As filed with the Securities and Exchange Commission on
May 29, 2015. |
Registration No. 333- |
|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-10
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF
1933
TRILLIUM THERAPEUTICS INC.
(Exact name of Registrant as specified in its charter)
Ontario, Canada |
2834 |
Not Applicable |
(Province or other Jurisdiction of |
(Primary Standard Industrial
Classification |
(I.R.S. Employer Identification Number, if
|
Incorporation or Organization) |
Code Number) |
applicable) |
96 Skyway Avenue, Toronto, Ontario, Canada M9W 4Y9
Telephone: (416) 595-0627
(Address and telephone
number of Registrants principal executive offices)
Puglisi & Associates, 850 Library Avenue, Suite 204,
Newark, Delaware 19711
Telephone: (302) 738-6680
(Name, address (including zip code) and telephone number
(including area code) of agent for service in the United States)
Copies to: |
|
|
|
James Parsons |
Daniel M. Miller |
Gordon G. Raman |
Trillium Therapeutics Inc. |
Dorsey & Whitney LLP |
Borden Ladner Gervais LLP |
96 Skyway Avenue, |
Suite 1605, Pacific Centre |
40 King Street West |
Toronto, Ontario |
777 Dunsmuir Street |
44th Floor |
Canada M9W 4Y9 |
Vancouver, British Columbia |
Toronto, Ontario |
(416) 595-0627 |
Canada V7Y 1K4 |
Canada M5H 3Y4 |
|
(604) 687-5151 |
(416) 367-6232 |
Approximate date of commencement of proposed sale of the
securities to the public:
From time to time after the effective date of
this Registration Statement.
Province of Ontario, Canada
(Principal
jurisdiction regulating this offering)
It is proposed that this filing shall become effective (check
appropriate box below):
A. |
[ ] upon filing with the Commission, pursuant to
Rule 467(a) (if in connection with an offering being made
contemporaneously in the United States and Canada). |
|
|
B. |
[X] at some future date (check the appropriate box
below) |
|
1. |
[ ] pursuant to Rule 467(b) on
( ) at ( ) (designate a
time not sooner than 7 calendar days after filing). |
|
|
|
|
2. |
[ ] pursuant to Rule 467(b) on
( ) at ( ) (designate a
time 7 calendar days or sooner after filing) because the securities
regulatory authority in the review jurisdiction has issued a receipt or
notification of clearance on ( ). |
|
|
|
|
3. |
[ ] pursuant to Rule 467(b) as soon as practicable
after notification of the Commission by the Registrant or the Canadian
securities regulatory authority of the review jurisdiction that a receipt
or notification of clearance has been issued with respect
hereto. |
|
|
|
|
4. |
[X] after the filing of the next amendment to this Form
(if preliminary material is being filed). |
If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis
pursuant to the home jurisdictions shelf prospectus offering procedures, check
the following box. [X]
CALCULATION OF REGISTRATION FEE
Title of each class of securities
to be
registered |
Amount to be registered
(1) |
Proposed maximum
offering price
per unit |
Proposed maximum (2)
aggregate offering price |
Amount of registration
fee
|
Common Shares |
|
|
|
|
First Preferred Shares |
|
|
|
|
Warrants |
|
|
|
|
Units |
|
|
|
|
Total |
$100,000,000 |
|
$100,000,000 |
$11,620 |
|
(1) |
Pursuant to Rule 457(o) of the Securities Act of 1933, as
amended, there are being registered under this Registration Statement such
indeterminate number of common shares, first preferred shares, warrants to
purchase common shares and units of the Registrant (including common
shares issuable upon exercise of any of such securities, including,
without limitation, as a result of the application of anti-dilution
provisions applicable thereto) as shall have an aggregate offering price
not to exceed $100,000,000. Any securities registered by this Registration
Statement may be sold separately or as units with other securities
registered under this Registration Statement. The proposed maximum initial
offering price per security will be determined, from time to time, by the
Registrant in connection with the sale of the securities under this
Registration Statement. |
|
|
|
|
(2) |
Estimated solely for the purpose of calculating the
amount of the registration fee pursuant to Rule 457(o) of the Securities
Act of 1933, as amended. |
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registration Statement shall become effective as provided in Rule 467 under the
Securities Act of 1933, as amended, or on such date as the Commission, acting
pursuant to Section 8(a) of the Act, may determine.
PART I
INFORMATION REQUIRED TO BE DELIVERED TO OFFEREES OR
PURCHASERS
I-1
SUBJECT TO COMPLETION, DATED MAY 29, 2015
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities has been filed
with the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
state.
A copy of this preliminary short form prospectus has been
filed with the securities regulatory authorities in each of the provinces of
British Columbia, Alberta, Manitoba, Ontario and Nova Scotia but has not yet
become final for the purpose of the sale of securities. Information contained in
this preliminary short form prospectus may not be complete and may have to be
amended. The securities may not be sold until a receipt for the short form
prospectus is obtained from the securities regulatory authorities.
This short form prospectus is a base shelf prospectus that
has been filed under legislation in each of the provinces of British Columbia,
Alberta, Manitoba, Ontario and Nova Scotia that permits certain information
about these securities to be determined after this short form prospectus has
become final and that permits the omission from this short form prospectus of
that information. The legislation requires the delivery to purchasers of a
prospectus supplement containing the omitted information within a specified
period of time after agreeing to purchase any of these securities.
No securities regulatory authority has expressed an
opinion about the securities and it is an offence to claim otherwise.
This short form prospectus constitutes a public offering of these
securities only in those jurisdictions where they may be lawfully offered for
sale and therein only by persons permitted to sell such securities.
Information has been incorporated by reference in this
short form prospectus from documents filed with securities commissions or
similar authorities in Canada. Copies of the documents incorporated
herein by reference may be obtained on request without charge from the Corporate
Secretary of Trillium Therapeutics Inc. at 96 Skyway Avenue, Toronto, Ontario,
M9W 4Y9 telephone (416) 595-0627, and are also available electronically at
www.sedar.com. See Documents Incorporated by Reference.
Preliminary Short Form Base Shelf Prospectus
US$100,000,000
Common Shares
First Preferred Shares
Warrants
Units
Trillium Therapeutics Inc., or we, our, Trillium or the
Corporation, may from time to time during the 25-month period that this
prospectus, or Prospectus, including any amendments, remains valid, offer and
sell under this Prospectus in one or more offerings, for an aggregate offering
price of up to US$100,000,000 (or the equivalent in other currencies or currency
units) common shares in the capital of the Corporation, or Common Shares,
First Preferred shares in the capital of the Corporation, or First
Preferred Shares, warrants to purchase Common Shares, or Warrants and units,
or Units, comprised of one or more of the other securities described in this
Prospectus in any combination (the Units, together with the Common Shares, First
Preferred Shares and Warrants, are referred to as the Securities). We may
offer Securities in such amounts and at such prices and, in the case of the
Warrants and Units, with such terms, as we may determine in light of market
conditions. We may sell the Warrants in one or more series and the First
Preferred Shares, in one or more series.
We are permitted, under a multijurisdictional disclosure
system adopted by the United States and Canada, to prepare this Prospectus in
accordance with Canadian disclosure requirements, which are different from those
of the United States. We prepare our financial statements in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board, or IFRS, and they are subject to Canadian auditing
and independence standards. Thus, they may not be comparable to financial
statements of United States companies.
Owning the Securities may subject you to tax consequences
both in the United States and Canada. This Prospectus or any applicable
supplement to this Prospectus, or Prospectus Supplement, may not describe
these tax consequences fully. You should read the tax discussion in any
applicable Prospectus Supplement.
Your ability to enforce civil liabilities under the United
States federal securities laws may be affected adversely because we are
incorporated in Ontario, Canada, some or all of our officers and directors and
some or all of the experts named in this Prospectus are residents of countries
other than the United States, and most or all of our assets are located in
Canada.
Neither the United States Securities and Exchange
Commission, or SEC, nor any state securities regulator has approved or
disapproved these Securities, or determined if this Prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
There are certain risk factors that should be carefully
reviewed by prospective purchasers. See Risk
Factors.
The specific terms of the Securities with respect to a
particular offering will be set forth in a Prospectus Supplement, including
where applicable: (i) in the case of the Common Shares, the number of Common
Shares offered, the currency (which may be Canadian dollars or any other
currency), the issue price and any other specific terms; (ii) in the case of the
First Preferred Shares, the number and series of First Preferred Shares offered,
the currency (which may be Canadian dollars or any other currency), the issue
price and any other specific terms; (iii) in the case of Warrants, the
designation, the number of Warrants offered, the currency (which may be Canadian
dollars or any other currency), number of Common Shares that may be acquired
upon exercise of the Warrants, the exercise price, dates and periods of
exercise, adjustment procedures and any other specific terms; and (iv) in the
case of Units, the designation, the number of Units offered, the offering price,
the currency (which may be Canadian dollars or any other currency), terms of the
Units and of the Securities comprising the Units and any other specific terms.
We may also include in a Prospectus Supplement specific terms pertaining to the
Securities which are not within the options and parameters set forth in this
Prospectus.
All shelf information permitted under applicable laws to be
omitted from this Prospectus will be contained in one or more Prospectus
Supplements that will be delivered to purchasers together with this Prospectus.
Each Prospectus Supplement will be incorporated by reference into this
Prospectus for the purposes of securities legislation as of the date of the
Prospectus Supplement and only for the purposes of the distribution of the
Securities to which the Prospectus Supplement pertains. You should read this
Prospectus and any applicable Prospectus Supplement before you invest in the
Securities.
The outstanding Common Shares are listed for trading on the
TSX, or TSX, under the trading symbol TR and on the NASDAQ Capital Market,
or NASDAQ, under the trading symbol TRIL. Unless otherwise specified in any
applicable Prospectus Supplement, the First Preferred shares, Warrants and Units
will not be listed on any securities exchange. Unless specified in the
applicable Prospectus Supplement, there is no market through which the First
Preferred Shares, Warrants or Units may be sold and purchasers may not be able
to resell the First Preferred Shares, Warrants or Units purchased under this
Prospectus. This may affect the pricing of these securities in the secondary
market, the transparency and availability of trading prices, the liquidity of
the securities, and the extent of issuer regulation. See the
Risk Factors section of the applicable Prospectus
Supplement.
We may sell the Securities to or through underwriters, dealers,
placement agents or other intermediaries or directly to purchasers or through
agents. See Plan of Distribution. The Prospectus Supplement relating to
a particular offering of Securities will identify each person who may be deemed
to be an underwriter with respect to such offering and will set forth the terms
of the offering of such Securities, including, as well as any fees or
compensation payable to them in connection with the offering and sale of a
particular issue of Securities, the public offering price or prices of the
Securities and the proceeds to us from the sale of the Securities.
Subject to applicable securities legislation, in connection
with any offering of Securities under this Prospectus, the underwriters, if any,
may over-allot or effect transactions which stabilize or maintain the market
price of the Securities offered at a level above that which might otherwise
prevail in the open market. These transactions, if commenced, may be
discontinued at any time. See Plan of Distribution.
You should rely only on the information contained in this
Prospectus. We have not authorized anyone to provide you with information
different from that contained in this Prospectus.
Our head office and registered office is located at 96 Skyway
Avenue, Toronto, Ontario, Canada M9W 4Y9.
TABLE OF CONTENTS
DEFINITIONS AND OTHER MATTERS
In this Prospectus, unless otherwise indicated, references to
Trillium, the Corporation, we, our or similar terms are, unless
otherwise stated or the context requires otherwise, to Trillium Therapeutics
Inc. and the subsidiaries through which it conducts business. Unless otherwise
indicated, all financial information included and incorporated by reference in
this Prospectus is determined using IFRS, which differs from United States
generally accepted accounting principles.
You should rely only on the information contained or
incorporated by reference in this Prospectus and any applicable Prospectus
Supplement. We have not authorized anyone to provide readers with different
information. We are not making an offer to sell or seeking an offer to buy the
Securities in any jurisdiction where the offer or sale is not permitted. You
should not assume that the information contained in this Prospectus and any
applicable Prospectus Supplement is accurate as of any date other than the date
on the front of such documents, regardless of the time of delivery of this
Prospectus and any applicable Prospectus Supplement or of any sale of the
Securities. Information contained on our website should not be deemed to be a
part of this Prospectus or incorporated by reference into this Prospectus and
should not be relied upon for the purpose of determining whether to invest in
the Securities.
CURRENCY AND EXCHANGE RATE PRESENTATION
The financial statements incorporated by reference into this
Prospectus are reported in Canadian dollars. All references to dollars or $
in this Prospectus are to Canadian dollars and all references to US$ are to
United States dollars.
The following table sets forth, for each period indicated, the
high, low and average exchange rates for Canadian dollars expressed in United
States dollars, as provided by the Bank of Canada. The exchange rates set forth
below demonstrate trends in exchange rates, but the actual exchange rates used
throughout this Prospectus may vary. The average exchange rate is calculated by
using the average of the closing prices on the last day of each month during the
relevant period. On May 26, 2015, the noon exchange rate for one Canadian dollar
expressed in United States dollars as reported by the Bank of Canada, was $1.00
= US$0.8045. The high and low exchange rates are intra-day values rather than
noon or closing rates.
|
|
Three months |
|
|
|
|
|
|
|
|
|
|
$1 Canadian dollar equivalent in |
|
ended |
|
|
Year ended December 31, |
|
United States dollars |
|
March 31, 2015 |
|
|
2014 |
|
|
2013 |
|
|
2012 |
|
Average rate for period |
|
US$ 0.7920 |
|
|
US$ 0.9021 |
|
|
0.9662 US$ |
|
|
1.0010 |
|
High for period |
|
0.8562 |
|
|
0.9444 |
|
|
1.0188 |
|
|
1.0371 |
|
Low for period |
|
0.7791 |
|
|
0.8568 |
|
|
0.9314 |
|
|
0.9576 |
|
ENFORCEMENT OF CIVIL LIABILITIES
Trillium Therapeutics Inc. is an Ontario corporation and its
principal place of business is in Canada. Some or all of the directors and
officers of the Corporation are resident outside of the United States and most
or all of its assets and the assets of such persons are located outside of the
United States. Consequently, it may be difficult for United States investors to
effect service of process within the United States on the Corporation or its
directors or officers, or to realize in the United States on judgments of courts
of the United States predicated on civil liabilities under the U.S. Securities
Act of 1933, as amended, or the U.S. Securities Act. You should not assume
that Canadian courts would enforce judgments of United States courts obtained in
actions against the Corporation or such persons predicated on the civil
liability provisions of the United States federal securities laws or the
securities or blue sky laws of any state within the United States or would
enforce, in original actions, liabilities against the Corporation or such
persons predicated on the United States federal securities or any such state
securities or blue sky laws. We believe that a judgment of a United States
court predicated solely upon civil liability under United States federal
securities laws would probably be enforceable in Canada if the United States
court in which the judgment was obtained has a basis for jurisdiction in the
matter that would be recognized by a Canadian court for the same purposes. We also believe, however, that there is substantial
doubt whether an action could be brought in Canada in the first instance on the
basis of liability predicated solely upon United States federal securities laws.
1
We have filed with the SEC, concurrently with the registration
statement on Form F-10 of which this Prospectus forms a part, an appointment of
agent for service of process on Form F-X. Under the Form F-X, we appointed
Puglisi & Associates as our agent for service of process in the United
States in connection with any investigation or administrative proceeding
conducted by the SEC, and any civil suit or action brought against or involving
us in a United States court, arising out of or related to or concerning the
offering of Securities under this Prospectus.
Luke Beshar, Robert Kirkman, Michael Moore and Thomas Reynolds
are our directors who reside outside of Canada and they have appointed the
Corporation at its business address as agent for service of process. Purchasers
are advised that it may not be possible for investors to enforce judgments
obtained in Canada against any person or company that is incorporated, continued
or otherwise organized under the laws of a foreign jurisdiction or resides
outside of Canada, even if the party has appointed an agent for service of
process.
FORWARD-LOOKING STATEMENTS
This Prospectus contains forward-looking statements within the
meaning of applicable securities laws. All statements contained herein that are
not clearly historical in nature are forward-looking, and the words
anticipate, believe, expect, estimate, may, will, could,
leading, intend, contemplate, shall and similar expressions are
generally intended to identify forward-looking statements. Forward-looking
statements in this prospectus include, but are not limited to, statements with
respect to:
|
our expected future loss and accumulated
deficit levels; |
|
|
|
our projected financial position and estimated
cash burn rate; |
|
|
|
our expectations about the timing of achieving
milestones and the cost of our development programs; |
|
|
|
our observations and expectations regarding the
binding profile of SIRPαFc with red blood cells compared to anti-CD47
monoclonal antibodies and proprietary CD47-blocking agents and the
potential benefits to patients; |
|
|
|
our requirements for, and the ability to
obtain, future funding on favorable terms or at all; |
|
|
|
our projections for the SIRPαFc development
plan and progress of each of our products and technologies, particularly
with respect to the timely and successful completion of studies and trials
and availability of results from such studies and trials; |
|
|
|
our expectations about our products safety and
efficacy; |
|
|
|
our expectations regarding our ability to
arrange for the manufacturing of our products and technologies; |
|
|
|
our expectations regarding the progress, and
the successful and timely completion, of the various stages of the
regulatory approval process; |
|
|
|
our ability to secure strategic partnerships
with larger pharmaceutical and biotechnology companies; |
|
|
|
our strategy to acquire and develop new
products and technologies and to enhance the capabilities of existing
products and technologies; |
|
|
|
our plans to market, sell and distribute our
products and technologies; |
|
|
|
our expectations regarding the acceptance of
our products and technologies by the market; |
|
|
|
our ability to retain and access appropriate
staff, management, and expert advisers; |
2
|
our expectations with respect to existing and
future corporate alliances and licensing transactions with third parties,
and the receipt and timing of any payments to be made by us or to us in
respect of such arrangements; and |
|
|
|
our strategy with respect to the protection of
our intellectual property. |
All forward-looking statements reflect our beliefs and
assumptions based on information available at the time the assumption was made.
These forward-looking statements are not based on historical facts but rather on
managements expectations regarding future activities, results of operations,
performance, future capital and other expenditures (including the amount, nature
and sources of funding thereof), competitive advantages, business prospects and
opportunities. By their nature, forward-looking information involves numerous
assumptions, inherent risks and uncertainties, both general and specific, known
and unknown, that contribute to the possibility that the predictions, forecasts,
projections or other forward-looking statements will not occur. Factors which
could cause future outcomes to differ materially from those set forth in the
forward-looking statements include, but are not limited to:
|
the effect of continuing operating losses on
our ability to obtain, on satisfactory terms, or at all, the capital
required to maintain us as a going concern; |
|
|
|
the ability to obtain sufficient and suitable
financing to support operations, preclinical development, clinical trials,
and commercialization of products; |
|
|
|
the risks associated with the development of
novel compounds at early stages of development in our intellectual
property portfolio; |
|
|
|
the risks of reliance on third-parties for the
planning, conduct and monitoring of clinical trials and for the
manufacture of drug product; |
|
|
|
the risks associated with the development of
our product candidates including the demonstration of efficacy and safety; |
|
|
|
the risks related to clinical trials including
potential delays, cost overruns and the failure to demonstrate efficacy
and safety; |
|
|
|
the risks of delays and inability to complete
clinical trials due to difficulties enrolling patients; |
|
|
|
risks associated with our inability to
successfully develop companion diagnostics for our development candidates; |
|
|
|
delays or negative outcomes from the regulatory
approval process; |
|
|
|
our ability to successfully compete in our
targeted markets; |
|
|
|
our ability to attract and retain key
personnel, collaborators and advisors; |
|
|
|
risks relating to the increase in operating
costs from expanding existing programs, acquisition of additional
development programs and increased staff; |
|
|
|
risk of negative results of clinical trials or
adverse safety events by us or others related to our product candidates; |
|
|
|
the potential for product liability claims; |
|
|
|
our ability to achieve our forecasted
milestones and timelines on schedule; |
|
|
|
financial risks related to the fluctuation of
foreign currency rates and expenses denominated in foreign currencies; |
3
|
our ability to adequately protect proprietary
information and technology from competitors; |
|
|
|
risks related to changes in patent laws and
their interpretations; |
|
|
|
our ability to source and maintain licenses
from third-party owners; and |
|
|
|
the risk of patent-related litigation and the
ability to protect trade secrets, |
all as further and more fully described under the section of
this Prospectus entitled Risk Factors.
Although the forward-looking statements contained in this
Prospectus are based upon what our management believes to be reasonable
assumptions, we cannot assure readers that actual results will be consistent
with these forward-looking statements.
Any forward-looking statements represent our estimates only as
of the date of this Prospectus and should not be relied upon as representing our
estimates as of any subsequent date. We undertake no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events, except as may be required by securities legislation.
DOCUMENTS INCORPORATED BY REFERENCE
Information has been incorporated by reference in this
Prospectus from documents filed with securities commissions or similar
authorities in Canada. Copies of the documents incorporated herein by
reference may be obtained on request without charge from our corporate secretary
at 96 Skyway Avenue, Toronto, Ontario, M9W 4Y9 telephone (416) 595-0627, and are
available electronically at www.sedar.com.
We have filed the following documents with the securities
commissions or similar regulatory authorities in certain of the provinces of
Canada and such documents are specifically incorporated by reference in, and
form an integral part of this Prospectus, provided that such documents are not
incorporated by reference to the extent that their contents are modified or
superseded by a statement contained in this Prospectus or in any subsequently
filed document that is also incorporated by reference in this Prospectus:
|
our annual information form dated March 23,
2015, for the year ended December 31, 2014, or AIF; |
|
|
|
our management information circular dated April
22, 2014 relating to our annual and special meeting of shareholders held
on May 27, 2014; |
|
|
|
our audited consolidated financial statements,
together with the notes thereto, as at December 31, 2014 and 2013 and for
the years then ended prepared under IFRS, as issued by the IASB, and the
auditors report thereon addressed to our shareholders dated March 23,
2015; |
|
|
|
our managements discussion and analysis of
financial condition and results of operations for the years ended December
31, 2014 and 2013 dated March 23, 2015; |
|
|
|
our unaudited interim condensed consolidated
financial statements, together with the notes thereto, as at March 31, 2015
and 2014 and for the three months then ended prepared in compliance with
International Accounting Standards 34, Interim Financial Reporting, dated May 12, 2015; |
|
|
|
our managements discussion and analysis of
financial condition and results of operations for the three months ended
March 31, 2015 and 2014 dated May 12, 2015; |
|
|
|
our management information circular dated April
22, 2015 prepared in connection with the annual meeting of shareholders to
be held on May 27, 2015; |
|
|
|
our material change report dated April 2, 2015
with respect to the pricing of an offering of 1,522,395 Common Shares and
1,077,605 non-voting convertible preferred shares at a price of US$19.50
per share for aggregate gross proceeds of US$50.7 million before deducting
underwriting discounts and commissions and other offering expenses; and |
4
|
our material change report dated April 14, 2015
with respect to the completion of an offering 1,750,754 Common Shares and
1,077,605 Series II Non-Voting Convertible First Preferred Shares, or
Series II First Preferred Shares, at a price of US$19.50 per share,
including 228,359 Common Shares sold pursuant to the full exercise of the
underwriters option to purchase additional Common Shares for gross
proceeds of approximately US$55.2 million. |
Any documents of the type referred to in the preceding
paragraph, including any annual information form, comparative annual
consolidated financial statements and the auditors report thereon, comparative
interim consolidated financial statements, managements discussion and analysis
of financial condition and results of operations, material change report (except
a confidential material change report), information circular, and the template
version of any marketing materials, if filed by us with the securities
commissions or similar authorities in the provinces of British Columbia,
Alberta, Manitoba, Ontario and Nova Scotia after the date of this Prospectus and
before the termination of the distribution, shall be deemed to be incorporated
by reference in this Prospectus.
