.01     Administration
	 	 	8	 
	Section 6—Transfer of Employment
	 	 	8	 
	6.01     Transfer of Employment
	 	 	8	 

 

i
 

 

	 	 	 	 	 
	Section 7—General Provisions
	 	 	9	 
	7.01     Assignment or Alienation
	 	 	9	 
	7.02     Amendment or Termination
	 	 	9	 
	7.03     Effect of Amendment or Termination
	 	 	9	 
	7.04     No Enlargement of Contractual Rights
	 	 	9	 
	7.05     Interpretation
	 	 	9	 
	7.06     Withholding of Taxes
	 	 	9	 
	7.07     Binding on Successors
	 	 	10	 
	7.08     Currency
	 	 	10	 
	Appendix “A”—Award Percentage
	 	 	11	 

 

ii
 

 

Section 1—Establishment of the Plan

 

	1.01	 	Purpose

This Annual Incentive Plan is established for the purpose of rewarding eligible
employees on an annual basis for their efforts and contributions in the attainment of
certain performance measures that contribute materially to the success of the business
interests of Potash Corporation of Saskatchewan Inc.
	 
	1.02	 	Effective Date

Subject to Section 7.02 (Amendment or Termination), this Plan shall be effective on
and after January 1, 2000.
	 
	 	 	The amendments made to the Plan effective April 30, 2007, including the addition of all
permanent salaried employees, shall only be effective on and after April 30, 2007.
	 
	 	 	The amendments made to the Plan effective January 1, 2008, including the addition of all
permanent Canadian and US Hourly Employees, shall only be effective on and after January 1,
2008.

Section 2—Definitions

 

The following terms, when capitalized, shall be defined as follows:

	2.01	 	Accrued Incentive Awards

“Accrued Incentive Awards” means the amounts accrued during the Year that represent
expected payments under this Plan, the Medium Term Incentive Plan, and other group incentive
plans as appropriate.
	 
	2.02	 	Adjusted Cash Flow Return (ACFR)

“Adjusted Cash Flow Return” or “ACFR” means an amount derived from the following
formula:
	 
	 	 	          ACFR = (CFR divided by Target CFR) multiplied by 100,
	 
	 	 	and used in the table in Appendix “A” to calculate an Entitled Employee’s Award Percentage
for a given Year.
	 
	2.03	 	Average Accumulated Amortization

“Average Accumulated Amortization” means the average consolidated accumulated
amortization of PCS Inc. during a given Year, calculated by dividing (a) by (b) where:

	 	(a)	 	equals the sum of the consolidated accumulated amortization of
PCS Inc. at the beginning of the Year, the consolidated accumulated
amortization of PCS Inc. at

 

1

 

	 	 	 	the beginning of the second quarter of the Year, the consolidated accumulated
amortization of PCS Inc. at the beginning of the third quarter of the Year, the
consolidated accumulated amortization of PCS Inc. at the beginning of the fourth
quarter of the Year and the consolidated accumulated amortization of PCS Inc. at
the end of the Year; and,

	 	(b)	 	equals five (5).

	2.04	 	Average Accumulated Depreciation

“Average Accumulated Depreciation” means the average consolidated accumulated
depreciation of PCS Inc. during a given Year, calculated by dividing (a) by (b) where:

	 	(a)	 	equals the sum of consolidated accumulated depreciation of PCS
Inc. at the beginning of the Year, consolidated accumulated depreciation of PCS
Inc. at the beginning of the second quarter of the Year, the consolidated
accumulated depreciation of PCS Inc. at the beginning of the third quarter of
the Year, the consolidated accumulated depreciation of PCS Inc. at the
beginning of the fourth quarter of the Year and the consolidated accumulated
depreciation of PCS Inc. at the end of the Year; and,
	 
	 	(b)	 	equals five (5).

	2.05	 	Average Assets

“Average Assets” means the average book value of PCS Inc.’s consolidated assets
during a given Year, calculated by dividing (a) by (b) where:

	 	(a)	 	equals the sum of the book value of the consolidated assets of
PCS Inc. at the beginning of the Year, the book value of the consolidated
assets of PCS Inc. at the beginning of the second quarter of the Year, the book
value of the consolidated assets of PCS Inc. at the beginning of the third
quarter of the Year, the book value of the consolidated assets of PCS Inc. at
the beginning of the fourth quarter of the Year and the book value of the
consolidated assets of PCS Inc. at the end of the Year; and,
	 
	 	(b)	 	equals five (5).

