Exhibit 3.1
CANADA BUSINESS [GRAPHIC] LOI SUR LES CORPORATIONS
CORPORATIONS ACT COMMERCIALES CANADIENNES
FORM 11 FORMULE 11
ARTICLES OF CONTINUANCE STATUTS DE CONTINUATION
(SECTION 181) (ARTICLE 181)
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1 - Name of Corporation Nom de la corporation
INTERPROVINCIAL STEEL AND PIPE CORPORATION LTD.
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2 - The place in Canada where the Lieu eu Canada ou doit etre situe
registered office is to be situated le siege social
City of Regina, Province of Saskatchewan
3 - The Classes and any maximum number of Categories el tout nombre maximal
shares that the corporation is d'actions que la corporation est
authorized to issue autorisee a emettre
There shall be one class of shares consisting of an unlimited number of
common shares each carrying the right to one vote at all meetings of
shareholders and fully participating as to dividends and distribution of
capital upon liquidation or winding up of the corporation; and for greater
certainty, the said common shares shall include all of the issued common
shares of the corporation outstanding at the date hereof
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4 - Restrictions if any on share transfers Restrictions sur le transferl des
actions s'il y a lieu.
There shall be no restrictions on share transfers.
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5 - Number (or minimum and maximum number) Nombre (ou nombre minimum et
of directors maximum) d'administrateurs
A minimum of 10 and a maximum of 23, as fixed by the Board of Directors
from time to time
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6 - Restrictions if any on businesses the Restrictions imposees quant aux
corporation may carry on entereprises que la corporation
peut exploiter s'il y a lieu
There shall be no restrictions on the business which the corporation may
carry on.
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7 - Other provisions if any Autras dispositions s'il y a lieu
Nil
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Signature Description of office -
Description du poste
January 10, 1977 /s/ Illegible Secretary
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FOR DEPARTMENTAL USE ONLY A L' USAGE DU MINISTERE SEULEMENT
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Corporation No - No de la corporation Filed - Deposee
18341-5 February 15, 1977.
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CANADA BUSINESS [GRAPHIC] LOI SUR LES CORPORATIONS
CORPORATIONS ACT COMMERCIALES CANADIENNES
FORM 4 FORMULE 4
ARTICLES OF AMENDMENT STATUTS DE MODIFICATION
(SECTION 27 OR 171) (ARTICLE 27 OU 171)
- --------------------------------------------------------------------------------
1 - Name of Corporation - Nom de la 2 - Corporation No. - No de la
corporation corporation
INTERPROVINCIAL STEEL AND PIPE
CORPORATION LTD. 18341-5
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3 - The articles of the above-named Les statuts de la corporation
corporations are amended as follows: ci-haut mentionee sont
modifies de la lacon survante:
Paragraph 1 of the Articles of the Corporation be deleted and the
following substituted therefor:
1. Name of Corporation:
"IPSCO INC."
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Signature Description of Office -
Description du poste
March 14, 1984 /s/ Illegible Secretary
-----------------
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DEPARTMENTAL USE ONLY A L'USAGE DU MINISTERE SEULEMENT
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Filed - Deposee
MARCH 19, 1984
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CANADA BUSINESS [GRAPHIC] LOI SUR LES CORPORATIONS
CORPORATIONS ACT COMMERCIALES CANADIENNES
FORM 4 FORMULE 4
ARTICLES OF AMENDMENT STATUTS DE MODIFICATION
(SECTION 27 OR 171) (ARTICLE 27 OU 171)
- --------------------------------------------------------------------------------
1 - Name of Corporation - Nom de la 2 - Corporation No. - No de la
corporation corporation
IPSCO INC. 18341-5
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3 - The articles of the above-named Les statuts de la corporation
corporations are amended as follows: ci-haut mentionnee sonl modifies
de la lacon survante:
The issued common shares of the Corporation are changed by dividing
each issued common share into two issued common shares.
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Signature Description of Office -
Description du poste
June 11, 1984 /s/ Illegible Secretary
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FOR DEPARTMENTAL USE ONLY A L'USAGE DU MINISTERE SEULEMENT
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Filed - Deposee
11.6.1984
----------------------------------
CANADA BUSINESS [GRAPHIC] LOI SUR LES CORPORATIONS
CORPORATIONS ACT COMMERCIALES CANADIENNES
FORM 4 FORMULE 4
ARTICLES OF AMENDMENT STATUTS DE MODIFICATION
(SECTION 27 OR 171) (ARTICLE 27 OU 171)
- --------------------------------------------------------------------------------
1 - Name of Corporation - Nom de la 2 - Corporation No. - No de la
corporation corporation
IPSCO INC. 18341-5
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3 - The articles of the above-named Les statuts de la corporation ci -
corporations are amended as follows: haut mentionnee sont modifies de
la facon suivante:
Paragraph 3 of the Articles of the Corporation be deleted and the following
substituted therefor:
The annexed Schedule I is incorporated in this form.
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Date Signature Description of office -
Description du poste
May 5, 1987 /s/ Illegible Secretary
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FOR DEPARTMENTAL USE ONLY A L'USAGE DU MINISTERE SEULEMENT
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Filed - Deposee
May 12, 1987
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2
SCHEDULE I
IPSCO INC.
SECTION A
AUTHORIZED CAPITAL
The Corporation is authorized to issue:
(a) An unlimited number of common shares (the "Common Shares");
(b) An unlimited number of first preferred shares (the "First
Preferred Shares") issuable in series; and
(c) An unlimited number of second preferred shares (the "Second
Preferred Shares") issuable in series.
SECTION B
COMMON SHARES
The Common Shares shall, as a class, carry and be subject to the
following rights, privileges, restrictions and conditions:
1. Voting Rights
The holders of the Common Shares shall be entitled to receive notice
of, to attend and to cast one vote per Common Share held at all meetings of
shareholders of the Corporation except meetings at which only holders of some
other specified class or series are, at law or pursuant to the articles of the
Corporation, entitled to vote.
2. Dividends
Subject to any prior rights of the holders of the First Preferred
Shares and the Second Preferred Shares, the right to receive any dividends
declared by the board of directors on the Common Shares.
3. Liquidation, Dissolution or Winding-up
Subject to any prior rights of the holders of the First Preferred
Shares and the Second Preferred Shares, the right to receive, equally on a
share-for-share basis, the remaining assets of the Corporation in the event of
liquidation, dissolution, or winding-up of the Corporation or other distribution
of assets and
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property of the Corporation among its shareholders for the purpose of
winding-up its affairs.
SECTION C
FIRST PREFERRED SHARES AS A CLASS
The First Preferred Shares shall, as a class, carry and be subject to
the following rights, privileges, restrictions and conditions:
1. Directors' Rights to Issue in One or More Series
The directors of the Corporation may at any time and from time to time
designate series of First Preferred Shares and authorize and issue such number
of shares of each such series as may be determined by the board of directors.
