<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
----------------------------------
FORM S-8 TO REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
TELEGLOBE INC.
----------------------------------
(Exact name of issuer as specified in its charter)
Canada Not applicable
-------------------------------- ------------------------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
1000 de la Gauchetiere Street West
24/th/ Floor
Montreal, Quebec, Canada H3B 4X5
---------------------------------------
(Address of Principal Executive Offices)
TELEGLOBE INC.
GLOBAL STOCK SAVINGS PLAN
---------------------------------------
(Full title of the plan)
Andre Bourbonnais, Esq.
Vice President, Chief Legal Officer and Corporate Secretary
Teleglobe Inc.
1000 de la Gauchetiere Street West
24/th/ Floor
Montreal, Quebec, Canada H3B 4X5
-----------------------------------------
(Name and address of agent for service)
Telephone number, including area code, of
agent for service: (514) 868-8124
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Title of Amount to Proposed Proposed Amount of
Securities be Maximum Maximum Fee
to be Registered Offering Aggregated
Registered Price per Offering
Share Price
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, 750,000 $29.50(b) $22,125,000 $6,150.75
no shares,
par value and corresponding
(a) plan interests
- -----------------------------------------------------------------------------------------------------
</TABLE>
(a) This registration statement covers an indeterminate amount of plan
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(b) All Shares purchased under the Plan will be purchased on the New York Stock
Exchange at prices then prevailing.
(c) Filing fee was calculated pursuant to 17 CFR 230.457(c), using a price of
$29.50 which is the closing price of Teleglobe Inc. Common Shares on
June 8, 1999, as reported by the New York Stock Exchange, which is with
five (5) business days
<PAGE>
prior to the date of filing.
PART II.
Information Required in the Registration Statement.
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents filed by Teleglobe Inc. (the "Company") with the
Securities and Exchange Commission (the "Commission") are incorporated by
reference in this registration statement, except to the extent that any
statement or information contained therein is modified, superseded or replaced
by a statement or information contained in any subsequently filed document
incorporated herein by reference:
(a) The Company's Annual Report on Form 40-F for the year ended December
31, 1998;
(b) The Company's Reports of Foreign Issuer on Forms 6-K dated May 20, 1998,
as amended by Form 6-K/A dated October 9, 1998, June 15, 1998, June 24,
1998, August 12, 1998, September 3, 1998, as amended by Form 6-K/A dated
October 9, 1998, October 22, 1998, November 10, 1998, November 13, 1998,
December 3, 1998 and May 19, 1999;
(c) The Company's Form F-4 dated September 4, 1998, as amended October 9,
1998; and
(d) The Company's description of its Common Shares contained in the
registration statement on Form 40-F (file number 333-62945).
All reports and other documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d)of the Securities Exchange Act of 1934, (the
"1934 Act") after the date of this registration statement, but prior to the
filing of a post-effective amendment which indicated that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold,
will be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing of such reports or documents.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Sections 16 and 17 of Teleglobe's By-Laws provide as follows:
"16. Limitation of Liability
No director or officer of the Corporation "Corporation" in this Item 6 refers
to Teleglobe) shall be liable for the
<PAGE>
acts, receipts, neglects or defaults of any other director or officer or
employee or for joining in any receipts or other act for conformity or for
any loss or expense happening to the Corporation through the insufficiency or
deficiency of title to any property acquired by order of the Board for, or on
behalf of, the Corporation or for the insufficiency or deficiency of any
security in or upon which any of the moneys of the Corporation shall be
invested, or for any loss or damage arising from the bankruptcy, insolvency
or tortious acts of any person with whom any of the moneys, securities or
effects of the Corporation shall be deposited or from any loss occasioned by
any error of judgment or oversight on his part, or for any other loss, damage
or misfortune whatever which shall happen in the execution of the duties of
his office or in relation thereto unless the same shall happen through his
own willful act or default. Nothing herein contained shall relieve any
director or officer of the Corporation from his duty to act in accordance
with the Act("Act" in this Item 6 refers to The Canada Business Corporation
Act) or from liability for any breach thereof.
17. Indemnification
The Corporation shall indemnify a director or officer, a former director or
officer, or a person who acts or acted at the request of the Corporation as a
director or officer of a body corporate of which the Corporation is or was a
shareholder or creditor (or a person who undertakes or has undertaken any
liability on behalf of the Corporation or any such body corporate) and the
heirs, executors, administrators and legal representatives of such person,
from and against all costs, charges and expenses whatsoever, including all
amounts paid to settle an action or satisfy a judgment sustained or
reasonably incurred by him in respect of any civil, criminal or
administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of the Corporation or such body
corporate if:
(a) he acted honestly and in good faith with a view to the best interests
of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty he had reasonable grounds for believing
that his conduct was lawful.
The Corporation shall, subject to the Act, indemnify such persons to the same
extent in respect of any action by or on behalf of the Corporation to procure
a judgment in favor of the Corporation to which he is made a party by reason
of being or having been a director or an officer of the
<PAGE>
Corporation if the aforesaid conditions (a) and (b) are fulfilled. Subject to
the Act, the Corporation shall indemnify every person who has been
substantially successful in the defense of any civil, criminal or
administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of the Corporation against all
costs, charges and expenses reasonably incurred by such person in respect of
such action or proceeding.
For greater certainty and without limiting the generality of the foregoing,
the Corporation shall indemnify and save harmless such persons from and
against any liability sustained by them for the acts, receipts, neglects or
defaults of any other director or officer or employee of the Corporation or
for joining in any receipt or act for conformity or for any loss, damage or
expense of the Corporation arising through the insufficiency or deficiency of
title to any property acquired by order of the Board for or on behalf of the
Corporation or for the insufficiency or deficiency of any security in or upon
which any of the moneys of or belonging to the Corporation shall be placed
out or invested or for any loss or damages arising from the bankruptcy,
insolvency or tortious act of any person, firm or corporation with whom or
which any moneys, securities or effects shall be lodged or deposited or for
any other loss, damage or misfortune whatsoever which may occur in the
execution of the duties of their office or in relation thereto, if the
aforesaid conditions (a) and (b) are fulfilled. Subject to the Act, the
Corporation may purchase and maintain for the benefit of any person referred
to in this section insurance against any liability incurred by him under the
Act in his capacity as a director or officer of the Corporation."
Teleglobe has purchased a policy of insurance for the benefit of itself and the
directors and officers of Teleglobe against liability incurred by the directors
and officers in the performance of their duties. The aggregate amount of
coverage is US$125,000,000 in respect of any and all claims. By the terms of
the policy, in circumstances where a director or officer has a claim against
Teleglobe in respect of a loss covered by the policy, Teleglobe may claim on the
policy for 100% of the loss less the deductible of US$100,000 other than for
securities laws violations and the deductible of US$250,000 for securities laws
violations applicable to a claim which may be indemnified by Teleglobe under the
policy. In addition, where a director or officer has a claim against the
insurers in respect of a loss covered by the policy, the director or officer may
claim on the policy for 100% of the loss.
<PAGE>
Item 8. Exhibits.
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Exhibit No. Description
----------- -----------
4(a) Certificate of Amalgamation of the Company (filed
herewith).
4(b) By-laws of Company, as amended (filed herewith).
4(c) Teleglobe Inc. Global Stock Savings Plan (filed
herewith).
5 Opinion of Counsel re: Legality.
23(a) Consent of Independent Accountants.
23(b) Consent of Counsel (included in Exhibit 5).
Item 9. Undertakings.
------------
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include in any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "1933 Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do
-------- -------
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports
<PAGE>
filed by the Company pursuant to Section 13 or Section 15(d) of the
1934 Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the 1933 Act, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) To file a post-effective amendment to the registration statement to include
any financial statements required by Rule 3-19 of Item 512 of Regulation 5-
K at the start of any delayed offering or throughout a continuous offering.
(b) The undersigned Company hereby undertakes that, for purposes of determining
any liability under the 1933 Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the 1933 Act, the Registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Montreal, Province of Quebec, Canada on this 9th day of June, 1999.
TELEGLOBE INC.
By: /s/ Charles Sirois
----------------------------------
Charles Sirois, Chairman and Chief
Executive Officer
Pursuant to the requirements of the 1933 Act, this registration statement
has been signed by the following persons in the capacities indicated on this
9th day of June, 1999.
SIGNATURE TITLE
- --------- -----
/s/ Kenny A. Troutt Vice Chairman, President, Chief Operating
- ---------------------
Kenny A. Troutt Officer and Director
/s/ Claude Seguin Principal Financial Officer
- ---------------------
Claude Seguin
/s/ Francois Laurin Principal Accounting Officer
- ---------------------
Francois Laurin
/s/ Derek H. Burney Director
- ---------------------
Derek H. Burney
/s/ Bruno Ducharme Director
- ---------------------
Bruno Ducharme
/s/ A. Michael Hainsfurther Director
- ---------------------------
A. Michael Hainsfurther
/s/ John A. MacDonald Director
- ---------------------
John A. MacDonald
/s/ T. Allen McArtor Director
- ---------------------
T. Allen McArtor
<PAGE>
/s/ C. Edward Medland Director
- ---------------------
C. Edward Medland
/s/ Jean C. Monty Director
- ---------------------
Jean C. Monty
/s/ Marvin Moses Director
- ---------------------
Marvin Moses
/s/ Carmand Normand Director
- ---------------------
Carmand Normand
/s/ Gregory S. Oliver Director
- ---------------------
Gregory S. Oliver
/s/ Stephen R. Smith Director
- ---------------------
Stephen R. Smith
/s/ H. Arnold Steinberg Director
- ----------------------
H. Arnold Steinberg
/s/ John M. Zrno Director
- ---------------------
John M. Zrno
<PAGE>
THE PLAN
Pursuant to the requirements of the 1933 Act, the persons who administer the
Plan have duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Montreal, Province of
Quebec, Canada, on this 9th day of June, 1999.
Teleglobe Inc. Global Stock Savings Plan
/s/Bruno Ducharme
-----------------
Bruno Ducharme
/s/A. Michael Hainsfurther
--------------------------
A. Michael Hainsfurther
/s/Jean C. Monty
----------------
Jean C. Monty
/s/Stephen R. Smith
-------------------
Stephen R. Smith
being all the members of the Human Resources Committee
of the board of directors of Teleglobe Inc.
<PAGE>
Exhibit 4 (a)
Certificate of Amalgamation
<TABLE>
<S> <C> <C> <C> <C>
[LOGO] Industry Canada Industrie Canada FORM 9 FORMULE 9
ARTICLES OF AMALGAMATION STATUTS DE FUSION
(SECTION 185) (ARTICLE 185)
___________________________________________________________________________________________________________________________________
1 - Name of amalgamated corporation Denomination de la societe issue de la fusion
TELEGLOBE INC.
TELEGLOBE INC.
___________________________________________________________________________________________________________________________________
2 - The place in Canada where the regulated office Lieu au Canada ou doit etre situe le siege social
is to be situated
Metropolitian Region of Montreal, Province of Quebec/Region metropolitaine de Montreal, Province de Quebec
___________________________________________________________________________________________________________________________________
3 - The classes and any maximum number of shares that Categories at tout nombre maximal d'actions que la societe est
the corporation is authorized to issue autorisee a emettre
See Appendix A/Voir l'Annexe A ci-jointe
___________________________________________________________________________________________________________________________________
4 - Restrictions, if any, on share transfers Restrictions sur le transfert des actions, s'il y a lieu
None/Aucune
___________________________________________________________________________________________________________________________________
5- Number (or minimum and maximum number) of directors Nombre(ou nombre minimal et maximal) d'administrateurs
Minimum: 5 Maximum: 25
___________________________________________________________________________________________________________________________________
6 - Restrictions, if any, on business the corporation Limites imposees a ractivite commerciale de la societe, s'il y
may carry on a lieu
None/Aucune
___________________________________________________________________________________________________________________________________
7 - Other provisions, if any Autres dispositions, s'il y a lieu
See Appendix B attached hereto/ Voir l'Annexe b ci-jointe
___________________________________________________________________________________________________________________________________
8 - The amalgamation has been approved pursuant to that 8 - La fusion a ete approuvee en accord avec l'article ou le
section or subsection of the Act which is indicated paragraphe de la Loi indique ci-apres.
as follows:
[_] 183
[X] 184(1)
[_] 184(2)
___________________________________________________________________________________________________________________________________
9 - Name of the amalgamating corporations Corporation No. Title
Denomination des societes fusionnantes Ne de la societe Signature Date Titre
___________________________________________________________________________________________________________________________________
TELEGLOBE CANADA, INC. 217584-3 /S/[SIGNATURE ILLEGIBLE] 1999-01-01 Andre Bourbonnais, Secret:
___________________________________________________________________________________________________________________________________
TELEGLOBE, INC. 200851-3 /S/[SIGNATURE ILLEGIBLE] 1999-01-01 Andre Bourbonnais, Secret:
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
FOR DEPARTMENTAL USE - A L'USAGE DU
MINISTERE SEULEMENT
Corporation No. - Ne de la societe Filed - Deposee
357264 - 1 Jan 6 1999
___________________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
APPENDIX A
--------------------
I- An unlimited number of common shares, Class A Non-Voting Shares and
Preferred Shares, all without nominal or par value.
The rights, privileges, restrictions and conditions attaching to the common
shares and to the Class A Non-Voting Shares shall be as follows:
1. Dividends: Subject to the prior rights of any other shares ranking senior
---------
to the common shares and to the Class A Non-Voting Shares (hereinafter the
"Non-Voting Shares") in respect of priority in the payment of dividends,
the holders of common shares and the holders of the Non-Voting Shares shall
be entitled to participate equally, share for share, at the same time, in
any dividend, whether in cash, in shares of the Corporation or otherwise,
which may be declared or paid on any class of such shares, including,
without limitation, with respect to the amount per share of any such
dividend.
2. Winding-up: In the event of the liquidation, dissolution or winding-up of
----------
the Corporation, or other distribution of assets among its shareholders for
the purpose of winding-up its affairs, whether voluntary or involuntary,
all the remaining property of the Corporation available for distribution to
the holders of the common shares and to the holders of Non-Voting Shares
shall, subject to the prior rights of any other shares ranking senior to
the common shares and to the Non-Voting Shares in respect of any such
distribution on liquidation, dissolution or winding-up of the Corporation
or other distribution of assets among its shareholders for the purpose of
winding-up its affairs, whether voluntary or involuntary, be paid or
distributed equally, share for share, to the holders of the common shares
and to the holders of Non-Voting Shares, without preference or distinction.
3. Voting Rights: At all meetings of shareholders of the Corporation, except
-------------
meetings at which only holders of another class of shares are entitled to
vote, the holders of the common shares shall be entitled to one (1) vote in
respect of each common share. Non-Voting Shares shall not have attached to
them any right to vote at any meeting of shareholders other than provided
for pursuant to the Canada Business Corporations Act.
4. Limitation on Voting Rights: Where the Corporation's articles are to be
---------------------------
amended as provided for in paragraphs (a), (b) or (e) of subsection (1) of
section 176 of the Canada Business Corporations Act, the holders of Non-
Voting Shares will not have the right to vote separately as a class.
<PAGE>
The rights, privileges, restrictions and conditions attaching to the
preferred shares shall be as follows:
5. Issuable in Series: The 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.
6. Rights of Each Series: The Board of Directors of the Corporation shall, by
---------------------
resolution duly passed before the issue of any preferred shares of any
series, determine the designation, rights, privileges, restrictions and
conditions to be attached to the preferred shares of such series,
including, but without in any way limiting or restricting the generality of
the foregoing, the rate of preferential dividends, the dates of payment
thereof, the terms and conditions of redemption, if any, and conversion
rights, if any, the whole as may be confirmed and declared by Articles of
Amendment. Notwithstanding the foregoing, no preferred shares shall have
attached to them any right to vote at any meeting of shareholders other
than:
(i) as provided for pursuant to the Canada Business Corporations Act; and
(ii) as may be provided for in the rights, privileges, restrictions and
conditions attached to any new series of preferred shares created by the
Board of Directors of the Corporation but in such case, voting rights shall
be attached to the preferred shares of such series if, and only if, the
Corporation fails to pay a certain number of dividends, as previously
determined by the Board of Directors of the Corporation, from time to time.
7. Redemption Price: For the purposes hereof, the term "redemption price" for
----------------
any preferred shares shall mean:
(i) where such share was issued for money, the amount for which such
shares was issued; or
(ii) where such share was issued in whole or in part for a consideration
other than money, then the amount in money (if any) paid for the issue of
such shares, plus an amount equal to the fair market value of such other
consideration received; such fair market value shall be calculated as at
the date of issue of such shares and shall be determined in accordance with
recognized standards of valuation.
The redemption price shall be reduced by the amount of any return of
capital paid to the holder of any preferred share as of the date of such
return of capital.
8. Priority: The preferred shares of each series shall, 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 shareholders for the purpose of winding-up
<PAGE>
its affairs, be entitled to a preference over the common shares of the
Corporation and over any other shares ranking junior to the preferred
shares and the preferred shares of each series shall also be given such
other preferences over the common shares and any other shares ranking
junior to the preferred shares as may be determined as to their respective
series authorized to be issued.
9. Parity with Other Series: The preferred shares of each series shall rank on
------------------------
a parity with the 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.
10. Winding-Up: In the event of the liquidation, dissolution or winding-up of
----------
the Corporation or any other distribution of the assets of the Corporation
among its shareholders for the purpose of winding up its affairs, the
holders of the preferred shares shall be entitled to receive, before any
distribution of the assets is made among the holders of the common shares
and any other class of shares ranking junior to the preferred shares, an
amount equal to the redemption price for such shares plus an amount equal
to all accrued and unpaid dividends thereon, whether or not declared (which
for such purposes shall be calculated up to the date of such distribution),
and no more.
11. Modification to Series: Subject to the issuance of a certificate by the
----------------------
Director under the Canada Business Corporations Act, the Corporation may at
any time or times or from time to time pass a special resolution or
resolutions whereby the terms hereof and of the foregoing paragraph may be
altered, amended or repealed or the application thereof suspended in any
particular case and changes may be made to the rights, privileges,
restrictions and conditions, attaching to the preferred shares, but no such
special resolution shall have any force or effect until after it has been
sanctioned by the affirmative vote of the holders of not less than two
thirds (2/3) of the preferred shares then outstanding at a meeting duly
called for such purpose, in addition to such other vote of other classes of
other shareholders as may be required by the Canada Business Corporations
Act.
II- A series of preferred shares of the Corporation designated as the "First
Series Preferred Shares".