To the extent that any document or information incorporated by
reference into this Prospectus is included in a report that is filed with or
furnished to the SEC, such document or information shall be deemed to be
incorporated by reference as an exhibit to the registration statement on Form
F-10 of which this Prospectus forms a part. In addition, any document filed by
us with, or furnished by us to, the SEC pursuant to the United States Securities
Exchange Act of 1934, as amended, or the Exchange Act, subsequent to the date
of this Prospectus and prior to the date that is 25 months from the date of this
Prospectus shall be deemed to be incorporated by reference into the registration
statement of which this Prospectus forms a part, if and to the extent provided
in such report.
Any statement contained in this Prospectus or in a document
incorporated or deemed to be incorporated by reference herein will be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained in this Prospectus or in any other subsequently filed
document which also is, or is deemed to be, incorporated by reference into this
Prospectus modifies or supersedes that statement. The modifying or superseding
statement need not state that it has modified or superseded a prior statement or
include any other information set forth in the document that it modifies or
supersedes. The making of a modifying or superseding statement shall not be
deemed an admission for any purposes that the modified or superseded statement
when made, constituted a misrepresentation, an untrue statement of a material
fact or an omission to state a material fact that is required to be stated or
that is necessary to make a statement not misleading in light of the
circumstances in which it was made. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this Prospectus.
Upon a new annual information form and related audited annual
financial statements and managements discussion and analysis being filed by us
with, and where required, accepted by, the securities commission or similar
regulatory authority in each of the provinces of British Columbia, Alberta,
Manitoba, Ontario and Nova Scotia during the term of this Prospectus, the
previous annual information form, the previous audited annual financial
statements and related managements discussion and analysis, all unaudited
interim financial statements and related managements discussion and analysis,
and material change reports filed prior to the commencement of our financial
year in which the new annual information form and related audited annual
financial statements and managements discussion and analysis are filed shall be
deemed no longer to be incorporated into this Prospectus for purposes of future
offers and sales of Securities under this Prospectus. Upon new interim financial
statements and related managements discussion and analysis being filed by us
with the securities commission or similar regulatory authority in each of the
provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia during
the term of this Prospectus, all interim financial statements and related
managements discussion and analysis filed prior to the new interim consolidated
financial statements and related managements discussion and analysis shall be
deemed no longer to be incorporated into this Prospectus for purposes of future
offers and sales of Securities under this Prospectus. Upon a new information
circular relating to an annual meeting of holders of Common Shares being filed
by us with the securities commission or similar regulatory authority in each of
the provinces of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia
during the term of this Prospectus, the information circular for the preceding
annual meeting of holders of Common Shares shall be deemed no longer to be
incorporated into this Prospectus for purposes of future offers and sales of
Securities under this Prospectus.
One or more Prospectus Supplements containing the specific
variable terms for an issue of the Securities and other information in relation
to such Securities will be delivered to purchasers of such Securities together
with this Prospectus and will be deemed to be incorporated by reference
into this Prospectus as of the date of the Prospectus Supplement solely for the
purposes of the offering of the Securities covered by any such Prospectus
Supplement.
5
AVAILABLE INFORMATION
We are subject to the informational requirements of the
Exchange Act and applicable Canadian requirements and, in accordance therewith,
we file reports and other information with the SEC and with securities
regulatory authorities in Canada. Under the multijurisdictional disclosure
system adopted by the United States and Canada, such reports and other
information may be prepared in accordance with the disclosure requirements of
Canada, which are different from those of the United States. As a foreign
private issuer, we are exempt from the rules under the Exchange Act prescribing
the furnishing and content of proxy statements, and our officers, directors and
principal shareholders are exempt from the reporting and short-swing profit
recovery provisions contained in Section 16 of the Exchange Act. Reports and
other information filed by us with, or furnished to, the SEC may be inspected
and copied at the public reference facilities maintained by the SEC in the SECs
public reference room at 100 F Street, N.E., Washington, D.C., 20549 by paying a
fee. You may call the SEC at 1-800-SEC-0330 or access its website at www.sec.gov
for further information regarding the public reference facilities. The SEC also
maintains a website that contains reports and other information regarding
registrants that file electronically with the SEC. The address of the website is
www.sec.gov.
We have filed with the SEC a registration statement on Form
F-10 under the U.S. Securities Act with respect to the Securities. This
Prospectus, including the documents incorporated by reference into this
Prospectus, which forms a part of that registration statement, does not contain
all of the information set forth in the registration statement, certain parts of
which are contained in the exhibits to the registration statement as permitted
by the rules and regulations of the SEC. For further information with respect to
our corporation and the Securities, reference is made to the registration
statement and the exhibits thereto. Statements contained in this Prospectus,
including the documents incorporated by reference into this Prospectus, as to
the contents of certain documents are not necessarily complete and, in each
instance, reference is made to the copy of the document filed as an exhibit to
the registration statement. Each such statement is qualified in its entirety by
such reference. The registration statement can be found on EDGAR at the SECs
website at www.sec.gov.
THE CORPORATION
We are an immuno-oncology company developing innovative
therapies for the treatment of cancer. Our lead program, SIRPαFc, is a novel,
antibody-like protein that harnesses the innate immune system by blocking the
activity of CD47, a molecule whose expression is increased on cancer cells to
evade the host immune system. Expressed at high levels on the cell surface of a
variety of liquid and solid tumors, CD47 functions as a signal that inhibits the
destruction of tumor cells by macrophages via phagocytosis. By blocking the
activity of CD47, we believe SIRPαFc has the ability to promote the
macrophage-mediated killing of tumor cells in a broad variety of cancers both as
a monotherapy and in combination with other immune therapies.
RISK FACTORS
An investment in the Securities involves a high degree of
risk. Prospective investors should consider carefully the risk factors
incorporated by reference in this Prospectus (including in subsequently filed
documents incorporated by reference) and those described in any Prospectus
Supplement before purchasing the Securities offered hereby. Prospective
investors should consider the categories of risks identified and discussed in
our annual information form and managements discussion and analysis
incorporated herein by reference. Any one of such risk factors could
materially affect our business, financial condition and/or future operating
results and prospects and could cause actual events to differ materially from
those described in forward-looking statements and information relating to our
corporation. Additional risks and uncertainties not currently identified by us
or that we currently believe not to be material also may materially and
adversely affect our business, financial condition, operations or prospects.
USE OF PROCEEDS
Unless otherwise indicated in an applicable Prospectus
Supplement relating to an offering of Securities, we will use the net proceeds
that we receive from the sale of Securities for ongoing research and development
activities, working capital and general corporate purposes, which may
include advancing the development of our SIRPαFc program, and investment in
other development programs.
6
CAPITALIZATION
On April 7, 2015 we completed an underwritten public offering
of Common Shares and Series II First Preferred Shares. In the offering, we sold
1,750,754 Common Shares and 1,077,605 Series II First Preferred Shares at a
price of US$19.50 per share, including 228,359 Common Shares sold pursuant to
the full exercise of the underwriters option to purchase additional Common
Shares. The gross proceeds to the Corporation from this offering, before
deducting underwriting discounts and commissions and other offering expenses
payable by the Corporation, were approximately US$55.2 million.
As at May 26, 2015, the following securities were issued and
outstanding:
|
7,185,847 Common Shares; |
|
|
|
64,904,689 Series I Non-Voting Convertible
First Preferred Shares, or Series I First Preferred Shares, convertible
into 2,163,490 Common Shares; |
|
|
|
1,077,605 Series II First Preferred Shares
convertible into 1,077,605 Common Shares; |
|
|
|
113,289,012 Common Share purchase warrants
convertible into 3,776,300 Common Shares at a weighted- average exercise
price of $8.67 per Common Share |
|
|
|
665,475 stock options with a weighted-average
exercise price of $11.44 per Common Share; and |
|
|
|
28,777 DSUs. |
After giving effect to the exercise of all Common Share
purchase warrants and options to purchase Common Shares, and the conversion of
all Series I and Series II First Preferred Shares and DSUs, there would be
14,897,494 Common Shares issued and outstanding as at May 26, 2015.
There have been no material changes in the number of our issued
and outstanding Securities since December 31, 2014 other than the public
offering of Common Shares completed on April 7, 2015 and described above and
other than as noted below under Prior Sales.
PRIOR SALES
The following table summarizes details of all securities issued
by us for the 12-month period prior to the date of this Prospectus.
Date of Issuance
|
Price
per Security or Exercise Price (as
applicable) |
Number of
and Description of Securities
|
May 27, 2014 |
$8.34 |
Issuance of 215,758 Options |
January 14, 16, 19, 21, 22 and 26, 2015 |
$8.40 |
Issuance of 92,354 Common Shares on exercise of
warrants |
January 16 and 19, 2015 |
$12.00 |
Issuance of 22,012 Common Shares on exercise of
warrants |
January 16, 2015 |
$7.50 |
Issuance of 3,333 Common Shares on exercise of
warrants |
February 3, 12, 17 and 27, 2015 |
$12.00 |
Issuance of 67,529 Common Shares on exercise of
warrants |
February 4, 6, 10, 12, 23, 25 and 26, 2015 |
$8.40 |
Issuance of 97,256 Common Shares on exercise of
warrants |
February 27, 2015 |
$7.50 |
Issuance of 93 Common Shares on exercise of
warrants |
March 2, 4, 10, 18, 19 and 24, 2015 |
$12.00 |
Issuance of 29,482 Common Shares on exercise of
warrants |
March 2, 12, 16, 18, 23, 27 and 31, 2015 |
$8.40 |
Issuance of 136,000 Common Shares on exercise of
warrants |
March 5, 2015 |
$7.50 |
Issuance of 6,666 Common Shares on exercise of
warrants |
March 5, 2015 |
$7.50 |
Issuance of 3,333 Common Shares on exercise of
warrants |
7
Date of Issuance
|
Price
per Security or Exercise Price (as
applicable) |
Number of
and Description of Securities
|
April 1, 2015 |
$23.44 |
Issuance of 85,000 Options |
April 1, 6, 7, 8, 10, 13, 15, 20 and 23, 2015 |
$12.00 |
Issuance of 67,516 Common Shares on exercise of
warrants |
April 2, 6, 9, 13, 14, 16, 20, 22 and 29, 2015 |
$8.40 |
Issuance of 228,932 Common Shares on exercise of
warrants |
April 6, 14 and 17, 2015 |
$6.30 |
Issuance of 92,668 Common Shares on exercise of
warrants |
April 7, 2015 |
US$19.50 |
Issuance of 1,750,754 Common Shares on an
underwritten public offering |
April 7, 2015 |
US$19.50 |
Issuance of 1,077,605 Series II First Preferred
Shares on an underwritten public offering |
May 1 and 13, 2015 |
$8.40 |
Issuance of 4,166 Common Shares on exercise of
warrants |
May 20 and 22, 2015 |
$12.00 |
Issuance of 4,366 Common Shares on exercise of
warrants |
DESCRIPTION OF COMMON SHARES
Holders of Common Shares are entitled to receive notice of and
to attend all meetings of shareholders, except meetings at which holders of
another specified class of shares are exclusively entitled to vote, and are
entitled to one vote for each Common Share held on all votes taken at such
meetings. The holders of Common Shares are entitled to receive such dividends as
the board of directors may in their discretion declare, regardless of whether
dividends are declared on any other class of shares. Upon liquidation,
dissolution or winding up of the Corporation, the holders of Common Shares are
entitled to receive any remaining property after payment of any amount required
to redeem or retract any issued and outstanding First Preferred Shares of the
Corporation and any other shares ranking senior in priority to the Common
Shares.
Class B Shares
The holders of the Class B Shares are entitled to receive
notice of and to attend any meeting of our shareholders but shall not be
entitled to vote any of their Class B Shares at any such meeting. Each issued
and fully paid Class B Share may at any time be converted, at the option of the
holder, into one Common Share.
DESCRIPTION OF FIRST PREFERRED SHARES
The First Preferred Shares may at any time and from time to
time be issued in one or more series and our board of directors may before the
issue thereof fix the number of shares in, and determine the designation,
rights, privileges, restrictions and conditions attaching to the shares of, each
series of First Preferred Shares.
The First Preferred Shares are entitled to priority over the
Common Shares and Class B Shares and all other shares ranking junior to the
First Preferred Shares with respect to the payment of dividends and the
distribution of our assets in the event of our liquidation, dissolution or
winding up or other distribution of our assets among our shareholders for the
purpose of winding up our affairs.
The First Preferred Shares of each series rank on a parity with
the First Preferred Shares of every other series with respect to priority in the
payment of dividends and in the distribution of our assets in the event of our
liquidation, dissolution or winding up or other distribution of our assets among
our shareholders for the purpose of winding up our affairs.
8
Series I First Preferred Shares
During 2013, we created a new series of First Preferred Shares,
our Series I First Preferred Shares. The holders of Series I First Preferred
Shares are not entitled to vote at any meeting of our shareholders (except in
limited circumstances provided for in the Business Corporations Act
(Ontario)).
The holders of Series I First Preferred Shares are entitled to
receive dividends as determined and declared at the discretion of our board of
directors equally on a one-for-one basis with the holders of shares of the other
series of First Preferred Shares and, at the discretion of our board of
directors, either in priority to, or equally on a share-for-share basis with,
holders of our Common Shares or Class B Shares. If any amount of cumulative
dividends, whether or not declared, or declared non-cumulative dividends, with
respect to shares of a series of our First Preferred Shares is not paid in full,
the shares of the series will participate on a pro rata basis with the shares of
all other series of that class of shares with respect to all accumulated
cumulative dividends, whether or not declared, and all declared non-cumulative
dividends.
Each issued and fully paid Series I First Preferred Share may
at any time be converted, at the option of the holder, into one Common Share,
subject to adjustment. Following the 30 for 1 share consolidation completed in
November 2014, each presently outstanding Series I First Preferred Share may be
converted, at the option of the holder into one thirtieth (1/30th) of a Common
Share, subject to further adjustment. Notwithstanding the foregoing, holders of
Series I First Preferred Shares will be prohibited from converting Series I
First Preferred Shares into Common Shares if, as a result of such conversion,
the holder, together with its affiliates, would own more than 4.99% (which the
holder may elect to increase or decrease by written notice to us to any other
percentage specified in such notice, provided that any increase (but not
decrease) will not be effective until the 61st day after such notice) of the
total number of our Common Shares then issued and outstanding, unless the holder
gives us at least 61 days prior notice of an intent to convert into Common
Shares that would cause the holder to own more than 4.99% (or another percentage
elected by the holder) of the total number of our Common Shares then issued and
outstanding.
In addition, we will not be required to deliver to a holder any
Common Shares upon a conversion of our Series I First Preferred Shares into
Common Shares if our Common Shares are then listed and posted for trading on the
Toronto Stock Exchange (or the TSX Venture Exchange) and to the extent that the
conversion would result in the holder, together with any person acting jointly
or in concert with the holder within the meaning of the Securities Act
(Ontario), beneficially owning or exercising control or direction over Common
Shares representing more than:
1. |
9.99% of our outstanding Common Shares unless the holder
(or, where the holder is not an individual, any director, officer or
insider of the holder) has first provided: |
|
(a) |
the stock exchange with a personal information form
pursuant to the rules of that stock exchange and the form has been
approved by the stock exchange; and |
|
|
|
|
(b) |
a copy of the approval of the personal information form
by the stock exchange to us; and |
2. |
19.99% of our outstanding Common Shares, unless we have
received approval from the stock exchange and the holders of our Common
Shares of the issuance of Common Shares at a meeting of holders of Common
Shares which we will call, at our expense, in accordance with the
applicable policies of the stock exchange. |
In the event of our liquidation, dissolution or winding-up,
whether voluntary or involuntary, or in the event of any other distribution of
our assets among our shareholders for the purpose of winding-up our affairs, or
in the event of a reduction or redemption of our capital stock, the holders of
Series I First Preferred Shares are entitled to receive an amount per share
equal to that amount of money that we received as consideration for such Series
I First Preferred Shares or, in the event that Series I First Preferred Shares
were not issued for money, then the amount equal to the fair value of any
property we received as consideration for the issuance of such Series I First
Preferred Shares divided by the number of Series I First Preferred Shares
issued, the whole before any amount shall be paid by us or any of our assets
shall be distributed to holders of our Common Shares and Class B Shares. After
such payment, the holders of Series I First Preferred Shares are not entitled to
share in any further distribution of our property or assets. If any amount
payable on return of capital in the event of our liquidation, dissolution or
winding-up in respect of shares of a series of our First Preferred Shares is not
paid in full, the shares of the series will participate on a pro rata basis with the shares of all other series of that class of
shares with respect to all amounts payable on return of capital in the event of
our liquidation, dissolution or winding-up.
9
Series II First Preferred Shares
During 2015, we created a new series of First Preferred Shares,
our Series II First Preferred Shares. The holders of Series II First Preferred
Shares are not entitled to vote at any meeting of our shareholders (except in
limited circumstances provided for in the Business Corporations Act
(Ontario)).
The holders of Series II First Preferred Shares are entitled to
receive dividends as determined and declared at the discretion of our board of
directors on a parity basis with the holders of shares of the other series of
First Preferred Shares and, at the discretion of our board of directors, either
in priority to, or equally on a share-for-share basis with, holders of our
Common Shares or Class B Shares. If any amount of cumulative dividends, whether
or not declared, or declared non-cumulative dividends, with respect to shares of
a series of our First Preferred Shares is not paid in full, the shares of the
series will participate on a pro rata basis with the shares of all other series
of that class of shares with respect to all accumulated cumulative dividends,
whether or not declared, and all declared non-cumulative dividends.
Each issued and fully paid Series II First Preferred Share may
at any time be converted, at the option of the holder, into one common share,
subject to adjustment. Notwithstanding the foregoing, holders of Series II First
Preferred Shares will be prohibited from converting Series II First Preferred
Shares into Common Shares if, as a result of such conversion, the holder,
together with its affiliates, would own more than 4.99% (which the holder may
elect to increase or decrease by written notice to us to any other percentage
specified in such notice, provided that any increase (but not decrease) will not
be effective until the 61st day after such notice) of the total number of our
Common Shares then issued and outstanding, unless the holder gives us at least
61 days prior notice of an intent to convert into Common Shares that would cause
the holder to own more than 4.99% of the total number of our Common Shares then
issued and outstanding.
In addition, we will not be required to deliver to a holder any
Common Shares upon a conversion of our Series II First Preferred Shares into
Common Shares if our Common Shares are then listed and posted for trading on the
Toronto Stock Exchange (or the TSX Venture Exchange) and to the extent that the
conversion would result in the holder, together with any person acting jointly
or in concert with the holder within the meaning of the Securities Act
(Ontario), beneficially owning or exercising control or direction over Common
Shares representing more than:
|
1. |
9.99% of our outstanding Common Shares unless the holder
(or, where the holder is not an individual, any director, officer or
insider of the holder) has first provided: |
|
|
(a) |
the stock exchange with a personal information form
pursuant to the rules of that stock exchange and the form has been
approved by the stock exchange; and |
|
|
|
|
|
|
(b) |
a copy of the approval of the personal information form
by the stock exchange to us; and |
|
2. |
19.99% of our outstanding Common Shares, unless we have
received approval from the stock exchange and the holders of our Common
Shares of the issuance of Common Shares at a meeting of holders of Common
Shares which we will call, at our expense, in accordance with the
applicable policies of the stock exchange. |
In the event of our liquidation, dissolution or winding-up,
whether voluntary or involuntary, or in the event of any other distribution of
our assets among our shareholders for the purpose of winding-up our affairs, or
in the event of a reduction or redemption of our capital stock, the holders of
Series II First Preferred Shares are entitled to receive an amount per share
equal to that amount of money that we received as consideration for such Series
II First Preferred Shares or, in the event that Series II First Preferred Shares
were not issued for money, then the amount equal to the fair value of any
property we received as consideration for the issuance of such Series II First
Preferred Shares divided by the number of Series II First Preferred Shares
issued, the whole before any amount shall be paid by us or any of our assets
shall be distributed to holders of our Common Shares and Class B Shares. After
such payment, the holders of Series II First Preferred Shares are not entitled
to share in any further distribution of our property or assets. If any amount
payable on return of capital in the event of our liquidation, dissolution or
winding-up in respect of shares of a series of our First Preferred Shares is not paid
in full, the shares of the series will participate on a pro rata basis with the
shares of all other series of that class of shares with respect to all amounts
payable on return of capital in the event of our liquidation, dissolution or
winding-up.
10
DESCRIPTION OF WARRANTS
The following description of the terms of Warrants sets forth
certain general terms and provisions of Warrants in respect of which a
Prospectus Supplement may be filed. The particular terms and provisions of
Warrants offered by any Prospectus Supplement, and the extent to which the
general terms and provisions described below may apply thereto, will be
described in the Prospectus Supplement filed in respect of such Warrants.
Warrants may be offered separately or in combination with one or more other
Securities.
The description of the general terms and provisions of Warrants
described in any Prospectus Supplement will include, where applicable:
|
the designation and aggregate number of
Warrants offered; |
|
|
|
the price at which the Warrants will be
offered; |
|
|
|
if other than Canadian dollars, the currency or
currency unit in which the Warrants are denominated; |
|
|
|
the designation and terms of the Common Shares
that may be acquired upon exercise of the Warrants; |
|
|
|
the date on which the right to exercise the
Warrants will commence and the date on which the right will expire; |
|
|
|
the number of Common Shares that may be
purchased upon exercise of each Warrant and the price at which and
currency or currencies in which that amount of securities may be purchased
upon exercise of each Warrant; |
|
|
|
the designation and terms of any Securities
with which the Warrants will be offered, if any, and the number of the
Warrants that will be offered with each Security; |
|
|
|
the date or dates, if any, on or after which
the Warrants and the related Securities will be transferable separately; |
|
|
|
the minimum or maximum amount, if any, of
Warrants that may be exercised at any one time; |
|
|
|
whether the Warrants will be subject to
redemption or call, and, if so, the terms of such redemption or call
provisions; and |
|
|
|
any other material terms, conditions and rights
(or limitations on such rights) of the Warrants. |
We reserve the right to set forth in a Prospectus Supplement
specific terms of the Warrants that are not within the parameters set forth in
this Prospectus. In addition, to the extent that any particular terms of the
Warrants described in a Prospectus Supplement differ from any of the terms
described in this Prospectus, the description of such terms set forth in this
Prospectus shall be deemed to have been superseded by the description of such
differing terms set forth in such Prospectus Supplement with respect to such
Warrants.
DESCRIPTION OF UNITS
We may issue Units comprised of one or more of the other
Securities described in this Prospectus in any combination. Each Unit will be
issued so that the holder of the Unit is also the holder of each Security
included in the Unit. Thus, the holder of a Unit will have the rights and
obligations of a holder of each included Security. The unit agreement, if any,
under which a Unit is issued may provide that the Securities comprising the Unit
may not be held or transferred separately, at any time or at any time before a
specified date.
11
The particular terms and provisions of Units offered by any
Prospectus Supplement, and the extent to which the general terms and provisions
described below may apply thereto, will be described in the Prospectus
Supplement filed in respect of such Units.
The particular terms of each issue of Units will be described
in the related Prospectus Supplement. This description will include, where
applicable:
|
the designation and aggregate number of Units
offered; |
|
|
|
the price at which the Units will be offered; |
|
|
|
if other than Canadian dollars, the currency or
currency unit in which the Units are denominated; |
|
|
|
the terms of the Units and of the Securities
comprising the Units, including whether and under what circumstances those
securities may be held or transferred separately; |
|
|
|
any provisions for the issuance, payment,
settlement, transfer or exchange of the Units or of the Securities
comprising the Units; and |
|
|
|
any other material terms, conditions and rights
(or limitations on such rights) of the Units. |
We reserve the right to set forth in a Prospectus Supplement
specific terms of the Units that are not within the parameters set forth in this
Prospectus. In addition, to the extent that any particular terms of the Units
described in a Prospectus Supplement differ from any of the terms described in
this Prospectus, the description of such terms set forth in this Prospectus
shall be deemed to have been superseded by the description of such differing
terms set forth in such Prospectus Supplement with respect to such Units.
