Form 12 - Information Required in Prospectus of Industrial Issuer [F - Rescinded]
| Published Date: | 1997-06-27 |
|---|---|
| Effective Date: | 1997-06-25 |
| Rescinded Date: | 2000-12-31 |
The prospectus for an industrial issuer required by Section 61 (2) of the Act shall be in the following form.
FORM 12
Securities Act
INFORMATION REQUIRED IN PROSPECTUS OF INDUSTRIAL ISSUER
Item 1 - Distribution Spread:
The information called for by the following Table shall be given, in substantially the tabular form indicated, on the first page of the prospectus as to all securities being offered for cash (estimate amounts, if necessary).
TABLE
___________________________________________________________
Column 1 Column 2 Column 3
___________________________________________________________
Price to Public Underwriting Proceeds to issuer
discounts or selling
or commissions security-holder
___________________________________________________________
Per unit
Total
___________________________________________________________
INSTRUCTIONS:
- Only commissions paid or payable in cash by the issuer or selling security holder or discounts granted are to be included in the table. Commissions or other consideration paid or payable in cash or otherwise by other persons and consideration other than discounts granted and other than cash paid or payable by the issuer or selling security holder shall be set out following the table with a reference thereto in the second column of the table. Any finder's fees or similar payments shall be appropriately disclosed.
- The table should set out separately those securities which are underwritten, those under option and those to be sold on a "best efforts" basis.
- If the presentation of information in the form contemplated herein results in unnecessary complication, the tabular form may, with the consent of the Executive Director, be varied.
- If it is impracticable to state the offering price, the method by which it is to be determined shall be explained. In addition, if the securities are to be offered at the market, indicate the market involved and the market price as of the latest practicable date.
- If any of the securities offered are to be offered for the account of existing security holders, refer on the first page of the prospectus to the information called for by Instruction 4 to Item 26. State the portion of the expenses of distribution to be borne by the selling security holder.
- If debt securities are to be offered at a premium or a discount, state in bold face type the effective yield if held to maturity.
Item 2 - Plan of Distribution:
(a) If the securities being offered are to be sold through underwriters, give the names of the underwriters. State briefly the nature of the underwriters' obligation to take up and pay for the securities. Indicate the date by which the underwriters are to purchase the securities.
(b) where the prospectus discloses a plan of distribution not involving a firm underwriting or other subscription guarantee it must also disclosure the amount of a minimum subscription. The face page shall contain the following disclosure or a reasonable paraphrase thereof:
"This offering is subject to a minimum subscription being received by the issuer within 180 days of the effective date of __________ (date of receipt of prospectus). Further particulars of the minimum subscription are disclosed on page __________ under the caption use of proceeds."
INSTRUCTIONS:
- All that is required as to the nature of the underwriters' obligation is whether the underwriters are or will be committed to take up and pay for all of the securities if any are taken up, or whether the underwriting is merely an agency or "best efforts" arrangement under which the underwriters are required to take up and pay for only such securities as they may sell.
- Where an underwriting is subject to a "market out" clause, a statement in the prospectus under Plan of Distribution should be made with respect to the "market out" clause.
A sample paragraph is as follows:
Plan of Distribution:
"Under an agreement dated __________ 19 ____ between the issuer and __________ as underwriter, the issuer has agreed to sell and the underwriter has agreed to purchase on __________ 19____ the __________ at a price of $__________, payable in cash to the issuer against delivery. The obligations of the underwriter under the agreement may be terminated at its discretion on the basis of its assessment of the state of the financial markets and may also be terminated upon the occurrence of certain stated events. The underwriter is however, obligated to take up and pay for all of the __________ if any of the __________ are purchased under the agreement." - Where a minimum subscription is required by the Executive Director, which will normally be that amount which together with uncommitted funds on hand will suffice to finance the minimum program disclosed in the prospectus plus the issuer's estimated administration costs over the ensuing current period then:
(a) All funds raised during the 180 days must be deposited in an account at a bank or trust company designated as a trust account until the full minimum amount has been received;
(b) An agreement must be entered into with the trustee of such trust account whereby the trustee undertakes:
(i) where within the 180-day period the minimum subscription has been received, to release the subscription funds to the issuer and to notify the Executive Director of such release; and
(ii) where the minimum amount is not raised within the 180-day period to refund the subscription in full with interest accruing thereon to the shareholders. - The Executive Director contemplates granting no extension for a minimum subscription beyond the 180-day period.
Item 3 - Market for Securities:
Where no bonafide market exists, or will exist after the distribution, state in bold face type on the first page: "There is no market through which these securities may be sold". Disclose how the price paid to the issuer was established, whether by negotiation with the underwriter, arbitrarily by the issuer, or otherwise.
Item 4 - Summary of Prospectus:
Give a synopsis near the beginning of the prospectus of that information in the body of the prospectus which in the opinion of the issuer or selling security holder would be most likely to influence the investor's decision to purchase the security.