The rights, privileges, restrictions and conditions attaching to the
First Series Preferred Shares in addition to those attaching to the
preferred shares of the Corporation as a class, shall be as follows:
1. Dividends: No dividend may be declared and made payable on the common
---------
shares unless an equal and rateable dividend has been declared and made
payable on the First Series Preferred Shares;
<PAGE>
2. Conversion: Each First Series Preferred Share may at any time, at the
----------
option of the holder, be converted into one (1) common share; the
conversion privilege for which provision is made herein shall be exercised
by notice in writing given to the Corporation or its transfer agent
accompanied by the certificate or certificates representing the First
Series Preferred Shares in respect of which the holder desires to exercise
such conversion privilege; such notice shall be signed by the holder of the
First Series Preferred Shares in respect of which such right is being
exercised or by its duly authorized representative and shall specify the
number of First Series Preferred Shares which the holder desires to have
converted; upon receipt of such notice and certificate or certificates, the
Corporation shall, effective as of the date of such receipt, issue or cause
to be issued a certificate or certificates representing fully paid common
shares upon the basis above prescribed to the holder of such First Series
Preferred Shares; if less than all of the First Series Preferred Shares
represented by any certificate are to be converted, the holder shall be
entitled to receive a new certificate representing the First Series
Preferred Shares comprised in the original certificate which are not to be
converted;
3. Fully Paid Shares: All shares resulting from any conversion of First Series
-----------------
Preferred Shares into common shares shall be deemed to be fully paid and
non-assessable;
4. Right to Stock Dividend: In the event that a holder of First Series
-----------------------
Preferred Shares exercises its right to convert any First Series Preferred
Shares in accordance with the terms hereof at any time following payment by
the Corporation of any dividend on any outstanding common shares payable in
shares of the Corporation (a "Stock Dividend") and provided no equivalent
Stock Dividend has been declared and paid on the outstanding First Series
Preferred Shares, such holder of First Series Preferred Shares shall be
entitled to receive, in addition to the common shares to which it would
otherwise be entitled on conversion had no Stock Dividend been paid, an
additional number of common shares equal to the number of common shares
which would have been payable to such holder of First Series Preferred
Shares as a Stock Dividend had the conversion rights giving rise to the
issuance of shares been exercised at or prior to the record date for
payment of the said Stock Dividend;
5. Subdivision: In the event of any subdivision or re-division or change of
-----------
the common shares of the Corporation at any time while any of the First
Series Preferred Shares are outstanding, into a greater number of common
shares, provided always that there has not been, concurrently therewith, an
equal or equivalent subdivision, re-division or change of the First Series
Preferred Shares into a greater number of First Series Preferred Shares (or
into such other shares into which First Series Preferred Shares are
changed), the number of common shares required to be issued and delivered
by the Corporation on the exercise thereafter of the right of conversion
shall be increased to such number of common shares as would have resulted
from such subdivision, re-division or change if the right of conversion had
been exercised prior to the date of such subdivision, re-division or
change.
<PAGE>
6. Consolidation: In the event of any consolidation or change of the common
-------------
shares at any time when any First Series Preferred Share is outstanding and
convertible as provided herein, into a lesser number of shares, the number
of common shares required to be issued and delivered by the Corporation on
the exercise thereafter of the right of conversion shall be reduced to such
number of common shares as would have resulted from such consolidation or
change if the right of conversion had been exercised by the holder of First
Series Preferred Shares prior to the date of such consolidation or change;
III- Divisions
---------
1. Common Shares: As of August 13, 1987, all of the issued and outstanding
-------------
Common Shares of the capital stock of the Corporation are subdivided on a
two-for-one basis, such that each issued and outstanding Common Share in
the capital stock of the Corporation is subdivided into two (2) such Common
Shares.
2. First Series Preferred Shares: As of August 13, 1987, all of the issued and
-----------------------------
outstanding First Series Preferred Shares in the capital stock of the
Corporation are subdivided on a two-for-one basis, such that each issued
and outstanding First Series Preferred share in the capital stock of the
Corporation is subdivided into two (2) such First Series Preferred Shares.
IV- A series of preferred shares of the Corporation designated as the "Second
Series Preferred Shares", which shall consist of 3,000,000 shares.
The rights, privileges, restrictions, and conditions attaching to the
Second Series Preferred Shares, in addition to those attaching to the
preferred shares of the Corporation as a class, shall be as follows:
<PAGE>
1. Dividend
--------
1.1 Payment: The holders of the Second Series Preferred Shares shall be
-------
entitled to receive (in priority to the holders of any shares ranking
junior to the Second Series Preferred Shares) fixed cumulative preferential
cash dividends as and when declared by the Board of Directors on behalf of
the Corporation, out of moneys properly applicable to the payment of
dividends, at the rate of eight per cent (8%) per annum, being Two Dollars
($2) per share per annum, such dividends to be payable (except for the
first of such dividends in an amount calculated in accordance with Section
1.2 of this paragraph 1 in equal amounts of fifty cents ($0.50) per share,
quarterly, in respect of each twelve (12) month period on the first day of
February, May, August and November (each of which dates is hereinafter
referred to as a "Dividend Payment Date"). Dividends on the Second Series
Preferred Shares shall accrue, as the case may be, from and including the
date of issue thereof, or from and including the last Dividend Payment Date
in respect of which dividends have been paid in full. Cheques of the
Corporation payable at par in lawful money of Canada at any branch in
Canada of the Corporation's bankers shall be issued in respect of such
dividends (less any taxes required to be deducted) to the holders of the
Second Series Preferred Shares entitled thereto and the mailing of such
cheques to the registered holders of Second Series Preferred Shares by the
Corporation shall constitute satisfaction of payment of such dividends to
the extent of the respective amounts represented thereby unless any such
cheques are not paid upon due presentation. If on any Dividend Payment Date
the dividends provided for herein as payable on such date are not paid in
full on all the Second Series Preferred Shares then issued and outstanding,
such dividends or the unpaid part thereof shall be paid on a subsequent
date or dates as determined by the Board of Directors. The holders of the
Second Series Preferred Shares shall not be entitled to any dividends other
than or in excess of the cash dividends hereinbefore provided for. A
dividend which is represented by a cheque which has not been presented for
payment within six (6) years after it was issued, or that otherwise remains
unclaimed for a period of six (6) years from the date on which it was
declared to be payable and set apart for payment, shall be forfeited to the
Corporation.
1.2 Calculation for the First Quarterly Dividend: The amount of the
--------------------------------------------
dividend accrued to and payable on August 1, 1991 on each Second Series
Preferred Shares shall be that proportion (rounded to the nearest one
hundredth (1/100th) of one cent) of Two Dollars ($2) which the number of
days from and including the date of issue to but excluding August 1, 1991
is to Three Hundred and Sixty-Five (365).
1.3 Election respecting Part VI.I Tax: The Corporation shall make an
---------------------------------
election, in the manner and within the time provided under the Income Tax
Act (Canada), (the "Act") under Section 191.2 of the said Act or any
successor or replacement provision of similar effect, and take all other
necessary action under such Act, to pay tax at a rate such that no holder
of Second Series Preferred Shares will be required to pay tax on dividends
<PAGE>
received on the Second Series Preferred Shares under Section 187.2 of such
Act or any successor or replacement provision of similar effect.
2. Restriction on Dividends and Retirement of Shares: Without the prior
-------------------------------------------------
approval of the holders of outstanding Second Series Preferred Shares given
as hereinafter set forth at Paragraph 12 of this Article IV:
a) the Corporation shall not pay or set apart for payment any dividends
(other than stock dividends in shares of the Corporation ranking junior to
the preferred shares of the Corporation) on any shares of the Corporation
ranking junior to or on a parity with the preferred shares of the
Corporation or any series thereof;
b) the Corporation shall not call for redemption, redeem, purchase or
otherwise retire or make any capital distribution on or in respect of any
shares ranking junior to or on a parity with the preferred shares of the
Corporation or any series thereof (except out of the net cash proceeds of a
substantially concurrent issue of shares of the Corporation ranking junior
to or on a parity with the preferred shares of the Corporation or any
series thereof);
c) except in connection with the redemption of Second Series Preferred
Shares as set forth in Paragraph 6 of this Article IV, the Corporation
shall not call for redemption, redeem, or otherwise retire less than all of
the Second Series Preferred Shares; or
d) except in connection with the exercise of a retraction privilege of a
shareholder or mandatory redemption obligation of the Corporation attaching
thereto, the Corporation shall not call for redemption, redeem, or
otherwise retire any shares of any class or series ranking prior to or on a
parity with the preferred shares of the Corporation or any series thereof;
unless, in each such case, all cumulative preferential dividends accrued on
outstanding Second Series Preferred Shares and on all other outstanding
shares of the Corporation ranking in priority to or on a parity with the
Second Series Preferred Shares up to and including the dividend payable on
the last preceding date applicable to any such shares for the payment of
dividends shall have been declared and paid or made available for payment
at the date of such declaration or payment or setting apart or call for
redemption or purchase for cancellation.
3. Liquidation: The holders of the Second Series Preferred Shares shall be
-----------
entitled on 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 (in priority to the holders of
shares ranking junior to the Second Series Preferred Shares) to the payment
of twenty-five dollars ($25) in respect of each share together with an
amount equal to all accrued and unpaid cumulative preferential dividends
thereon, whether or not
<PAGE>
declared, calculated to the date of such distribution. After payment to the
holders of the Second Series Preferred Shares as aforesaid such holder
shall not be entitled to share in any further distribution of the assets of
the Corporation.
4. Redemption at the Option of the Corporation
-------------------------------------------
4.1 No Redemption: The Corporation may not redeem any Second Series
-------------
Preferred Shares prior to May 2, 1997.
4.2 Right to Redeem: Subject to Paragraph 2 of this Article IV, the
---------------
Corporation, upon giving notice as hereinafter provided, may, on or after
May 2, 1997, redeem all at any time and part from time to time of the
Second Series Preferred Shares on payment for each shares to be redeemed of
a price of Twenty-Five Dollars ($25), plus in each case an amount equal to
all accrued and unpaid cumulative preferential dividends thereon, whether
or not declared, calculated to the date of redemption (the whole
constituting the "Second Series Redemption Price").
4.3 Partial Redemption: If less than all outstanding Second Series
------------------
Preferred Shares are to be redeemed pursuant to Section 4.2 of this
Paragraph 4, the shares to be redeemed shall be selected by lot, or
redeemed pro rata in such manner as the Board of Directors may in its
--- ----
discretion by resolution determine.
4.4 Procedure: The Corporation shall give at least sixty (60) days prior
---------
notice in writing to each person who, at the date of giving such notice, is
the registered holder of the Second Series Preferred Shares to be redeemed,
of the intention of the Corporation to redeem such shares. Such notice
shall be given, at the option of the Corporation, by personal delivery or
by posting the same in a postage paid envelope addressed to each holder of
Second Series Preferred Shares to be redeemed at the last address of such
holder as it appears on the books of the Corporation or, in the event of
the address of any holder not so appearing, then to the address of such
holder last known to the Corporation, provided that the accidental failure
or omission to give any such notice as aforesaid to one or more of such
holders shall not affect the validity of the redemption, and upon any such
failure or omission being discovered the Corporation shall give notice as
aforesaid and such notice shall have the same force and effect as if given
correctly and in due time. Such notice shall set out the Second Series
Redemption Price, the Conversion Rate in effect on the date of the mailing
of the notice, the time, place and manner of redemption and, in the case of
partial redemption, the number of Second Series Preferred Shares held by
the person to whom it is addressed which are to be redeemed.
4.5 Payment: On and after the date so fixed for redemption, the Series
-------
Preferred Shares to be redeemed the applicable Second Series Redemption
Price on presentation and surrender at the head office of the Corporation,
or at any other place or places within Canada designated by such notice, of
the certificate or certificates for such Second Series
<PAGE>
Preferred Shares so called for redemption. Such payment shall be made by
cheque payable at par at any branch in Canada of the Corporation's bankers
and the delivery of such cheques shall be deemed to constitute satisfaction
of the respective amounts represented thereby (plus any tax required to be
and deducted or withheld therefrom). From and after the date fixed for
redemption in any such notice, the Second Series Preferred Shares called
for redemption shall be deemed to have been redeemed and the holders
thereof shall cease to be entitled to dividends or to exercise any of the
rights of shareholders in respect thereof unless any such cheques are not
paid on due presentation, in which event the rights of the holders of such
shares shall remain unimpaired.
4.6 Deposit of Second Series Redemption Price: At any time after notice of
-----------------------------------------
redemption is given as aforesaid, the Corporation shall have the right to
deposit the Second Series Redemption Price of any and all Second Series
Preferred Shares to be redeemed with any chartered bank or banks or with
any trust company or trust companies in Canada named in the notice of
redemption to the credit of a special account or accounts in trust for the
respective holders of such shares, to be paid to them respectively upon
presentation and surrender to such bank or banks or trust company or trust
companies of the certificate or certificates representing the same. Upon
such deposit or deposits being made or upon the date fixed for redemption
in such notice, whichever is later, the shares in respect of which such
deposit shall have been made shall be deemed to have been redeemed and the
rights of each holder thereof shall be limited to receiving the proportion
(less any tax required to be and deducted or withheld therefrom) of the
amounts so deposited applicable to such shares, without interest, any
interest allowed on any such deposit belonging to the Corporation.
4.7 New Certificate upon Partial Redemption: If a part of the Second
---------------------------------------
Series Preferred Shares represented by any certificate shall be redeemed, a
new certificate for the balance shall be issued without charge.
5. Purchase for Cancellation
-------------------------
5.1 Right to Purchase: Subject to the terms of Paragraph 2 of this Article
-----------------
IV, the Corporation may, at any time, purchase in the open market for
cancellation any or all of the Second Series Preferred Shares at a price
not exceeding twenty-five dollars ($25) plus all accrued and unpaid
dividends thereon, whether or not declared calculated to the date of such
purchase for cancellation. Any Second Series Preferred Shares so purchased
by the Corporation shall be cancelled and shall not be reissued.
5.2 Partial Purchase for Cancellation: If a part only of the Second Series
---------------------------------
Preferred Shares represented by any certificate shall be purchased for
cancellation, a new certificate for the balance shall be issued without
charge.
6. Redemption at Option of Holder
------------------------------
<PAGE>
6.1 Holder's Right to Require Redemption: Each holder of Second Series
------------------------------------
Preferred Shares shall be entitled, subject to and upon compliance with the
provisions of this Paragraph 6, to require the Corporation to redeem all or
any part of the Second Series Preferred Shares registered in the name of
that holder on May 1, 1997 (the "Retraction Date") at a price equal to
twenty-five dollars ($25) per share plus an amount equal to all accrued and
unpaid dividends thereon, whether or not declared, calculated to the date
of redemption, the whole constituting the "Retraction Price".
6.2 Procedure: The Corporation or the transfer agent for the time being of
---------
the Second Series Preferred Shares shall, at least sixty (60) days and not
more than ninety (90) days prior to the Retraction Date, give written
notice of the right provided for in Section 6.1 of this Paragraph 6 to the
registered holders of the Second Series Preferred Shares. Such notice shall
set out the Retraction Price and particulars of the procedure to be
followed by any holder wishing to exercise such right, including the time,
place and manner of exercise of such right as hereinafter set out. If, on
the date of such notice, the Corporation, acting in good faith, has reason
to believe that the Corporation will be unable, under applicable law, to
redeem all of the Second Series Preferred Shares on the Retraction Date,
such notice shall contain a statement to that effect, as well as an
estimate of the number of Second Series Preferred Shares which the
Corporation expects to be in a position to redeem on the Retraction Date.
Each holder of Second Series Preferred Shares who elects to have the
Corporation redeem any or all Second Series Preferred Shares registered in
the name of that holder must, prior to the close of business on April 15,
1997, deposit the certificate or certificates representing the Second
Series Preferred Shares which that holder desires to have redeemed with the
transfer agent for the Second Series Preferred Shares at any place where a
transfer registry is maintained and must, at the time of such deposit, have
signified his election and the number of shares which he desires to have
redeemed by duly completing the holder's election contained in the
retraction panel contained on the certificates for Second Series Preferred
Shares.
6.3 Payment: Subject to Section 6.4 of this Paragraph 6, the Corporation
-------
shall redeem on the Retraction Date the number of Second Series Preferred
Shares for which certificates have been deposited and with respect to which
the holders have signified their election as aforesaid by paying to the
holder entitled thereto or by depositing the Retraction Price, both as set
forth in Paragraph 4 of this Article IV. The Second Series Preferred Shares
in respect of which such payment or deposit is made shall be deemed to have
been redeemed on the Retraction Date and the holders thereof shall cease to
be entitled to dividends or to exercise any of the rights of holders
thereof, unless payment or deposit of the Retraction Price is not made as
aforesaid, in which event (but subject to Sections 6.5 and 6.6 of this
Paragraph 6 the rights of the holders of such shares shall remain
unimpaired.
6.4 Limitation: If the redemption by the Corporation of all Second Series
----------
Preferred Shares required to be redeemed on the Retraction Date under this
Paragraph
<PAGE>
6 would be contrary to applicable law, the Corporation shall redeem pro
---
rata (to the nearest whole share) the maximum number of Second Series
----
Preferred Shares (rounded to the next lower multiple of One Hundred (100)
shares) which the Corporation is then permitted to redeem. Thereafter, the
Corporation shall redeem pro rata (to the nearest whole share) on each
--- ----
succeeding Dividend Payment Date the maximum number of shares (rounded to
the next lower multiple of One Hundred (100) shares) which the Corporation
is then permitted to redeem, and so on until all Second Series Preferred
Shares which have been deposited for redemption under this Paragraph 6 and
which have not been released from deposit under Section 6.6 of this
Paragraph 6 have been redeemed. Redemptions under Section 6.4 of this
Paragraph 6 shall be in accordance with Paragraph 4 of this Article IV,
except that the shares to be redeemed shall be the shares which have been
deposited for redemption under this Paragraph 6 and which have not been
released from deposit under Section 6.6 of this Paragraph 6.
6.5 Partial Redemption: Upon any redemption of part but not all Second
------------------
Series Preferred Shares represented by any certificate(s) deposited as
aforesaid, the Corporation shall issue a new certificate to the holder
representing the number of Second Series Preferred Shares not redeemed and
remaining outstanding, provided that any certificate issued in respect of
shares not released from deposit under Section 6.6 of this Paragraph 6
shall remain on deposit pending redemption under Section 6.4 of this
Paragraph 6.
6.6 Election Irrevocable:
--------------------
6.6.1 Subject to clause 6.6.2, the election by any holder to require
the Corporation to redeem any Second Series Preferred Shares shall be
irrevocable upon receipt by the Corporation of the certificates for
the shares to be redeemed and the signification of election of the
holder as aforesaid.
6.6.2 To the extent that the Corporation has not redeemed shares
deposited for redemption due to the operation of Section 6.4 of this
Paragraph 6, any holder who made an original deposit may elect to
withdraw all but not less than all the number of shares so deposited
by him, and not redeemed, by giving notice to that effect at least
five (5) business days prior to any succeeding Dividend Payment Date
on which such shares may be subject to redemption by the Corporation
as in this Paragraph 6 provided. Any such notice shall be deemed to be
validly given if the same is duly executed by or on behalf of the
registered holder of such shares and delivered to the transfer agent
of the Corporation at any office where transfers of such shares may be
registered and the date of delivery of such notice shall be deemed to
be the date of giving of same, in which case, such holder shall be
deemed to have elected not to have the unredeemed balance of his
deposited shares redeemed under Section 6.4 of this Paragraph 6; such
number of shares deposited and not redeemed
<PAGE>
shall be released from the deposit and the Corporation shall
thereafter have no obligation to redeem pursuant to Section
6.4 of this Paragraph 6 any of the shares so released.
6.7 Not Affected Dividends: The inability of the Corporation to
----------------------
effect a redemption in whole on the Retraction Date or a subsequent
Dividend Payment Date shall not affect or limit the obligations of the
Corporation to pay any dividends accrued or accruing on the Second
Series Preferred Shares from time to time not redeemed and remaining
outstanding.
7. Conversion Rights
-----------------
7.1 Right to Convert: Subject to and upon compliance with the
----------------
provisions of this Paragraph 7, the holder of any Second Series
Preferred Shares may elect at any time including, in case the Second
Series Preferred Shares are called for redemption by the Corporation,
up to the close of business on the third business day prior to the date
fixed for redemption, that such Second Series Preferred Shares be
converted into fully paid and non-assessable common shares of the
Corporation (the "Commons Shares") at a conversion rate of 2.32558
Common Shares for each Second Series Preferred Share so converted,
representing an effective conversion price of $10.75 for each Common
Share as currently constituted. As used herein, "Conversion Rate"
shall mean the conversion rate set forth in this Section 7.1 of this
Paragraph 7 as adjusted from time to time in accordance with Paragraph
8 of this Article IV.
