February 2019

Your Employee Share Ownership Plan at a Glance

Scotiabank offers the Employee Share Ownership Plan (ESOP) to enable you
to share in the Bank’s success in a tangible way. Contributing to ESOP helps
you achieve personal short-term and long-term financial goals, such as saving
for a home or your retirement.
Why should you join ESOP?
Invest in the future of Scotiabank
By participating in ESOP, you have the opportunity to buy Scotiabank common shares through convenient biweekly
payroll deductions. Plus, you will have voting rights and receive the value of any dividends paid as additional shares.

Receive Scotiabank contributions to purchase shares

You can contribute up to 6% of eligible earnings to a maximum of $230 through each biweekly pay ($6,000 annually)
and receive a 60% Bank match. For example, for every $2 that you contribute, Scotiabank will contribute $1.20 on
your behalf, up to a maximum of $138 each biweekly pay or $3,600 annually.

Additional voluntary contributions

You can make additional voluntary contributions of up to 25% of your eligible earnings. These contributions
are held in a separate account from your regular contributions and are not matched by Scotiabank.

Save on purchase and sale costs

Scotiabank pays administration and purchase fees for ESOP, as well as certain transaction and brokerage fees
associated with the sale of shares in your regular and additional voluntary contribution accounts.

Receive favourable tax treatment

Depending on the accounts and plans in which you participate, you may defer tax. Read on to learn how and
when your contributions and Scotiabank’s matching contributions, plus any capital gains (and/or losses) and
dividends are taxed.

Track your investment easily

You can view your transaction history and plan holdings at any time through My Employee Share Ownership Plan
located in Pay and Benefits in me@scotiabank.

This at-a-glance overview describes the key features of ESOP. For more details, refer to Your Guide to Scotiabank’s
Employee Share Ownership Plan.

Employee Share Ownership Plan at a Glance 1

Employee Share Ownership Plan at a Glance

How does the Plan work?

Key components Employee Share Ownership Plan

Eligibility If you are a regular status employee, you may join ESOP after completing six months of continuous
employment with Scotiabank. Participation is voluntary.

Your contributions You can choose to contribute any whole percentage between 1% and 6% of your eligible earnings1
in after-tax dollars. Your maximum regular contribution is $230 each biweekly pay ($6,000 annually).

Scotiabank’s Scotiabank will match 60% of your regular contributions up to a maximum of $138 each biweekly pay
contributions ($3,600 annually).

Additional voluntary You may make additional voluntary contributions up to 25% (in whole percentages) of your eligible
contributions earnings, which are not matched by Scotiabank.

Contribution You may change your contribution level or voluntarily suspend your contributions at any time through
changes your online Shareworks account (only during Window Periods, if applicable to you).
NOTE: If you stop your regular contributions, Scotiabank’s matching contribution and any additional
voluntary contributions also stop.

Allocation options Your regular Scotiabank Your additional voluntary

contributions contributions contributions

• Regular Tax Account • Employee Profit Sharing Plan • Regular Tax Account
• Registered Retirement • Deferred Profit Sharing Plan • Registered Retirement
Savings Plan Savings Plan
• Tax-Free Savings Account • Tax-Free Savings Account

Investment Both your contributions and Scotiabank’s are used to buy Scotiabank common shares. Dividends on
shares will be paid in cash and automatically re-invested in additional shares (allocated to your accounts).

Vesting Shares purchased with your regular and additional voluntary contributions are vested immediately, which
means you own these shares right away.
Shares purchased with Scotiabank’s contributions are vested after two years of participation in ESOP.
There are special vesting rules that apply in the event of retirement, death or the termination of ESOP.

Withdrawals You may make withdrawals in shares or cash. If you withdraw shares purchased with your regular
contributions within the first two years of participation in ESOP:
• You must withdraw 100% of the shares purchased with your regular contributions; and
• You lose 100% of the shares purchased with Scotiabank’s matching contributions.
After two years of participation in ESOP, you may make withdrawals of any shares (purchased with
your regular contributions or Scotiabank’s match) without restriction.
Shares purchased with your additional voluntary contributions can be withdrawn at any time.

Transfers You may transfer shares between certain accounts within ESOP, though vesting rules and restrictions apply.

Fees Scotiabank pays the transaction and brokerage fees for the first two transactions in a calendar year of
either cash withdrawals (bulk sale only) or share withdrawals. You are responsible for transaction and
brokerage fees after the first two such transactions, and at all times for fees associated with real-time
sale transactions (including limit orders).

Leaving Scotiabank You must close your ESOP account within 180 days of the date you leave Scotiabank.
If you do not close your account by the deadline, your shares will be sold, taxes and fees will be withheld
and a cheque will be mailed to your home address Solium has on record.

Window Periods From time to time, there are “Window Periods” when affected ESOP participants are restricted from
trading Scotiabank shares. You are allowed to trade during Window Periods.
1
Eligible earnings include regular earnings and eligible commissions. They do not include overtime, bonuses and other incentives (unless the plan under
which such amounts are paid provides otherwise).