2. Directors to Fix Terms of Each Series
The directors of the Corporation may (subject as hereinafter provided)
from time to time fix before issuance the designation, rights, privileges,
restrictions and conditions to attach to each such series of First Preferred
Shares which they may designate from time to time including, without limiting
the generality of the foregoing, any dividend rights and the rate and dates of
payment thereof, any redemption, retraction or conversion rights and the terms
and conditions thereof, and any voting rights to be attached thereto in the
event of default or non-fulfillment by the Corporation of or in respect of any
right, privilege, restriction, term or condition attached thereto or to any
other shares of the Corporation.
3. Ranking of First Preferred Shares
The First Preferred Shares of each series shall, on a share by share
basis, rank on a parity with the First Preferred Shares of every other series
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
or other distribution of assets of the Corporation among its shareholders for
the purpose of winding-up its affairs.
4. Priority of First Preferred Shares
The First Preferred Shares shall be entitled to preference over the
Common Shares, the Second Preferred Shares and any other shares of the
Corporation ranking junior to the First Preferred Shares with respect to the
payment of dividends and the distribution of assets in the event of liquidation,
dissolution or winding-up of the Corporation or other
-3-
distribution of assets of the Corporation among its shareholders for the purpose
of winding-up its affairs and, subject to the articles, may also be given such
other preferences over the Common Shares, the Second Preferred Shares and any
other shares of the Corporation ranking junior to the First Preferred Shares, as
may be fixed by the board of directors of the Corporation as to the respective
series authorized to be issued.
5. Participation in Unpaid Amounts
If any cumulative dividends or amounts payable on a return of capital
are not paid in full when due, the First Preferred Shares of all series shall
participate rateably in respect of any such accumulated dividends and return of
capital.
6. Voting
Except as required by law or by the provisions fixed by the directors
in respect of any series, the holders of the First Preferred Shares shall as a
class not be entitled 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.
SECTION D
SECOND PREFERRED SHARES AS A CLASS
The Second Preferred Shares shall, as a class, carry and be subject to
the following rights, privileges, restrictions and conditions:
1. Directors' Rights to Issue in One or More Series
The directors of the Corporation may at any time and from time to time
designate series of Second Preferred Shares and authorize and issue such number
of shares of each such series as may be determined by the board of directors.
2. Directors to Fix Terms of Each Series
The directors of the Corporation may (subject as hereinafter provided)
from time to time fix before issuance the designation, rights, privileges,
restrictions and conditions to attach to each such series of Second Preferred
Shares which they may designate from time to time including, without limiting
the generality of the foregoing, any dividend rights and the rate and dates of
payment thereof, any redemption, retraction or conversion rights and the terms
and conditions thereof, and any voting rights to be attached thereto in the
event of default or non-fulfillment by the Corporation of or in respect of
-4-
any right, privilege, restriction, term or condition attached thereto or to any
other shares of the Corporation.
3. Ranking of Second Preferred Shares
The Second Preferred Shares of each series shall, on a share by share
basis, rank on a parity with the Second Preferred Shares of every other series
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
or other distribution of assets of the Corporation among its shareholders for
the purpose of winding-up its affairs.
4. Priority of Second Preferred Shares
The Second Preferred Shares shall be entitled to preference over the
Common Shares of the Corporation and any other shares of the Corporation ranking
junior to the Second Preferred Shares, but subject to the prior rights of the
holders of the First Preferred Shares, with respect to the payment of dividends
and the distribution of assets in the event of 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 and, subject to
the articles, may also be given such other preferences over the Common Shares of
the Corporation, and any other shares of the Corporation ranking junior to the
Second Preferred Shares, as may be fixed by the board of directors of the
Corporation as to the respective series authorized to be issued.
5. Participation in Unpaid Amounts
If any cumulative dividends or amounts payable on a return of capital
are not paid in full when due, the Second Preferred Shares of all series shall
participate rateably in respect of any such accumulated dividends and return of
capital.
6. Voting
Except as required by law or by the provisions fixed by the directors
in respect of any series, the holders of the Second Preferred Shares shall as a
class not be entitled 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.
CANADA BUSINESS CORPORATIONS ACT
FORM 4
ARTICLES OF AMENDMENT
(SECTION 27 OR 171)
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1. Name of Corporation 2 - Corporation No.
IPSCO Inc. 18341-5
3. The articles of the above-named corporation are amended as follows
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Paragraph 7 of the Articles of the Corporation be amended by deleting the
word "Nil" and substituting therefor:
"Right to Appoint Directors
The Board of Directors may appoint one or more Directors, who shall
hold office for a term expiring not later than the close of the next
annual meeting of shareholders, but the total number of Directors so
appointed may not exceed the lesser of three or one-third of the
number of Directors elected at the previous annual meeting of
shareholders."
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Date Signature Description of Office
1 May 1998 /s/ Illegible Secretary
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FOR DEPARTMENTAL USE ONLY
Filed
MAY 11 1998
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CANADA BUSINESS CORPORATIONS ACT
FORM 4
ARTICLES OF AMENDMENT
(SECTION 27 OR 171)
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1 - Name of Corporation 2 - Corporation No.
IPSCO Inc. 18341-5
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3 - The articles of the above-named corporation are amended as follows
Pursuant to paragraph 3 of the Articles of the Corporation, 6,000,000
First Preferred Shares are hereby designated "5.50% First Preferred
Shares, Series 1" having attached thereto, in addition to the rights,
privileges, restrictions and conditions attached to the First
Preferred Shares as a class, the rights, privileges, restrictions and
conditions set forth in Schedule A attached hereto.
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Date Signature Description of Office
November 9, 1998 /s/ Illegible Secretary
----------------
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FOR DEPARTMENTAL USE ONLY
Filed
NOV 10, 1998
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SCHEDULE A
IPSCO Inc.
5.50% CUMULATIVE REDEEMABLE FIRST
PREFERRED SHARES, SERIES 1
The 5.50% Cumulative Redeemable First Preferred Shares, Series 1 (the "Series 1
Preferred Shares"), in addition to the rights, privileges, restrictions and
conditions attaching to the First Preferred Shares as a class, shall have
attached thereto the following rights, privileges, restrictions and conditions:
1. Dividends
1.1 Payment of Dividends
The holders of the Series 1 Preferred Shares 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 moneys of the Corporation properly
applicable to the payment of dividends, fixed cumulative preferential cash
dividends at the rate of $1.375 per share per annum. The Board of Directors of
the Corporation shall be entitled from time to time to declare part of the said
fixed preferential cumulative dividend for any fiscal year of the Corporation
notwithstanding that such dividend for such fiscal year shall not be declared in
full. Such dividends shall accrue from and including the date on which the
Series 1 Preferred Shares are issued. Such dividends shall be payable by
quarterly instalments of $0.34375 per share on the 15th day of each of February,
May, August and November in each year commencing in 1999 (each such date
hereinafter referred to as a "Dividend Payment Date"), except that on the first
Dividend Payment Date, being February 15, 1999, the dividend payable on such
date, if declared, shall be $0.35128 per share or, if the Series 1 Preferred
Shares are issued on a date other than November 13, 1999, such other amount per
share as the Corporation shall determine to be payable calculated in a manner
consistent with subsection 1.2 hereof.