INSTRUCTION:
- This summary should highlight in condensed form the information, both favourable and adverse, including risk factors in item 10, particularly pertinent to a decision to purchase the securities offered, including information about both the issuer and the securities.
- Appropriate cross references may be made to items in the prospectus where information is difficult to summarize accurately, but this shall not detract from the necessity to have the salient points summarized in the summary.
Item 5 - Use of Proceeds to Issuer:
(a) State the estimated net proceeds to be derived by the issuer from the sale of the securities to be offered, the principal purposes for which the net proceeds are intended to be used and the approximate amount intended to be used for each purpose.
(b) State the particulars of any provisions or arrangements made for holding any part of the net proceeds of the issue in trust or subject to the fulfilment of any conditions.
INSTRUCTIONS:
- Statements as to the principal purposes to which the proceeds are to be applied are to be reasonably specific although details of the particulars of proposed expenditures are not to be given except as otherwise required hereunder. The phrase "for general corporate purposes" is, in most cases, not sufficient.
- Where a minimum subscription is required by the Executive Director a separate columnar allocation of this minimum amount of proceeds shall be shown in addition to a columnar allocation of the maximum amount proposed to be raised by this prospectus.
- Include a statement regarding the proposed use of the actual proceeds if they should prove insufficient to accomplish the purposes set out, and the order of priority in which they will be applied. However, the statement need not be made if the underwriting arrangements are such that, if any securities are sold, it can be reasonably expected that the actual proceeds of the issue will not be substantially less than the estimated aggregate proceeds to the issuer as shown under item 1.
- If any material amounts of other funds are to be used in conjunction with the proceeds, state the amounts and sources of the other funds. If any material part of the proceeds is to be used to reduce or retire indebtedness, this item is to be answered as to the use of the proceeds of that indebtedness if the indebtedness was incurred within the two preceding years.
- If any material amount of the proceeds is to be used directly or indirectly to acquire assets, otherwise than in the ordinary course of business, briefly describe the assets, and, where known, the particulars of the purchase price being paid for or being allocated to the respective categories of assets (including intangible assets) that are being acquired and, where practicable and meaningful, give the name of the person from whom the assets are to be acquired. State the cost of the assets to the issuer and the principle followed in determining the cost. State briefly the nature of the title to or interest in the assets to be acquired by the issuer. If any part of the consideration for the acquisition of any of the assets consists of securities of the issuer, give brief particulars of the designation, number or amount, voting rights (if any) and other appropriate information relating to the class of securities, including particulars of any allotment or issuance of any such securities within the two preceding years.
Item 6 - Sales Otherwise than for Cash:
If any of the securities being offered are to be offered otherwise than for cash, state briefly the general purposes of the issue, the basis upon which the securities are to be offered, the amount of compensation paid or payable to any person and any other expenses of distribution, and by whom they are to be borne.
INSTRUCTION:
If the offer is to be made pursuant to a plan of acquisition, describe briefly the general effect of the plan and state when it became or is to become operative.
Item 7 - Share and Loan Capital Structure:
Furnish in substantially the tabular form indicated, or where appropriate in notes thereto:
(1) particulars of the share and loan capital of the issuer;
(2) particulars of the loan capital of each subsidiary of the issuer (other than loan capital owned by the issuer or its wholly-owned subsidiaries) whose financial statements are contained in the prospectus on either a consolidated or individual basis;
(3) the aggregate amount of the minority interest in the preference shares, if any, and the aggregate amount of the minority interest in the common shares and surplus of all subsidiaries whose financial statements are contained in the prospectus on a consolidated basis; and
(4) the aggregate amount of the minority interest in the preference shares, if any, and the aggregate amount of minority interest in the common shares and surplus of all subsidiaries whose financial statements are contained in the prospectus on an individual basis and not included in the consolidated financial statements.
TABLE
___________________________________________________________
Column 1 Column 2 Column 3 Column 4 Column 5
___________________________________________________________
Designation Amount Amount out- Amount out- Amount to be
of security authorized or standing as of standing as of out-standing
to be the date of the a specific if all
authorized most balance date securities
sheet contained within 30 days being issued
in the prospectus are sold
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
INSTRUCTIONS:
- Include all indebtedness for borrowed money as to which a written understanding exists that the indebtedness may extend beyond one year. Do not include other indebtedness classified as current liabilities unless secured.
- Include in the table the amount of obligations under financial leases capitalized in accordance with generally accepted accounting principles. Set out in a note to the table a cross reference to any note in the financial statements containing information concerning the extent of obligations arising by virtue of other leases on real property.
- Individual items of indebtedness which are not in excess of 3% of total assets as shown in the balance sheet referred to in Column 3 may be set out in a single aggregate amount under an appropriate caption such as "Sundry Indebtedness".
- Where practicable, state in general terms the respective priorities of the indebtedness shown in the table.
- Give particulars of the amount, general description of and security for any substantial indebtedness proposed to be created or assumed by the issuer or its subsidiaries, other than indebtedness offered by the prospectus.
- Set out in a note the amount of contributed surplus and retained earnings as of the date of the most recent balance sheet contained in the prospectus.
