UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): January 1, 2005
NEXEN INC.
(Exact name of registrant as specified in its charter)
CANADA
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
1-6702 98-6000202
- --------------------------------------------------------------------------------
(Commission File Number) (IRS Employer Identification No.)
801 - 7TH AVENUE S.W.
CALGARY, ALBERTA, CANADA T2P 3P7
- --------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (403) 699-4000
- --------------------------------------------------------------------------------
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 5.03. AMENDMENT OF ARTICLES OF INCORPORATION.
On January 5, 2005, Nexen Inc. received a Certificate of Amalgamation
dated January 1, 2005 ("Certificate") and subsequently received Amended Articles
of Amalgamation dated January 13, 2005 ("Articles"). The Certificate and
Articles were filed to affect an amalgamation of Nexen Inc.'s wholly-owned
subsidiary Nexen Canada Ltd. with Nexen Inc. and provide that the existing
Articles of Nexen Inc. would continue as the Articles of the continuing
corporation. The Certificate and Articles are attached hereto as Exhibits 1 and
2, respectively, and are incorporated by reference into this item.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report on Form 8-K to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: February 4, 2005
NEXEN INC.
By: /s/ Sylvia L. Groves
------------------------
Name: Sylvia L. Groves
Title: Assistant Secretary
EXHIBIT 1
---------
[GRAPHIC OMITTED] Industry Canada Industrie Canada
CERTIFICATE OF CERTIFICAT
AMALGAMATION DE FUSION
CANADA BUSINESS LOI CANADIENNE SUR
CORPORATIONS ACT LES SOCIETES PAR ACTIONS
- --------------------------------------------------------------------------------------------------------
NEXEN INC. 427706-6
- --------------------------------------------------- ----------------------------------------------------
Name of corporation-Denomination de la societe Corporation number-Numero de la societe
I hereby certify that the above-named corporation Je certifie que la societe susmentionnee est issue
resulted from an amalgamation, under section 185 of d'une fusion, en vertu de l'article 185 de la LOI
the CANADA BUSINESS CORPORATIONS ACT, of the CANADIENNE SUR LES SOCIETES PAR ACTIONS, des
corporations set out in the attached articles of societes dont les denominations apparaissent dans
amalgamation. les statuts de fusion ci-joints.
/s/ JANUARY 1, 2005 / LE 1 JANVIER 2005
Director - Directeur Date of Amalgamation - Date de fusion
- --------------------------------------------------------------------------------------------------------
[GRAPHIC OMITTED]CANADA
EXHIBIT 2
---------
[GRAPHIC
OMITTED] Industry Canada Industrie Canada FORM 9 - AMENDED FORMULAIRE 9
ARTICLES OF AMALGAMATION STATUTS DE FUSION
Canada Business Loi canadienne (Section 185) (ARTICLE 185)
Corporation Act sur les societes
par actions
- ----------------------------------------------------------------------------------------------------------
1 - Name of Corporation Denomination sociale de la societe issue de la fusion
NEXEN INC.
- ----------------------------------------------------------------------------------------------------------
2 - The province or territory in Canada where La province ou le territoire au Canada
the registered office is to be situated se situere le siege social
Alberta
- ----------------------------------------------------------------------------------------------------------
3 - The classes and the maximum number of Categories et le nombre maxim al d'actions
shares that the corporation is authorized que la societe est autorisee acmettre
to issue
The attached Schedule "A" is incorporated into these Articles. The authorized
share capital of the Corporation consists of an unlimited number of common
shares and an unlimited number of class A preferred shares, issuable in series.
- ----------------------------------------------------------------------------------------------------------
4 - Restrictions, if any, on share transfers Restrictions sur le transfert des actions, s'il y a lieu
None.
- ----------------------------------------------------------------------------------------------------------
5 - Number (or minimum and maximum number) Nombre (ou nombre minimal et maximal) d'administrateurs
of directors
A minimum of 3 and a maximum of 15 directors, and the number within such range
shall be determined from time to time by the board of directors.
- ----------------------------------------------------------------------------------------------------------
6 - Restrictions, if any, on business the Limites imposees a l'activite commerciale
corporation may carry on de la societe, s'il y a lieu
None.
- ----------------------------------------------------------------------------------------------------------
7 - Other provisions, if any Autres dispositions, s'il y a lieu
The directors of the Corporation may appoint 1 or more additional directors who
shall hold office for a term expiring not later than the close of the next
annual meeting of the shareholders of the Corporation. The total number of
directors so appointed shall not exceed 1/3 of the number of directors elected
at the previous annual meeting of shareholders, provided that the total number
of directors of the Corporation shall not exceed the maximum number stated in
the articles of the Corporation.