MARKET FOR SECURITIES
Our Common Shares were listed on the TSX Venture Exchange, or
TSXV, until April 22, 2014 when we delisted from the TSXV and began trading on
the TSX. Our Common Shares traded under the symbol SSS until June 6, 2014 when
the symbol was changed to TR. Our Common Shares were listed on the OTCQX
International under the symbol SCTPF from May 20, 2013 until we delisted and
began trading on NASDAQ, under the symbol TRIL on December 19, 2014.
The high and low market prices and the aggregate volume of
trading of our Common Shares for each month for the most recent twelve months on
the TSXV/TSX, NASDAQ and the OTCQX International were as follows:
TSXV/TSX(1)(2)
Month |
High ($) |
Low ($) |
Volume (#) |
May 1 to May 26, 2015 |
29.98 |
21.21 |
163,150 |
April 2015 |
37.27 |
22.69 |
538,051 |
March 2015 |
26.07 |
17.00 |
307,858 |
February 2015 |
20.21 |
15.14 |
204,365 |
January 2015 |
18.37 |
10.50 |
361,364 |
December 2014 |
10.50 |
7.02 |
209,040 |
November 2014 |
10.35 |
8.25 |
183,076 |
October 2014 |
8.40 |
6.30 |
59,873 |
September 2014 |
9.15 |
7.20 |
66,472 |
August 2014 |
9.15 |
8.25 |
51,381 |
July 2014 |
10.35 |
8.40 |
60,773 |
June 2014 |
12.30 |
8.10 |
103,066 |
May 2014 |
12.15 |
7.95 |
83,797 |
12
Notes:
(1) |
Our Common Shares began trading on the TSX on April 22,
2014. |
(2) |
Common Share market prices are restated to reflect the 30
for 1 share consolidation completed in November
2014. |
NASDAQ(1)
Month |
High (US$) |
Low (US$) |
Volume (#) |
May 1 to May 26, 2015 |
24.55 |
17.57 |
2,821,241 |
April 2015 |
27.99 |
18.80 |
7,607,223 |
March 2015 |
20.88 |
13.06 |
2,542,925 |
February 2015 |
16.50 |
12.61 |
1,321,813 |
January 2015 |
15.65 |
9.05 |
3,046,079 |
December 2014 |
9.10 |
7.01 |
733,484 |
Notes:
(1) |
Our Common Shares began trading on the OTCQX
International on May 20, 2013 and on the NASDAQ on December 19,
2014. |
OTCQX International(1)(2)
Month |
High (US$) |
Low (US$) |
Volume (#) |
December 2014 |
8.35 |
6.02 |
159,907 |
November 2014 |
9.09 |
7.35 |
177,862 |
October 2014 |
7.65 |
5.64 |
68,959 |
September 2014 |
8.55 |
6.30 |
40,676 |
August 2014 |
8.41 |
7.50 |
45,757 |
July 2014 |
9.96 |
7.61 |
32,116 |
June 2014 |
11.49 |
7.28 |
32,151 |
May 2014 |
11.31 |
7.14 |
34,901 |
April 2014 |
14.24 |
8.70 |
50,706 |
Notes: Our
(1) |
Our Common Shares began trading on the OTCQX International on May 20, 2013 and on NASDAQ on December 19, 2014. |
(2) |
Common Share market prices are restated to reflect the 30 for 1 share consolidation completed in November 2014.
|
PLAN OF DISTRIBUTION
We may, from time to time, during the 25-month period that this
Prospectus remains valid, offer for sale and issue Securities. We may issue and
sell up to US$100,000,000, in the aggregate, of Securities.
We may sell Securities to or through underwriters, dealers,
placement agents or other intermediaries and also may sell Securities directly
to purchasers or through agents, subject to obtaining any applicable exemption
from registration requirements.
The distribution of Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, including in
transactions that are deemed to be at-the-market distributions as defined in
NI 44-102, including sales made directly on the TSX, NASDAQ or other existing trading markets for the Securities, or
at prices related to such prevailing market prices to be negotiated with
purchasers and as set forth in an accompanying Prospectus Supplement. In
connection with the sale of Securities, underwriters may receive compensation
from us or from purchasers of Securities for whom they may act as agents in the
form of discounts, concessions or commissions. Underwriters, dealers, placement
agents or other intermediaries that participate in the distribution of
Securities may be deemed to be underwriters and any discounts or commissions
received by them from us and any profit on the resale of Securities by them may
be deemed to be underwriting discounts and commissions under applicable
securities legislation.
13
If so indicated in the applicable Prospectus Supplement, we may
authorize dealers or other persons acting as our agents to solicit offers by
certain institutions to purchase the Securities directly from us pursuant to
contracts providing for payment and delivery on a future date. These contracts
will be subject only to the conditions set forth in the applicable Prospectus
Supplement or supplements, which will also set forth the commission payable for
solicitation of these contracts.
The Prospectus Supplement relating to any offering of
Securities will set forth the terms of the offering of the Securities, including
the name or names of any underwriters, dealers, placement agents or
intermediaries and any fees or compensation payable to them in connection with
the offering and sale of a particular issue of Securities, the public offering
price or prices of the Securities and the proceeds to us from the sale of the
Securities.
Under agreements which may be entered into by us, underwriters,
dealers, placement agents and other intermediaries who participate in the
distribution of Securities may be entitled to indemnification by us against
certain liabilities, including liabilities under the U.S. Securities Act and
applicable Canadian securities legislation, or to contribution with respect to
payments which such underwriters, dealers, placement agents or other
intermediaries may be required to make in respect thereof. The underwriters,
dealers, placement agents and other intermediaries with whom we enter into
agreements may be customers of, engage in transactions with or perform services
for us in the ordinary course of business. Any offering of First Preferred
Shares, Warrants or Units will be a new issue of securities with no established
trading market. Unless otherwise specified in the applicable Prospectus
Supplement, the First Preferred Shares, Warrants or Units will not be listed on
any securities exchange. Unless otherwise specified in the applicable
Prospectus Supplement, there is no market through which the First Preferred
Shares, Warrants or Units may be sold and purchasers may not be able to resell
First Preferred Shares, Warrants or Units purchased under this Prospectus or any
Prospectus Supplement. This may affect the pricing of the First Preferred
Shares, Warrants or Units in the secondary market, the transparency and
availability of trading prices, the liquidity of the securities, and the extent
of issuer regulation. Certain dealers may make a market in the First
Preferred Shares, Warrants or Units, as applicable, but will not be obligated to
do so and may discontinue any market making at any time without notice. No
assurance can be given that any dealer will make a market in the First Preferred
Shares, Warrants or Units or as to the liquidity of the trading market, if any,
for the First Preferred Shares, Warrants or Units.
Subject to applicable securities legislation, in connection
with any offering of Securities under this Prospectus, other than an
at-the-market distribution, the underwriters, dealers or agents, if any, may
over-allot or effect transactions which stabilize or maintain the market price
of the Securities offered at a level above that which might otherwise prevail in
the open market. These transactions, if commenced, may be discontinued at any
time. No underwriter, dealer or agent involved in an at-the-market
distribution, as defined in NI 44-102, no affiliate of such an underwriter,
dealer or agent and no person acting jointly or in concert with such an
underwriter, dealer or agent will over-allot Securities in connection with such
distribution or effect any other transactions that are intended to stabilize or
maintain the market price of the Securities.
INCOME TAX CONSIDERATIONS
The applicable Prospectus Supplement may describe certain
Canadian or United States federal income tax consequences which may be
applicable to a purchaser of Securities offered thereunder.
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
The following documents have been, or will be, filed with the
SEC as part of the registration statement on Form F-10 of which this Prospectus
forms a part: the documents listed under Documents Incorporated by Reference;
consents of accountants and counsel; and powers of attorney from some of our
directors and officers. A copy of any applicable form of warrant agreement will be filed by
post-effective amendment to the registration statement or by incorporation by
reference to documents filed or furnished with the SEC under the Exchange Act.
14
EXPERTS
Our auditors are Ernst & Young LLP, Chartered Professional
Accountants, Licensed Public Accountants, Toronto, Ontario, Canada. Our audited
consolidated financial statements as at December 31, 2014 and 2013 and for the
years then ended incorporated by reference into this Prospectus have been
audited by Ernst & Young LLP, Independent Registered Public Accounting Firm,
as indicated in their report dated March 23, 2015 as set forth in their report
thereon incorporated herein, and are included in reliance upon such report given
on the authority of such firm as experts in accounting and auditing. Ernst & Young LLP has been our auditors since
inception on March 31, 2004.
Ernst & Young LLP has advised that they are independent
with respect to us within the meaning of the Rules of the Professional Conduct
of the Chartered Professional Accountants of Ontario (registered name of The
Institute of Chartered Accountants of Ontario) and within the meaning of the
U.S. Securities Act and the applicable rules and regulations thereunder adopted
by the SEC and the United States Public
Company Accounting Oversight Board.
REGISTRAR AND TRANSFER AGENT
Our registrar and transfer agent in Canada is Computershare
Investor Services Inc. at its principal office in Toronto, Ontario and the
co-registrar and co-transfer agent in the United States is Computershare Trust
Company, N.A., at its offices in Canton, Massachusetts.
15
PART II
INFORMATION NOT REQUIRED TO BE DELIVERED TO
OFFEREES OR PURCHASERS
Indemnification of Directors and Officers
Under the Business Corporations Act (Ontario) (the OBCA), the
Registrant may, indemnify a director or officer of the corporation, a former
director or officer of the corporation or another individual who acts or acted
at the corporations request as a director or officer, or an individual acting
in a similar capacity, of another entity (an indemnified person), against all
costs, charges and expenses, including an amount paid to settle an action or
satisfy a judgment, reasonably incurred by the individual in respect of any
civil, criminal, administrative, investigative or other proceeding in which the
individual is involved because of that association with the corporation or other
entity, if the individual acted honestly and in good faith with a view to the
best interests of the corporation or, as the case may be, to the best interests
of the other entity for which the individual acted as a director or officer or
in a similar capacity at the corporations request, and, in the case of a
criminal or administrative action or proceeding that is enforced by a monetary
penalty, such individual had reasonable grounds for believing that his or her
conduct was lawful. The Registrant may advance moneys to an indemnified person
for the costs, charges and expenses of a proceeding referred to above, but the
individual must repay the money if the individual has not acted honestly and in
good faith with a view to the best interests of the corporation or, as the case
may be, to the best interests of any other entity for which the indemnified
person acted as a director or officer or in a similar capacity at the
corporation's request. However, any such indemnified person is entitled under
the OBCA to indemnity from the corporation in respect of all costs, charges and
expenses reasonably incurred by the individual in connection with the defense of
any civil, criminal, administrative, investigative or other proceeding to which
he or she is subject because of the individuals association with the
corporation or other entity, if such indemnified person was not judged by a
court or other competent authority to have committed any fault or omitted to do
anything that the individual ought to have done and fulflled the conditions set
forth above.
By-laws of Registrant
In accordance with the provisions of the OBCA, the by-laws of
the Registrant provide that the Registrant will indemnify a director or officer,
a former director or officer, or an individual who acts or acted at the
Registrants request as a director or officer or an individual acting in a
similar capacity of another entity, and such persons heirs and legal
representatives, against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by such
individual in respect of any civil, criminal, administrative, investigative or
other proceeding in which the individual is involved because of that association
with the registrant or other entity, provided however that the Registrant shall
not so indemnify an individual unless the individual (i) acted honestly and in
good faith with a view to the best interests of the registrant or, as the case
may be, to the best interests of the other entity for which the individual acted
as a director or officer or in a similar capacity at the registrants request,
and (ii) if the matter is a criminal or administrative action or proceeding that
is enforced by a monetary penalty, had reasonable grounds for believing that the
individuals conduct was lawful.
The Registrant has purchased directors and officers liability
insurance for the benefit of the directors and officers of the Registrant, to
back up the Registrants indemnification of them against liability incurred in
their capacity as directors and officers, subject to certain limitations under
applicable law. If the Registrant becomes liable under the terms of its by-laws,
the insurance coverage will extend to its liability; however, each claim will be
subject to a per claim retention of $750,000.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant
has been informed that in the opinion of the U.S. Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is therefore unenforceable.
II-1
EXHIBITS
See the Exhibit Index hereto.
II-2
PART III
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
Item 1. Undertaking.
The Registrant undertakes to make available, in person or by
telephone, representatives to respond to inquiries made by the Commission staff,
and to furnish promptly, when requested to do so by the Commission staff,
information relating to the securities registered pursuant to this Form F-10 or
to transactions in said securities.
Item 2. Consent to Service of Process.
Concurrently with the filing of this Registration Statement,
the Registrant has filed with the Commission a written irrevocable consent and
power of attorney on Form F-X.
Any change to the name or address of the Registrants agent for
service shall be communicated promptly to the Commission by amendment to Form
F-X referencing the file number of this Registration Statement.
III-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form F-10 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Toronto, Ontario, on this 29th day of
May, 2015.
|
TRILLIUM THERAPEUTICS INC.
|
|
|
|
|
|
|
|
|
|
By: |
|
/s/
Niclas Stiernholm |
|
Name: |
Niclas Stiernholm |
|
Title: |
President and Chief Executive Officer
|
POWERS OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Niclas Stiernholm and James Parsons, and each of them, either of whom
may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities indicated and on May 29, 2015:
Signature |
|
Title |
|
|
|
|
|
/s/ Niclas Stiernholm |
|
President and Chief Executive Officer and
Director (principal executive officer) |
Niclas Stiernholm |
|
|
|
|
|
|
|
|
|
|
|
/s/ James Parsons |
|
Chief Financial Officer (principal financial
and accounting officer) |
James Parsons |
|
|
|
|
|
|
|
|
|
|
|
/s/ Calvin Stiller |
|
Director |
|
Calvin Stiller |
|
|
|
|
|
|
|
|
|
|
|
/s/ Luke Beshar |
|
Director |
|
Luke Beshar |
|
|
|
|
|
|
|
|
|
|
|
/s/ Henry Friesen |
|
Director |
|
Henry Friesen |
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert Kirkman |
|
Director |
|
Robert Kirkman |
|
|
|
/s/ Michael Moore |
|
Director |
|
Michael Moore |
|
|
|
|
|
|
|
|
|
|
|
/s/ Thomas Reynolds |
|
Director |
|
Thomas Reynolds |
|
|
|
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities
Act of 1933, the undersigned has signed this Registration Statement, solely in
its capacity as the duly authorized representative of the Registrant in the
United States, on May 29, 2015.
PUGLISI & ASSOCIATES
|
|
|
|
|
|
|
By: |
|
/s/ Donald J. Puglisi |
|
Name: |
Donald J. Puglisi |
|
Title: |
Managing Director |
EXHIBIT INDEX
Exhibit |
Description |
Number |
|
|
|
4.1 |
Annual information form of the
Registrant dated March 23, 2015, for the year ended December 31, 2014
(incorporated by reference to Exhibit 99.1 to the Registrants Annual
Report on Form 40-F filed with the Commission on March 24, 2015 (File
No. 001-36596)). |
|
|
4.2 |
Management information circular of the Registrant dated April 22, 2014. |
|
|
4.3 |
Audited consolidated financial
statements of the Registrant, together with the notes thereto, as at
December 31, 2014 and 2013 and for the years then ended (incorporated by
reference to Exhibit 99.3 to the Registrants Annual Report on Form 40-F
filed with the Commission on March 24, 2015 (File No. 001-36596)).
|
|
|
4.4 |
Managements discussion and
analysis of the Registrant for the years ended December 31, 2014 and 2013
(incorporated by reference to Exhibit 99.2 to the Registrants Annual
Report on Form 40-F filed with the Commission on March 24, 2015 (File
No. 001-36596)). |
|
|
4.5 |
Unaudited interim condensed
consolidated financial statements of the Registrant, together with the
notes thereto, as at March 31, 2015 and 2014 and for the three months then
ended (incorporated by reference to Exhibit 99.1 to the Registrants
Current Report on Form 6-K furnished to the Commission on May 13, 2015
(File No. 001-36596)); |
|
|
4.6 |
Managements discussion and
analysis of the Registrant for the three months ended March 31, 2015 and
2014 (incorporated by reference to Exhibit 99.2 to the Registrants
Current Report on Form 6-K furnished to the Commission on May 13, 2015 (File No.
001-36596)); |
|
|
4.7 |
Management information circular
of the Registrant dated April 22, 2015 (incorporated by reference to
Exhibit 99.1 to the Registrants Current Report on Form 6-K furnished to
the Commission on April 30, 2015 (File No. 001-36596)). |
|
|
4.8 |
Material change report, dated
April 2, 2015 (incorporated by reference to Exhibit 99.1 to the
Registrants Current Report on Form 6-K furnished to the Commission on
April 29, 2015 (File No. 001-36596)). |
|
|
4.9 |
Material change report, dated
April 14, 2015 (incorporated by reference to Exhibit 99.2 to the
Registrants Current Report on Form 6-K furnished to the Commission on
April 29, 2015 (File No. 001-36596)). |
|
|
5.1 |
Consent of Ernst & Young
LLP. |
|
|
6.1 |
Powers of Attorney (included on the signature page of this Registration Statement). |
Annual and Special Meeting of Shareholders
Management Information Circular
This Management Information Circular (Circular) is
furnished in connection with the solicitation of proxies by and on behalf of the
management of Stem Cell Therapeutics Corp. (the Corporation) for use at
the Annual and Special Meeting of the Corporations shareholders to be held on
May 27, 2014 at the time and place and for the purposes set out in the
accompanying Notice of Annual and Special Meeting and any adjournment thereof.
No person has been authorized to give any information or make
any representation in connection with any matters to be considered at the Annual
and Special Meeting, other than as contained in this Circular and, if given or
made, any such information or representation must not be relied upon as having
been authorized.
April 22, 2014
STEM CELL THERAPEUTICS CORP.
Notice of Annual and Special Meeting of Shareholders
NOTICE IS HEREBY GIVEN that the Annual and Special Meeting of
Shareholders (the Meeting) of Stem Cell Therapeutics Corp. (the
Corporation) will be held at the offices of the Corporation at 96
Skyway Avenue, Toronto, ON M9W 4Y9, on May 27, 2014, at 5:00 pm (Toronto time),
for the following purposes:
1. |
to receive the audited consolidated financial statements
of the Corporation for the year ended December 31, 2013, together with the
auditors report thereon; |
|
|
2. |
to elect directors of the Corporation for the ensuing
year; |
|
|
3. |
to reappoint Ernst & Young, LLP, Chartered
Accountants, Licensed Public Accountants, as auditors of the Corporation
for the ensuing year and to authorize the directors to fix the
remuneration to be paid to the auditors; |
|
|
4. |
to consider, and if deemed advisable, approve the
Corporations amended and restated stock option plan; |
|
|
5. |
to consider, and if deemed advisable, approve the
Corporations amended and restated deferred share unit plan; |
|
|
6. |
to consider, and if deemed advisable, approve the
Corporations amended and restated shareholder rights plan; |
|
|
7. |
to consider, and if deemed advisable, approve the change
of name of the Corporation to Trillium Therapeutics Inc.; |
|
|
8. |
to consider, and if deemed advisable, approve the
consolidation of the outstanding common shares of the Corporation on the
basis of a ratio to be determined by the board of directors of the
Corporation in its sole discretion, within a range of one
post-consolidation common share for every 10 to 30 outstanding
pre-consolidation common shares of the Corporation; |
|
|
9. |
to consider, and if deemed advisable, approve certain
amendments to the Corporations By-Law No.1; and |
|
|
10. |
to transact such other business as may properly come
before the Meeting or any adjournment or postponement
thereof. |
The Management Information Circular and the form of proxy are
prepared in respect of the Meeting accompanying this notice.
Shareholders who are unable to attend the Meeting in person are
requested to date, sign and return the enclosed form of proxy in the addressed
envelope provided for that purpose.
DATED as of the 22nd day of April, 2014.
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
Dr. Calvin Stiller |
|
|
|
Dr. Calvin Stiller |
|
Chairman |
- 3 -
In order to be represented by proxy at the Meeting,
you must complete, date and sign the enclosed form of proxy or
other appropriate form of proxy and, in either case, (i) deliver the
completed proxy to Computershare Investor Services Inc., 100
University Avenue, 8th Floor, Toronto, ON M5J 2Y1, or (ii) vote
using the Internet at www.investorvote.com, or (iii) vote using the
Telephone at 1-866-732-VOTE(8683) from a touch tone telephone, no
later than 48 hours (excluding Saturdays, Sundays and holidays)
preceding the date and time of the Meeting, or any adjournment or
postponement thereof. |
MANAGEMENT INFORMATION CIRCULAR
TABLE OF CONTENTS
- ii -
STEM CELL THERAPEUTICS CORP.
96 Skyway Avenue
Toronto, Ontario
M9W 4Y9
MANAGEMENT INFORMATION CIRCULAR
Except where indicated
otherwise, the following information is dated as at April 22, 2014 and all
dollar amounts are in Canadian dollars.
SOLICITATION OF PROXIES
The information contained in
this Management Information Circular (the Circular) is furnished in connection
with the solicitation of proxies by the management of Stem Cell Therapeutics
Corp. (the Corporation) for use at the Annual and Special Meeting (the
Meeting) of the holders (the Shareholders) of common shares (Common
Shares) of the Corporation to be held on May 27, 2014 at 5:00 pm (Toronto time)
at the offices of the Corporation at 96 Skyway Avenue, Toronto, Ontario, Canada,
and at all adjournments or postponements thereof, for the purposes set forth in
the Notice of Annual and Special Meeting of Shareholders (the Notice).
The solicitation of proxies is
being made by or on behalf of the management of the Corporation. The
Corporation will bear the entire cost of solicitation of proxies including
preparation, assembly, printing and mailing of this Circular, the Notice, and
the form of proxy (collectively, the Documents). Copies of the
Documents are being sent by mail to those Shareholders entitled to receive
notice of the Meeting. The Documents will also be furnished to banks, securities
dealers, and clearing agencies (Intermediaries) holding in their names
Common Shares of the Corporation, beneficially owned by others to forward to
such beneficial owners. The Corporation is not sending proxy-related materials
directly to non-registered holders who are non-objecting beneficial owners of
Common Shares, but will make delivery through such Intermediaries. The
Corporation will pay for Intermediaries to deliver proxy-related materials to
non-registered holders who are objecting beneficial owners of Common Shares.
Original solicitation of proxies by mail may be supplemented by telephone,
facsimile or personal solicitation by directors, officers, or other regular
employees of the Corporation. No additional compensation will be paid to
directors, officers, or other regular employees for such services.
- 2 -
APPOINTMENT OF PROXY HOLDERS
Shareholders may vote at the
Meeting in person or by proxy. The persons named in the accompanying form of
proxy are directors or executive officers of the Corporation. A Shareholder has
the right to appoint a person other than the persons specified in such form of
proxy (who need not be a shareholder of the Corporation) to attend and act on
behalf of the Shareholder at the Meeting. To exercise this right, a Shareholder
may either insert the name of the desired person in the blank space provided in
the accompanying form of proxy, or complete another appropriate form of proxy.
Those Shareholders who wish to be
represented by proxy at the Meeting, must complete, date and sign the enclosed
form of proxy or other appropriate form of proxy and, in either case, (i)
deliver the completed proxy to Computershare Investor Services Inc., 100
University Avenue, 8th Floor, Toronto, ON M5J 2Y1, or (ii) vote using the
Internet at www.investorvote.com, or (iii) vote using the Telephone at
1-866-732-VOTE(8683) from a touch tone telephone,, no later than 48 hours
(excluding Saturdays, Sundays and holidays) preceding the date and time of the
Meeting, or any adjournment or postponement thereof.
