Exhibit 99.2
(POINTS INTERNATIONAL LTD LOGO)
POINTS INTERNATIONAL LTD.
www.points.com
ANNUAL INFORMATION FORM
April 22, 2004
Information presented herein is current as of December 31, 2003, unless
otherwise indicated. All dollar amounts are in Canadian dollars
unless otherwise indicated.
TABLE OF CONTENTS
POINTS INTERNATIONAL LTD................................................... 1
INTRODUCTION............................................................... 1
SUBSIDIARIES............................................................... 1
GENERAL DEVELOPMENT OF THE BUSINESS........................................ 2
THREE-YEAR HISTORY...................................................... 2
SIGNIFICANT ACQUISITIONS AND SIGNIFICANT DISPOSITIONS................... 3
TRENDS.................................................................. 3
DESCRIPTION OF THE BUSINESS................................................ 3
CORE BUSINESS - POINTS SOLUTIONS........................................ 3
COMPETITIVE CONDITIONS.................................................. 4
STATUS OF NEW PRODUCTS.................................................. 5
OTHER MATTERS........................................................... 5
FINANCIAL INFORMATION...................................................... 6
MANAGEMENT DISCUSSION & ANALYSIS........................................ 6
ANNUAL INFORMATION...................................................... 6
DIVIDENDS............................................................... 6
RISKS AND UNCERTAINTIES.................................................... 6
HIGH DEPENDENCE ON KEY CUSTOMERS........................................ 7
GROWTH-RELATED RISKS.................................................... 7
DEPENDENCE UPON KEY PERSONNEL........................................... 7
LIMITED FINANCIAL RESOURCES............................................. 7
IMPEDIMENTS TO MATERIAL TRANSACTIONS.................................... 8
LIABILITIES OF POINTS................................................... 8
CONFLICTS OF INTEREST................................................... 8
LIMITED OPERATING HISTORY............................................... 9
THE GROWTH AND DEVELOPMENT OF THE INTERNET.............................. 9
LIMITED CUSTOMERS....................................................... 9
REVENUES................................................................ 9
FINANCIAL INFORMATION OF MINORITY HOLDINGS.............................. 9
MARKET FOR SECURITIES...................................................... 10
DIRECTORS AND OFFICERS..................................................... 10
NAME, ADDRESS AND OCCUPATION OF DIRECTORS............................... 10
CURRENT OFFICERS OF THE CORPORATION..................................... 11
SECURITY HOLDINGS....................................................... 12
BOARD COMMITTEES........................................................ 12
CORPORATE CEASE TRADE ORDERS OR BANKRUPTCIES............................ 13
ADDITIONAL INFORMATION..................................................... 13
INTRODUCTION
Points International Ltd. (herein referred to as "Points" or the "Corporation")
is a corporation existing under the Business Corporations Act (Ontario). The
address of the principal office of the Corporation is 300 - 134 Peter Street,
Toronto, Ontario M5V 2H2.
The Corporation was initially incorporated under the Business Corporations Act
(Alberta) on January 5, 1999 under the name Sportek Systems Inc. Pursuant to
Certificates of Amendment dated February 2, 1999 and April 16, 1999,
respectively, the Corporation changed its name to Sports Technologies Group Inc.
("STGI") and amended its articles to remove its private company restrictions.
STGI owned no significant assets other than cash and did not conduct operations
or business of any kind except for identifying and evaluating potential major
transactions. This process culminated on February 1, 2000, when Exclamation Inc.
(which became a wholly-owned subsidiary of the Corporation) completed a reverse
take-over of STGI.
By way of Articles of Amendment dated February 10, 2000, STGI's name was changed
to Exclamation International Incorporated. The Corporation was then continued
from the Business Corporations Act (Alberta) to the Business Corporations Act
(Ontario) on February 17, 2000. The Articles of Continuance were amended on
December 20, 2001, June 27, 2002 and April 10, 2003 to, respectively, add a new
series of preferred shares designated the "Series One Preferred Share", to
change the Corporation's name to Points International Ltd, and add two new
series of preferred shares designated the "Series Two Preferred Share" and
"Series Three Preferred Share".
SUBSIDIARIES
At December 31, 2003, the Corporation had the following subsidiaries:
(FLOW CHART)
Note: (1) The Corporation does not own 100% of Points.com Inc. on a
fully-diluted basis due to certain outstanding options and warrants. See
"General Development of the Business - Three Year History" below.