7.2 Conversion Procedure: In order to exercise the conversion
--------------------
privilege herein provided for, the holder of any Second Series
Preferred Shares to be converted shall surrender the certificate or
certificates representing such Second Series Preferred Shares to the
Corporation or the transfer agent for the time being of the Second
Series Preferred Shares with the election of conversion privilege panel
contained on the certificates for Second Series Preferred Shares duly
completed by the said holder or his agent specifying the number of
Second Series Preferred Shares which the holder desires to convert. If
any Common Shares into which such Second Series Preferred Shares are to
be converted are to be issued to a person or persons other than the
registered holder thereof, such election of conversion privilege shall
be accompanied by payment to the Corporation of any transfer tax which
may be payable by reason thereof. The endorsement of the election of
conversion privilege by the holder of any Second Series Preferred
Shares and the surrender of the certificate or certificates
representing the Second Series Preferred Shares which that holder
desires to convert shall be deemed to constitute a contract between the
holder of the Second Series Preferred Shares to be converted and the
Corporation whereby: (a) the holder of such Second Series Preferred
Shares subscribes for the number of Common Shares which he shall be
entitled to receive upon such conversion; and (b) the Corporation
agrees that the surrender of the certificate or certificates
representing the Second Series Preferred Shares in the manner aforesaid
for conversion,
<PAGE>
in whole or in part, constitutes full payment of the subscription price
for the Common Shares issuable on such conversion and to the extent
thereof.
As promptly as possible after the date of conversion, but subject to
Paragraph 8 of this Article IV, the Corporation shall issue or cause to
be issued and deliver or cause to be delivered to the holder whose
Second Series Preferred Shares are so surrendered, a certificate or
certificates in the name or names of the person or persons specified in
the election of conversion privilege for the number of Common Shares
deliverable upon the conversion of such Second Series Preferred Shares,
or the specified portion thereof, as the case may be, together with new
certificates representing the Second Series Preferred Shares, where
applicable, that remain unconverted. Upon conversion the rights of the
holder of such Second Series Preferred Shares to receive any payment in
respect of the Second Series Redemption Price thereon or any dividend
(other than dividends accrued and unpaid thereon, whether or not
declared, calculated to the date of such conversion), shall cease and
the holder or the other person or persons in whose name or names any
certificate or certificates for Common Shares shall be deliverable upon
such conversion shall be deemed to have become on such date the holder
or holders of record of the Common Shares represented thereby.
The right of a holder of Second Series Preferred Shares to convert such
shares into Common Shares shall be deemed to have been exercised and
the holder of Second Series Preferred Shares to be converted (or any
person in whose name such holder of Second Series Preferred Shares
shall have directed that a certificate or certificates representing
Common Shares be issued as provided in this Paragraph 7))shall be
deemed to have become a holder of Common Shares for all purposes, on
the date or dates of receipt by the transfer agent of the certificate
or certificates representing Second Series Preferred Shares as herein
provided, notwithstanding any delay in the delivery of the certificate
or certificates representing the Common Shares into which such Second
Series Preferred Shares have been converted.
The registered holder of any Second Series Preferred Shares on the
record date for any dividend payable on such shares shall be entitled
to such dividend notwithstanding that such shares shall have been
converted into Common Shares after such record date and before the
payment date of such dividend, and the registered holder of a Common
Share resulting from such conversion shall be entitled to rank equally
with the registered holders of all other Common Shares from and after
the date of such conversion. Subject to the foregoing, upon conversion
of any Second Series Preferred Shares there shall be no adjustment by
the Corporation or by any holder of Second Series Preferred Shares on
account of any dividend on the Second Series Preferred Shares so
converted or on any Common Shares resulting from such conversion.
The holder of any Second Series Preferred Shares converted in
accordance with the provisions hereof shall be deemed to remain a
holder of such Second Series Preferred
<PAGE>
Shares in respect of all entitlements to accrued and unpaid dividends
thereon, whether or not declared, as herein provided, calculated to the
date of such conversion.
Upon surrender to the Corporation or the transfer agent of the
Corporation for the time being of the certificate or certificates
representing the Second Series Preferred Shares which are to be
converted in part only, the holder thereof shall be entitled to
receive, without expense to such holder, one or more new certificates
representing the unconverted portion of the Second Series Preferred
Shares so surrendered.
7.3 No Fractional Shares: Notwithstanding anything herein
--------------------
contained, the Corporation shall in no case be required to issue
fractional Common Shares upon the conversion of any Second Series
Preferred Shares. If, except for the provisions of this part, any
fractional Common Shares would be deliverable upon the conversion of
any Second Series Preferred Shares, the Corporation shall adjust for
such fraction by either, at its sole discretion:
7.3.1 paying to the holder of such surrendered Second
Series Preferred Shares an amount in cash equal to the value
thereof (to the nearest cent), such value to be determined by
the amount of the fraction in relation to the conversion
price; or
7.3.2 issuing or causing to be issued in respect of such
fraction or fractions a scrip certificate, transferable by
delivery, entitling the holder thereof and other similar scrip
certificates aggregating one (1) full Common Share, (upon
surrender of such scrip certificates at such place as may be
designated therein), to obtain from the Corporation a full
Common Share and to receive a share certificate therefor.
Such scrip certificate shall be in such form and terms and
shall be subject to such conditions as the Corporation may
determine, and shall provide that the holder thereof shall not
be a shareholder or be entitled to receive dividends or to any
other rights of a shareholder.
7.4 Conversion Rights Prior to Redemption: In the event that the
-------------------------------------
Second Series Preferred Shares are called for redemption, any right of
conversion thereof shall terminate at the close of business on the
third business day immediately prior to the date fixed for redemption,
provided, however, that in the event the Corporation shall fail to
redeem such Second Series Preferred Shares in accordance with the
notice of redemption, the right of conversion shall thereupon be
restored.
7.5 Fully Paid and Non-Assessable: All Common Shares resulting
-----------------------------
from any conversion of Second Series Preferred Shares shall be deemed
to be fully paid and shall be non-assessable.
<PAGE>
8. Adjustments: The number of Common Shares which may be issued upon an
-----------
election by a holder of Second Series Preferred Shares to convert as
herein provided shall be subject to adjustment from time to time as
follows:
8.1 Stock Dividends, Subdivision, Consolidation, etc.: In case
-------------------------------------------------
the Corporation shall:
8.1.1 except as provided in Subsection 8.7.1 of this
Paragraph 8, issue Common Shares of the Corporation to all or
substantially all the holders of Common Shares by way of a
stock dividend or otherwise; or
8.1.2 subdivide its outstanding Common Shares into a
greater number of shares; or
8.1.3 reduce, combine or consolidate its outstanding Common
Shares into a smaller number of shares; or
8.1.4 reclassify its outstanding Common Shares;
a holder of Second Series Preferred Shares shall be entitled to receive
upon conversion the number of Common Shares which he would have owned
or been entitled to receive had such Second Series Preferred Shares
been converted immediately prior to such time. Any dividend or
distribution in Common Shares declared on the Common Shares shall be
deemed to have been issued or made immediately prior to the time of the
record date for such dividend or distribution for purposes of
calculating the number of outstanding Common Shares under Sections 8.2
and 8.3 of this Paragraph 8. Such adjustments shall be made
successively whenever any event listed above shall occur.
8.2 Adjustment of Conversion Rate: In case the Corporation shall
-----------------------------
fix a record date for the issuance of options, rights or warrants to
all or substantially all the holders of its Common Shares entitling
them (for a period expiring within forty-five (45) days after such
record date) to subscribe for or purchase Common Shares (or securities
convertible into or exchangeable for Common Shares) at a price per
share (or having a conversion or exchange price per share) less than
ninety-five per cent (95%) of the Current Market Price (as herein
defined) of a Common Share on such record date, the Conversion Rate in
effect on such record date shall be adjusted immediately thereafter so
that it shall equal the price determined by multiplying the Conversion
Rate in effect on such record date by a fraction, of which the
denominator shall be the total number of Common Shares outstanding on
such record date plus a number of Common Shares equal to the number
arrived at by dividing the aggregate price of the total number of
additional Common Shares so offered (or the aggregate conversion or
exchange price of the convertible or exchangeable securities so
offered) by such Current Market Price per Common Share and of which the
numerator shall be the total number of Common Shares outstanding on
such record date plus the total number of additional Common Shares
<PAGE>
offered for subscription or purchase (or into which the convertible or
exchangeable securities so offered are convertible or exchangeable, as
the case may be). Common Shares owned by or held for the account of the
Corporation shall be deemed not to be outstanding for the purpose of
any such computation. Such adjustment shall be made successively
whenever such a record date is fixed. To the extent that such options,
rights or warrants are not so issued or such options, rights or
warrants are not exercised prior to the expiration thereof, the
Conversion Rate shall be readjusted to the Conversion Rate which would
then be in effect based upon the number of Common Shares (or securities
convertible or exchangeable into Common Shares), if any, actually
delivered upon the exercise of such options, rights or warrants.
8.3 Record Date: In case the Corporation shall fix a record date
-----------
for the making of a distribution to all or substantially all the
holders of its Common Shares (a) of any shares of any class not
included in the definition of Common Shares, or (b) of evidence of
indebtedness, or (c) of assets (excluding cash dividends paid in the
ordinary course out of earnings and excluding dividends or distribution
of Common Shares as provided in Section 8.1 of this Paragraph 8 and
stock dividends to holders of Common Shares as provided in subsection
8.7.1 of this Paragraph 8, or (d) of options, rights or warrants for a
period expiring more than forty-five (45) days after such record date,
then, in each such case the Conversion Rate shall be adjusted
immediately after such record date so that it shall equal the price
determined by multiplying the Conversion Rate in effect on such record
date by a fraction, of which the denominator shall be the total number
of Common Shares outstanding on such record date multiplied by the
Current Market Price of a Common Share on such record date, less the
aggregate fair market value (as determined by the board of directors,
whose determination shall be conclusive) of said shares or evidences of
indebtedness or assets or options, rights or warrants so distributed
and of which the numerator shall be the total number of Common Shares
outstanding on such record date multiplied by such Current Market Price
of each such Common Share on such record date. Common Shares owned by
or held for the account of the Corporation shall be deemed not to be
outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed. To
the extent that such distribution is not so made, the Conversion Rate
shall be readjusted to the Conversion Rate which would then be in
effect based upon the said shares or evidences of indebtedness or
assets or options, rights or warrants actually distributed.
8.4 No Adjustments: No adjustments of the Conversion Rate shall
--------------
be made pursuant to Subsection 8.1.1 or pursuant to Sections 8.2 and
8.3 of this Paragraph 8 if the holders of the Second Series Preferred
Shares are permitted to participate in such dividend or distribution on
the Common Shares of the Corporation in Common Shares or in the issue
of such options, rights, warrants or in such distribution, as the case
may be, as though and to the same effect as if they had converted their
Second Series Preferred Shares into Common Shares prior to the record
date for such dividend or distribution or the issue of such options,
rights or warrants or such distribution, as the case may be.
<PAGE>
8.5 Other Adjustments: In any case in which this Paragraph 8
-----------------
shall require that an adjustment shall become effective immediately
after a record date for an event referred to herein, until the
occurrence of such event, the Corporation may defer (a) issuing to the
holder of any Second Series Preferred Shares converted after such
record date and before the occurrence of such event the additional
Common Shares issuable upon such conversion by reason of the adjustment
required by such event in addition to the Common Shares issuable upon
such conversion before giving effect to such adjustment, and (b) paying
to such holder cash in lieu of any fractional interest to which he is
entitled pursuant to Paragraph 7 of this Article IV above provided,
however, that the Corporation shall deliver to such holder an
appropriate instrument evidencing such holder's rights to receive such
additional Common Shares and such cash, upon the occurrence of the
event requiring such adjustment.
8.6 De Minimis Exception: No adjustment in the Conversion Rate
--------------------
shall be required unless such adjustment would result in an increase or
decrease of at least one per cent (1%) in such conversion price;
provided, however, that any adjustments which by reason of this Section
8.6 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.
8.7 Adjustment Exclusions: For greater certainty, nothing
---------------------
contained in this Paragraph 8 or elsewhere herein shall be construed as
requiring adjustment in the Conversion Rate where an increase in the
number of issued Common Shares results from:
8.7.1 the payment of a dividend in the form of additional
Common Shares to the holders thereof who exercise a right or
option given to all or substantially all the holders of Common
Shares to receive equivalent dividends in shares in lieu of
cash dividends paid in the ordinary course; or
8.7.2 the exercise of any non-transferable right, option or
warrant extended or given to employees of the Corporation from
time to time to subscribe for or purchase Common Shares or
other shares of the Corporation; or
8.7.3 the exercise of the right already or in future
extended or given to all or substantially all the holders of
Common Shares to purchase additional Common Shares at a
discount of up to and including ten per cent (10%) pursuant to
any employee stock option plan or plans of the Corporation in
effect from time to time; or
8.7.4 the exercise of any right to convert any debenture or
other evidence of indebtedness of the Corporation into Common
Shares; or
<PAGE>
8.7.5 the exercise of any warrant to purchase Common Shares
of the Corporation; or
8.7.6 the exercise of any right to convert into Common
Shares any shares of any class of shares, other than Common
Shares that may be issued and outstanding from time to time;
or
8.7.7 the issuance of any Common Shares or the issuance of
any options, rights, warrants, evidence of indebtedness or
other securities which could result in the subsequent issuance
of Common Shares, in circumstances other than those prescribed
in this Paragraph 8.
8.8 "Current Market Price" and "Weighted Average Daily Market
---------------------------------------------------------
Price" Defined
--------------
8.8.1 "Current Market Price" at any date means a price per
Common Share equal to at least the Weighted Average Daily
Market Price as defined herein, at which the Common Shares on
The Toronto Stock Exchange or, if the Common Shares are not
then listed on The Toronto Stock Exchange, on a stock exchange
in Canada on which the Common Shares are listed as may be
selected for such purposes by the Board of Directors of the
Corporation, during any period of thirty (30) consecutive
trading days commencing forty-five (45) trading days before
such date preceding the applicable record date referred to in
Sections 8.2 or 8.3 of this Paragraph 8.
8.8.2 "Weighted Average Daily Market Price", for the
purposes of this Paragraph 8, for a given period, means the
sum of the daily amounts resulting from the multiplication of
the daily volume of Common Shares traded on a Stock
Exchange(s) by the arithmetic average of the high and low at
which they have traded on such Stock Exchange during that day,
divided by the total number of Common Shares traded on such
Stock Exchange(s) during such given period.
8.9 Notice of Adjustment: Forthwith after the occurrence of any
--------------------
adjustment in the Conversion Rate as provided herein, the Corporation
shall file with the transfer agent of the Corporation for the Second
Series Preferred Shares a certificate certifying 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 give written notice to the holders of Second Series Preferred
Shares of the Conversion Rate following such adjustment (in the manner
set out at Paragraph 10 of this Article IV).
<PAGE>
9. Corporation to Give Notice to Holders of Second Series Preferred Shares
-----------------------------------------------------------------------
in Certain Events
-----------------
If:
a) the Corporation shall declare a dividend or make a
distribution on its Common Shares in Common Shares of the Corporation
(other than a stock dividend to the holders of Common Shares who
exercise an option to receive equivalent dividends in shares in lieu of
receiving cash dividends paid in the ordinary course); or
b) any of the events mentioned in Sections 8.2 and 8.3 of
Paragraph 8 of this Article IV occurs;
then, in each such case the Corporation shall give notice, in the
manner specified herein, to each holder of Second Series Preferred
Shares of the action proposed to be taken and the date on which the
books of the Corporation shall close or a record shall be taken for
such dividends, distribution, subscription rights or other options,
rights or warrants, as the case may be, provided that the Corporation
shall only be required to specify in such notice such particulars of
such action as shall have been fixed and determined at the date on
which such notice is given. Such notice shall also specify the date as
of which the holders of Common Shares of record shall participate in
such dividend, distribution, subscription rights or other rights or
warrants, or shall be entitled to exchange their Common Shares for
securities or other property deliverable upon such reclassification,
change, amalgamation, merger, sale, transfer or other disposition,
dissolution, liquidation or winding up, as the case may be. Such
written notice shall be given, with respect to the actions described
above, not less than fourteen (14) days prior to the record date or the
date on which the Corporation's transfer books are to be closed with
respect thereto.
10. Notices
-------
10.1 Methods of Delivery: Subject to clause 10.2 of this Paragraph
-------------------
10 and unless otherwise specifically provided elsewhere in the articles
of the Corporation, any notice or other communication from the
Corporation herein provided for shall be sufficiently given if
delivered or if sent by ordinary unregistered mail, postage prepaid,
or, in the case of a notice of redemption, by prepaid registered mail,
to the holders of the Second Series Preferred Shares at their
respective addresses appearing on the books of the Corporation or, at
the address of such last holder known to the Corporation. Accidental
failure to give any such notice or other communication to one or more
holders of the Second Series Preferred Shares shall not affect the
validity of the notices or other communications properly given or any
action taken pursuant to such notice or other communication but, upon
such failure being discovered, the notice or other communication, as
the case may be, shall be sent forthwith to such holder or holders.
<PAGE>
10.2 Disruption of Mail Services: If there exists any actual or
---------------------------
apprehended disruption of mail services in any Province in which there
are holders of Second Series Preferred Shares whose addresses appear on
the books of the Corporation to be in such Province, notice may (but
need not) be given to the holders in such Province by means of
publication once in each of two successive weeks in a newspaper of
general circulation published or distributed in the capital city of
such Province, or if the Corporation maintains a register of transfers
for the Second Series Preferred Shares in such Province, then in the
city in such Province where the register of transfers is maintained.
Notice given by publication shall be deemed for all purposes to be
proper notice.
10.3 Deemed Delivery: Notice given by mail shall be deemed to be
---------------
given on the day upon which it is mailed unless on the day of or the
day following such mailing an actual disruption of mail services has
occurred in the Province from or to which such notice is mailed.
Notice given by publication shall be deemed to be given on the day on
which the first publication is completed in any city in which notice is
published.
10.4 Other Requirements: Nothing in this Paragraph 10 shall
------------------
derogate from any specific notice requirements otherwise set forth in
these articles.
11. Interpretation
--------------
11.1 Ranking: For the purposes hereof, the use of the terms
-------
"ranking in priority to" or "ranking on a parity with", or "ranking
junior" or similar terms, whether used independently or in combination,
refer to the ranking of shares of different classes or series in the
capital of the Corporation with respect to the payment of dividends and
the distribution of assets in the event of the liquidation, dissolution
or winding up of the Corporation, voluntary or involuntary, or any
other distribution of assets of the Corporation among its shareholders
for the purpose of winding up its affairs.
11.2 Days: In the event any payment or other action required to be
----
made or taken by the Corporation pursuant to the provisions hereof
would require to be made or taken on a day other than a business day,
such payment or other action may be made or taken on the next business
day. For the purposes of these provisions, "business day" shall mean a
day other than a Saturday, Sunday or statutory holiday in the
jurisdiction in which the head office of the Corporation is located.
12. Modification to Series: The Corporation may at any time or times or
----------------------
from time to time pass a special resolution or resolutions whereby the
terms hereof respecting the Second Series Preferred Shares may be
altered, amended or repealed or the application thereof suspended in
any particular case and changes may be made to the rights, privileges,
restrictions and conditions, attaching to the Second Series Preferred
Shares, but no such special resolution shall have any force or effect
until after it has been sanctioned by the affirmative vote of the
holders of not less than two thirds (2/3) of the Second Series
<PAGE>
Preferred Shares represented and voted at a meeting duly called for
such purpose, in addition to such other vote of other classes or series
of classes of other shareholders as may be required by the Canada
Business Corporations Act.
V- A series of Preferred Shares of the Corporation designated as the
"Third Series Preferred Shares", which shall consist of 5,000,000
shares.