	2.06	 	Average Non-Interest Bearing Current Liabilities

“Average Non-Interest Bearing Current Liabilities” means the average consolidated
non-interest bearing current liabilities of PCS Inc. during a given Year, calculated by
dividing (a) by (b) where:

	 	(a)	 	equals the sum of the consolidated non-interest bearing current
liabilities of PCS Inc. at the beginning of the Year, the consolidated
non-interest bearing current liabilities of PCS Inc. at the beginning of the
second quarter of the Year, the consolidated non-interest bearing current
liabilities of PCS Inc. at the beginning of the third quarter of the Year, the
consolidated non-interest bearing current liabilities of PCS Inc. at the
beginning of the fourth quarter of the Year and the

 

2

 

	 	 	 	consolidated non-interest bearing current liabilities of PCS Inc. at the end of
the Year; and,

	 	(b)	 	equals five (5).

	2.07	 	Award Payment

“Award Payment” means a cash payment to an Entitled Employee calculated pursuant to
Section 4 (Award Payments).

	 	(a)	 	Corporate Award Payment is the payment calculated based upon the Corporate ACFR
measure of CFR relative to Target CFR.
	 
	 	(b)	 	Operations Award Payment is the payment calculated based upon operations
performance factors as established in accordance with Section 4.03 for the benefit of
Entitled Operations Employees.

	2.08	 	Award Percentage

“Award Percentage” means the percentage of an Entitled Employee’s Salary derived from
the table contained in Appendix “A”. The Award Percentages applicable to an Entitled
Employee, as set out in the table in Appendix “A”, shall be recommended by the CEO and
approved by the Committee.
	 
	2.09	 	Board

“Board” means the Board of Directors of PCS Inc.
	 
	2.10	 	Cash Flow Return (CFR)

“Cash Flow Return” or “CFR” means the amount derived from the following formula:

	 	(a)	 	Operating Income, plus/minus
	 
	 	 	 	Non-recurring/Unusual Items, plus
	 
	 	 	 	Accrued Incentive Awards, plus
	 
	 	 	 	Depreciation and Amortization, minus
	 
	 	 	 	Current Taxes

DIVIDED BY

	 	(b)	 	Average Assets (plus/minus the fair value adjustment for
investments in available-for-sale securities and minus the fair value of
derivative instrument assets), plus
	 
	 	 	 	Average Accumulated Depreciation, plus
	 
	 	 	 	Average Accumulated Amortization, minus

 

3

 

	 	 	 	Average cash and cash equivalents, minus
	 
	 	 	 	Average Non-Interest Bearing Current Liabilities,

	 	 	and used in the table at Appendix “A” to calculate an Entitled Employee’s Award Percentage
for a given Year.
	 
	2.11	 	Current Taxes

“Current Taxes” means the current income taxes accrued for a given Year, less
provision for deferred income taxes as set out in the audited consolidated financial
statements of PCS Inc. for that Year.
	 
	2.12	 	CEO

“CEO” means the Chief Executive Officer of PCS Inc.
	 
	2.13	 	Committee

“Committee” means the Compensation Committee of the Board.
	 
	2.14	 	Corporation

“Corporation” means Potash Corporation of Saskatchewan Inc. and its direct and
indirect subsidiaries.
	 
	2.15	 	Depreciation and Amortization

“Depreciation and Amortization” means the depreciation and amortization expense for a
given Year, as set out in the audited consolidated financial statements of PCS Inc. for that
Year.
	 
	2.16	 	Eligible Employee

“Eligible Employee” means an employee, including an Hourly Employee, who has
satisfied the eligibility requirements set out in Section 4.01 (Eligibility).
	 
	2.17	 	Entitled Employee

“Entitled Employee” means an Eligible Employee who is recommended by the CEO and
approved by the Committee to participate in this Plan.

	 	(a)	 	Entitled Operations Employee
	 
	 	 	 	“Entitled Operations Employee” means an Entitled Employee who is attached to one of
the operating facilities of PCS Inc. or its direct or indirect subsidiaries.

	2.18	 	Hourly Employee

“Hourly Employee” means an employee employed at either a Canadian or U.S. operation
who is paid on an hourly wage rate basis, including both employees who are and who are not
covered by a collective bargaining agreement.
	 
	2.19	 	Non-recurring/Unusual Items

“Non-recurring/Unusual Items” means exceptional transactions that are considered
non-routine, unique, and not expected to be repeated in a normal course of the Corporation’s

 

4

 

	 	 	operating cycle. Such items may result in a measurable charge or increase to income and may
or may not be triggered by a management decision.

