EXHIBIT 99.15
BANRO CORPORATION
Suite 7070, 1 First Canadian Place
100 King Street West
Toronto, Ontario M5X 1E3
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN THAT a special meeting (the "Meeting") of
shareholders of Banro Corporation (the "Corporation") will be held at the
offices of Macleod Dixon LLP, BCE Place, Canada Trust Tower, Suite 3900, 161 Bay
Street, Toronto, Ontario on Monday, the 8th day of March, 2004 at the hour of
nine o'clock in the forenoon (Toronto time), for the following purposes:
(1) To elect Mr. Simon Village as a director of the Corporation;
(2) To consider and, if thought advisable, to approve, confirm and ratify by
means of an ordinary resolution, an amendment to the Corporation's stock
option plan (the "Plan") to increase by 700,000 the maximum number of
common shares of the Corporation that may be issued pursuant to the
exercise of stock options granted under the Plan;
(3) To consider and, if thought advisable, to authorize by means of a special
resolution, the continuance of the Corporation under the Canada Business
Corporations Act (the "Continuance"); and
(4) To transact such other business as properly may be brought before the
Meeting or any adjournment or adjournments thereof.
The specific details of the matters to be put before the Meeting as
identified above are set forth in the management information circular of the
Corporation (the "Circular") accompanying and forming part of this Notice. This
Notice and the accompanying Circular have been sent to each director of the
Corporation, each shareholder of the Corporation entitled to notice of the
Meeting and the auditors of the Corporation. Shareholders who are unable to
attend the Meeting in person are requested to sign and return the enclosed form
of proxy to the Corporation c/o Equity Transfer Services Inc., Richmond Adelaide
Centre, Suite 420, 120 Adelaide Street West, Toronto, Ontario, M5H 4C3.
Pursuant to section 185 of the Ontario Business Corporations Act, a
shareholder is entitled to dissent in respect of the special resolution to
authorize the proposed Continuance and, if the Continuance is effected, to be
paid by the Corporation the fair value of his or her shares of the Corporation,
as described in the accompanying Circular.
DATED at Toronto, Ontario this 9th day of February, 2004.
BY ORDER OF THE BOARD
(signed)
Arnold T. Kondrat
President
NOTE:The directors have fixed the hour of 4:00 p.m. (Toronto time) on the 5th
day of March, 2004 before which time the instrument of proxy to be used at
the Meeting must be deposited with the Corporation c/o Equity Transfer
Services Inc., Richmond Adelaide Centre, Suite 420, 120 Adelaide Street
West, Toronto, Ontario, M5H 4C3, provided that a proxy may be delivered to
the Chairman of the Meeting on the day of the Meeting or any adjournment
thereof prior to the time for voting.
BANRO CORPORATION
MANAGEMENT INFORMATION CIRCULAR
SOLICITATION OF PROXIES
This management information circular (the "Circular") is furnished in
connection with the solicitation of proxies by the management of BANRO
CORPORATION (the "Corporation") for use at the special meeting of shareholders
of the Corporation (the "Meeting") to be held at the time and place and for the
purposes set forth in the attached notice of special meeting of shareholders
(the "Notice"). It is expected that the solicitation will be by mail primarily,
but proxies may also be solicited personally by the management of the
Corporation. The cost of such solicitation will be borne by the Corporation.
APPOINTMENT, REVOCATION AND DEPOSIT OF PROXIES
The persons named in the enclosed form of proxy are officers of the
Corporation.
A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A
SHAREHOLDER) TO ATTEND AND ACT FOR HIM OR HER AND ON HIS OR HER BEHALF AT THE
MEETING OTHER THAN THE PERSONS DESIGNATED IN THE ENCLOSED FORM OF PROXY. SUCH
RIGHT MAY BE EXERCISED BY STRIKING OUT THE NAMES OF THE PERSONS DESIGNATED IN
THE FORM OF PROXY AND BY INSERTING IN THE BLANK SPACE PROVIDED FOR THAT PURPOSE
THE NAME OF THE DESIRED PERSON OR BY COMPLETING ANOTHER PROPER FORM OF PROXY
AND, IN EITHER CASE, DELIVERING THE COMPLETED AND EXECUTED PROXY TO THE
CORPORATION C/O EQUITY TRANSFER SERVICES INC., RICHMOND ADELAIDE CENTRE, SUITE
420, 120 ADELAIDE STREET WEST, TORONTO, ONTARIO, M5H 4C3, AT ANY TIME PRIOR TO
4:00 P.M. (TORONTO TIME) ON THE 5TH DAY OF MARCH, 2004.
A shareholder forwarding the enclosed form of proxy may indicate the manner
in which the appointee is to vote with respect to any specific item by checking
the appropriate space. If the shareholder giving the proxy wishes to confer a
discretionary authority with respect to any item of business, then the space
opposite the item is to be left blank. The shares represented by the proxy
submitted by a shareholder will be voted in accordance with the directions, if
any, given in the proxy.
A shareholder who has given a proxy may revoke it at any time in so far as
it has not been exercised. A proxy may be revoked, as to any matter on which a
vote shall not already have been cast pursuant to the authority conferred by
such proxy, by instrument in writing executed by the shareholder or by his or
her attorney authorized in writing or, if the shareholder is a body corporate,
by an officer or attorney thereof duly authorized, and deposited at the
registered office of the Corporation at any time prior to 4:00 p.m. (Toronto
time) on the last business day preceding the day of the Meeting, or any
adjournment thereof, or with the Chairman of the Meeting on the day of the
Meeting or any adjournment thereof, and upon either of such deposits the proxy
is revoked. A proxy may also be revoked in any other manner permitted by law.
The Corporation's registered office is located at Suite 7070, 1 First Canadian
Place, 100 King Street West, Toronto, Ontario, M5X 1E3.
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MANNER OF VOTING AND EXERCISE OF DISCRETION BY PROXIES
The persons named in the enclosed form of proxy will vote or withhold from
voting the common shares in respect of which they are appointed in accordance
with the direction of the shareholders appointing them. In the absence of such
direction, such common shares will be voted FOR each of the matters identified
in the Notice and described in this Circular.
The enclosed form of proxy confers discretionary authority upon the persons
named therein with respect to amendments or variations to matters identified in
the Notice, and with respect to other matters which may properly come before the
Meeting. At the time of the printing of this Circular, management of the
Corporation knows of no such amendments, variations or other matters to come
before the Meeting other than the matters referred to in the Notice.
VOTING BY NON-REGISTERED SHAREHOLDERS
Only registered shareholders or the persons they appoint as their proxies
are permitted to vote at the Meeting. However, in many cases, common shares
owned by a person (a "non-registered holder") are registered either (a) in the
name of an intermediary (an "Intermediary") that the non-registered holder deals
with in respect of the common shares (Intermediaries include, among others,
banks, trust companies, securities dealers or brokers and trustees or
administrators of self-administered registered savings plans, registered
retirement income funds, registered education savings plans and similar plans),
or (b) in the name of a clearing agency (such as The Canadian Depository for
Securities Limited ("CDS")) of which the Intermediary is a participant. In
accordance with the requirements of National Instrument 54-101 of the Canadian
Securities Administrators, the Corporation has distributed copies of this
Circular and the accompanying Notice together with the form of proxy
(collectively, the "Meeting Materials") to the clearing agencies and
Intermediaries for onward distribution to non-registered holders of common
shares.