The rights, privileges, restrictions, and conditions attaching to the
Third Series Preferred Shares, in addition to those attaching to the
preferred shares of the Corporation as a class, shall be as follows:
1. Dividends
---------
1.1 Dividend Payment Dates and Dividend Periods: The dividend
-------------------------------------------
payment dates (the "Dividend Payment Dates") in respect of the
dividends payable on the Third Series Preferred Shares shall be the
first day of each of the months of February, May, August and November
in each year. A "Dividend Period" shall mean the period from and
including the date of issue of the Third Series Preferred Shares to but
excluding August 1, 1994, being the first Dividend Payment Date and,
thereafter, the period from and including each Dividend Payment Date to
but excluding the next succeeding Dividend Payment Date.
1.2 Payment of Dividends: The holders of Third Series 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, cumulative, preferential cash dividends (the
"Quarterly Dividends") payable, with respect to each Dividend Period,
on the Dividend Payment Date immediately following the end of such
Dividend Period, the first of such dividends to be payable on August 1,
1994 and to be in an amount per share determined in accordance with
Section 1.3 of this Paragraph 1. For all subsequent Dividend Periods,
dividends, subject to Section 1.3 of this Paragraph 1, shall be in an
amount per Third Series Preferred Share equal to $0.3375 per share.
1.3 Dividend for Other than a Full Dividend Period: The Quarterly
----------------------------------------------
Dividends for any period which is more or less than a full Dividend
Period shall be determined as follows:
1.3.1 an initial dividend in respect of the period from and
including the date of the initial issue of the Third Series
Preferred Shares to but excluding August 1, 1994 (the "Initial
Dividend Period") equal to the amount obtained (rounded to
four decimal places) when $1.35 is multiplied by a fraction
the numerator of which is the number of days in the Initial
Dividend Period and the denominator of which is 365; which,
<PAGE>
if the Third Series Preferred Shares are issued on March 15,
1994, shall be $0.5141 per share; and
1.3.2 a dividend in an amount per share with respect to any
Third Series Preferred Share:
a) which is issued, redeemed, purchased or converted
during any Dividend Period; or
b) where the assets of the Corporation are distributed
to the holders of the Third Series Preferred Shares pursuant
to the provisions attaching to the Preferred Shares as a class
with an effective date during any Dividend Period;
equal to the amount obtained (rounded to four decimal places)
when $1.35 is multiplied by a fraction the numerator of which
is the number of days in such Dividend Period that such share
has been outstanding (excluding the date of issue, redemption,
purchase or conversion or the effective date for the
distribution of assets) and the denominator of which is the
number of days in the year in which such Dividend Period
falls.
1.4 Accrual and Cumulation of Dividends: If on any Dividend
-----------------------------------
Payment Date, the dividend payable on that date is not paid in full on
all the Third Series Preferred Shares then issued and outstanding as
set forth in Sections 1.2 and 1.3 of this Paragraph 1, dividends shall
accrue day by day from and including the date of initial issue or the
last Dividend Payment Date for which payment in full is made, whichever
is later, and the dividend or the unpaid part of it shall be paid on a
subsequent date or dates as determined by the board of directors out of
moneys properly applicable to the payment of dividends.
1.5 Payment Procedure: The Corporation shall pay the dividends on
-----------------
the Third Series Preferred Shares to the holders of record thereof at
the close of business on the fifth business day immediately preceding
the relevant Dividend Payment Date on or such other date as the board
of directors may determine (less any tax required to be deducted or
withheld by the Corporation) (i) by mailing or delivering cheques dated
the relevant Dividend Payment Date drawn on a Canadian chartered bank
and payable in lawful money of Canada at any branch of such bank in
Canada or (ii) at the registered holder's option, by electronic
transfer of funds on the relevant Dividend Payment Date. The delivery
or mailing of any cheque to a holder of Third Series Preferred Shares
shall be a full and complete discharge of the Corporation's obligation
to pay the dividends to such holder (including any tax required to be
and in fact deducted and withheld therefrom and remitted to the proper
taxing authority) unless such cheque is not honoured when presented for
payment. Dividends which are represented by a cheque which has not
been presented to the Corporation's bankers for payment or that
otherwise remain unclaimed
<PAGE>
for a period of three years from the date on which they were declared
to be payable may be reclaimed and used by the Corporation for its own
purposes and shall thereupon be forfeited to the Corporation (except as
otherwise provided by law).
2. Redemption, conversion and purchase
-----------------------------------
2.1 General:
-------
2.1.1 Subject to Paragraph 5 of this Article V and to the
extent permitted by applicable law, the Third Series Preferred
Shares may be redeemed, converted or purchased by the
Corporation as provided in this Paragraph 2 and in Section 3.3
of Paragraph 3 of this Article V hereof but not otherwise.
2.2.2 For the purposes hereof, the "Common Shares" of the
Corporation shall mean such common shares as currently
constituted and any shares resulting from a reclassification
of the common shares of the Corporation or which result from a
capital reorganization of the Corporation or a consolidation,
amalgamation or merger of the Corporation with or into any
other corporation (other than a capital reorganization,
consolidation, amalgamation or merger which does not result in
any reclassification of the common shares or a change of the
common shares into other shares or securities).
2.2 Redemption and Conversion Rights
--------------------------------
2.2.1 The Third Series Preferred Shares shall not be
redeemable prior to April 1, 2001. The Corporation may,
subject to the provisions of any shares of the Corporation
ranking prior to or pari passu with the Third Series Preferred
Shares and subject to Paragraph 5 of this Article V, upon
giving notice as hereinafter provided, redeem on or after
April 1, 2001 at any time the whole or from time to time any
part of the then outstanding Third Series Preferred Shares, by
the payment of an amount in cash for each Third Series
Preferred Share so redeemed equal to the sum of $25.00 plus an
amount equal to all accrued but undeclared cumulative
preferential dividends thereon, up to but excluding the date
fixed for redemption (the "Redemption Price").
2.2.2 The Third Series Preferred Shares shall not be
convertible at the option of the Corporation prior to April 1,
2001. Subject to the approvals of The Montreal Exchange
("ME") and The Toronto Stock Exchange (the "TSE"), and subject
to the provisions of any shares of the Corporation ranking
prior to or pari passu with the Third Series Preferred Shares,
the Corporation may, by giving notice as hereinafter provided,
<PAGE>
convert on or after April 1, 2001, at any time, the whole or
any part of the then outstanding Third Series Preferred Shares
into fully paid, non-assessable and freely tradeable (in all
provinces of Canada) Common Shares of the Corporation on the
basis that each Third Series Preferred Share of each holder
called for conversion by the Corporation will be converted
into (subject to that exception as to fractions contained in
Section 2.7 of this Paragraph 2) that number (the "Common
Share Conversion Number") of Common Shares as is equal to the
number obtained when:
(A) $25.00 plus an amount equal to all accrued but
undeclared cumulative preferential dividends thereon per Third
Series Preferred Share up to but excluding the date fixed for
conversion,
is divided by
(B) the greater of (I) $3.00 and (II) 95% of the weighted
average trading price of all Common Shares of the Corporation
on the ME and the TSE for the 20 consecutive trading days
ending on the fourth day immediately prior to the date
specified for conversion or, if such day is not a trading day
on the ME and the TSE, then the last trading day on the ME and
the TSE ending immediately prior to such fourth day (the
"Market Price"),
with the result of that calculation being rounded upward to the nearest
1/100 of a Common Share.
2.2.3 If less than all of the outstanding Third Series
Preferred Shares are to be redeemed or converted, the shares
to be redeemed or converted shall be selected, pro rata
(disregarding fractions) or in such other manner as the board
of directors or a committee thereof in its sole discretion
shall by resolution determine.
2.3 Manner of Redemption or Conversion
----------------------------------
2.3.1 Notice of redemption or conversion of Third Series
Preferred Shares shall be given by the Corporation not less
than 30 nor more than 60 calendar days prior to the date fixed
for redemption and not less than 40 nor more than 60 calendar
days prior to the date fixed for conversion, to each holder of
Third Series Preferred Shares to be redeemed or converted, as
the case, may be. Such notice shall set out (i) the date (the
"Redemption/Conversion Date") on which the redemption or
conversion is to take place; (ii) unless all the Third Series
Preferred Shares held by the holder to whom it is addressed
are to be redeemed or converted, the
<PAGE>
number of Third Series Preferred Shares so held which are to
be redeemed or converted; (iii) whether the Corporation shall
redeem or convert such Third Series Preferred Shares; (iv) the
Redemption Price or the method of determining the Common Share
Conversion Number, as the case may be; and (v) where the Third
Series Preferred Shares are to be converted into Common
Shares, the advice that such Common Shares will be registered
in the name of the registered holder of the Third Series
Preferred Shares to be converted unless the Transfer Agent for
the Third Series Preferred Shares (the "Transfer Agent")
receives from such holder, on or before the tenth calendar day
prior to the date fixed for conversion (the "Transferee Notice
Date"), at the principal transfer office of the Transfer Agent
in any of the cities of Halifax, Montreal, Toronto, Winnipeg,
Calgary or Vancouver, written notice in a form and executed in
a manner satisfactory to the Transfer Agent directing the
Corporation to register such Common Shares in some other name
or names (the "Transferee") and stating the name or names
(with addresses) accompanied by payment to the Transfer Agent
of any transfer tax that may be payable by reason thereof and
a written declaration of such matters as may be required by
law in order to determine the entitlement of such Transferee
to hold such Common Shares. The Corporation shall, within 24
hours of the end of the 20 trading day period for calculation
of the Market Price, announce the Common Share Conversion
Number by either i) issuing and delivering to one or more
Canadian business news services a press release, or ii)
publishing a notice in La Presse and in The National Edition
of the Globe and Mail.
2.3.2 In the case of a redemption, on and after the
Redemption/Conversion Date the Corporation shall pay or cause
to be paid to the holders of the Third Series Preferred Shares
so called for redemption the Redemption Price therefor (less
any tax or other amount required by law to be deducted or
withheld by the Corporation) on presentation and delivery at
the principal transfer office of the Transfer Agent in any of
the cities of Halifax, Montreal, Toronto, Winnipeg, Calgary or
Vancouver, or such other place or places in Canada designated
in the notice referred to in subsection 2.3.1 of this
Paragraph 2, of the certificate or certificates representing
the Third Series Preferred Shares so called for redemption.
Such payment shall be made by cheque mailed or delivered to
the holder in accordance with Paragraph 8 of this Article V
and shall be a full and complete discharge of the
Corporation's obligation to pay the Redemption Price owed to
the holders of Third Series Preferred Shares so called for
redemption unless the cheque is not honoured when presented
for payment. From and after the Redemption/ Conversion Date,
the holders of Third Series Preferred Shares called for
redemption shall cease to be entitled to dividends or to
exercise any of the rights of holders of Third
<PAGE>
Series Preferred Shares in respect of such shares except the
right to receive therefor the Redemption Price, provided that
if payment of such Redemption Price is not duly made in
accordance with the provisions hereof, then the rights of such
holders shall remain unimpaired.
2.3.3 In the case of a redemption, the Corporation shall
have the right at any time after giving a notice of redemption
to deposit the aggregate Redemption Price of the Third Series
Preferred Shares thereby called for redemption, or such part
thereof as at the time of deposit that has not been claimed by
the holders entitled thereto, in a special account with a
Canadian chartered bank for the holders of such shares. If
the Corporation deposits moneys pursuant to this section
representing the Redemption Price to which a holder of Third
Series Preferred Shares is entitled, the Corporation shall
promptly give the holder notice of the deposit, including a
description of the manner in which the moneys may be claimed
by the holder. Any interest on any such deposit shall belong
to the Corporation. Redemption moneys which remain unclaimed
for a period of three years from the Redemption/Conversion
Date may be reclaimed and used by the Corporation for its own
purposes and shall thereupon be forfeited to the Corporation
(except as otherwise provided by law).
2.3.4 In the case of a conversion of Third Series Preferred
Shares into Common Shares, on and after the
Redemption/Conversion Date, the Corporation shall deliver the
Common Share Conversion Number of Common Shares on
presentation and delivery by the holder at the principal
transfer office of the Transfer Agent in any of the cities of
Halifax, Montreal, Toronto, Winnipeg, Calgary or Vancouver, or
such other place or places in Canada designated in the notice
referred to in subsection 2.3.1 of this Paragraph 2, of the
certificate or certificates representing the Third Series
Preferred Shares so called for conversion. The Corporation
shall deliver or cause to be delivered certificates
representing such Common Shares registered in the name of the
registered holders of Third Series Preferred Shares to be
converted, or as such holders shall have directed as
aforesaid. Third Series Preferred Shares so converted shall
be converted effective on the Redemption/Conversion Date.
2.3.5 From and after the Redemption/Conversion Date, the
holders of Third Series Preferred Shares so converted who have
not presented and delivered the certificate or certificates
representing such shares as herein required shall cease to be
entitled to dividends on such Third Series Preferred Shares or
to exercise any of the rights of holders of Third Series
Preferred Shares in respect of such shares except the right to
receive
<PAGE>
therefor the Common Share Conversion Number of Common Shares
and any payment with respect to a fraction of a Third Series
Preferred Share.
2.3.6 If less than all the Third Series Preferred Shares
represented by any certificate shall be redeemed or converted,
a new certificate for the balance shall be issued without cost
to the holder.
2.3.7 The Corporation shall not exercise its right to
convert any Third Series Preferred Shares into Common Shares
if on the date for giving notice or on the
Redemption/Conversion Date the Common Shares are not listed on
the ME or TSE and are not freely tradeable under applicable
securities laws in the ten provinces of Canada.
2.4 Purchase: The Corporation may purchase at any time all or from
--------
time to time any number of the outstanding Third Series Preferred
Shares in the open market (including purchases through or from an
investment dealer or firm holding membership on a stock exchange) or
pursuant to tenders received by the Corporation upon an invitation for
tenders addressed to all holders of the Third Series Preferred Shares,
at the lowest price or prices at which, in the opinion of the board of
directors or a committee thereof, the shares are obtainable. If upon
any invitation for tenders, the Corporation receives tenders for Third
Series Preferred Shares at the same price in an aggregate number
greater than the number for which the Corporation is prepared to accept
tenders, the shares to be purchased shall be selected from the shares
offered at such price as nearly as may be pro rata (to the nearest 10
shares) according to the number of Third Series Preferred Shares
offered in each such tender, in such manner as the board of directors
or a committee thereof in its sole discretion shall by resolution
determine. If part only of the Third Series Preferred Shares
represented by any certificate shall be purchased, a new certificate
for the balance of such shares shall be issued without cost to the
holder.
2.5 Conversion into Another Series of Preferred Shares: The
--------------------------------------------------
Corporation may at any time designate a further series of Preferred
Shares (the "New Preferred Shares") and notify the holders of Third
Series Preferred Shares that they have the right pursuant to the terms
of the Third Series Preferred Shares, at their option, to convert their
Third Series Preferred Shares into fully paid, non-assessable and
freely tradeable (in all provinces of Canada) New Preferred Shares on a
share for share basis on a date specified by the Corporation in such
notice (the "Exchange Date"). Such notice shall provide the details of
the terms and conditions of the New Preferred Shares and instructions
on how to convert Third Series Preferred Shares into New Preferred
Shares and shall be accompanied by the proper form of instrument of
surrender. The Third Series Preferred Shares will be so convertible
into New Preferred Shares only if such New Preferred Shares are not,
and the Corporation will ensure that such New Preferred Shares will
not, if issued, be or be deemed to be, "term preferred shares" within
the meaning of the
<PAGE>
Income Tax Act (Canada) if such definition were read without reference
to paragraph (f) of the definition of "term preferred shares" set out
in subsection 248(1) of such Act.
2.6 Manner of Conversion into Another Series of Preferred Shares:
------------------------------------------------------------
Third Series Preferred Shares may be converted into New Preferred
Shares by the holder of such shares tendering to the Corporation on or
prior to the Exchange Date the certificate or certificates representing
the Third Series Preferred Shares to be so converted and the written
instrument of surrender in form satisfactory to the Corporation and
duly executed by the registered holder of the Third Series Preferred
Shares represented by the certificate or certificates so surrendered in
which instrument the holder may elect to convert all or a portion of
the Third Series Preferred Shares represented by such certificate or
certificates into New Preferred Shares. Any holder of Third Series
Preferred Shares who has delivered a notice of conversion with respect
to the conversion of Third Series Preferred Shares into Common Shares
will be entitled to accept any such offer to convert Third Series
Preferred Shares into New Preferred Shares up to the Conversion Date.
The rights, privileges, restrictions and conditions attaching to the
New Preferred Shares shall provide that any accrued and undeclared
dividends, on each Third Series Preferred Share converted into New
Preferred Share, shall be deemed to be an accrued and undeclared
dividend on the New Preferred Share into which it is converted. The
holder of Third Series Preferred Shares to be converted to New
Preferred Shares shall be entitled to receive on the day immediately
preceding the Exchange Date any declared but unpaid dividends on the
Third Series Preferred Shares.
The Corporation shall, on presentation and delivery at the principal
transfer office of the Transfer Agent in any of the cities of Halifax,
Montreal, Toronto, Winnipeg, Calgary or Vancouver, or such other place
or places in Canada as the Corporation may agree of the certificate or
certificates representing the Third Series Preferred Shares to be
converted, issue and deliver or cause to be delivered as soon as is
reasonably practicable after the Exchange Date a certificate or
certificates representing the New Preferred Shares into which such
Third Series Preferred Shares have been converted. Such certificate or
certificates shall be registered in the name of the holder of the Third
Series Preferred Shares so converted or in such name or names as he may
specify in the written instrument accompanying the Third Series
Preferred Shares to be converted. The Third Series Preferred Shares so
converted shall be converted, and the holder thereof shall become a
holder of record of New Preferred Shares, effective on the Exchange
Date. The provisions of subsection 2.3.6 of this Paragraph 2 shall
apply, mutatis mutandis, in the event of a conversion into New
Preferred Shares of less than all of the Third Series Preferred Shares
represented by a particular share certificate.
2.7 Avoidance of Fractional Shares: In any case where a fraction
------------------------------
of a Common Share would otherwise be issuable on conversion of one or
more Third Series Preferred Shares, the Corporation shall adjust such
fractional interest (rounded upward to the
<PAGE>
nearest 1/100 of a Common Share) by payment by cheque in an amount
equal to the then Market Price of such fractional interest.
3. Holder's conversion right
-------------------------
3.1 Conversion Right: Subject to the option of the Corporation in
----------------
Section 3.3 of this Paragraph 3, each Third Series Preferred Share
shall, on and after May 1, 2001, at the option of the holder, be
convertible on the first day of February, May, August and November in
each year (a "permitted conversion date") into (subject to the
exception as to fractions contained in Section 3.4 of this Paragraph 3)
fully paid, non-assessable and freely tradeable (in all provinces of
Canada) Common Shares of the Corporation on the basis that each Third
Series Preferred Share will be converted into the Common Share
Conversion Number of Common Shares.
Not less than 60 nor more than 120 calendar days prior to May 1, 2001,
the Corporation shall give to the registered holders of the Third
Series Preferred Shares notice of the conversion right containing
instructions to such holders as to the method by which such conversion
right may be exercised, as set out in Section 3.2 of this Paragraph 3.
The registered holder of Common Shares resulting from the conversion
shall be entitled to rank equally with the registered holders of all
other Common Shares on any date on or after the permitted conversion
date.
3.2 Manner of Conversion:
--------------------
3.2.1 Third Series Preferred Shares may be converted by the
holder of such shares delivering to the principal transfer
office of the Transfer Agent in any of the cities of Halifax,
Montreal, Toronto, Winnipeg, Calgary or Vancouver, or such
other place as the Corporation may agree, not less than 60
calendar days prior to the date (which must be a permitted
conversion date) fixed for conversion by such holder the
certificate or certificates for the Third Series Preferred
Shares to be converted with the notice of conversion on the
reverse side thereof (the "Conversion Notice") duly completed.