	2.20	 	Operating Income

“Operating Income” means the operating income for a given Year, as set out in the
audited consolidated financial statements of PCS Inc. for that Year.
	 
	2.21	 	PCS Inc.

“PCS Inc.” means Potash Corporation of Saskatchewan Inc.
	 
	2.22	 	Plan

“Plan” means this Annual Incentive Plan, as amended from time to time.
	 
	2.23	 	Salary

“Salary” means:

	 	(a)	 	For Entitled Employees who are exempt from the overtime requirements of U.S.
wage and hour legislation, other than Canadian Hourly Employees, the annual base salary
in effect at the end of a given Year.
	 
	 	(b)	 	For Entitled Employees who are Canadian Hourly Employees, the actual total base
pay for the given Year, excluding, but not limited to, overtime, bonuses, shift
differentials and premiums.
	 
	 	(c)	 	For Entitled Employees who are U.S. employees and who are non-exempt from the
overtime requirements of U.S. wage and hour legislation, total earned income, including
overtime and shift differentials, for the given Year.

	2.24	 	Target CFR

“Target CFR” means the CFR projected in the annual budget approved by the Board and
used in the table at Appendix “A” to calculate an Entitled Employee’s Award Percentage for a
given Year.
	 
	2.25	 	Target Percentage

“Target Percentage” means the percentage assigned to the Tier Level for Entitled
Employees within that Tier, as shown in the table contained in Appendix “A”.
	 
	2.26	 	Year

“Year” means the fiscal year of PCS Inc.

Section 3—Participation

 

	3.01	 	Participation Requirements

Participation in the Plan is limited to Eligible Employees.

 

5

 

Section 4—Award Payments

 

	4.01	 	Eligibility

A full-time permanent employee of the Corporation who:

	 	a)	 	is employed for at least three months during a Year, and who is in the employ
of the Corporation at the end of a Year, and
	 
	 	b)	 	who is not a participant in another annual cash bonus plan sponsored by the
Corporation for the same period during the Year as covered by this Plan

	 	 	shall become an Eligible Employee.
	 
	4.02	 	Calculation of Award Payment

Subject to Section 4.04 (Limitation of Award Payments and General Discretion), an
Entitled Employee, other than Entitled Operations Employees, shall receive an Award Payment
equal to the Entitled Employee’s Award Percentage multiplied by his or her Salary.

	 	a)	 	The Corporate Award Percentage is calculated as follows:
	 
	 	 	 	If ACFR equals or exceeds 50% and up to 100%, the calculation is:
	 
	 	 	 	          Target Percentage X ACFR = Corporate Award Percentage
	 
	 	 	 	If ACFR exceeds 100% and up to 150%, the calculation is:
	 
	 	 	 	(Two times the Target Percentage multiplied by ACFR) minus Target Percentage =
Corporate Award Percentage
	 
	 	b)	 	The individual Award Payment calculated in accordance with this Section 4.02 is
subject to an adjustment of plus or minus 20% depending upon the Entitled Employee’s
job performance, as determined by his or her supervisor, and approved in accordance
with the provisions of this Plan.
	 
	 	c)	 	No Corporate Award Percentage is calculated for ACFR less than 50% and for
Corporate Award Percentage calculations, ACFR is limited to 150%.

	4.03	 	Entitled Operations Employees

Subject to Section 4.04 (Limitation of Award Payments and General Discretion), an
Entitled Operations Employee shall be entitled to an Award Payment equal to the sum of
paragraphs (a) and (b) below:

	 	(a)	 	the award calculated pursuant to Section 4.02 (Calculation of Award Payment),
divided by two (2); and,

 

6

 

	 	(b)	 	an amount equal to the Target Percentage of the Salary of the Entitled
Operations Employee, adjusted by applying a formula to be developed from time to time
by the CEO in consultation with the Senior Vice-President, Administration and the
appropriate subsidiary President which formula shall reasonably reflect the actual
results of the operating facility to which the employee is attached compared to the
approved target for that operating facility, subject to achieving a threshold of at
least 25% of the operating facility’s targets, and thereafter dividing such amount by
two (2).
	 
	 	(c)	 	The total individual Award Payment calculated in accordance with this Section
4.03, other than for Hourly Employees, is subject to an adjustment of plus or minus 20%
depending upon the Entitled Employee’s job performance, as determined by his or her
supervisor, and approved in accordance with the provisions of this Plan.
	 
