UNITED STATES SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrantþ
Filed by a Party other than the Registranto
Check the appropriate box:
o | Preliminary Proxy Statement | o | Confidential, For Use of the Commission Only | |||
þ | Definitive Proxy Statement | (as permitted by Rule 14a-6(e)(2)) | ||||
o | Definitive Additional Materials | |||||
o | Soliciting Material Pursuant to Rule 14a-12 |
OPPENHEIMER HOLDINGS INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. | Title of each class of securities to which transaction applies: | |||
2. | Aggregate number of securities to which transaction applies: | |||
3. | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
4. | Proposed maximum aggregate value of transaction: | |||
5. | Total fee paid: |
o | Fee paid previously with preliminary materials: | |||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration number, or the form or schedule and the date of its filing. |
1. | Amount previously paid: | |||
2. | Form, Schedule or Registration Statement No.: | |||
3. | Filing Party: | |||
4. | Date Filed: |
1. | To receive the 2004 Annual Report including the consolidated financial statements of the Corporation for the year ended December 31, 2004, together with the Auditors’ Report thereon; | |
2. | To elect Directors; | |
3. | To appoint PricewaterhouseCoopers LLP as auditors of the Corporation and authorize the Directors to fix their remuneration; | |
4. | To consider and, if deemed advisable, pass a resolution confirming amendments to the Corporation’s 1996 Equity Incentive Plan described in the accompanying Management Information Circular; | |
5. | To consider and, if deemed advisable, pass a resolution confirming the adoption of the Oppenheimer & Co. Inc. Employee Share Plan described in the accompanying Management Information Circular; | |
6. | To consider and, if deemed advisable, pass a resolution authorizing the issue of up to 180,000 Class A non-voting shares to the Oppenheimer & Co. Inc. 401(k) Plan; | |
7. | To consider and, if deemed advisable, pass a special resolution authorizing the Corporation to apply for a Certificate of Continuance continuing the Corporation under theCanada Business Corporations Act(“CBCA”), as described in the accompanying Management Information Circular; | |
8. | Subject to the approval and authorization of item 7 above, to consider and, if deemed advisable, confirm By-Law Number 1 of the Corporation, being a by-law relating generally to the transaction of the business and affairs of the Corporation pursuant to and in accordance with the CBCA, as described in the accompanying Management Information Circular; | |
9. | To consider and, if deemed advisable, pass a resolution confirming the Performance-Based Compensation Agreement described in the accompanying Management Information Circular; and | |
10. | To transact such other business as is proper to such meeting or any adjournment thereof. |
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Class A Shares | Class B Shares | |||||||||||||||
Name of Beneficial Owner | Shares | % | Shares | % | ||||||||||||
Private Capital Management, L.P. | 3,833,339 | 28.8% | — | — | ||||||||||||
AIC Limited | 1,626,851 | 12.2% | — | — | ||||||||||||
Olga Roberts (1) | 324,955 | 2.4% | 44,309 | 44.4% | ||||||||||||
Albert G. Lowenthal (2) | 2,786,643 | 21.0% | 50,975 | 51% | ||||||||||||
J.L. Bitove (3) | 63,080 | * | 20 | * | ||||||||||||
R. Crystal (4) | 20,200 | * | — | — | ||||||||||||
K.W. McArthur (5) | 52,750 | * | — | — | ||||||||||||
R. Neuhoff (6) | 74,057 | * | — | — |
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Class A Shares | Class B Shares | |||||||||||||||
Name of Beneficial Owner | Shares | % | Shares | % | ||||||||||||
R. Okin (7) | 6,468 | * | — | — | ||||||||||||
A.W. Oughtred (8) | 16,000 | * | ||||||||||||||
E.K. Roberts (9) | 181,094 | 1.4 | 116 | * | ||||||||||||
B. Winberg (10) | 16,900 | * | — | — | ||||||||||||
Executive Officers and Directors as a group (9 persons) | 3,217,192 | 24.2% | 51,011 | 51% |
* | Less than 1% |
(1) | With respect to the Class B Shares, Mrs. Roberts, who is the mother of Elaine Roberts, President of the Corporation, owns 100 Class B Shares directly and 44,209 Class B Shares indirectly through Elka Estates Limited, an Ontario corporation (“Elka”), which is wholly-owned by Mrs. Roberts. With respect to the Class A Shares, Mrs. Roberts owns 41,900 Class A Shares directly and 283,055 Class A Shares through Elka. |
(2) | With respect to the Class A Shares, Mr. Lowenthal is the sole general partner of Phase II Financial L.P., a New York limited partnership, which is the record holder of 2,736,430 Class A Shares. Mr. Lowenthal holds 11,347 Class A Shares through the Oppenheimer 401(k) Plan, and 1,366 Class A Shares directly and 37,500 Class A Shares are beneficially owned in respect of Class A Shares issuable upon exercise of options issued under the Corporation’s 1996 Equity Incentive Plan (the “Equity Incentive Plan”). With respect to the Class B Shares, Phase II Financial Limited, an Ontario corporation wholly-owned by Mr. Lowenthal, is the holder of record of all such shares. |
(3) | Mr. Bitove holds 50,480 Class A Shares directly, 100 Class A Shares indirectly through JB’s Investments Inc. and 12,500 Class A Shares are beneficially owned in respect of Class A Shares issuable upon exercise of options issued under the Equity Incentive Plan. |
(4) | Mr. Crystal owns 2,700 Class A Shares directly and 17,500 Class A Shares are beneficially owned in respect of Class A Shares issuable upon exercise of options issued under the Equity Incentive Plan. |
(5) | Mr. McArthur owns 20,000 Class A Shares directly, 29,000 Class A Shares are held through Shurway Capital and 3,750 Class A Shares are beneficially owned in respect of Class A Shares issuable upon exercise of options issued under the Equity Incentive Plan. |
(6) | Mr. Neuhoff owns 50,145 Class A Shares directly, 5,162 Class A Shares through the Oppenheimer 401(k) Plan and 18,750 Class A Shares are beneficially owned in respect of Class A Shares issuable upon exercise of options issued under the Equity Incentive Plan. |
(7) | Mr. Okin owns 218 Class A Shares through the Oppenheimer 401(k) Plan and 6,250 Class A Shares are beneficially owned in respect of Class A Shares issuable upon exercise of options issued under the Equity Incentive Plan. |
(8) | Mr. Oughtred owns 3,500 Class A Shares directly and 12,500 Class A Shares are beneficially owned in respect of Class A Shares issuable upon exercise of options issued under the Equity Incentive Plan. |
(9) | Ms. Roberts owns 178,594 Class A Shares directly and 2,500 Class A Shares are beneficially owned in respect of Class A Shares issuable upon exercise of options issued under the Equity Incentive Plan. |
(10) | Mr. Winberg owns 4,400 Class A Shares directly and 12,500 Class A Shares are beneficially owned in respect of Class A Shares issuable upon exercise of options issued under the Equity Incentive Plan. |
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Number of Securities Remaining | ||||||||
Number of Securities to be | Weighted Average Exercise | Available for Future Issuance | ||||||
Issued Upon Exercise of | Price | Under | ||||||
Outstanding Options | of Outstanding Options | the Equity Incentive Plan | ||||||
1,659,370 | $ | 27.19 | 540,042 |
Positions and Offices | Year | |||||||||||||||
Province/State, | held with | Occupation for | Became | |||||||||||||
Name | Country of Residence | Age | the Corporation | Previous 5 years | Director | |||||||||||
J.L. Bitove | Florida, USA | 77 | Director | Retired Executive | 1980 | |||||||||||
R. Crystal | New York, USA | 64 | Director | Partner, Brown Raysman Millstein Felder & Steiner LLP (law firm) | 1992 | |||||||||||
A.G. Lowenthal | New York, USA | 59 | Chairman of the Board and Chief Executive Officer and Director | Chairman of the Board and Chief Executive Officer of the Corporation and Oppenheimer | 1985 | |||||||||||
K.W. McArthur | Ontario, Canada | 69 | Lead Director | President and Chief Executive Officer, Shurway Capital Corporation (private investment company) | 1996 |
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Positions and Offices | Year | |||||||||||||||
Province/State, | held with | Occupation for | Became | |||||||||||||
Name | Country of Residence | Age | the Corporation | Previous 5 years | Director | |||||||||||
A.W. Oughtred | Ontario, Canada | 62 | Secretary and Director | Partner, Borden Ladner Gervais LLP (law firm) | 1979 | |||||||||||
E.K. Roberts | Ontario, Canada | 53 | President, Treasurer and Director | President and Treasurer of the Corporation | 1977 | |||||||||||