Subject to Section 3.3 of this Paragraph 3 and to the right to
accept an offer to convert Third Series Preferred Shares into
New Preferred Shares under Section 2.5 of Paragraph 2 of this
Article V, such Conversion Notice shall be irrevocable once it
has been delivered and shall set out:
a) the date (the "Conversion Date") on which the conversion is to
take place;
b) unless all the Third Series Preferred Shares held by the
holder by whom such notice is given are to be converted, the number of
Third Series Preferred Shares so held which are to be converted; and
<PAGE>
c) an acknowledgement that the Common Shares into which the Third
Series Preferred Shares are to be converted are to be registered in the
name of the registered holder of the Third Series Preferred Shares to
be converted unless such holder, on or before the tenth calendar day
prior to the Conversion Date (the "Transferee Notice Date") provides
notice to the Transfer Agent at the principal transfer office of the
Transfer Agent in any of the cities of Halifax, Montreal, Toronto
Winnipeg, Vancouver or Calgary, a written notice in a form and executed
in a manner satisfactory to the Transfer Agent directing the Transfer
Agent to register such Common Shares in some other name or names (the
"Transferee") and stating the name or names (with addresses)
accompanied by payment to the Transfer Agent of any transfer tax that
may be payable by reason thereof and a written declaration of such
matters as may be required by law in order to determine the entitlement
of such Transferee to hold such Common Shares.
3.2.2 Subject to Section 3.3 of this Paragraph 3, the
Corporation shall, on presentation and delivery at the
principal transfer office of the Transfer Agent in any of the
cities of Halifax, Montreal, Toronto, Winnipeg, Calgary or
Vancouver, or such other place or places in Canada as the
Corporation may agree of the certificate or certificates
representing the Third Series Preferred Shares so surrendered
for conversion, deliver or cause to be delivered certificates
representing the Common Share Conversion Number of Common
Shares into which such Third Series Preferred Shares are to be
converted, registered in the name of the holder of the Third
Series Preferred Shares to be converted, or as such holder
shall have directed as aforesaid, as the case may be, on the
Conversion Date. The Third Series Preferred Shares so
converted shall be converted, and the holder thereof shall
become a holder of Common Shares of record, effective on the
Conversion Date.
3.2.3 If less than all the Third Series Preferred Shares
represented by any certificate shall be converted, a new
certificate for the balance shall be issued without cost to
the holder.
3.2.4 The delivery of a Conversion Notice by a holder of
Third Series Preferred Shares shall constitute the holder's
irrevocable authority to the Corporation to have the Third
Series Preferred Shares which are the subject of the notice
sold to a Substitute Purchaser if the Corporation exercises
its option under subsection 3.3.2 of this Paragraph 3 in
respect of the shares.
3.3 Options of the Corporation: Prior to any Conversion Date, the
--------------------------
Corporation may, by notice given not less than 40 calendar days before
such Conversion Date to all holders who have given a Conversion Notice,
<PAGE>
3.3.1 redeem on the Conversion Date all or any part of the
Third Series Preferred Shares forming the subject matter of
the applicable Conversion Notice at the Redemption Price
provided for in Paragraph 2 of this Article V, in which event
such redemption shall be made on the Conversion Date by
mailing or delivering in accordance with Section 8.1 of
Paragraph 8 of this Article V, a cheque of the Corporation or
of the Transfer Agent in an amount equal to the Redemption
Price to the holder of the Third Series Preferred Shares
entitled thereto; or
3.3.2 request such holders to sell on the Conversion Date
all or any part of such Third Series Preferred Shares to
another purchaser or purchasers in the event that a purchaser
or purchasers willing to purchase all or any part of such
Third Series Preferred Shares at a price equal to the
Redemption Price is or are found by the Corporation and such
holders shall sell such Third Series Preferred Shares at a
price equal to the Redemption Price to such purchaser or
purchasers ("Substitute Purchasers"), in which event the
provisions of Section 3.5 of this Paragraph 3 shall apply.
The notice given by the Corporation shall set out:
a) the number of Third Series Preferred Shares tendered for
conversion on the Conversion Date;
b) the number of Third Series Preferred Shares which the
Corporation has determined to redeem;
c) the number of Third Series Preferred Shares which the
Corporation has required to be sold to a Substitute Purchaser;
d) the number of Third Series Preferred Shares to be converted
into Common Shares; and
e) the Redemption Price.
If less than all the Third Series Preferred Shares tendered for
conversion on a permitted conversion date are to be redeemed or
purchased by a Substitute Purchaser, the Third Series Preferred Shares
to be redeemed or purchased shall be selected pro rata (disregarding
fractions of shares) or in such other manner as the board of directors
or a committee thereof in its sole discretion shall by resolution
determine.
The provisions of subsection 2.3.6 of Paragraph 2 of this Article V
shall apply, mutatis mutandis, in the event of a redemption or purchase
of less than all the Third Series Preferred Shares represented by a
particular share certificate.
<PAGE>
The Third Series Preferred Shares so purchased or redeemed shall not be
converted on the Conversion Date. In the event that for any reason the
redemption or purchase provided for in this section is not effected in
respect of a Third Series Preferred Share or Shares on the Conversion
Date, the option of the Corporation in respect of such Third Series
Preferred Share or Shares shall lapse and such Third Series Preferred
Share or Shares shall be deemed to have been converted on the
Conversion Date.
3.4 Avoidance of Fractional Shares: In any case where a fraction
------------------------------
of a Common Share would otherwise be issuable on conversion of one or
more Third Series Preferred Shares under this Article 3, the
Corporation shall adjust such fractional interest by payment by cheque
in an amount equal to the then Market Price of such fractional interest
(rounded upward to the nearest 1/100 of a Common Share) determined in
respect of the relevant Conversion Date.
3.5 Manner of Purchase By A Substitute Purchaser: The Corporation
--------------------------------------------
shall receive and hold on behalf of the Substitute Purchaser the
purchase price to be paid to the holder of a Third Series Preferred
Share to be acquired by such Substitute Purchaser determined in
accordance with the provisions of Section 3.3 of this Paragraph 3. On
the date on which the sale of such Third Series Preferred Share to a
Substitute Purchaser is to be effected, the Corporation shall pay or
cause to be paid to the holder of such Third Series Preferred Share the
purchase price for such share received from the Substitute Purchaser on
behalf of the Substitute Purchaser acquiring such share. Such payment
shall be made by cheque mailed to the holder of such Third Series
Preferred Share in accordance with Paragraph 8 of this Article V and
shall be a full and complete payment of the purchase price for the
Third Series Preferred Share to be sold by such holder to such
Substitute Purchaser unless the cheque is not honoured when presented
for payment. From and after the date on which the cheque is mailed in
payment for such Third Series Preferred Share, the Substitute Purchaser
shall be treated by the Corporation as the registered holder of the
Third Series Preferred Share which has been sold to such Substitute
Purchaser in accordance with the provisions of this Paragraph 3.
3.6 Continuance of Conversion Right: In the event that the
-------------------------------
Corporation exercises its right pursuant to subsection 3.3.2 of this
Paragraph 3 to require a Third Series Preferred Share tendered for
conversion to be sold by the holder thereof to a Substitute Purchaser,
such Third Series Preferred Share shall continue to be convertible into
Common Shares pursuant to section 3.1 after having been sold to a
Substitute Purchaser notwithstanding its having been tendered for
conversion by the previous holder thereof.
4. Voting rights: Except as otherwise provided herein or in the conditions
-------------
attaching to the Preferred Shares as a class, the holders of Third
Series Preferred Shares shall not be entitled as such to receive notice
of or to attend or to vote at any meeting of shareholders of the
Corporation. In the event that the Corporation fails to pay in the
aggregate
<PAGE>
Quarterly Dividends for eight Dividend Periods on or before the last
day of such Dividend Periods, whether or not consecutive, 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, the holders of the Third Series Preferred Shares shall have
the right to receive notice of and to attend each meeting of
shareholders of the Corporation at which directors of the Corporation
are to be elected, the record date for notice of which occurs after the
end of such Dividend Periods (other than meetings at which only holders
of another specified series or class of shares are entitled to vote),
and such holders shall have the right at any such meeting to vote in
the election of two directors to be elected in conjunction with the
holders of any other series of Preferred Shares which may have such
right. The right to receive notice of, attend and vote at such meetings
shall continue until such time as the Corporation declares and pays the
full amount of a Quarterly Dividend for a Dividend Period, after which
payment such rights to receive notice of, attend and vote at such
meetings shall forthwith expire. At such time as the Corporation may
again fail to pay the full amount in the aggregate of eight Quarterly
Dividends, such voting rights shall become effective again and so on
from time to time.
Each Third Series Preferred Share shall entitle the holder thereof to
one vote at any such meeting, provided that if the shares of any other
series of Preferred Shares (which may have a similar right to vote)
entitle their holder thereof to a number of vote greater than one vote
per 25.00 dollars received by the Corporation as consideration for the
issue of a share of such series, the number of votes per Third Series
Preferred Share will be adjusted pro rata.
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 in accordance with the procedures prescribed by its Articles.
Any vacancy occurring among the directors elected in accordance with
the foregoing provisions of this Paragraph 4 to represent the holders
of the series of Preferred Shares which may have such right may be
filled by the board of directors with the consent and approval of any
remaining director elected to represent the holders of such series of
Preferred Shares. If there is no such remaining director, the board of
directors may appoint a holder or holders of the series of Preferred
Shares which may have such right to fill the vacancy or vacancies.
Whether or not vacancies are so filled by the board of directors, the
registered holders of at least 10% of the issued and outstanding series
of Preferred Shares which may have such right shall have the right to
require the secretary of the Corporation to call a meeting for the
purpose of filling the vacancies or replacing all or any of the persons
who have been appointed by the board of directors.
5. Restrictions on dividends and retirement of shares: So long as any of
--------------------------------------------------
the Third Series Preferred Shares are outstanding, the Corporation
shall not, without the prior approval
<PAGE>
of the holders of such outstanding Third Series Preferred Shares given
in the manner hereinafter specified:
a) pay or set apart for payment any dividends (other than stock
dividends in shares of the Corporation ranking junior to the Preferred
Shares of the Corporation) on any shares of the Corporation ranking
junior to or on a parity with the Preferred Shares of the Corporation
or any series thereof;
b) call for redemption, redeem, purchase or otherwise retire or
make any capital distribution on or in respect of any shares ranking
junior to the Preferred Shares of the Corporation or any series thereof
(except out of the net cash proceeds of a substantially concurrent
issue of shares of the Corporation ranking junior to the Preferred
Shares of the Corporation or any series thereof);
c) call for redemption, redeem, or otherwise retire less than all
of the Third Series Preferred Shares then outstanding; or
d) except in connection with the exercise of a retraction
privilege of a shareholder or mandatory redemption obligation of the
Corporation attaching thereto, call for redemption, redeem, purchase or
otherwise retire any shares of any class or series ranking on a parity
with the Preferred Shares of the Corporation or any series thereof;
unless in each such case, all cumulative preferential dividends accrued
on outstanding Third Series Preferred Shares up to and including the
latest Dividend Payment Date shall have been declared and paid or made
available for payment at the date of such declaration or payment or
setting apart or call for redemption or purchase for cancellation.
6. Issue price: The price or consideration for which each Third Series
-----------
Preferred Share shall be issued is $25.00 and, upon payment of such
price, each such share shall be issued as fully paid and non-
assessable.
7. Election under the Income Tax Act: The Corporation shall elect under
---------------------------------
subsection 191.2(1) of the Income Tax Act (Canada) or any successor or
replacement provision of similar effect, and take all other necessary
action under such Act, to pay tax under section 191.1 of such Act, or
any successor or replacement provision of similar effect at a rate such
that no holder of the Third Series Preferred Shares will be required to
pay tax on dividends received on the Third Series Preferred Shares
under Section 187.2 of Part IV.1 of such Act or any successor or
replacement provision of similar effect. Such election shall be made
in the manner prescribed by such Act and shall be filed within the time
provided under paragraph 191.2(1)(a) of such Act.
8. Notice and interpretation
-------------------------
<PAGE>
8.1 Notices:
-------
8.1.1 Any notice, cheque, invitation for tenders or other
communication from the Corporation herein provided for shall
be sufficiently given if delivered or if sent by first class
unregistered mail, postage prepaid, to the holders of the
Third Series Preferred Shares at their respective addresses
appearing on the books of the Corporation or, in the event of
the address of any of such holders not so appearing, then at
the last address of such holder known to the Corporation.
Accidental failure to give such notice, invitation for tenders
or other communication to one or more holders of the Third
Series Preferred Shares shall not affect the validity of the
notices, invitations for tenders or other communications
properly given or any action taken pursuant to such notice,
invitation for tender or other communication but, upon such
failure being discovered, the notice, invitation for tenders
or other communication, as the case may be, shall be sent
forthwith to such holder or holders.
8.1.2 If any notice, cheque, invitation for tenders or
other communication from the Corporation given to a holder of
Third Series Preferred Shares pursuant to subsection 8.1.1 is
returned on three consecutive occasions because he cannot be
found, the Corporation shall not be required to give or mail
any further notices, cheques, invitations for tenders or other
communications to such shareholder until he informs the
Corporation in writing of his new address.
8.2 Interpretation:
--------------
8.2.1 In the event that any day on which any dividend on
the Third Series Preferred Shares is payable or on or by which
any other action is required to be taken hereunder is not a
business day, then such dividend shall be payable or such
other action shall be required to be taken on or before the
next succeeding day that is a business day. A "business day"
means a day other than a Saturday, a Sunday or any other day
that is a statutory or civic holiday in the place where the
Corporation has its head office.
8.2.2 All references herein to a holder of Third Series
Preferred Shares shall be interpreted as referring to a
registered holder of the Third Series Preferred Shares.
9. Modification: The provisions attaching to the Third Series Preferred
------------
Shares may be deleted, varied, modified, amended or amplified with the
prior approval of the holders of Third Series Preferred Shares given in
accordance with Paragraph 10 of this Article V.
<PAGE>
10. Approval of third series preferred shareholders: Any approval required
-----------------------------------------------
or permitted to be given by the holders of the Third Series Preferred
Shares with respect to any and all matters referred to herein shall be
deemed to have been sufficiently given by the holders of the Third
Series Preferred Shares if given in the manner provided in the by-laws
of the Corporation, provided that the quorum for any meeting of holders
of Third Series Preferred Shares shall be shareholders represented in
person or by proxy holding at least 25% of the outstanding Third Series
Preferred Shares. If at any such meeting the holders of at least 25%
of the outstanding Third Series Preferred Shares are not present or
represented by proxy within one-half hour after the time appointed for
such meeting, then the meeting shall be adjourned to such date not less
than 15 days thereafter and to such time and place as may be designated
by the chairman of such meeting, and not less than 10 days' written
notice shall be given of such adjourned meeting. At such adjourned
meeting the holders of Third Series Preferred Shares present or
represented by proxy may transact the business for which the meeting
was originally called. A resolution passed at a meeting or an
adjourned meeting by the affirmative vote of not less than 66 2/3% of
the votes cast at such meeting shall constitute the approval of the
holders of the Third Series Preferred Shares.
11. 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, whether voluntary or involuntary, the holders of the Third
Series Preferred Shares shall be entitled to receive an amount equal to
$25.00 per Third Series Preferred Share, together with all accrued and
unpaid dividends, whether or not declared, up to and excluding the date
of payment, before any amount is paid or any assets of the Corporation
are distributed to the holders of Common Shares or shares of any other
class of the Corporation ranking junior to the Third Series Preferred
Shares. After payment to the holders of the Third Series Preferred
Shares of the amounts so payable to them, they shall not be entitled to
share in any further distribution of the assets of the Corporation.
<PAGE>
APPENDIX B
____________________________
7. The directors of the Corporation may from time to time:
(A) borrow money upon the credit of the Corporation;
(B) limit or increase the amount to be borrowed;
(C) issue debentures or other securities of the Corporation;
(D) pledge or sell such debentures or other securities for such sums and
at such prices as may be deemed expedient;
(E) secure any such debentures, or other securities, or any other present
or future borrowing or liability of the Corporation, by mortgage,
hypothec, charge or pledge of all or any currently owned or
subsequently acquired real and personal, moveable and immoveable,
property of the Corporation, and the undertaking and rights of the
Corporation.
The directors of the Corporation may from time to time delegate to such one
or more of the directors or officers of the Corporation as may be
designated by the directors all or any of the powers conferred on the
directors above to such extent and in such manner as the directors shall
determine at the time of such delegation.
The directors of the Corporation may from time to time 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 one third of the number of directors
elected at the previous annual meeting of shareholders.
7A - Notwithstanding any other provision of the Articles or the By-laws of
the Corporation,
(1) (a) The Board of Directors of the Corporation shall consist at the
Effective Time (as defined in the Agreement and Plan of Merger
dated as of June 14, 1998 among the Corporation, North Merger Sub
Corporation and Excel Communications, Inc. ("Excel")), of a total
of 15 members as follows:
(i) 7 members shall be Teleglobe Directors (as defined in
paragraph (e) below);
(ii) 7 members shall be Excel Directors (as defined in
paragraph (e) below); and
(iii) 1 member shall be named jointly by the Teleglobe Directors
and the Excel Directors.
(b) In connection with any annual, annual and special or special
meeting of shareholders of the Corporation during the period from
the Effective Time until December 31, 2003 (the "Time Period")
involving an election of directors:
(i) the Teleglobe Directors shall be entitled to nominate 5
qualified individuals (or such greater number equal to or,
subject to the 34% requirement in clause
<PAGE>
(b)(ii) below, greater than the number of individuals nominated
pursuant to such clause (b)(ii) below) to stand for election at
any such meeting;
(ii) the Excel Directors shall be entitled to nominate 5 qualified
individuals (or such greater number as shall be necessary to
ensure that the nominees for Excel Directors represent at least
34% of the total number of directors comprising the Teleglobe
Board) to stand for election at any such meeting; and
(iii) the Teleglobe Directors and Excel Directors shall be entitled
to jointly nominate 3 qualified individuals to stand for
election at any such meeting.
(c) Any vacancy in the Board of Directors among the Teleglobe Directors
during the Time Period shall be filled by the Board of Directors with
a qualified individual nominated by the remaining Teleglobe Directors.
(d) Any vacancy in the Board of Directors among the Excel Directors during
the Time Period shall be filled by the Board of Directors with a
qualified individual nominated by the remaining Excel Directors.
(e) For purposes of this section (1), a Teleglobe Director means (i) any
person serving as a director of the Corporation who is designated by
the Board of Directors of the Corporation prior to the Effective Time
for purposes of continuing as a director of the Corporation under
clause (a)(i) above, and (ii) any person who becomes a director of the
Corporation in the manner contemplated by either clause (b)(i) or
paragraph (c) above. For purposes of this section (1), an Excel
Director means (i) any person designated by the Board of Directors of
Excel prior to the Effective Time for purposes of becoming a director
of the Corporation under clause (a)(ii) above, and (ii) any person who
becomes a director of the Corporation in the manner contemplated by
either clause (b)(ii) or paragraph (d) above.
(f) There shall at no time be more than two members of the Board of
Directors who are employed by the Corporation or its affiliates, one
of whom shall be the Chief Executive Officer of the Corporation and
the other of whom shall be the Chief Executive Officer of Excel.
(2) During the Time Period, any sale, disposition, transfer or pledge of any
shares of a Subsidiary (as defined below) or any sale, disposition, lease,
transfer or mortgage of all or a substantial portion of the assets of a
Subsidiary or any merger, consolidation, amalgamation, combination,
liquidation or dissolution involving any Subsidiary shall, in addition to
any other approval, require approval by an affirmative vote of at least 66-
2/3% of the entire Board of Directors (disregarding vacancies) of the
Corporation.