	 	(d)	 	There will be no adjustment for job performance for Entitled Operations
Employees who are Hourly Employees.

	4.04	 	Limitation of Award Payments and General Discretion

	 	(a)	 	Generally, no Award Payment shall be granted under this Plan with respect to any
Year in which the CFR is less than 50% of the Target CFR. However, the Committee may
elect, in its discretion, to grant Award Payments in any Year, regardless of the CFR.
	 
	 	(b)	 	The Award Payment for any Entitled Employee may exceed or be below the amount
calculated in accordance with this Section 4. Award Payments falling outside the
established range shall be reviewed and approved by the Board and Committee for the CEO
and the CEO and Committee for direct reports to the CEO. For all others, approval of
the CEO is required.
	 
	 	(c)	 	An Entitled Employee who has been employed by the Corporation for less than one
year shall have his or her Award Payment prorated in accordance with his or her period
of employment.
	 
	 	(d)	 	An employee who for part of the Year was a full-time active employee but for
part of the Year was on long-term disability or an approved or unpaid leave of absence,
may be considered an Entitled Employee and eligible for a pro-rata share of the Award
Payment based upon the fraction of the Year the employee was considered a full-time
active employee. However, in situations where the fractional portion of the Year
worked is less than one-twelfth, the employee will not be considered an Entitled
Employee unless the CEO recommends and the Committee approves the exception.
	 
	 	(e)	 	An Entitled Employee who was, during a Year, promoted or demoted from one Group
to another Group set forth in Appendix “A”, shall have his or her Award Payment
calculated on the basis of his or her Group as at the end of the Year.
	 
	 	(f)	 	Notwithstanding the Groups established in Appendix “A”, the Committee may on
the recommendation of the CEO, designate an Eligible Employee for inclusion in one of

 

7

 

	 	 	 	such Groups when, but for such designation, the Eligible Employee would not
otherwise be included in such Group.

	4.05	 	Timing of Award Payments

The Committee shall, on the recommendation of the CEO and within 30 days of the end
of a Year, approve the ACFR calculation and the amount of Award Payments for each Entitled
Employee who is a direct report to the CEO for any given Year. The CEO’s Award Payment will
be approved by the Board. Following approval of the ACFR, final calculations for the
remaining Entitled Employees will be prepared. The Award Payments shall be paid to Entitled
Employees within 30 days of the Committee’s approval of the ACFR and no later than 2 1/2
months after the end of the Year.

Section 5—Administration of the Plan

 

	5.01	 	Administration

The Committee shall conclusively interpret the provisions of this Plan and decide all
questions of fact arising in the application of the Plan. Determinations and interpretations
in individual cases may be made by the CEO with due regard to consistency with any prior
action by the Committee and such determination shall be binding and conclusive upon the
individual employees concerned and persons claiming under them. The Committee shall be
advised of any such determination or interpretation made by the CEO. To the extent
applicable, the Plan shall be administered with respect to Entitled Employees subject to
U.S. law so as to avoid penalties pursuant to Section 409A of the Internal Revenue Code.

Section 6—Transfer of Employment

 

	6.01	 	Transfer of Employment

	 
	 	 	If an Entitled Employee’s employment is transferred during a Year to a different
location, within the Corporation the Senior Vice-President, Administration and the CEO shall
determine whether the Entitled Employee’s Award Payment is calculated in accordance with
Section 4.02 (Calculation of Award Payment), Section 4.03 (Entitled Operations Employees),
or a combination of those sections.

 

8

 

Section 7—General Provisions

 

	7.01	 	Assignment or Alienation

Except as required by applicable laws, the right of an Entitled Employee to receive
an Award Payment under this Plan shall not be:

	 	(a)	 	given as security;
	 
	 	(b)	 	subject to transfer, anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation; or
	 
	 	(c)	 	subject to execution, attachment, levy or similar process or assignment by
operation of law,

	 	 	and any attempt to effect any such action shall be null and void and of no effect.
	 
	7.02	 	Amendment or Termination

Subject to Section 7.03 (Effect of Amendment or Termination), this Plan may be
amended in whole or in part from time to time or terminated by the Corporation. Any
amendment or termination shall be binding on the Corporation, Entitled Employees, Eligible
Employees and their respective beneficiaries.
	 