B. Winberg | Ontario, Canada | 80 | Director | President, Rockport Holdings Limited (real estate development) | 1979 |
1. | There is no Executive Committee of the Board of Directors. Messrs. J.L. Bitove, K.W. McArthur and B. Winberg are members of the Audit Committee. Messrs. J.L. Bitove, K.W. McArthur, B. Winberg and R Crystal are members of the Nominating/ Corporate Governance Committee. Messrs. J.L. Bitove and B. Winberg are members of the Compensation and Stock Option Committee. |
2. | The numbers of Class A and Class B Shares owned by the nominees appear under “Security Ownership of Certain Beneficial Owners and Management” above. |
3. | A.W. Oughtred is a partner in the law firm of Borden Ladner Gervais LLP and Richard Crystal is a partner in the law firm of Brown Raysman Millstein Felder & Steiner LLP, both of which firms provide legal services to the Corporation and its subsidiaries. The billings to the Corporation in 2004 by each of these firms were less than 1% of each firm’s 2004 total billings. |
Annual Retainer Fee | — | $15,000 | ||||
Board and Committee Meeting Fees | — | $1,500 per meeting attended in person | ||||
— | $500 per meeting attended by telephone | |||||
Committee Chairs | — | $5,000 per year | ||||
Lead Director | — | $5,000 per year | ||||
Members of Audit Committee | — | $2,500 per year | ||||
(other than chairman) |
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Number of Class A Shares | ||||||||||||
Remaining Available for | ||||||||||||
Number of Class A Shares | Weighted-Average | Future Issuance Under | ||||||||||
to be Issued Upon Exercise | Exercise Price of | Equity Compensation | ||||||||||
of Outstanding Options, | Outstanding Options, | Plans (Excluding | ||||||||||
and Conditional | and Conditional | Securities Reflected | ||||||||||
Plan Category | Issues of Shares | Issues of Shares | in Column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity Compensation Plans approved by shareholders: | ||||||||||||
(i) 1996 Equity Incentive Plan | 1,840,681 | $26.91 | 308,244 | |||||||||
(ii) Conditional Issue of Shares to Employees | 31,110 | $22.50 | — | |||||||||
Equity Compensation Plans not approved by shareholders: | ||||||||||||
Oppenheimer Employee Share Plan (1) | 10,137 | $24.45 | 739,863 |
(1) | To be considered, and if deemed advisable, approved, at the Meeting (See “Stock Based Compensation Arrangements”). |
Financially | ||||||||||||||||||
Largest | Assisted | |||||||||||||||||
Amount | Securities | Amount | ||||||||||||||||
Outstanding | Purchases | Forgiven | ||||||||||||||||
During Most | Amount | During Most | During Most | |||||||||||||||
Recently | Outstanding as | Recently | Recently | |||||||||||||||
Involvement of | Completed | at March 10, | Completed | Completed | ||||||||||||||
Company or | Financial Year | 2005 | Financial Year | Security for | Financial Year | |||||||||||||
Name and Principal Position | Subsidiary | ($) | ($) | (#) | Indebtedness | ($) | ||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | ||||||||||||
Securities Purchase Programs | ||||||||||||||||||
N/ A | ||||||||||||||||||
Other Programs | ||||||||||||||||||
A.G. Lowenthal, Chairman and CEO of the Company and Oppenheimer | Oppenheimer Margin Account | $ | 26,401 | nil | nil | Margined securities | nil | |||||||||||
R. Okin Executive Vice President of Oppenheimer | Oppenheimer Margin Account | $ | 231,132 | nil | nil | Margined securities | nil |
2. | APPOINTMENT OF AUDITORS |
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Year ended December 31, | ||||||||
2004 | 2003 | |||||||
Audit fees | $ | 1,075,000 | $ | 827,500 | ||||
Audit-related fees | 50,000 | 50,000 | ||||||
Tax fees | nil | nil | ||||||
All other fees | nil | nil | ||||||
$ | 1,125,000 | $ | 877,500 |
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20 Eglinton Avenue West | |
Suite 1110, P.O. Box 2015 | |
Toronto, Ontario M4R 1K8 | |
Telephone: (416) 322-1515 Facsimile: (416) 322-7007 Email: investorrelations@opy.ca |
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Long-term | |||||||||||||||||||||||||
Annual Compensation | Compensation | ||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||
Shares | |||||||||||||||||||||||||
Other Annual | Underlying | All Other | |||||||||||||||||||||||
Name and Principal Occupation | Year | Salary | Bonus | Compensation (1) | Options | Compensation (2) | |||||||||||||||||||
A.G. Lowenthal, | 2004 | $ | 500,000 | $ | 207,568 | $ | 27,500 | 150,000 | $ | 2,525 | |||||||||||||||
Chairman, CEO, and | 2003 | $ | 500,000 | $ | 3,225,368 | $ | 22,000 | 150,000 | $ | 3,050 | |||||||||||||||
Director of the | 2002 | $ | 480,340 | 0 | $ | 22,500 | 0 | $ | 2,475 | ||||||||||||||||
Corporation; Chairman and | |||||||||||||||||||||||||
CEO, and Director of | |||||||||||||||||||||||||
Oppenheimer | |||||||||||||||||||||||||
Thomas Robinson (4), | 2004 | $ | 200,000 | $ | 800,000 | 0 | 15,000 | $ | 2,525 | ||||||||||||||||
President of OAM | 2003 | $ | 200,000 | $ | 1,000,000 | 0 | 10,000 | $ | 2,820 | ||||||||||||||||
E.K. Roberts, | 2004 | $ | 200,000 | $ | 175,000 | $ | 26,500 | 75,000 | 0 | ||||||||||||||||
President, Treasurer and | 2003 | $ | 200,000 | $ | 300,000 | $ | 22,500 | 10,000 | 0 | ||||||||||||||||
Director of the Corporation, | 2002 | $ | 183,300 | $ | 60,000 | $ | 22,500 | 0 | 0 | ||||||||||||||||
Treasurer and a director of | |||||||||||||||||||||||||
Oppenheimer | |||||||||||||||||||||||||
Robert Neuhoff, | 2004 | $ | 260,000 | $ | 200,000 | 0 | 50,000 | $ | 2,525 | ||||||||||||||||
Executive Vice President of | 2003 | $ | 260,000 | $ | 250,000 | 0 | 25,000 | $ | 3,050 | ||||||||||||||||
Oppenheimer | 2002 | $ | 260,000 | $ | 75,000 | 0 | $ | 2,475 | |||||||||||||||||
Robert Okin (3) | 2004 | $ | 200,000 | $ | 780,000 | 0 | 25,000 | $ | 2,525 | ||||||||||||||||
Executive Vice President of | 2003 | $ | 190,256 | $ | 1,000,000 | 0 | 50,000 | $ | 3,050 | ||||||||||||||||
Oppenheimer |
(1) | Includes Directors’ Fees. |
(2) | This amount represents Corporation contributions to the Oppenheimer 401(k) Plan. |
(3) | Mr. Okin joined Oppenheimer on January 3, 2003. In addition to the above compensation, on March 17, 2003 Mr. Okin was awarded 22,222 Class A Shares, which will be issued on January 3, 2006 and priced at $22.50, provided that Mr. Okin remains continuously employed by the Corporation. The issuance of these conditionally-issued Class A Shares was confirmed by shareholders on May 12, 2003. |
(4) | Mr. Robinson joined OAM on June 4, 2003. |
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Number of | ||||||||||||||||||||
Securities | % of Total | |||||||||||||||||||
Underlying | Options/SARs | |||||||||||||||||||
Options/SARs | Granted to Employees | Exercise Price | ||||||||||||||||||
Granted | in Fiscal Year | Per Share | Expiry Date | Grant Date Value | ||||||||||||||||
A.G. Lowenthal | 150,000 | 30 | % | $ | 33.00 | 2/25/09 | $ | 908,200 | ||||||||||||
E.K. Roberts | 75,000 | 15 | % | $ | 33.00 | 2/25/09 | $ | 454,100 | ||||||||||||
T. Robinson | 15,000 | 3 | % | $ | 33.00 | 2/25/09 | $ | 90,800 | ||||||||||||
R. Neuhoff | 50,000 | 10 | % | $ | 33.00 | 2/25/09 | $ | 302,800 | ||||||||||||
R. Okin | 25,000 | 5 | % | $ | 33.00 | 2/25/09 | $ | 151,400 |
Number of Securities | ||||||||||||||||
Underlying Unexercised | Value of Unexercised | |||||||||||||||
Shares | Options/SARs | in-the-money Options/SARs | ||||||||||||||
Acquired | Value | at Fiscal Year end | at Fiscal Year end | |||||||||||||
Name | on Exercise | Realized | Exercisable/Unexercisable | Exercisable/Unexercisable | ||||||||||||
A.G. Lowenthal | 150,000 | $ | 2,944,000 | 37,500/262,500 | $ | 45,750/$137,250 | ||||||||||
T. Robinson | 0 | 0 | 0/25,000 | 0/0 | ||||||||||||
E.K. Roberts | 75,000 | $ | 1,476,000 | 2,500/82,500 | $ | 3,050/$9,150 | ||||||||||
R. Neuhoff | 50,000 | $ | 557,056 | 18,750/56,250 | $ | 35,063/$6,248 | ||||||||||
R. Okin | 0 | 0 | 6,250/68,750 | $ | 17,375/$52,125 |
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Burton Winberg — Chairman | |
John L. Bitove |
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![(PERFORMANCE GRAPH)](https://capedge.com/proxy/DEF 14A/0000909567-05-000673/t16082bt1608201.gif)
1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |||||||||||||||||||
Oppenheimer | 100 | 163 | 192 | 171 | 229 | 173 | ||||||||||||||||||
S&P 500 | 100 | 90 | 78 | 60 | 76 | 83 | ||||||||||||||||||
S&P / TSX Composite | 100 | 106 | 91 | 79 | 98 | 110 | ||||||||||||||||||
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• | the establishment and maintenance of an appropriate system of corporate governance, including practices to ensure that the Board functions effectively and independently of management; | |