- ----------------------------------------------------------------------------------------------------------
8 - The amalgamation has been approved pursuant La fusion a ete approuvee en accord avec
to that section or subsection of the Act l'article ou le paragraphe de la Loi
which is indicated as follows. indique ci-apres
[_] 183
[X] 184(1)
[_] 184(2)
- ----------------------------------------------------------------------------------------------------------
9 - Name of the Corporation No. Signature Date Title Tel No.
amalgamating N(Degree). Titre N(Degree)
corporations de la societe de tel
Denomination
social des
societes
fusionnates
- ----------------------------------------------------------------------------------------------------------
Nexen Inc. 161345-6 /s/ 13-01-05 Assistant (403)
Secretary 699-5291
- ----------------------------------------------------------------------------------------------------------
Nexen Canada Ltd. 632130-5 /s/ 13-01-05 Assistant (403)
Secretary 699-5282
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
FOR DEPARTMENT USE ONLY. A L'USAGE DU MINISTERE SEULEMENT
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
CANADA
SCHEDULE "A"
TO ARTICLES OF AMALGAMATION
The Corporation is authorized to issue two classes of shares, as
hereinafter set forth.
1. Common Shares having attached thereto the rights, privileges, restrictions
and conditions hereinafter set forth:
(a) to vote at all meetings of shareholders, except meetings at which
only holders of a specified class or series of shares are entitled
to vote; and
(b) subject to the rights, privileges, restrictions and conditions
attaching, to other classes of shares of the Corporation, to receive
any dividend declared by the Corporation on the Common Shares and to
receive the remaining property of the Corporation upon dissolution.
2. (a) Class A Preferred Shares, issuable in series, having attached
thereto, as a class, the rights, restrictions, conditions and
limitations hereinafter set forth:
(i) ISSUABLE IN SERIES
The Class A Preferred Shares may at any time and from time to
time be issued in one or more series, each series to consist
of such number of shares as may, before the issue thereof, be
determined by resolution of the board of directors of the
Corporation.
(ii) RESOLUTION OF DIRECTORS
The board of directors of the Corporation shall (subject as
hereinafter provided), by resolution duly passed before the
issue of the Class A Preferred Shares of each series, fix the
designation, rights, restrictions, conditions and limitations
to be attached to the Class A Preferred Shares of such series,
including, but without in any way limiting or restricting the
generality of the foregoing, the rate or amount of cumulative
preferential dividends, the date or dates and places of
payment thereof, the date or dates from which such
preferential dividends shall accrue, the rights and
obligations, if any, of the Corporation to purchase the Class
A Preferred Shares of such series and to redeem the same, the
price and the terms and conditions of any such purchase or
redemption, conversion rights, if any, the terms and
conditions of any share purchase plan or sinking fund and the
restrictions, if any, respecting the payment of dividends on
any shares ranking junior to the Class A Preferred Shares, the
whole subject to the
-2-
filing of Articles of Amendment setting forth the designation,
rights, restrictions, conditions and limitations to be
attached to the Class A Preferred Shares of such series.
(iii) DIVIDEND AND LIQUIDATION PREFERENCE
The Class A Preferred Shares of each series shall, with
respect to priority in payment of dividends and in the
distribution of assets in the event of 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, be entitled to preference
over the common shares of the Corporation and over any other
shares ranking junior to the Class A Preferred Shares; and the
Class A Preferred Shares of each series may also be given such
other preferences over the said common shares and any other
shares ranking junior to the Class A Preferred Shares as may
be determined as to the respective series authorized to be
issued.
(iv) PRIOR SHARES
The Corporation may, at any time or times and from time to
time, create one or more classes of shares which, with respect
to priority in payment of dividends or in the distribution of
assets in the event of 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 rank on
a parity with, or are entitled to a preference over, the Class
A Preferred Shares, upon compliance with such restrictions, if
any, as may be set forth in the rights, restrictions,
conditions and limitations to be attached to the Class A
Preferred Shares of each series at such time outstanding.
(v) RANK PARI PASSU
The Class A Preferred Shares of each series shall rank on a
parity with the Class A Preferred Shares of every other series
with respect to priority in payment of dividends and in 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.
-3-
(vi) PARTICIPATE RATABLY
When any fixed cumulative dividends or amounts payable on a
return of capital are not paid in full, the Class A Preferred
Shares of all series shall participate ratably in respect of
such dividends including accumulations, if any, in accordance
with the sums which would be payable on the said Class A
Preferred Shares if all such dividends were declared and paid
in full, and on any return of capital in accordance with the
sums which would be payable on such return of capital if all
sums so payable were paid in full.
(vii) VOTING RIGHTS
The holders of the Class A Preferred Shares shall not be
entitled (except as hereinafter specifically provided) to
receive notice of or attend any meeting of the shareholders of
the Corporation and shall not be entitled to any vote at any
such meeting unless and until four (4) quarterly dividends on
the Class A Preferred Shares of any one (1) series shall
remain outstanding and be unpaid, whether or not such
dividends have been declared and whether or not there are any
monies of the Corporation properly applicable to the payment
of dividends. Thereafter, but only so long as any dividend on
the Class A Preferred Shares of any series remains in arrears,
the holders of Class A Preferred Shares shall be entitled to
receive notice of and to attend all meetings of shareholders
of the Corporation and shall be entitled to one (1) vote in
respect of each Class A Preferred Share held and in addition
shall be entitled, voting separately and exclusively as a
class, to elect two (2) members of the board of directors of
the Corporation. Nothing herein contained shall be deemed to
limit the right of the Corporation from time to time to
increase or decrease the number of its directors.