Intermediaries are required to forward the Meeting Materials to
non-registered holders. Very often, Intermediaries will use service companies to
forward the Meeting Materials to non-registered holders. Generally,
non-registered holders who have not waived the right to receive Meeting
Materials will either:
a) be given a form of proxy which has already been signed by the Intermediary
(typically by a facsimile stamped signature), which is restricted as to the
number and class of securities beneficially owned by the non-registered
holder but which is not otherwise completed. Because the Intermediary has
already signed the form of proxy, this form of proxy is not required to be
signed by the non-registered holder when submitting the proxy. In this
case, the non-registered holder who wishes to vote by proxy should
otherwise properly complete the form of proxy and deliver it as specified;
or
b) be given a form of proxy which is not signed by the Intermediary and which,
when properly completed and signed by the non-registered holder and
returned to the Intermediary or its service company, will constitute voting
instructions (often called a "Voting Instruction Form") which the
Intermediary must follow. Typically, the non-registered holder will also be
given a page of instructions which contains a removable label containing a
bar code and other information. In order for the form of proxy to validly
constitute a Voting Instruction Form, the non-registered holder must remove
the label from the instructions and affix it to the Voting Instruction
Form, properly complete and sign the Voting Instruction Form and submit it
to the Intermediary or its services company in accordance with the
instructions of the Intermediary or its service company.
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In either case, the purpose of this procedure is to permit non-registered
holders to direct the voting of the common shares they beneficially own. Should
a non-registered holder who receives either form of proxy wish to vote at the
Meeting in person, the non-registered holder should strike out the persons named
in the form of proxy and insert the non-registered holder's name in the blank
space provided. Non-registered holders should carefully follow the instructions
of their Intermediary including those regarding when and where the form of proxy
or Voting Instruction Form is to be delivered.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The authorized share capital of the Corporation consists of an unlimited
number of common shares and an unlimited number of preference shares, issuable
in series. As of the date of this Circular, an aggregate of 11,082,844 common
shares of the Corporation and no preference shares of the Corporation were
issued and outstanding. Each common share entitles the holder thereof to one
vote at all meetings of shareholders of the Corporation, except for meetings at
which only holders of another specified class or series of shares of the
Corporation are entitled to vote separately as a class or series.
All shareholders of record at the close of business on February 6, 2004
will be entitled either to attend and vote at the Meeting in person the shares
held by them or, provided a completed and executed proxy shall have been
delivered to the Corporation as described above, to attend and vote thereat by
proxy the shares held by them. However, if a shareholder has transferred any
shares after February 6, 2004 and the transferee of such shares establishes
ownership thereof and makes a written demand, not later than ten days before the
Meeting, to be included in the list of shareholders entitled to vote at the
Meeting, the transferee will be entitled to vote such shares.
As of the date of this Circular, the only person or company who, to the
knowledge of the directors and senior officers of the Corporation, beneficially
owns, directly or indirectly, or exercises control or direction over more than
ten percent (10%) of the issued and outstanding common shares of the Corporation
is as follows:
Number of Total of
Name Common Shares Common Shares
---- ------------- -------------
Arnold T. Kondrat(1) 1,595,299 14.39%
- ----------
(1) Mr. Kondrat is Chief Executive Officer, President, Executive Vice President
and a director of the Corporation.
CURRENCY
As the Corporation's financial statements are prepared in United States
dollars, all dollar amounts referred to in this Circular are expressed in United
States dollars unless otherwise indicated.
ELECTION OF DIRECTOR
The Corporation is currently governed by the Ontario Business Corporations
Act which provides that the board of directors of the Corporation (the "Board")
may not, between meetings of shareholders of the Corporation, appoint an
additional director if, after such appointment, the total number of directors
would be greater than one and one-third times the number of directors required
to have been elected at the last annual meeting of shareholders of the
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Corporation. Five directors were elected at the last annual meeting of
shareholders of the Corporation, which was held on October 3, 2003. Since that
shareholders' meeting, the Board has appointed a sixth director to the Board.
The Corporation now wishes to add Mr. Simon Village as the seventh member of the
Board. However, as a result of the said restriction on the number of additional
directors that may be appointed by the Board between meetings of shareholders,
Mr. Village must be elected a director by shareholders, rather than appointed by
the Board.
Shareholders will therefore be asked at the Meeting to elect Mr. Village as
a director of the Corporation. Unless otherwise specified, the persons named in
the enclosed form of proxy will vote FOR the election of Mr. Village. If
elected, Mr. Village will hold office until the close of the first annual
meeting of shareholders of the Corporation following the Meeting unless his
office is earlier vacated in accordance with the by-laws of the Corporation.
Mr. Village has advised the Corporation that (a) his municipality of
residence is Kent, United Kingdom, (b) he presently does not beneficially own,
directly or indirectly, or exercise control or direction over, any common shares
of the Corporation (however, a trust the beneficiaries of which are Mr.
Village's children, controls 20,000 common shares of the Corporation), and (c)
his principal occupations during the last five years are as follows: from
September 2002 to the present, Managing Director, Gold Investment Services, of
the World Gold Council (an international marketing organization for the gold
industry formed and funded by the world's leading gold mining companies); from
September 2000 to September 2002, Managing Director in charge of the South
African securities business of HSBC (James Capel) (an investment dealer); and,
prior to September 2000, a gold mining analyst with HSBC (James Capel).
AMENDMENT TO STOCK OPTION PLAN
The Corporation's stock option plan (the "Plan") was approved by
shareholders of the Corporation at the annual and special meeting of
shareholders held on December 12, 2000, and an amendment to the Plan was
approved by shareholders of the Corporation at the annual and special meeting of
shareholders held on October 3, 2003. There are currently outstanding under the
Plan stock options to purchase 1,126,500 common shares of the Corporation
("Shares") and, to date, stock options to purchase 485,000 Shares have been
exercised under the Plan. Prior to the amendment described in the next sentence,
the terms of the Plan provided that the maximum number (the "Maximum Number") of
additional stock options that could still be granted under the Plan was stock
options to purchase 288,500 Shares. The Board, by resolution dated effective
February 9, 2004, approved, subject to and conditional upon receipt of
shareholder approval and the approval of the TSX Venture Exchange, an amendment
to the Plan to increase the Maximum Number by 700,000 to stock options to
purchase 988,500 Shares. Therefore, assuming receipt of the required approvals
for the said amendment to the Plan, the aggregate number of Shares issuable
pursuant to the exercise of stock options currently outstanding (1,126,500) or
which may in the future be granted under the Plan (988,500) is 2,115,000.
Shareholders of the Corporation will be asked at the Meeting to consider
and, if thought advisable, to approve, confirm and ratify by means of an
ordinary resolution, the said amendment to the Plan. The resolution shareholders
will be asked to approve is as follows:
WHEREAS there are currently outstanding under the Corporation's stock
option plan (the "Plan") stock options to purchase 1,126,500 common shares
of the Corporation ("Shares") and, to date, stock options to purchase
485,000 Shares have been exercised under the Plan;
5
AND WHEREAS prior to the amendment to the Plan described in the next
recital, the terms of the Plan provided that the maximum number (the
"Maximum Number") of additional stock options that could still be granted
under the Plan was stock options to purchase 288,500 Shares;
AND WHEREAS the board of directors of the Corporation, by resolution dated
effective February 9, 2004, approved, subject to and conditional upon
receipt of shareholder approval and the approval of the TSX Venture
Exchange, an amendment (the "Amendment") to the Plan to increase the
Maximum Number by 700,000 to stock options to purchase 988,500 Shares;
AND WHEREAS shareholders of the Corporation wish to approve, confirm and
ratify the Amendment pursuant hereto;
NOW THEREFORE BE IT RESOLVED THAT:
1. the Amendment be and is hereby approved, confirmed and ratified; and
2. any one director or officer of the Corporation be and is hereby authorized
and directed to execute and deliver on behalf of the Corporation all such
documents and instruments and to do all such other acts and things as in
his opinion may be necessary or desirable in connection with the foregoing.