• | monitoring and overseeing the Corporation’s strategic planning; | |
• | monitoring the performance of the Corporation’s business, identifying and evaluating opportunities and risks and controlling risk; | |
• | overseeing monitoring systems for internal controls, audit and information management systems; | |
• | assessing and monitoring the performance of senior management and overseeing succession planning; | |
• | remuneration of executive officers and senior management and reviewing the general compensation policy of the Corporation; | |
• | reviewing and approving the Corporation’s financial statements and overseeing the Corporation’s compliance with applicable audit, accounting and financial reporting requirements; and | |
• | overseeing corporate communications to all stakeholders. |
• | Reviewed and discussed with the Corporation’s management and PricewaterhouseCoopers LLP, the Corporation’s unaudited quarterly reports on Form 10-Q and quarterly reports to shareholders for the first three quarters of the year; | |
• | Reviewed and discussed the Corporation’s audited financial statements and report on Form 10-K for the fiscal year ended December 31, 2004 with the Corporation’s management; | |
• | Discussed with PricewaterhouseCoopers LLP the matters required to be discussed by SAS 61 (American Institute of Certified Public Accountants Codification of Statements on Auditing Standards), as amended; | |
• | Received written disclosure regarding independence from PricewaterhouseCoopers LLP as required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committee) and discussed with PricewaterhouseCoopers LLP its independence; and | |
• | Discussed with management and Grant Thornton LLP (who were retained by the Corporation to assist management) and with PricewaterhouseCoopers LLP the documentation and testing of the Corporation’s internal accounting controls in accordance with the requirements of section 404 of theSarbanes Oxley Act of 2002. |
Burton Winberg — Chairman | |
John L. Bitove | |
Kenneth W. McArthur |
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Oppenheimer Holdings Inc. | |
Board of Directors | |
c/o The President | |
20 Eglinton Avenue West | |
Suite 1110, P.O. Box 2015 | |
Toronto, Ontario | |
M4R 1K8 |
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1. | The resolution passed by the Board of Directors on March 10, 2005 amending the Corporation’s 1996 Equity Incentive Plan by increasing the number of Class A non-voting shares of the Corporation (“Class A Share”) which may be issued pursuant to options to purchase Class A Shares granted under the Plan by 400,000 shares as more fully described in the Corporation’s Management Information Circular dated March 24, 2005 be and it is hereby confirmed. | |
2. | The proper officers and directors of the Corporation be and they are herby authorized and directed to take all such action and execute all such documents as are necessary to implement the terms of this resolution. |
A-1
1. | The resolution passed by the Board of Directors on March 10, 2005 approving the Oppenheimer & Co. Inc. Employee Share Plan, a copy of which appears as Schedule B to the Corporation’s Management Information Circular dated March 24, 2005, be and it is hereby confirmed. | |
2. | The proper officers and directors of the Corporation be and they are hereby authorized and directed to take all such actions and execute all such documents as are necessary to implement the terms of this resolution. |
A-2
1. | The issue by the Board of Directors of the Corporation, from time to time, of up to an aggregate of 180,000 Class A non-voting shares of the Corporation to the Oppenheimer & Co. Inc. 401(k) Plan at the closing price per share on the New York Stock Exchange of the Class A non-voting shares on the date of issue be and they are hereby authorized. | |
2. | The proper officers and directors of the Corporation be and they are hereby authorized and directed to take all such actions and execute all such documents as are necessary to implement the terms of this resolution. |
A-3
1. | The Corporation apply to the Director under the OBCA, pursuant to section 181 of the OBCA, for authorization of its application to continue under the CBCA; | |
2. | The Corporation apply to the Director under the CBCA, pursuant to section 187 of the CBCA, for a certificate of continuance continuing the Corporation under the CBCA; | |
3. | The articles of continuance of the Corporation forming part of the said application for continuance shall be substantially in the form attached to the Corporation’s Management Information Circular dated March 24, 2005 as Schedule C and, upon the issuance of a certificate of continuance continuing the Corporation under the CBCA, the articles of continuance shall be deemed to be the articles of incorporation of the Corporation; | |
4. | The directors of the Corporation are hereby authorized to abandon the application for continuance of the Corporation under the CBCA without further approval of the shareholders of the Corporation; and | |
5. | Any one of the directors or officers of the Corporation is hereby authorized to execute, whether under the corporate seal of the Corporation or otherwise, and deliver all such documents and to do all such other acts and things as such director or officer may determine to be necessary or advisable in connection with such continuance. |
A-4
A-5
1. | The resolution passed by the Board of Directors on March 10, 2005 approving the Amended and Restated Performance-Based Compensation Agreement dated as of March 15, 2005 between the Corporation and Mr. A. G. Lowenthal, a copy of which appears as Schedule E to the Corporation’s Management Information Circular dated March 24, 2005, be and it is hereby confirmed. | |
2. | The proper officers and directors of the Corporation be and they are hereby authorized and directed to take all such action and execute all such documents as are necessary to implement the terms of this resolution. |
A-6
B-1
B-2
(a) | The number of Class A Shares issuable, at any time, to employees that are Insiders as Restricted Stock Awards and with respect to all other rights such Employees have to receive Class A Shares under other share compensation arrangements of the Company or the Parent shall not exceed 10% of the issued and outstanding Class A Shares. |
(b) | The number of Class A Shares issued to Employees that are Insiders, within any twelve-month period, pursuant to Restricted Stock Awards or pursuant to other share compensation arrangements of the Company or the Parent may not exceed 10% of the issued and outstanding Class A Shares. |
B-3
B-4
B-5
B-6
B-7
TO: | Oppenheimer & Co. Inc. (the “Corporation”) Attention: Secretary | |||
FROM: | ||||
[Print Name] |
Signed: | Dated: | |||||
Accepted by: | Dated: | |||||
Secretary, on behalf of the Corporation, certifying that this Election of Bonus Deferral is complete |
B-8
TO: | Oppenheimer & Co. Inc. (the “Corporation”) Attention: Secretary | |||
FROM: | ||||
[Print Name] |
Primary Designated Beneficiary | Percent | Relationship | Social Security # | |||
(include address if not same as yours) | ||||||
% | ||||||
% | ||||||
Primary Designated Beneficiary | Percent | Relationship | Social Security # | |||
(include address if not same as yours) | ||||||
% | ||||||
% | ||||||
Signed: | Dated: | |||||
Accepted by: | Dated: | |||||
Secretary, on behalf of the Corporation, certifying that this Designation of Beneficiary Election is complete |
B-9
1. | The name of the Corporation is: |
2. | Date of incorporation/amalgamation. |
3. | The corporation is offering securities to the public within the meaning of subsection 1(6) of theBusiness Corporations Act. |
4. | The corporation is not in default in filing notices under theCorporations Information Act. |
5. | There are no actions, suits or proceedings pending against the corporation and no unsatisfied judgements or orders outstanding against the corporation. |
6. | It is requested that the corporation be authorized under section 181 of theBusiness Corporations Actto apply to the proper officer for an instrument of continuance continuing the corporation as if it had been incorporated under the laws of Canada. |
7. | The laws of the jurisdiction to which the corporation will apply for an instrument of continuance provide in effect that: |
(a) | The property of the corporation continues to be the property of the body corporate; |
(b) | The body corporate continues to be liable for the obligations of the corporation; | |
(c) | An existing cause of action, claim or liability to prosecution is unaffected; | |