1.2 Dividend for less than a Full Quarter
Except as otherwise provided in subsection 1.1 hereof, the amount of any
accrued and unpaid dividend on a Series 1 Preferred Share for any period which
is less than a full quarterly period (a "Partial Period") in the circumstance
where a Series 1 Preferred Share:
(a) is redeemed by the Corporation;
(b) is converted into common shares of the Corporation ("Common Shares")
at the option of the Corporation as provided in section 3 hereof;
(c) is entitled to a distribution of capital pursuant to section 8 hereof;
or
2
(d) is purchased pursuant to subsection 4.6 hereof;
shall be determined in accordance with the following formula:
X($1.3750)
D = -----------
365
Where: D is the amount of the accrued and unpaid dividend payable per Series
1 Preferred Share for the Partial Period; and
X is the number of days from and including the last Dividend Payment
Date (regardless of whether a dividend was paid on such Dividend
Payment Date) to but excluding the last day of the Partial Period.
1.3 Method of Payment
Cheques payable in lawful money of Canada at par at any branch of the
Corporation's bankers in Canada may be issued in respect of dividends payable on
the Series 1 Preferred Shares (less any tax required by law to be deducted or
withheld by the Corporation). The mailing on or before the third business day
prior to any Dividend Payment Date, of such a cheque dated such Dividend Payment
Date, payable to the registered holder on the applicable record date shall
satisfy payment in respect of the dividends represented thereby unless the
cheque is not paid on presentation. No holder of Series 1 Preferred Shares shall
be entitled to recover, by action or other legal process against the
Corporation, any dividend that is represented by a cheque that has not been duly
presented to the Corporation's bankers for payment within, or that otherwise
remains unclaimed for, a period of six years from the date on which it was
payable and such dividend shall, unless applicable law otherwise provides, be
forfeited to the Corporation.
1.4 Cumulative Payment of Dividends
If on any Dividend Payment Date the dividend accrued to such date is not
paid in full on all the Series 1 Preferred Shares then outstanding, such
dividend or the unpaid part thereof shall be paid on a subsequent date or dates,
as determined in the absolute discretion of the Board of Directors, at a time in
which the Corporation shall have sufficient moneys properly applicable to the
payment thereof. A holder of a Series 1 Preferred Share shall not be entitled to
any dividends in respect of such Series 1 Preferred Share other than or in
excess of the fixed cumulative preferential cash dividends provided for herein.
1.5 Payment in U.S. Dollars
Notwithstanding any other provision of this section 1, the Corporation may
pay dividends, to holders of the Series 1 Preferred Shares who are resident in
the United States, in United States Dollars by converting the Canadian dollar
amount of the amount payable into United States Dollars using the Bank of Canada
noon buying rate on the record date set for such
3
dividends. Any payment in United States dollars pursuant to this subsection 1.5
shall be made by a cheque payable in lawful money of the United States at par at
any branch of the Corporation's bankers in the United States (less any tax
required by law to be deducted or withheld by the Corporation).
2. Redemption
2.1 Restriction on Redemption
The Corporation may not redeem the Series 1 Preferred Shares prior to May
15, 2004. Subject to section 7 hereof, on and after May 15, 2004 the Corporation
may redeem at any time the whole, or from time to time any part, of the then
outstanding Series 1 Preferred Shares on payment for each share to be redeemed
of $25.00 together with an amount equal to all accrued and unpaid dividends
(which for such purpose shall be calculated as if such fixed preferential
cumulative cash dividends were accruing from day to day for the period from the
expiration of the last period for which cumulative dividends have been paid up
to but excluding the Redemption Date).
2.2 Redemption Procedure
(a) Redemption Notice:
In any case of redemption of Series 1 Preferred Shares, the Corporation
shall, at least 30 and no more than 60 days before the Redemption Date, mail to
each person who at the record date, if one is set by the Corporation, or if no
record date is set then at the date of mailing, is a registered holder of the
Series 1 Preferred Shares which are to be redeemed a notice in writing of the
intention of the Corporation to redeem such Series 1 Preferred Shares (a
"Redemption Notice"). The Redemption Notice shall set out the redemption price
per share (as calculated in accordance with subsection 2.1) and the date on
which redemption is to take place as determined in the sole discretion of the
Board of Directors (the "Redemption Date"), and, if part only of the Series 1
Preferred Shares held by the person to whom the Redemption Notice is addressed
are to be redeemed, the number thereof to be redeemed. The Redemption Notice
shall be sent by prepaid mail to each registered holder of a Series 1 Preferred
Share which is to be redeemed at such holder's address as it appears in the
shareholder or securities register maintained by or on behalf of the
Corporation, or in the event of the address of any such holder not so appearing
then at the last known address of such holder; provided, however, that
accidental failure or omission to give a Redemption Notice to one or more of any
such holders shall not affect the validity of the redemption of such holders
Series l Preferred Shares which are to be redeemed. In the case of joint holders
of Series 1 Preferred Shares, the Redemption Notice may be mailed to any one of
such holders.
(b) Payment of Redemption Price:
On or after the Redemption Date the Corporation shall pay, or cause to be
paid, to or
4
to the order of each registered holder of Series 1 Preferred Shares called for
redemption, the amount payable on redemption of the Series 1 Preferred Shares
held by such holder, but such payment shall only be made upon presentation and
surrender at the registered office of the Corporation (or such other place as is
designated in the Redemption Notice) of the certificates representing the Series
1 Preferred Shares called for redemption which are held by such holder. Such
payment shall be made by cheque payable in lawful money of Canada at par at any
branch of the Corporation's bankers in Canada.