To be approved, the above resolution must be passed by a majority of the
votes cast by shareholders at the Meeting in respect of this resolution, other
than votes attaching to Shares beneficially owned by insiders of the Corporation
to whom stock options may be granted under the Plan ("Insiders") and associates
of such Insiders(1). Unless otherwise specified, the persons named in the
enclosed form of proxy will vote FOR the resolution.
- ----------
(1) Based on information furnished to the Corporation by Insiders, the number
of votes attaching to Shares beneficially owned by Insiders and Insiders'
associates is 1,699,631 in the aggregate.
CONTINUANCE OF THE CORPORATION
The Corporation is currently governed by the Ontario Business Corporations
Act (the "OBCA"). Under the OBCA, a majority of the directors of every
corporation (other than a "non-resident corporation" which the Corporation is
not) must be resident Canadians. The Canada Business Corporations Act (the
"CBCA") provides that only 25% of the directors of a corporation must be
resident Canadians (subject to certain exceptions which would not apply to the
Corporation) (the "CBCA Residency Rule"). Both the OBCA and the CBCA permit a
corporation governed by the OBCA to be continued as a corporation under the
CBCA. Management of the Corporation believes that the interests of the
Corporation will be better served if the Corporation is continued under the
CBCA, thereby making the CBCA Residency Rule available to the Corporation which,
in turn, will provide the Corporation with greater flexibility in attracting
experienced directors of any nationality to serve the Corporation.
The OBCA provides that an application to continue a corporation in another
jurisdiction must be authorized by a special resolution of shareholders.
Shareholders of the Corporation will therefore be asked at the Meeting to
consider and, if thought advisable, to authorize by means of a special
resolution (the "Continuance Resolution"), the making of an application by the
Corporation to the Director under the CBCA for a certificate of continuance
continuing the Corporation under the CBCA (the "Continuance"). To be effective,
the Continuance Resolution, the text of which is attached to this Circular as
6
Schedule "A", must be passed by at least two-thirds of the votes cast by
shareholders at the Meeting in respect of the Continuance Resolution. Unless
otherwise specified, the persons named in the enclosed form of proxy will vote
FOR the Continuance Resolution.
The effect of the Continuance would be that the Corporation would become a
corporation to which the CBCA applies, the OBCA would no longer apply to the
Corporation and the Corporation's articles of continuance (see Schedule "A" to
this Circular) would be deemed to be the Corporation's articles of
incorporation. When a body corporate is continued as a corporation under the
CBCA, the property of the body corporate continues to be the property of the
corporation and the corporation continues to be liable for the obligations of
the body corporate. The CBCA also provides that a share of a body corporate
issued before the body corporate was continued under the CBCA is deemed to have
been issued in compliance with the CBCA, and continuance under the CBCA does not
deprive a holder of any right or privilege that the holder claims under an
issued share.
Should the Continuance Resolution be approved, it is expected that
application will be made for a certificate of continuance shortly following the
Meeting. The Continuance Resolution provides, however, that the directors of the
Corporation may determine not to implement the Continuance at any time prior to
the issuance of the certificate of continuance, without further action on the
part of the Corporation's shareholders. Shareholders are entitled to dissent
from the Continuance Resolution. See "Rights of Dissenting Shareholders" below
for a discussion of such rights.
Rights of Dissenting Shareholders
Pursuant to section 185 of the OBCA, a shareholder of the Corporation who
objects to the Continuance Resolution is entitled to dissent and, if the
Continuance becomes effective, be paid by the Corporation the fair value of his
or her shares. A summary of the provisions of section 185 of the OBCA is set out
below and the text of such section is set out in full as Schedule "B" to this
Circular. Notwithstanding the following summary, it is strongly recommended that
a shareholder obtain legal advice if he or she wishes to invoke his or her right
of dissent. Failure to comply strictly with the procedure set out in section 185
of the OBCA may result in the loss of all dissenters' rights.
A shareholder may dissent only with respect to all of the common shares of
the Corporation held by the shareholder on behalf of any one beneficial owner
and registered in the shareholder's name. Accordingly, a shareholder is not
entitled to dissent with respect to any common shares of the Corporation
beneficially owned by one owner if the shareholder votes any of such shares in
favour of the Continuance Resolution.
In order to dissent, a shareholder must send to the Corporation at or
before the Meeting a written objection (an "Objection Notice") to the
Continuance Resolution. A vote against the Continuance Resolution or an
abstention does not constitute such a written objection, but a shareholder need
not vote his shares against the Continuance Resolution in order to object.
Within ten days after the Continuance Resolution is approved, the Corporation
must send to each shareholder who has filed an Objection Notice a notice stating
that the Continuance Resolution has been adopted (the "Corporation Notice"). A
Corporation Notice is not required to be sent to any shareholder who voted for
the Continuance Resolution or who has withdrawn his Objection Notice.
Within 20 days after receipt of the Corporation Notice or, if no
Corporation Notice is received by the dissenting shareholder within 20 days
after the shareholder learns that the Continuance Resolution has been adopted,
the dissenting shareholder is required to send to the Corporation a written
notice containing the shareholder's name and address, the number of shares in
respect of which the shareholder dissents and a demand for payment of the fair
value of such shares (the "Demand for Payment"). Within 30 days thereafter, the
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dissenting shareholder must send the share certificates representing such shares
to the Corporation or to the Corporation's transfer agent. Such share
certificates will be endorsed by the Corporation or its transfer agent with a
notice that the holder is a dissenting shareholder and will be returned to the
dissenting shareholder. A dissenting shareholder who fails to forward his share
certificates within the time required loses any right to make a claim for
payment of the fair value of his shares.
On sending the Demand for Payment to the Corporation, a dissenting
shareholder ceases to have any rights as a shareholder in respect of the shares
in respect of which the shareholder dissents other than the right to be paid the
fair value of his or her shares except where (a) the dissenting shareholder
withdraws the Demand for Payment before the Corporation sends an Offer to
Purchase as described below, (b) the Corporation fails to properly make an Offer
to Purchase as described below and the dissenting shareholder withdraws the
Demand for Payment, or (c) the directors abandon the Continuance, in which case
the dissenting shareholder's rights as a shareholder are reinstated as of the
date he or she sent the Demand for Payment.
Not later than seven days after the later of the date on which the
Continuance is effective or the date the Corporation received the Demand for
Payment, the Corporation will send to each dissenting shareholder a written
offer (the "Offer to Purchase") to pay for his or her shares in an amount
considered by the directors of the Corporation to be the fair value thereof,
accompanied by a statement showing how the fair value was determined. Every
Offer to Purchase shall be on the same terms.
Dissenting shareholders who accept the Offer to Purchase will be paid
within ten days after the Corporation receives notice of such acceptance. The
Offer to Purchase lapses if the Corporation does not receive an acceptance
within 30 days after the date on which the Offer to Purchase was made.