GENERAL DEVELOPMENT OF THE BUSINESS
THREE-YEAR HISTORY
Until November 2001, the Corporation, through its subsidiary Exclamation Inc.,
operated as a holding company of Internet-based businesses. One such business,
Points.com Inc., an indirect subsidiary of the Corporation, was incorporated in
June 1999 for the purpose of developing a portfolio of technology solutions for
the loyalty program industry referred to as the Points Solutions.
On November 5, 2001, the Corporation's board of directors adopted a
restructuring plan (hereafter referred to as the "Restructuring Plan"), pursuant
to which, on February 8, 2002, the Corporation acquired the 5% of the issued
shares of Points.com Inc. not previously indirectly held by the Corporation. As
a result, the Corporation and its affiliates own directly and indirectly 100% of
the outstanding shares of Points.com Inc. However, the Restructuring Plan did
not result in the Corporation acquiring all of the shares of Points.com Inc. on
a fully diluted basis. Points.com Inc. had previously issued to certain loyalty
program partners "partner" warrants, and rights to acquire warrants, which are
exercisable to acquire common shares of Points.com Inc. In addition, Points.com
Inc. had previously issued options to acquire its common shares. Holders of the
options to acquire common shares of Points.com Inc. have been granted the right
to put those shares to the Corporation for common shares ("Common Shares") of
the Corporation.
The Corporation is now focused solely on the business of Points.com Inc. In
connection with the Restructuring Plan, the Corporation wound down or divested
most of its remaining interests in other companies and minority holdings. The
Corporation continues to hold a 12% (fully diluted) interest in ThinApse
Corporation ("ThinApse"), a Vancouver-based technology company. The Corporation
intends to dispose of its interest in ThinApse as soon as commercially
practicable.
On April 11, 2003, InterActiveCorp ("IAC"), through a wholly-owned affiliate,
made a $15.1 million strategic investment in Points (the "IAC Investment").
Under the IAC Investment, Points issued one convertible preferred share (the
"Series Two Preferred Share") and Common Share purchase warrants (the
"Warrants") for aggregate cash consideration of $12.4 million and $2.7 million,
respectively. As at the date hereof, the Series Two Preferred Share is
convertible, for no additional consideration, into up to 21,868,750 Common
Shares of Points, subject to anti-dilution adjustment. The Warrants are
exercisable over three years to acquire up to 55% of the Common Shares of Points
(calculated on an adjusted fully diluted basis) less the number of Common Shares
issued or issuable on conversion of the Series Two Preferred Share.
Under an investor rights agreement entered into on the closing of the IAC
Investment, IAC and its affiliates have various rights, including prospectus
qualification rights, pre-emptive rights in connection with further issuances of
shares, matching rights for change of control transactions, approval rights over
certain material transactions and rights to board and board committee
representation.
Page 2 of 14
SIGNIFICANT ACQUISITIONS AND SIGNIFICANT DISPOSITIONS
The Corporation did not make any significant acquisitions or dispositions in its
most recently completed financial year.
TRENDS
A discussion of the trends, commitments, events and uncertainties that are both
presently known to management and reasonably expected to have a material effect
on the issuer's business, financial condition or results of operations are
discussed in the Management's Discussion and Analysis dated April 22, 2004 which
is incorporated herein by reference.
DESCRIPTION OF THE BUSINESS
The Corporation had only one operating segment, Points.com Inc., in each of 2003
and 2002.
CORE BUSINESS - POINTS SOLUTIONS
Points has developed a proprietary technology platform that allows it to offer a
portfolio of solutions, referred to as the Points Solutions, to the loyalty
program industry. The Points platform was designed to create value for consumers
and loyalty programs alike. The Points Solutions are comprised of the Points
Exchange and a suite of Private Branded Solutions available to loyalty program
operators.
The Points Exchange
In April 2001, Points launched its cornerstone product, the proprietary Points
Exchange. The Points Exchange is an online service allowing consumers who are
members of participating loyalty programs to exchange their loyalty program
points and/ or miles between the participating loyalty programs. The Points
Exchange also serves as a central resource to help individuals track their
account balances with a number of their major loyalty programs. Management
believes that the Points Exchange is currently the only independent loyalty
points exchange of its kind.
As at December 31, 2003, the Points Exchange had attracted 35 loyalty program
participants (39 as at the date hereof), including the loyalty programs of
leading airlines, hotels, online businesses, retail businesses and gift
certificate programs.