REVOCABILITY OF PROXY
A Shareholder who has given a
proxy may revoke it by depositing an instrument in writing executed by the
Shareholder or by his attorney, authorized in writing, or if the Shareholder is
a body corporate, under its corporate seal or by an officer or attorney thereof
duly authorized, to Computershare Investor Services Inc., by delivery to 100
University Avenue, 8th Floor, Toronto, ON M5J 2Y1, any time up to
4:30 pm (Toronto time) on the business day immediately preceding the date of the
Meeting, or any adjournment or postponement thereof, or (ii) with the Chair of
the Meeting on the day of the Meeting, or any adjournment or postponement
thereof, prior to the time of voting and, upon either of such deposits, the
earlier proxy shall be revoked.
VOTING OF SHARES REPRESENTED BY MANAGEMENT PROXIES
The executive officers named in
the enclosed form of proxy will vote or withhold from voting the Common Shares
for which they are appointed proxy holders in accordance with the instructions
of the Shareholder indicated on the form of proxy. In the absence of such
instructions, the executive officers named in the enclosed form of proxy intend
to vote the Common Shares represented by the proxy IN FAVOUR of each motion put
forth by management of the Corporation.
If a Shareholder appoints a
person, other than the executive officers named in the accompanying form of
proxy to represent it, such person will vote the Common Shares for which they
are appointed proxy holder in accordance with the instructions of the
Shareholder indicated on the form of proxy. In the absence of such instructions,
such person may vote the Common Shares for which they are appointed proxy holder
at their discretion.
The accompanying form of proxy
confers discretionary authority upon the persons named therein with respect to
amendments or variations of matters identified in the Notice, and with respect
to any other matters, if any, which may properly come before the Meeting. At the
time of printing of this Circular, management of the Corporation knows of no
such amendments, variations or other matters to come before the Meeting.
However, if any such amendments, variations or other matters which are not now
known to management should properly come before the Meeting, the persons named
in the form of proxy will vote on such other business in accordance with their
best judgment.
- 3 -
VOTING SHARES AND THE PRINCIPAL HOLDERS THEREOF
As at April 22, 2014, the
Corporation has 124,377,031 Common Shares outstanding, each carrying the right
to one vote. Only the holders of Common Shares of record at the close of
business on April 22, 2014 (the Record Date) will be entitled to notice
of, and to attend and vote at, the Meeting. Any transferee or person acquiring
Common Shares after the Record Date may, on proof of ownership of such Common
Shares, make a written demand, not later than 10 days before the Meeting, to be
included in the list of Shareholders entitled to vote at the Meeting, in which
case the transferee will be entitled to vote his or her Common Shares at the
Meeting or any adjournment or postponement thereof.
As at the date hereof, to the
knowledge of the directors and executive officers of the Corporation, no person
beneficially owns, directly or indirectly or exercises control or direction over
more than 10% of the issued and outstanding Common Shares of the Corporation.
As at April 22, 2014, the
Corporation has 77,895,165 Series I Non-Voting Convertible First Preferred
Shares outstanding. The holders of Series I Non-Voting Convertible First
Preferred Shares shall be entitled to receive notice of and to attend the
Meeting but shall not be entitled to vote with respect to the matters to be
presented for approval at the Meeting as described in this information circular.
ADVICE TO BENEFICIAL HOLDERS OF SECURITIES
The information set forth in this
section is provided to beneficial holders of Common Shares of the Corporation
who do not hold their Common Shares in their own name (Beneficial
Shareholders). Beneficial Shareholders should note that only proxies
deposited by Shareholders whose names appear on the records of the Corporation
as the registered holders of Common Shares can be recognized and acted upon at
the Meeting. If Common Shares are listed in an account statement provided to a
Beneficial Shareholder by a broker, then in almost all cases those Common Shares
will not be registered in the Beneficial Shareholders name on the records of
the Corporation. Such Common Shares will more likely be registered under the
name of the Beneficial Shareholders broker or an agent of that broker. In
Canada, the vast majority of such Common Shares are registered under the name of
CDS & Co. (the registration name for CDS Clearing and Depository Services
Inc., which acts as nominee for many Canadian brokerage firms). Common Shares
held by brokers or their nominees can only be voted (for or against resolutions)
upon the instructions of the Beneficial Shareholder. Without specific
instructions, the brokers or nominees are prohibited from voting Common Shares
for their clients. The Corporation does not know for whose benefit the Common
Shares registered in the name of CDS & Co. are held. Therefore, Beneficial
Shareholders cannot be recognized at the Meeting for the purposes of voting the
Common Shares in person or by way of proxy except as set forth below.
Applicable regulatory policy
requires intermediaries or brokers to seek voting instructions from Beneficial
Shareholders in advance of shareholders meetings. Every intermediary or broker
has its own mailing procedures and provides its own return instructions, which
should be carefully followed by Beneficial Shareholders in order to ensure that
their Common Shares are voted at the Meeting. Often, the form of proxy supplied
to a Beneficial Shareholder by its broker is identical to the form of proxy
provided to registered Shareholders; however, its purpose is limited to
instructing the registered Shareholder how to vote on behalf of the Beneficial
Shareholder. The majority of brokers now delegate responsibility for obtaining
instructions from clients to Broadridge Investor Communication Solutions
(Broadridge) in the United States and Canada. Broadridge typically
applies a special sticker to proxy forms, mails those forms to the Beneficial
Shareholders and requests the Beneficial Shareholders to return the proxy forms
to Broadridge. Broadridge then tabulates the results of all instructions
received and provides appropriate instructions respecting the voting of Common
Shares to be represented at the Meeting. A Beneficial Shareholder receiving a
proxy from Broadridge cannot use that proxy to vote Common Shares directly at
the Meeting as the proxy must be returned as directed by Broadridge well in
advance of the Meeting in order to have the Common Shares voted.
- 4 -
Although a Beneficial Shareholder
may not be recognized directly at the Meeting for the purposes of voting Common
Shares registered in the name of his or her broker (or agent of the broker), a
Beneficial Shareholder may attend at the Meeting as proxyholder for the
registered Shareholder and vote Common Shares in that capacity. Beneficial
Shareholders who wish to attend the Meeting and indirectly vote their Common
Shares as proxyholder for the registered Shareholder should enter their own name
in the blank space on the form of proxy provided to them and return the same to
their broker (or the brokers agent) in accordance with the instructions
provided by such broker (or agent), well in advance of the Meeting.
In addition, a proxy may be
revoked by the Shareholder executing another form of proxy bearing a later date
and depositing same at the offices of the Registrar and Transfer Agent of the
Corporation within the time period set out under the heading Revocability of
Proxy, or by the Shareholder personally attending the Meeting and voting his or
her Common Shares.
IF YOU ARE A BENEFICIAL SHAREHOLDER AND WISH TO VOTE IN
PERSON AT THE MEETING, PLEASE CONTACT YOUR BROKER OR AGENT WELL IN ADVANCE OF
THE MEETING TO DETERMINE HOW YOU CAN DO SO.
BUSINESS OF THE MEETING
At the Meeting, Shareholders will be
asked:
1. |
to receive the audited consolidated financial statements
of the Corporation for the year ended December 31, 2013, together with the
auditors report thereon; |
|
|
2. |
to elect directors of the Corporation for the ensuing
year; |
|
|
3. |
to reappoint Ernst & Young, LLP, Chartered
Accountants, Licensed Public Accountants, as auditors of the Corporation
for the ensuing year and to authorize the directors to fix the
remuneration to be paid to the auditors; |
|
|
4. |
to consider, and if deemed advisable, approve the
Corporations amended and restated stock option plan; |
|
|
5. |
to consider, and if deemed advisable, approve the
Corporations amended and restated deferred share unit plan (DSU
Plan); |
|
|
6. |
to consider, and if deemed advisable, approve the
Corporations amended and restated shareholder rights plan; |
|
|
7. |
to consider, and if deemed advisable, approve the change
of name of the Corporation to Trillium Therapeutics Inc.; |
|
|
8. |
to consider, and if deemed advisable, approve the
consolidation of the outstanding common shares of the Corporation on the
basis of a ratio to be determined by the board of directors of the
Corporation in its sole discretion, within a range of one
post-consolidation common share for every 10 to 30 outstanding
pre-consolidation common shares of the
Corporation; |
- 5 -
9. |
to consider, and if deemed advisable, approve certain
amendments to the Corporations By-Law No.1, to provide for: (i) the
electronic direct registration of the Corporations securities in a
security holders name and allow such securities to be transferred
electronically; and (ii) the quorum for shareholders meetings to be two
persons holding at least 33 1/3% of the issued shares as more particularly
described below; and |
|
|
10. |
to transact such other business as may properly come
before the Meeting or any adjournment or postponement
thereof. |
Audited Consolidated Financial Statements and Auditors
Report
The Corporations audited
consolidated financial statements for the year ended December 31, 2013, and the
auditors report thereon will be submitted at the Meeting. No vote will be taken
regarding the Corporations audited consolidated financial statements.
Election of Directors
The articles of the Corporation
provide that the Corporation have not less than three and not more than ten
directors, with the actual number of directors holding office from time to time
to be determined by the board of directors (the Board of Directors).
Currently, the Board of Directors is comprised of seven members, all of whom
will be standing for re-election at the Meeting. Accordingly, seven directors
are proposed to be elected at the Meeting. All directors so elected will,
subject to the by-laws of the Corporation and to applicable laws, hold office
until the close of the next annual meeting of Shareholders, or until their
respective successors are elected or appointed.
All of the nominees are now
members of the Board of Directors and have been since the dates indicated below.
The term of each current directors appointment will expire at the Meeting. At
the Meeting, the nominees will be voted on individually and in accordance with
applicable Canadian securities legislation, the voting results for each nominee
will be publicly disclosed.
The persons designated in the
enclosed proxy form, unless instructed otherwise, intend to vote FOR the
election of the following nominees. Management of the Corporation does not
contemplate that any of the nominees will be unable to serve as a director, but
if that should occur for any reason at or prior to the Meeting, the persons
named in the enclosed form of proxy reserve the right to vote for another
nominee in their discretion.
The following table sets forth
for all persons proposed to be nominated for election as directors, the
positions and offices with the Corporation now held by them, their present
principal occupation and principal occupation for the preceding five years, if
applicable, the periods during which they have served as directors of the
Corporation and the number of Common Shares of the Corporation beneficially
owned, directly or indirectly, by each of them, or over which they exercise
control or direction as of April 22, 2014.
- 6 -
|
|
|
|
|
|
|
|
Number of |
Name and Municipality |
|
Current Positions and |
|
Principal Occupation in the |
|
|
|
Common |
of
Residence |
|
Offices Held |
|
Past Five Years |
|
Director Since |
|
Shares |
|
|
|
|
|
|
|
|
|
Mr. Luke Beshar(1) |
|
Director |
|
January 2012 to present: EVP |
|
March 10, 2014 |
|
Nil |
|
|
|
|
and CFO, NPS Pharmaceuticals, |
|
|
|
|
New Jersey, USA |
|
|
|
Inc. a global biopharmaceutical |
|
|
|
|
|
|
|
|
company; 2009 to December |
|
|
|
|
|
|
|
|
2011: SVP and CFO, NPS |
|
|
|
|
|
|
|
|
Pharmaceuticals, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Henry Friesen(1)(3) |
|
Director |
|
October 2009 to present: |
|
June 28, 2011 |
|
Nil |
Manitoba, Canada |
|
|
|
Distinguished University |
|
|
|
|
|
|
|
|
Professor Emeritus, University of |
|
|
|
|
|
|
|
|
Manitoba |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Robert Kirkman(1)(2) |
|
Director |
|
2009 to present: President and |
|
December 17, 2013 |
|
Nil |
Washington, USA |
|
|
|
CEO, Oncothyreon Inc., an |
|
|
|
|
|
|
|
|
oncology-focused biotechnology |
|
|
|
|
|
|
|
|
company. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Michael Moore(2)(3) |
|
Director |
|
2009 to present: Chairman/ |
|
April 9, 2013 |
|
Nil |
Berkshire, United |
|
|
|
Director of a number of private |
|
|
|
|
Kingdom |
|
|
|
biopharmaceutical companies in |
|
|
|
|
|
|
|
|
the UK; 2009 to March 2013: |
|
|
|
|
|
|
|
|
Chairman, Trillium Therapeutics |
|
|
|
|
|
|
|
|
Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Thomas |
|
Director |
|
Feb 2013 to present: |
|
March 10, 2014 |
|
Nil |
Reynolds(2)(3) |
|
|
|
independent biotechnology |
|
|
|
|
Washington, USA |
|
|
|
consultant; 2009 to January |
|
|
|
|
|
|
|
|
2013: Chief Medical Officer, |
|
|
|
|
|
|
|
|
Seattle Genetics, Inc., a |
|
|
|
|
|
|
|
|
biotechnology company focused |
|
|
|
|
|
|
|
|
on antibody-based therapies for |
|
|
|
|
|
|
|
|
the treatment of cancer. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Niclas Stiernholm |
|
President and CEO, |
|
April 2013 to present: President |
|
July 18, 2011 |
|
Nil |
Ontario, Canada |
|
Director |
|
and CEO of the Corporation |
|
|
|
|
|
|
|
|
2009 - present: CEO of Trillium |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Calvin Stiller |
|
Director, Chairman |
|
2009 - present: Chair, BioQuest |
|
July 18, 2011 |
|
890,000 |
Ontario, Canada |
|
|
|
Innovations Inc.; Chair/ Director, |
|
|
|
|
|
|
|
|
Ontario Institute for Cancer |
|
|
|
|
|
|
|
|
Research; Professor Emeritus, |
|
|
|
|
|
|
|
|
Western University |
|
|
|
|
Notes: |
|
(1) |
Member
of the Audit Committee. |
(2) |
Member
of the Compensation Committee. |
(3) |
Member
of the Corporate Governance and Nominating Committee. |
Due to the small number of
employees of the Corporation and with a majority of directors being independent,
for 2012 the Board of Directors considered Corporate Governance and Compensation
matters directly rather than through committees of the Board. On April 8, 2013
the Board of Directors formed a Compensation Committee and a Corporate
Governance and Nominating Committee.
- 7 -
Appointment and Remuneration of the Auditors
Ernst & Young LLP, Chartered
Accountants, Licensed Public Accountants, have been the auditors of the
Corporation since August 25, 2004. The Board of Directors has proposed that
Ernst & Young LLP be reappointed as the Corporations independent auditors
for the year ending December 31, 2014 and that the Board of Directors be
authorized to fix the auditors remuneration. A majority of the votes voted by
the Shareholders represented at the Meeting is required to approve the
appointment of the Corporations auditors.
Unless otherwise directed, the
persons named in the enclosed form of proxy intend to vote at the Meeting IN
FAVOUR of the reappointment of Ernst & Young LLP as the Corporations
auditors and the authorization of the Board of Directors to fix the auditors
remuneration.
Approval of the Stock Option Plan
On the graduation to the Toronto
Stock Exchange (TSX) from the TSX Venture Exchange (TSXV), the
Corporations stock option plan (the 2012 Stock Option Plan), approved
at the last annual meeting of Shareholders on October 17, 2013, has been amended
and restated (the 2014 Stock Option Plan) to conform with the TSXs
rules and to provide that the 2014 Stock Option Plan provides a stock option
pool equal to 10% of the sum of the outstanding Common Shares plus the number of
Common Shares into which the outstanding Series I Non-Voting First Preferred
Shares of the Corporation (Series I Preferred Shares) may be converted
in accordance with their terms.
Shareholders will be asked to
vote on a resolution to approve the 2014 Stock Option Plan at the Meeting (the
Stock Option Plan Resolution). A copy of the complete 2014 Stock Option
Plan is attached as Schedule B to this Circular, with black-lines highlighting
all the amendments to the plan. The following is a summary of the 2014 Stock
Option Plan, which is qualified in its entirety by reference to the text of the
2014 Stock Option Plan. All capitalized terms used in this section under the
heading, Approval of Stock Option Plan, that are not specifically
defined herein shall have the meanings ascribed to them in the 2014 Stock Option
Plan.
Administration by the Board of Directors
The 2014 Stock Option Plan is
administered by the Board of Directors which has final authority and discretion,
subject to the express provisions of the 2014 Stock Option Plan, to interpret
the 2014 Stock Option Plan, to prescribe, amend and rescind rules and
regulations relating to it and to make all other determinations deemed necessary
or advisable for the administration of the 2014 Stock Option Plan. This includes
the discretion of the Board of Directors to decide who will participate in the
2014 Stock Option Plan, including directors, officers, employees or consultants
(the Participants). The Board of Directors also has authority to
delegate its duties to the Compensation Committee.
Expiry
Options granted under the 2014
Stock Option Plan (the Options) are non-transferable, expire not later
than ten years from the date of issuance and are exercisable as determined by
the Board of Directors. In addition, notwithstanding the expiration date
applicable to any Option, if an Option would otherwise expire during or
immediately after a Blackout Period (as defined in the 2014 Stock Option Plan),
then the expiration date of such Option shall be the 10th business day following
the expiration of the Blackout Period, provided that in no event shall the
period during which said Option is exercisable be extended beyond 10 years from
the date such Option is granted to the Participant.
- 8 -
Exercise Price
The exercise price payable in
respect of each Option may not be lower than the volume weighted average trading
price of the Common Shares on the TSX over a period of five days preceding the
date of grant.
Insider Participation Limit
The aggregate number of Common
Shares issuable (or reserved for issuance) to Insider Participants under the
2014 Stock Option Plan or any other security-based compensation arrangement of
the Corporation and its affiliates (including, without limitation, the
Corporations 2014 DSU Plan), may not at any time exceed 10% of the combined
total number of Common Shares issued and outstanding (on a non-diluted basis)
and the total number of Common Shares into which the outstanding Series I
Preferred Shares may be converted. Common Shares issued to Insider Participants
under the 2014 Stock Option Plan or any other security-based arrangement of the
Corporation within a one-year period may not exceed 10% of the total number of
Common Shares issued and outstanding (on a non-diluted basis) plus 10% of the
total number of Common Shares into which the outstanding Series I Preferred
Shares may be converted.
Amendment Provisions
The Board of Directors has the
discretion to make amendments to the 2014 Stock Option Plan and any Options
granted thereunder which it may deem necessary, without having to obtain
Shareholder approval. Such changes include, without limitation:
|
a) |
minor changes of a housekeeping nature; |
|
|
|
|
b) |
amending Options under the 2014 Stock Option Plan,
including with respect to the Option Period (provided that the period
during which an Option is exercisable does not exceed ten years from the
date the Option is granted and that such Option is not held by an Insider
Participant), vesting period, exercise method and frequency, exercise
price of an Option (provided that such Option is not held by an Insider
Participant) and method of determining the exercise price, assignability
and effect of termination of a Participants employment or cessation of
the Participants directorship; |
|
|
|
|
c) |
changing the class of Participants eligible to
participate under the 2014 Stock Option Plan; |
|
|
|
|
d) |
accelerating vesting or extending the expiration date of
any Option (provided that such Option is not held by an Insider
Participant), provided that the period during which an Option is
exercisable does not exceed 10 years from the date the Option is
granted; |
|
|
|
|
e) |
changing the terms and conditions of any financial
assistance which may be provided by the Company to Participants to
facilitate the purchase of Common Shares under the 2014 Stock Option Plan;
and |
|
|
|
|
f) |
adding a cashless exercise feature, payable in cash or
securities, whether or not providing for a full deduction of the number of
underlying Common Shares from the 2014 Stock Option Plan
reserve. |
Shareholder approval will be
required in the case of: (i) any amendment to the amendment provisions of the
2014 Stock Option Plan; (ii) any increase in the maximum number of Common Shares
issuable under the 2014 Stock Option Plan; and (iii) any reduction in the
exercise price or extension of the Option Period benefiting an Insider
Participant, in addition to such other matters that may require Shareholder
approval under the rules and policies of the TSX.
- 9 -
Termination, Resignation, Death, etc.
Options granted under the 2014
Stock Option Plan are, and they will be, evidenced by an option agreement
entered between the Participant and the Corporation. Options granted under the
plan terminate immediately if a Participant is dismissed with cause. If a
Participant ceases to hold any position as a Participant, by reason of
retirement, resignation or disability, the vested options terminate within 120
days from cessation. Under the 2014 Stock Option Plan, the Board of Directors
has been provided with discretion to extend the time to termination for
cessation beyond 120 days but no longer than the normal expiry of the
Option.
Under the 2014 Stock Option Plan,
if a Participant dies, his options may be exercised by his legal representatives
during the period of (and they shall terminate) one year following the date to
the extent they were exercisable on the date of death. If a Participant ceases
to be a director, officer or employee of, or consultant to, the Corporation or
of one of its subsidiaries as a result of disability or illness preventing the
Participant from performing the duties routinely performed by such Participant,
vested options terminate 180 days from the date that the Participant ceases to
serve in such capacities (or until the normal expiry date of the Options if
earlier).
Change of Control
The 2014 Stock Option Plan
provides that any Options outstanding immediately prior to the occurrence of a
Change of Control (as defined in the plan), but which are not then exercisable,
shall immediately vest and become fully exercisable upon the occurrence of a
Change of Control.
Maximum Limit
The 2014 Stock Option Plan is a
rolling and reloading stock option plan, meaning that Options may be granted
for no more than 10% of the total number of Common Shares issued and outstanding
(on a non-diluted basis) plus 10% of the total number of Common Shares into
which the outstanding Series I Preferred Shares may be converted in accordance
with their terms less the number of any Common Shares reserved for issuance to
insiders of the Corporation pursuant to the DSU Plan. At April 22, 2014, the
maximum number of Options available for granting is 8,922,655, being 10% of the
124,377,031 issued and outstanding Common Shares and 10% of the 77,895,165
issued and outstanding Series I Preferred Shares less the 11,304,565 outstanding
stock options, in each case as at April 22, 2014. See Approval of Deferred
Share Unit Plan. Each exercise of Options will result in a corresponding
increase in the number of Options available for granting under the 2014 Stock
Option Plan, up to the 10% aggregate maximum limit. There are additional
restrictions in the 2014 Stock Option Plan with regard to the number of Options
that may be granted which include the restriction that the aggregate number of
Options granted in any 12 month period to any one person cannot exceed 5% of the
aggregate total number of issued and outstanding Common Shares (on a non-diluted
basis) and Common Shares into which the outstanding Series I Preferred Shares
may be converted in accordance with their terms.
As at the date of this Circular,
options to acquire 11,304,565 Common Shares of the Corporation are
outstanding.
- 10 -
Shareholder Approval
The following is the text of the Stock Option Plan Resolution
which will be put forward for approval by the Shareholders at the Meeting:
BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:
|
(a) |
The Amended and Restated 2014 Stock Option Plan is
approved. |
|
|
|
|
(b) |
Any director or officer of the Corporation is authorized,
for and on behalf of the Corporation, to execute and deliver such other
documents and instruments and take such other action as he may determine
to be necessary or advisable to implement this resolution and the matters
authorized hereby, such determination to be conclusively evidenced by the
execution and delivery of any such documents or instruments and the taking
of any such actions by such director or officer. |
Unless otherwise directed, the
persons named in the enclosed form of proxy intend to vote at the Meeting FOR
approving the 2014 Stock Option Plan.
Recommendation of the Board
The Board of Directors
unanimously recommends that Shareholders ratify, confirm and approve the 2014
DSU Plan by voting FOR the Stock Option Plan Resolution.
Approval of the Deferred Share Unit Plan
On the graduation to the TSX from
the TSXV, the DSU Plan, approved at the last annual meeting of Shareholders on
October 17, 2013, has been amended and restated (the 2014 DSU Plan) to
conform with the TSXs rules, to provide that the definition of Outstanding
Issue in the DSU Plan now include the addition of the number of Common Shares
into which the issued and outstanding Series I Preferred Shares may be converted
in accordance with their terms and to include a reference to the TSX when
referring to the exchanges on which the Common Shares trade. Shareholders are
being asked to approve the 2014 DSU Plan, which has been conditionally accepted
by the TSX.