The Corporation shall have the right at any time after the mailing of a
Redemption Notice relating to any Series 1 Preferred Shares to deposit the
amount payable on redemption of the Series 1 Preferred Shares so called for
redemption, or the amount payable in respect of such of the Series 1 Preferred
Shares represented by certificates that have not at the date of such deposit
been surrendered by the holders thereof in connection with such redemption, in a
special trust account in any chartered bank or trust company in Canada which has
been named in either the original Redemption Notice or in a subsequent notice
sent to the registered holders of the Series 1 Preferred Shares in respect of
which such deposit is made. Such monies held on deposit are to be paid without
interest to or to the order of the respective registered holders of Series 1
Preferred Shares in respect of which the deposit shall have been made, upon
presentation and surrender to such bank or trust company of the certificate(s)
representing such shares. The rights of the registered holders of Series 1
Preferred Shares in respect of which such deposit shall have been made shall be
limited to receiving without interest their proportionate part of the total
amount so deposited against presentation and surrender of the certificates
representing their respective Series 1 Preferred Shares being redeemed. Any
interest earned on any such deposit shall belong to the Corporation.
Redemption moneys (including moneys held on deposit as provided herein)
that are represented by a cheque which has not been duly presented for payment
within, or that otherwise remain unclaimed for, a period of six years from the
applicable Redemption Date shall, unless applicable law otherwise provides, be
forfeited to the Corporation.
(c) Redemption of Part Only:
If part only of the Series 1 Preferred Shares are to be redeemed, the
Series 1 Preferred Shares to be redeemed shall be selected for redemption by lot
or in such equitable manner as the Board of Directors of the Corporation in its
sole discretion determines. If part only of the Series 1 Preferred Shares
represented by any share certificate are redeemed, a new share certificate for
the remaining balance of the Series 1 Preferred Shares which are not to be
redeemed shall be issued at the expense of the Corporation. Only whole Series 1
Preferred Shares may be redeemed from any particular holder.
(d) Termination of Rights:
From and after the Redemption Date, the Series 1 Preferred Shares called
for redemption shall cease to be entitled to dividends and the holders thereof
shall not be entitled to exercise any of the rights of shareholders in respect
thereof unless the amount payable on redemption
5
of such Series 1 Preferred Shares is not paid upon presentation and surrender of
certificates for such Series 1 Preferred Shares in accordance herewith, in which
case the rights of the holders in respect of such Series 1 Preferred Shares
shall remain unaffected.
3. Conversion into Common Shares at the Option of the Corporation
3.1 Interpretation
In this section 3 the following phrases have the following meanings,
respectively:
(a) Weighted Average Price means the weighted average of the prices at
which the Common Shares trade during the Trading Period, as such
prices are reported by The Toronto Stock Exchange (or if the Common
Shares are not then listed on The Toronto Stock Exchange, then by such
other Canadian stock exchange on which the Common Shares are then
listed as determined in the sole discretion of the Board of
Directors);
(b) Trading Period means the period of 20 trading days during which the
Common Shares traded on the exchange mentioned in clause 3.1(a) hereof
and which ends on the fourth day prior to the Conversion Date (as
defined in subsection 3.5 hereof), or, if that fourth day is not a
trading day, then ending on the immediately preceding trading day.
3.2 Right of Conversion
On and after May 15, 2004, and subject to the Corporation obtaining the
prior approval (if required) of The Toronto Stock Exchange and any other
Canadian stock exchanges on which the Series 1 Preferred Shares are listed, the
Corporation may at any time convert all, or from time to time any part, of the
then outstanding Series 1 Preferred Shares into fully paid and non-assessable
Common Shares of the Corporation.
3.3 Rate of Conversion
Subject to adjustment in accordance with subsection 3.4 hereof, the number
of Common Shares into which each Series 1 Preferred Share may be converted
pursuant to this section 3 shall be determined in accordance with the following
formula:
X = $25.00 + D
----------
P
Where: X is the number of Common Shares into which each Series 1 Preferred
Share may be converted;
D is the amount of dividends accrued and unpaid on each Series 1
Preferred Share being converted, (which for such purpose shall be
calculated as if such fixed preferential cumulative cash dividends
were accruing from day to day for
6
the period from the expiration of the last period for which cumulative
dividends have been paid up to but excluding the Conversion Date (as
defined in subsection 3.5 hereof)); and
P is the greater of $3.00 and 95% of the Weighted Average Price of the
Common Shares.
3.4 Adjustments
(a) Subdivisions:
In the event that the Corporation shall set a record date, which shall fall
on any day during the period commencing with the first day of the Trading Period
and ending on the Conversion Date (as defined in subsection 3.5 hereof), in
respect of any of the following events, namely:
(i) subdivisions, consolidations or reclassifications of Common Shares; or
(ii) distributions to all or substantially all the holders of Common Shares
of:
(A) shares (other than shares distributed in lieu of dividends paid
in the ordinary course),
(B) rights, options or warrants,
(C) evidences of indebtedness, or
(D) assets (other than dividends paid in the ordinary course);
which in the opinion of the Board of Directors have or shall have had an effect
on the trading price of the Common Shares on any date during the period
commencing with the first day of the Trading Period and ending on the Conversion
Date (as defined in subsection 3.5 hereof), then the Board of Directors, acting
reasonably and in good faith, shall, on or prior to the Conversion Date and
subject to stock exchange approval, prescribe adjustments to be made to the
number of Common Shares to be issued on the Conversion Date in order to make the
number of Common Shares to be issued on the Conversion Date equivalent in value
to the number of Common Shares which would otherwise have been issuable had any
of the foregoing capital changes not occurred.
(b) Mergers and Plan of Arrangements:
If there is a consolidation or merger or amalgamation of the Corporation
with or into any other company or body corporate, including by way of a sale
whereby all or substantially all of the Corporation's undertaking and assets
would become the property of any other company or body corporate or plan of
arrangement involving the Corporation (any of which is herein called
7
a "capital reorganization") on any date during the period commencing with the
first day of the Trading Period and ending on the Conversion Date (as defined in
subsection 3.5 hereof), to the extent and only to the extent, that the capital
reorganization is not covered by clause 3.4(a) above, any holder of Series 1
Preferred Shares who has not exercised his or her right of conversion prior to
the effective date of such capital reorganization shall be entitled to receive
and shall accept, upon the exercise of such right at any time on the effective
date or thereafter, in lieu of the number of Common Shares to which he or she
was theretofore entitled upon conversion, the aggregate number of shares or
other securities or property of the Corporation or of the company or body
corporate resulting from or under the capital reorganization that such holder
would have been entitled to receive as a result of such capital reorganization
if, on the effective date thereof, he or she had been the registered holder of
the number of Common Shares to which he or she was theretofore entitled upon
conversion and no capital reorganization shall be carried into effect unless, in
the opinion of the Board of Directors, all necessary steps shall have been taken
to ensure that the holders of the Series 1 Preferred Shares shall thereafter be
entitled to receive such number of shares or other securities or property of the
Corporation or of the company or body corporate resulting from the
consolidation, merger or amalgamation or to which such sale may be made, as the
case may be, subject to adjustment thereafter in accordance with the provisions
substantially similar to those contained in these articles.