Private Branded Solutions
In addition to the Points Exchange, Points offers a portfolio of Private Branded
Solutions to loyalty programs. This suite of technologies includes:
POINTSpurchase and POINTSgift - facilitates the online sale and gift of miles,
points and other loyalty program currencies.
POINTScorporate - facilitates the sale of loyalty program currencies to
corporate customers.
Page 3 of 14
POINTStransfer - facilitates the amalgamation or transfer of loyalty program
currencies among multiple accounts.
POINTSintegrate - functions as a common platform to process transactions between
third-party loyalty programs, to simplify and automate a complex and
resource-intensive process with a single integration.
POINTSelite - facilitates the online sale of tier status to members of loyalty
programs.
POINTScustom - custom applications developed for select large loyalty program
partners.
COMPETITIVE CONDITIONS
Several indirect competitors are currently in the market with limited product
offerings. Other internet sites that offer financial and account aggregation and
management (e.g., MileageManager) are potential competitors. These indirect and
potential competitors currently offer a product similar to the Corporation's
pointsfolio(TM), but do not offer an exchange function. Management believes that
none of the competitors is actively partnering with loyalty programs to
independently provide a solution similar to the Points Exchange service. Rather,
these indirect competitors are only able to retrieve and display member account
information. However it is possible that one or more of the indirect or
potential competitors could, in the future, compete directly with the Points
Exchange.
The Corporation must compete with a wide range of companies that seek to provide
private branded technology services, from small companies to large companies.
Many existing and potential competitors do or could have greater technical or
financial resources than the Corporation. The financial performance of the
Corporation may be adversely affected by such competition. In particular, no
assurances can be given that additional direct competitors to the Corporation
may not be formed or the Corporation may not lose some or all of its
arrangements with its loyalty program partners, including its key loyalty
program partners, decreasing its ability to be competitive and operate as a
viable business.
Companies such as IBM Ltd. and Sabre Inc. ("Sabre") (a leading provider of
technology for the travel industry) are potential competitors for Points'
services. Sabre in particular has greater resources and extensive relationships
with airlines, although a significant investment in time and resources would be
required to develop offerings similar to those offered by Points.
Points has established mutually beneficial relationships with potential
competitors. During April 2002, Points and Sabre entered into a formal agreement
that has resulted in the Points Solutions being marketed to loyalty programs
internationally by Sabre. Sabre focuses on international markets, working in
complement with Points' business development team, which focuses on North
American markets, through Points.com Inc. and Points International (US) Ltd.,
and on international markets through Points International (UK) Limited. With
operations in 45 countries, Sabre's marketing network has global reach and
established relationships with major loyalty programs.
Any competition, as described above, could have a material adverse impact on
Points' business, operations and prospects.
Page 4 of 14
STATUS OF NEW PRODUCTS
During 2003, Points developed the POINTSelite product, to facilitate the online
sale of elite level memberships for loyalty programs. For more detail on the
Points Solutions see "Core Business - Points Solutions - Private Branded
Solutions" above.
OTHER MATTERS
Raw Materials, Component Parts and Finished Products
Predominantly all of Points' business is conducted electronically. Accordingly,
the sources, pricing and availability of raw materials and component parts for
the Corporation are not known to be subject to any material constraints.
Intangible Property
Points holds the rights to the Points.com and Points.net domain names and has
several trademark applications in process. On December 16, 2003, Points was
awarded the registration of the trade-mark POINTS.COM and design in the United
States and has an application pending in Canada for the trade-mark POINTS.COM.
On July 5, 2001, MyPoints.com, Inc., ("MyPoints") (a wholly owned subsidiary of
United New Ventures and part of the UAL Corporation family of companies) filed a
Statement of Opposition in Canada to Points' application for the trade-mark
POINTS.COM. Points filed a Counterstatement To Opposition on October 26, 2001.
On May 23, 2002, MyPoints filed further evidence in the matter. On March 27,
2003, Points filed Rule 42 Evidence in the matter and expects cross-examinations
to be concluded by June 2004. Management expects the POINTS.COM trade-mark will
be found to be registrable in Canada.
The proprietary technology used in the business is owned by Points, and Points
has made two applications to register U.S. patents, one relating to the Points
Exchange and the other in respect of the POINTScorporate solution.
As part of the Points Exchange, Points is regularly granted the right to use its
partners' trade-marks in connection with the joint branding of its website and
provision of the exchange services to members.
As Points operates in a technology-based environment, its intellectual property
and its access to the property of its loyalty program partners are critical to
the Corporation's ongoing business.