Notwithstanding anything contained in the by-laws of the
Corporation, the term of office of all persons who may be
directors of the Corporation at any time when the right to
elect directors shall accrue to the holders of the Class A
Preferred Shares, as herein provided, or who may be appointed
as directors thereafter and before a meeting of shareholders
shall have been held, shall terminate upon the election of
directors at the next annual meeting of shareholders or at a
general meeting of shareholders which may be held for the
purpose of electing directors at any time after the accrual of
such right to elect directors upon not less than fifteen (15)
days' written notice and which shall be called by the
Secretary of the Corporation upon the written request of the
holders of record of at least one-tenth (1/10) of the
outstanding Class A Preferred Shares; in default
-4-
of the calling of such general meeting by the Secretary within
fifteen (15) days after the mating of such request, such
meeting may be called by any holder of record of Class A
Preferred Shares.
Any vacancy or vacancies occurring among members of the board
elected by the holders of Class A Preferred Shares voting
separately and exclusively as a class, in accordance with the
foregoing provisions, may be filled by the board of directors
with the consent and approval of the remaining director
elected by the holders of Class A Preferred Shares voting
separately and exclusively as a class, but if there be no such
vacancies; whether or not such vacancy or vacancies is or are
so filled by the board, the holders of record of at least
one-tenth (1/10) of the outstanding Class A Preferred Shares
shall have the right to require the Secretary of the
Corporation to call a meeting of the holders of Class A
Preferred Shares for the purpose of filling the vacancy or
vacancies or replacing either or both of the persons elected
or appointed to fill such vacancy or vacancies and the
provisions of the last preceding subparagraph with respect to
the calling of any such meeting shall apply.
Notwithstanding the foregoing or anything contained in the
by-laws of the Corporation, upon any termination of the said
right to elect directors the term of office of the directors
elected or appointed to represent the holders of the Class A
Preferred Shares exclusively shall forthwith terminate.
(viii) AMENDMENTS
The provisions of the preceding paragraphs (i) to (vii)
inclusive, of this paragraph (viii) and of the following
paragraph (ix) or any of them may be deleted, varied,
modified, amended or amplified by Special Resolution but only
with the prior approval of the holders of the Class A
Preferred Shares given as hereinafter specified in addition to
any other approval required by the CANADA BUSINESS
CORPORATIONS ACT or such other statute, if any, as the
Corporation may at any time be continued under.
(ix) APPROVAL OF SHAREHOLDERS
The approval of the holders of the Class A Preferred Shares
with respect to any and all matters referred to herein may be
given by compromise or arrangement under the CANADA BUSINESS
CORPORATIONS ACT or, if permitted, by compromise or
arrangement or analogous proceedings under such other statute,
if any, under which the Corporation may from time to time be
continued or may, subject to the provisions of the CANADA
BUSINESS CORPORATIONS ACT or of such other statute, if any, as
the Corporation may
-5-
at any time be continued under, be given in writing by the
holders of not less than two-thirds (2/3) of the Class A
Preferred Shares for the time being outstanding or by
resolution duly passed and carried by not less than two-thirds
(2/3) of the votes cast on a poll at a meeting of the holders
of the Class A Preferred Shares duly called and held for the
purpose of considering the subject matter of such resolution
and at which holders of not less than a majority of all Class
A Preferred Shares then outstanding are present in person or
represented by proxy in accordance with the by-laws of the
Corporation; provided, however, that if at any such meeting,
when originally held, the holders of at least a majority of
all Class A Preferred Shares then outstanding are not present
in person or so represented by proxy within thirty (30)
minutes after the time fixed for the meeting, then the meeting
shall be adjourned to such date, being not less than fifteen
(15) days later, and to such time and place, as may be fixed
by the chairman of such meeting and at such adjourned meeting
the holders of Class A Preferred Shares present in person or
so represented by proxy, whether or not they hold more or less
than a majority of all Class A Preferred Shares then
outstanding, may transact the business for which the meeting
was originally called, and a resolution duly passed and
carried by not less than two-thirds (2/3) of the votes cast on
a poll at such adjourned meeting shall constitute the approval
of the holders of the Class A Preferred Shares hereinbefore
mentioned. Notice of any such original meeting of the holders
of the Class A Preferred Shares shall be given not less than
fourteen (14) days prior to the date fixed for such meeting
and shall specify in general terms the purpose for which the
meeting is called, and notice of any such adjourned meeting
shall be given at least ten (10) days prior to the date fixed
for such adjourned meeting, but it shall not be necessary to
specify in such notice the purpose for which the adjourned
meeting is called. The formalities to be observed with respect
to the giving of notice of any such original meeting or
adjourned meeting and the conduct thereof shall be those from
time to time prescribed in the by-laws of the Corporation with
respect to meetings of shareholders. On every poll taken at
any such original meeting or adjourned meeting the holders of
Class A Preferred Shares present in person or so represented
by proxy shall be entitled to one (1) vote in respect of each
Class A Preferred Share held by each of such holders
respectively.