If the Corporation fails to make the Offer to Purchase, or the dissenting
shareholder fails to accept the Offer to Purchase, the Corporation may, within
50 days after the Continuance is effective or within such further period as a
court may allow, apply to a court to fix a fair value for the shares. If the
Corporation fails to make such an application, a dissenting shareholder has the
right to apply for the same purpose within a further period of 20 days or within
such further period as the court may allow. All the dissenting shareholders who
have sent to the Corporation the Demand for Payment and have not accepted the
Offer to Purchase, if such an offer was made, will be joined as parties to the
application and will be bound by the decision of the court. On the application,
the court may determine whether any other person is a dissenting shareholder who
should be joined as a party, and the court will fix a fair value for the shares
of all dissenting shareholders.
A shareholder who complies with each of the steps required to dissent
effectively is entitled to be paid by the Corporation the fair value of the
shares in respect of which the shareholder dissents determined as of the close
of business on the day before the Continuance Resolution is adopted.
All notices to the Corporation pursuant to section 185 of the OBCA should
be addressed to the President of the Corporation at Suite 7070, 1 First Canadian
Place, 100 King Street West, Toronto, Ontario, M5X 1E3.
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STATEMENT OF EXECUTIVE COMPENSATION
Ontario securities law requires that a "Statement of Executive
Compensation" in accordance with Form 40 to the Regulation to the Securities Act
(Ontario) ("Form 40") be included in this Circular. Form 40 prescribes the
disclosure requirements in respect of the compensation of the executive officers
and directors of reporting issuers. The following addresses the applicable items
identified in Form 40.
Summary Compensation Table
- --------------------------
The following table (which is presented in accordance with Form 40) sets
forth certain information with respect to the named individuals for the
financial years ended December 31, 2003, December 31, 2002 and December 31,
2001.
Long Term
Annual Compensation Compensation
------------------- ------------
Other Annual Shares under All other
Name Year Salary Bonus Compensation Options Granted Compensation
- ------------------ ---- ------ ----- ------------ --------------- ------------
William R. Wilson 2003 Nil Nil $14,256(2) 10,000 Nil
2002 Nil Nil $10,286(2) Nil Nil
2001(1) Nil Nil $12,028(2) 50,000 Nil
Arnold T. Kondrat(3) 2003 $154,548 Nil Nil 121,000 Nil
2002 $30,526 $107,016 Nil 123,000 Nil
2001 $30,998 Nil Nil 250,000 Nil
Bernard R. van Rooyen 2001(4) Nil Nil Nil 50,000 Nil
- ----------
(1) Mr. Wilson was Chief Executive Officer and President of the Corporation
from January 16, 2001 to January 13, 2004.
(2) Represents management fees paid by the Corporation to Mr. Wilson.
(3) Mr. Kondrat is Executive Vice President of the Corporation and also became
Chief Executive Officer and President of the Corporation on January 13,
2004.
(4) Mr. van Rooyen was Chairman of the Board, Chief Executive Officer and
President of the Corporation until January 16, 2001.
Long-Term Incentive Plan Awards
- -------------------------------
The Corporation did not have a long-term incentive plan within the meaning
of Form 40 (the definition of "long-term incentive plan" contained in Form 40
expressly excludes a stock option plan) during the financial year ended December
31, 2003.
Stock Options
- -------------
The following table (which is presented in accordance with Form 40) sets
forth certain information with respect to stock options of the Corporation
granted to Mr. Wilson and Mr. Kondrat during the financial year ended December
31, 2003.
9
Market Value
% of Total of Shares
Options Underlying
Shares Under Granted Exercise Price Options on the Expiration
Name Options Granted in 2002 (per share) Date of Grant(1) Date
- ---- --------------- ------- ----------- ---------------- ----
William R. Wilson 10,000 2.33% Cdn$4.00 Cdn$4.00 Oct. 16, 2008
Arnold T. Kondrat 121,000 28.24% Cdn$4.00 Cdn$4.00 Oct. 16, 2008
- ----------
(1) The market value figure identified in this column of the table is the last
closing sale price per share of the common shares of the Corporation prior
to the date the stock options were granted, as reported by the TSX Venture
Exchange.
No stock options of the Corporation were exercised by either Mr. Wilson or
Mr. Kondrat during the financial year ended December 31, 2003. The following
table (which is presented in accordance with Form 40) sets forth the value of
all outstanding stock options of the Corporation held by such individuals as at
December 31, 2003.
Number of Value of Unexercised
Unexercised Options in-the-Money
Name at Dec. 31, 2003 Options at Dec. 31, 2003
- ---- ---------------- ------------------------
William R. Wilson Exercisable - 52,500 Cdn$254,000 (exercisable)
Unexercisable - 7,500
Arnold T. Kondrat Exercisable - 403,250 Cdn$1,888,800 (exercisable)
Unexercisable - 90,750 Cdn$145,200 (unexercisable)
Stock Option Repricings
- -----------------------
The Corporation did not during the financial year ended December 31, 2003
reprice downward any stock options.
Defined Benefit or Actuarial Plan Disclosure
- --------------------------------------------
The Corporation does not have a defined benefit or actuarial plan.
Employment Contracts
- --------------------
Other than as set out in the next paragraph, there is no (a) employment
contract between the Corporation or any of its subsidiaries and either Mr.
Wilson or Mr. Kondrat (such individuals shall be referred to in this section as
the "Named Executive Officers"), or (b) compensatory plan or arrangement with
respect to a Named Executive Officer which results or will result from the
resignation, retirement or any other termination of a Named Executive Officer's
employment with the Corporation and its subsidiaries or from a change of control
of the Corporation or any subsidiary of the Corporation or a change in a Named
Executive Officer's responsibilities following a change of control.
The Corporation and Mr. Kondrat have entered into an employment contract
(the "Agreement") which sets out the terms upon which Mr. Kondrat performs the
services of Executive Vice President of the Corporation. Under the Agreement,
Mr. Kondrat is paid a salary of Cdn$18,000 per month. The Corporation may
terminate the Agreement at any time (a) for "just cause" (as defined in the
Agreement) without notice and without any payment in lieu of notice, or (b)
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without cause or notice provided the Corporation pays Mr. Kondrat an amount
equal to six months salary in lieu of notice.
Composition of the Compensation Committee
- -----------------------------------------
The board of directors of the Corporation (the "Board") does not have a
compensation committee such that the Board itself performs the functions of a
compensation committee. The members of the Board during the financial year ended
December 31, 2003 were Mr. Wilson (who was also Chief Executive Officer and
President of the Corporation until January 13, 2004), Mr. Kondrat (who is also
Executive Vice President of the Corporation and also became Chief Executive
Officer and President of the Corporation on January 13, 2004), Bernard R. van
Rooyen (who was formerly Chairman of the Board, Chief Executive Officer and
President of the Corporation), Richard J. Lachcik and Geoffrey G. Farr (who is
also Secretary of the Corporation). Mr. Wilson resigned as a director of the
Corporation on January 13, 2004 and Peter N. Cowley was appointed a director of
the Corporation on January 13, 2004.
The Corporation's only executive officers during the financial year ended
December 31, 2003 were Mr. Wilson and Mr. Kondrat. Mr. Kondrat is also an
executive officer and a director of each of Nevada Bob's International Inc. and
BRC Development Corporation and Mr. Wilson also serves as a director of each of
these companies.
Report on Executive Compensation
- --------------------------------
Annual Compensation. As set out under "Statement of Executive Compensation
- - Summary Compensation Table", the Corporation during the financial year ended
December 31, 2003 paid to the Corporation's two executive officers, Mr. Wilson
and Mr. Kondrat, compensation of, respectively, $14,256 (paid as management
fees) and $154,548 (paid as a salary).