Seasonality
Over Points' course of operation, no significant seasonal trends have become
evident to management.
Contracts
The Corporation anticipates the renegotiation of contracts to occur in the
normal course of business. In the event that such contracts are not renegotiated
on terms reasonably satisfactory to the Corporation, the Corporation's business
could be materially adversely affected. However, the
Page 5 of 14
Corporation's management does not anticipate that material contracts will not be
successfully renegotiated.
Environmental
Due to the nature of Points' business, management of the Corporation does not
expect the financial and operational effects of environmental protection
requirements on the capital expenditures, earnings and competitive position of
the Corporation to be material to the Corporation.
Employees
As at December 31, 2003, Points had 64 employees.
Foreign Operations
Due to the nature of Points' business, management of the Corporation does not
believe that there are any particular risks associated with the foreign
operations of the Corporation that differ materially from the risks associated
with the domestic operations of the Corporation, although the Corporation
believes that it is possible that it may face competition within foreign
markets.
FINANCIAL INFORMATION
MANAGEMENT DISCUSSION & ANALYSIS
A copy of Management's Discussion and Analysis dated April 22, 2004 (the
"Management's Discussion and Analysis") has been filed with Canadian securities
regulators, is available on www.sedar.com and is incorporated herein by
reference.
ANNUAL INFORMATION
For information on the Corporation's selected consolidated financial
information, please refer to the Management's Discussion and Analysis which is
incorporated herein by reference.
DIVIDENDS
The Corporation has not declared or paid any dividends to its shareholders and
may not do so without the prior approval of the holder of the Series Two
Preferred Share in the capital of the Corporation. The Corporation will retain
earnings for general corporate purposes to promote future growth. As such, the
board of directors does not anticipate paying any dividends for the foreseeable
future. Points' board of directors will review this policy from time to time,
having regard to the Corporation's financial condition, financing requirements
and other relevant factors.
RISKS AND UNCERTAINTIES
Investing in early-stage Internet-based businesses has a high degree of business
risk. In addition to the other information contained in this AIF, investors
should carefully consider the risk factors set out below, review the discussion
under "Description of the Business" above and review the
Page 6 of 14
Management Discussion and Analysis prior to making an investment decision with
respect to the Corporation.
HIGH DEPENDENCE ON KEY CUSTOMERS
For the year ended December 31, 2003, two key customers represented
approximately 61% (2002 - 77%) of the Corporation's gross revenues and two key
customers represented approximately 58% (2002 - 91%) of the Corporation's
deposits. Management expects the economic dependence on key customers to
continue on a downward trend. However, the inability of the Corporation to
maintain and/or renew these relationships, or a material change in a key
customer's business, could have a material adverse impact on the Corporation's
business, operations and prospects.
GROWTH-RELATED RISKS
The Corporation may be subject to growth-related risks, including capacity
constraints and pressure on its internal systems and controls. The Corporation's
ability to manage its growth effectively will require it to continue to
implement and improve its operational and financial systems and to expand, train
and manage its employee base. Any inability of the Corporation to deal with this
growth could have a material adverse impact on its business, operations and
prospects.
DEPENDENCE UPON KEY PERSONNEL
The success of the Corporation is substantially dependent on the services of key
members of the management team. Despite the fact that the Corporation maintains
"key man" insurance on certain of its officers, the success of the Corporation
is dependent upon such key personnel and loss of such management or personnel
could adversely affect the Corporation's business, operations and prospects.
The Points Solutions are a proprietary technology. As a result, the Corporation
is also dependent on its ability to retain talented and highly skilled
information technology professionals to maintain, build and operate the
technology infrastructure. The loss of key employees could adversely affect the
Corporation's business, operations and prospects.
LIMITED FINANCIAL RESOURCES
The financial resources of Points are limited, although improved in 2003 as a
result of the IAC Investment, pursuant to which IAC invested $15.1 million in
the Corporation.
For 2003, Points reported ($1,426,454) of cash flows used in operating
activities, deposits held of $10,455,646 and working capital of $10,461,182. If
cash flow provided by operations does not increase the Corporation's liquid and
unencumbered cash position, it could impact Points' ability to pay its
liabilities and/or exploit its business opportunities and fund growth.
Consequently, the Corporation could in future be dependent upon its ability to
obtain additional financing either by debt, equity or other means.