(b) 1,000,000 Class A Preferred Shares, issued as the first series of
Class A Preferred Shares, are designated as 10% Cumulative
Redeemable Class A Preferred Shares, First Series (hereinafter
referred to as "Preferred Shares, First Series"). The rights,
restrictions, conditions and limitations attached to the Preferred
Shares, First Series, in addition to the rights, restrictions,
conditions and limitations attached to the Class A Preferred Shares
as a class, are as follows:
-6-
(i) FIXED DIVIDENDS
The holders of Preferred Shares, First Series shall be
entitled to receive and the Corporation shall pay thereon as
and when declared by the board of directors of the Corporation
out of the moneys of the Corporation properly applicable to
the payment of dividends fixed cumulative preferential cash
dividends at the rate of ten percent (10%) per annum of the
amount paid up thereon, such dividends to accrue from the date
of issue and to be payable quarterly on the first (1st) days
of January, April, July and October in each year, adjusted to
avoid payment of any fraction of a cent. Any dividends
declared on Preferred Shares, First Series will be paid
(except in the case of a purchase for cancellation or
redemption in which case payment of dividends will be made
upon surrender of the certificates representing the Preferred
Shares, First Series to be purchased for cancellation or
redeemed) by forwarding by prepaid post, addressed to each
holder of Preferred Shares, First Series at his address as it
appears on the books of the Corporation, or in the case of
joint holders to the address of that one whose name stands
first in the books of the Corporation as one of such joint
holders, a cheque for such dividends (less any tax required to
be deducted) payable to the order of such holder or, in the
case of joint holders, to the order of all such holders
failing written instructions from them to the contrary. The
forwarding of any such cheque shall satisfy such dividends to
the extent of the sum represented thereby (plus the amount of
tax required to be deducted as aforesaid) unless such cheque
is not paid on presentation. Each dividend on the Preferred
Shares, First Series shall be paid to the registered holders
appearing on the register at the close of business on such day
(which shall not be more than thirty (30) days preceding the
date fixed for payment of such dividend) as may be determined
from time to time by the board of directors of the
Corporation. If on any dividend payment date the dividends
payable on such date are not paid in full on all of the
Preferred Shares, First Series then issued and outstanding,
such dividends or the unpaid part thereof shall be paid on a
subsequent date or dates determined by the board of directors
of the Corporation on which the Corporation shall have
sufficient moneys properly applicable to the payment of same.
(ii) RIGHTS ON LIQUIDATION
In the event of the liquidation, dissolution or winding-up of
the Corporation or other distribution of assets of the
Corporation among its shareholders for the purpose of winding
up its affairs the holders of Preferred Shares, First Series
shall be entitled to receive the amount paid up on such shares
together with all accrued and unpaid preferential
-7-
dividends thereon (which for such purpose shall be calculated
as if such dividends were accruing for the period from the
expiration of the last quarterly period for which dividends
have been paid up to the date of such distribution) before any
amount shall be paid or any property or assets of the
Corporation distributed to the holders of Common Shares or
shares of any other class ranking junior to the Preferred
Shares, First Series. After payment to the holders of
Preferred Shares, First Series of the amounts so payable to
them they shall not be entitled to share in any further
distribution of the property or assets of the Corporation.
(iii) PURCHASE FOR CANCELLATION
Subject to the provisions of the CANADA BUSINESS CORPORATIONS
ACT and to the rights, restrictions, conditions and
limitations attaching to the Preferred Shares, First Series
the Corporation may at any time or times purchase (if
obtainable) for cancellation, in accordance with the CANADA
BUSINESS CORPORATIONS ACT, all or any of the Preferred Shares,
First Series outstanding from time to time in the market
(including purchase through or from an investment dealer or
firm holding membership on a recognized stock exchange) or by
invitation for tenders addressed to all the holders of record
of the Preferred Shares, First Series outstanding at the
lowest price or prices at which in the opinion of the board of
directors of the Corporation such shares are obtainable but
not exceeding twenty-seven dollars and fifty cents ($27.50) if
such purchase is made before January 1, 1982 and, if made on
or after such date, then not exceeding the price at which, at
the date of purchase, such shares would be redeemable,
together in all cases with all accrued and unpaid cumulative
preferential dividends thereon, calculated as if such
dividends were accruing on a day-to-day basis from the
expiration of the last quarterly period for which dividends
thereon have been paid up to the date of purchase, together in
all cases with costs of purchase. If upon any invitation for
tenders under the provisions of this clause the Corporation
shall receive tenders of Preferred Shares, First Series at the
same lowest price which the Corporation may be willing to pay
in an aggregate number greater than the number for which the
Corporation is prepared to accept tenders, the Preferred
Shares, First Series so tendered shall be purchased as nearly
as may be pro rata (disregarding fractions) according to the
number of Preferred Shares, First Series so tendered by each
of the holders of Preferred Shares, First Series who submitted
tenders at the same said lowest price. From and after the date
of purchase of any Preferred Shares, First Series under the
provisions of this clause (iii) the Preferred Shares, First
Series so purchased shall be cancelled and, if purchased out
-8-
of capital, the authorized and the issued capital of the
Corporation shall be thereby decreased.