For purposes of this section (2), Subsidiary means a subsidiary (as
defined in the Canada Business Corporations Act) of the Corporation which
is incorporated under the laws of one of the states of the United States of
America and has a net book value of more than U.S. $400 million.
<PAGE>
(3) This section 7A shall come into force at the Effective Time and shall
remain in effect until the expiration of the Time Period and may be
amended, modified or repealed in any manner provided for under applicable
law if approved by an affirmative vote of at least 66-2/3% of the entire
Board of Directors (disregarding vacancies) of the Corporation."
<PAGE>
Exhibit 4 (b)
Bylaws of the Company
MEMOTEC DATA INC.
BY-LAW A
Being a by-law relating generally to the conduct
of the affairs of MEMOTEC DATA INC.
BE IT ENACTED and it is hereby enacted as a by-law of MEMOTEC DATA INC. as
follows:
1. Interpretation
In the by-laws of the Corporation, unless the context otherwise requires a
different interpretation:
"Act" means the Canada Business Corporations Act, as amended from time to
time, and includes any regulations adopted pursuant thereto;
"appoint" includes "elect" and vice versa;
"Articles" means the articles annexed to the Certificate of Amalgamation of
the Corporation bearing the date of December 31, 1985, as amended or modified
from time to time;
"Board" means the Board of Directors of the Corporation;
"By-laws" means this by-law and all other by-laws of the Corporation from
time to time in force and effect;
"Corporation" means MEMOTEC DATA INC.
"meeting of shareholders" means an annual meeting of shareholders and a
special meeting of shareholders; "special meeting of shareholders" means a
meeting of any class or classes of shareholders and a meeting of all
shareholders entitled to vote at an annual meeting of shareholders;
"non-business day" means Saturday, Sunday and any other day that is a
holiday as defined in the Interpretation Act (Canada);
"recorded address" means, in the case of a shareholder, his address as
recorded in the securities register of the Corporation; and, in the case of
joint shareholders, the address appearing in the securities register in respect
of such joint holding or the first address so appearing if there is more than
one; and, in the case of a director, officer, auditor or member of a committee
of the Board, his latest address as recorded in the records of the Corporation;
and
<PAGE>
"signing officer" means, in relation to any instrument, any person
authorized to sign the same on behalf of the Corporation pursuant to section 77
hereof or to a resolution adopted for such purpose.
Save as aforesaid, words and expressions defined in the Act have the same
meanings when used herein.
Words importing the singular number shall be deemed to include the plural
and vice versa; words importing gender shall be deemed to include the masculine,
feminine and neuter genders; and words importing persons shall be deemed to
include individuals, bodies corporate, partnerships, trusts and unincorporated
entities.
CORPORATE MATTERS
2. Registered Office
The registered office of the Corporation shall be situated in the Montreal
Urban Community, in the Province of Quebec, and at such place therein as the
Board may from time to time determine.
3. Corporate Seal
The Corporation shall have a seal in the form approved by resolution of the
Board.
DIRECTORS
4. Powers, Number and Quorum
Subject to the Articles, the business and affairs of the Corporation shall
be managed by a Board of Directors consisting of a minimum of five (5) directors
and a maximum of fifteen (15) directors. Five (5) directors shall form a quorum
for the transaction of business.
5. Qualifications
No person shall be qualified for election as a director if he less than
eighteen (18) years of age; if he is of unsound mind and has been so found by a
court in Canada or elsewhere; if he is not an individual; or if he has the
status of bankrupt. A director need not be a shareholder. A majority of the
directors shall be resident Canadians.
No person shall be elected a director if he has attained the age of
seventy-five (75) years prior to the date of the meeting at which an election of
directors is to take place. Provided, however, that a director who has been
elected prior to his attaining the age of seventy-five (75) years, may complete
his term in office. Furthermore, this provision shall not apply to those persons
who were
<PAGE>
members of the Board immediately prior to the adoption of the present By-law and
who, at the date of such adoption, had attained the age of seventy-five (75)
years.
6. Election, Term of Office and Removal of Directors
The election of directors shall take place at each annual meeting of
shareholders. Directors shall be elected on a show of hands unless a ballot is
demanded or required under the Act.
Directors shall hold office for a term not exceeding the close of the third
annual meeting of shareholders following their election or for such shorter term
as may be fixed by the shareholders at the time of the election. Subject to the
Act and this By-law with respect to the removal of a director, the term of
office of a director, once fixed by the shareholders, may not be modified.
Retiring directors shall be eligible for re-election if otherwise qualified
and shall and in any event continue in office until their successors have been
duly elected or appointed. A retiring director shall retain office until the
dissolution or adjournment of the meeting at which his successor is elected or
appointed.
Subject to the Act, the shareholders of the Corporation may from time to
time, by ordinary resolution at a special meeting of shareholders of which
notice specifying the intention to pass such resolution has been given, remove
any director before the expiration of his term of office and appoint any
qualified person to fill the vacancy thereby created, failing which such vacancy
may be filled by a resolution of the directors then in office.
7. Vacancies
A director ceases to hold office when he dies, when he is removed from
office pursuant to Section 6, when he ceases to be qualified for election as a
director or when he submits his written resignation to the Corporation.
Subject to the Act, a quorum of directors may fill a vacancy among the
directors, except a vacancy resulting from an increase in the minimum number of
directors or from a failure of the shareholders to elect the minimum number of
directors required by the Articles. If there is not a quorum of directors, or if
the vacancy has arisen due to a failure of the shareholders to elect the minimum
number of directors required by the Articles, the directors then in office shall
forthwith call a special meeting of shareholders to fill the vacancy and , if
they fail to call a meeting or if there are no directors then in office, the
meeting may be called by any shareholder.
MEETINGS OF DIRECTORS
8. Place of Meeting and Notice
Meetings of the Board of Directors may be held either at the registered
office of the Corporation or in such other place as the directors may from time
to time determine. A meeting of the Board may
<PAGE>
be convened by the Chairman of the Board, the President, a Vice-President who is
a director, or any two (2) directors at any time, and the Secretary shall
convene a meeting of directors at the direction of the Chairman of the Board,
the President, a Vice-President who is a director or any two (2) directors.
Notice of the time and place of each meeting of the Board shall be given to
each director in the manner provided in section 64 not less than forty-eight
(48) hours before the time when the meeting is to take place; provided always
that a director may waive notice of a meeting of the Board at any time and in
any manner, or may otherwise consent to the holding of such meeting, in writing
or by cable or telegram. Attendance of a director at a meeting of the Board
constitutes a waiver of notice of the meeting, except where a director attends
such meeting for the express purpose of objecting to the transaction of any
business on the grounds that the meeting is not lawfully called. Any
irregularity in the notice of a meeting may also be waived by any director.
In any case of what is considered by the President or a Vice-President who
is a director, in his discretion, to be a matter of urgency, notice of a meeting
of the directors may be given by telephone or telegram not less than twelve (12)
hours before such meeting is to be held and such notice shall be adequate for
the meeting so convened. Any irregularity in the notice of an emergency meeting
may also be waived by any director.
A notice of a meeting of the Board need not specify the purpose of or the
business to be transacted at the meeting except where the Act requires such
purpose or such business to be so specified, including any proposal to:
(a) submit to the shareholders any question or matter requiring their
approval under the Act;
(b) fill a vacancy among the directors or in the office of auditor;
(c) issue securities;
(d) declare dividends;
(e) purchase, redeem or otherwise acquire shares issued by the
Corporation;
(f) pay a commission for the sale of shares;
(g) approve a management proxy circular;
(h) approve a take-over bid circular, an issuer bid circular, or a
director's circular;
(i) approve annual financial statements; or
(j) adopt, amend or repeal By-laws.
For the first meeting of the Board to be held immediately following the
election of directors at a meeting of shareholders, or for a meeting of the
Board at which a director is appointed to fill a vacancy, a notice of such
meeting to the newly elected or appointed director or directors shall not be
necessary in order that such meeting be duly constituted, provided that a quorum
of directors is present thereat.
9. Canadian Majority
<PAGE>
Directors shall transact business only at a meeting of directors at which a
majority of directors present are resident Canadians, unless:
(a) A resident Canadian director who is unable to be present approves in
writing or by telephone or other communications facilities the business
transacted at the meeting; and
(b) A majority of resident Canadian directors would have been present had
that director been present at the meeting.
10. Meetings by Telephone
If all the directors consent, a director may participate in a meeting of
the Board or of a committee of directors by means of such telephone or other
communication facilities as permit all persons participating in the meeting to
hear each other, and a director participating in a meeting by such means shall
be deemed to be present at such meeting. The consent shall be effective whether
given before or after the meeting to which it relates, and may be given with
respect to all meetings of the Board and/or of a committee of directors held
during the term of office of the director.
11. Regular Meetings
The Board may designate a day or days in any month or months for regular
meetings of the Board at a place and hour to be determined. A copy of any
resolution of the Board fixing the place and time of such regular meetings shall
be sent to each director forthwith after being passed, but no other notice shall
thereafter be required for any such regular meeting unless the Act requires the
purpose thereof or the business to be transacted thereat to be specified.
12. Votes to Govern
At all meetings of the Board, every question shall be decided by a majority
of the votes cast on the question; in the case of an equality of votes, the
chairman of the meeting shall be entitled to a second or casting vote.
13. Resolution in lieu of Meeting
A resolution in writing, signed by all the directors entitled to vote on
such resolution at a meeting of the Board or a committee of directors, is as
valid as if it had been passed at a meeting of the Board or committee of
directors.
14. Remuneration of Directors
The directors shall be paid such remuneration, if any, as the Board may
from time to time determine. In addition, the Board may by resolution from time
to time award special remuneration out of the funds of the Corporation to any
director who devotes the whole of his time to the affairs of the Corporation, or
who performs any special work or service for or undertakes any special mission
on behalf of the Corporation outside the work or services ordinarily required of
a director
<PAGE>
of the Corporation. The directors shall also be paid such sums in respect of
their out-of-pocket expenses incurred in attending Board or committee meetings
or otherwise in respect of the performance by them of their duties, as the Board
may from time to time determine. No confirmation by the shareholders of any such
remuneration or payment shall be required.
15. Conflict of Interest
A director or officer of the Corporation who is a party to, or who is a
director or officer of or has a material interest in any person who is a party
to, a material contract or proposed material contract with the Corporation shall
disclose the nature and extent of his interest, at the time and in the manner
provided in the Act, and shall not vote on any resolution to approve such
contract except as provided in the Act.
PROTECTION OF DIRECTORS, OFFICERS AND OTHERS
16. Limitation of Liability
No director or officer of the Corporation shall be liable for the acts,
receipts, neglects or defaults of any other director or officer or employee or
for joining in any receipts or other act for conformity or for any loss or
expense happening to the Corporation through the insufficiency or deficiency of
title to any property acquired by order of the Board for, or on behalf of, the
Corporation or for the insufficiency or deficiency of any security in or upon
which any of the moneys of the Corporation shall be invested, or for any loss or
damage arising from the bankruptcy, insolvency or tortious acts of any person
with whom any of the moneys, securities or effects of the Corporation shall be
deposited or from any loss occasioned by any error of judgement or oversight on
his part, or for any other loss damage or misfortune what ever which shall
happen in the execution of the duties of his office or in relation thereto
unless the same shall happen through his own wilful act or default. Nothing
herein contained shall relieve any director or officer of the Corporation from
his duty to act or in accordance with the Act or from liability for any breach
thereof.
17. Indemnification
The Corporation shall indemnify a director or officer, a former director or
officer, or a person who acts or acted at the request of the Corporation as a
director or officer of a body corporate of which the Corporation is or was a
shareholder or creditor (or a person who undertakes or has undertaken any
liability on behalf of the Corporation or any such body corporate) and the
heirs, executors, administrators and legal representatives of such person, from
and against all costs, charges and expenses whatsoever, including all amounts
paid to settle an action or satisfy a judgement sustained or reasonably incurred
by him in respect of any civil, criminal or administrative action or proceeding
to which he is made a party by reason of being or having been a director or
officer of the Corporation or such body corporate, if
(a) he acted honestly and in good faith with a view to the best interests
of the Corporation; and
<PAGE>
(b) in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty he had reasonable grounds for believing that
his conduct was lawful.
The Corporation shall, subject to the Act, indemnify such persons to the
same extent in respect of any action by or on behalf of the Corporation to
procure a judgement in favour of the Corporation to which he is made a party by
reason of being or having been a director or an officer of the Corporation if
the aforesaid conditions (a) and (b) are fulfilled. Subject to the Act, the
Corporation shall indemnify every person who has been substantially successful
in the defence of any civil, criminal or administrative action or proceeding to
which he is made a party by reason of being or having been a director or officer
of the Corporation against all costs, charges and expenses reasonably incurred
by such person in respect of such action or proceeding.
For greater certainty and without limiting the generality of the foregoing,
the Corporation shall indemnify and save harmless such persons from and against
any liability sustained by them for the acts, receipts, neglects or defaults of
any other director or officer or employee of the Corporation or for joining in
any receipt or act for conformity or for any loss, damage or expense of the
Corporation arising through the insufficiency or deficiency of title to any
property acquired by order of the Board for or on behalf of the Corporation or
for the insufficiency or deficiency of any security in or upon which any of the
moneys of or belonging to the Corporation shall be placed out or invested or for
any loss or damages arising from the bankruptcy, insolvency or tortious act of
any person, firm or corporation with whom or which any moneys, securities or
effects shall be lodged or deposited or for any other loss, damage or misfortune
whatsoever which may occur in the execution of the duties of their office or in
relation thereto, if the aforesaid conditions (a) and (b) are fulfilled. Subject
to the Act, the Corporation may purchase and maintain for the benefit of any
person referred to in this section insurance against any liability incurred by
him under the Act in his capacity as a director or officer of the Corporation.
18. Submission of Contracts or Transactions to Shareholders for Approval
The Board, in its discretion and subject to the Act, may submit any
contract, act or transaction for approval, ratification or confirmation at any
meeting of the shareholders called for the purpose of considering the same and
any such contract, act or transaction that shall be approved, ratified or
confirmed by a resolution passed by a majority of the votes cast at any such
meeting (unless any different or additional requirement is imposed by the Act or
by the Articles of the Corporation or any other By-law) shall be as valid and as
binding upon the Corporation and upon all the shareholders as though it had been
approved, ratified or confirmed by every shareholder of the Corporation.
COMMITTEES
19. Executive Committee
Subject to the Act, the Board may elect from its number an executive
committee consisting of not less than three (3) directors and from time to time
fill any vacancy occurring therein. Each member of the executive committee shall
hold office at the pleasure of the Board. During intervals
<PAGE>
between meetings of the Board, the executive committee shall possess and may
exercise all powers of the Board, subject to the provisions of this By-law, any
regulations which the Board may from time to time make and any specific
directions which the Board may from time to time give and save and except only
such powers as are by the Act required to be exercised by the Board itself.
Unless otherwise directed by the executive committee, the Secretary of the
Corporation shall act as secretary of the executive committee.
20. Transaction of Business
Subject to the provisions of section 10, the powers of the executive
committee shall be exercised by a meeting at which a quorum is present or by
resolution in writing signed by all members of the executive committee who would
have been entitled to vote on such resolution at a meeting of the executive
committee. Meetings of the executive committee may be held at any place in or
outside Canada.
21. Audit Committee
The Board shall elect annually from among its number an audit committee to
be composed of not less than three (3) directors, of whom a majority shall not
be officers or employees of the Corporation or its affiliates.
The audit committee shall have the powers and duties provided in the Act.
22. Standing Committees
The Board may appoint from its number standing committees and may confer
upon such committees such powers as it may legally delegate, subject to such
conditions as it may prescribe.
23. Procedure
Subject to section 24 and unless otherwise determined by the Board, each
committee shall have the power to fix its quorum at not less than a majority of
its members, to elect its chairman and to regulate its procedure. All committees
shall keep regular minutes of their transactions and shall report all such
transactions to the Board at its meeting next succeeding such action and all
such transactions shall be subject to revision or alteration by the Board,
provided that no acts or rights of third parties shall be affected or
invalidated by such revision or alteration.
24. Constitution of Committees
The majority of the members of each committee shall be resident Canadians.
A committee shall transact business only at a meeting at which a majority of the
members of such committee present and eligible to vote are resident Canadians,
unless:
(a) a resident Canadian member who is unable to be present approves in
writing or by telephone or other communications facilities the business
transacted at the meeting; and
<PAGE>
(b) a majority of resident Canadian members would have been present had
that director been present at the meeting.
OFFICERS
25. Election and Appointment of Officers
The Board shall elect from its number a President and may elect a Chairman
of the Board. The Board may from time to time appoint one or more
Vice-Presidents, a Secretary and a Treasurer and, if deemed advisable, one or
more Assistant-Secretaries and one or more Assistant-Treasurers. With the
exception of the Chairman of the Board and the President, an officer need not be
a member of the Board. Any two of the offices of the Corporation may be held by
the same person except those of President and Vice-President. In case and
whenever the same person holds the offices of Secretary and Treasurer, he may,
but need not, be called Secretary-Treasurer. The Board may from time to time
appoint such other officers, agents and attorneys as it shall deem necessary who
shall have such authority and shall perform such duties as may from time to time
be prescribed by the Board.
26. Terms of Employment, Remuneration and Removal of Officers
In the absence of a written agreement to the contrary, the employment of
any officer of the Corporation shall be at the pleasure of the Board. The terms
of employment shall be as determined by the Board from time to time.
The Board may by resolution delegate to a committee of the Board the
establishment of the remuneration of such officers and employees as it may from
time to time determine. The fact that any officer or employee is a director or
shareholder of the Corporation shall not disqualify him from receiving such
remuneration that may be so determined. All officers shall be subject to removal
by resolution of the Board at any time, with or without cause.
27. Duties of Officers may be Delegated
In the case of the absence, refusal to act or incapacity of the Chairman of
the Board (if any), the President, a Vice-President or any other officer of the
Corporation, or for any other reason that the Board may deem sufficient, the
Board may delegate all or any of the powers and duties of such officer to any
other officer or to any director for such time as it may direct.
28. Chairman of the Board
The Chairman of the Board shall, if present and willing, preside at all
meetings of directors and shareholders and subject to the Act, shall possess and
may exercise such powers and fulfil such duties as the Board may from time to
time determine. The Chairman of the Board or the President, as determined by the
Board, shall be the Chief Executive Officer of the Corporation.
<PAGE>
29. President
In the case of the absence, refusal to act or incapacity of the Chairman of
the Board, or if such office be vacant, the President shall assume his position
and carry out his functions. He shall sign all instruments which require his
signature and shall perform all duties incident to his office and shall have
such other powers and duties as may from time to time be assigned to him by the
Board.
30. Vice-President
In the case of the absence, refusal to act or incapacity of the President, a
Vice-President shall, to the extent that he may be authorized by the Board, be
vested with the powers and shall perform the duties of the President. A Vice-
President shall have such powers and duties as may from time to time be assigned
to him by the Board or, if so directed by the Board, by the Chairman of the
Board or the President.
31. Secretary
The Secretary shall give or cause to be given, as and when instructed, all
notices required to be given to shareholders, directors, officers, auditors, and
members of committees. He shall attend and act as secretary at all meetings of
the Board, shareholders and the executive committee and shall enter, or cause to
be entered, in books or records kept for such purpose minutes of all proceedings
at such meetings. He shall sign such contracts, documents or instruments in
writing as require his signature, and he shall be the custodian of the stamp or
mechanical device generally used for affixing the corporate seal of the
Corporation and of all books, papers, records, documents and other instruments
belonging to the Corporation except when some other officer or agent has been
appointed by resolution for such purpose. He shall have such other powers and
shall perform such other duties as may from time to time be prescribed by the
Board or required by the Act.