The 2014 DSU Plan is intended to
promote a greater alignment of long-term interests between non-executive
directors and executive officers of the Corporation and its shareholders through
the issuance of deferred share units (DSUs).
Since the value of a DSU
increases or decreases with the market price of the Common Shares, DSUs reflect
a philosophy of aligning the interests of directors and executive officers with
those of the Shareholders by tying compensation to share price performance.
The Board of Directors intends to
use DSUs issued under the 2014 DSU Plan, as well as Options issued under the
2014 Stock Option Plan, as part of the Corporations overall director and
executive officer compensation program.
Shareholders will be asked to
vote on a resolution to approve the 2014 DSU Plan at the Meeting (the DSU
Plan Resolution). A copy of the complete 2014 DSU Plan is attached as
Schedule C to this Circular, with black-lines highlighting all amendments to
the plan. The following is a summary of the 2014 DSU Plan, which is qualified in
its entirety by reference to the text of the 2014 DSU Plan. All capitalized
terms used in this section under the heading, Approval of Deferred Share
Unit Plan, that are not specifically defined herein shall have the meanings
ascribed to them in the 2014 DSU Plan.
- 11 -
Description of the 2014 DSU Plan
The 2014 DSU Plan provides that,
subject to the terms of the 2014 DSU Plan and such other conditions as the Board
of Directors (or Compensation Committee of the Board of Directors after
delegation by authority from the Board of Directors) may impose, an executive
officer or director of the Corporation (an Eligible Person) shall
receive his or her Total Compensation in the form of DSUs. The term, Total
Compensation includes annual and special bonuses payable to directors and
executive officers and, in the case of directors, directors fees (including
annual board retainers, fees for serving as Chair of the Board of Directors
and/or as a Chair or member of any committee of the Board of Directors, for
attending meetings of the Board of Directors or any committee thereof, and any
other fees payable to directors) in the form of DSUs. The Board of Directors may
use DSUs to pay bonuses and directors fees either alone or in conjunction with
cash, or any combination of DSUs and cash.
The number of DSUs (including
fractional DSUs, computed to three digits) to be credited to an Eligible Person
for services will be determined by dividing the Awarded Amount by the Fair
Market Value as at the last trading day before the date the Awarded Amount is
declared by the Board of Directors. Fair Market Value of the Common
Shares is the volume weighted average trading price of the Common Shares on the
TSX for the five days immediately preceding the date in question.
An Eligible Person who has ceased
to be a director or executive officer (other than as a result of death) may
elect to receive one Common Share in respect of each whole DSU credited to the
Eligible Persons account by filing with the Corporation a notice of redemption
in the form and by the time stipulated in the 2014 DSU Plan.
If the Eligible Person does not
make the election on a timely basis, the Eligible Person will be deemed to have
elected to redeem all of his or her DSUs.
The issuance of the Common Shares
will be made by the Corporation as soon as reasonably possible following the
election to redeem the DSUs, or being deemed to have been made, by the Eligible
Person.
Maximum Number of Shares issuable under the Plan
The Outstanding Issue
means the combined total of the number of Common Shares outstanding and the
number of Common shares into which the Series I Preferred Shares outstanding (on
a non-diluted basis) may be converted in accordance with their terms. The
maximum number of Common Shares reserved for issuance under the 2014 DSU Plan is
2,000,000, which is approximately 1.0% of the current Outstanding Issue.
The 2014 DSU Plan provides that
the maximum number of Common Shares that may be reserved for issuance to
insiders (as that term is defined in the TSXs rules) pursuant to the
2014 DSU Plan, together with any Common Shares issuable pursuant to any other
securities-based compensation arrangement of the Corporation (including the 2014
Stock Option Plan), will not exceed 10% of the Outstanding Issue.
In addition, the maximum number
of Common Shares that may be issued to insiders under the 2014 DSU Plan,
together with any Common Shares issued to insiders pursuant to any other
securities-based compensation arrangement of the Corporation (including the 2014
Stock Option Plan), within any one year period, will not exceed 10% of the
Outstanding Issue. Also, in no event, may the number of Common Shares reserved
for issuance to any one person pursuant to the 2014 DSU Plan and the 2014 Stock
Option Plan exceed 5% of the Outstanding Issue.
- 12 -
Transferability
DSUs and any other rights,
benefits or interests in the 2014 DSU Plan are non-transferable, except that if
the Eligible Person dies, the legal representatives of the Eligible Person will
be entitled to receive the amount of any payment otherwise payable to the
Eligible Person in accordance with the provisions 2014 DSU Plan.
Amendments to the 2014 DSU Plan
The Board of Directors has the
discretion to make amendments to the 2014 DSU Plan and any DSUs granted
thereunder which it may deem necessary, without having to obtain Shareholder
approval. Such changes may include, without limitation:
|
a) |
minor changes of a housekeeping nature; |
|
|
|
|
b) |
amending the terms of DSUs under the 2014 DSU Plan and
method of determining the Awarded Amount and the number of DSUs that may
be issued to an Eligible Person, and the assignability and effect of
Terminated Service of an Eligible Person; |
|
|
|
|
c) |
changing the class of Eligible Persons; and |
|
|
|
|
d) |
changing the method and procedures to be followed with
regard to the issuance of DSUs under the 2014 DSU
Plan. |
Shareholder approval will be
required in the case of: (i) any amendment to the amendment provisions of the
2014 DSU Plan; (ii) any increase in the maximum number of Common Shares issuable
under the 2014 DSU Plan; and (iii) such other matters that may require
shareholder approval under the rules and policies of the TSX.
Termination of Service
An Eligible Person who has
Terminated Service may elect to receive one Common Share in respect of each
whole DSU credited to the Eligible Person's account, by filing with the
President of the Corporation a notice of redemption in the form prescribed from
time to time by the Corporation on or before December 15 of the first calendar
year commencing after the date on which the Eligible Person has Terminated
Service. If the Eligible Person fails to file such notice on or before that
December 15, the Eligible Person will be deemed to have filed with the President
of the Corporation a notice of redemption on that December 15 and will be deemed
to have elected to redeem all of his or her DSUs. The date on which a notice is
filed or deemed to be filed with the Secretary of the Corporation is the Filing
Date. The Corporation may defer the Filing Date to any other date if such
deferral is, in the sole opinion of the Company, desirable to ensure compliance
the 2014 DSU Plan. There are no causes of cessation of entitlement under the
2014 DSU Plan, including termination for or without cause.
In the event of the death of an Eligible
Person, the Company will, within two months of the Eligible Person's death, pay
cash equal to the Fair Market Value of the Shares which would be deliverable to
the Eligible Person if the Eligible Person had Terminated Service in respect of
the Deferred Share Units credited to the deceased Eligible Person's account (net
of any Applicable Withholding Tax) to or for the benefit of the legal
representative of the Eligible Person. The Fair Market Value will be calculated
on the date of death of the Eligible Person.
- 13 -
As of the date of the Circular, no DSUs have been issued.
Shareholder Approval
The following is the text of the
DSU Plan Resolution which will be put forward for approval by the Shareholders
at the Meeting:
BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:
|
(a) |
The Amended and Restated Deferred Share Unit Plan of the
Corporation, as described in the Management Information Circular of the
Corporation dated April 22, 2014, and in the form filed with the Canadian
Securities Administrators and appearing on SEDAR at www.sedar.com, is
hereby approved. |
|
|
|
|
(b) |
Any one officer or director of the Corporation is
authorized to take such steps or execute such documents, whether or not
under corporate seal, which are in his or her opinion necessary or
advisable in order to give effect to this
resolution. |
Unless otherwise directed, the
persons named in the enclosed form of proxy intend to vote at the Meeting FOR
approving the 2014 DSU Plan.
Recommendation of the Board
The Board of Directors
unanimously recommends that Shareholders ratify, confirm and approve the 2014
DSU Plan by voting FOR the DSU Plan Resolution.
Approval of the Shareholder Rights Plan
The Corporation originally
implemented a shareholder rights plan on September 16, 2013 between the
Corporation and Computershare Trust Company of Canada, which was approved by
Shareholders at the last annual meeting of Shareholders on October 17, 2013 (the
2013 Rights Plan). The Board of Directors has now approved, subject to
Shareholder approval, amendments to the 2013 Rights Plan (the Rights Plan
Amendment which together with the 2013 Rights Plan may be referred to as
the Rights Plan). At the Meeting, the Shareholders will be asked to
pass an ordinary resolution approving the Rights Plan Amendment (the Rights
Plan Resolution).
The Board of Directors has
determined that the Rights Plan is in the best interests of the Corporation and
unanimously recommends that the Shareholders vote in favour of the Rights Plan
Resolution. The Rights Plan was not adopted in response to any specific proposal
or intention to acquire control of the Corporation.
Change of Rights Agent
Pursuant to an Assignment
Agreement dated April 22, 2014, Computershare Trust Company of Canada
(CTCC), the Corporations duly appointed Rights Agent under the Rights
Plan transferred and assigned its rights, powers, duties and obligations under
the Rights Plan to Computershare Investor Services Inc. (CISI). The
Corporation consented to such transfer and assignment from CTCC to CISI.
Effective, April 28, 2014, CISI will become the new Rights Agent under the
Rights Plan.
- 14 -
Rights Plan Amendment
The 2013 Rights Plan provides
that any amendments must be approved by the TSX Venture Exchange
(TSXV). With the Corporations graduation to the TSX, the reference in
the plan to the requirement of the TSXVs approval of amendments to the plan has
been amended to reference that any such amendments to the plan would require the
approval of the TSX.
References in the 2013 Rights
Plan to Computershare Trust Company of Canada as the Rights Agent have been
amended to refer to Computershare Investor Services Inc. as the new Rights
Agent pursuant to the Assignment Agreement dated April 22, 2014.
Purpose of the Rights Plan
Many public companies in Canada
have shareholder rights plans in effect. While securities legislation in Canada
requires a take-over bid to be open for at least 35 days, the Board of Directors
is concerned that this is too short a time for companies that are subject to
unsolicited take-over bids to be able to respond to ensure that shareholders are
offered full and fair value for their shares. The Rights Plan is designed to
give the Corporations Shareholders sufficient time to properly assess a
take-over bid without undue pressure and to give the Board of Directors time to
consider alternatives designed to allow the Corporations Shareholders to
receive full and fair value for their Common Shares.
The Board of Directors is also
concerned that current Canadian take-over bid rules permit a person or company
to obtain control or effective control of the Corporation without treating all
Shareholders equally.
The Rights Plan is not intended
to prevent a take-over bid or deter offers for Common Shares. It is designed to
encourage any bidder to provide Shareholders with equal treatment and full and
fair value for their Common Shares. A summary of the Rights Plan is found below.
Board Review of the Rights Plan
In adopting the Rights Plan and
recommending that Shareholders vote in favour of the Rights Plan Resolution, the
Board of Directors considered matters including experience of other issuers with
rights plans in the context of take-over bids, judicial and regulatory
consideration of shareholder rights plans, the terms and conditions of rights
plans adopted by other Canadian companies and the commentary of the investment
community on rights plans, including the published proxy voting guidelines.
It is not the intention of the
Board of Directors, in adopting the Rights Plan and proposing that it be
approved by Shareholders, to secure the continuance in office of the existing
members of the Board of Directors or management, or to avoid an acquisition of
control of the Corporation in a transaction that is fair and in the best
interests of Shareholders. The Rights Plan will not detract from or lessen the
duty of the Board of Directors to act honestly and in good faith with a view to
the best interests of the Corporation. The Board of Directors will continue to
have the duty and power to take such actions and make such recommendations to
Shareholders of the Corporation as are considered appropriate.
Summary of the Rights Plan
The following is a summary of the
principal terms of the Rights Plan, which is qualified in its entirety by
reference to the text of the Rights Plan. A copy of the complete 2013 Rights
Plan has been filed with the Canadian Securities Administrators and is available
on SEDAR at www.sedar.com. All capitalized terms used in this summary without
definition have the meanings attributed to them in the Rights Plan.
- 15 -
Effective Date and Term
The 2013 Rights Plan came into
effect on September 16, 2013 and the Rights Plan Amendment was approved by the
Board of Directors on April 17, 2014. Subject to approval and periodic
confirmation by Shareholders of the Corporation as discussed below, the Rights
Plan will remain in effect until the termination of the annual meeting of the
Corporation in the year 2016.
Shareholder Approval of the Rights Plan
The Rights Plan must be approved
by a simple majority of the votes cast at the Meeting by Shareholders present in
person or represented by proxy.
Issue of Rights
Immediately upon the Rights Plan
coming into effect, one right (Right) was issued and attached to each
Common Share outstanding and will attach to each Common Share subsequently
issued.
Rights Exercise Privilege
The Rights will separate from the
Common Shares and will be exercisable on the close of business on the tenth
trading day (the Separation Time) after the earlier of the date on
which a person has acquired 20% or more of, or a person commences or announces a
take-over bid for, the Corporations outstanding Common Shares, other than by an
acquisition pursuant to a Permitted Bid or a Competing Permitted Bid. The
acquisition by a person (an Acquiring Person) of 20% or more of the
Common Shares is referred to as a Flip-in Event. When a Flip-in Event
occurs each Right (except for Rights beneficially owned by an Acquiring Person
or certain transferees of an Acquiring Person, which Rights will be void
pursuant to the Rights Plan) becomes a right to purchase from the Corporation,
upon exercise thereof in accordance with the terms of the Rights Plan, that
number of Common Shares having an aggregate market price on the date of
consummation or occurrence of such Flip-in Event equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price. The Exercise Price for
the Rights provided for in the Rights Plan is $100. As an example, if at the
time of the Flip-in Event the Common Shares have a market price of $25.00, the
holder of each Right would be entitled to receive $200 (twice the Exercise
Price) in market value of the Common Shares (8 Common Shares) for $100, i.e. at
a 50% discount.
The issue of the Rights is not
initially dilutive. However, upon a Flip-in Event occurring and the Rights
separating from the Common Shares, reported earnings per share may be affected.
Holders of Rights not exercising their Rights upon the occurrence of a Flip-in
Event may suffer substantial dilution.
Any Rights held by an Acquiring
Person will become void upon the occurrence of a Flip-in Event. Any offer other
than a Permitted Bid, a competing Permitted Bid or a bid for which the Board of
Directors has waived the application of the Rights Plan to a particular Flip-in
Event (see Waiver below) will become prohibitively expensive for the
Acquiring Person. The Rights Plan is therefore designed to require any person
interested in acquiring more than 20% of the Common Shares to do so by way of a
Permitted Bid or a Competing Permitted Bid or to make an offer which the Board
of Directors considers to represent the full and fair value of the Common
Shares.
- 16 -
Exemptions for Portfolio Managers, etc.
Portfolio managers (for fully
managed accounts), mutual funds and their managers, trust companies (acting in
their capacities as trustees and administrators), statutory bodies whose
business includes the management of funds, administrators of registered pension
plans and crown agents acquiring greater than 20% of the Common Shares are
exempted from triggering a Flip-in Event, provided that they are not making, and
are not part of a group making, a take-over bid.
Grandfathered Person
A person (a Grandfathered
Person) who was the beneficial owner of more than 20% of the outstanding
Common Shares on September 16, 2013 is deemed not to be an Acquiring Person
until it ceases to own more than 20% of the Common Shares or increases its
beneficial ownership by more than 1% of the outstanding Common Shares on
September 16, 2013 except in specified circumstances. To the knowledge of the
senior officers of the Corporation, the Corporation does not have any
Grandfathered Person.
Certificates and Transferability
Prior to the Separation Time, the
Rights will be evidenced by a legend imprinted on the Common Share certificates
of the Corporation and will not be transferable separately from the Common
Shares. Common Share certificates do not need to be exchanged to entitle a
Shareholder to these Rights. The legend will be on all new certificates issued
by the Corporation after the Effective Date. From and after the Separation Time,
the Rights will be evidenced by Rights certificates and will be transferable
separately from the Common Shares.
Permitted Bid Requirements
The Permitted Bid requirements include the following:
|
(a) |
the take-over bid must be made by way of a take-over bid
circular; |
|
|
|
|
(b) |
the take-over bid must be made to all holders of Common
Shares (other than the bidder); |
|
|
|
|
(c) |
the take-over bid provides that no Common Shares tendered
pursuant to the take-over bid may be taken up prior to the expiry of a 60
day period following the date of the bid and unless at such date more than
50% of the Common Shares held by the Independent Shareholders (i.e. the
shareholders, other than the bidder, its affiliates and persons acting
jointly or in concert and certain other persons), have been tendered to
the take-over bid and not withdrawn; |
|
|
|
|
(d) |
the take-over bid must be open for acceptance for a
minimum period of 60 days; |
|
|
|
|
(e) |
the Common Shares deposited pursuant to the bid may be
withdrawn until taken up or paid for; and |
|
|
|
|
(f) |
if the minimum deposit condition described in (iii) above
has been satisfied, the bidder must make a public announcement of that
fact and the take-over bid must remain open for deposits of Common Shares
for an additional 10 business days from the date of such public
announcement. |
- 17 -
The Rights Plan allows for a
competing Permitted Bid (a Competing Permitted Bid) to be made while a
Permitted Bid is in existence. A Competing Permitted Bid must satisfy all of the
requirements of a Permitted Bid except that no Common Shares will be taken up or
paid for pursuant to the Competing Permitted Bid prior to the close of business
on a date that is no earlier than the later of:
|
(a) |
35 days after the date of the Competing Permitted Bid;
and |
|
|
|
|
(b) |
the 60th day after the earliest date on which any other
Permitted Bid that is then in existence was made. |
Waiver
The Board of Directors, acting in
good faith may, prior to the occurrence of a Flip-in Event, waive the
application of the Rights Plan to a particular Flip-in Event (an Exempt
Acquisition) where the take-over bid is made by a take-over bid circular to
all holders of Common Shares. Where the Board of Directors exercises the waiver
power for one take-over bid, the waiver will also apply to any other take-over
bid for the Corporation made by a take-over bid circular to all holders of
Common Shares prior to the expiry of any other bid for which the Rights Plan has
been waived.
Redemption
The Board of Directors, with the
approval of the majority of votes cast by Shareholders (or the holders of the
Rights if the Separation Time has occurred) voting in person and by proxy, at a
meeting duly called for that purpose, may redeem all of the then outstanding
Rights at $0.000001 per Right as adjusted by the terms of the Rights Plan.
Rights shall be automatically redeemed following completion of a Permitted Bid,
Competing Permitted Bid or Exempt Acquisition.
Protection Against Dilution
The Rights Plan contains detailed
provisions regarding adjustments to the Exercise Price and the number and nature
of the securities that may be purchased upon exercise of Rights outstanding to
prevent dilution in the event of certain declarations of dividends, or
consolidation of outstanding Common Shares, issuances of Common Shares (or other
securities or rights) in respect of or in lieu of an exchange for existing
Common Shares or other changes in the Common Shares.
Amendment
The Board of Directors may amend
the Rights Plan with the approval of a majority of votes cast by Shareholders
(or the holders of the Rights if the Separation Time has occurred) voting in
person and by proxy at a meeting duly called for that purpose. The Board of
Directors, without such approval, may correct clerical or typographical errors
and, subject to the subsequent approval as noted above at the next meeting of
the Shareholders (or holders of Rights, as the case may be), may make amendments
to the Rights Plan to maintain its validity due to changes in applicable
legislation.
Certain Canadian Federal Income Tax Considerations of the
Rights Plan
The following commentary
summarizes certain Canadian federal income tax consequences of the issuance of
the Rights. It is of a general nature only and is not intended to constitute nor
should it be construed to constitute legal or tax advice to any particular
holder of Common Shares. Such shareholders are advised to consult their own tax
advisors regarding the consequences of acquiring, holding, exercising or
otherwise disposing of their Rights, taking into account their own particular
circumstances and any applicable foreign, provincial or territorial legislation.
- 18 -
The Corporation did not receive
any income for the purposes of the Income Tax Act (Canada) (the
ITA) as a result of the issuance of the Rights. The ITA provides that
the value of a right to acquire additional shares of a corporation is not a
taxable benefit which must be included in computing income of a shareholder, and
is not subject to non-resident withholding tax, if the right is conferred on all
holders of common shares. Although the Rights are to be so conferred, the Rights
could become void in the hands of certain holders of Common Shares upon certain
triggering events occurring (such as a Flip-in Event) and, consequently, whether
or not the issuance of the Rights is a taxable event is not entirely free from
doubt. In any event, only the amount or value of such benefit must be included
in computing income of a shareholder. The Corporation considers that the Rights
have negligible monetary value because there is only a remote possibility that
the Rights will ever be exercised. If the Rights are disposed of (except on
exercise thereof), a holder of Rights may be subject to tax in respect of the
proceeds of disposition of such Rights.
Eligibility for Investment in Canada
Provided that at all material
times the Corporation remains a public corporation for purposes of the ITA and
deals at arms length with each person who is an annuitant, a beneficiary, an
employer or a subscriber, as the case may be, under a registered retirement
savings plan, a registered retirement income fund, a deferred profit sharing
plan or a registered education savings plan (collectively, the Plans),
the Rights will be qualified investments under the ITA for the Plans.
Shareholder Approval
To be effective, the resolution must be passed by:
|
(a) |
a simple majority of the votes cast thereon by the
Shareholders present in person or by proxy at the Meeting; and |
|
|
|
|
(b) |
a simple majority of the votes cast thereon by the
Shareholders present in person or by proxy at the Meeting without giving
effect to any votes cast by any Grandfathered Person and any associate,
affiliate and insider of a Grandfathered Person. |
The following is the text of the
Rights Plan Resolution which will be put forward for approval by the
Shareholders at the Meeting:
BE IT RESOLVED AS AN ORDINARY RESOLUTION THAT:
|
(a) |
the amended and restated shareholder rights plan, the
terms and conditions of which are set out in the amended Shareholders
Rights Plan Agreement to be dated on or after May 27, 2014 between Stem
Cell Therapeutics Corp. (the Corporation) and Computershare Investor
Services Inc. (the Rights Agreement), and the distribution and continued
existence of the rights distributed pursuant to the Rights Agreement, as
more particularly described in the Management Proxy and Information
Circular dated April 22, 2014 be and the same is hereby ratified,
confirmed and approved; |
|
|
|
|
(b) |
any officer or director of the Corporation be and is
hereby authorized and directed, for and on behalf of the Corporation to
execute and deliver, under the corporate seal of the Corporation or
otherwise, all such certificates, directions, notices, acknowledgements,
receipts, documents, agreements and instruments and including, without
limitation, execution of the Rights Agreement and to do or cause to be
done all such other acts and things as such director or officer of the
Corporation shall determine to be necessary or desirable in order to carry
out the intent of this resolution and the matters authorized hereby, such
determination to be conclusively evidenced by the execution and delivery
of such documents or instruments or the doing of any such act or thing;
and |
- 19 -
|
(c) |
notwithstanding that these resolutions have been duly
passed by the holders of the outstanding common shares of the Corporation,
the directors of the Corporation are hereby authorized and empowered, if
they decide not to proceed with any of the actions contemplated in the
foregoing resolutions, to revoke these resolutions at any time prior to
the proposed effective date for such action without further notice to, or
approval of the holders of the common shares. |
The TSX has accepted notice from
the Corporation of the issue of the Rights and the Common Shares made subject to
issuance on the exercise of the Rights, subject to Shareholder ratification of
the Rights Plan at the Meeting.
Unless otherwise directed, the
persons named in the enclosed form of proxy intend to vote at the Meeting IN
FAVOUR of the amendment to the Rights Plan.
Recommendation of the Board
The Board of Directors
unanimously recommends that Shareholders ratify, confirm and approve the Rights
Plan by voting IN FAVOUR of the Rights Plan Resolution.
Approval of the Change of the Corporations Name to Trillium
Therapeutics Inc.