Stock Options. The Corporation has a stock option plan (the "Plan"). The
principal purposes of the Plan are (a) to retain and attract qualified
directors, officers, employees and service providers which the Corporation and
its subsidiaries require, (b) to promote a proprietary interest in the
Corporation and its subsidiaries, and (c) to provide an incentive element in
compensation. Stock options are awarded from time to time under the Plan by the
Board. In determining the number of stock options to be granted to an executive
officer, the Board takes into account the respective responsibilities and
contributions to the Corporation of the executive, the executive's ability and
experience, the number of common shares of the Corporation available for stock
options, the number of stock options already held by the executive (if any) and
the benefits of providing management with a personal interest in maximizing
shareholder value. During the financial year ended December 31, 2003, 121,000
stock options were granted under the Plan by the Board to Mr. Kondrat and 10,000
stock options were granted to Mr. Wilson (see "Statement of Executive
Compensation - Stock Options").
Report submitted by the Board:
Arnold T. Kondrat
Bernard R. van Rooyen
Richard J. Lachcik
Geoffrey G. Farr
Peter N. Cowley
John A. Clarke
11
Performance Graph
- -----------------
The following graph compares the five year cumulative shareholder return
for Cdn$100 invested in common shares of the Corporation on December 31, 1998
with the cumulative total return of the S&P/TSX Composite Index (formerly the
TSE 300 Composite Index) and the TSX Gold and Precious Minerals Index (both of
which assume dividend reinvestment).
Cumulative Value of Cdn$100 Invested on December 31, 1998
[GRAPHIC OMITTED]
Compensation of Directors
- -------------------------
No directors of the Corporation were compensated by the Corporation during
the financial year ended December 31, 2003 for their services in their capacity
as directors or for services as consultants or experts. During the financial
year ended December 31, 2003, the Corporation incurred legal expenses of $72,913
to Macleod Dixon LLP, which acts as counsel to the Corporation. Richard J.
Lachcik and Geoffrey G. Farr, directors of the Corporation, are partners of
Macleod Dixon LLP.
INDEBTEDNESS OF DIRECTORS AND OFFICERS
Other than as set out in the table below, no director or officer of the
Corporation (or proposed director in the case of Mr. Village) or associate of
any such director or officer is, or at any time since the beginning of the
Corporation's financial year ended December 31, 2003 has been, indebted to the
Corporation or any of its subsidiaries. As of the date of this Circular, the
outstanding aggregate indebtedness to the Corporation and all of its
subsidiaries of all current and former officers, directors and employees of the
Corporation and its subsidiaries was $50,595.
12
Largest Amount
Name and Position Outstanding During Amount
with the Corporation and Involvement of Financial Year Outstanding as at
Municipality of Residence the Corporation(1) Ended Dec. 31, 2003 Feb. 9, 2004
------------------------- ------------------ ------------------- -------------
BRC Development Lender $526,442 $254,628
Corporation(2)
Toronto, Ontario
Nevada Bob's Lender $376,502 Nil
International Inc.(3)
Toronto, Ontario
Donat K. Madilo Lender $26,930 Nil
Treasurer
Mississauga, Ontario
- ----------
(1) The indebtedness set out in the above table is (or was in the case of
indebtedness that has now been repaid) unsecured, non-interest bearing and
repayable upon demand.
(2) BRC Development Corporation ("BRC") is an associate of Mr. Arnold T. (who
is a senior officer Kondrat and a director of the Corporation) given that
Mr. Kondrat beneficially owns more than 10% of the outstanding common
shares of BRC. BRC and the Corporation previously shared office space and
personnel and, as a result, both companies had certain common expenses such
as rent. BRC's current indebtedness as set out in the last column of the
above table represents the aggregate of various payments made over the
years by the Corporation on behalf of BRC to pay BRC's share of such common
expenses. This arrangement with respect to the sharing of office space and
personnel was terminated effective December 31, 2003.
(3) Nevada Bob's International Inc. ("NBOB") is an associate of Mr. Kondrat
given that he beneficially owns more than 10% of the outstanding common
shares of NBOB. NBOB and the Corporation previously shared office space and
personnel and, as a result, both companies had certain common expenses such
as rent. NBOB's indebtedness set out in the above table represented the
aggregate of various payments made over the years by the Corporation on
behalf of NBOB to pay NBOB's share of such common expenses. This
arrangement with respect to the sharing of office space and personnel was
terminated effective December 31, 2003.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
No insider of the Corporation, as defined in the Securities Act
(Ontario),(1) or associate or affiliate of such insider has any material
interest in any transaction completed since the commencement of the
Corporation's financial year ended December 31, 2003 or in any proposed
transaction which has materially affected or will materially affect the
Corporation or any of its subsidiaries.
- ----------
(1) The definition of "insider" contained in the Securities Act (Ontario)
includes every director or senior officer of the Corporation, every
director or senior officer of a company that is itself an insider or
subsidiary of the Corporation and any person or company who beneficially
owns, directly or indirectly, or who exercises control or direction over,
more than 10% of the outstanding common shares of the Corporation.
13
DIRECTORS' APPROVAL
The contents and the sending of this Circular to the shareholders of the
Corporation have been approved by the board of directors of the Corporation.
Unless otherwise indicated, information contained in this Circular is given as
of February 9, 2004.
DATED at Toronto, Ontario this 9th day of February, 2004.
BY ORDER OF THE BOARD
(signed)
Arnold T. Kondrat
President
SCHEDULE "A"
Special Resolution re Continuance
WHEREAS Banro Corporation (the "Corporation") is currently governed by the
Ontario Business Corporations Act (the "OBCA");
AND WHEREAS it is considered to be in the best interests of the Corporation
that it be continued under the Canada Business Corporations Act (the "CBCA")
pursuant to section 181 of the OBCA and section 187 of the CBCA;
NOW THEREFORE BE IT RESOLVED THAT:
1. the continuance of the Corporation under the CBCA is hereby authorized and
approved;
2. the Corporation is hereby authorized to make application to the Director
under the OBCA, pursuant to section 181 of the OBCA, for authorization to
continue under the CBCA;
3. the Corporation is hereby authorized to make application to the Director
under the CBCA, pursuant to section 187 of the CBCA, for a certificate of
continuance continuing the Corporation under the CBCA;
4. the articles of continuance forming part of the said application for
continuance shall be substantially in the form annexed hereto and, upon the
issuance of a certificate of continuance continuing the Corporation under
the CBCA, the articles of the Corporation shall be replaced in their
entirety by the said articles of continuance;
5. the directors of the Corporation are hereby authorized to abandon the
application for continuance of the Corporation under the CBCA at any time
without further approval of the shareholders of the Corporation; and
6. any one director or officer 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 (including, without limitation, the
execution and delivery of such articles of continuance), the execution of
any such document or the doing of any such other act or thing by any one
director or officer of the Corporation being conclusive evidence of such
determination.
[GRAPHIC OMITTED]
Industry Canada
FORM 11
ARTICLES OF CONTINUANCE
(SECTION 187)
- --------------------------------------------------------------------------------
1 - Name of the corporation
BANRO CORPORATION
- --------------------------------------------------------------------------------
2 - The province or territory in Canada where the registered office is to be
situated
Province of Ontario
- --------------------------------------------------------------------------------
3 - The classes and the maximum number of shares that the corporation is
authorized to issue
See attached Schedule "I" which is incorporated into and forms part of this
Form 11.