(iv) QUARTERLY PURCHASE OBLIGATION
The Corporation shall, in each calendar quarter (herein
sometimes called an "Initial Calendar Quarter") beginning with
the quarter commencing October 1, 1977 purchase for
cancellation twelve thousand five hundred (12,500) Preferred
Shares, First Series (the "Basic Quarterly Requirement") in
the manner provided for in clause (iii) hereof, if and to the
extent that such Shares are available for purchase at a price
or prices (excluding all accrued and unpaid cumulative
preferential dividends thereon calculated as provided in the
said clause (iii) hereof and all costs of purchase) not
exceeding twenty-five dollars ($25) per share. The obligation
of the Corporation to purchase in each calendar quarter the
Basic Quarterly Requirement of Preferred. Shares, First Series
shall be cumulative during each of the next succeeding seven
calendar quarters so that the number of Preferred Shares,
First Series to be purchased in any calendar quarter shall be
increased by the number of Preferred Shares, First Series
which the Corporation was unable to purchase during the seven
preceding calendar quarters. If, after using all reasonable
efforts, the Corporation is unable in any calendar quarter,
after having met all obligations hereunder carried forward
into such calendar quarter, to purchase the Basic Quarterly
Requirement of Preferred Shares, First Series and, during the
next succeeding seven calendar quarters is unable to purchase
that number of Preferred Shares, First Series, which is equal
to the number by which it has fallen short of its said
obligation hereunder, then at the end of the seventh calendar
quarter following the Initial Calendar Quarter in question the
Corporation's obligation to purchase Preferred Shares, First
Series with respect to the initial Calendar Quarter in
question shall be extinguished and the Corporation shall be
under no further obligation to purchase Preferred Shares,
First Series in respect of such Initial Calendar Quarter.
Purchases of Preferred Shares, First Series made pursuant to
this obligation during any calendar quarter shall be credited
first against the oldest such obligation then outstanding, in
succession, and last in satisfaction of the Basic Quarterly
Requirement hereunder in respect of the calendar quarter in
which such purchase occurred.
The Corporation's obligation to purchase Preferred Shares,
First Series pursuant to this clause (iv) shall be suspended
during any period in which such purchase would be contrary to
the rights, restrictions, conditions and limitations attaching
to the Preferred Shares, First Series or to any
-9-
applicable law or during any period in which such purchase
would constitute a breach by the Corporation of the provisions
of any indenture or other instrument securing any indebtedness
of the Corporation (other than indebtedness to an affiliate of
the Corporation), but such obligation shall cease to be
suspended as soon as such purchase would no longer contravene
such rights, restrictions, conditions and limitations, or
contravene such law, or constitute a breach of any such
indenture or other instrument. In the event of the winding-up
or dissolution of the Corporation the provisions of this
clause (iv) shall be null and void and of no effect.
(v) REDEMPTION
Subject to the provisions of the CANADA BUSINESS CORPORATIONS
ACT and to the rights, restrictions, conditions and
limitations attached to the Preferred Shares, First Series,
the Corporation may on or after January 1, 1982 at its option
at any time redeem the whole or from time to time any part of
the Preferred Shares, First Series outstanding in the manner
provided for in the CANADA BUSINESS CORPORATIONS ACT on
payment for each share to be redeemed of
$26.25 if redeemed on or before December 31, 1982,
$26.00 if redeemed thereafter and on or before December 31,
1983,
$25.75 if redeemed thereafter and on or before December 31,
1984,
$25.50 if redeemed thereafter and on or before December 31,
1985,
$25.25 if redeemed thereafter and on or before December 31,
1986, and
$25.00 if redeemed thereafter,
together with all accrued and unpaid cumulative preferential
dividends thereon (which for such purpose shall be calculated
as if such dividends were accruing on a day-to-day basis from
the expiration of the last quarterly period for which
dividends have been paid up to the date of such redemption).
If part only of the then outstanding Preferred Shares, First
Series is at any time to be redeemed, the shares so to be
redeemed shall be selected in such manner as is prescribed by
a resolution of the board of directors of the Corporation.
From and after the date of redemption of any Preferred Shares,
First Series under the provisions of this clause the Preferred
Shares, First Series so redeemed shall be cancelled and, if
redeemed out of capital, the authorized and issued capital of
-10-
the Corporation shall be thereby decreased; provided, however,
that no such redemption shall take place under the provisions
of this clause (v) when the Corporation is insolvent or when
such redemption would render the Corporation insolvent.
The Corporation may not redeem the Preferred Shares, First
Series at any time if any part of the redemption price which
constitutes a repayment of paid-up capital (as that term is
defined in the INCOME TAX ACT) would for the purposes of the
INCOME TAX ACT be deemed to have been paid as a dividend by
reason of the paid-up capital limit (as that term is defined
in the said Act) of the Corporation being less than the
paid-up capital in respect of those shares so to be redeemed.