(d) | A civil, criminal, or administrative action or proceeding pending by or against the corporation may be continued to be prosecuted by or against the body corporate; and | |
(e) | A conviction against the corporation may be enforced against the body corporate or a ruling, order of judgement in favour of or against the corporation may be enforced by or against the body corporate. |
8. | This application has been authorized by a special resolution: |
9. | This application is accompanied by the consent of: |
(a) | The Corporations Tax Branch of the Ministry of Revenue and |
(b) | The Ontario Securities Commission. |
OPPENHEIMER HOLDINGS INC. | |
By: | |
Name: | |
Title: |
C-1
Industry Canada | Form 11 | |
Canada Business | Articles of Continuance | |
Corporations Act | (Section 187) |
1. | Name of Corporation |
2. | The province or territory in Canada where the registered office is to be situated |
ONTARIO | |
3. | The classes and any maximum number of shares that the corporation is authorized to issue |
See attached Schedule A | |
4. | Restrictions, if any on share transfers |
none | |
5. | Number (or minimum and maximum number) of directors |
minimum of five (5) and maximum of fifteen (15) | |
6. | Restrictions, if any, on business the corporation may carry on |
none | |
7. | Change of name effected, previous name |
none | |
8. | Details of incorporation |
Incorporated on November 16, 1933 under the laws of British Columbia; and Continued on October 12, 1977 under the laws of Ontario | |
9. | Other provisions, if any |
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4. | The classes and any maximum number of shares that the corporation is authorized to issue: |
An unlimited number of First Preference Shares, issuable in series; | |
An unlimited number of Class A non-voting shares; and | |
99,680 Class B voting shares. |
(i) | Unless the directors otherwise determine by resolution, the holders of shares of a series of First Preference Shares, as such, shall not be entitled to receive notice of or to attend or vote at meetings of shareholders of the Corporation except that holders of shares of any series of First Preference Shares shall be entitled to notice of meetings of shareholders called for the purpose of authorizing the dissolution of the Corporation or the sale of its undertaking or a substantial part thereof and, where |
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entitled by law, holders of First Preference Shares of all series shall be entitled to notice of and to vote at meetings of shareholders with each First Preference Share entitling the holder thereof to one vote per share. | ||
(ii) | The holders of the First Preference Shares as a class, or, of a series of First Preference Shares, as such, shall not be entitled to vote separately as a class or series or to dissent under theCanada Business Corporations Actand any statute that may be substituted therefor, as from time to time amended (hereinafter the “Act”) upon a proposal to amend the Articles to: |
(1) | increase or decrease any maximum number of authorized First Preference Shares, or increase any maximum number of authorized shares of a class or series having rights or privileges equal or superior to the First Preference Shares or any series thereof; or | |
(2) | create a new class or series of shares equal or superior to the First Preference Shares; |
or to dissent under the Act upon a proposal to amend the Articles to effect an exchange, reclassification or cancellation of all or part of the First Preference Shares or any series thereof. |
(i) | The holders of the Class B voting shares, as such, shall be entitled to vote at all meetings of shareholders, except meetings at which only holders of a specified class, other than Class B voting shares, or a specified series of shares are entitled to vote and shall be entitled to one vote for each Class B voting share held. | |
(ii) | Holders of Class B voting shares, as such, shall not be entitled to vote separately as a class or to dissent under the Act upon a proposal to amend the Articles to: |
(1) | increase or decrease any maximum number of authorized Class B voting shares or increase any maximum number of authorized shares of a class of shares having rights or privileges equal or superior to the Class B voting shares; or | |
(2) | create a new class or series of shares equal or superior to the Class B voting shares; |
or to dissent under the Act upon a proposal to amend the Articles to effect an exchange, reclassification, or cancellation of all or a part of the Class B voting shares. |
(i) | Except where entitled by law holders of Class A non-voting shares, as such, shall not be entitled to vote at meetings of shareholders of the Corporation. | |
(ii) | Where entitled by law to vote at meetings of shareholders of the Corporation holders of Class A non-voting shares shall be entitled to one vote for each Class A non-voting share held. |
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9. | Other provisions: |
1. | The board of directors may from time to time on behalf of the corporation, without authorization of the shareholders: |
(a) | borrow money on the credit of the corporation; | |
(b) | issue, reissue, sell, pledge or hypothecate bonds, debentures, notes or other evidences of indebtedness or guarantee of the corporation, whether secured or unsecured; | |
(c) | give a guarantee on behalf of the corporation to secure performance of any present or future indebtedness, liability or obligation of any person; and | |
(d) | mortgage, hypothecate, pledge or otherwise create a security interest in all or any currently owned or subsequently acquired real or personal, movable or immovable, property of the corporation including book debts, rights, powers, franchises and undertakings, to secure any such bonds, debentures, notes or other evidences of indebtedness or any guarantees or any other present or future indebtedness, liability or obligation of the corporation. |
2. | The board of directors may from time to time delegate to such one or more of the directors and officers of the corporation as may be designated by the board all or any of the powers conferred on the board above to such extent and in such manner as the board shall determine at the time of such delegation. |
3. | All meetings of the Directors and Shareholders may be held in Canada or outside Canada. |
4. | The directors or the shareholders may by resolution from time to time determine the number of directors to be elected at an annual meeting, within such minimum and maximum number of directors. The directors or shareholders may by resolution passed at a meeting specially called for such purpose remove any director from office and the vacancy created by such removal may be filled at the same meeting. |
5. | The directors may appoint one or more additional directors, in addition to the maximum number of directors provided for in the articles, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders. |
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Part | Description | |||
I | — | Interpretation | ||
II | — | Business of the Corporation | ||
III | — | Borrowing and Securities | ||
IV | — | Directors | ||
V | — | Committees | ||
VI | — | Officers | ||
VII | — | Protection of Directors, Officers and Others | ||
VIII | — | Shares | ||
IX | — | Dividends and Rights | ||
X | — | Meetings of Shareholders | ||
XI | — | Notices | ||
XII | — | Documents in Electronic Form | ||
XIII | — | Effective Date |
“Act” means theCanada Business Corporations Act, and any statute that may be substituted therefor, as from time to time amended; | |
“appoint” includes “elect” and vice versa; | |
“articles” means the articles of incorporation of the Corporation as from time to time amended or restated; | |
“board” means the board of directors of the Corporation; | |
“by-laws” means this by-law and all other by-laws of the Corporation from time to time in force and effect; | |
“meeting of shareholders” includes an annual meeting of shareholders and a special meeting of shareholders; “special meeting of shareholders” includes a meeting of any class or classes of shareholders and a special meeting of all shareholders entitled to vote at an annual meeting of shareholders; | |
“non-business day” means Saturday, Sunday and any other day that is a holiday as defined in theInterpretation Act(Canada); | |
“recorded address” means in the case of a shareholder, that person’s address as recorded in the securities register; and in the case of joint shareholders the address appearing in the securities register in respect of such joint holding or the first address so appearing if there are more than one; and in the case of a director, officer, auditor or member of a committee of the board, that individual’s latest address as recorded in the records of the Corporation; | |