32. Treasurer
The Treasurer shall have care and custody of all funds and securities of the
Corporation and shall deposit the same in the name of the Corporation in such
bank or banks or with such other depository or depositories as the Board may
direct. He shall keep or cause to be kept the books of account and accounting
records required by the Act. As required, he shall render an account to the
Board of all his transactions as Treasurer and of the financial position of the
Corporation. He shall sign such contracts, documents or instruments in writing
as require his signature and shall have such powers and duties as may from time
to time be assigned to him by the Board or as are incident to his office.
33. Assistant-Secretary and Assistant-Treasurer
The Assistant-Secretary or, if more than one, the Assistant-Secretaries, in
order of seniority, and the Assistant-Treasurer or, if more than one, the
Assistant-Treasurers, in order of seniority, shall perform all the duties of the
Secretary and Treasurer, respectively. In the case of the absence or
<PAGE>
incapacity of the Secretary or Treasurer, as the case may be, the Assistant-
Secretary or Assistant-Treasurer or, if more than one, the Assistant-Secretaries
or Assistant-Treasurers, shall sign such contracts, documents or instruments in
writing as require his or their signatures, respectively, and shall have such
other powers and duties as may from time to time be assigned to them by the
Board.
34. Fidelity Bonds
The Board may require such officers, employees, attorneys, and agents of the
Corporation as the Board may deem advisable, to furnish bonds for the faithful
discharge of their duties in such form and with such sureties as the Board may
from time to time prescribe, and no director shall be liable for failure to
require any such bond or for the insufficiency of any such bond or for any loss
by reason of failure of the Corporation to receive any indemnity thereby
provided.
MEETINGS OF SHAREHOLDERS
35. Place and Time of Meetings
Meetings of shareholders shall be held at the registered office of the
Corporation or elsewhere in Canada at such time and upon such day as the Board
may be resolution determine.
36. Notice of Meetings
Notice of the time and place of each annual meeting of shareholders and of
each special meeting of shareholders shall be given in the manner provided in
section 64 not less than twenty-one (21) days nor more than fifty (50) days
before the date of the meeting to each director, to the auditor of the
Corporation and to each shareholder entitled to vote who, at the close of
business on the record date for notice, if any, is entered in the securities
register as the holder of one or more shares of the Corporation carrying the
right to vote at the meeting. Notice of a meeting of shareholders called for
any purpose other than the consideration of the financial statements and
auditor's report, the election of directors or the reappointment of the
incumbent auditor shall state the nature of the business in sufficient detail to
permit the shareholder to form a reasoned judgment thereon and shall state the
text of any special resolution to be submitted to the meeting.
A shareholder may in any manner waive notice of or otherwise consent to the
holding of a meeting of shareholders. Attendance of a shareholder at a meeting
of shareholders shall be deemed to constitute a waiver of notice of such meeting
except where a shareholder attends such meeting for the express purpose of
objecting to the transaction of any business thereat on the grounds that the
meeting is not lawfully called.
Irregularities in a notice or in the giving thereof, as well as the accidental
omission to give notice of any meeting to or the non-receipt of any such notice
by any shareholder or shareholders, a director
<PAGE>
or the auditor of the Corporation, shall not invalidate any resolution passed or
any proceedings taken at any such meeting. A certificate of the Secretary or of
any duly authorized officer of the Corporation or of any transfer agent or
registrar of the Corporation, with respect to the mailing of any notice, shall
be conclusive evidence thereof and shall be binding on every director,
shareholder and the auditor of the Corporation.
37. Requisition of Meeting
The holders of not less than ten percent (10%) of the issued shares of the
Corporation that carry the right to vote at the meeting sought to be held may
requisition the directors to call a meeting of shareholders for the purposes
stated in the requisition. The requisition shall state the business to be
transacted at the meeting and shall be sent to each director and to the
registered office of the Corporation. Subject to the Act, upon receiving the
requisition, the directors shall call a meeting of shareholders to transact the
business stated in the requisition. If the directors do not call a meeting
within twenty-one (21) days after receiving the requisition, any shareholder who
signed the requisition may call the meeting.
38. List of Shareholders Entitled to Notice
For every meeting of shareholders, the Corporation shall prepare a list of
shareholders entitled to receive notice of the meeting, arranged in alphabetical
order and showing the number of shares held by each shareholder entitled to vote
at the meeting. If a record date for the meeting is fixed pursuant to section
39, the list of shareholders shall be prepared not later than ten (10) days
after such record date. If no record date is fixed, the list of shareholders
shall be prepared at the close of business on the business day immediately
preceding the day on which notice is given or, where no such notice is given,
the day on which the meeting is held. The list of shareholders shall be
available for examination by any shareholder during usual business hours at the
registered office of the Corporation or at the place where the securities
register is maintained and at the meeting for which the list was prepared.
39. Record Date for Notice
The Board may fix in advance a record date preceding the date of any meeting
of shareholders by not more than fifty (50) days and not less than twenty-one
(21) days for the determination of the shareholders entitled to receive notice
of the meeting, provided that notice of any such record date is given not less
than fourteen (14) days before such record date in the manner provided in
accordance with the Act. If no record date is fixed, the record date for the
determination of the shareholders entitled to receive notice of the meeting
shall be the close of business on the business day immediately preceding the day
on which the notice is given.
40. Proxies
Every shareholder, including a shareholder that is a corporation, entitled to
vote at a meeting of shareholders, may appoint a proxy, or one or more alternate
proxies, who need not be shareholders
<PAGE>
of the Corporation, as his nominee to attend and act at the meeting in the
manner and to the extent authorized by the proxy and with the authority
conferred by the proxy. An instrument appointing a proxy shall be in writing and
executed by the shareholder or his attorney duly authorized in writing or, if
the shareholder is a corporation, executed on its behalf by its duly authorized
officer or officers; instruments appointing a proxy signed by or on behalf of a
corporation need not be under seal. A proxy shall conform with the requirements
of the Act and shall be deposited with the Secretary of the Corporation before
any vote is cast under its authority or at such earlier time and in such manner
as the Board may prescribe. Without limiting the generality of the foregoing,
the directors may from time to time and subject to the Act, make regulations
regarding the deposit of proxies at a place or places other than the place at
which a meeting or adjourned meeting of shareholders is to be held and may
provide for particulars of such proxies to be cabled or telegraphed or sent in
writing to the Corporation or an agent of the Corporation before the meeting or
adjourned meeting; and any proxy so deposited in accordance with the regulations
may be voted upon as though it was produced at the meeting or adjourned meeting
and votes given in respect thereof shall be valid and shall be counted. Subject
to any regulations made as aforesaid and to the Act, the chairman of any meeting
of shareholders may, in his discretion, accept telegraphic or cable or written
communication as the authority of anyone claiming to represent and to vote on
behalf of a shareholder notwithstanding that no proxy conferring such authority
has been deposited with the Corporation, and any votes given in accordance with
such telegraphic or cable or written communication accepted by the chairman
shall be valid and shall be counted.
41. Joint Shareholders
If two (2) or more persons are registered as joint holders of any share or
shares of the Corporation, any one of such persons may, in the absence of the
others, vote at any meeting either personally or by proxy in respect of such
share or shares as if he were solely entitled thereto, but if more than one of
such shareholders be present or represented by proxy at such meeting, that one
of such joint holders so present or represented whose name stands before the
other or others in the books of the Corporation in respect of such share or
shares shall alone be entitled to vote in respect thereof. Several executors or
administrators of a deceased shareholder in whose name any shares stand shall,
for the purpose of this section, be deemed joint holders thereof.
42. Scrutineers
The chairman, at any meeting of shareholders, may appoint two (2) or more
persons (who may but need not be shareholders, directors, officers or employees
of the Corporation) to act as scrutineers at such meeting.
43. Chairman
In the absence of the Chairman of the Board, the President and every Vice-
President who has been vested with the powers of the President, the shareholders
present and entitled to vote at a meeting of shareholders shall choose another
director as chairman of the meeting and, if no director
<PAGE>
is present or if all the directors present decline to take the chair, then the
shareholders present shall choose one of their number to be chairman of the
meeting.
44. Secretary
If the Secretary of the Corporation is absent or is unable to act, the
chairman of the meeting shall appoint a person, who need not be a shareholder of
the Corporation, to act as secretary of the meeting.
45. Votes to Govern
Unless otherwise prescribed by the Act, the Articles, or the By-laws of the
Corporation, every question submitted to any meeting of shareholders shall be
determined by a majority of votes cast on the question. Upon a show of hands,
every person who is present and entitled to vote shall have one vote. In the
case of an equality of votes, the chairman shall, both on a show of hands and in
the case of a ballot, have a casting vote in addition to the vote or votes to
which he may be entitled to as a shareholder.
At any meeting of shareholders unless a ballot is demanded, and a declaration
by the chairman of the meeting that a resolution has been carried, whether
unanimously or by a particular majority, or has been rejected or not carried by
a particular majority and an entry to that effect in the minutes of the meeting,
shall constitute conclusive evidence of the fact, without proof of the number or
proportion of votes recorded for or against such resolution.
A ballot may be directed to be taken by the chairman or may be required to be
taken by any person present and entitled to vote upon any question arising at a
meeting. If a ballot be demanded and the demand be not withdrawn, it shall be
taken in such manner and either at once or later at the meeting or after
adjournment as the chairman of the meeting shall direct; provided that, if a
ballot is demanded in connection with the election of a chairman or the question
of adjournment, it shall be taken forthwith without adjournment. In the case of
a ballot, each shareholder who is present in person or represented by proxy
shall be entitled to one vote for each share in respect of which he is entitled
to vote at the meeting and the result of the ballot shall be the decision of the
Corporation at any meeting of shareholders upon the question.
46. Corporate Shareholder
At any meeting of shareholders, a shareholder which is a corporation shall, as
an alternative to voting by proxy, be entitled to vote by its representative
duly authorized in accordance with the provisions of the Act and the person so
authorized shall be entitled to exercise the same powers on behalf of the
corporation which he represents as such corporation could exercise if it were an
individual shareholder personally present at the meeting.
47. Adjournment
<PAGE>
The chairman may, with the consent of any meeting and subject to such
conditions as the meeting decides, adjourn such meeting from time to time and
from place to place and, if such meeting is adjourned for less than thirty (30)
days, it shall not be necessary to give notice of the adjourned meeting other
than by announcement at the meeting that it is adjourned. If a meeting of
shareholders is adjourned by one or more adjournments for an aggregate of thirty
(30) days or more, notice of the adjourned meeting shall be given in accordance
with the provisions of the Act.
48. Quorum
Unless otherwise prescribed by the Act, the Articles or the By-laws of the
Corporation, a quorum for any meeting of shareholders shall be shareholders
present in person and personally holding or representing by proxy not less than
ten percent (10%) of the issued and outstanding shares of the Corporation
entitled to vote at the meeting. If a quorum is present at the opening of a
meeting of shareholders, the shareholders present or represented by proxy may
proceed with the business of the meeting and may continue the meeting even
though a quorum is not present throughout the meeting.
SHARES AND TRANSFERS
49. Allotment and Issuance
Subject to the provisions of the Act, shares in the capital stock of the
Corporation may from time to time be allotted and issued by resolution of the
Board on such terms and conditions, and to such persons and for such
consideration as the Board may determine.
50. Right to Vote
Subject to the provisions of the Act, at any meeting of shareholders in
respect of which the Corporation has prepared the list referred to in section
38, every person named in such list shall be entitled to vote the shares shown
thereon opposite his name at the meeting to which the list relates except to the
extent that such person has transferred any of his shares after the record date
or the date of preparation of the list, as the case may be, and the transferee,
upon producing properly endorsed certificates evidencing such shares or
otherwise establishing that he owns such shares, demands not later than ten (10)
days before the meeting that his name be included in the list before the
meeting, in which case the transferee is entitled to vote the transferred shares
at the meeting.
51. Registration of Transfer
Subject to the provisions of the Act, the Articles and the By-laws of the
Corporation, no transfer of shares shall be registered in a securities register
except upon presentation of the certificates representing such shares with a
transfer endorsed thereon or delivered therewith duly executed by the registered
holder or by his attorney or successor duly appointed, together with such
reasonable assurance or evidence of signature, identification and authority to
transfer as the Board may from
<PAGE>
time to time prescribe, upon payment of all applicable taxes and any fees
prescribed by the Board and upon compliance with such restrictions on transfer
as are authorized by the Articles.
52. Transfer Agent and Registrar
The Board may from time to time by resolution appoint a registrar to maintain
the securities register and a transfer agent to maintain the register of
transfers and may also appoint one or more branch registrars to maintain branch
securities registers and one or more branch transfer agents to maintain branch
registers of transfers, but one person may be appointed both registrar and
transfer agent. The Board may at any time terminate any such appointment and
make new appointments.
53. Share Certificates
Every holder of one or more shares of the Corporation shall be entitled, at
his option, to a share certificate, or to a non-transferable written
acknowledgement of his right to obtain a share certificate, stating the number
and class or series of shares held by him as shown on the securities register.
Share certificates and acknowledgements of a shareholder's rights to a share
certificate, respectively, shall be in such form as the Board may from time to
time approve. Any such share certificate shall be signed by the President and
the Secretary; provided that, unless the Board otherwise determines,
certificates representing shares in respect of which a transfer agent and/or
registrar has been appointed shall not be valid unless manually countersigned by
or on behalf of such transfer agent and/or registrar.
The signature of one of the signing officers or, in the case of share
certificates which are not valid unless manually countersigned by or on behalf
of a transfer agent and/or registrar, the signatures of both signing officers,
may be printed or mechanically reproduced in facsimile upon share certificates
and every such facsimile signature shall for all purposes be deemed to be the
signature of the officer whose signature it reproduces and shall be binding upon
the Corporation. A share certificate executed as aforesaid shall be valid
notwithstanding that one or both of the officers whose facsimile signature
appears thereon no longer holds office at the date of issue of the certificate.
54. Defacement, Destroyed, Stolen or Lost Certificates
In the case of the defacement, destruction, theft or loss of a certificate for
shares held by any shareholder, the fact of such defacement, destruction, theft
or loss shall be reported to any officer of the Corporation or to a transfer
agent or branch transfer agent of the Corporation, if any, with a statement
verified by oath or statutory declaration as to the defacement, destruction,
theft or loss and the circumstances concerning the same and with a request for
the issuance of a new certificate to replace the one so defaced, destroyed,
stolen or lost. Upon furnishing to the Corporation the Corporation's transfer
agent(s) and/or registrar(s) a bond of a surety company or other security
approved by the Board, in a form approved by the Board or by the Secretary of
the Corporation, indemnifying the Corporation (and the Corporation's transfer
agent(s) and/or registrar(s) if any,) against all loss, damage or expense to
which the Corporation and/or the Corporation's transfer
<PAGE>
agent(s) and/or registrar(s) may be put or be liable for by reason of issuance
of a new certificate to such shareholder, a new certificate may be issued in
replacement of the one defaced, destroyed, stolen or lost if such issuance is
ordered and authorized by the Chairman of the Board, the President or the
Secretary of the Corporation or by resolution of the Board.
55. Joint Shareholders
If two (2) or more persons are registered as joint holders of any share, the
Corporation shall not be bound to issue more than one certificate in respect
thereof and delivery of such certificate to one of such persons shall be
sufficient delivery to all of them. Any one of such persons may give an
effectual receipt for the certificate issued in respect of such share or for any
share warrant.
56. Deceased Shareholders
In the event of the death of a holder, or of one of the joint holders, of any
share, the Corporation shall not be required to make any entry in the securities
register in respect thereof or to make any payment of dividends thereon except
upon the production of all such documents as may be required by the Act and upon
compliance with the reasonable requirements of the Corporation or its transfer
agent.
FINANCIAL ASSISTANCE
57.
Subject to the Act, the Corporation may from time to time give financial
assistance by means of loans, guarantees or otherwise to shareholders,
directors, officers and employees of the Corporation or any of its affiliates.
DIVIDENDS AND RIGHTS
58. Dividends
Subject to the Act and the Articles, the Board may from time to time by
resolution, as it deems advisable, declare dividends payable on the issued and
outstanding shares of the Corporation to the shareholders in accordance with
their respective rights and interests in the Corporation. Dividends may be paid
in money or property or by issuing fully paid shares of the Corporation.
59. Dividend Cheques
A dividend payable in cash shall be paid by cheque drawn on the Corporation's
bankers or one of them to the order of each registered holder of shares of the
class or series in respect of which it has been declared and mailed by prepaid
ordinary mail to such registered holder at his recorded address, unless such
holder otherwise directs. In the case of joint holders, the cheque shall,
unless such joint holders otherwise direct, be made payable to the order of all
of such joint holders and
<PAGE>
mailed to them at their recorded address. The mailing of such cheque as
aforesaid, unless the same is not paid on due presentation, shall satisfy and
discharge the liability of the Corporation for the dividend to the extent of the
sum represented thereby plus the amount of any tax which the Corporation is
required to and does withhold.
60. Record Date for Dividends and Rights
The Board shall fix in advance a date, preceding by not more than fifty (50)
days the date for the payment of any dividend or the date for the issue of any
warrant or other evidence of right to subscribe for securities of the
Corporation, as a record date for the determination of the persons entitled to
receive payment of such dividend or to exercise the right to subscribe for such
securities, provided that notice of any such record date is given not less than
fourteen (14) days before such record date in the manner provided in the Act.
61. Unclaimed Dividends
Any dividend unclaimed after a period of six (6) years from the date on which
the same has been declared to be payable shall be forfeited and shall revert to
the Corporation.
62. Reserve Fund
The Board may, from time to time, set aside such sums as it may consider
advisable as a reserve or reserves which shall, in the absolute discretion of
the directors, be applicable for any purpose deemed to be in the best interests
of the Corporation. The Board may, from time to time, in its discretion,
increase, reduce or abolish any reserve fund in whole or in part and may
transfer the whole or any part of the reserve fund to surplus.
63. Voting Shares and Securities in Other Companies
All the shares or other securities carrying voting rights of any other
corporation or corporations held from time to time by the Corporation may be
voted at any and all meetings of shareholders, bondholders, debentureholders,
debenture stockholders or holders of other securities (as the case may be) of
such other corporation or corporations and in such manner and by such person or
persons as the President or the Board shall from time to time determine. The
proper signing officers of the Corporation may also, from time to time, execute
and deliver for and on behalf of the Corporation instruments of proxy and/or
arrange for the issuance of voting certificates and/or evidence of the right to
vote in such names as they may determine without the necessity of a resolution
or other action of the Board.
NOTICES
64. Service of Notice
<PAGE>
Any notice (which term includes any communication or other document) to be
given (which term includes sent, delivered, furnished or served) pursuant to the
Act, the regulations thereunder, the Articles, the By-laws or otherwise to a
shareholder, director, officer, auditor or member of a committee of the Board
shall be sufficiently given if delivered personally to the person to whom it is
to be given or if delivered to his recorded address or if mailed to him at his
recorded address by prepaid ordinary mail or if sent to him at his recorded
address by any means of prepaid transmitted or recorded communication. A notice
so delivered shall be deemed to have been given when it is delivered personally
or to the recorded address as aforesaid; a notice so mailed shall be deemed to
have been sent at the time it was deposited in a post office or public mail box;
a notice so sent by any means of transmitted or recorded communication shall be
deemed to have been given when dispatched or delivered to the appropriate
communication company or agency or its representative for dispatch. The
Secretary may change or cause to be changed the recorded address of any
shareholder, director, officer, auditor or member of a committee of the Board in
accordance with any information believed by him to be reliable.
65. Shares Registered in More Than One Name
If two (2) or more persons are registered as joint holders of any share, any
notice shall be addressed to all of such joint holders but notice sent or
delivered to one of such persons shall be sufficient notice to all of them.