At the Meeting, the Shareholders
will be asked to consider and, if deemed advisable, pass a special resolution
(the Name Change Resolution) authorizing the Corporation to file
articles of amendment under Business Corporations Act (Ontario) (the
OBCA) to change the name of the Corporation from Stem Cell
Therapeutics Corp. to Trillium Therapeutics Inc., or to such other name as
the Board of Directors deems appropriate and as may be approved by applicable
regulatory authorities, including the TSX. The Corporation believes that the
Stem Cell Therapeutics name reflects its history as a regenerative medicine
company but does not reflect its current focus of immuno-oncology. Trillium is
associated with a history of drug development in immunology and oncology and is
recognized for this by the life sciences industry. The Board of Directors may
determine not to implement the Name Change Resolution at any time after the
Meeting and after receipt of necessary regulatory approvals, but prior to the
issuance of a certificate of amendment, without further action on the part of
the Shareholders.
No Dissent Rights
Under the OBCA, the Shareholders
do not have any dissent and appraisal rights with respect to the proposed Name
Change Resolution.
Shareholder Approval
The OBCA requires that the Name
Change Resolution be approved by a special resolution of Shareholders, either in
person or by proxy at the Meeting. Shareholders will be asked to consider and,
if thought advisable, to authorize and approve the Name Change Resolution.
Pursuant to the provisions of the OBCA, in order to be effective, the Name
Change Resolution must be approved by 66 2/3% of the votes cast in respect
thereof by Shareholders present in person or by proxy at the Meeting.
- 20 -
The following is the text of the
Name Change Resolution which will be put forward for approval by the
Shareholders at the Meeting:
BE IT RESOLVED AS A SPECIAL
RESOLUTION THAT:
|
(a) |
the Articles of the Corporation be amended to provide
that the Corporation change its name from Stem Cell Therapeutics Corp.
to Trillium Therapeutics Inc., or such other name that the Board of
Directors deems appropriate and as may be approved by applicable
regulatory authorities, including the TSX, if the Board of Directors
considers it to be in the best interests of the Corporation to implement
such a name change; |
|
|
|
|
(b) |
notwithstanding that this resolution has been duly passed
by the Shareholders, the Board of Directors is hereby authorized and
empowered, if it decides not to proceed with this resolution, to revoke
this resolution in whole or in part at any time prior to it being given
effect without further notice to, or approval of, the Shareholders;
and |
|
|
|
|
(c) |
any one director or officer of the Corporation be, and
such director or officer of the Corporation is hereby, authorized,
instructed and empowered, acting for, in the name of and behalf of the
Corporation, to do or to cause all such other acts and things in the
opinion of such director or officer of the Corporation as may be necessary
or desirable in order to fulfill the intent of these foregoing
resolutions. |
Unless otherwise directed, the
persons named in the enclosed forms of proxy intend to vote at the Meeting IN
FAVOUR of the Named Change Resolution.
Recommendation of the Board
The Board of Directors
unanimously recommends that Shareholders vote IN FAVOUR of the Name Change
Resolution.
Approval of the Share Consolidation
At the Meeting, Shareholders will
be asked to consider, and if deemed advisable, approve, the resolution
authorizing an amendment to the Corporations articles to consolidate the issued
and outstanding Common Shares (the Share Consolidation Resolution). The
Board of Directors believes it is in the best interests of the Corporation to
consolidate the issued and outstanding Common Shares of the Corporation on a
ratio of one post-consolidation Common Share for each 10 to 30 outstanding
pre-consolidation Common Shares (the Share Consolidation), with the
final ratio to be determined by the Board of Directors in its sole discretion.
If the Share Consolidation Resolution is approved, the Share Consolidation would
only be implemented, if at all, upon a determination by the Board of Directors
that it is in the best interests of the Corporation and its Shareholders, at
that time. The Board of Directors selection of the specific ratio will be based
primarily on the price of the Common Shares at the given time and expected
stability of that price.
If the proposed Share
Consolidation is implemented, the number of Common Shares issued and outstanding
will be reduced from approximately 124,377,031 Common Shares (as of April 22,
2014) to between approximately 4,145,901 (in the event of a 30 to 1
consolidation) to 12,437,703 (in the event of a 10 to 1 consolidation) Common
Shares, depending on the ratio selected by the Corporations Board of Directors.
The number of Series I Preferred Shares which are convertible on a one-for-one
basis to Common Shares will not change but the conversion ratio of Series I
Preferred Shares will change to reflect the consolidation ratio. The issued and
outstanding warrants which are each exercisable into one Common Share will be
reduced from approximately 138,724,781 (as of April 22, 2014) to between
approximately 4,624,159 (in the event of a 30 to 1 consolidation) and 13,872,478
(in the event of a 10 to 1 consolidation) warrants.
- 21 -
No fractional Common Shares will
be issued in connection with the Share Consolidation and, in the event that a
Shareholder would otherwise be entitled to receive a fractional Common Share,
upon such Share Consolidation, the number of Common Shares to be received by
such Shareholder will be rounded up or down to the nearest whole number.
Upon the Share Consolidation
becoming effective, the number of Common Shares issuable upon conversion of the
Series I Preferred Shares shall be adjusted in accordance with their terms and
the number of Common Shares issuable upon the due exercise of outstanding
warrants of the Corporation shall be adjusted in accordance with the terms of
such warrants set forth in the certificate and any warrant indenture governing
the warrants. No further action by the holders of Series I Preferred Shares and
warrants shall be required in order to give effect to these adjustments.
The Share Consolidation is
subject to regulatory approval, including approval of the TSX. As a condition to
the approval of a consolidation of shares listed for trading on the TSX, the TSX
requires, among other things, that the Corporation must meet,
post-consolidation, the continued listing requirements contained in Part VII of
the TSX Company Manual. Specifically, the Corporations securities may be
delisted if: (a) the market value of listed issued securities is less than
$3,000,000 over any period of 30 consecutive trading days; or (b) the market
value of the Corporations freely-tradable, publicly held securities is less
than $2,000,000 over any period of 30 consecutive trading days; or (c) the
number of freely-tradable, publicly held securities is less than 500,000; or (d)
the number of public security holders, each holding a board lot or more, is less
than 150.
If the Share Consolidation
Resolution is approved, the Board of Directors will determine when and if the
articles of amendment giving effect to the Share Consolidation would be filed,
and shall determine the share consolidation ratio. No further action on the part
of Shareholders would be required in order for the Board of Directors to
implement the Share Consolidation.
Notwithstanding approval of the
proposed Share Consolidation by Shareholders, the Board of Directors, in its
sole discretion, may delay implementation of the Share Consolidation or revoke
the Share Consolidation Resolution and abandon the Share Consolidation without
further approval or action by or prior notice to Shareholders.
If the Board Directors does
not implement the Share Consolidation prior to the next annual meeting of
Shareholders, the authority granted by the special resolution to implement the
Share Consolidation on these terms would lapse and be of no further force or
effect.
Reasons for the Share Consolidation
The Board of Directors believes
that it is in the best interests of the Corporation and the Corporation's
Shareholders to reduce the number of outstanding Common Shares by way of the
Share Consolidation, because it may be required as a condition to listing the
Corporations securities on a recognized US stock exchange (a US
Exchange) and also position the Common Shares in the best possible manner
to attract investor interest from the United States, Canada and other
jurisdictions.
- 22 -
Listing on US Exchange
The Corporation plans to explore
its eligibility for a listing of the Common Shares on a foreign stock exchange,
and must effect a consolidation of the Common Shares to achieve the minimum
share trading price required to satisfy the listing requirements of the foreign
exchange. The trading price of the Common Shares on the TSX is currently below
the minimum price for such foreign stock exchange and the proposed Share
Consolidation should allow the Corporation to achieve such minimum listing
price.
The Board of Directors of the
Corporation believes that Shareholder approval of a range of potential
consolidation ratios (rather than a single consolidation ratio) provides the
Board of Directors with flexibility to achieve the desired results of the Share
Consolidation, being an increase in the trading price of the Common Shares so as
to meet the minimum listing price of the previously mentioned foreign stock
exchange.
There can be no assurances
whatsoever that any increase in the market price per Common Share will result
from the proposed Share Consolidation and there is no assurance whatsoever that
the Corporation will submit an application for listing on any foreign stock
exchange, or if an application is made, that the Corporation will be successful
at achieving such a listing if the proposed Share Consolidation is implemented.
Share Certificates
If the proposed Share
Consolidation is approved by the Shareholders and all regulatory requirements
are complied with, including the Corporation obtaining approval of the TSX, and
implemented by the Board of Directors no later than one year from the date of
approval of the Share Consolidation by the Shareholders, following the
announcement by the Corporation of the effective date of the Share
Consolidation, registered Shareholders will be sent a transmittal letter by the
Corporations transfer agent, Computershare Investor Services Inc., containing
instructions on how to exchange their share certificates representing
pre-consolidation Common Shares for new share certificates representing
post-consolidation Common Shares. Non-registered Shareholders holding their
Common Shares through a bank, broker or other nominee should note that such
banks, brokers or other nominees may have different procedures for processing
the Share Consolidation than those that will be put in place by the Corporation
for the registered Shareholders. If you hold your Common Shares with such a
bank, broker or other nominee and if you have any questions in this regard, you
are encouraged to contact your nominee.
Risk Factors Associated with the Share Consolidation
Decline in Market Capitalization
There are numerous factors and
contingencies that could affect the prices of pre-consolidation Common Shares
and the post-consolidation Common Shares, including the Corporations reported
financial results in future periods, and general economic, geopolitical, stock
market and industry conditions. Accordingly, the market price of the
post-consolidation Common Shares may not be sustainable at the direct arithmetic
result of the Share Consolidation, and may be lower. If the market price of the
post-consolidation Common Shares is lower than it was before the Share
Consolidation on an arithmetic equivalent basis, the Corporations total market
capitalization (the aggregate value of all Common Shares at the then market
price) after the Share Consolidation may be lower than before the Share
Consolidation.
Potential for Adverse Effect on the Liquidity of the Common
Shares
If the Share Consolidation is
implemented and the market price of the post-consolidation Common Shares
declines, the percentage decline may be greater than would occur in the absence
of the Share Consolidation. The market price of the post-consolidation Common
Shares will, however, also be based on the Corporations performance and other
factors, which are unrelated to the number of Common Shares outstanding.
Furthermore, the liquidity of the post-consolidation Common Shares could be
adversely affected by the reduced number of consolidated Common Shares that
would be outstanding after the Share Consolidation.
- 23 -
No Fractional Shares to be Issued
No fractional consolidated Common
Shares will be issued in connection with the Share Consolidation and, in the
event that a Shareholder would otherwise be entitled to receive a fractional
consolidated share upon the Share Consolidation, such fraction will be rounded
up or down to the nearest whole number.
Effects of the Share Consolidation on the Common
Shares
The Consolidation Ratio will be
the same for all Common Shares. Except for any variances attributable to the
rounding up and down of fractional shares, the change in the number of issued
and outstanding Common Shares that will result from the Share Consolidation will
cause no change in the capital attributable to the Common Shares and will not
materially affect any Shareholders percentage ownership in the Corporation,
even though such ownership will be represented by a smaller number of
consolidated Common Shares.
The Share Consolidation will not
materially affect any Shareholders proportionate voting rights. Each
consolidated Common Share outstanding after the Share Consolidation will have
the same rights and privileges as the existing Common Shares.
The implementation of the Share
Consolidation would not affect the total Shareholders equity of the Corporation
or any components of Shareholders equity as reflected on the Corporations
financial statements except to change the number of issued and outstanding
Common Shares to reflect the Share Consolidation.
Procedure for Implementing the Share Consolidation
If the Share Consolidation
Resolution is approved by the Shareholders and the Board of Directors decides to
implement the Share Consolidation, the Corporation will file articles of
amendment with the Director under the OBCA in the form prescribed by the OBCA to
amend the Corporations articles. The Share Consolidation will become effective
as specified in the articles of amendment and the certificate of amendment
issued by the Director under the OBCA.
No Dissent Rights
Under the OBCA, Shareholders do
not have dissent and appraisal rights with respect to the proposed Share
Consolidation.
U.S. Federal Income Tax Considerations
A Shareholder taxable in the U.S.
generally will not recognize gain or loss on the Share Consolidation. In
general, the aggregate tax basis of the consolidated Common Shares received will
be equal to the aggregate tax basis of the existing Common Shares exchanged
therefor, and the holding period of the consolidated Common Shares received will
include the holding period of the existing Common Shares exchanged.
SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE
TAX CONSEQUENCES OF THE SHARE CONSOLIDATION TO THEM, INCLUDING THE EFFECTS OF
U.S. FEDERAL, STATE AND LOCAL, FOREIGN AND OTHER TAX LAWS.
CIRCULAR 230 WARNING: NOTHING HEREIN MAY BE USED BY ANY
TAXPAYER FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED UNDER THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED. EACH TAXPAYER SHOULD SEEK ADVICE
BASED ON THE TAXPAYERS PARTICULAR CIRCUMSTANCE FROM AN INDEPENDENT TAX ADVISOR.
- 24 -
Share Consolidation Resolution
Shareholders will be asked to
consider and, if thought advisable, to authorize and approve the Share
Consolidation Resolution. Pursuant to the provisions of the OBCA, in order to be
effective, the Share Consolidation Resolution must be approved by 66 2/3% of the
votes cast in respect thereof by Shareholders present in person or by proxy at
the Meeting.
The following is the text of the
Share Consolidation Resolution which will be put forward for approval by the
Shareholders at the Meeting:
BE IT RESOLVED AS A SPECIAL
RESOLUTION THAT:
|
(a) |
Pursuant to section 168(1)(h) of the Business
Corporations Act (Ontario) (the OBCA), the Articles of Stem Cell
Therapeutics Corp. (the Corporation) be amended to consolidate all of
the issued and outstanding common shares of the Corporation (the Common
Shares) on the basis of a ratio of one (1) post- consolidation Common
Share for each 10 to 30 outstanding pre-consolidation Common Shares, with
such ratio to be determined by the Board of Directors in its sole
discretion. Any resulting fractional Common Shares shall be either rounded
up or down to the nearest whole Common Share; |
|
|
|
|
(b) |
The Board of Directors of the Corporation be and it is
hereby authorized to revoke, without further approval of the Shareholders,
this special resolution at any time prior to the completion thereof,
notwithstanding the approval by the Shareholders of same, if determined,
in the Board of Directors sole discretion to be in the best interest of
the Corporation; and |
|
|
|
|
(c) |
Any director or officer of the Corporation be and is
hereby authorized to do all such further acts and things and execute all
such documents and instruments as may be necessary or desirable to give
effect to the matters contemplated by this special resolution, including
but not limited to, the filing of articles of amendment under the
OBCA. |
Unless otherwise
directed, the persons named in the enclosed form of proxy intend to
vote at the Meeting IN FAVOUR of the Share Consolidation Resolution.
Recommendation of the Board
The Board of Directors
believes that the proposed Share Consolidation of the Common Shares is in the
best interests of the Corporation and its Shareholders and unanimously
recommends that Shareholders vote IN FAVOUR of the Share Consolidation
Resolution.
Approval of By-Law Amendments
At the Meeting, Shareholders will
be asked to consider, and if deemed appropriate, pass two ordinary resolutions
authorizing two separate sets of amendments to the Corporations by-laws (the
ByLaw Amendment Resolutions). The Corporation wishes to amend its
by-laws to provide for: (i) the electronic direct registration of the
Corporations securities in a security holders name and allow such securities
to be transferred electronically; and (ii) the quorum for shareholders meetings
to be two persons holding at least 33 1/3% of the issued shares as more
particularly described below.
- 25 -
The Direct Registration System
(DRS) provides for electronic direct registration of securities in a
security holders name on the books of a corporation and allows such securities
to be transferred electronically under DRS. At the Corporations option,
shareholders will receive either a share certificate or a statement from the
Corporations transfer agent of the Common Shares, evidencing ownership of such
Common Shares, rather than a physical share certificate. The Corporation
believes the use of the DRS will improve access to the Corporations Common
Shares by United States investors. Amendments to By-Law No. 1 of the Corporation
(the By-Law) are required to allow the Corporation to utilize DRS.
The Corporation also seeks
approval from shareholders in respect of the amendment to the ByLaw to provide
that the quorum for shareholders meetings shall be two or more persons present
in person, each being a shareholder entitled to vote thereat, or a duly
appointed proxy or proxy holder for an absent shareholder so entitled, holding
or representing in the aggregate not less than 33 1/3% of the issued shares of
the Corporation.
Shareholder Approval
The following is the text of the By-Law Amendment Resolutions
which will be put forward for approval by the Shareholders at the Meeting:
BE IT RESOLVED AS AN ORDINARY
RESOLUTION THAT:
Section 8.3 of the By-Law is hereby
amended by adding the words underlined below:
8.3 Registration of
Transfer Subject to the Act, no transfer of shares shall be registered in
a securities register except on presentation of the certificate or
acknowledgment of the right to receive a certificate representing such
shares with an endorsement which complies with the Act, together with such
reasonable assurance or evidence of signature, identification and authority to
transfer as the Board may from time to time prescribe, on payment of all
applicable taxes and any fees prescribed by the Board, on compliance with such
restrictions on transfer as are authorized by the articles and on satisfaction
of any lien referred to in Section 8.5
Section 8.7 of the By-Law is
hereby amended by deleting the words struck out below and adding the word
underlined below:
8.7 Security Certificates Every holder of one or more
securities of the Corporation shall be entitled, at the security
holders Corporations option, to a security certificate, or to
a non-transferable written acknowledgement of such security holder's right to
obtain a security certificate, stating the number and class or series of
securities held by such security holder as shown on the securities register.
Security certificates and acknowledgements of a security holder's right to a
security certificate, respectively, shall be in such form as the Board shall
from time to time approve. Any security certificate shall be signed in
accordance with Section 2.2 and need not be under the corporate seal; provided
that, unless the Board otherwise determines, certificates representing
securities in respect of which a transfer agent and/or registrar has been
appointed shall not be valid unless 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 security certificates which are not valid unless
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 on security 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 on the Corporation. A security 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.
- 26 -
BE IT RESOLVED AS AN ORDINARY
RESOLUTION THAT:
Section 10.11 of the By-Law is deleted
and replaced with the following:
10.11 Quorum - Subject to the Act, a quorum for
the transaction of business at any meeting of shareholders shall be two or more
persons present in person, each being a shareholder entitled to vote thereat, or
a duly appointed proxy or proxy holder for an absent shareholder so entitled,
holding or representing in the aggregate not less than 33 1/3% of the issued and
outstanding shares of the Corporation. If a quorum is present at the opening of
any meeting of shareholders, the shareholders present in person or represented
by proxy may proceed with the business of the meeting notwithstanding that a
quorum is not present throughout the meeting. If a quorum is not present at the
opening of any meeting of shareholders, the shareholders present in person or
represented by proxy may adjourn the meeting to a fixed time and place, but may
not transact any other business.
A copy of the amended and
restated By-Law is attached to this Circular (reflecting both sets of amendments
referenced above) as Schedule D, with black-lines highlighting all amendments
to the By-Law. Unless otherwise directed, the persons named in the enclosed form
of proxy intend to vote at the Meeting IN FAVOUR of the By-Law Amendment
Resolutions.
Recommendation of the Board
The Board of Directors
believes that the By-Law amendments are in the best interests of the Corporation
and its Shareholders and unanimously recommends that Shareholders vote in favour
of the By-Law Amendment Resolutions.
OTHER MATTERS COMING BEFORE THE MEETING
Management knows of no other
matters to come before the Meeting other than as referred to in the Notice of
Annual and Special General Meeting. Should any other matters properly come
before the Meeting, the Common Shares represented by proxy solicited hereby will
be voted on such matters in accordance with the best judgement of the person
voting such proxy.
STATEMENT OF EXECUTIVE COMPENSATION
All dollar amounts in this
Circular are expressed in Canadian dollars unless otherwise indicated. The
Corporation does not have any subsidiaries.
- 27 -
Compensation Discussion and Analysis
The executive compensation policy
of the Corporation is determined by the Compensation Committee of the Board of
Directors. The Compensation Committee exercises general responsibility regarding
overall compensation of employees and executive officers of the Corporation.
In carrying out its duties and
responsibilities in relation to compensation, the Compensation Committee:
|
(a) |
annually assess the competitiveness and appropriateness
of the compensation package of the CEO, all other officers of the
Corporation and such other key employees of the Corporation or any
subsidiary of the Corporation as may be identified by the CEO and approved
by the Committee (collectively, the Designated
Employees); |
|
|
|
|
(b) |
annually review the performance goals and criteria for
the CEO and evaluate the performance of the CEO against such goals and
criteria establishes the amount of regular and incentive compensation, if
any, to be paid to the CEO; |
|
|
|
|
(c) |
annually review the CEOs performance evaluation of
Designated Employees and his recommendations with respect to the amount of
regular and incentive compensation, if any, to be paid to such Designated
Employees; |
|
|
|
|
(d) |
review any employment contracts or arrangements with each
of the Designated Employees, including any retiring allowance arrangements
or any similar arrangements to take effect in the event of a termination
of employment; |
|
|
|
|
(e) |
when requested by the CEO, review short term incentive or
reward plans, incentive stock option plans and any other long term
incentive plans; and |
|
|
|
|
(f) |
periodically, but at least every third year, review the
compensation of the Board of Directors. |
The objectives of the
Corporations executive compensation program are to: (a) to attract, retain and
motivate quality executives; (b) align the interests of executives with those of
the Corporations Shareholders; and (c) to provide total compensation to
executives that is competitive with that paid by other companies of comparable
size engaged in similar business in appropriate regions. The executive
compensation program has been designed to reward executives for the
reinforcement of the Corporations business objectives and values, the
achievement of the Corporations performance objectives and milestones, and
their individual performance.
The Corporations executive
total direct compensation is comprised of three primary elements: (i) base
salary, (ii) a short term incentive plan, which, if paid, generally consists of
a cash bonus, and (iii) a stock option plan which serves as a long term
incentive.
As soon as practical following
any year, the Board of Directors determines the performance of the Corporation
against pre-determined targets and milestones for that year. The resultant
corporate performance in that year is considered in connection with determining
an executives total direct compensation for the year.
With respect to the individual
components of an executives total direct compensation, the salary of each
executive is determined by the Compensation Committee each year. This will
depend on the recent performance of the executive, his or her potential as a
succession candidate for key roles and the Board of Directors perception of the
executives development in the position. The base salary review of each Named
Executive Officer (NEO) takes into consideration the current
competitive market conditions, experience, proven or expected performance, and
the particular skills of the NEO. Benchmarking is performed across
representative biotechnology companies.
- 28 -
A short-term incentive award, if
any, shall be a cash payment made by Corporation to the executive each year. The
Board of Directors will determine the amount of such payment based on normal
ranges for the executives compensation level as determined by applicable
corporate performance. The amount of the short term incentive award is subject
to increase or decrease based on the Compensation Committees assessment of the
individual performance of the executive and departments for which the executive
is responsible.
With respect to long-term
incentives, each year the executive may be awarded stock options. The amount of
the long term incentive award for each year shall be determined by the
Compensation Committee based on normal ranges for the executives target
compensation level as determined by reference to the applicable corporate
performance, and shall generally be determined to bring the executives total
direct compensation to the appropriate level after taking into account salary
and short term incentive payments. The Board of Directors takes into account
previous stock option grants to a particular individual when considering new
grants. The purpose and principal features of the Corporations stock option
plan is set out under the heading Approval of Stock Option Plan and
Incentive Plan Awards Stock Option Plan.