- --------------------------------------------------------------------------------
4 - Restrictions, if any, on share transfers
None
- --------------------------------------------------------------------------------
5 - Number (or minimum and maximum number) of directors
A minimum of three (3) and a maximum of twenty (20).
- --------------------------------------------------------------------------------
6 - Restrictions, if any, on business the corporation may carry on
There are no restrictions on the business the corporation may carry on or
on the powers the corporation may exercise.
- --------------------------------------------------------------------------------
7 - (1) If change of name effected, previous name
Not applicable.
(2) Details of incorporation
The corporation was incorporated under the Canada Business Corporations Act
on May 3, 1994 by articles of incorporation. The corporation was continued
under the Ontario Business Corporations Act by articles of continuance
effective on October 24, 1996.
- --------------------------------------------------------------------------------
8 - Other provisions, if any
The directors of the corporation may, between annual meetings of
shareholders of the corporation, appoint one or more additional directors,
who shall hold office for a term expiring not later than the close of the
next annual meeting of shareholders of the corporation, provided that the
total number of additional directors so appointed may not exceed one-third
of the number of directors elected at the previous annual meeting of
shareholders of the corporation.
================================================================================
Date Signature Capacity of
March , 2004 Director
================================================================================
FOR DEPARTMENTAL USE ONLY Filed
Corporation No.
================================================================================
A-2
THIS IS SCHEDULE "I" REFERRED TO IN THE FOREGOING
ARTICLES OF CONTINUANCE OF BANRO CORPORATION (the "Corporation")
3. THE CLASSES AND THE MAXIMUM NUMBER OF SHARES THAT THE CORPORATION IS
AUTHORIZED TO ISSUE
The authorized share capital of the Corporation shall consist of an
unlimited number of common shares ("Common Shares") and an unlimited number of
preference shares, issuable in series ("Preference Shares").
(a) The Common Shares of the Corporation shall have attached thereto the
following rights, privileges, restrictions and conditions:
(A) Dividends
(i) Subject to the prior rights of the holders of the Preference Shares
and to any other shares ranking senior to the Common Shares with
respect to priority in the payment of dividends, the holders of the
Common Shares shall be entitled to receive dividends and the
Corporation shall pay dividends thereon, as and when declared by the
board of directors of the Corporation, out of moneys properly
applicable to the payment of dividends, in such amount and in such
form as the board of directors may from time to time determine and all
dividends which the directors may declare on the Common Shares shall
be declared and paid in equal amounts per share on all Common Shares
at the time outstanding.
(B) Dissolution
(i) In the event of the dissolution, liquidation or winding-up of the
Corporation, whether voluntary or involuntary, or any other
distribution of assets of the Corporation among its shareholders for
the purpose of winding-up its affairs, subject to the prior rights of
the holders of the Preference Shares and to any other shares ranking
senior to the Common Shares with respect to priority in the
distribution of assets upon dissolution, liquidation or winding-up,
the holders of the Common Shares shall be entitled to receive the
remaining property and assets of the Corporation.
(C) Voting Rights
(i) The holders of the Common Shares shall be entitled to receive notice
of and to attend all meetings of the shareholders of the Corporation
and shall have one (1) vote for each Common Share held at all meetings
of the shareholders of the Corporation, except for meetings at which
only holders of another specified class or series of shares of the
Corporation are entitled to vote separately as a class or series.
A-3
(b) The Preference Shares of the Corporation shall as a class have attached
thereto the following rights, privileges, restrictions and conditions:
(A) Directors' Authority to Issue One or More Series
(i) The board of directors of the Corporation may issue the Preference
Shares at any time and from time to time in one or more series. Before
the first shares of a particular series are issued, the board of
directors of the Corporation shall fix the number of shares in such
series and shall determine, subject to the limitations out in the
articles, the set designation, rights, privileges, restrictions and
conditions to attach to the shares of such series including, without
limiting the generality of the foregoing, the rate or rates, amount or
method or methods of calculation of preferential dividends, whether
cumulative or non-cumulative or partially cumulative, and whether such
rate(s), amount or method(s) of calculation shall be subject to change
or adjustment in the future, the currency or currencies of payment,
the date or dates and place or places of payment thereof and the date
or dates from which such preferential dividends shall accrue, the
redemption price and terms and conditions of redemption (if any), the
rights of retraction (if any), and the prices and other terms and
conditions of any rights of retraction and whether any additional
rights of retraction may be vested in such holders in the future,
voting rights and conversion or exchange rights (if any) and any
sinking fund, purchase fund or other provisions attaching thereto.
Before the issue of the first shares of a series, the board of
directors of the Corporation shall send to the Director (as defined in
the Canada Business Corporations Act) articles of amendment in the
prescribed form containing a description of such series including the
designation, rights, privileges, restrictions and conditions
determined by the directors.
(B) Ranking of Preference Shares
(i) No rights, privileges, restrictions or conditions attaching to a
series of Preference Shares shall confer upon a series a priority in
respect of dividends or return of capital in the event of the
liquidation, dissolution or winding-up of the Corporation over any
other series of Preference Shares. The Preference Shares of each
series shall rank on a parity with the Preference Shares of every
other series with respect to priority in the payment of dividends and
the return of capital and the distribution of assets of the
Corporation in the event of the liquidation, dissolution or winding-up
of the Corporation, whether voluntary or involuntary, or any other
distribution of the assets of the Corporation among its shareholders
for the purpose of winding-up its affairs.
(ii) The Preference Shares shall be entitled to priority over the Common
Shares of the Corporation and over any other shares of any other class
of the Corporation ranking junior to the Preference Shares with
respect to priority in the payment of dividends and the return of
capital and the distribution of assets in the event of the
liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary, or any other distribution of the assets of
the Corporation among its shareholders for the purpose of winding-up
its affairs.
(iii)If any amount of cumulative dividends, whether or not declared, or
declared non-cumulative dividends or amount payable on a return of
capital in the event of the liquidation, dissolution or winding-up of
the Corporation in respect of series a of Preference Shares is not
paid in full, the Preference Shares of all series shall participate
rateably in respect of all accumulated cumulative dividends, whether
or not declared, and all declared non-cumulative dividends in
A-4
accordance with the sums that would be payable on such shares if all
such dividends were declared and paid in full, and in respect of
amounts payable on return of capital in the event of the liquidation,
dissolution or winding-up of the Corporation in accordance with the
sums that would be payable on such repayment of capital if all sums so
payable were paid in full; provided, however, that in the event of
there being insufficient assets to satisfy in full all such claims as
aforesaid, the claims of the holders of the Preference Shares with
respect to amounts payable on return of capital shall first be paid
and satisfied and any assets remaining thereafter shall be applied
towards the payment and satisfaction of claims in respect of
dividends.
(iv) The Preference Shares of any series may also be given such other
preferences not inconsistent with the provisions hereof over the
Common Shares and over any other shares of the Corporation ranking
junior to the Preference Shares as may be determined in the case of
such series of Preference Shares.