- Set out in a note the number of shares subject to rights, options and warrants.
- No information need be given under Column 2 with respect to the common and preference shares of subsidiaries.
- For the purposes of Column 3, in computing the amount of the minority interest in the subsidiaries whose financial statements are contained in the prospectus on an individual basis and not included in the consolidated financial statements, such computation may be based on the financial statements of each such subsidiary contained in the prospectus.
- In computing the minority interest in the subsidiaries for the purpose of Column 4, the amount set out in Column 3 may be used provided that appropriate adjustment is made to such amount to reflect any change in the percentage of ownership in the capital and surplus of any subsidiary by the minority interest.
- The thirty-day period referred to in Column 4 is to be calculated within thirty days of the date of the preliminary prospectus or the date of the pro forma prospectus. Where more than thirty days have elapsed from the date of the preliminary or pro forma prospectus, the information included in the prospectus shall, if feasible, be updated to a date within thirty days of the prospectus.
- The information to be set out in Column 5 may be based upon the information contained in Column 4, adjusted to take into account any amounts set out in Column 4 to be retired out of the issue.
Item 8 - Name and Incorporation of Issuer:
State the full corporate name of the issuer and the address of its head office and principal office. State the laws under which the issuer was incorporated and whether incorporated by articles of incorporation or otherwise and the date the corporation came into existence. If material state whether these have been amended.
INSTRUCTIONS:
- Particulars of the documents need to be set out only if material to the securities offered by the prospectus. See Item 17.
- If the issuer is not a company, give material details of its form of organization and structure.
Item 9 - Description of Business:
Briefly describe the business carried on and intended to be carried on by the issuer and its subsidiaries and the general development of the business within the five preceding years. If the business consists of the production or distribution of different kinds of products or the rendering of different kinds of services, indicate, in so far as practicable, the principal products or services.
INSTRUCTIONS:
- The description shall not relate to the powers and objects specified in the incorporating instruments, but to the actual business carried on and intended to be carried on. Include the business of subsidiaries of the issuer only in so far as is necessary to understand the character and development of the business conducted by the combined enterprise.
- In describing developments, information shall be given as to matters such as the following: the nature and results of any bankruptcy, receivership or similar proceedings with respect to the issues or any of its subsidiaries; the nature and results of any other material reorganization of the issuer or any of its subsidiaries; the acquisition or disposition of any material amount of assets otherwise than in the ordinary course of business; material changes in the types of products produced or services rendered by the issuer and its subsidiaries; and any material changes in the mode of conducting the business of the issuer or its subsidiaries.
Item 10 - Risk Factors:
(a) Where appropriate to a clear understanding by investors of the risk factors and speculative nature of the enterprise or the securities being offered, an introductory statement shall be made on the first page or in the summary of the prospectus summarizing the factors which make the purchase a risk or speculation. Include such matters as the pro forma dilution of the investment based on net tangible assets and a comparison, in percentages, of the securities being offered for cash and those issued or to be issued to promoters, directors, officers, substantial securityholders as defined in section 120 (2) of the Act, and underwriters for cash, property and services. The information may be given in the body of the prospectus if an appropriate reference is made on the first page or in the summary of the prospectus to the risks and the speculative or promotional nature of the enterprise and a cross reference is made to the place in the prospectus where the information is contained.
(b) Where there is a risk that purchasers of the securities offered may become liable to make an additional contribution beyond the price of the security, disclose any information or facts that may bear on the security holder's assessment of risk associated with the investment.
Item 11 - Acquisitions:
Briefly describe all material acquisitions and dispositions whether of shares or assets by the issuer and its subsidiaries during the past two years and to the extent reasonably practicable the impact of these acquisitions or dispositions on the operating results and financial position of the issuer.
Item 12 - Description of Property:
State briefly the location and general character of the principal properties, including buildings and plants, of the issuer and its subsidiaries. If any property is not freehold property or is held subject to any major encumbrance, so state and briefly describe the nature of the title or encumbrance, as the case may be.
INSTRUCTION:
What is required is information essential to an investor's appraisal of the securities being offered. Such information should be furnished as will reasonably inform investors as to the suitability, adequacy, productive capacity and extent of utilization of the facilities used in the enterprise. Detailed descriptions of the physical characteristics of individual properties or legal descriptions by metes and bounds are not required and should not be given.
Item 13 - Variations in Operating Results:
Explain to the extent reasonably practicable any substantial variations, both favourable; and adverse, in the operating results of the issuer over the last three years, but the Executive Director may permit or require an explanation of such substantial variations over a longer period not to exceed five years.
INSTRUCTION:
The explanation should be in narrative form. However, where ratios are used to illustrate variations, a table may be used to supplement the narrative.
Item 14 - Asset and Earnings Coverage:
Disclose asset and earnings coverage in an appropriate and reasonable form.