Employee Share Ownership Plan at a Glance 2

Employee Share Ownership Plan at a Glance

Allocation options for your contributions

Your contributions can be allocated to the Regular Tax Account (RTA), Registered Retirement Savings Plan (RSP)
or the Tax-Free Savings Account (TFSA) or a combination of all three. The tax treatment of contributions, dividends,
gains and losses varies by account as follows:

Regular Tax Registered Retirement Tax-Free Savings

Account (RTA) Savings Plan (RSP) Account (TFSA)

Account type Non-registered Registered Tax-free savings arrangement

Tax treatment Contributions are not Contributions are Contributions are not
of contributions tax-deductible—do not tax-deductible—lower tax-deductible—do not
lower your taxable income. your taxable income. lower your taxable income.

Contribution No contribution limits other than Contributions reduce your Contributions reduce your
limits plan limits. personal RRSP contribution room. personal TFSA contribution room.

Dividends Taxable. Dividends received are Not taxable. Tax is deferred as Not taxable.
included in taxable income. long as shares remain in a
registered plan.

Capital gains Realized on the sale or deemed Recognized on share withdrawals Not recognized for tax purposes.
and/or losses disposition of shares and reported and reported for tax purposes in
for tax purposes in the same year. the year of realization.

Withdrawals Not taxable. Taxable. Withdrawals are included Not taxable.

in taxable income in the year
shares are withdrawn and are
subject to withholding tax.

Before you decide where to allocate your contributions, please review your personal financial situation to ensure you
will not exceed your annual contribution limits. Visit the Canada Revenue Agency’s (CRA) website at www.cra-arc.gc.ca
for more information.

Your personal RRSP deduction limit is located on your annual tax Notice of Assessment. For your personal TFSA
contribution room information, you can use the following CRA services:
• My Account;
• My CRA; or
• Tax Information Phone Service (TIPS).

You can also contact the CRA to receive a TFSA Contribution Room Statement or you can contact your TFSA issuer(s)
to find out about your contributions.

Employee Share Ownership Plan at a Glance 3

Employee Share Ownership Plan at a Glance

Allocation options for Scotiabank’s contributions

If you were hired before January 1, 2016—and are eligible to participate in the defined benefit component of the
Scotiabank Pension Plan, Roynat Pension Plan or Scotia Capital Inc. Pension Plan and your benefits salary is $139,000
or less—you will have two options for allocating Scotiabank’s contributions: the Employee Profit Sharing Plan or the
Deferred Profit Sharing Plan.

If you were hired on or after January 1, 2016 and before May 1, 2018 and are eligible to participate in the hybrid
pension arrangement of the Scotiabank Pension Plan, Scotiabank’s contributions will go to the Employee Profit
Sharing Plan only. This ensures CRA limits for registered plans are not exceeded.

If you were hired on or after May 1, 2018—and are eligible to participate in the defined contribution component
of the Scotiabank Pension Plan and your benefits salary is $167,500 or less—you will have two options for allocating
Scotiabank’s contributions: the Employee Profit Sharing Plan or the Deferred Profit Sharing Plan.

Employee Profit Sharing Plan (EPSP) Deferred Profit Sharing Plan (DPSP)

Account type Non-registered Registered

Tax treatment Contributions are taxable in the year they are made. Tax is deferred on contributions as long as they
of contributions stay in the DPSP.

Contribution limits No contribution limits other than plan limits. Contributions result in a Pension Adjustment,
which reduces your personal RRSP contribution
room for the following year.

Dividends Taxable. While dividends are received by the EPSP, Not taxable. Tax is deferred as long as shares
they are treated for tax purposes as if you received remain in a registered plan.
them personally.

Capital gains Realized on the sale or deemed disposition of shares Recognized on share withdrawals.
and/or losses and reported for tax purposes in the same year.

Withdrawals Generally non-taxable; however, you will realize
capital gains and/or losses from sales or deemed
dispositions of shares occurring after withdrawal
from the EPSP. This must be reported for tax
purposes in the year of realization.
Taxable. Withdrawals are included in taxable income
in the year shares are withdrawn and are subject to
withholding tax.

Your decision to participate should be based on your personal situation. Participation is voluntary. By participating,
you acknowledge and accept the risk that the value of shares will fluctuate based on stock market performance so
that shares purchased under ESOP, when sold, may be worth more or less than their original cost. Please consult a
professional financial advisor if you are unsure of whether or not to participate.

Employee Share Ownership Plan at a Glance 4

Employee Share Ownership Plan at a Glance

Resources
To find more detailed information about ESOP, go to Ask HR in me@scotiabank or refer to Your Guide to Scotiabank’s
Employee Share Ownership Plan through the ESOP Guide link in Pay and Benefits in me@scotiabank.

If you have questions about ESOP, go to Ask HR in me@scotiabank, select Contact HR and then Contact Us.

Or, contact Solium, the administrator of ESOP, through HR Services and follow the prompts to the Employee Share
Ownership Plan.
Phone: 1-888-888-8089
TTY Line: 1-877-726-8429

This at-a-glance is a summary only. While every effort has been made to convey accurate and detailed information, official plan documents will govern
in the event of any discrepancies or special situations.

Registered trademark of the Bank of Nova Scotia

®

Employee Share Ownership Plan at a Glance 5