Risk Oversight
In carrying out its mandate, the
Compensation Committee reviews from time to time the risk implications of the
Corporations compensation policies and practices, including those applicable to
the Corporations executives. This review of the risk implications ensures that
compensation plans, in their design, structures and application have a clear
link between pay and performance and do not encourage excessive risk taking. Key
considerations regarding risk management include the following:
|
design of the compensation program to ensure
all executives are compensated equally based on the same or, depending on
the mandate and term of appointment of that particular executive,
substantially equivalent performance goals; |
|
|
|
balance of short-term performance incentives
with equity-based awards that vest over time; |
|
|
|
utilizing compensation policies that do not
rely solely on the accomplishment of specific tasks without consideration
to longer term risks and objectives. |
For the reasons set forth below,
the Board of Directors believes that the Corporations current executive
compensation policies and practices achieve an appropriate balance in relation
to the Corporations overall business strategy and do not encourage executives
to expose the Corporation to inappropriate or excessive risks.
While a significant feature of
the Corporations current executive compensation practice is the awarding of
stock options under the 2014 Stock Option Plan, and while such compensation is
at risk (i.e. not guaranteed), the Corporations long-term incentive plans are
designed such that stock options vest over a two to four year period and
therefore encourage sustainable Common Share price appreciation and reduce the
risk of actions which may have short-term advantages.
- 29 -
Additionally, the granting of
options is in accordance with the terms and provisions of the Corporations 2014
Stock Option Plan.
The base salaries set for the
Corporations executives are intended to provide a steady income regardless of
share price performance, allowing executives to focus on both near-term and
long-term goals and objectives without undue reliance on short term share price
performance or market fluctuations.
Compensation payable under the
Corporations bonus plan is overseen by the Compensation Committee. The
Compensation Committee does not consider the applicable periods set for bonus
purposes to be heavily weighed to the short-term and believes it has struck an
appropriate balance between short-term performance incentives and long-term
awards that vest over time.
Hedging and Offsetting
The Corporation does not have a
formal policy prohibiting its directors and officers from engaging in short
sales of securities of the Corporation or buying or selling puts, calls or other
derivatives that are designed to hedge or offset a decrease in the market value
of securities of the Corporation.
Currently, in the absence of such
a policy, the directors and officers of the Corporation are expected to act at
all times transparently, with integrity and with a view to the best interests of
the Corporation and its Shareholders in their securities trading activities.
It should be noted that any
transactions of this nature are subject to insider reporting requirements and
are reported on the System for Electronic Disclosure by Insiders (SEDI).
- 30 -
Summary Compensation Table
Outlined below is a summary of
the compensation paid, payable, awarded or granted by the Corporation for 2013
to the Executive Chairman, President and Chief Executive Officer, the Chief
Financial Officer and the Chief Scientific Officer (collectively, the Named
Executive Officers).
|
|
|
|
|
|
|
|
Non-equity incentive |
|
|
|
|
|
|
|
|
|
|
|
|
plan
compensation |
|
|
|
|
|
|
|
|
|
|
|
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option- |
|
|
|
|
|
|
|
|
Name and |
|
|
|
|
|
based |
|
Annual |
|
Long-term |
|
All other |
|
Total |
principal |
|
|
|
Salary |
|
awards |
|
incentive |
|
Incentive |
|
compensation |
|
compensation |
position(8) |
|
Year |
|
($) |
|
($)(6) |
|
Plans(7) |
|
plans |
|
($) |
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Niclas |
|
2013 |
|
217,500(6) |
|
262,679 |
|
120,000 |
|
Nil |
|
Nil |
|
600,179 |
Stiernholm(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Allan(2) |
|
2013 |
|
138,750 |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
138,750 |
Executive |
|
2012 |
|
200,000 |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
200,000 |
Chairman |
|
2011 |
|
100,000(1) |
|
177,100 |
|
Nil |
|
Nil |
|
Nil |
|
277,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Uger(1) |
|
2013 |
|
137,750(6) |
|
52,536 |
|
47,500 |
|
Nil |
|
Nil |
|
237,786 |
Chief Scientific |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allen Davidoff |
|
2011 |
|
166,154(3) |
|
15,000 |
|
Nil |
|
Nil |
|
80,000(3) |
|
261,154 |
Chief Scientific |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Parsons |
|
2013 |
|
106,042 |
|
26,268 |
|
25,000 |
|
Nil |
|
Nil |
|
157,310 |
CFO |
|
2012 |
|
93,525 |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
93,525 |
|
|
2011 |
|
47,175(4) |
|
7,625 |
|
Nil |
|
Nil |
|
Nil |
|
54,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Cook |
|
2011 |
|
68,477(5) |
|
7,500 |
|
15,000 |
|
Nil |
|
56,000(5) |
|
146,977 |
CFO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes: |
|
(1) |
Dr. Stiernholm and Dr. Uger joined the Corporation on the
acquisition of Trillium from April 9, 2013 and the salaries shown here are
for the period from this date to the end of 2013. Dr. Stiernholms annual
salary was $300,000 and Dr. Ugers salary was $190,000. |
(2) |
David Allan was appointed Executive Chairman on June 28,
2011. The information is this table reflects the compensation of Mr. Allan
in his role as an officer of the Corporation and subsequent to May 31,
2013, in his role as a consultant. Mr. Allan received compensation as a
Board member beginning Q2-2013 and this data is disclosed under Director
Compensation below. |
(3) |
Allen Davidoff ceased employment on December 31, 2011 and
he received a severance of $80,000. |
(4) |
James Parsons joined as CFO from August 25, 2011 and
worked on a part-time basis from 2011 to 2013. |
(5) |
Michael Cook ceased employment on August 25, 2011 and he
received a severance of $56,000. |
(6) |
Amount represents the grant date fair value of the award
using the Black-Scholes option pricing model. |
(7) |
These payments reflect cash bonuses on the achievement of
the 2013 corporate objectives. |
(8) |
The Corporation has not issued any share-based awards.
|
- 31 -
Option-Based Awards
Stock Option Plan
The 2014 Stock Option Plan
provides for the granting of stock options to officers, directors, employees and
consultants of the Corporation and its affiliates. The purpose of the 2014 Stock
Option Plan is to assist in attracting, retaining, and motivating directors,
officers, employees and consultants of the Corporation and its subsidiaries and
to closely align the personal interests of such directors, officers, employees
and consultants with those of Shareholders by providing an opportunity, through
options, to acquire an ownership interest in the Corporation. As at April 22,
2014, pursuant to the 2014 Stock Option Plan, the Corporation is entitled to
issue an additional 8,922,655 stock options. Below are some of the key features
of the 2014 Stock Option Plan:
1. |
directors, officers, employees and consultants of the
Corporation, or those of its subsidiaries, are eligible to receive options
under the 2014 Stock Option Plan; |
|
|
2. |
the maximum number of Common Shares issuable pursuant to
the 2014 Stock Option Plan is a rolling maximum equal to the aggregate
of 10% of the total number of outstanding Common Shares and the number of
Common Shares issuable upon conversion of the outstanding Series I
Preferred Shares in accordance with their terms. Any increase in the
issued and outstanding Common Shares or the number of Common Shares
issuable upon conversion of the outstanding Series I Preferred Shares will
result in an increase in the available number of Common Shares issuable
under the 2014 Stock Option Plan, and any exercises of options will result
in a corresponding increase to the number of options available for
granting under the 2014 Stock Option Plan; |
|
|
3. |
the exercise price for Common Shares under each option is
determined by the Board of Directors, as set forth under the 2014 Stock
Option Plan and in accordance with the rules of the TSX, at the time any
option is granted; |
|
|
4. |
the 2014 Stock Option Plan will provide that the
aggregate number of Common Shares reserved for issuance to any one person
under the 2014 Stock Option Plan in any one year period must not exceed 5%
of the aggregate of the then outstanding Common Shares plus the number of
Common Shares issuable upon conversion of the outstanding Series I
Preferred Shares unless the Corporation has obtained disinterested
Shareholder approval in respect of such grant and meets applicable TSX
requirements; |
|
|
5. |
all options granted under the 2014 Stock Option Plan
shall expire not later than the 10th anniversary of the date such options
were granted and may be exercised by the Participant as to such varying
percentages, on a cumulative basis, during the terms thereof as the Board
of Directors shall determine; |
|
|
6. |
options terminate within a prescribed period of time
following an optionholder ceasing to be an employee, director, officer or
consultant of the Corporation or a subsidiary of the Corporation. In the
event of death, the legal representatives of the deceased Participant
shall have the right for a period of 1 year (or until the normal expiry
date of the option rights of such Participant if earlier) from the date of
death of the Participant to exercise the deceased Participants option
with respect to all of the Optioned Shares of the deceased Participant to
the extent they were exercisable on the date of death; |
|
|
7. |
options granted under the 2014 Stock Option Plan are
non-transferrable and non-assignable. |
- 32 -
Outstanding Option-Based Awards
The following table sets forth
all awards outstanding as at December 31, 2013 held by Named Executive Officers
under the 2014 Stock Option Plan, as awards under the 2014 Stock Option Plan are
considered option-based awards under applicable securities laws. The value of
the unexercised in-the-money options as at December 31, 2013 has been
determined based on the excess of the closing price of the Common Shares on the
TSXV of $0.41 per Common Share over the exercise price of such options.
Outstanding Option-Based Awards
|
|
|
|
Option-based Awards |
|
|
|
|
Number of securities |
|
|
|
|
|
Value of unexercised |
|
|
underlying unexercised |
|
Option exercise |
|
|
|
in- the money options |
Name
|
|
options (#) |
|
price ($) |
|
Option expiration date |
|
($) |
Niclas Stiernholm |
|
50,000 |
|
1.00 |
|
Jul 18, 2016 |
|
Nil |
President and CEO |
|
1,275,141 |
|
0.25 |
|
Apr 8, 2023 |
|
204,023 |
|
|
|
|
|
|
|
|
|
David Allan(1) |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
Executive Chairman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Uger Chief |
|
255,028 |
|
0.25 |
|
Apr 8, 2023 |
|
40,804 |
Scientific Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James Parsons |
|
12,500 |
|
1.00 |
|
Aug 25, 2016 |
|
Nil |
CFO |
|
127,514 |
|
0.25 |
|
Apr 8, 2023 |
|
20,402 |
Notes: |
|
(1) |
David Allan received stock options in his
capacity of Director in 2013 see Director Compensation.
|
Value Vested or Earned During the Year
The following table sets forth
the value of the awards that vested for each Named Executive Officer under the
2014 Stock Option Plan in 2013 as well as non-equity incentive plan compensation
earned during the financial year ended December 31, 2013.
|
|
Option-based awards - |
|
Share-based awards - |
|
Non-equity incentive plan
|
|
|
Value vested during |
|
Value vested during the |
|
compensation Value earned
|
|
|
the year |
|
year |
|
during the year |
Name
|
|
($)(1) |
|
($) |
|
($) |
|
|
|
|
|
|
|
Niclas Stiernholm President and CEO |
|
Nil |
|
N/A |
|
120,000 |
|
|
|
|
|
|
|
David Allan Executive Chairman |
|
Nil |
|
N/A |
|
Nil |
|
|
|
|
|
|
|
Robert Uger Chief Scientific Officer
|
|
Nil |
|
N/A |
|
47,500 |
|
|
|
|
|
|
|
James Parsons CFO |
|
Nil |
|
N/A |
|
25,000 |
Notes:
1) |
Aggregate dollar value that would have been realized by
determining the difference between the closing market price of the
Corporations Common Shares on the TSXV and the exercise price of the
underlying option on each date during the fiscal year when an option award
vested. |
- 33 -
Securities Authorized for Issuance under Equity Compensation
Plan
The following table sets out
information concerning the number and price of securities to be issued under the
Corporations equity compensation plans as at December 31, 2013.
Equity Compensation Plan Information
|
|
|
|
|
Number of
securities |
|
|
|
|
|
remaining available
for |
|
Number of
securities to be |
|
Weighted-average
exercise |
|
future issuance
under |
|
issued upon
exercise of |
|
price of
outstanding |
|
equity compensation
plans |
|
outstanding
options, |
|
options, warrants
and |
|
(excluding
securities |
|
warrants and rights |
|
rights |
|
reflected in column (a)) |
|
|
|
|
|
|
Plan Category |
(a) |
|
(b) |
|
(c) |
|
|
|
|
|
|
Equity compensation plans approved by
securityholders |
14,175,238 |
|
$0.33 |
|
11,254,141 |
|
|
|
|
|
|
Equity compensation plans not approved
by securityholders |
Nil |
|
N/A |
|
Nil |
|
|
|
|
|
|
Total |
14,175,238 |
|
$0.33 |
|
11,254,141
|
Share-based Awards 2014 DSU Plan
The 2014 DSU Plan was approved at the annual general meeting of
Shareholders held on October 17, 2013. The purpose of the 2014 DSU Plan is to
provide an alternative form of compensation to satisfy annual and special
bonuses payable to directors and executive officers and to satisfy fees that may
be payable to directors for acting as directors of the Corporation. This form of
compensation promotes a greater alignment of interests amongst directors and
executive officers and the Corporations Shareholders.
The 2014 DSU Plan provides that the Board of Directors may,
from time to time, issue deferred share units to any eligible person (as defined
by the 2014 DSU Plan) at the time of declaring or awarding any bonuses or at the
time of payment of fees to directors. The number of DSUs granted is determined
by dividing the applicable awarded amount by the fair market value of the common
shares based on the five-day volume weighted average trading price as calculated
in accordance with the policies of the TSX. The maximum aggregate number of
common shares that may be reserved for issuance pursuant to the 2014 DSU Plan is
2,000,000 common shares. No DSUs have been issued to the date of this Circular.
- 34 -
Performance Graph
The following graph compares the total shareholder return of
$100 invested in our Common Shares with the total return of the S&P/TSX
Venture Composite Index.
Year Return on Investment
December 31, 2008 to December 31, 2013
2008 = $100
The performance trend shown by the above graph does not reflect
the trend in the Corporations compensation to Named Executive Officers reported
over the same period. The market price of the Common Shares, similar to the
share prices of many publicly-traded biotechnology companies, has historically
been highly volatile. The Corporations approach to compensation is designed to
attract and retain quality executives while promoting long-term profitability
and maximizing shareholder value. The Corporations Named Executive Officers are
compensated on the basis of individual and corporate performance and
compensation is benchmarked to other life sciences companies, rather than on
factors strictly tied to the performance of the Corporations shares in the
market.
- 35 -
Termination of Employment, Change of Control and Employment
Contracts
Effective April 9, 2013, the
Corporation entered into an employment agreement with Niclas Stiernholm which
has an indefinite term and provides for his employment as President and Chief
Executive Officer of the Corporation. The agreement provides for compensation
with respect to Dr. Stiernholms annual base salary of $300,000 and
participation in the Corporations bonus plan and stock option plan. Dr.
Stiernholms agreement provides for severance pay of fifteen months salary plus
bonus if terminated without cause and 18 months salary plus bonus if terminated
on a change in control. If the severance is as a result of a change in control,
all unvested stock options will also immediately vest. In the event that Dr.
Stiernholm was entitled to severance as of December 31, 2013, Dr. Stiernholm
would have been entitled to $472,500.
Effective April 9, 2013, the
Corporation entered into an employment agreement with Robert Uger which has an
indefinite term and provides for his employment as Chief Scientific Officer of
the Corporation. The agreement provides for compensation with respect to Dr.
Ugers annual base salary of $190,000 and participation in the Corporations
bonus plan and stock option plan. Dr. Ugers agreement provides for severance
pay of nine months base salary remuneration. If the severance is as a result of
a change in control, all unvested stock options will also immediately vest. In
the event that Dr. Uger was entitled to severance as of December 31, 2013, Dr.
Uger would have been entitled to $142,500.
Effective May 1, 2013, the
Corporation entered into an employment agreement with James Parsons which has an
indefinite term and provides for his employment as Chief Financial Officer of
the Corporation. The agreement provides for compensation with respect to Mr.
Parsons annual base salary of $200,000, prorated for part-time employment, and
participation in the Corporations bonus plan and stock option plan. Mr.
Parsons agreement provides for severance pay of nine months base salary
remuneration. If the severance is as a result of a change in control, all
unvested stock options will also immediately vest. In the event that Mr. Parsons
was entitled to severance as of December 31, 2013, Mr. Parsons would have been
entitled to $75,000. Prior to May 1, 2013, Mr. Parsons compensation was subject
to a consulting arrangement with an indefinite term.
Effective June 28, 2011, the
Corporation entered into an employment agreement with David Allan which had an
indefinite term and provided for his employment as Executive Chairman of the
Corporation. The agreement provided for compensation with respect to Mr. Allans
annual base salary of $200,000 and participation in the Corporations bonus plan
and stock option plan. Mr. Allan resigned his post of Executive Chairman on May
31, 2013 and retained the Chairmanship of the Board of Directors. Mr. Allan
received compensation as a member of the Board of Directors from April 1, 2013
and also received compensation under a consulting agreement with the Corporation
which may be terminated on 30 days notice.
Stock Option Plan
If an optionholder shall cease to
be a director, officer, consultant or employee of the Corporation or a service
provider to the Corporation due to retirement, resignation or termination, such
optionholder may exercise his or her options to the extent that the optionholder
was entitled to exercise his or her options at the date of such cessation,
provided that such exercise must occur within 120 days after the optionholder
ceases to be a director, officer, consultant, employee or service provider, or
until the normal expiry date of the subject options, whichever is earlier.
In the event of the death of any
optionholder, the legal representatives of the deceased optionholder shall have
the right for a period of 1 year (or until the normal expiry date of the option
rights of such Participant if earlier) from the date of death of the
optionholder to exercise the deceased optionholders option with respect to all
of the Optioned Shares of the deceased optionholder to the extent they were
exercisable on the date of death. Upon the expiration of such period, all
unexercised option rights of the deceased optionholder shall immediately become
terminated and shall lapse notwithstanding the original term of the option
granted to the deceased optionholder under the 2014 Stock Option Plan.
- 36 -
Director Compensation
During 2013, each independent
director of the Corporation was compensated with an annual fee of $20,000 paid
quarterly. Beginning in the second quarter of 2013, the chair of the Board of
Directors also received an additional fee of $10,000 paid quarterly. The Board
of Directors was also eligible to receive stock options. In addition, each
independent director of the Corporation was entitled to reimbursement for
reasonable expenses incurred in such capacity as a director, including travel
and other out-of-pocket expenses relating to meetings of the Board of Directors
and any committee meetings. Compensation paid to the independent directors for
the year ended December 31, 2013 and stock options issued to them for their
services as a director and committee member were as follows:
|
|
|
|
|
|
Non-equity |
|
|
|
|
|
|
|
|
Option-based |
|
incentive plan |
|
All other |
|
|
|
|
Fees earned |
|
awards |
|
compensation |
|
compensation |
|
Total |
Name |
|
($) |
|
($)(4) |
|
($) |
|
($) |
|
($) |
|
|
|
|
|
|
|
|
|
|
|
Mr. David Allan |
|
22,500 |
|
30,900 |
|
Nil |
|
Nil |
|
53,400 |
|
|
|
|
|
|
|
|
|
|
|
Dr. James DeMesa(1) |
|
20,000 |
|
20,600 |
|
Nil |
|
Nil |
|
40,600 |
|
|
|
|
|
|
|
|
|
|
|
Dr. Henry Friesen |
|
20,000 |
|
27,810 |
|
Nil |
|
Nil |
|
47,810 |
|
|
|
|
|
|
|
|
|
|
|
Dr. Robert Kirkman(3) |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
Nil |
|
|
|
|
|
|
|
|
|
|
|
Dr. Michael Moore |
|
15,000 |
|
24,720 |
|
Nil |
|
Nil |
|
39,720 |
|
|
|
|
|
|
|
|
|
|
|
Mr. R. Dean Peterson |
|
20,000 |
|
20,600 |
|
Nil |
|
Nil |
|
40,600 |
|
|
|
|
|
|
|
|
|
|
|
Dr. Niclas Stiernholm(2) |
|
5,000 |
|
Nil |
|
Nil |
|
Nil |
|
5,000 |
|
|
|
|
|
|
|
|
|
|
|
Dr. Calvin Stiller |
|
20,000 |
|
24,720 |
|
Nil |
|
Nil |
|
44,720
|
Notes: |
|
(1) |
Dr. DeMesas director fees were paid in U.S.
dollars. |
(2) |
Dr. Stiernholm ceased receiving fees as a
director when he became President and CEO on April 9, 2013 |
(3) |
Dr. Kirkman was appointed to the Board of
Directors on December 17, 2013. |
(4) |
Amount represents the grant date fair value of
the award using the Black-Scholes option pricing model.
|
Outstanding Option-Based Awards
The following table sets forth
all outstanding awards held by the independent directors of the Corporation as
at December 31, 2013 under the 2014 Stock Option Plan, as awards under the 2014
Stock Option Plan are considered option based awards under applicable
securities laws. The value of the unexercised in-the-money options as at
December 31, 2013 has been determined based on the excess of the closing price
of the Common Shares on the TSXV on December 31, 2013 of $0.41 per Common Share
over the exercise price of such options.
- 37 -
|
|
|
|
Option-based Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities |
|
|
|
|
|
|
|
|
underlying |
|
|
|
|
|
Value of unexercised |
|
|
unexercised options |
|
Option exercise price |
|
Option |
|
in-the-money options |
Name |
|
(#) |
|
($) |
|
expiration date |
|
($) |
|
|
|
|
|
|
|
|
|
Mr. David Allan(1) |
|
50,000 |
|
0.25 |
|
Apr 25, 2014 |
|
8,000 |
|
|
|
|
|
|
|
|
|
Dr. James DeMesa(2) |
|
12,000 |
|
1.00 |
|
Feb 24, 2014 |
|
Nil |
|
|
3,000 |
|
1.20 |
|
Aug 28, 2014 |
|
Nil |
|
|
20,000 |
|
1.70 |
|
Nov 24, 2014 |
|
Nil |
|
|
40,000 |
|
1.00 |
|
Mar 7, 2015 |
|
Nil |
|
|
100,000 |
|
0.25 |
|
Mar 7, 2015 |
|
16,000 |
|
|
|
|
|
|
|
|
|
Dr. Henry Friesen |
|
50,000 |
|
1.00 |
|
Jun 28, 2016 |
|
Nil |
|
|
135,000 |
|
0.25 |
|
Apr 8, 2023 |
|
21,600 |
|
|
|
|
|
|
|
|
|
Dr. Robert Kirkman |
|
Nil |
|
N/A |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
|
|
Dr. Michael Moore |
|
120,000 |
|
0.25 |
|
Apr 8, 2023 |
|
19,200 |
|
|
|
|
|
|
|
|
|
Mr. R. Dean |
|
50,000 |
|
1.00 |
|
Mar 6, 2015 |
|
Nil |
Peterson(3) |
|
100,000 |
|
0.25 |
|
Mar 6, 2015 |
|
16,000 |
|
|
|
|
|
|
|
|
|
Dr. Calvin Stiller |
|
50,000 |
|
1.00 |
|
Jul 18, 2016 |
|
Nil |
|
|
120,000 |
|
0.25 |
|
Apr 8, 2023 |
|
19,200 |
Notes: |
|
(1) |
Mr. Allan resigned from the Board of Directors
on January 25, 2014. |
(2) |
Dr. DeMesa resigned from the Board of Directors
on March 7, 2014, |
(3) |
Mr. Peterson resigned from the Board of
Directors on March 6, 2014. |
Value Vested or Earned During the Year
The following table sets forth
the value of the awards that vested for each independent director of the
Corporation under the 2014 Stock Option Plan in 2013. None of the independent
directors earned any non-equity incentive plan compensation during 2013. Only
the options which vested during the 2013 fiscal year that were in-the-money
are reported in the table below.
|
|
Option-based awards - |
|
|
|
|
|
|
Value vested during the |
|
Share-based awards - Value |
|
Non-equity incentive plan
|
|
|
year |
|
vested during the year |
|
compensation -Value |
Name |
|
($)(1) |
|
($) |
|
earned during the year |
|
|
|
|
|
|
|
Mr. David Allan |
|
Nil |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
Dr. James DeMesa |
|
Nil |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
Dr. Henry Friesen |
|
Nil |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
Dr. Robert Kirkman |
|
Nil |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
Dr. Michael Moore |
|
Nil |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
Mr. R. Dean Peterson |
|
Nil |
|
N/A |
|
N/A |
|
|
|
|
|
|
|
Dr. Calvin Stiller |
|
Nil |
|
N/A |
|
N/A |
Notes: |
|
(1) |
Aggregate dollar value that would have been realized by
determining the difference between the closing market price of the
Corporations Common Shares on the TSXV and the exercise price of the
underlying option on each date during the fiscal year when an option award
vested. |
- 38 -
REGULATORY MATTERS AND BANKRUPTCIES AND INSOLVENCIES
No nominee for director of the
Corporation is, as at the date of this Circular, or has been, within 10 years
before the date of this Circular, a director or executive officer of any company
that, while that person was acting in that capacity, (i) was the subject of a
cease trade or similar order or an order that denied the relevant company access
to any exemption under securities legislation for a period of more than 30
consecutive days, (ii) was subject to an event that resulted, after the director
or executive officer ceased to be a director or executive officer, in the
company being the subject of a cease trade or similar order or an order that
denied the relevant company access to any exemption under securities
legislation, for a period of more than 30 consecutive days, or (iii) within a
year of that person ceasing to act in that capacity, became bankrupt, made a
proposal under any legislation relating to bankruptcy or insolvency or was
subject to or instituted any proceedings, arrangement or compromise with
creditors or had a receiver, receiver manager or trustee appointed to hold its
assets.