Item 15 - Promoters:
If any person is or has been a promoter of the issuer or of any of its subsidiaries within the five years immediately preceding the date of the preliminary prospectus or pro forma prospectus, furnish the following information:
(a) State the names of the promoters, the nature and amount of anything of value (including money, property, contracts, options or rights of any kind) received or to be received by each promoter directly or indirectly from the issuer, or from any of its subsidiaries, and the nature and amount of any assets, services or other consideration therefor received or to be received by the issuer or subsidiary.
(b) As to any assets acquired within the past two years or to be acquired by the issuer or by any of its subsidiaries from a promoter, state the amount at which acquired or to be acquired and the principle followed or to be followed in determining the amount. Identify the person making the determination and state his relationship, if any, with the issuer, any subsidiary or any promoter. State the date that the assets were acquired by the promoter and the cost thereof to the promoter.
Item 16 - Legal Proceedings:
Briefly describe any legal proceedings material to the issuer to which the issuer or any of its subsidiaries is a party or of which any of their property is the subject. Make a similar statement as to any such proceedings known to be contemplated.
INSTRUCTION:
Include the name of the court or agency, the date instituted, the principal parties thereto, the nature of the claim, the amount claimed, if any, whether the proceedings are being contested, and the present status of the proceedings.
Item 17 - Issuance of Shares:
(a) If shares are being offered, state the description or the designation of the class of shares offered and furnish all material attributes and characteristics including, without limiting the generality of the foregoing, the following information:
(i) dividend rights;
(ii) voting rights;
(iii) liquidation or distribution rights;
(iv) pre-emptive rights;
(v) conversion rights;
(vi) redemption, purchase for cancellation or surrender provisions;
(vii) sinking or purchase fund provisions;
(viii) liability to further calls or to assessment by the issuer; and
(ix) provisions as to modification, amendment or variation of any such rights or provisions.
(b) If the rights of holders of such shares may be modified otherwise than in accordance with the provisions attaching to such shares or the provisions of the governing Act relating thereto, so state and explain briefly.
INSTRUCTIONS:
- This item requires only a brief summary of the provisions that are material from an investment standpoint. Do not set out verbatim the provisions attaching to the shares; only a succinct resume is required.
- If the rights attaching to the shares being offered are materially limited or qualified by the rights of any other class of securities, or if any other class of securities (other than obligations covered in Item 18), ranks ahead of or equally with the shares being offered, include information regarding such other securities that will enable investors to understand the rights attaching to the shares being offered. If any shares being offered are to be offered in exchange for other securities, an appropriate description of the other securities shall be given. No information need be given, however, as to any class of securities that is to be redeemed or otherwise retired, provided appropriate steps to assure redemption or retirement have been or will be taken prior to or contemporaneously with the delivery of the shares being offered.
- In addition to the summary referred to in instruction 1, the issuer may set out verbatim in a schedule to the prospectus the provisions attaching to the shares being offered.
Item 18 - Issuance of Obligations:
If obligations are being offered, give a brief summary of the material attributes and characteristics of the indebtedness and the security therefor including, without limiting the generality of the foregoing:
(a) Provisions with respect to interest rate, maturity, redemption or other retirement, sinking fund and conversion rights.
(b) The nature and priority of any security for the obligations, briefly identifying the principal properties subject to lien or charge.
(c) Provisions permitting or restricting the issuance of additional securities, the incurring of additional indebtedness and other material negative covenants, (including restrictions against payment of dividends, restrictions against giving security on the assets of the issuer or its subsidiaries and the like) and provisions as to the release or substitution of assets securing the obligations, the modification of the terms of the security and similar provisions.
(d) The name of the trustee under any indenture relating to the obligations and the nature of any material relationship between the trustee and the issuer or any of its affiliates.
(e) Indicate any financial arrangements between the issuer and any of its affiliates or among its affiliates that could affect the security for the indebtedness.
INSTRUCTION:
The instructions to Item 17 apply to this item with due alteration for point of detail.
Item 19 - Issuance of Other Securities:
If securities other than shares or obligations are being offered, outline briefly the rights evidenced thereby. If subscription warrants or rights are being offered or issued, state the description and amount of securities covered thereby, the period during which, and the price at which, the warrants or rights are exercisable, and the principal terms and conditions by which they may be exercised.
INSTRUCTION:
The instructions to Item 17 apply to this item with due alteration for point of detail.
Item 20 - Dividend Record:
State the amount of dividends or other distributions, if any, paid by the issuer during its last five completed financial years preceding the date of the preliminary prospectus or pro forma prospectus.
INSTRUCTION:
Dividends should be set out on a per share basis, shown separately for each class of shares in respect of each of the financial years. Appropriate adjustments shall be made to reflect changes in capitalization during the period.
Item 21 - Directors and Officers:
List the names and home addresses in full or, alternatively, solely the municipality of residence or postal address, of all directors and officers of the issuer and indicate all positions and offices with the issuer hold by each person named, and the principal occupations within the five preceding years, of each director and officer.
INSTRUCTIONS:
- Where the municipality of residence or postal address is listed, the Director may request that the home address in full be furnished to the Commission.