Page 7 of 14
The ability of the Corporation to arrange such additional financing in the
future will depend in part upon the prevailing capital market conditions as well
as the business performance of the Corporation. There can be no assurance that
the Corporation will be successful in its efforts to arrange additional
financing on terms satisfactory to the Corporation. The nature of the
relationship with IAC (including the ability of IAC to acquire control of the
Corporation, to exercise pre-emptive rights and the right to match third party
offers for the Corporation) may result in difficulties for the Corporation in
finding new third parties willing to make debt or equity investments in the
Corporation.
If additional financing is raised by the issuance of shares from the treasury of
the Corporation, control of the Corporation may change and/or shareholders may
suffer additional dilution. If additional financing is raised by the issuance of
debt, the Corporation will be more highly leveraged going forward and the
repayment of or interest payments upon such debt could have a negative effect on
the cash flow of the Corporation. If adequate financing is not available, or is
not available on acceptable terms, the Corporation may not be able to take
advantage of opportunities, invest in technological development and
enhancements, or otherwise respond to competitive pressures and remain in
business. In addition, the failure to secure additional financing could result
in the failure of the Corporation to meet its liabilities as they become due,
which would have a material adverse effect on the Corporation.
IMPEDIMENTS TO MATERIAL TRANSACTIONS
Under the investor's rights agreement entered into by the Corporation and IAC in
connection with the IAC Investment, in the event that there is an offer to
effect any transaction that could result in any person (or group of persons)
other than IAC acquiring (i) assets of Points and/or its subsidiaries that are,
individually or in the aggregate, material to Points or any of its subsidiaries,
or (ii) 20% or more of the equity of, or voting rights in respect of, Points or
any of its subsidiaries, IAC is entitled to notice of such transaction and the
right to propose a matching transaction. The existence of this matching right in
favour of IAC will significantly reduce the probability that a third party would
propose a transaction in the nature described above and that could otherwise
have been beneficial to the Corporation and its shareholders.
LIABILITIES OF POINTS
As at December 31, 2003, Points had outstanding consolidated current liabilities
of $11,643,245 and consolidated total liabilities of $32,704,095, including the
11% $6,000,000 senior secured convertible debenture (the "Debenture") issued to
CIBC Capital Partners, a division of Canadian Imperial Bank of Commerce on March
15, 2001 (plus accrued interest thereon), the Series One Preferred Share and the
Series Two Preferred share, all of which are discussed in greater detail in the
Management's Discussion and Analysis. There is no assurance that the Corporation
will be able to repay such amounts when and if they are due, as any such
repayment will be dependent upon generating sufficient cash reserves and may
also be dependent upon securing additional financing.
CONFLICTS OF INTEREST
There are potential conflicts of interest to which the directors and officers
will be subject with respect to the operations of the Corporation. As a result
of the Corporation's efforts to engage
Page 8 of 14
people who have experience in the Corporation's area of business, some of the
directors and officers have been and will continue to be engaged in other
businesses. Situations may arise where the directors and officers will be in
direct competition or have an interest in parties that conflict with the
Corporation. Any such conflicts will be subject to the governance practices of
the board of directors and governed by the law applicable to directors' and
officers' conflict of interest.
LIMITED OPERATING HISTORY
Points has a limited financial history and the Corporation's future success is
reliant almost exclusively on its ability to develop new Private Branded
Solutions contracts, such as its current POINTSpurchase agreements with
partners, and to develop new customers and transactions for the Points Exchange.
There can be no assurance that the Corporation will be successful in developing
into a profitable corporation.
THE GROWTH AND DEVELOPMENT OF THE INTERNET
The development of the internet, the level of usage of the internet and the
introduction of new products and services by Points or its competitors may
materially affect the Corporation's business, operations and prospects.
LIMITED CUSTOMERS
There can be no assurance that Points will be successful in marketing its
products to potential retail customers and loyalty program operating partners.
Competitors of the Corporation may have long-standing relationships with their
customers. As a result, it may be difficult for the Corporation to penetrate
certain markets to gain new customers or loyalty program partners. In addition,
it is possible that the Corporation will not be able to maintain its existing
relationships with retail customers and loyalty program partners.
REVENUES
Operating revenues are derived from contracts for Points Solutions. This
includes revenue from private branded technology services business, in the form
of development fees, maintenance fees and commissions, and revenue from Points
Exchange in the form of fees and commissions. Revenue growth is dependent on
attracting new partners and customers for the Corporation's business, and in
securing continued contracts for its Private Branded Solutions business.
Competition or other business factors may have a material adverse effect on the
Corporation's business.