In any case of a redemption of Preferred Shares, First Series
under the provisions of this clause (v), the Corporation shall
at least thirty (30) days before the date specified for
redemption mail to each person who at the date of mailing is a
registered holder of Preferred Shares, First Series to be
redeemed, a notice in writing of the intention of the
Corporation to redeem such Preferred Shares, First Series.
Such notice shall be mailed postage prepaid addressed to each
such shareholder at his address as it appears in the books of
the Corporation or in the event of the address of any such
shareholder not so appearing then to the last known address of
such shareholder; provided, however, that accidental failure
to give any such notice to one (1) or more of such holders
shall not affect the validity of such redemption as to the
other holders. Such notice shall set out the redemption price
and the date on which redemption is to take place and if part
only of the Preferred Shares, First Series held by the person
to whom it is addressed is to be redeemed the number thereof
so to be redeemed. On or after the date so specified for
redemption the Corporation shall pay or cause to be paid to or
to the order of the registered holders of Preferred Shares,
First Series to be redeemed the redemption price on
presentation and surrender, at the head office of the
Corporation or at any office of the transfer agent for the
Preferred Shares, First Series from time to time at which a
transfer register or branch transfer register is maintained by
such transfer agent in respect of the Preferred Shares, First
Series, of the certificates representing the Preferred Shares,
First Series called for redemption. If part only of the shares
represented by any certificate be redeemed, a new certificate
for the balance of the shares represented by the certificate
presented and surrendered shall be issued at the expense of
the Corporation. From and after the date on which redemption
is to take place as specified in any such notice, the
Preferred Shares, First Series called for redemption shall
cease to be entitled to dividends and the holders thereof
shall not be
-11-
entitled to exercise any of the rights of shareholders in
respect thereof unless payment of the redemption price shall
not be made upon presentation of certificates in accordance
with the foregoing provisions, in which case the rights of the
holders shall remain unaffected. The Corporation has the right
at any time after the mailing of notice of its intention to
redeem any Preferred Shares, First Series, as aforesaid, to
deposit the redemption price of the shares so called for
redemption or of such of the said shares represented by
certificates which have not at the date of such deposit been
surrendered by the holders thereof in connection with such
redemption (together with accrued and unpaid cumulative
preferential dividends payable thereon pursuant to this clause
(v)) to a special account in any chartered bank or any trust
company named in such notice, to be paid without interest to
or to the order of the respective holders of such Preferred
Shares, First Series called for redemption, upon presentation
and surrender to such bank or trust company of the
certificates representing the same and upon such deposit being
made or upon the date specified for redemption in such notice,
whichever is the later, the Preferred Shares, First Series in
respect of which such deposit shall have been made shall be
deemed to be redeemed and shall be cancelled and the rights of
the holders thereof after such deposit or such redemption
date, as the case may be, shall be limited to receiving
without interest their proportionate part of the total
redemption price (together with accrued and unpaid cumulative
preferential dividends payable thereon pursuant to this clause
(v)) so deposited against presentation and surrender of the
said certificates held by them respectively.
(vi) RESTRICTIONS ON PAYMENT OF DIVIDENDS AND REDUCTION OF CAPITAL
The Corporation shall not declare, pay or set apart for
payment any dividends (other than stock dividends in shares of
the Corporation ranking junior to the Preferred Shares, First
Series) on any shares of the Corporation ranking junior to the
Preferred Shares, First Series, nor shall the Corporation call
for redemption or purchase for cancellation or make any
capital distribution in respect of any shares of the
Corporation ranking junior to the Preferred Shares, First
Series, nor shall the Corporation call for redemption or
purchase for cancellation less than all. the Preferred Shares,
First Series or any other Class A Preferred Shares or any
other preferred shares ranking on a parity with the Class A
Preferred Shares, unless, at the date of such action, all
dividends then payable on all of the Class A Preferred Shares
and any other preferred shares ranking on a parity with the
Class A Preferred Shares, then issued and outstanding, shall
have been declared and paid.
-12-
The Corporation shall not, without the approval of the holders
of the Preferred Shares, First Series given as hereinafter
specified, declare, pay or set apart for payment any dividends
(other than stock dividends in shares of the Corporation
ranking junior to the Preferred Shares, First Series) on any
shares of the Corporation ranking junior to the Preferred
Shares, First Series or call for redemption or purchase for
cancellation or make any capital distribution in respect of
any shares of the Corporation ranking junior to the Preferred
Shares, First Series (except out of the net cash proceeds of a
substantially concurrent issue of shares of the Corporation
ranking junior to the Preferred Shares, First Series), or pay
any tax under Part IX of the INCOME TAX ACT, unless, after
giving effect to such action, the sum of:
(A) all amounts declared and paid subsequent to October 1,
1976 as dividends (other than stock dividends in shares
of the Corporation ranking junior to the Preferred
Shares, First Series) on all shares of all classes of
the Corporation,
(B) all amounts paid subsequent to October 1, 1976 on or in
connection with any redemption, purchase for
cancellation or capital distribution in respect of
shares of the Corporation ranking junior to the
Preferred Shares, First Series, and
(C) all amounts paid subsequent to October 1, 1976 under
Part IX of the INCOME TAX ACT,
would not exceed the aggregate of the Consolidated Net
Earnings of the Corporation and its Subsidiaries earned
subsequent to December 31, 1975, plus Three Million Four
Hundred Thousand Dollars ($3,400,000).