“regulations” means the regulations enacted pursuant to the Act, as from time to time amended; | |
“signing officer” means, in relation to any instrument, any person authorized to sign the same on behalf of the Corporation by section 2.03 or by a resolution passed pursuant thereto; | |
“unanimous shareholder agreement” means a written agreement among all the shareholders of the Corporation, or among all such shareholders and one or more persons who are not shareholders, or a written |
D-1
declaration of the beneficial owner of all of the issued shares of the Corporation, that restricts, in whole or in part, the powers of the directors to manage the business and affairs of the Corporation, as from time to time amended; | |
save as aforesaid, words and expressions defined in the Act have the same meanings when used herein; and | |
words importing the singular number include the plural and vice versa; and words importing persons include individuals, bodies corporate, partnerships, trusts and unincorporated organizations. |
D-2
(a) | borrow money on the credit of the Corporation; |
(b) | issue, reissue, sell, pledge or hypothecate bonds, debentures, notes or other evidences of indebtedness or guarantee of the Corporation, whether secured or unsecured; | |
(c) | give a guarantee on behalf of the Corporation to secure performance of any present or future indebtedness, liability or obligation of any person; and | |
(d) | mortgage, hypothecate, pledge or otherwise create a security interest in all or any currently owned or subsequently acquired real or personal, movable or immovable, property of the Corporation including book debts, rights, powers, franchises and undertakings, to secure any such bonds, debentures, notes or other evidences of indebtedness or guarantee or any other present or future indebtedness, liability or obligation of the Corporation. | |
(e) | Nothing in this section limits or restricts the borrowing of money by the Corporation on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the Corporation. |
D-3
(a) | a resident Canadian director who is unable to be present approves in writing or by telephonic, electronic or other communications facilities, the business transacted at the meeting; and |
(b) | the required number of resident Canadians would have been present had that director been present at the meeting. |
D-4
(a) | submit to the shareholders any question or matter requiring approval of the shareholders; |
(b) | fill a vacancy among the directors or in the office of auditor, or appoint additional directors; | |
(c) | issue securities; | |
(d) | issue shares of a series; | |
(e) | declare dividends; |
(f) | purchase, redeem or otherwise acquire shares issued by the Corporation; |
(g) | pay a commission for the sale of shares; | |
(h) | approve a management proxy circular; |
(i) | approve a take-over bid circular or directors’ circular; | |
(j) | approve any annual financial statements; or |
(k) | adopt, amend or repeal by-laws. |
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(a) | acted honestly and in good faith with a view to the best interests of the Corporation, or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the request of the Corporation; and |
(b) | in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful. |
D-7
(a) | in the individual’s capacity as a director or officer of the Corporation; or |
(b) | in the individual’s capacity as a director or officer, or similar capacity, of another entity, if the individual acts or acted in that capacity at the request of the Corporation. |
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(a) | the addressee has consented, in the manner prescribed by regulation, if any, and has designated an information system for the receipt of electronic documents; | |
(b) | the electronic document is provided to the designated information system, unless otherwise prescribed by regulation; and | |
(c) | any other requirements of the regulations have been complied with. |
(a) | the information in the electronic document is accessible so as to be usable for subsequent reference; and | |
(b) | any other requirements of the regulations have been complied with. |
(a) | the information in the electronic document is accessible by the addressee and capable of being retained by the addressee, so as to be usable for subsequent reference; and | |
(b) | any other requirements of the regulations have been complied with. |
D-14
President | Secretary | |
CONFIRMED by the shareholders in accordance with the Act as of the day of 2005. | ||
Secretary |
D-15
(a) | Class A Stock means the Class A non-voting shares of Holdings. | |
(b) | Market Value of a share of Class A Stock as of a determination date means its closing price on the New York Stock Exchange on such date or, if such date is not a trading day, on the trading day next preceding such determination date. | |
(c) | Performance Award means the written performance goal established with respect to a Performance Year pursuant to Section 2. | |
(d) | Performance Award Amount means the amount of performance-based compensation determined pursuant to the terms of a Performance Award. | |
(e) | Performance Year means a calendar year during the Term. | |
(f) | Term means the period commencing on January 1, 2001 and ending on December 31, 2010. |
E-1
(a) | If prior to the end of a Performance Year Lowenthal’s employment with the Company or Holdings terminates for any reason (including death or permanent disability) other than the termination of his employment for Cause (as defined in subsection (b)), in lieu of any payments otherwise payable under this Agreement with respect to such Performance Year Lowenthal or his estate, on the later of five (5) days after the Committee’s certification in accordance with Section 3 following the end of the Performance Year in which termination occurs or six (6) months and one (1) day after the date of termination, shall be paid the sum of the following: (i) the amount that would be owed to Lowenthal with respect to the Performance Award (other than the portion thereof described in clause (ii)) for such Performance Year multiplied by a fraction, the numerator of which is the number of actual days of the year to the date of such termination and the denominator of which is 365 and (ii) with respect to the portion (if any) of the Performance Award attributable to appreciation in the Market Value of Class A Stock, the amount that would be owed to Lowenthal with respect to the stock appreciation amount using the Market Value of the Class A Stock on such termination date rather than December 31 of the Performance Year;provided, however, that any such payment of a Performance Award Amount shall be subject to the limit set forth in Section 4 and the prior certification of the Committee as set forth in Section 3. | |
(b) | If prior to the end of a Performance Year, Lowenthal’s employment is terminated for Cause, his right to receive any payment under this Agreement with respect to such Performance Year shall be forfeited. For purposes of this Agreement, “Cause” means (i) conviction of a felony involving theft or moral turpitude, or (ii) a determination by the Board that Lowenthal has engaged in conduct that constitutes wilful gross neglect or wilful gross misconduct with respect to his duties which results in material economic harm to Holdings or the Company;provided, however, that for purposes of determining whether conduct constitutes wilful gross misconduct, no act on Lowenthal’s part shall be considered “wilful” unless it is done by him in bad faith and without reasonable belief that his action was in the best interests of Holdings and the Company. |
E-2
OPPENHEIMER HOLDINGS INC. |
By: |
Name: | |
Title: | |
Albert G. Lowenthal, individually |
E-3
Does the | ||||||||
NYSE Corporate | Corporation | OPPENHEIMER HOLDINGS INC. | ||||||
Governance | Align? | GOVERNANCE PROCEDURES | ||||||
The Board must affirmatively determine each director’s independence and disclose those determinations. | ü | • The Board has not adopted formal categorical standards to assist in determining independence. • The Board has considered the relationship of each non management/officer director and has made a determination that the four non-management/ officer directors of the Corporation are independent. | ||||||