FINANCIAL INFORMATION OF MINORITY HOLDINGS
Financial information for ThinApse contained herein or incorporated by reference
has been obtained from, and is based on, internal financial information provided
by ThinApse. No separate review or audit process on this information has been
undertaken by the Corporation or the Corporation's auditors. Therefore, the
financial information with respect to such minority positions may, if audited by
the Corporation, vary materially from the information contained herein or
incorporated by reference.
Page 9 of 14
MARKET FOR SECURITIES
Points' Common Shares are listed on the Toronto Stock Exchange ("TSX") under the
symbol "PTS".
DIRECTORS AND OFFICERS
NAME, ADDRESS AND OCCUPATION OF DIRECTORS
The following table sets forth the name, municipalities of residence, term as
director and current and five-year historic occupation of the directors of the
Corporation. Each director is elected to hold office until the Corporation's
next annual shareholders' meeting or until his successor is elected or
appointed. Points' next annual and special meeting is expected to be held on
June 24, 2004.
PRINCIPAL OCCUPATION WITHIN THE PRECEDING FIVE YEARS
NAME OFFICE TERM AS DIRECTOR (CURRENT AND FOR PAST FIVE YEARS UNLESS OTHERWISE NOTED)
- ------------------------ ----------------------- ------------------- ---------------------------------------------------------
Douglas A. Carty(1) Chairman of the Board Feb. 2002 - present Chief Financial Officer, Laidlaw International Ltd.
Glen Ellyn, Illinois (Jan. 2003 - present)
Chief Financial Officer, Atlas Air Worldwide Holdings
Inc. (Jul. 2001 - Dec. 2002)
Chief Financial Officer, Canadian Airlines (Jul. 1996 -
Jul. 2000)
Marc B. Lavine Vice-Chairman of the Feb. 2000 - present Chief Executive Officer, President and Director of
Paris, France Board Chrysalis Capital Corporation (Oct. 1, 2003 - present)
Chief Executive Officer, Exclamation International
Incorporated (Jun. 1999 - Feb. 2002)
President, Exclamation International Incorporated
(Dec. 1997 - Jun. 1999)
T. Robert MacLean(3) Chief Executive Officer Feb. 2002 - present Chief Executive Officer, Points International Ltd.
Toronto, Ontario and Director (Feb. 2002 - present)
Chief Executive Officer, Points.com Inc. (Feb. 2000 -
present) and President, Points.com Inc. (Feb. 2000 -
Feb. 2002)
Vice-President, other positions, Canadian Airlines
(1988 - 2000)
Christopher J.D. Barnard President and Director Feb. 2000 - present President, Points International Ltd. (Feb. 2000 -
Toronto, Ontario present) and Points.com Inc. (Feb. 2002 - present)
Vice-President, Exclamation International Incorporated
(Jul. 1998 - Feb. 2000)
Rowland W. Fleming(1, 2) Director Feb. 2002 - present Director for a number of public and private companies
Mississauga, Ontario (Apr. 1999 - present)
President and Chief Executive Officer, The Toronto
Stock Exchange (Jan. 1995 - Apr. 1999)
John W. Thompson(1, 2) Director Feb. 2002 - present Managing Director, Kensington Capital Partners Limited
Toronto, Ontario (Aug. 2000 - Nov 2003)
Executive Vice-President, Loblaw Companies Limited
(Feb. 1978 - Apr. 1999)
J. Grant McCutcheon(1) Director Feb. 2000 - present Director, Lawrence & Company Incorporated (Dec. 1995 -
Toronto, Ontario present)
Jim W. Kranias Director Feb. 2000 - present Entrepreneur and Consultant (1996 - present)
London, England
Page 10 of 14
PRINCIPAL OCCUPATION WITHIN THE PRECEDING FIVE YEARS
(CURRENT AND FOR PAST FIVE YEARS
NAME OFFICE TERM AS DIRECTOR UNLESS OTHERWISE NOTED)
- ---------------------------- -------- --------------------- ----------------------------------------------------------------
Christopher E.M. Payne(2, 4) Director Feb. 2003 - present Managing Director, Financial Services, CIBC World Markets
Toronto, Ontario (Jun. 2000 - present)
Executive Vice-President, Financial Services, WhatifI.com
(Jun. 1999 - Jun. 2000)
Executive Vice-President, Financial Services, X. Com
(Jan. 1999 - Jun. 1999)
Executive Vice-President, Financial Services, BMO Nesbitt
Burns Equity Partners (Nov. 1996 - Jan. 1999)
Eric A. Korman(2, 5) Director June 2003 - present Vice President, Mergers & Acquisitions, InterActiveCorp,
New York, New York an interactive commerce company (Nov. 2003 to Present);
other positions at InterActiveCorp, (Sept. 2001 - Nov.