(v) In the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other
distribution of the assets of the Corporation among its shareholders
for the purpose of winding-up its affairs, the holders of each series
of Preference Shares shall, before any amount shall be paid to or any
property or assets of the Corporation distributed among the holders of
the Common Shares or any other shares of the Corporation ranking
junior to the Preference Shares, be entitled to receive (i) an amount
equal to the stated capital attributed to each series of Preference
Shares, respectively, together with, in the case of a series of
Preference Shares entitled to cumulative dividends thereon, all unpaid
accumulated cumulative dividends, whether or not declared (which for
such purpose shall be calculated as if such cumulative dividends were
accruing from day to day for the period from the expiration of the
last period for which such cumulative dividends were paid up to but
excluding the date of distribution) and, in the case of a series of
Preference Shares entitled to non-cumulative dividends, all declared
and unpaid non-cumulative dividends thereon, and (ii) if such
liquidation, dissolution, winding-up or distribution shall be
voluntary, an additional amount, if any, equal to any premium which
would have been payable on the redemption of any series of Preference
Shares had they been called for redemption by the Corporation
effective the date of distribution and, if any series of Preference
Shares could not be redeemed on such date, then an additional amount
equal to the greatest premium, if any, which would have been payable
on the redemption of any other series of Preference Shares.
(C) Restrictions on Dividends and Redemptions, etc.
(i) Except with the approval of all the holders of the Preference Shares,
no dividends shall at any time be declared or paid or set apart for
payment on the Common Shares or any other shares of the Corporation
ranking junior to the Preference Shares unless all dividends up to and
including the dividend payable for the last completed period for which
such dividends shall be payable on each series of Preference Shares
then issued and outstanding shall have been declared and paid or set
apart for payment at the date of such declaration or payment or
setting apart for payment on the Common Shares or such other shares of
the Corporation ranking junior to the Preference Shares; nor shall the
Corporation call for redemption, redeem, purchase for cancellation,
acquire for value or reduce or otherwise pay off any of the Preference
Shares (less than the total amount then outstanding) or any Common
Shares or any other shares of the Corporation ranking junior to the
Preference Shares unless and until all dividends up to and including
the dividends payable for the last completed period for which such
A-5
dividends shall be payable on each series of Preference Shares then
issued and outstanding shall have been declared and paid or set apart
for payment at the date of such call for redemption, purchase,
acquisition, reduction or other payment.
(D) Voting Rights
(i) Except as hereinafter referred to or as otherwise provided by law or
in accordance with any voting rights which may from time to time be
attached to any series of Preference Shares, the holders of the
Preference Shares as a class shall not be entitled as such to receive
notice of, to attend or to vote at any meeting of the shareholders of
the Corporation.
(E) Specific Matters Requiring Approval
(i) The approval of the holders of the Preference Shares, given in the
manner described in section F(i) below, shall be required for the
creation of any new shares ranking prior to or on a parity with the
Preference Shares, and if, but only so long as, any cumulative
dividends are in arrears or any declared non-cumulative dividends are
unpaid on any outstanding series of Preference Shares, for the
issuance of any additional series of Preference Shares or of any
shares ranking prior to or on a parity with the Preference Shares.
(ii) The provisions of clauses A(i) to F(i) inclusive may be deleted,
amended, modified or varied in whole or in part by a certificate of
amendment issued by the Director (as defined in the Canada Business
Corporations Act), but only with the prior approval of the holders of
the Preference Shares given as hereinafter specified in addition to
any other approval required by the Canada Business Corporations Act or
any other statutory provisions of like or similar effect, from time to
time in force.
(F) Approval of the Holders of the Preference Shares
(i) The approval of the holders of the Preference Shares with respect to
any and all matters hereinbefore referred to may be given by at least
two thirds of the votes cast at a meeting of the holders of the
Preference Shares duly called for that purpose and held upon at least
21 days' notice at which the holders of a majority of the outstanding
Preference Shares are present or represented by proxy. If at any such
meeting the holders of a majority of the outstanding Preference Shares
are not present or represented by proxy within one half-hour after the
time appointed for such meeting, then the meeting shall be adjourned
to such date being not less than 30 days later and to such time and
place as may be appointed by the chairman and not less than 21 days'
notice shall be given of such adjourned meeting. At such adjourned
meeting the holders of the Preference Shares present or represented by
proxy may transact the business for which the meeting was originally
called and a resolution passed thereat by not less than two-thirds of
the votes cast at such adjourned meeting shall constitute the approval
of the holders of the Preference Shares referred to above. The
formalities to be observed with respect to the giving of notice of any
such meeting or adjourned meeting and the conduct thereof shall be
those from time to time prescribed by the Canada Business Corporations
Act and the by-laws of the Corporation with respect to meetings of
shareholders. On every poll taken at every such meeting or adjourned
meeting every holder of Preference Shares shall be entitled to one (1)
vote in respect of each Preference Share held.
A-6
SCHEDULE "B"
Section 185 of the Business Corporations Act (Ontario)
------------------------------------------------------
Rights of dissenting shareholders
185. (1) Subject to subsection (3) and to sections 186 and 248, if a corporation
resolves to,
(a) amend its articles under section 168 to add, remove or change restrictions
on the issue, transfer or ownership of shares of a class or series of the shares
of the corporation; (b) amend its articles under section 168 to add, remove or
change any restriction upon the business or businesses that the corporation may
carry on or upon the powers that the corporation may exercise; (c) amalgamate
with another corporation under sections 175 and 176; (d) be continued under the
laws of another jurisdiction under section 181; or (e) sell, lease or exchange
all or substantially all its property under subsection 184 (3), a holder of
shares of any class or series entitled to vote on the resolution may dissent.
Idem
- ----
(2) If a corporation resolves to amend its articles in a manner referred to in
subsection 170 (1), a holder of shares of any class or series entitled to vote
on the amendment under section 168 or 170 may dissent, except in respect of an
amendment referred to in, (a) clause 170 (1) (a), (b) or (e) where the articles
provide that the holders of shares of such class or series are not entitled to
dissent; or (b) subsection 170 (5) or (6).
Exception
- ---------
(3) A shareholder of a corporation incorporated before the 29th day of July,
1983 is not entitled to dissent under this section in respect of an amendment of
the articles of the corporation to the extent that the amendment, (a) amends the
express terms of any provision of the articles of the corporation to conform to
the terms of the provision as deemed to be amended by section 277; or (b)
deletes from the articles of the corporation all of the objects of the
corporation set out in its articles, provided that the deletion is made by the
29th day of July, 1986.
Shareholder's right to be paid fair value
- -----------------------------------------
(4) In addition to any other right the shareholder may have, but subject to
subsection (30), a shareholder who complies with this section is entitled, when
the action approved by the resolution from which the shareholder dissents
becomes effective, to be paid by the corporation the fair value of the shares
held by the shareholder in respect of which the shareholder dissents, determined
as of the close of business on the day before the resolution was adopted.
No partial dissent
- ------------------
(5) A dissenting shareholder may only claim under this section with respect to
all the shares of a class held by the dissenting shareholder on behalf of any
one beneficial owner and registered in the name of the dissenting shareholder.
Objection
- ---------
(6) A dissenting shareholder shall send to the corporation, at or before any
meeting of shareholders at which a resolution referred to in subsection (1) or
(2) is to be voted on, a written objection to the resolution, unless the
corporation did not give notice to the shareholder of the purpose of the meeting
or of the shareholder's right to dissent.
Idem
- ----
(7) The execution or exercise of a proxy does not constitute a written objection
for purposes of subsection (6).
Notice of adoption of resolution
- --------------------------------
(8) The corporation shall, within ten days after the shareholders adopt the
resolution, send to each shareholder who has filed the objection referred to in
subsection (6) notice that the resolution has been adopted, but such notice is
not required to be sent to any shareholder who voted for the resolution or who
has withdrawn the objection.