66. Undelivered Notices
If any notice given to a shareholder pursuant to section 64 is returned on
three (3) consecutive occasions because he cannot be found, the Corporation
shall not be required to give any further notice to such shareholder until he
informs the Corporation in writing of his new address.
67. Persons Becoming Entitled by Death or Operation of Law
Every person who, by the operation of the Act, a transfer, the death of a
shareholder or any other means whatsoever, becomes the owner of or entitled to
any share, shall be bound by every notice in respect of such share duly given to
the shareholder from whom he derives his title to such share prior to his name
and address being entered on the securities register (whether such notice was
given before or after the occurrence of the event upon which he became so
entitled) and prior to his furnishing to the Corporation the proof of authority
or evidence of his entitlement prescribed by the Act.
68. Waiver of Notice
Any shareholder (or his duly appointed proxyholder), director, auditor or
member of a committee of the Board may at any time waive any notice, or waive or
abridge the time for any notice, required to be given to him under any provision
of the Act, the regulations thereunder, the Articles, the By-laws or otherwise,
and such waiver or abridgement shall be deemed to cure any defect in the
procedure or delay for the notice, as the case may be. Any such waiver or
abridgement shall be in
<PAGE>
writing, except a waiver of notice of a meeting of shareholders or of the Board
which may be given in any manner.
69. Omissions and Errors
The accidental omission to give any notice to any shareholder, director,
officer, auditor or member of a committee of the Board or the non-receipt of any
notice by any such person or any error in any notice not affecting the substance
thereof shall not invalidate any action or decision taken at any meeting held
pursuant to such notice or otherwise founded thereon.
70. Signature to Notices
The signature to any notice to be given by the Corporation may be written,
stamped, typewritten, printed or otherwise reproduced in facsimile or partly
written, stamped, typewritten, printed or otherwise reproduced in facsimile.
71. Computation of Time
Subject to the Act, where a specified number of days' notice or notice
extending over any period is required to be given, the day of service or posting
of the notice shall, unless it is otherwise provided, be counted in such number
of days or other period.
72. Proof of Service
A certificate of the Secretary or other duly authorized officer of the
Corporation then in office, or of the transfer officer of any transfer agent of
shares of any class of the Corporation, as to facts in relation to the mailing
or delivery of any notice or other document to any shareholder, director,
auditor or officer, or publication of any notice or other document, shall,
subject to the Act, be conclusive evidence thereof and shall be binding on every
shareholder, director, auditor or officer of the Corporation, as the case may
be.
73. Books of Accounts
The books of account of the Corporation may be kept either at the registered
office or at such other place in Canada as the directors may, from time to time,
determine or approve.
74. Borrowing of Money by the Corporation
The directors may and they are hereby authorized from time to time to:
(a) Borrow money upon the credit of the Corporation;
(b) Limit or increase the amount to be borrowed;
(c) Issue debentures or other securities of the Corporation;
<PAGE>
(d) Pledge or sell such debentures or other securities for such sums and at
such prices as may be deemed expedient; and
(e) Secure any such debentures, or other securities, or any other present or
future borrowing or liability of the Corporation, by mortgage, hypothec, charge
or pledge of all or any currently owned or subsequently acquired real and
personal, moveable and immoveable, property of the Corporation, and the
undertaking and rights of the Corporation.
The directors may from time to time by resolution delegate to any officer or
director of the Corporation all or any of the powers conferred on the directors
by the above paragraph to the full extent thereof or such lesser extent as the
directors may in any such resolution provide.
The powers hereby conferred shall be deemed to be in supplement of an not in
substitution for any powers to borrow money for the purpose of the Corporation
possessed by its directors or officers independently of a borrowing by-law.
BANKING ARRANGEMENTS AND INSTRUMENTS
75.
The banking business of the Corporation or any part thereof, shall be
transacted with such one or more banks, trust companies or other firms or
corporations carrying on a banking business as the Board may designate, appoint
or authorize from time to time by resolution, and all such banking business, or
any part thereof, shall be transacted on behalf of the Corporation by such one
or more officers and/or other persons as the Board may designate, direct or
authorize from time to time by resolution and to the extent therein provided.
For greater certainty, but without restricting the generality of the foregoing,
such banking business shall include the operation of the Corporation's accounts;
the making, signing, drawing, accepting, endorsing, negotiating, lodging,
depositing or transferring of any cheques, promissory notes, drafts,
acceptances, bills of exchange and orders for the payment of money; the giving
of receipts for and orders relating to any property of the Corporation; the
execution of any agreement relating to any such banking business and defining
the rights and powers of the parties thereof; and the authorizing of any officer
of such bank, trust company or other firm or corporation to do any act or thing
on the Corporation's behalf to facilitate such banking business.
76. Declarations
The President, Chairman of the Board, Secretary and Treasurer, or any one of
them, is authorized and empowered to appear and make answer for the Corporation
to all writs, orders and interrogatories upon articulated facts issued out of
any court and to declare for and on behalf of the Corporation any answer to
writs of attachment by way of garnishment in which the Corporation is garnishee,
and to make all affidavits and sworn declarations in connection therewith or in
connection with any or all judicial proceedings to which the Corporation is a
party and to make demands of abandonment or partitions for winding-up or
bankruptcy orders upon any debtor of the Corporation
<PAGE>
and to attend and vote at all meetings of creditors of any of the Corporation's
debtors and grant proxies in connection therewith.
EXECUTION OF INSTRUMENTS
77.
Contracts, documents or instruments in writing requiring the signature of the
Corporation may be validly signed by:
(a) any one of the Chairman of the Board, the President, or a Vice-President,
together with the Secretary, the Treasurer, an Assistant-Secretary or an
Assistant-Treasurer; or
(b) any two (2) directors;
and all contracts, documents or instruments in writing so signed shall be
binding upon the Corporation without any further authorization or formality.
The Board may from time to time by resolution appoint any officer or officers
or any other person or persons either to sign contracts, documents or
instruments in writing generally or to sign specific contracts, documents or
instruments in writing on behalf of the Corporation. The corporate seal of the
Corporation may, when required, be affixed to the contracts, documents or
instruments in writing signed as aforesaid by any officer or officers, person or
persons appointed as aforesaid by resolution of the Board.
The term "contracts, documents or instruments in writing" as used in this By-
law includes deeds, mortgages, hypothecs, charges, conveyances, transfers and
assignments of property, real or personal, immoveable or moveable, obligations,
sureties, indemnities, bonds, guarantees, agreements, releases, receipts and
discharges for the payment of money or other obligations, conveyances, transfers
and assignments of shares, share warrants, rights, bonds, debentures or other
securities and all paper writings.
FISCAL YEAR
78.
The fiscal year of the Corporation shall terminate on the 31st day of December
in each year or on such other date as the directors may from time to time by
resolution determine.
REPEAL, REDESIGNATION AND COMING INTO FORCE
79.
By-law 101 of the Corporation heretofore enacted by the directors and
confirmed by the shareholders is hereby repealed effective as of the coming into
force of this By-law.
<PAGE>
The repeal shall be without prejudice to any action heretofore taken under the
By-law so repealed and the numbers designating the By-law so repealed may be
allocated to any by-laws heretofore or hereafter enacted by the Board.
This By-law shall come into force when it has been ratified by the
Shareholders of the Corporation.
<PAGE>
EXHIBIT 4(C)
Exhibit 4 (c)
The Teleglobe Inc. Global Employees Stock Savings Plan
Teleglobe Inc. Global
Employees Stock Savings Plan (the "Plan")
As Amended and Restated on May 12, 1999
1. The Plan. The purpose of this Plan is to provide Eligible Employees of
--------
Teleglobe Inc. ("Teleglobe") with an opportunity to become shareholders of
Teleglobe by facilitating the purchase of its common shares and to receive
additional shares as a matching contribution.
2. Offering Period. Provided that proper paperwork is timely received,
---------------
Eligible Employees may join or make changes in their enrollment in the Plan
quarterly, the first business day of each calendar quarter and newly hired
or rehired Eligible Employees may begin participation immediately.
3. The Shares. Shares offered through the Plan are common shares of Teleglobe
----------
and are purchased on the New York Stock Exchange.
4. Eligibility and Participation. Regular full-time employees of Teleglobe
-----------------------------
Inc. and its subsidiaries ("Employer(s)") and regular part-time employees
(those employees working 20 or more hours per week) are eligible to
participate in the Plan, provided that participation is permitted by the
laws of the country the employee resides in, that Teleglobe, in its sole
discretion, has determined to offer the Plan in the employee's location and
all regulatory requirements have been met ("Eligible Employees"). Employees
residing in Canada are not eligible to participate. Employees of Employers
classified as interns, participants of the Teleglobe Associates Program and
employees hired for a temporary assignment of less than one year are not
eligible. Employees on a temporary assignment in a country which is not
their home country are not eligible, unless both their home country and the
country to which they are assigned participate in the Plan. Individuals who
perform services for an Employer under an agreement (which may be written,
oral and/or evidenced by the Employer's payroll practices) with such
individual or with any organization that provides services of such
individual to an Employer, pursuant to which the individual is treated as
an independent contractor or is otherwise treated as an individual
ineligible for the Plan, such an individual will not be treated as an
Eligible Employee, irrespective of whether he or she is treated as an
employee of an Employer under common law employment principles. Eligible
Employees may participate in the Plan beginning on their date of hire (and
any subsequent calendar quarter) provided the required application form is
received by Teleglobe, within ten (10) business days of the date of hire or
no later than thirty (30) days prior to the start of any subsequent
calendar quarter.
<PAGE>
5. Contributions
-------------
5.1. Employee Contributions. Eligible Employees make contributions to the
----------------------
Plan through after-tax payroll deductions as indicated on the
enrollment form, in whole percentages of net Earnings (with no limit),
during each pay period for an entire calendar quarter ("Employee
contributions"). Earnings include base pay, incentives, commissions,
bonuses, overtime and shift differential, if any. Earnings do not
include other income such as relocation, Personal Best Fitness
Reimbursement, Educational Reimbursement, Housing Allowance, life
insurance imputed income amounts or compensation related to the
exercise of stock options. Employee contributions begin with the first
pay period following hire in the case of a newly hired or a rehired
Eligible Employee, or with the first pay period of a calendar quarter
for other Eligible Employees. An Eligible Employee who elects to make
contributions in the Plan is referred to as a "Participant."
5.2. Change to Contribution Rate. A Participant may change his or her rate
---------------------------
of contribution quarterly, provided that Teleglobe, receives the
completed paperwork no later than thirty (30) days prior to the start
of a calendar quarter. Changes are effective with the first payroll
period of the calendar quarter following timely receipt of the
paperwork.
5.3. Retroactive Contributions. An Eligible Employee may not make
-------------------------
retroactive contributions to the Plan.
5.4. Lump Sum Payments. An Eligible Employee may not make lump sum
-----------------
contributions to the Plan.
5.5. Contributions While On Authorized Leave. An Eligible Employee may
---------------------------------------
contribute to the Plan while on authorized leave of absence as
follows:
(A) During authorized leave with pay, employee may continue payroll
deductions as if employee was not on a leave of absence.
(B) During an authorized leave without pay, employee may continue to
contribute provided that an election to continue is made prior to
the beginning of the authorized leave in accordance with Plan's
policy. Amounts eligible for contributions are based on the
employee's base salary in effect on the day prior to the start of
the authorized leave. Employees must send contribution checks to
Teleglobe in accordance with its then current administrative
procedures. If employee elects not to participate during the
authorized leave, contributions will resume with the first
payroll period following the employee's return to active
employment.
5.6. Employer Payments to Trustee. The Employer will remit Participants'
----------------------------
contributions to General Trust of Canada or any other trustee
appointed from time to time by
<PAGE>
Teleglobe ("Trustee"), as soon as possible, immediately prior to, or
after each pay check date.
5.7. Dividends. Any dividends received on shares held under the Plan are
---------
retained in the Plan and used to purchase additional shares on the
next purchase date following allocation of dividends. However,
dividends are not considered contributions and will not be matched
(see Section 5.8 below for details on matching contributions).
5.8. Employer Matching Contributions. On each pay date, the Employer will
-------------------------------
contribute an amount (in cash or in stock) equal to fifty percent
(50%) of the Participant's first six percent (6%) of contributions.
Matching contributions will not exceed three percent (3%) of
Participant's Earnings.
6. Allocation and Vesting to Participants.
--------------------------------------
6.1. Trust Fund. All Employee and matching contributions, together with any
----------
dividends, will constitute the trust fund. The trust fund is held,
invested, managed and administered pursuant to the terms of the trust
agreements entered into between Teleglobe and the Trustee.
6.2. Credits to Participant's Accounts. The Trustee immediately credits
---------------------------------
Participant accounts with Employee contributions and matching
contributions. All contributions vest immediately. The Trustee will
allocate any dividends to Participants within thirty (30) days of
Trustee's receipt of the dividends.
6.3. Dividends. Any dividends are reinvested in accordance with Section
---------
5.7.
7. Withdrawal of Shares from the Plan.
----------------------------------
7.1. Withdrawal without Penalty. A Participant may withdraw, without
--------------------------
penalty, all of the shares purchased with Employee contributions and
any shares purchased with matching contributions that have been
allocated to the Participant for at least twelve (12) months as of
January1st, provided a completed form is received by Teleglobe at
least thirty (30) days prior to January 1st of any calendar year. The
shares that the Participant wishes to withdraw will be delivered to
the Participant by the following February 15th. A withdrawal of shares
under this Section 7.1 will not result in suspension from the Plan.
7.2. Withdrawal with Penalty. A Participant may withdraw, with penalty,
-----------------------
some or all of the shares purchased with Employee contributions and
some or all of the shares purchased with matching contributions,
provided that the shares purchased with matching contributions have
been allocated to the Participant for at least 12 months as of the
preceding January 1st, and provided Teleglobe receives the request at
least thirty (30) days prior to the start of the quarter in which the
withdrawal will be made. A
<PAGE>
withdrawal of shares under this subsection will not result in
suspension from the Plan. However, matching contributions will not be
made for one (1) year after the withdrawal was made.
7.3. Withdrawal with Suspension - "Opting Out". A Participant may withdraw
----------------------------------------
all of the shares and cash (if any) in his or her account without
regard to how long the shares have been in the Plan. However, this
action will suspend Participant's participation in the Plan for one
(1) year following the end of the calendar quarter in which the
Participant's last contribution was made.
7.4. Withdrawal on Termination of Employment, Retirement or Death. The
------------------------------------------------------------
total cash and share balance in the Participant's account will be
distributed to the Participant, or in the case of his or her death, to
his or her estate or designated beneficiaries, no later than ninety
(90) days after the close of the offering period after the first of
the following events:
(A) the Participant's death;
(B) the Participant's retirement from an Employer;
(C) termination of the Participant's employment with an
Employer; or
(D) termination of the Plan.
Any funds not used to purchase shares will be returned to the
Participant, his or her estate or beneficiaries. Participation in the
Plan ends on the date of any of the events described above.
7.5. Distributions. Distributions are made in the form of shares, with
-------------
fractional shares distributed in cash. The Trustee will charge a fee
of US$15.00 for each distribution. The Trustee and Teleglobe may agree
to change the fee from time to time. The fee can be paid by remitting
a check or by requesting that the Trustee liquidate a share, or
shares, of stock to cover the fee.
8. Investments.
-----------
8.1. Investment of Shares. Contributions to the Plan and any dividends will
--------------------
be invested in Teleglobe common shares, including any fractional share
amounts.
8.2. Investment by Trustee. All contributions and any dividends will be
---------------------
invested by the Trustee as soon as possible within a reasonable period
of time following receipt. The Trustee will purchase shares on the New
York Stock Exchange in an amount equal to the total contributions made
by all Participants. When purchasing shares for the trust, the Trustee
may, at its discretion, limit the daily volume of trades if the
Trustee deems
<PAGE>
it to be in the Participants' best interest. If the Trustee deems it
necessary to purchase shares for the Plan through multiple trades, the
price of the shares will be averaged among all of the trades in order
to allocate shares to Participants' accounts.
9. Statements of Account. Account statements will be sent quarterly to each
---------------------
Participant.
10. Assignment of Interest. Except for transfers by will or under laws of
----------------------
descent and distribution, no employee may sell, assign, transfer, pledge or
otherwise dispose of or encumber his or her right to participate in the
Plan or shares accumulated. The Plan will not be liable for or subject to
the debts, contracts or liabilities of any employee.
11. Amendment or Termination of Plan. Teleglobe reserves the right to amend or
--------------------------------
terminate the Plan, in whole or in part, at any time or from time to time
at its sole discretion. No amendment to the Plan will reduce a
Participant's account balance.
12. Tax Effects of Plan Participation. Matching contributions made to a
---------------------------------
Participant will be treated as taxable compensation in the year contributed
to the Plan for income tax purposes. This amount will be added to
Participant's annual federal and state income statement and withholding tax
deductions will be taken as required by federal, state and local law. An
Employer is entitled to a tax deduction for the expense of making the
matching contributions to Participants.
13. Employment Status. The Plan does not confer upon an employee any right with
-----------------
respect to continuance of employment by an Employer or by any subsidiary of
an Employer, nor does it alter an employee's status as an employee-at-will
of an Employer or any of its subsidiaries. This means that either an
employee or an Employer may terminate an employee's employment at any time
for any reason or no reason.
14. ERISA. The Plan is not subject to any of the provisions of the Employment
-----
Retirement Income Security Act of 1974, as amended, and is not qualified
under Section 401 of the Internal Revenue Code of 1986, as amended.
15. Address Changes. Participants are responsible to notify the Trustee of any
---------------
changes to their name or address. All such notices should be directed to
the Trustee.
16. Number of Shares Offered. The maximum number of common shares of Teleglobe
------------------------
that may be purchased under the Plan is 2,313,494. Such shares are
previously issued shares of Teleglobe.
17. Administration of the Plan. The Plan will be administered by the Human
--------------------------
Resources Committee of Teleglobe's board of directors (the "Committee").
The Committee may prescribe rules and regulations for the Plan, interpret
and construe all questions arising under the Plan.
<PAGE>
18. Reorganization. In the event of a reorganization, recapitalization, stock
--------------
split, stock dividend, combination of shares, merger, consolidation,
offering of rights or any other change in the structure of Teleglobe's
common shares, Teleglobe's board of directors or the Committee may make
such adjustments, if any, as it may deem appropriate, in the number, kind
and price of shares available for purchase under the Plan.
19. Governing Law. All rights and obligations under the Plan will be construed
-------------
and interpreted in accordance with the laws of the Commonwealth of
Virginia, without giving effect to principles of conflict of laws.
<PAGE>
Exhibit 5
June 9, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
Reference is made to the registration statement on Form S-8 to be filed by
Teleglobe Inc., a Canadian corporation (the "Company"), with the Securities and
Exchange Commission relating to 750,000 Common Shares, no par value, of the
Company.
I have examined all such records of the Company and all such agreements,
certificates of public officials and such other documents as I have deemed
relevant and necessary as a basis for the opinions hereinafter expressed. Based
on such examination, I am of the opinion that the Common Shares of the Company
to be issued pursuant to the Teleglobe Inc. Global Stock Savings Plan will be,
when issued in compliance with such plan, legally issued, fully-paid and non-
assessable.
I hereby consent to the use of this opinion as an Exhibit to the above-mentioned
registration statement.
Very truly yours,
/s/Andre Bourbonnais
- --------------------
Andre Bourbonnais
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Teleglobe Inc. ("Teleglobe") of the Auditors' report
co-signed by Raymond Chabot Grant Thornton and Arthur Andersen & Cie dated
February 8, 1999, which appears on page 38 of Teleglobe's Current Report on Form
40-F dated May 25, 1999.
Raymond Chabot Grant Thornton
Date June 9, 1999
Arthur Andersen & Cie
Date June 9, 1999