2003); Principal, and head of business development for
ePartners Venture Capital, a $650 million venture fund
(Jan. 2000 - Apr. 2001); Senior Analyst, Corporate
Business Development for The Coca-Cola Co., a consumer
products company (Aug. 1997 - Jan. 2000)
Erik C. Blachford(5) Director June 2003 - June 2004 Chief Executive Officer of Expedia Inc. (Apr. 2003 - present)
Seattle, Washington President of Expedia Inc., North America (Mar. 2002 - Apr. 2003)
and other positions (1995 - Mar. 2002))
Notes:
(1) Audit Committee
(2) Human Resources Committee
(3) Mr. MacLean serves as an observer for both the Audit and Human Resources
Committees.
(4) Nominee of CIBC Capital Partners, holder of the Debenture and the Series
One Preferred Share.
(5) Nominee of Points Investments, Inc. , a corporation controlled by
InterActiveCorp, holder of the Series Two Preferred Share.
CURRENT OFFICERS OF THE CORPORATION
The following table sets forth the name, municipalities of residence, office,
term as officer and current and five-year historic occupation of the officers of
the Corporation.
PRINCIPAL OCCUPATION WITHIN THE PRECEDING FIVE YEARS
(CURRENT AND FOR PAST FIVE YEARS
NAME OFFICE TERM AS OFFICER UNLESS OTHERWISE NOTED)
- ------------------------ --------------------------- ------------------- -----------------------------------------------------
T. Robert MacLean Chief Executive Officer and Feb. 2002 - present Chief Executive Officer, Points (Feb. 2002 - present)
Toronto, Ontario Director Chief Executive Officer, Points.com Inc. (Feb. 2000 -
present) and President, Points.com Inc. (Feb. 2000 -
Feb. 2002)
Vice-President, other positions, Canadian Airlines
(1988 - 2000)
Christopher J.D. Barnard President and Director Feb. 2000 - present President, Points International Ltd. (Feb. 2000 -
Toronto, Ontario present) and Points.com Inc. (Feb. 2002 - present)
Vice-President, Exclamation International
Incorporated (Jul. 1998 - Feb. 2000)
Stephen M. Yuzpe Chief Financial Officer and Feb. 2000 - present Catalyst, Exclamation International Incorporated
Toronto, Ontario Corporate Secretary (Feb. 1999 - Feb. 2000)
Vice-President, Cougar Global Investments
(Nov. 1995 - Feb. 1999)
Page 11 of 14
PRINCIPAL OCCUPATION WITHIN THE PRECEDING FIVE YEARS
(CURRENT AND FOR PAST FIVE YEARS
NAME OFFICE TERM AS OFFICER UNLESS OTHERWISE NOTED)
- ------------------------- --------------------------- ------------------- ----------------------------------------------------
William A. Thompson Senior Vice President, Sep. 2002 - present Senior Vice-President, Partners, Points
Flower Mound, Texas Partners International Ltd. (Feb. 2003 - present)
Vice-President, Partner Relationships, other
positions, Points International Ltd. and Points.com
Inc. (Aug. 2000 - Feb. 2003)
Director and General Manager, Canadian Airlines
(Jun. 1996 - Aug. 2000)
Darlene J. Higbee Clarkin Vice President and Chief Feb. 2002 - present Vice-President and Chief Technology Officer, other
Delta, British Columbia Technology Officer positions, Points.com Inc. (Jul. 2000 - present)
IT Manager, Canadian Airlines (1990 - 2000)
Jerry J. Philip Vice President, Business Feb. 2002 - present Vice-President, Business Development, Points.com
Oakville, Ontario Development Inc. (Mar. 2000 - present)
Senior Manager, other positions, Canadian Airlines
(1995 - Mar. 2000)
Stephen P. Ogden Vice President, Product Feb. 2002 - present Vice-President, Product Development, other
Toronto, Ontario Development positions, Points.com Inc. (Mar. 2000 - present)
Marketing Manager, Intrawest Corporation (Dec. 1999
- Mar. 2000)
Marketing and Communication Manager, Canadian
Airlines (1995 - Dec. 1999)
Christine J. Vandaele Vice President, Consumer Feb. 2002 - present Vice-President, Consumer Marketing (Feb. 2003 -
Toronto, Ontario Marketing present)
Vice-President, Finance and Controller, other
positions, Points.com Inc. (Sep. 2000 Feb. 2003)
Controller, Sales, North America and other
positions, Canadian Airlines (1996 - Aug. 2000)
Morley S. Ivers Vice President, Business Apr. 2002 - present Director, Business Strategy, Points.com Inc. (Apr.