• Of the four non-management/officer Directors, the Board has determined that the only Director that has a relationship with the Corporation (other than as a Director) is Mr. Crystal. The Board has determined that although Mr. Crystal is a partner in the firm of Brown Raysman Millstein Felder & Steiner LLP, which firm provides legal services to the Corporation, in view of the professional ethical standards which govern his conduct, the fact that less than one percent of the annual revenues of his firm are derived from the Corporation and that Mr. Crystal receives no direct compensation from the Corporation other than his Director’s compensation, his relationship with the Corporation is not material for the purposes of determining that Mr. Crystal is an independent director. | ||||||||
A majority of the directors must be independent. | ü | • A majority of the directors are independent. • Assuming the slate of directors nominated for election at the Corporation’s 2005 shareholders meeting are elected, four of the seven directors will be independent. | ||||||
Non-management directors must meet at regularly scheduled executive sessions without management. | ü | • At each regular Board and Audit Committee meeting, the independent members of the Board and the members of the Audit Committee meet in the absence of management. | ||||||
There must be a nominating/corporate governance committee composed entirely of independent directors. | ü | • The Corporation has a Nominating/ Corporate Governance Committee composed of independent Directors. | ||||||
F-1
Does the | ||||||||
NYSE Corporate | Corporation | OPPENHEIMER HOLDINGS INC. | ||||||
Governance | Align? | GOVERNANCE PROCEDURES | ||||||
The nominating/corporate governance committee must have a written charter that addresses: (i) the committee’s purpose and responsibilities; and (ii) an annual performance evaluation. | ü | • The Corporation has a Nominating/ Governance Charter which addresses (i) the Committee’s purpose and responsibilities and (ii) annual performance evaluation of the Board members and effectiveness of the Board Committees. | ||||||
There must be a compensation committee composed entirely of independent directors. | ü | • The Corporation has a Compensation and Stock Option Committee composed entirely of independent directors. | ||||||
The compensation committee must have a written charter that addresses: (i) the committee’s purpose and responsibilities; and (ii) an annual performance evaluation. | ü | • The Corporation’s Compensation and Stock Option Committee Charter addresses the Committee’s purpose and responsibilities. | ||||||
The audit committee must have a minimum of three members all of whom must be independent. | ü | • The Corporation has an Audit Committee of three members, all of whom are independent. | ||||||
The audit committee must have a written charter that addresses: (i) the committee’s purpose and responsibilities; and (ii) an annual performance evaluation. | ü | • The Corporation has an Audit Committee Charter which addresses the Committee’s purpose and responsibilities and provides for an annual performance evaluation of the Committee. | ||||||
The Corporation must have an internal audit function. | ü | • The Corporation’s principal operating subsidiary has an Internal Audit Department. | ||||||
The Corporation must adopt and disclose corporate governance guidelines. | ü | • The Corporation has Board of Directors Corporate Governance Guidelines which are summarized in the Corporation’s annual Management Information Circular dated March 24, 2005. | ||||||
The Corporation must adopt and disclose a code of business conduct and ethics. The Corporation must disclose any waiver of the Code of Conduct for directors and officers. | ü | • The Corporation has a Code of Conduct and Business Ethics for Directors, Officers and Employees which is posted on the Corporation’s website and available in hard copy from the Corporation’s head office. No waivers have been granted under the Code for Directors and Officers. | ||||||
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Does the | ||||||||
Sarbanes-Oxley Act | Corporation | OPPENHEIMER HOLDINGS INC. | ||||||
and Related United States Requirements | Align? | GOVERNANCE PROCEDURES | ||||||
The CEO and CFO must certify, among other things, that the financial statements contained in the Corporation’s annual and quarterly reports filed with the SEC fairly present the financial condition and results of operations of the Corporation. | ü | • The Corporation prepares and files annually and quarterly for the first three quarters of the year the required CEO and CFO certificates. | ||||||
The CEO and CFO must certify, among other things, that the Corporation’s annual and quarterly reports filed with the SEC: (i) do not contain an untrue statement of material fact; and (ii) that the financial information in its annual filing fairly presents the financial condition of the Corporation. | ü | • The Corporation prepares and files annually and quarterly for the first three quarters of the year the required CEO and CFO certificates which include certification that the Corporation’s annual report (i) does not contain an untrue statement of material fact and (ii) that the financial information filed fairly presents the financial condition of the Corporation. | ||||||
The Corporation must disclose the CEO’s and CFO’s (i) conclusions on the effectiveness of the Corporation’s disclosure controls and procedures; and (ii) any changes to internal controls which might have a material impact on internal controls. | ü | • The CEO and CFO certificates filed with the SEC include certification that the CEO and CFO are satisfied with the Corporation’s disclosure controls and procedures. • In 2004, there were no changes to internal controls that might have a material impact on internal controls. | ||||||
The Corporation must have disclosure controls and procedures to ensure that all material information flows to those persons responsible for the Corporation’s public disclosures. | ü | • The Corporation has internal disclosure controls and procedures that ensure that all material information flows to the CEO and CFO and others responsible for the Corporation’s public disclosures. | ||||||
The Corporation must have a written code of ethics and conduct applicable to senior financial officers and the CEO, and must disclose any waivers of the code. | ü | • The Corporation has a Code of Conduct and Business Ethics for Directors, Officers and Employees. • In 2004 no waiver of the Code was granted for officers. | ||||||
The Corporation must disclose the identity of the financial expert on the Audit Committee. | ü | • All of the members of the audit committee are financially literate. • Mr. Kenneth W. McArthur has been designated an audit committee financial expert. | ||||||
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Does the | ||||||||
Sarbanes-Oxley Act | Corporation | OPPENHEIMER HOLDINGS INC. | ||||||
and Related United States Requirements | Align? | GOVERNANCE PROCEDURES | ||||||
The Audit Committee must establish policies and procedures for pre-approval of audit and permitted non-audit services. | ü | • In accordance with the Corporation’s Audit Committee Charter, the Audit Committee pre- approves the audit, audit related and non-audit services provided by the Corporation’s auditors and fee estimates for such services. | ||||||
The Corporation must have in place procedures for the treatment of complaints regarding, and for the submission by employees of complaints relating to, accounting and auditing matters. | ü | • The Corporation’s Code of Conduct and Business Ethics for Directors, Officers and Employees provides for the reporting of complaints relating to accounting and auditing matters and protection of any employee reporting such behaviour. | ||||||
The Corporation must have a process in place to protect employees who have provided information or assisted in an investigation of securities fraud or related crimes. | ü | • See immediately preceding paragraph. | ||||||
F-4
Does the | ||||||||
TSX Guidelines for | Corporation | OPPENHEIMER HOLDINGS INC. | ||||||
Improved Corporate Governance | Align? | GOVERNANCE PROCEDURES | ||||||
1. The board should explicitly assume responsibility for the stewardship of the Corporation and for: | ü | • The fundamental responsibility of the Board is to supervise the management of the business of the Corporation with a view to maximizing shareholder value and ensuring corporate conduct in a legal and ethical manner through a system of corporate governance and internal controls appropriate to the Corporation’s business. | ||||||
(a) adoption of a strategic planning process; | ü | • The Board monitors and oversees strategic planning which is conducted by management. | ||||||