- Where the principal occupation of a director or officer is that of an officer of a company other than the issuer, state the principal business in which such company is engaged.
- Where a director or officer has held more than one position in the issuer, or a parent or subsidiary thereof, state only the first and last position held.
Item 22 - Executive Compensation:
Complete and attach to or include in this Form a Statement of Executive Compensation in Form 41, provided however, that the disclosure required by Items V, VIII, IX and X of Form 41 may be omitted for purposes of this Form.
Item 23 - Indebtedness of Directors, Executive Officers and Senior Officers:
(a) The information required by this Item must be provided for each individual who is or, at any time during the most recently completed financial year, was a director, executive officer or senior officer of the issuer, each proposed nominee for election as a director of the issuer, and each associate of any such director, officer or proposed nominee,
(i) who is, or at any time since the beginning of the most recently completed financial year of the issuer has been, indebted to the issuer or any of its subsidiaries, or
(ii) whose indebtedness to another entity is, or at any time since the beginning of the most recently completed financial year of the issuer has been, the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the issuer or any of its subsidiaries.
(b) State in the tabular form under the caption set out, for any indebtedness referred to in paragraph (a) of this Item that was entered into in connection with a purchase of securities of the issuer or any of its subsidiaries:
(i) The name of the borrower (column (a)).
(ii) If the borrower is a director, executive officer or senior officer, the principal position of the borrower. If the borrower was, during the year, but no longer is a director or officer, include a statement to that effect. If the borrower is a proposed nominee for election as a director, include a statement to that effect. If the borrower is included as an associate describe briefly the relationship of the borrower to an individual who is or, during the year, was a director, executive officer or senior officer or who is a proposed nominee for election as a director, name that individual and provide the information required by this subparagraph for that individual (column (a)).
(iii) Whether the issuer or a subsidiary of the issuer is the lender or the provider of a guarantee, support agreement, letter of credit or similar arrangement or understanding (column (b)).
(iv) The largest aggregate amount of the indebtedness outstanding at any time during the last completed financial year (column (c)).
(v) The aggregate amount of indebtedness outstanding as at a date within thirty days of certification of the prospectus (column (d)).
(vi) Separately for each class or series of securities, the sum of the number of securities purchased during the last completed financial year with the financial assistance (column (e)).
(vii) The security for the indebtedness, if any, provided to the issuer, any of its subsidiaries or the other entity (column (f)).
TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS
AND SENIOR OFFICERS UNDER SECURITIES PURCHASE PROGRAMS
___________________________________________________________
Largest Financially
Amount Assisted
Outstanding Amount Securities Purchases
Name and Involvement During [Last Outstanding During [Last Security
Principal of Issuer or Completed as at [current Completed for
Position Subsidiary Financial Year] date] Financial Year] Indebtedness
($) ($) (#)
(a) (b) (c) (d) (e) (f)
___________________________________________________________
___________________________________________________________
___________________________________________________________
(c) State in the introduction immediately preceding the table required by paragraph (b) of this Item, for indebtedness entered into in connection with a purchase of securities of the issuer or any of its subsidiaries, separately, the aggregate indebtedness,
(i) to the issuer or any of its subsidiaries, and
(ii) to another entity if the indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the issuer or any of its subsidiaries,
of all officers, directors, employees and former officers, directors and employees of the issuer or any of its subsidiaries outstanding as at a date within thirty days of certification of the prospectus.
(d) State in the tabular form under the caption set out, for any indebtedness referred to in paragraph (a) of this Item that was not entered into in connection with a purchase of securities of the issuer or any of its subsidiaries, the information referred to in subparagraphs (b) (i) through (v) of this Item.
TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
[insert if the issuer has a securities purchase program
"OTHER THAN UNDER SECURITIES PURCHASE PROGRAMS"]
___________________________________________________________
Largest Amount
Outstanding Amount
Name and Involvement During [Last Outstanding
Principal of Issuer or Completed as at [current
Position Subsidiary Financial Year] date]
($) ($)
(a) (b) (c) (d)
___________________________________________________________
___________________________________________________________
___________________________________________________________
(e) State in the introduction immediately preceding the table required by paragraph (d) of this Item, for indebtedness not entered into in connection with a purchase of securities of the issuer or any of its subsidiaries, separately, the aggregate indebtedness,
(i) to the issuer or any of its subsidiaries, and
(ii) to another entity if the indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the issuer or any of its subsidiaries,
of all officers, directors, employees and former officers, directors and employees of the issuer or any of its subsidiaries outstanding as at a date within thirty days of certification of the prospectus.
(f) Disclose in a footnote to, or a narrative accompanying, each table required by this Item,
(i) the material terms of each incidence of indebtedness and, if applicable, of each guarantee, support agreement, letter of credit or other similar arrangement or understanding, including without limitation the term to maturity, rate of interest and any understanding, agreement or intention to limit recourse, and for the table required by paragraph (d) only, any security for the indebtedness and the nature of the transaction in which the indebtedness was incurred,
(ii) any material adjustment or amendment made during the most recently completed financial year to the terms of the indebtedness and, if applicable, the guarantee, support agreement, letter of credit or similar arrangement or understanding, and
(iii) the class or series of the securities purchased with financial assistance or held as security for the indebtedness and, if the class or series of securities is not publicly traded, all material terms of the securities, including but not limited to provisions for exchange, conversion, exercise, redemption, retraction and dividends.