(c) Other Capital Reorganizations:
In the event there is any other capital reorganization or change in the
share capital of the Corporation not covered by clauses 3.4(a) and (b) which in
the opinion of the Board of Directors have or shall have had an effect on the
trading price of the Common Shares on any date during the period commencing with
the first day of the Trading Period and ending on the Conversion Date (as
defined in subsection 3.5 hereof), then the Board of Directors, acting
reasonably and in good faith, shall, on or prior to the Conversion Date and
subject to stock exchange approval, prescribe adjustments to be made to the
number of Common Shares to be issued on the Conversion Date in order to make the
number of Common Shares to be issued on the Conversion Date equivalent in value
to the number of Common Shares which would otherwise have been issuable had any
of the foregoing capital changes not occurred.
(d) Minimum Adjustment:
No adjustment in the number of Common Shares to be issued pursuant to this
subsection 3.4 hereof shall be required unless an increase or decrease of at
least 1% of the number of Common Shares to be issued to each holder of Series 1
Preferred Shares would result; provided, however, that any adjustment which,
except for the provisions of this clause 3.4(d) would otherwise have been
required to be made, shall be carried forward and taken into account in
determining whether to make any subsequent adjustment.
(e) Notice of Adjustment:
8
Forthwith after any adjustment in the number of Common Shares to be issued
to each holder of Series 1 Preferred Shares, the Corporation shall file with the
transfer agent and registrar of the Corporation for the Series 1 Preferred
Shares a certificate of an officer of the Corporation certifying as to the
amount of such adjustment and, in reasonable detail, the event requiring and the
manner of computing such adjustment; the Corporation shall also at such time
mail, by prepaid first class mail, a copy of such certificate to the holders of
the Series 1 Preferred Shares.
3.5 Conversion Procedure
(a) Conversion Notice:
Where the Corporation chooses to convert Series 1 Preferred Shares pursuant
to this section 3, the Corporation shall, at least 40 days before the Conversion
Date (as defined in this subsection 3.5), publish at least once in an English
language business newspaper in Regina, Vancouver, Calgary, Winnipeg and Toronto
and in a French language business newspaper in Montreal and send by mail to each
person who at the record date, if one is set by the Corporation, or if no record
date is set, then at the date of mailing, is a registered holder of Series 1
Preferred Shares which are to be converted a notice in writing of the intention
of the Corporation to convert such holder's Series 1 Preferred Shares (in this
section 3 referred to as the "Conversion Notice").
The Conversion Notice shall set out the date fixed for conversion (in this
section 3 referred to as the "Conversion Date") and the number of Common Shares
per Series 1 Preferred Share to be received on conversion regardless of whether
all or part only of the Series 1 Preferred Shares held by the person to whom
the Conversion Notice is addressed are to be converted. The Conversion Notice
shall be sent by prepaid mail to each registered holder of a Series 1 Preferred
Share which is to be converted at such holder's address as it appears in the
shareholder or securities register maintained by or on behalf of the
Corporation, or in the event of the address of any such holder not so appearing
then to the last known address of such holder; provided, however, that
accidental failure or omission to send the Conversion Notice to one or more of
any such holders shall not affect the validity of the conversion of such
holder's Series 1 Preferred Shares which are to be converted. In the case of
joint holders of Series 1 Preferred Shares, the Conversion Notice may be mailed
to any one of such holders.
(b) Receipt of Common Shares on Conversion:
On the Conversion Date the Series l Preferred Shares which are the subject
of the Conversion Notice shall be converted into fully paid and non-assessable
Common Shares of the Corporation and the registered holders thereof shall be
deemed to have become holders of Common Shares of record on the Conversion Date.
As promptly as practicable after the Conversion Date, and following presentation
and surrender, at the office of the transfer agent for the Series 1 Preferred
Shares (or at any other place designated in the Conversion Notice), of the
certificates for the Series 1 Preferred Shares so converted, the Corporation
shall issue and deliver or cause to be delivered to those persons being
registered holders, as at the Conversion
9
Date for the Series 1 Preferred Shares called for conversion, a certificate or
certificates for the number of Common Shares of the Corporation issuable to such
holders.
(c) Conversion of Part Only:
If part only of the Series 1 Preferred Shares are at any time to be
converted, the Series 1 Preferred Shares to be converted shall be selected by
lot or in such equitable manner as the Board of Directors of the Corporation in
its sole discretion determines. If part only of the Series 1 Preferred Shares
represented by any share certificate are to be converted, a new share
certificate for the remaining balance of the Series 1 Preferred Shares which are
not to be converted shall be issued at the expense of the Corporation.
(d) Termination of Rights:
From and after the Conversion Date, the Series 1 Preferred Shares called
for conversion shall be deemed to be converted and the holders thereof shall
cease to be entitled to dividends on such Series 1 Preferred 5hares and shall
not be entitled to exercise any of the rights of shareholders in respect
thereof, unless the issue and delivery of the Common Shares and any payment to
which such holders are entitled shall not be duly made by the Corporation in
accordance herewith in which case the rights of such holders shall remain
unaffected.
3.6 Fractional Shares
Fractional Common Shares shall not be issued on any conversion of Series 1
Preferred Shares but in lieu thereof the Corporation shall make payments in an
amount per fractional Common Share which is equal to the product obtained by
multiplying the fraction of the Common Share otherwise issuable by the greater
of $3.00 and 95% of the Weighted Average Price of the Common Shares, as adjusted
in accordance with subsection 3.4 hereof, if applicable,
Any payment in respect of a fraction of a Common Share shall be made by
cheque payable at par at any branch of the Corporation's bankers in Canada to
the person being the registered holder, as at the Conversion Date, of the Series
1 Preferred Shares called for conversion. The Corporation shall deliver or cause
to be delivered such cheque with the certificate or certificates for the Common
Shares which are delivered in accordance with subsection 3.5 hereof.
4. Conversion into Common Shares at the Option of the Holder
4.1 Interpretation
In this section 4 the following phrases have the following meanings,
respectively:
(a) Weighted Average Price means the weighted average of the prices at
which the
10
Common Shares trade during the Trading Period, as such prices are
reported by The Toronto Stock Exchange (or if the Common Shares are
not then listed on The Toronto Stock Exchange, then by such other
Canadian stock exchange on which the Common Shares are then listed as
determined in the sole discretion of the Board of Directors);
(b) Trading Period means the period of 20 trading days during which the
Common Shares traded on the exchange mentioned in clause 4.1(a) and
which ends on the fourth day prior to the applicable Conversion Date
(as defined in subsection 4.2 hereof), or, if that fourth day is not a
trading day, then ending on the immediately preceding trading day.