(vii) CREATION AND ISSUE OF ADDITIONAL SHARES
So long as any of the Preferred Shares, First Series is
outstanding, the Corporation shall not, without, the prior
approval of the holders of the Preferred Shares, First Series
given as hereinafter provided, create any shares ranking prior
to the Preferred Shares, First Series.
So long as any of the Preferred Shares, First Series is
outstanding, the Corporation shall not, without the prior
approval of the holders of the Preferred Shares, First Series
given as hereinafter provided, issue any Class A Preferred
Shares in addition to the Preferred Shares, First Series or
issue any other preferred shares ranking prior to or on a
parity with the Preferred Shares, First Series unless:
-13-
(A) the Consolidated Net Earnings (excluding extraordinary
items) of the Corporation and its Subsidiaries for any
12 consecutive calendar months out of the 18 calendar
months next preceding the date of issue of such
additional shares shall have been at least equal to
three (3) times the aggregate annual dividend
requirements on all Preferred Shares, First Series and
all other preferred shares ranking prior to or on a
parity with the Preferred Shares, First Series to be
outstanding after the issue of such additional shares;
(B) the Consolidated Net Tangible Assets of the Corporation
and its Subsidiaries immediately after giving effect to
such issue are at least equal to twice the aggregate
amount paid up on all Preferred Shares, First Series and
all other preferred shares ranking prior to or on a
parity with the Preferred Shares, First Series to be
outstanding after the issue of such additional shares;
and
(C) all dividends then payable on the Preferred Shares,
First Series and on all other preferred shares ranking
prior to or on a parity with the Preferred Shares, First
Series shall have been declared and paid or set apart
for payment.
(viii) CERTAIN DEFINITIONS
In these provisions the following terms will have the
following meanings:
(A) "CALENDAR QUARTER" means a period of three calendar
months commencing on the first day of January, April,
July or October.
(B) "CANADA BUSINESS CORPORATIONS ACT" means the CANADA
BUSINESS CORPORATIONS ACT, Statutes of Canada,
1974-1975, Chapter 33, as the same may, from time to
time, be amended, re-enacted or replaced and includes
any such amending, re-enacting or replacing statute or
any other statute, whether federal, provincial or
otherwise, which is applicable to the Corporation by
enactment or by continuation of the Corporation
thereunder.
(C) "CONSOLIDATED NET EARNINGS OF THE CORPORATION AND ITS
SUBSIDIARIES" means the aggregate of the net incomes of
the Corporation and its Subsidiaries determined on a
consolidated basis in accordance with generally accepted
accounting principles.
(D) "CONSOLIDATED NET TANGIBLE ASSETS OF THE CORPORATION AND
ITS SUBSIDIARIES" means the excess of the total of the
assets of the
-14-
Corporation and its Subsidiaries (other than intangible
assets) over the total of the liabilities of the
Corporation and its Subsidiaries (including deferred
income taxes, if any, but excluding contingent
liabilities except to such extent, if any, as the
directors in their discretion shall determine that
special provision should be made in the accounts for
meeting such contingent liabilities and excluding
liabilities for capital stock, capital surplus and
retained earnings) determined on a consolidated basis in
accordance with generally accepted accounting
principles.
(E) The Corporation shall be deemed to be affiliated with
another body corporate if one is the subsidiary of the
other or both are subsidiaries of the same body
corporate or each is controlled by the same person. If
the Corporation and another body corporate are each
affiliated with the same body corporate at the same
time, then the Corporation and the first such body
corporate shall be deemed to be affiliated with each
other. A body corporate is deemed to be controlled by a
person if shares of the body corporate carrying voting
rights sufficient to elect a majority of the directors
of the body corporate are held, directly or indirectly,
other than by way of security, by or on behalf of that
person. A body corporate is a subsidiary of another if
it is controlled by that other body corporate.
(F) "INCOME TAX ACT" means the INCOME TAX ACT, Revised
Statutes of Canada, 1952, Chapter 148, as amended, and
in particular as amended by Statutes of Canada,
1970-71-72, Chapter 63, as the same may from time to
time be amended, re-enacted or replaced.
(G) "IN PRIORITY TO", "ON A PARITY WITH" and "JUNIOR TO"
have reference to the order of priority in. payment of
dividends and in the distribution of assets in the event
of any liquidation, dissolution or winding-up of the
Corporation or other distribution of its assets among
its shareholders for the purpose of winding up its
affairs, whether voluntary or involuntary.