(g) No disclosure need be made under this Item of an incidence of indebtedness that has been entirely repaid on or before the date of certification of the prospectus or of routine indebtedness.
"Routine indebtedness" means indebtedness described in any of the following:
(i) If an issuer makes loans to employees generally, whether or not in the ordinary course of business, loans are considered routine indebtedness if made on terms, including those as to interest rate and security, no more favourable to the borrower than the terms on which loans are made by the issuer to employees generally, but the amount at any time during the last completed financial year remaining unpaid under the loans to any one director, executive officer, senior officer or proposed nominee together with his or her associates that are treated as routine indebtedness under this clause must not exceed $25,000.
(ii) Whether or not the issuer makes loans in the ordinary course of business, a loan to a director, executive officer or senior officer is considered routine indebtedness if,
A. the borrower is a full-time employee of the issuer,
B. the loan is fully secured against the residence of the borrower, and
C. the amount of the loan does not exceed the annual salary of the borrower.
(iii) If the issuer makes loans in the ordinary course of business, a loan is considered routine indebtedness if made to a person or company other than a full-time employee of the issuer, and if the loan,
A. is made on substantially the same terms, including those as to interest rate and security, as are available when a loan is made to other customers of the issuer with comparable credit ratings, and
B. involves no more than usual risks of collectibility.
(iv) Indebtedness arising by reason of purchases made on usual trade terms or of ordinary travel or expense advances, or for similar reasons is considered routine indebtedness if the repayment arrangements are in accord with usual commercial practice.
(h) For purposes of this Item, "executive officer" has the same meaning as in Form 41 and "support agreement" includes, but is not limited to, an agreement to provide assistance in the maintenance or servicing of any indebtedness and an agreement to provide compensation for the purpose of maintaining or servicing any indebtedness of the borrower.
Item 24 - Options to Purchase Securities:
Furnish (in tabular form, if possible) the information referred to in Instruction 1, as at a specified date not more than thirty days before the date of the preliminary prospectus or pro forma prospectus, as the case may be, and as at the date of the filing of the prospectus, as to options to purchase securities of the issuer or any of its subsidiaries that are held or proposed to be held:
(i) by all executive officers as a group and all directors who are not also executive officers as a group, indicating the aggregate number of executive officers and the aggregate number of directors to whom the information applies, without naming them;
(ii) by all executive officers of all subsidiaries of the issuer as a group and all directors of such subsidiaries who are not also executive officers as a group, without naming them, excluding individuals referred to in clause (i);
(iii) by all other employees of the issuer as a group, without naming them;
(iv) by all other employees of the subsidiaries of the issuer as a group, without naming them; and
(v) by any other person or company, naming each such person or company.
INSTRUCTIONS:
- Describe the options, stating the material provisions of each class or type of option including,
(i) the designation and number of the securities under option;
(ii) the purchase price of the securities under option or the formula by which the purchase price will be determined, and the expiration dates of such options;
(iii) if reasonably ascertainable, the market value of the securities under option on the date of grant; and
(iv) if reasonably ascertainable, the market value of the securities under option on the specified date. - For the purposes of this Item,
(i) "executive officer" means the chairman and any vice-chairman of the board of directors of an issuer who performs the functions of such office on a full-time basis, the president, any vice-president in charge of a principal business unit such as sales, finance or production, and any officer of the issuer or of a subsidiary who performs a policy-making function in respect of the issuer, whether or not such officer is also a director of the issuer or the subsidiary;
(ii) "options" includes all options, share purchase warrants or rights other than those shares issued on a pro rata basis, to all security holders of the same class resident in Canada and an extension of an option shall be deemed to be a granting of an option. - Options that are proposed to be held are those where there is an approval or understanding or commitment of the issuer or a subsidiary in respect of the granting of such options.
- In the disclosure made under this Item 24, do not include options granted or proposed to be granted that are otherwise disclosed in Item 1 or 2, including options granted or to be granted to the underwriter in respect of the distribution under the prospectus.
Item 25 - Escrowed Shares:
State as of a specified date within thirty days prior to the date of the preliminary prospectus or pro forma prospectus, in substantially the tabular form indicated, the number of shares of each class of voting securities of the issuer to the knowledge of the issuer held in escrow, disclosing the name of the depositary, if any, the date of and the conditions governing the release of the shares from escrow;
TABLE
___________________________________________________________
Column 1 Column 2 Column 3
___________________________________________________________
Designation of class Number of securities Percentage of class
held in escrow
___________________________________________________________
___________________________________________________________
___________________________________________________________
Item 26 - Principal Holders of Securities:
Furnish the following information as of a specified date within thirty days prior to the date of the preliminary prospectus or pro forma prospectus, in substantially the tabular form indicated.