4.2 Right of Conversion
On and after August 15, 2004, and subject to all of the further provisions
of this section 4, each Series 1 Preferred Share shall be convertible into fully
paid and non-assessable Common Shares of the Corporation, at the option of the
holder. A conversion of Series 1 Preferred Shares may only take place, at the
option of the holder, on the 15th day of February, May, August or November in
each year (in this section 4 each such date being hereinafter referred to as a
"Conversion Date") provided that prior notice (in this section 4 being
hereinafter referred to as the "Conversion Notice") has been given by the
holder, in accordance with subsection 4.7 hereof, at least 65 days before the
applicable Conversion Date.
4.3 Rate of Conversion
Subject to adjustment in accordance with subsection 4.4 hereof, the number
of Common Shares into which each Series 1 Preferred Share may be converted
pursuant to this subsection 4.3 shall be determined in accordance with the
following formula:
X = $25.00 + D
----------
P
Where: X is the number of Common Shares into which each Series 1 Preferred
Share may be converted;
D is the amount of dividends accrued and unpaid on each Series 1
Preferred Share being converted (which for such purpose shall be
calculated as if such fixed preferential cumulative cash dividends
were accruing from day to day for the period from the expiration of
the last period for which cumulative dividends have been paid up to
but excluding the applicable Conversion Date); and
P is the greater of $3.00 and 95% of the Weighted Average Price of the
Common
11
Shares.
4.4 Adjustments
(a) Subdivisions:
In the event of:
(i) subdivisions, consolidations or reclassifications of Common Shares; or
(ii) distributions to all or substantially all the holders of Common Shares
of:
(A) shares (other than shares distributed in lieu of dividends paid
in the ordinary course),
(B) rights, options or warrants,
(C) evidences of indebtedness, or
(D) assets (other than dividends paid in the ordinary course);
which in the opinion of the Board of Directors have or shall have had an effect
on the trading price of the Common Shares on any date during the period
commencing with the first day of the Trading Period and ending on the Conversion
Date, then the Board of Directors, acting reasonably and in good faith, shall,
on or prior to the Conversion Date and subject to stock exchange approval,
prescribe adjustments to be made to the number of Common Shares to be issued on
the Conversion Date in order to make the number of Common Shares to be issued on
the Conversion Date equivalent in value to the number of Common Shares which
would otherwise have been issuable had any of the foregoing capital changes not
occurred.
(b) Mergers and Plan of Arrangements:
If there is a consolidation or merger or amalgamation of the Corporation
with or into any other company or body corporate, including by way of a sale
whereby all or substantially all of the Corporation's undertaking and assets
would become the property of any other company or body corporate or plan of
arrangement involving the Corporation (any of which is herein called a "capital
reorganization") on any date during the period commencing with the first day of
the Trading Period and ending on the Conversion Date, to the extent and only to
the extent that the capital reorganization is not covered by clause 4.4(a)
hereof, any holder of Series 1 Preferred Shares who has not exercised his or her
right of conversion prior to the effective date of such capital reorganization
shall be entitled to receive and shall accept, upon the exercise of such right
at any time on the effective date or thereafter, in lieu of the number of Common
Shares to which he or she was theretofore entitled upon conversion, the
aggregate number of shares or
12
other securities or property of the Corporation or of the company or body
corporate resulting from or under the capital reorganization that such holder
would have been entitled to receive as a result of such capital reorganization
if, on the effective date thereof, he or she had been the registered holder of
the number of Common Shares to which he or she was theretofore entitled upon
conversion and no capital reorganization shall be carried into effect unless, in
the opinion of the Board of Directors, all necessary steps shall have been taken
to ensure that the holders of the Series 1 Preferred Shares shall thereafter be
entitled to receive such number of shares or other securities or property of the
Corporation or of the company or body corporate resulting from the
consolidation, merger or amalgamation or to which such sale may be made, as the
case may be, subject to adjustment thereafter in accordance with the provisions
substantially similar, to those contained in these articles.
(c) Other Capital Reorganizations:
In the event there is any other capital reorganization or change in the
share capital of the Corporation which in the opinion of the Board of Directors
have or shall have had an effect on the trading price of the Common Shares on
any date during the period commencing with the first day of the Trading Period
and ending on the Conversion Date, then the Board of Directors, acting
reasonably and in good faith, shall, on or prior to the Conversion Date and
subject to stock exchange approval, prescribe adjustments to be made to the
number of Common Shares to be issued on the Conversion Date in order to make the
number of Common Shares to be issued on the Conversion Date equivalent in value
to the number of Common Shares which would otherwise have been issuable had any
of the foregoing capital changes not occurred.
(d) Minimum Adjustment:
No adjustment in the number of Common Shares to be issued pursuant to this
subsection 4.4 shall be required unless an increase or decrease of at least 1%
of the number of Common Shares to be issued to each holder of Series 1 Preferred
Shares would result; provided, however, that any adjustment which, except for
the provisions of this clause 4.4(d) would otherwise have been required to be
made, shall be carried forward and taken into account in determining whether to
make any subsequent adjustment.
(e) Notice of Adjustment:
Forthwith after any adjustment in the number of Common Shares to be issued
to each holder of Series 1 Preferred Shares, the Corporation shall file with the
transfer agent and registrar of the Corporation for the Series 1 Preferred
Shares a certificate of an officer of the Corporation certifying as to the
amount of such adjustment and, in reasonable detail, the event requiring and the
manner of computing such adjustment; the Corporation shall also at such time
mail, by prepaid first class mail, a copy of such certificate to the holders of
the Series 1 Preferred Shares.
4.5 Fractional Shares
13
Fractional Common Shares shall not be issued on any conversion of Series 1
Preferred Shares but in lieu thereof the Corporation shall make payments in an
amount per fractional Common Share which is equal to the product obtained by
multiplying the fraction of the Common Share otherwise issuable by the greater
of $3.00 and 95% of the Weighted Average Price of the Common Shares, as adjusted
in accordance with subsection 4.4 hereof, if applicable.
Any payment in respect of a fraction of a Common Share shall be made by
cheque payable at par at any branch of the Corporation's bankers in Canada to
the person being the registered holder, as at the Conversion Date, of the Series
1 Preferred Shares called for conversion. The Corporation shall deliver or cause
to be delivered such cheque with the certificate or certificates for the Common
Shares which are delivered in accordance with subsection 4.7 hereof.
4.6 Corporation's Right to Redeem or Arrange Sale
(a) Right to Redeem of Arrange Sale:
Notwithstanding a holder's election to convert Series 1 Preferred Shares
held by it into Common Shares in accordance with this section 4, the Corporation
has the right (subject only to clause 7(b) hereof) in respect of those Series 1
Preferred Shares which are the subject of a Conversion Notice (the "Subject
Shares") to elect to either (i) redeem, on the applicable Conversion Date, all
or part of the Subject Shares or (ii) cause the holder to sell, on the
applicable Conversion Date, all or part of the Subject Shares to another
purchaser or purchasers in the event that a purchaser or purchasers willing to
purchase such Series 1 Preferred Shares can be found. The number of Subject
Shares to be redeemed or caused to be sold to other purchasers shall be
determined by the Board of Directors of the Corporation in its sole discretion.
