DIRECTORS’ EQUITY REQUIREMENTS Minimum equity holding requirements for directors creates greater alignment of the interests of our directors and shareholders. For the purpose of determining whether directors meet the minimum equity requirement, CWB common shares and DSUs are valued using the higher of the closing price on the TSX on the assessment date or on the acquisition date. We assess compliance with this requirement annually on October 31. Directors are prohibited from directly or indirectly entering into short sales, or buying or selling a call or put option in respect of CWB's securities. Directors are not permitted to enter into non-recourse pledges of CWB securities or to purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars or units of exchange funds) designed to hedge or offset a decrease in the market value of CWB equity securities granted as compensation or held, directly or indirectly, by the director.
Under the current director equity requirements, all independent directors and the Chair of the Board must hold, either directly or indirectly, CWB common shares or DSUs with a value equivalent to six times the maximum annual cash component of the director retainer. In other words, the minimum directors’ equity requirement is $570,000. This requirement was effective as of May 1, 2019, and directors had until May 1, 2022, to meet this equity requirement. Newly elected directors have three years from their initial appointment to meet the equity requirement. All nominated directors met or exceeded their applicable requirement as of October 31, 2022.
EFFECTIVE MAY 1, 2023
Beginning May 1, 2023, all independent directors must hold, either directly or indirectly, CWB common shares or DSUs with a value equivalent to seven times the maximum annual cash component of the director retainer (in other words, $665,000), and the Chair of the Board must hold, either directly or indirectly, CWB common shares or DSUs with a value of $1,000,000. All directors have five years from the date of initial appointment to meet these requirements.
Additionally, all independent directors and the Chair of the Board must hold a minimum of 1,000 CWB common shares, which are counted towards their total director equity requirement. Each new director has six months from the date of their election or appointment to meet this requirement.
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