(a) The number of securities of each class of voting securities of the issuer owned of record or beneficially, directly or indirectly, by each person who owns of record, or is known by the issuer to own beneficially, directly or indirectly, more than 10 per cent of any class of such securities. Show in Column 3 whether the securities are owned both or record and beneficially, of record only, or beneficially only, and show in Columns 4 and 5 the respective amounts and percentages known by the issuer to be owned in each such manner.
TABLE
___________________________________________________________
Column 1 Column 2 Column 3 Column 4 Column 5
___________________________________________________________
Name and Designation Type of Number of Percentage
address of class ownership securities of class
owned
___________________________________________________________
___________________________________________________________
(b) The percentage of securities of each class of voting securities of the issuer or any of its parents or its subsidiaries, beneficially owned, directly or indirectly, by all directors and senior officers of the issuer, as a group, without naming them:
TABLE
___________________________________________________________
Column 1 Column 2
___________________________________________________________
Designation of Class Percentage of Class
___________________________________________________________
___________________________________________________________
___________________________________________________________
INSTRUCTIONS:
- Where a person is shown by the issuer as owning directly or indirectly more than 10 per cent of any class of such securities, the Executive Director may require the disclosure of such additional information as is necessary to identify any individual who, through his direct or indirect ownership of voting securities in the person owns directly or indirectly more than 10 percent of any class of such securities. The name of such an individual should be disclosed in a foot note to the table described in paragraph (a).
- For purposes of paragraph (a), securities owned beneficially, directly or indirectly, and of record shall be aggregated in determining whether any person owns more than 10 per cent of the securities of any class.
- If voting securities are being offered in connection with, or pursuant to, a plan of acquisition, amalgamation or reorganization, indicate as far as practicable, the respective holdings of voting securities that will exist after giving effect to the plan.
- If any of the securities being offered are to be offered for the account of a security holder name such security holder and state the number or amount of the securities owned by him, the number or amount to be offered for his account, and the number or amount to be owned by him after the offering.
- If, to the knowledge of the issuer or the underwriter of the securities being offered, more than 10 per cent of any class of voting securities of the issuer are held or are to be held subject to any voting trust or other similar agreement, other than an escrow arrangement referred to in Item 24, state the designation of such securities, the number or amount held or to be held and the duration of the agreement. Give the names and addresses of the voting trustees and outline briefly their voting rights and other powers under the agreement.
- If, to the knowledge of the issuer, the parent or the underwriter of the securities being offered, any person named in answer to paragraph (a) is an associate or affiliate of any other person named therein, disclose, in so far as known, the material facts of such relationship, including any basis for influence over the issuer enjoyed by the person other than the holding of the voting securities of the issuer.
Item 27 - Intercorporate Relationships:
(a) Furnish a list of each subsidiary, other than inactive subsidiaries, of the issuer. As to each such subsidiary indicate the jurisdiction under the laws of which it was organized, and the percentage of voting securities owned by its parent.
(b) Clearly illustrate by way of a diagram or otherwise the intercorporate relationships of the issuer, its parent and those subsidiaries listed pursuant to paragraph (a).
(c) Where one of the primary businesses of the issuer is investing, reinvesting, owning, holding or trading in securities, give in substantially the tabular form indicated the following information as at a date within thirty days of the date of the preliminary prospectus or pro forma prospectus, with respect to each company 5 per cent or more of whose securities of any class are owned directly or indirectly by the issuer or its affiliates.
TABLE
___________________________________________________________
Name and address Nature of its Percentage of securities Percentage of
of company principal business of any class beneficially book value of
owned, directly or issuer's assets
indirectly invested therein
___________________________________________________________
___________________________________________________________
___________________________________________________________
INSTRUCTIONS:
- If the securities being issued are to be issued in connection with, or pursuant to, a plan of acquisition, reorganization, readjustment, or succession, indicate insofar as practicable the status to exist upon consummation of the plan.
- The name of any particular subsidiary may be omitted if
(a) - the assets of the subsidiary, or
- the investment in and advances to the subsidiary by its parent and the parent's
other subsidiaries
- if any, do not exceed 10 per cent of the assets of the parent and its subsidiaries
on a consolidated basis;
(b) the sales and operating revenue of the subsidiary do not exceed 10 per cent of the sales and operating revenues of its parent and the parent's subsidiaries on a consolidated basis; and
(c) the unnamed subsidiaries considered in the aggregate as a single subsidiary would satisfy the conditions in (a) and (b) if the reference therein to 10 per cent were replaced by 20 per cent.
Item 28 - Prior Sales:
(a) State the prices at which securities of the class offered by the prospectus have been sold within the twelve months prior to the date of the preliminary prospectus or pro forma prospectus, or are to be sold, by the issuer or selling security holder if such prices differ from those at which the securities are offered by the prospectus. State the number of securities sold or to be sold at each price.