(b) Notice of Redemption or Arranged Sale:
If the Corporation elects to redeem or cause the holders to sell any of the
Subject Shares, the Corporation shall, not later than 40 days before the
applicable Conversion Date, send a notice to each holder who has delivered a
Conversion Notice to the Corporation. Such notice shall state:
(i) the number of Subject Shares to be redeemed by the Corporation (if
any);
(ii) the number of Subject Shares to be sold to a purchaser(s) (if any);
and
(iii) the number of Subject Shares which are still to be converted into
Common Shares (if any);
such that all of the Subject Shares shall be redeemed, caused to be sold or
converted on the Conversion Date. The proportion of a holder's Series 1
Preferred Shares which are the subject
14
of a Conversion Notice, that are to be either redeemed, caused to be sold or
converted on the Conversion Date shall, to the extent practicable, be in the
same proportion as the proportion of the Subject Shares (as a whole) that are to
be either redeemed, caused to be sold or converted on that same Conversion Date.
(c) Payment Upon Redemption or Arranged Sale:
In the event that redemption or arranged sale to a purchaser(s) is elected
by the Corporation in respect of all or part of the Subject Shares, the
Corporation or the purchaser(s) (as the case may be) shall make payment, by
cheque payable to the holders of the Subject Shares, of an amount of $25.00 per
Series 1 Preferred Share which is being redeemed or sold, together with all
accrued and unpaid dividends on such Series 1 Preferred Share (which for such
purpose shall be calculated as if such fixed preferential cumulative cash
dividends were accruing from day to day for the period from the expiration of
the last period for which cumulative dividends have been paid up to but
excluding the applicable Conversion Date).
(d) Termination of Rights:
The Subject Shares to be redeemed or sold shall not be converted into
Common Shares on the applicable Conversion Date and the right of any holder to
convert such shares into Common Shares as herein provided shall cease and
terminate if the election has been made by the Corporation to redeem or arrange
for the sale of such shares; provided, however, that should, on or before the
close of business on the applicable Conversion Date, either (i) the Corporation
fail to pay the redemption price or make the same available for payment, or (ii)
the purchaser or purchasers fail to pay the purchase price, then the right of
conversion shall thereupon revive in respect of those Subject Shares which were
to have been redeemed or sold and the conversion requested by the holder of
those Subject Shares shall be implemented with effect on the Conversion Date as
if such shares had not been called for redemption or sold to a purchaser(s).
(e) Redemption or Purchase Procedure
The redemption or the arranged sale by the Corporation, as the case may be,
of Series 1 Preferred Shares as provided in this section 4 shall be effected by
the transfer agent and registrar for the Series 1 Preferred Shares presenting
and surrendering, to the Corporation, the certificate(s) representing the Series
1 Preferred Shares deposited by the holder thereof for conversion.
4.7 Conversion Procedure
(a) Delivery of Conversion Notice and Share Certificates:
A holder of Series 1 Preferred Shares desiring to convert all or part of
the Series 1 Preferred Shares held by the holder thereby into Common Shares may
do so only by delivering
15
to the transfer agent for the Series 1 Preferred Shares, on or before the date
65 days prior to the Conversion Date, the following:
(i) a certificate or certificates representing the Series 1 Preferred
Shares to be converted; and
(ii) a duly completed Conversion Notice in the form set out on the back of
the certificate for the Series 1 Preferred Shares to be converted.
The Conversion Notice must be signed by the registered holder of the Series
1 Preferred Shares to be converted, or such holder's duly authorized attorney
(in which case proof of the appointment of the attorney, satisfactory to the
Corporation in form and execution, shall be provided), and shall specify the
number of Series 1 Preferred Shares which the holder desires to have converted.
(b) Receipt of Common Shares on Conversion:
The registered holder of Series 1 Preferred Shares surrendered for
conversion as provided in this section 4 (or any person or persons in whose name
or names any such registered holder of Series 1 Preferred Shares shall have
directed certificates representing Common Shares to be issued) shall be deemed
to have become a holder of Common Shares of record on the Conversion Date. As
promptly as practicable after the Conversion Date the Corporation shall issue
and cause to be delivered a certificate or certificates for the number of Common
Shares resulting from such conversion in the name of and to the registered
holder of the Series 1 Preferred Shares so converted or, subject to payment by
the registered holder of any stock transfer or other applicable taxes, in the
name of and to such other person or persons as such registered holder may direct
in writing satisfactory to the transfer agent and registrar in form and
execution.
(c) Conversion of Part Only:
If fewer than all the Series 1 Preferred Shares represented by a
certificate or certificates accompanying a Conversion Notice are to be
converted, the Corporation shall issue and deliver or cause to be delivered, at
the expense of the Corporation, a new certificate representing the Series 1
Preferred Shares comprised in the certificate or certificates surrendered but
which are not to be converted, redeemed or sold.
(d) Termination of Rights:
From and after the Conversion Date, the Series 1 Preferred Shares in
respect of which conversion rights shall have been exercised and which are to be
converted into Common Shares as provided in this section 4 shall be deemed to be
converted and the holders thereof shall cease to be entitled to dividends on
such Series 1 Preferred Shares and shall not be entitled to exercise any of the
rights of shareholders in respect thereof, unless the issue and delivery of the
Common
16
Shares and any payment to which such holders are entitled shall not be duly made
by the Corporation in accordance herewith in which case the rights of such
holders shall remain unaffected.
(e) Interpretation:
For the purposes of this section 4, the Conversion Date applicable to a
particular conversion of Series 1 Preferred Shares (or any redemption or
arranged sale thereof as herein provided) shall be the first Conversion Date
which occurs not less than 65 days after an election has been duly made by the
holder of such Series 1 Preferred Shares as provided in this section 4.
5. Purchase for Cancellation
Subject to section 7 hereof, the Corporation may at any time or from time
to time purchase for cancellation all or any number of Series 1 Preferred Shares
at any price in the following ways:
(a) by an invitation for tenders which is distributed directly to all
holders of Series 1 Preferred Shares;
(b) by an invitation for tenders which is distributed through the
facilities of any stock exchange on which the Series 1 Preferred
Shares are listed; or
(c) in any other manner other than as set forth in paragraphs (a) and (b)
above;
provided that in the case of a purchase in any manner other than as set forth in
(a) and (b) above, the price for such Series 1 Preferred Shares so purchased for
cancellation shall not exceed the highest price offered for a board lot of the
Series 1 Preferred Shares on any stock exchange on which such shares are listed
on the date of purchase, plus the costs of purchase.
