8-KMaterial AgreementsExhibits & Filings

IMPERIAL OIL LTD 8-K Report, Material Agreement (Nov 25, 2008)

Filed November 25, 2008For Securities:IMO

Summary

Imperial Oil Ltd. (IMO) filed an 8-K report on November 24, 2008, detailing an amendment to its Restricted Stock Unit Plan for non-employee directors, effective November 20, 2008. The primary change removes the Board's general discretion to cancel restricted stock units (RSUs) awarded to a director after they leave the board. This amendment aims to reinforce director independence by removing a provision that previously required board approval for the retention of RSUs upon departure, thereby encouraging directors to stay until standard retirement age. While this broad cancellation discretion is removed, RSUs can still be forfeited if a director engages in direct competition or activities detrimental to the company, both while on the board and for a 24-month period afterward.

Key Highlights

  • 1Amendment to Imperial Oil's Restricted Stock Unit (RSU) Plan for non-employee directors, effective November 20, 2008.
  • 2The Board's general discretion to cancel RSUs awarded to non-employee directors upon their departure from the board has been removed.
  • 3The change aims to reinforce the independence of board members.
  • 4This amendment applies to all outstanding RSUs and future grants.
  • 5RSUs may still be forfeited if a director competes with the company or acts detrimentally to it, both during board service and for 24 months post-departure.
  • 6The report also provides details on director compensation, including cash retainers and committee fees for 2008.

Frequently Asked Questions

The main change is the removal of the Board's general discretion to cancel restricted stock units (RSUs) that have been awarded to non-employee directors after they leave the company's board. Previously, board approval was needed for directors to retain these units upon departure.

The company stated that the amendment was made to reinforce the independence of each Board member. By removing the need for board approval to retain RSUs upon departure, the company aims to support director independence and ensure they are not unduly influenced by the prospect of their equity awards being canceled.

No, directors can still forfeit their RSUs. While the Board's general cancellation discretion has been removed, RSUs may still be forfeited if a non-employee director engages in direct competition with Imperial Oil or participates in any activity deemed detrimental to the company. This forfeiture provision applies both while they are serving on the board and for a period of 24 months after they have left the board.

The amendment applies to the terms of all outstanding restricted stock units and any restricted stock unit grants made in 2008 and future years. This means the new provision regarding the removal of broad cancellation discretion is effective immediately for existing awards and all new awards going forward.