(b) Where the class of securities offered are listed on a Canadian stock exchange or solely on a foreign stock exchange, give price ranges and volume traded on such stock exchange on a monthly basis for each month or, if applicable, part month, of the current quarter and the immediately preceding quarter and on a quarterly basis for the next preceding seven quarters provided that the Executive Director may permit the omission of the information regarding trading volume.
INSTRUCTION:
In the case of sales by a selling securityholder, the information required by paragraph (a) may be given in the form of price ranges for each calendar month.
Item 29 - Interest of Management and Other in Material Transactions:
Describe briefly, and where practicable state the approximate amount of any material interest, direct or indirect, of any of the following persons in any transaction within the three years prior to the date of the preliminary prospectus or pro forma prospectus, or in any proposed transaction which has materially affected or will materially affect the issuer or any of its subsidiaries:
(i) any director or senior officer of the issuer;
(ii) any security holder named in answer to paragraph (a) of Item 26; and
(iii) associate or affiliate of any of the foregoing persons.
INSTRUCTIONS:
- Give a brief description of the material transaction. Include the name and address of each person whose interest in any transaction is described and the nature of the relationship by reason of which such interest is required to be described.
- As to any transaction involving the purchase or sale of assets by or to the issuer or any subsidiary, state the cost of the assets to the purchaser and the cost thereof to the seller if acquired by the seller within two years to the transaction.
- This item does not apply to any interest arising from the ownership of securities of the issuer where the security holder receives no extra or special benefit or advantage not shared on an equal basis by all other holders of the same class of securities or all other holders of the same class of securities who are resident in Canada.
- Information shall be included as to any material underwriting discounts or commissions upon the sale of securities by the issuer where any of the specified persons was or is to be an underwriter or is an associate, affiliate or partner of a person, or partnership that was or is to be an underwriter.
- No information need be given in answer to this item as to any transaction or any interest therein, where,
(i) the rates or charges involved in the transaction are fixed by law or determined by competitive bids;
(ii) the interest of a specified person in the transaction is solely that of a director of another issuer that is a party to the transaction;
(iii) the transaction involves services as a bank or other depository of funds, transfer agent, registrar, trustee under a trust indenture or other similar services;
(iv) the interest of a specified person, including all periodic instalments in the case of any lease or other agreement providing for periodic payments or instalments, does not exceed $50,000; or
(v) the transaction does not, directly or indirectly, involve remuneration for services, and,
(a) the interest of the specified person arose from the beneficial ownership, direct or indirect, of less than 10 per cent of any class of voting securities of another company that is a party to the transaction,
(b) the transaction is in the ordinary course of business of the issuer or its subsidiaries, and
(c) the amount of the transaction or series of transactions is less than 10 per cent of the total sales or purchases, as the case may be, of the issuer and its subsidiaries for the last completed financial year. - Information shall be furnished in answer to this item with respect to transactions not excluded above that involve remuneration, directly or indirectly, to any of the specified persons for services in any capacity unless the interest of the person arises solely from the beneficial ownership, direct or indirect, of less than 10 per cent of any class of voting securities of another company furnishing the services to the issuer or its subsidiaries.
- This item does not require the disclosure of any interest in any transaction unless such interest and transaction are material.
Item 30 - Auditors, Transfer Agents and Registrars:
(a) State the name and address of the auditor of the issuer.
(b) Where shares are offered, state the names of the issuer's transfer agents and registrars and the location (by municipalities) of the registers of transfers of each class of shares of the issuer. Where securities other than shares are offered, state the location (by municipalities) of each register on which transfers of such securities may be recorded.
Item 31 - Material Contracts:
Give particulars of every material contract entered into within the two years prior to the date of the preliminary prospectus or pro forma prospectus, by the issuer or any of its subsidiaries and state a reasonable time and place at which any such contract or a copy thereof may be inspected during distribution of the securities being offered.
INSTRUCTIONS:
- The term "material contract" for this purpose means any contract that can reasonably be regarded as presently material to the proposed investor in the securities being offered.
- Set out a complete list of all material contracts, indicating those which are disclosed elsewhere in the prospectus and provide particulars with respect to those material contracts about which particulars are not given elsewhere in the prospectus. This item does not require disclosure of contracts entered into in the ordinary course of business of the issuer or its subsidiaries as the case may be.
- Particulars of contracts should include the dates of, parties to, consideration and general nature of the contracts, succinctly described.
- Particulars of contracts need not be disclosed, or copies of such contracts made available for inspection, if the Executive Director determines that such disclosure or making-available would impair the value of the contract and would not be necessary for the protection of investors.
Item 32 - Other Material Facts:
Give particulars of any other material facts relating to the securities proposed to be offered and not disclosed pursuant to the foregoing items.
IT IS AN OFFENCE FOR A PERSON TO MAKE A STATEMENT IN A DOCUMENT REQUIRED TO BE FILED OR FURNISHED UNDER THE ACT OR THIS REGULATION THAT, AT THE TIME AND IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH IT IS MADE, IS A MISREPRESENTATION.
January 15, 1987