	7.03	 	Effect of Amendment or Termination

Notwithstanding Section 7.02 (Amendment or Termination), no amendment or termination
of any provision of this Plan shall directly or indirectly deprive any Entitled Employee or
beneficiary of all or any portion of an Award Payment earned with respect to any Year ending
prior to the date of the amendment or termination.
	 
	7.04	 	No Enlargement of Contractual Rights

This Plan shall not give any Entitled Employee or Eligible Employee the right to be
retained in the service of the Corporation nor shall it interfere with the right of the
Corporation to terminate the employment of the Entitled Employee or Eligible Employee.
Participation in this Plan shall not give any Entitled Employee or Eligible Employee any
right or claim to any benefit, except to the extent provided in this Plan.
	 
	7.05	 	Interpretation

This Plan shall be interpreted pursuant to the laws of the Province of Saskatchewan.
Section headings are for convenience only and shall not be considered provisions of the
Plan. Words in the singular shall include the plural, and vice versa, unless qualified by
the context.
	 
	7.06	 	Withholding of Taxes

The Corporation shall withhold all applicable taxes from any amounts paid pursuant to
this Plan.

 

9

 

	7.07	 	Binding on Successors

This Plan shall be binding on any successor or successors of PCS Inc. whether by
merger, consolidation or otherwise.
	 
	7.08	 	Currency

The benefits payable pursuant to this Plan shall be paid in the same currency as the
Entitled Employee receives his or her Salary.

 

10

 

Appendix “A”—Award Percentage

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Tier	 	Group	 	Target	 	Award	 	Award Percentage	 	Award
	 	 	 	 	 	 	Percentage	 	Percentage	 	When CFR Equals	 	Percentage at
	 	 	 	 	 	 	 	 	 	 	When CFR is	 	or is Greater Than	 	Maximum
	 	 	 	 	 	 	 	 	 	 	Less Than	 	Target CFR	 	CFR (150% of
	 	 	 	 	 	 	 	 	 	 	Target CFR	 	 	 	Target CFR)
	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	1	 	 	Corporate President,

and CEO

	 	 	100	%	 	100% multiplied

by ACFR
	 	(200% multiplied

by ACFR) minus 100%
	 	 	200	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	2	 	 	Exec Level 7

	 	 	70	%	 	70% multiplied by

ACFR
	 	(140% multiplied by

ACFR) minus 70%
	 	 	140	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	3	 	 	Exec Level 6

	 	 	55	%	 	55% multiplied

by ACFR
	 	(110% multiplied

by ACFR) minus 55%
	 	 	110	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	4	 	 	Exec Levels 3, 4 & 5

Staff Hay Points 1900 +

	 	 	40	%	 	40% multiplied by

ACFR
	 	(80% multiplied by

ACFR) minus 40%
	 	 	80	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	5	 	 	Selected Corporate VP’s

	 	 	35	%	 	35% multiplied by

ACFR
	 	(70% multiplied by

ACFR) minus 35%
	 	 	70	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	6	 	 	Exec Level 2

Managing Dir., Trinidad

Staff Hay Points 1600 to 1899

	 	 	30	%	 	30% multiplied

by ACFR
	 	(60% multiplied

by ACFR) minus 30%
	 	 	60	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	7	 	 	Exec Level 1

Staff Hay Points 1300 to 1599

	 	 	25	%	 	25% multiplied

by ACFR
	 	(50% multiplied

by ACFR) minus 25%
	 	 	50	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	8	 	 	Staff Hay Points 900 to 1299

	 	 	20	%	 	20% multiplied

by ACFR
	 	(40% multiplied

by ACFR) minus 20%
	 	 	40	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	9	 	 	Staff Hay Points 775 to 899

	 	 	15	%	 	15% multiplied

by ACFR
	 	(30% multiplied

by ACFR) minus 15%
	 	 	30	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	10	 	 	Staff Hay Points 534 to 774

	 	 	10	%	 	10% multiplied by

ACFR
	 	(20% multiplied by

ACFR) minus 10%
	 	 	20	%
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	11	 	 	Staff Hay Points 0 to 533

Hourly employees

	 	 	5	%	 	5% multiplied by

ACFR
	 	(10% multiplied by

ACFR) minus 5%
	 	 	10	%
	 

Notes:

	1.	 	Where the ACFR is greater than 150 (i.e. the maximum CFR), the ACFR is deemed to be 150.
	 
	2.	 	Subject to Section 4.04 (Limitation of Award Payments and General Discretion) where the ACFR
is less than 50, the ACFR is deemed to be zero (0).

 

11

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