(b) identification of the principal risks of the Corporation’s business and ensuring the implementation of appropriate systems to manage these risks; | ü | • The Board, with senior management, identifies and evaluates corporate risk and oversees risk controls. | ||||||
(c) succession planning, including appointing, training and monitoring senior management; | ü | • The Board assesses and monitors the performance of senior management and oversees succession planning. | ||||||
(d) a communications policy; | ü | • The Board oversees the Corporation’s communication policy and corporate communications. | ||||||
(e) the integrity of the Corporation’s internal control and management information systems | ü | • The Board through the Audit Committee oversees and monitors the Corporation’s internal controls, audit and information management systems. | ||||||
2. A majority of the directors should be “unrelated” (independent of management and free from any interest, business or relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act with a view to the best interests of the Corporation, other than interests and relationships arising from shareholding). | ü | • The Board has determined that four of the seven current directors of the Corporation are unrelated for the purposes of the TSX guideline. • Assuming the slate of directors nominated for election at the Corporation’s 2005 shareholders meeting is elected, four of the then seven directors will be unrelated. | ||||||
F-5
Does the | ||||||||
TSX Guidelines for | Corporation | OPPENHEIMER HOLDINGS INC. | ||||||
Improved Corporate Governance | Align? | GOVERNANCE PROCEDURES | ||||||
3. The board should be responsible for applying the definition of “unrelated director” to the circumstances of each individual director and for disclosing annually whether the board has a majority of unrelated directors and an analysis of the application of the principles supporting this conclusion. | ü | • As required in the Corporation’s Corporate Governance Guidelines, the Board is responsible for the determination of whether directors are related or unrelated based on all relevant facts and circumstances that apply to each director. • The Board has determined based on its assessments and including the criteria contained in the NYSE Rules that each of the Corporation’s Directors except Ms. E.K. Roberts and Messrs. A.G. Lowenthal and A.W. Oughtred are unrelated and independent. • Of the four non-management/officer Directors, the Board has determined that the only Director that has a relationship with the Corporation (other than as Director) is Mr. Crystal. The Board has determined that although Mr. Crystal is a partner in the law firm of Brown Raysman Millstein Felder & Steiner LLP which firm provides legal services to the Corporation, in view of the professional ethical standards which govern his conduct, the fact that less than one percent of the annual revenue of his firm is derived from the Corporation and that Mr. Crystal receives no direct compensation from the Corporation other than his Director’s compensation, his relationship with the Corporation is not material for the purposes of determining that he is an unrelated director. | ||||||
4. The board should appoint a committee of directors composed exclusively of outside, i.e., non-management directors, a majority of whom are unrelated directors, with the responsibility for proposing to the board new nominees to the board and for assessing directors on an ongoing basis. | ü | • The Board has appointed a Nominating/ Governance Committee comprised exclusively of non- management directors all of whom are unrelated directors which is responsible, among other things, for assessing the effectiveness of the Board as a whole, the Committees of the Board and the contributions of individual Directors. | ||||||
5. The board should implement a process, to be carried out by the nominating committee or other appropriate committee, for assessing the effectiveness of the board as a whole, its committees and the contribution of individual directors. | • The Board does not currently have a formal process for assessing the effectiveness of the Board as a whole, the Committees of the Board or the contributions of individual Directors. The Board contemplates adopting such a formal process during 2005. | |||||||
6. An orientation and education program should be provided for new directors. | ü | • The Corporation’s Corporate Governance Guidelines provide for the orientation and education of new Directors. | ||||||
F-6
Does the | ||||||||
TSX Guidelines for | Corporation | OPPENHEIMER HOLDINGS INC. | ||||||
Improved Corporate Governance | Align? | GOVERNANCE PROCEDURES | ||||||
7. The board should examine its size with a view to determining the impact upon effectiveness and should undertake, where appropriate, a program to reduce the number of directors to a number which facilitates more effective decision-making. | ü | • The Board examines its size periodically. The Board has determined that a board of seven directors (which the Corporation currently has) is appropriate for the effectiveness of the Board. The Board is currently considering whether seven directors is sufficient or whether the Board should be expanded. Should it be decided to expand the size of the Board, the Directors may, after its 2005 annual meeting of shareholders, add up to two additional Directors prior to the Corporation’s 2006 annual meeting of shareholders. | ||||||
8. The board should review the adequacy and form of the compensation of directors and ensure the compensation realistically reflects responsibilities and risk involved in being an effective director. | ü | • Under the Corporation’s Corporate Governance Guidelines, the Compensation and Stock Option Committee is responsible for reviewing and making recommendations with respect to Directors’ compensation. • The Board is currently satisfied with the adequacy and form of the current level of Director compensation. | ||||||
9. Committees of the board should generally be composed of outside directors, a majority of whom are unrelated, although some board Committees, such as the executive committee, may include one or more inside directors. | ü | • All of the Board’s committees are currently composed of unrelated Directors as is required under the Corporation’s Corporate Governance Guidelines. | ||||||
10. The board should expressly assume responsibility for, or assign to a committee of directors the general responsibility for developing the approach to corporate governance issues. | ü | • The Nominating/ Corporate Governance Committee is responsible, in accordance with its Charter, for the Corporation’s approach to corporate governance. That Committee has reviewed and approved the provisions of the Management Information Circular dated March 24, 2005 describing corporate governance and the corporate governance checklists which appear as Schedules thereto. | ||||||
This committee would, among other things, be responsible for the response to the TSX governance guidelines. | ||||||||
F-7
Does the | ||||||||
TSX Guidelines for | Corporation | OPPENHEIMER HOLDINGS INC. | ||||||
Improved Corporate Governance | Align? | GOVERNANCE PROCEDURES | ||||||
11. The board, together with the CEO, should develop position descriptions for the board and for the CEO, including the definition of the limits to management’s authority. The board should approve or develop the corporate objectives, which the CEO is responsible for meeting. | • The Board has not developed formal position descriptions for the Board and the CEO nor has it developed corporate objectives which the CEO is responsible for meeting. The Board has determined that these are not currently necessary for the Corporation in its context. The Board believes that it and the CEO have a clear understanding of their mandates and authority. The CEO involves the Board in all significant matters and discussions involving the Corporation and its business. The Board is also satisfied with its involvement with management in setting corporate objectives and strategies and in monitoring corporate performance. | |||||||
