ITEM 8. CORPORATE CONSTITUTION Our Corporate Constitution forms part of our charter documents. The Corporate Constitution defines the rights of our employees and investors to participate in our profits and growth and imposes discipline on our management. The description which follows does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the detailed provisions of the Corporate Constitution as contained in our charter documents. Board of Directors Our Corporate Constitution requires that a majority of the members of our Board of Directors be individuals who are not also our officers, employees or persons related to our officers or employees. Employee Equity Participation and Profit Sharing Programs Our Corporate Constitution requires that 10% of our qualifying Employee Pre-Tax Profits Before Profit Sharing (as defined in the Corporate Constitution) for each fiscal year be allocated in that fiscal year or the immediately following fiscal year to: · the employee equity participation and profit sharing programs and any other profit sharing programs we have established for our employees; and · our defined benefit pension plan (for participating employees). 44 Senior members of divisional, regional and executive management who are direct profit participators do not participate in these employee equity participation and profit sharing programs. Dividends; Minimum Profit Performance Our Corporate Constitution provides that unless otherwise approved by ordinary resolution of the holders of our Class A Subordinate Voting Shares and our Class B Shares, voting as separate classes, the holders of our Class A Subordinate Voting Share and Class B Shares will be entitled to receive and we will pay, if, as and when declared by our Board of Directors out of funds properly applicable to the payment of dividends, non-cumulative dividends in respect of each fiscal year so that the aggregate of the dividends paid or payable in respect of such year is: · equal to at least 10% of our After-Tax Profits (as defined in the Corporate Constitution) after providing for dividends on preference shares, if any, for such year; and · on average, equal to at least 20% of our After-Tax Profits (as defined in the Corporate Constitution) after providing for dividends on preference shares, if any, for such fiscal year and the two immediately preceding fiscal years. If at any time our After-Tax Profits (as defined in the Corporate Constitution) are less than 4% of the average stated capital attributable to our Class A Subordinate Voting Shares and Class B Shares at the beginning and at the end of the fiscal year in question, for two consecutive fiscal years or we fail to pay the required dividends described above for a period of two consecutive fiscal years, the holders of our Class A Subordinate Voting Shares will, until the 4% return is achieved in a succeeding fiscal year and all required dividends, if any, are paid, have the exclusive right, voting separately as a class, to elect two directors at the next meeting of our shareholders at which directors are to be elected. If the 4% return is not achieved or a required dividend is not paid for any two consecutive fiscal years following the initial two consecutive fiscal years, then the holders of our Class A Subordinate Voting Shares will, until the 4% return is achieved for one fiscal year and all required dividends are paid, have the exclusive right, voting separately as a class, to elect two additional directors at the next meeting of shareholders at which directors are to be elected. Once the right of holders of our Class A Subordinate Voting Shares to elect such directors terminates, the directors who had been so elected will nonetheless serve until their successors are duly elected at the next meeting of our shareholders. Two of the directors to be elected at our Annual and Special Meeting of Shareholders to be held on May 6, 2010 will be voted on solely by holders of our Class A Subordinate Voting Shares in accordance with the “Minimum Profit Performance” provisions of our Corporate Constitution. For a detailed discussion regarding the election of directors, see “Business of the Meeting — Election of Directors” in our Management Information Circular/Proxy Statement dated March 29, 2010. Changes in Share Capital Except as otherwise approved by the holders of at least a majority of each of our Class A Subordinate Voting Shares and Class B Shares, voting as separate classes, our Corporate Constitution prohibits: · an increase in the maximum number of authorized shares of any class of our capital stock (other than our Class A Subordinate Voting Shares which may be issued in an unlimited amount); and · the creation of any new class or series of capital stock having voting rights (other than on default in the payment of dividends) or having rights to participate in our profits (other than securities convertible into existing classes of shares or a class or series of shares having fixed dividends or dividends determined without regard to profits). Unrelated Investments Unless approved by the holders of at least a majority of each of our Class A Subordinate Voting Shares and Class B Shares, voting as separate classes, our Corporate Constitution prohibits us from making an investment (whether direct or indirect, by means of loans, guarantee, or otherwise) in any “unrelated business” where such an investment, together with the aggregate of all other investments in unrelated businesses on the date in question, exceeds 20% of our “available equity” at the end of the financial quarter immediately preceding the 45 date of investment. For purposes of our Corporate Constitution, the term “unrelated business” means any business that: · does not relate to the design, manufacture, distribution or sale of motor vehicles or motor vehicle parts, components, assemblies or accessories; · does not utilize technology, manufacturing processes, equipment or skilled personnel in a manner similar to that utilized or under development by us; or · does not involve the provision of products or services to our suppliers and customers, or the provision of products or services similar to those provided by our suppliers and customers from time to time. A business will be deemed to cease to be an unrelated business for purposes of our Corporate Constitution if the net profits after tax of such business exceed on average 5% of our aggregate investment in such business for two out of any three consecutive years after the date of such investment. For purposes of our Corporate Constitution, the term “available equity” is defined to mean our total shareholders’ equity, less the stated capital of any non-participating preference shares. Research and Development Our Corporate Constitution requires a minimum of 7% of our Pre-Tax Profits (as defined in the Corporate Constitution) for any fiscal year to be allocated to research and development during that fiscal year or the immediately following fiscal year. Social Objectives Pursuant to our Corporate Constitution, a maximum of 2% of our Pre-Tax Profits (as defined in the Corporate Constitution) for any fiscal year may be allocated to the promotion of “social objectives” during the fiscal year or the immediately following fiscal year. For purposes of our Corporate Constitution, the term “social objectives” means objectives which, in the sole opinion of our executive management, are of a political, patriotic, philanthropic, charitable, educational, scientific, artistic, social or other useful nature to the communities in which we operate. Incentive Bonuses; Management Base Salaries Our Corporate Constitution provides that aggregate incentive bonuses paid or payable to “Corporate Management” in respect of any fiscal year will not exceed 6% of our Pre-Tax Profits Before Profit Sharing (as defined in the Corporate Constitution) for that fiscal year and that their base salaries shall be comparable to those in industry generally. For purposes of our Corporate Constitution, “Corporate Management” means our chief executive officer, chief operating officer, chief marketing officer and chief administrative officer and any other employee designated by these persons from time to time to be included within “Corporate Management”. For a detailed discussion of our executive compensation, see “Compensation Discussion and Analysis”, “Summary Compensation Table” and “Incentive Plan Awards” in our Management Information Circular/Proxy Statement dated March 29, 2010.