Page 21 - MIC 2014 - English

Equity Based Compensation

Annual DSU Grant. Non-employee directors participate in The number of DSUs to be credited to the non-employee

the Suncor Deferred Share Unit Plan (previously defined director’s account on each payment date is equal to the
herein as the ‘‘DSU Plan’’). When redeemed, each DSU pays number of Suncor common shares that could have been

the holder the then current cash equivalent of the market purchased on the quarterly payment date based on the
price per share, as calculated in accordance with the DSU fees allocated to the director. On each dividend payment

Plan. DSUs are an important component of non-employee date for Suncor common shares, an additional number of
director compensation as they provide a stake in Suncor DSUs, equivalent to the number of Suncor common shares

and promote greater alignment between directors and that could have been acquired on that date by notional
shareholders.
dividend reinvestment, are credited to the non-employee

directors’ DSU accounts.

‘‘DSUs, which represent almost Redemption of DSUs. DSUs are redeemed when a

non-employee director ceases to hold office, or on a date
70% of the annual pay for elected by that director prior to November 30 of the
following calendar year. For directors subject to payment of
non-employee directors, other
U.S. federal tax, the redemption period to elect payout of
than the chairman of the the DSUs they hold commences on the first day of the

calendar year following that year in which the
Board for whom they represent non-employee director ceases to be a member of the

over 50%, provide a stake in Board, and ends on November 30 of that same year.
However, no redemption will be permitted within the first
Suncor’s long term success.’’
six months following separation from service by a
U.S. taxpayer who is considered a ‘‘specified employee’’.

The cash payment at redemption is calculated by
Under the DSU Plan, each non-employee director receives multiplying the number of DSUs by the then-current

an annual DSU grant as part of his or her total market value of a Suncor common share.
compensation. The annual grant of DSUs is awarded in
Stock Options. In line with governance best practice,
equal quarterly installments. In 2013, non-employee
directors, including the chairman of the Board, received an stock option grants to non-employee directors were
discontinued after 2008. All stock options that were
aggregate of 63,940 DSUs. Each non-employee director,
other than the chairman of the Board, received
granted to directors through 2008 vested prior to
January 1, 2012. No future stock option grants to
5,540 DSUs. The chairman of the Board received
8,540 DSUs.
non-employee directors are planned. For additional
information on stock options held by our non-employee
For each new non-employee director, the DSU Plan
directors, see Schedule A.
provides for an additional grant equal to the annual grant
for the year in which he or she is appointed to the Board. Director Equity Compensation Hedging. Pursuant to

New non-employee directors, including any new chairman Suncor’s policies, directors are not permitted to engage in
of the Board, who join after February of a calendar year, short selling in Suncor common shares or purchase

will receive a pro-rated annual DSU grant based on the financial instruments (including, for greater certainty, puts,
date they join the Board.
options, calls, prepaid variable forward contracts, equity

swaps, collars or units of exchange funds) that are
Fees Paid in DSUs. Until share ownership guidelines for designed to hedge or offset a change in the market value
non-employee directors are met (see page 17 of this
of Suncor common shares or other securities of Suncor
management proxy circular for details), non-employee held by the director.
directors receive one-half or, if they choose, all of their fees

(excluding expense reimbursements) in the form of DSUs.

SUNCOR ENERGY INC. MANAGEMENT PROXY CIRCULAR 2014 19