12. The board should have in place appropriate structures and procedures to ensure that it can function independently of management. An appropriate structure would be to (i) appoint a chair of the board who is not a member of management with responsibility to ensure that the board discharges its responsibilities or (ii) adopt alternate means such as assigning this responsibility to a committee of the board or to a director, sometimes referred to as the “lead director.” Appropriate procedures may involve a meeting of the board on a regular basis without management present or may involve expressly assigning responsibility for administering the board’s relationship to management to a committee of the board. | ü | • The Corporation does not have an unrelated or independent chairman. The Board has appointed as lead director, Mr. Kenneth W. McArthur, an unrelated and independent director. • At each regular meeting of the Board and the Audit Committee, then on-management/unrelated directors meet in the absence of management and related directors and the Audit Committee members regularly meet in the absence of management and related directors. | ||||||
F-8
Does the | ||||||||
TSX Guidelines for | Corporation | OPPENHEIMER HOLDINGS INC. | ||||||
Improved Corporate Governance | Align? | GOVERNANCE PROCEDURES | ||||||
13. The audit committee should be composed only of outside directors. | ü | • The Audit Committee is composed of outside directors who are unrelated. | ||||||
The roles and responsibilities of the audit committee should be specifically defined so as to provide appropriate guidance to audit committee members as to their duties. | • The Corporation has an Audit Committee Charter which, among other things, sets out the role and responsibilities of the Audit Committee. | |||||||
The audit committee should have direct communication channels with the internal and external auditors to discuss and review specific issues as appropriate. | • As required by the Audit Committee Charter, the Audit Committee meets with the Corporation’s internal auditors at least four times a year to review and discuss internal controls, compliance, external audit issues and requirements, regulatory and financial reporting and other matters. | |||||||
The audit committee duties should include oversight responsibility for management reporting on internal control. While it is management’s responsibility to design and implement an effective system of internal control, it is the responsibility of the audit committee to ensure that management has done so. | • The Audit Committee oversees the Corporation’s internal control procedures. | |||||||
14. The board should implement a system to enable an individual director to engage an outside advisor, at the Corporation’s expense, in appropriate circumstances. The engagement of the outside advisor should be subject to the approval of an appropriate committee of the board. | ü | • The Board and each of its Committees has, under the Corporation’s Corporate Governance Guidelines, the authority to retain independent legal, financial or other advisors at the expense of the Corporation. | ||||||
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Audit Committee (Messrs. Bitove, McArthur and Winberg (Chair)) |
• | reviews annual, quarterly and all legally required public disclosure documents containing financial information that are submitted to the Board; | |
• | reviews the nature, scope and timing of the annual audit carried out by the external auditors and reports to the Board; | |
• | evaluates the external auditors’ performance for the preceding fiscal year; reviews their fees and makes recommendations to the Board; | |
• | reviews internal financial control policies, procedures and risk management and reports to the Board; | |
• | meets with the external auditors quarterly to review quarterly and annual financial statements and reports and to consider material matters which, in the opinion of the external auditors, should be brought to the attention of the Board and the shareholders; | |
• | reviews internal audit activities, meets regularly with internal audit personnel and reports to the Board; | |
• | reviews accounting principles and practices; | |
• | reviews management reports with respect to litigation, capital expenditures, tax matters and corporate administration charges and reports to the Board; | |
• | reviews related party transactions; | |
• | reviews and approves changes or waivers to the Corporation’s Code of Ethics for Senior Executive, Financial and Accounting Officers; and | |
• | annually reviews the Audit Committee Charter and recommends and make changes thereto as required. |
Compensation and Stock Option Committee (Messrs. Bitove and Winberg (Chair)) |
• | makes recommendations to the Board with respect to compensation policy for the Corporation and its subsidiaries; | |
• | makes recommendations to the Board with respect to salary, bonus and benefits paid and provided to senior management of the Corporation; | |
• | in accordance with the provisions of the Corporation’s 1996 Equity Incentive Plan, authorizes grants of stock options and recommends modifications to the Plan; | |
• | grants certain compensation awards to senior management of the Corporation based on criteria linked to the performance of the individual and/or the Corporation; | |
• | administers the Performance-Based Compensation Agreement between the Corporation and Mr. A.G. Lowenthal; |
F-10
• | certifies compliance with the criteria for performance-based awards or grants; and | |
• | administers and makes awards under the Corporation’s Stock Appreciation Rights Plan. |
Nominating/ Corporate Governance Committee (Messrs. Bitove, McArthur (Chair), Winberg and Crystal) |
• | makes recommendations to the Board with respect to corporate governance; | |
• | when necessary, oversees the recruitment of new Directors for the Corporation; | |
• | recommends nominees for election or appointment to the Board; | |
• | maintains an orientation program for new Directors and oversees the continuing education needs of Directors; | |
• | evaluates Director performance; | |
• | reviews and makes recommendations with respect to the Corporation’s Corporate Governance Guidelines; and | |
• | reviews and approves governance reports for publication in the Corporation’s Management Information Circular and Annual Report on Form 10-K. |
F-11
2. | VOTED FOR o AGAINST o |
3. | VOTED FOR o AGAINST o |
Signature of Shareholder |
A shareholder has the right to appoint a person, who need not be a shareholder, to represent him at the meeting other than the persons designated herein. To exercise this right a shareholder may insert the name of the desired person in the blank space provided herein or may submit another form of proxy. | |
If any amendments or variations to matters identified in the notice of the meeting are proposed at the meeting or if any other matters properly come before the meeting, this proxy confers discretionary authority to vote on such amendments or variations or such other matters according to the best judgment of the person voting the proxy at the meeting. |
NOTES: |
1. | Please date and sign the form of proxy exactly as your name appears on this form of proxy. If a shareholder is a corporation the form of proxy must be executed under its corporate seal or by an officer or attorney thereof duly authorized. | |
2. | Your name and address are recorded on this form of proxy, please report any change. |
________________________________________________________________________________
as nominee, with full power of substitution, to attend, vote and otherwise act for the undersigned at the Annual and Special Meeting of Shareholders to be held on May 9, 2005 and at any adjournment thereof to the same extent and with the same power as if the undersigned were personally present at the said meeting or adjournment or adjournments thereof and hereby revokes any proxy previously given; provided that the undersigned shareholder specifies and directs the persons above named that the Class B voting shares registered in the name of the undersigned shall be:
1. | VOTED o WITHHELD FROM VOTING o |
2. | VOTED o WITHHELD FROM VOTING o |
Signature of Shareholder |
A shareholder has the right to appoint a person, who need not be a shareholder, to represent him at the meeting other than the persons designated herein. To exercise this right a shareholder may insert the name of the desired person in the blank space provided herein or may submit another form of proxy. | |
If any amendments or variations to matters identified in the notice of the meeting are proposed at the meeting or if any other matters properly come before the meeting, this proxy confers discretionary authority to vote on such amendments or variations or such other matters according to the best judgment of the person voting the proxy at the meeting. |
NOTES: |
1. | Please date and sign the form of proxy exactly as your name appears on this form of proxy. If a shareholder is a corporation the form of proxy must be executed under its corporate seal or by an officer or attorney thereof duly authorized. | |
2. | Your name and address are recorded on this form of proxy, please report any change. |