Toronto, Ontario Strategy 2001 - Apr. 2002)
President, College Home Safety Inc. (1999 - 2001)
SECURITY HOLDINGS
As of the date of this AIF, as a group, the directors and officers of Points
beneficially owned, directly or indirectly, or exercised control or direction
over, 9,000,693 Common Shares representing approximately14.4% of the issued and
outstanding Common Shares.
BOARD COMMITTEES
Pursuant to the Business Corporations Act (Ontario), the Corporation is required
to have an audit committee comprised of not fewer than three directors, the
majority of whom are not officers or employees of the Corporation or any of its
affiliates. The Audit Committee is comprised of four board members: Messrs.
Carty (Chairman of the Committee), Fleming, McCutcheon and Thompson. No members
of the Audit Committee are officers or employees of the Corporation.
The Human Resources Committee is comprised of four members of the board: Messrs.
Fleming (Chairman of the Committee), Korman, Payne and Thompson. The Human
Resources Committee reviews the performance of the executive officers, the
performance of the Corporation (including its separate divisions and
subsidiaries) and fixes the compensation package for executive officers.
In connection with the IAC Investment, the number of members of each of these
board committees will be limited to four, with one member of each committee
being a director elected by the holder of the Series Two Preferred Share. The
Human Resource Committee was
Page 12 of 14
reconstituted during 2003 to reflect these requirements. IAC, as holder of the
Series Two Preferred Share, has waived its right to elect a member to the Audit
Committee, but can, at any time, revoke this waiver and be entitled to elect a
member to the Audit Committee.
CORPORATE CEASE TRADE ORDERS OR BANKRUPTCIES
In October of 1996, J. Grant McCutcheon joined the board of directors of
Innovadent Technologies Ltd. ("Innovadent") as the nominee of Innovadent's
largest shareholder and secured lender. Innovadent made a proposal to creditors
in May of 1998, which was accepted. In April 1999, the Ontario Securities
Commission issued a cease trade order against Innovadent for failure to file
financial statements and in August 1999, Innovadent filed a notice of intent to
make a proposal to creditors. Mr. McCutcheon resigned from the board of
Innovadent on August 31, 1999.
ADDITIONAL INFORMATION
Upon request to the Corporate Secretary of the Corporation:
Mr. Stephen Yuzpe
300 - 134 Peter Street
Toronto, Ontario M5V 2H2(1)
Tel: 416.596.6370
Fax: 416.595.6444
Points will provide to any person or company when the securities of Points are
in the course of a distribution under a preliminary short form prospectus or a
short form prospectus:
(a) one copy of the AIF of Points, together with one copy of any document,
or the pertinent pages of any document, incorporated by reference in
the AIF;
(b) one copy of the comparative financial statements of Points for its
most recently completed financial year for which financial statements
have been filed together with the accompanying report of the auditor
and one copy of the most recent interim financial statements of Points
that have been filed, if any, for any period after the end of its most
recent completed financial year;
(c) one copy of the information circular of Points in respect of its most
recent annual meeting of shareholders that involved the election of
directors or one copy of any annual filing prepared instead of that
information circular, as appropriate; and
(d) one copy of any other documents that are incorporated by reference
into the preliminary short form prospectus or the short form
prospectus and are not required to be provided under paragraphs (a),
(b) or (c) above; or
- ----------
(1) On May 1, 2004, the Corporation is moving its principle office to 800 - 179
John Street, Toronto, ON M5T 1X4
Page 13 of 14
at any other time, one copy of any documents referred to in paragraphs (a), (b)
and (c) above, provided that Points may require the payment of a reasonable
charge if the request is made by a person or company that is not a security
holder of the Corporation.
Additional information, including directors' and officers' remuneration and
indebtedness, principal holders of Points' securities, options to purchase
securities and interests of insiders in material transactions, if applicable,
are contained in Points' information circular for its most recent annual meeting
of shareholders.
Additional financial information is provided in Points' comparative financial
statements for its most recently completed financial year.
Page 14 of 14