Idem
- ----
(9) A notice sent under subsection (8) shall set out the rights of the
dissenting shareholder and the procedures to be followed to exercise those
rights.
Demand for payment of fair value
- --------------------------------
(10) A dissenting shareholder entitled to receive notice under subsection (8)
shall, within twenty days after receiving such notice, or, if the shareholder
does not receive such notice, within twenty days after learning that the
resolution has been adopted, send to the corporation a written notice
containing, (a) the shareholder's name and address; (b) the number and class of
shares in respect of which the shareholder dissents; and (c) a demand for
payment of the fair value of such shares.
Certificates to be sent in
- --------------------------
(11) Not later than the thirtieth day after the sending of a notice under
subsection (10), a dissenting shareholder shall send the certificates
representing the shares in respect of which the shareholder dissents to the
corporation or its transfer agent.
Idem
- ----
(12) A dissenting shareholder who fails to comply with subsections (6), (10) and
(11) has no right to make a claim under this section.
Endorsement on certificate
- --------------------------
(13) A corporation or its transfer agent shall endorse on any share certificate
received under subsection (11) a notice that the holder is a dissenting
shareholder under this section and shall return forthwith the share certificates
to the dissenting shareholder.
Rights of dissenting shareholder
- --------------------------------
(14) On sending a notice under subsection (10), a dissenting shareholder ceases
to have any rights as a shareholder other than the right to be paid the fair
value of the shares as determined under this section except where,
(a) the dissenting shareholder withdraws notice before the corporation makes an
offer under subsection (15); (b) the corporation fails to make an offer in
accordance with subsection (15) and the dissenting shareholder withdraws notice;
or (c) the directors revoke a resolution to amend the articles under subsection
B-2
168 (3), terminate an amalgamation agreement under subsection 176 (5) or an
application for continuance under subsection 181 (5), or abandon a sale, lease
or exchange under subsection 184 (8), in which case the dissenting shareholder's
rights are reinstated as of the date the dissenting shareholder sent the notice
referred to in subsection (10), and the dissenting shareholder is entitled, upon
presentation and surrender to the corporation or its transfer agent of any
certificate representing the shares that has been endorsed in accordance with
subsection (13), to be issued a new certificate representing the same number of
shares as the certificate so presented, without payment of any fee.
Offer to pay
- ------------
(15) A corporation shall, not later than seven days after the later of the day
on which the action approved by the resolution is effective or the day the
corporation received the notice referred to in subsection (10), send to each
dissenting shareholder who has sent such notice, (a) a written offer to pay for
the dissenting shareholder's shares in an amount considered by the directors of
the corporation to be the fair value thereof, accompanied by a statement showing
how the fair value was determined; or (b) if subsection (30) applies, a
notification that it is unable lawfully to pay dissenting shareholders for their
shares.
Idem
- ----
(16) Every offer made under subsection (15) for shares of the same class or
series shall be on the same terms.
Idem
- ----
(17) Subject to subsection (30), a corporation shall pay for the shares of a
dissenting shareholder within ten days after an offer made under subsection (15)
has been accepted, but any such offer lapses if the corporation does not receive
an acceptance thereof within thirty days after the offer has been made.
Application to court to fix fair value
- --------------------------------------
(18) Where a corporation fails to make an offer under subsection (15) or if a
dissenting shareholder fails to accept an offer, the corporation may, within
fifty days after the action approved by the resolution is effective or within
such further period as the court may allow, apply to the court to fix a fair
value for the shares of any dissenting shareholder.
Idem
- ----
(19) If a corporation fails to apply to the court under subsection (18), a
dissenting shareholder may apply to the court for the same purpose within a
further period of twenty days or within such further period as the court may
allow.
Idem
- ----
(20) A dissenting shareholder is not required to give security for costs in an
application made under subsection (18) or (19).
Costs
- -----
(21) If a corporation fails to comply with subsection (15), then the costs of a
shareholder application under subsection (19) are to be borne by the corporation
unless the court otherwise orders.
B-3
Notice to shareholders
- ----------------------
(22) Before making application to the court under subsection (18) or not later
than seven days after receiving notice of an application to the court under
subsection (19), as the case may be, a corporation shall give notice to each
dissenting shareholder who, at the date upon which the notice is given, (a) has
sent to the corporation the notice referred to in subsection (10); and (b) has
not accepted an offer made by the corporation under subsection (15), if such an
offer was made, of the date, place and consequences of the application and of
the dissenting shareholder's right to appear and be heard in person or by
counsel, and a similar notice shall be given to each dissenting shareholder who,
after the date of such first mentioned notice and before termination of the
proceedings commenced by the application, satisfies the conditions set out in
clauses (a) and (b) within three days after the dissenting shareholder satisfies
such conditions.
Parties joined
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(23) All dissenting shareholders who satisfy the conditions set out in clauses
(22) (a) and (b) shall be deemed to be joined as parties to an application under
subsection (18) or (19) on the later of the date upon which the application is
brought and the date upon which they satisfy the conditions, and shall be bound
by the decision rendered by the court in the proceedings commenced by the
application.
Idem
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(24) Upon an application to the court under subsection (18) or (19), the court
may determine whether any other person is a dissenting shareholder who should be
joined as a party, and the court shall fix a fair value for the shares of all
dissenting shareholders.
Appraisers
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(25) The court may in its discretion appoint one or more appraisers to assist
the court to fix a fair value for the shares of the dissenting shareholders.
Final order
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(26) The final order of the court in the proceedings commenced by an application
under subsection (18) or (19) shall be rendered against the corporation and in
favour of each dissenting shareholder who, whether before or after the date of
the order, complies with the conditions set out in clauses (22) (a) and (b).
Interest
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(27) The court may in its discretion allow a reasonable rate of interest on the
amount payable to each dissenting shareholder from the date the action approved
by the resolution is effective until the date of payment.
Where corporation unable to pay
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(28) Where subsection (30) applies, the corporation shall, within ten days after
the pronouncement of an order under subsection (26), notify each dissenting
shareholder that it is unable lawfully to pay dissenting shareholders for their
shares.
B-4
Idem
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(29) Where subsection (30) applies, a dissenting shareholder, by written notice
sent to the corporation within thirty days after receiving a notice under
subsection (28), may, (a) withdraw a notice of dissent, in which case the
corporation is deemed to consent to the withdrawal and the shareholder's full
rights are reinstated; or (b) retain a status as a claimant against the
corporation, to be paid as soon as the corporation is lawfully able to do so or,
in a liquidation, to be ranked subordinate to the rights of creditors of the
corporation but in priority to its shareholders.
Idem
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(30) A corporation shall not make a payment to a dissenting shareholder under
this section if there are reasonable grounds for believing that, (a) the
corporation is or, after the payment, would be unable to pay its liabilities as
they become due; or (b) the realizable value of the corporation's assets would
thereby be less than the aggregate of its liabilities.
Court order
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(31) Upon application by a corporation that proposes to take any of the actions
referred to in subsection (1) or (2), the court may, if satisfied that the
proposed action is not in all the circumstances one that should give rise to the
rights arising under subsection (4), by order declare that those rights will not
arise upon the taking of the proposed action, and the order may be subject to
compliance upon such terms and conditions as the court thinks fit and, if the
corporation is an offering corporation, notice of any such application and a
copy of any order made by the court upon such application shall be served upon
the Commission.
Commission may appear
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(32) The Commission may appoint counsel to assist the court upon the hearing of
an application under subsection (31), if the corporation is an offering
corporation.
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