6. Authorized Capital
Any Series 1 Preferred Shares which are redeemed or purchased by the
Corporation pursuant to sections 2, 4 or 5 hereof shall be cancelled.
7. Restrictions on Dividends and Retirement of Shares
So long as any of the Series 1 Preferred Shares are outstanding, unless the
prior approval of the holders of the Series 1 Preferred Shares is obtained in
the manner specified in section 10 hereof and such other approvals are obtained
as may then be prescribed by the articles of the
17
Corporation and applicable law, the Corporation shall not:
(a) declare, pay or set apart for payment any dividend on the Common
Shares, the Second Preferred Shares or shares of any other class of
shares of the Corporation ranking junior to the Series 1 Preferred
Shares with respect to priority in the payment of dividends, other
than a stock dividend payable in Common Shares, Second Preferred
Shares or shares of any other class of shares of the Corporation
ranking junior to the Series 1 Preferred Shares with respect to
priority in the payment of dividends;
(b) redeem, purchase or otherwise retire or make any capital distribution
on or in respect of any Common Shares, Second Preferred Shares or
shares of any other class of shares of the Corporation ranking junior
to the Series 1 Preferred Shares with respect to priority in the
distribution of assets in the event of the liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary, or
other distribution of assets of the Corporation among its shareholders
for the purpose of winding up its affairs, except out of the net cash
proceeds of a substantially concurrent issue of shares of the
Corporation ranking junior to the Series 1 Preferred Shares with
respect to priority in the distribution of assets in the event of the
liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary, or other distribution of assets of the
Corporation among its shareholders for the purpose of winding up its
affairs;
(c) redeem, purchase or otherwise retire fewer than all of the Series 1
Preferred Shares then outstanding; or
(d) redeem, purchase or otherwise retire any other shares of the
Corporation ranking on a parity with the Series 1 Preferred Shares
with respect to the payment of dividends or the distribution of assets
in the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or other distribution
of assets of the Corporation among its shareholders for the purpose of
winding up its affairs, except in connection with the exercise of any
purchase obligation, sinking fund, retraction privilege or mandatory
redemption provisions attached to any such shares;
unless all dividends accrued to the most recent Dividend Payment Date then
payable in respect of the Series 1 Preferred Shares shall have been declared and
paid or set apart for payment, and all dividends then payable on all other
shares of the Corporation then issued and outstanding which rank prior to or on
a parity with the Series 1 Preferred Shares in respect of the payment of
dividends shall have been declared and paid or set apart for payment.
18
8. Liquidation, Dissolution or Winding-up
In the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or other distribution of assets
of the Corporation among its shareholders for the purpose of winding up its
affairs, the holders of the Series 1 Preferred Shares shall be entitled to
receive from the assets of the Corporation an amount equal to the aggregate of
(a) $25.00 per Series 1 Preferred Share held by them respectively, plus (b) an
amount equal to all dividends, if any, accrued and unpaid thereon (which for
such purpose shall be calculated as if such fixed preferential cumulative cash
dividends were accruing from day to day for the period from the expiration of
the last period for which cumulative dividends have been paid up to but
excluding the date of distribution), the whole to be paid before any amount
shall be paid by the Corporation or any assets of the Corporation shall be
distributed to holders of the Common Shares of the Corporation, to holders of
the Second Preferred Shares of the Corporation or to holders of any other class
of shares of the Corporation ranking junior to the Series 1 Preferred Shares
with respect to priority 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 assets of the Corporation among its
shareholders for the purpose of winding up its affairs. After payment to the
holders of the Series 1 Preferred Shares of the amounts so payable to them as
specified herein, such holders shall not be entitled to share in any further
distribution of the assets of the Corporation.
9. Modification of Series Provisions
The rights, privileges, restrictions and conditions attaching to the Series
1 Preferred Shares may be deleted, varied, modified, amended or amplified by the
Corporation only with the approval of the holders of the Series 1 Preferred
Shares as provided for in section 10 hereof.
10. Approval of Holders of Series 1 Preferred Shares
Any approval that may be given at any time by the holders of the Series 1
Preferred Shares shall be given either in such manner as may then be required by
applicable law or, if permitted by applicable law, by an instrument or
instruments in writing signed by the holders of not less than two-thirds of the
then outstanding Series 1 Preferred Shares or by resolution passed by not less
than two-thirds of the votes cast on a poll at a meeting or adjourned meeting of
the holders of the Series 1 Preferred Shares then outstanding duly called for
that purpose.
In the event that any approval is to be given at a meeting of the holders
of the Series 1 Preferred Shares, a quorum for the meeting shall consist of the
holders, present in person or represented by proxy, of not less than 25% of the
Series 1 Preferred Shares outstanding at the time of the meeting; if, however,
the holders of 25% of the outstanding Series 1 Preferred Shares are not present
in person or represented by proxy at such meeting within one-half hour after
the time for which the meeting was called, the meeting shall be adjourned
without further notice
19
to a subsequent date and time established by the Chair of the meeting, and a
quorum for the adjourned meeting shall consist of two or more persons holding
Series 1 Preferred Shares present in person or represented by proxy. On every
poll taken at a meeting of holders of Series 1 Preferred Shares, each holder
entitled to vote thereat shall be entitled to one vote for each Series 1
Preferred Share held by such holder.
Except as otherwise provided above, the formalities to be observed with
respect to the calling and conduct of such meeting or adjourned meeting shall be
those from time to time prescribed by the by-laws of the Corporation with
respect to meetings of shareholders of the Corporation or as otherwise provided
by applicable law.
11. Voting Rights
Except as provided in section 10 or provided by applicable law, the holders
of the Series 1 Preferred Shares shall not be entitled as such to receive notice
of, or to attend, or to vote at, any meeting of the shareholders of the
Corporation unless the Corporation shall have failed to fulfil its obligation to
declare and pay eight quarterly dividends on the Series 1 Preferred Shares,
whether or not consecutive. In that event and for so long as any of such
dividends in respect of the Series 1 Preferred Shares remain in arrears, 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,
the holders of the Series 1 Preferred Shares shall be entitled to receive notice
of, and to attend, all meetings of shareholders of the Corporation and shall be
entitled to cast one vote thereat for each Series 1 Preferred Share held.
12. Tax Election
The Corporation shall elect, in the manner and within the time provided
under subsection 191.2(1) of Part VI.1 of the Income Tax Act (Canada) or any
successor or replacement provision of similar effect, to pay tax at a rate and
take all other necessary action under such Act such that no holder of the Series
1 Preferred Shares shall be required to pay tax on dividends received on the
Series 1 Preferred Shares under section 187.2 of part IV.1 of such Act or any
successor or replacement provision of similar effect.