(ix) DIRECTORS' DETERMINATION
The directors may from time to time determine Consolidated Net
Earnings of the Corporation and its Subsidiaries and
Consolidated Net Tangible Assets of the Corporation and its
Subsidiaries, in each case as of or up to a date not more than
two hundred and fifteen (215) days prior to the making of such
determination and may determine such Consolidated Net
-15-
Earnings of the Corporation and its Subsidiaries or
Consolidated Net Tangible Assets of the Corporation and its
Subsidiaries, to be not less than a stated amount or amounts
without determining the exact amount thereof. In making such
determination the directors shall consider and may rely on the
last available audited consolidated balance sheet of the
Corporation and its Subsidiaries and may consider and rely on
the last available unaudited consolidated balance sheet of the
Corporation and its Subsidiaries and/or the last available
unaudited balance sheet of the Corporation or of any
Subsidiary prepared by the accounting officers of the
Corporation and any other financial statement, report or other
data which they may consider reliable, provided that the
directors shall not make any such determination on the basis
of any balance sheet, statement, report or other data if to
their knowledge any event has happened which would materially
and adversely affect the amount to be determined on such
basis. Upon any determination having been made by the
directors under the provisions hereof the Consolidated Net
Earnings of the Corporation and its Subsidiaries and
Consolidated Net Tangible Assets of the Corporation and its
Subsidiaries, as the case may be, as at or up to any date
within a period of two hundred and fifteen (215) days
following the date as of or up to which such determination is
made (unless any further determination of such Consolidated
Net Earnings of the Corporation and its Subsidiaries, or
Consolidated Net Tangible Assets of the Corporation and its
Subsidiaries, as the case may be, is so made within the said
period) shall be conclusively deemed to be not less than the
amount or respective amounts stated in such determination and
such determination shall be conclusive and binding upon the
Corporation and the holders of the Preferred Shares, First
Series, provided that no action shall be taken or authorized
by the directors on the basis of any such determination at any
time after to their knowledge any event has happened which
would materially and adversely affect the amount or respective
amounts so determined, without making a new determination
thereof.
(x) AMENDMENTS
The provisions of the immediately preceding clauses, (i) to
(ix) inclusive, of this clause (x) and of the following clause
(xi), or any of them may be deleted, varied, modified, amended
or amplified by Special Resolution but only with the prior
approval of the holders of the Preferred Shares, First Series
given as hereinafter specified, in addition to any other
approval required by the CANADA BUSINESS CORPORATIONS ACT.
-16-
(xi) APPROVAL OF SHAREHOLDERS
The approval of the holders of the Preferred Shares, First
Series with respect to any and all matters referred to herein
may be given by compromise or arrangement under the CANADA
BUSINESS CORPORATIONS ACT or may, subject to the provisions of
the CANADA BUSINESS CORPORATIONS ACT, be given in writing by
the holders of not less than two-thirds (2/3) of the Preferred
Shares, First Series for the time being outstanding or by
resolution duly passed and carried by not less than two-thirds
(2/3) of the votes cast on a poll at a meeting of the holders
of the Preferred Shares, First Series, duly called and held
for the purpose of considering the subject matter of such
resolution and at which holders of not less than twenty-five
percent (25%) of all Preferred Shares, First Series then
outstanding are present in person or represented by proxy in
accordance with the by-laws of the Corporation, provided,
however, that if at such meeting when originally held, the
holders of at least twenty-five percent (25%) of all Preferred
Shares, First Series then outstanding are not present in
person or so represented by proxy within thirty (30) minutes
after the time fixed for the meeting, then the meeting shall
be adjourned to such date, being not less than fifteen (15)
days later, and to such time and place as may be fixed by the
chairman of such meeting and, at such adjourned meeting, the
holders of Preferred Shares, First Series present in person or
so represented by proxy, whether or not they hold more or less
than twenty-five percent (25%) of all Preferred Shares, First
Series then outstanding, may transact the business for which
the meeting was originally called, and a resolution duly
passed and carried thereat by not less than two-thirds (2/3)
of the votes cast on a poll at such adjourned meeting shall
constitute the approval of the holders of the Preferred
Shares, First Series hereinbefore mentioned. Notice of any
such original meeting of the holders of the Preferred Shares,
First Series shall be given not less than fourteen (14) days
prior to the date fixed for such meeting and shall specify in
general terms the purpose for which the meeting is called, and
notice of any such adjourned meeting shall be given not less
than ten (10) days prior to the date fixed for such adjourned
meeting but, it shall not be necessary to specify in such
notice the purpose for which the adjourned meeting is called.
The formalities to be observed with respect to the giving of
notice of any such original meeting or adjourned meeting and
the conduct thereof shall be those from time to time
prescribed in the by-laws of the Corporation with respect to
meetings of the shareholders. On every poll taken at any such
original meeting or adjourned meeting the holders of Preferred
Shares, First Series present in person or so represented by
proxy shall be entitled to one (1) vote in respect of each
Preferred Share, First Series held by each of such holders
respectively.