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Exhibit 10.17
EXFO-ELECTRO-OPTICAL ENGINEERING INC.
DIRECTORS' COMPENSATION PLAN
1. PURPOSE OF THE PLAN
The Plan is designed to further align the Interests of the Directors of the
Corporation with those of its Shareholders by enabling Directors to be
compensated through the issue of Subordinate Voting Shares.
2. DEFINITIONS
In this document:
(a) "BOARD" means the Board of Directors of the Corporation;
(b) "BUSINESS DAY" means a day on which Canadian Chartered Banks are open
for the transaction of business in Montreal and The Toronto Stock
Exchange is open for trading in Toronto;
(c) "COMPENSATION CALCULATION DATE" means the fifteenth day of each of the
months March, June, September and December of each year or the
Business Day next following;
(d) "SUBORDINATE VOTING SHARES" means the subordinate voting shares in the
capital stock of the Corporation;
(e) "CORPORATION" means EXFO Electro-Optical Engineering Inc.
(f) "DIRECTORS" means duly elected or appointed Directors of the
Corporation;
(g) "FEE SCHEDULE" means such schedule of monetary compensation as may be
established by the Board from time to time with respect to
compensation of Directors, including annual retainer fees, additional
compensation for maintaining share holdings above a specific level,
fees for attendance at meetings of the Board or committees thereof,
and such other fees as the Board may deem appropriate for services
rendered on behalf of the Corporation as a member of the Board;
(h) "MARKET PRICE", per share at any date, means the closing price of the
Subordinate Voting Shares established by the greater of the closing
prices of the Subordinate Voting Shares on The Toronto Stock Exchange
and the NASDAQ National Market on the last trading day preceding such
date or, if the Subordinate Voting 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 Subordinate Voting Shares on
The Toronto Stock Exchange and the NASDAQ National Market at the close
of trading on the last trading day preceding such date;
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(i) "SELECTED PERCENTAGE" means such number, between 10 and 100, as a
director may have chosen to establish the percentage of Quarterly
Compensation to be received by that director in the form of
Subordinate Voting Shares;
(j) "PLAN" means this Directors' Compensation Plan of the Corporation, as
the same may be amended or varied from time to time;
(k) "QUARTERLY COMPENSATION PERIOD" means a period:
(i) commencing on the 15th day of March and ending on the 14th day
of June;
(ii) commencing on the 15th day of June and ending on the 14th day
of September;
(iii) commencing on the 15th day of September and ending on the
15th day of December;
in any year, and
(iv) the period commencing on the 15th day of December in any year
and ending on the 14th day of March in the year next following;
and
(l) "QUARTERLY COMPENSATION" means the aggregate compensation receivable
by a director with respect to any Quarterly Compensation Period in
accordance with the Fee Schedule.
3. ADMINISTRATION OF THE PLAN
Until otherwise determined, the Plan shall be administered by the Secretary
of the Corporation under the direction of the Board.
4. CALCULATION OF COMPENSATION
On the first Compensation Calculation Date next following the date of
approval of the Plan by the shareholders of the Corporation, and at every
Compensation Calculation Date thereafter, the Secretary shall determine the
Quarterly Compensation to which each Director is entitled with respect to
the Quarterly Compensation Period ending with the day before such Quarterly
Compensation Date.
5. FIXATION OF SPECIFIED PERCENTAGE
Following the approval of the Plan by the shareholders of the Corporation,
each Director shall advise the Secretary of the Corporation as to the
Selected Percentage of Quarterly Compensation applicable in the year in
which such approval is received and shall, on or
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before the last day of such year and each year thereafter advise the
Corporation of the Selected Percentage applicable in the year next
following the date of each such advice.
6. PAYMENT OF QUARTERLY COMPENSATION
Quarterly Compensation receivable shall be paid to each director
respectively,
(a) as to the amount established by application of the Selected
Percentage, by the issue of Subordinate Voting Shares, and
(b) as to the balance of compensation, in cash.
The election of the Subscription Percentage may be made only once in
respect of any financial year of the Corporation and may not be changed
during such year.
7. ISSUANCE OF SUBORDINATE VOTING SHARES
The number of Subordinate Voting Shares issuable to each Director as of any
Compensation Calculation Date shall be equal to the number arrived at by
dividing the Specified Percentage of compensation payable to each Director
respectively for the Quarterly Compensation Period preceding such
calculation date by the Market Price of the Subordinate Voting Shares at
the Compensation Calculation Date, disregarding fractions.
8. NUMBER OF SHARES ISSUABLE UNDER THE PLAN
The aggregate number of Subordinate Voting Shares to be reserved for
issuance under the Plan shall be Fifty Thousand (50,000).
9. DECISIONS OF THE BOARD
All decisions and interpretations of the Board respecting the Plan or the
Subordinate Voting Shares issued or issuable hereunder shall be conclusive
and binding on the Corporation and on the Directors and their respective
legal personal representatives.
10. AMENDMENT OR DISCONTINUANCE OF PLAN
The Board may amend or discontinue the Plan at any time.
11. GOVERNMENT REGULATION
The Corporation's obligation to issue and deliver Subordinate Voting Shares
under the Plan is subject to:
(a) the approval of the Toronto Stock Exchange and the NASDAQ National
Market;
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(b) the satisfaction of all requirements under applicable securities laws
in respect thereof and obtaining all such regulatory approvals as the
Corporation shall determine to be necessary or advisable in connection
with the authorization, issuance or sale thereof;
(c) the admission of such Subordinate Voting Shares to listing on the
Toronto Stock Exchange and the NASDAQ National Market; and
(d) the receipt from the Director to whom such Subordinate Voting Shares
are to be issued of such representations, agreements and undertakings
as to future dealings in such Subordinate Voting Shares as the
Corporation may determine to be necessary or advisable in order to
safeguard against the violation of the securities laws of any
jurisdiction.
In this connection, the Corporation shall take all reasonable steps to
obtain such approvals as may be necessary for the issuance of such
Subordinate Voting Shares in compliance with applicable securities laws and
for the listing of such Subordinate Voting Shares on the Toronto Stock
Exchange and the NASDAQ National Market.
12. RIGHTS AS A SHAREHOLDER
A Director shall have no rights as a holder of Subordinate Voting Shares
issuable hereunder until the issuance of a certificate representing such
Subordinate Voting Shares as contemplated by paragraph 6 above.
13. APPROVALS
The Plan shall be subject to:
(a) the approval of the shareholders of the Corporation to be given by
a resolution; and
(b) acceptance by the Toronto Stock Exchange and the NASDAQ National
Market; and
(c) the granting by the Quebec Securities Commission of an exemption
to prepare a prospectus for the distribution of the Subordinate Voting
Shares of the Corporation under this Plan.
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