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
As at the date of this Circular,
other than routine indebtedness as defined under applicable securities laws,
there exists no indebtedness of any of the directors or executive officers to
the Corporation.
INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
No informed person, proposed
director or any associate or affiliate of an informed person or proposed
director of the Corporation had a material interest, direct or indirect, in any
transaction or proposed transaction during the period ended December 31, 2013
that materially affected or would materially affect the Corporation.
INTERESTS OF CERTAIN PERSONS AND COMPANIES IN MATTERS TO BE
ACTED UPON
Management of the Corporation is
not aware of any material interest, direct or indirect, of any director or
nominee for director, executive officer or any associate or affiliate of any of
the foregoing in any matter to be acted on at the Meeting.
AUDIT COMMITTEE AND RELATIONSHIP WITH AUDITORS
National Instrument 52-110 Audit
Committees (NI 52-110) requires the Corporation to disclose annually
certain information relating to the Corporations audit committee (the Audit
Committee) and its relationship with the Corporations independent
auditors. This information may be found in the in the Corporations Audit
Committee Charter attached as Schedule A.
Audit Committee Charter
The Corporations Audit Committee
Charter is attached to this information circular as Schedule A.
Composition of the Audit Committee
During 2013, the Corporations
Audit Committee consisted of the following directors: Dr. Niclas Stiernholm
(Chair), Mr. Dean Peterson, and Dr. James DeMesa. On April 8, 2013, the Audit
Committee composition was changed to: Dr. Henry Friesen (Chair), Dr. James
DeMesa, and Dr. Calvin Stiller. Effective March 10, 2014, the Audit Committee
composition was changed to: Dr. Henry Friesen (Chair), Mr. Luke Beshar, and Dr.
Robert Kirkman, and Mr. Beshar became Chair of the Audit Committee on April 1,
2014.
- 39 -
As such terms are defined in NI 52-110, all members are
independent and financially literate.
Relevant Education and Experience
The following describes the
education and experience of each Audit Committee member that is relevant in the
performance of his responsibilities as an Audit Committee member:
Luke Beshar is
Executive Vice President and Chief Financial Officer of NPS Pharmaceuticals. He
joined the company in 2007 and has been responsible for financial management,
investor relations, information technology, technical operations, supply-chain
management, facilities, project management, contracts & outsourcing, and
alliance management. Under his financial leadership, NPS secured approximately
$400M of capital and its market capitalization increased from $180 million to
more than $3 billion. Prior to joining NPS, Mr. Beshar served as Executive Vice
President and Chief Financial Officer of Cambrex Corporation, a global life
sciences company. At Cambrex, his accomplishments included raising approximately
$600 million of new capital, building a global finance team, and leading a
process of evaluating strategic alternatives, which resulted in the sale of
non-strategic operations for $460 million and an $11 per share special dividend
to Shareholders. Mr. Beshar began his career with Arthur Andersen & Co. and
is a certified public accountant. He obtained his bachelors degree in
Accounting and Finance from Michigan State University and is a graduate of The
Executive Program at the Darden Graduate School of Business at the University of
Virginia.
Dr. Henry Friesen was the
President of the Canadian Governments Medical Research Council, President of
the National Cancer Institute of Canada and President of the Canadian Society
for Clinical Investigation. He is the Past Founding Chair of Genome Canada. Dr.
Friesen was Chair of the Gairdner Foundation whose international awards are
Canadas most prestigious prizes in the biomedical sciences and Chair, Genome
Canada, a $600 million budget non-profit organization that supports
genomics/proteomics programs to position Canada as a world leader in selected
areas in this important sector. From 1991 to 2000, Dr. Friesen was President of
the Medical Research Council of Canada and was instrumental in transforming it
into the Canadian Institutes of Health Research, an organization with an annual
budget in 2008 of over $900 million dedicated to supporting Canadian researchers
as well as industry participants. Dr. Friesen has served on the boards of
several life science companies including Sanofi Pasteur Canada, YM BioSciences
Inc. and Spectral Diagnostics Inc.
Dr. Kirkman has broad executive experience from several public
biotechnology companies. He currently serves as the President and Chief
Executive Officer of Oncothyreon Inc., an oncology company with a
long-established interest in the immunotherapy field. He previously held various
executive positions at Xcyte Therapies, another immunotherapy company, and
Protein Design Labs. Dr. Kirkman began his career as a clinician-scientist,
holding various positions at Brigham and Womens Hospital, Boston, including
Chief, Division of Transplantation. Dr. Kirkman holds an M.D. degree from
Harvard Medical School and a B.A. in economics from Yale University.
Audit Committee Oversight
Since the commencement of the
Corporations most recently completed fiscal period and adoption of the Audit
Committee charter, the Board of Directors has not failed to adopt a
recommendation of the Audit Committee to nominate or compensate an external
auditor.
- 40 -
Reliance on Certain Exemptions
The Corporation has not relied on
the exemptions contained in section 2.4 or Part 8 of NI 52-110 in the most
recently completed fiscal period.
Pre-Approval Policies and Procedures
The Audit Committee has not
adopted specific policies and procedures for the engagement of non-audit
services. The Audit Committee will review the engagement of non-audit services
as required.
External Auditors Service Fees (By Category)
The aggregate fees billed and
accrued by the Corporations external auditor in the last two fiscal periods for
auditor service fees is as follows:
FINANCIAL PERIOD
ENDING |
AUDIT
FEES(1) |
AUDIT RELATED
FEES(2) |
TAX FEES |
ALL OTHER
FEES(3) |
December 31, 2013
|
$50,000 |
$45,000 |
$ -
|
$ -
|
December 31, 2012
|
$40,000 |
$15,000 |
$ -
|
$
43,000 |
Notes: |
|
(1) |
Includes fees related to the fiscal year audit,
notwithstanding when the fees and expenses were billed or when the
services were rendered. |
(2) |
For 2013, includes incremental audit procedures related
to the purchase price allocation of Trillium and an interim review fee for
Q3 2013. For 2012, included interim review fees for Q3 2012. |
(3) |
For 2012, includes fees related to the filing of a
prospectus supplement. |
CORPORATE GOVERNANCE DISCLOSURE
Corporate governance relates to
the activities of the Board of Directors, the members of which are elected by
and accountable to the Shareholders, and accounts for the role of management who
are appointed by the Board of Directors and charged with the day to day
management of the Corporation. The Board of Directors and senior management
consider good corporate governance to be central to the effective and efficient
operation of the Corporation. National Instrument 58-101 Disclosure of
Corporate Governance Practices (NI 58-101) requires the Corporation
to disclose annually in its Circular certain information concerning its
corporate governance practices, as set forth below.
Board of Directors
The Board of Directors is
responsible for overseeing the management of the Corporation and for the conduct
of the Corporations affairs generally. Each director is elected annually by the
Shareholders and serves for a term that will end at the Corporations next
annual meeting. The Board of Directors elected in fiscal 2013 consisted of
seven members, six of whom were independent. Dr. James DeMesa, Mr. R.
Dean Peterson, Dr. Henry Friesen, Dr. Michael Moore, Mr. David Allan and Dr.
Calvin Stiller (Chair) were independent meaning that they are not in a
relationship which could reasonably interfere with the exercise of their
independent judgment. Dr. Niclas Stiernholm became the Corporations President
and CEO on April 9, 2013 and therefore became a non-independent director.
Subsequent to year-end, Mr. David Allan, Mr. Dean Peterson and Dr. James DeMesa
retired from the Board of Directors, and Dr. Robert Kirkman, Mr. Luke Beshar and
Dr. Thomas Reynolds were appointed to the Board of Directors. The three new
appointees are independent directors.
- 41 -
The Board of Directors
facilitates its exercise of independent supervision over the Corporations
management through a combination of formal meetings of the Board of Directors
and informal discussions amongst board members. The Corporate Governance and
Nominating Committee oversees all governance matters and looks to management of
the Corporation to keep it apprised of all significant developments affecting
the Corporation and its operations. All major acquisitions, dispositions,
investments and contracts and other significant matters outside the ordinary
course of the Corporations business are subject to approval by the Board of
Directors.
During the most recently
completed financial year ended December 31, 2013, the Board of Directors held
seven formal board meetings. The remaining decisions during the year were passed
by written resolution following informal discussions amongst the directors and
management.
The Board of Directors functions
independently as a majority of the members of the Board of Directors are not
involved in management. Also, when appropriate, the Board of Directors excuses
management from meetings and conducts business and makes decisions exclusive of
management. During 2013, five such in-camera sessions were held. In addition,
each Board of Directors committee is comprised of independent directors.
The responsibilities of the Chair
of the Board of Directors includes (i) providing leadership to enhance the
effectiveness and focus of the Board, (ii) calling and chairing meetings of the
Board of Directors ensuring that the Board of Directors meets on a regular
basis, at least quarterly, (iii) setting with the Chief Executive Officer the
agenda for each meeting, and (iv) ensuring that the Board of Directors receives
adequate and regular updates from Management on all matters necessary for the
Board of Directors to discharge its responsibilities.
The Board of Directors does not
have a written mandate, however, the Board of Directors delineates its role and
responsibilities by overseeing the conduct of the business of the Corporation
and the activities of management who are responsible for the day-to-day conduct
of the business of the Corporation. The Board of Directors further operates by
delegating certain of its authorities to management and by reserving certain
powers to itself. The Board of Directors retains the responsibility of managing
its own affairs including selecting its Chairman, nominating candidates for
election to the Board, constituting committees of the full Board of Directors
and determining compensation for the directors. Subject to the Corporations
constating documents, the Board of Directors may constitute, seek the advice of
and delegate powers, duties and responsibilities to committees of the Board.
Each of the committees of the Board of Directors has a charter which sets out
the responsibilities of the committee and the role of the chair of each
committee.
Board and Committee Meetings Held for the Fiscal Year Ended
December 31, 2013
|
Number of Meetings |
|
Dates of Meetings |
|
|
|
|
Board of Directors |
7 |
|
Mar 7, Apr 8, Apr 29, May 23, |
|
|
|
Aug 27, Oct 7, Nov 15 |
|
|
|
|
Audit Committee |
6 |
|
Jan 16, Apr 29, May 23, Aug 27, |
|
|
|
Oct 21, Nov 18 |
|
|
|
|
Corporate Governance and |
1 |
|
May 15 |
Nominating Committee |
|
|
|
|
|
|
|
Compensation Committee |
1 |
|
May 15 |
|
|
|
|
Total Number of Meetings Held |
15 |
|
|
- 42 -
Attendance of Directors for the Fiscal Year Ended December
31, 2013
Director |
Board |
Audit |
Corporate |
Compensation |
|
Meetings |
Committee |
Governance |
Committee |
|
Attended |
Meetings |
Committee |
Meetings |
|
|
Attended(1,2) |
Meetings |
Attended(2) |
|
|
|
Attended(2) |
|
David Allan |
7 |
- |
- |
1 |
James DeMesa |
7 |
6 |
- |
1 |
Henry Friesen |
7 |
5 |
1 |
- |
Robert Kirkman(4) |
- |
- |
- |
- |
Michael Moore(3) |
4 |
- |
1 |
1 |
R. Dean Peterson |
6 |
- |
- |
- |
Niclas Stiernholm |
7 |
1 |
- |
- |
Calvin Stiller |
7 |
5 |
1 |
- |
Notes: |
|
(1) |
Audit Committee attendance is determined based
on membership of the Audit Committee during the year ended December 31,
2013. |
(2) |
Committee attendance results above are recorded
only for committee members. If non-committee members attend a committee
meeting, their attendance is not recorded above. |
(3) |
Dr. Moore joined the Board of Directors on
April 9, 2013. |
(4) |
Dr. Kirkman joined the Board of Directors on
December 17, 2013 and therefore did not attend any meetings in 2013.
|
Directorships
Each of the directors of the
Corporation is also a director of other Reporting Issuers, as described below:
DIRECTOR |
COMPANY |
Dr. Robert Kirkman |
Oncothyreon Inc. |
Dr.
Thomas Reynolds |
MEI
Pharma, Inc. |
Dr.
Calvin R. Stiller |
Magor
Corporation |
Orientation and Continuing Education
The Corporation does not
currently have a formal orientation or continuing education program for new
directors. New directors are provided with access to recent, publicly filed
documents of the Corporation, technical reports and internal financial
information and given copies of Board of Directors minutes and corporate
governance materials. Directors are encouraged to ask questions and communicate
with management, auditors and technical consultants to keep themselves current
with industry trends and developments and changes in legislation.
- 43 -
Ethical Business Conduct
Ethical business behaviour is of
great importance to the Board of Directors and the management of the
Corporation. The Corporation has instituted policies on disclosure, insider
trading as well as a whistleblower policy for all staff and personnel to report
any fraudulent or illegal acts on an anonymous basis directly to the Audit
Committee chair.
In addition, as some of the
directors of the Corporation also serve as directors and officers of other
companies engaged in similar activities, the Board of Directors must comply with
the conflict of interest provisions of the Business Corporations Act
(Ontario), as well as the relevant securities regulatory instruments, in order
to ensure that directors exercise independent judgment in considering
transactions and agreements in respect of which a director or officer has a
material interest. Any director would be required to declare the nature and
extent of his interest and would not be entitled to vote at meetings which
involve such conflict.
The Board of Directors has also
adopted a Code of Business Conduct and Ethics (Code) intended to document the
principles of conduct and ethics to be followed by the Corporation employees,
officers and directors. A copy of the Corporations Code can be obtained under
the Corporations profile on www.sedar.com or by written request to the
Corporations Chief Financial Officer, at 96 Skyway Avenue, Toronto, Ontario,
M9W 4Y9.
Nomination of Directors
On April 8, 2013, the Board of
Directors formed a Corporate Governance and Nominating Committee of the Board of
Directors to perform the function of determining the need for and selecting
candidates for the Board of Directors. The primary duties and responsibilities
of the Corporate Governance and Nominating Committee are to review and make
recommendations to the Board of Directors in respect of the governance of the
Corporation, identify and recommend new candidates to the Board, and assess
directors on an on-going basis.
Compensation Committee
On April 8, 2013, the Board of
Directors of the Corporation formed the Compensation Committee consisting of the
following independent directors: Dr. Michael Moore (Chair), Mr. Dean Peterson,
and Mr. David Allan. In March 2014, Dr. Kirkman and Dr. Thomas Reynolds joined
the Compensation Committee on the retirement of Mr. Allan and Mr. Peterson.
The Compensation Committee is
charged with the responsibility for reviewing executive compensation policies
and guidelines for the Corporation, recommending to the Board of Directors
matters with respect to compensation structure, incentive compensation plans and
equity-based plans, and monitoring the administration of the Corporations
executive officer incentive and other compensation related plans. The
Corporations Board of Directors has adopted a written mandate for the Committee
that is available on the Corporations website.
Relevant Education and Experience
The following describes the
education and experience of each Compensation Committee member that is relevant
in the performance of his responsibilities as a Compensation Committee member:
Dr. Moore was most recently Chief Executive Officer and Director of PIramed Ltd,
a UK-based biotechnology company recently acquired by Roche. He is also
Associate Professor at the Brunel Institute Mr. Luke Beshar, and Dr. Robert
Kirkman, and Mr. Beshar became Chair of the Audit Committee on April 1, 2014.
Dr. Moore was most recently Chief Executive Officer and Director of PIramed Ltd, a UK-based
biotechnology company recently acquired by Roche. He is also Associate Professor at the Brunel Institute of Cancer Genetics and Pharmacogenomics, a post he has held since 1997. Prior to joining PIramed, he
held several progressive positions at Xenova Group plc (1988-2003), including Chief Scientific Officer
and Research Director. He also acted as Chairman for Phogen (2001-2003), a joint venture between
Xenova and Marie Curie Cancer Care.
- 44 -
Dr. Thomas Reynolds served as
Chief Medical Officer of Seattle Genetics from March 2007 until his retirement
in February 2013. While at Seattle Genetics, he was responsible for building and
leading an integrated clinical development, regulatory and medical affairs
organization, highlighted by the development and approval of ADCETRIS®. From
2002 to 2007, Dr. Reynolds served at ZymoGenetics (acquired by Bristol-Myers
Squibb in 2010), most recently as Vice President, Medical Affairs, where he
oversaw the clinical development and regulatory filing of RECOTHROM®.
Previously, he was Vice President, Clinical Affairs at Targeted Genetics, and
before that he was at Somatix Therapy (acquired by Cell Genesys in 1997). Dr.
Reynolds received his M.D. and Ph.D. in Biophysics from Stanford University and
a B.A. in Chemistry from Dartmouth College.
Dr. Kirkmans qualifications are
discussed above under Audit Committee Relevant Education and Experience.
Other Committees
The Corporation may establish
Special Committees from time to time to deal with specific matters.
For a description of the Audit
Committee see above under Audit Committee and Relationship with Auditors and
Schedule A hereto which contains a copy of the Audit Committee charter.
Assessments
The Board of Directors has
developed a formal questionnaire to be completed by each director on an annual
basis for the purpose of formally assessing the effectiveness of the Board of
Directors as a whole, committees of the Board, and the contribution of
individual directors. These questionnaires, and the issues arising therefrom,
are intended to be reviewed and assessed by the Chair on an annual basis or more
frequently from time to time as the need arises. The Chair takes appropriate
action as required based on the results obtained.
ADDITIONAL INFORMATION
Additional information relating
to the Corporation can be found on SEDAR at www.sedar.com. Financial information
is provided in the Corporations audited consolidated financial statements for
the year ended December 31, 2013 and the related Managements Discussion and
Analysis (MD&A). Each of these documents is available on SEDAR at
www.sedar.com and are incorporated herein by reference.
Copies of these consolidated
financial statements and MD&A may be obtained (in some cases upon payment of
a reasonable charge if the request is made by a person or company that is not a
securityholder of the Corporation) upon written request to James Parsons, CFO,
at: Stem Cell Therapeutics Corp., 96 Skyway Avenue, Toronto, Ontario, M9W 4Y9.
- 45 -
DIRECTORS APPROVAL
The contents and the sending of
this Circular have been approved by the directors.
DATED the 22nd day of April, 2014.
SCHEDULE A
AUDIT COMMITTEE CHARTER
Policy Statement
It is the policy of Stem Cell Therapeutics Corp. (the
Corporation) to establish and maintain an Audit Committee, composed
entirely of independent directors, to assist the Board of Directors (the
Board) in carrying out its oversight responsibility for the
Corporations internal controls, financial reporting and risk management
processes. The Audit Committee will be provided with resources commensurate with
the duties and responsibilities assigned to it by the Board including
administrative support. If determined necessary by the Audit Committee, it will
have the discretion to institute investigations of improprieties, or suspected
improprieties within the scope of its responsibilities, including the standing
authority to retain special counsel or experts.
Composition of the Committee
1. |
The Audit Committee shall consist of at least three
directors. The Board shall appoint the members of the Audit Committee. The
members of the Committee shall appoint one member of the Audit Committee
to be the Chair of the Audit Committee. |
|
|
2. |
Each director appointed to the Audit Committee by the
Board shall be an independent director who is unrelated. An outside,
unrelated director is a director who is independent of management and is
free from any interest, any business or other relationship which could, or
could reasonably be perceived, to materially interfere with the directors
ability to act with a view to the best interests of the Corporation, other
than interests and relationships arising solely from shareholding. In
determining whether a director is independent of management, the Board
shall make reference to the then current legislation, rules, policies and
instruments of applicable regulatory authorities. |
|
|
3. |
Each member of the Audit Committee shall be financially
literate. In order to be financially literate, a director must be, at a
minimum, able to read and understand basic financial statements. |
|
|
4. |
A director appointed by the Board to the Audit Committee
shall be a member of the Audit Committee until replaced by the Board or
until his or her resignation. |
|
|
5. |
The Chief Executive Officer (the CEO) and
Chairman of the Board shall be ex officio members of the Audit
Committee. |
Meetings of the Committee
6. |
The Audit Committee shall convene a minimum of four times
each year at such times and places as may be designated by the Chair of
the Audit Committee and whenever a meeting is requested by the Board, a
member of the Audit Committee, the auditors, or a senior officer of the
Corporation. Meetings of the Audit Committee shall correspond with the
review of the quarterly financial statements and management discussion and
analysis. |
|
|
7. |
The rules for calling, holding, conducting and adjourning
meetings of the Audit Committee shall be the same as those governing
meetings of the Directors as are set out in the Corporations
By-laws. |
- 2 -
8. |
Notice of each meeting of the Audit Committee shall be
given to each member of the Audit Committee, the Chairman of the Board and
the CEO. |
|
|
9. |
Notice of a meeting of the Audit Committee
shall: |
|
(a) |
be in writing; |
|
|
|
|
(b) |
state the nature of the business to be transacted at the
meeting in reasonable detail; |
|
|
|
|
(c) |
to the extent practicable, be accompanied by copies of
documentation to be considered at the meeting; and |
|
|
|
|
(d) |
be given at least two business days prior to the time
stipulated for the meeting or such shorter period as the members of the
Audit Committee may permit. |
10. |
A quorum for the transaction of business at a meeting of
the Audit Committee shall consist of a majority of the members of the
Audit Committee (excluding the Chairman of the Board and CEO). However, it
shall be the practice of the Audit Committee to require review, and, if
necessary, approval of certain important matters by all members of the
Audit Committee. |
|
|
11. |
A member or members of the Audit Committee may
participate in a meeting of the Audit Committee by means of telephonic,
electronic or other communication facilities, as such permits all persons
participating in the meeting to communicate adequately with each other. A
member participating in such a meeting by any such means is deemed to be
present at the meeting. |
|
|
12. |
In the absence of the Chair of the Audit Committee, the
members of the Audit Committee shall choose one of the members present to
be Chair of the meeting. In addition, the members of the Audit Committee
shall choose one of the persons present to be the Secretary of the
meeting. |
|
|
13. |
The Chairman of the Board, senior management of the
Corporation and other parties may attend meetings of the Audit Committee;
however the Audit Committee (i) shall meet with the external auditors
independent of management and (ii) may meet separately with or without
management. |
|
|
14. |
Minutes shall be kept of all meetings of the Audit
Committee and shall be signed by the Chair and the Secretary of the
meeting. |
Duties and Responsibilities of the Committee
15. |
The Audit Committees primary duties and responsibilities
are to: |
|
(a) |
identify and monitor the management of the principal
risks that could impact the financial reporting of the
Corporation; |
|
|
|
|
(b) |
monitor the integrity of the Corporations financial
reporting process and system of internal controls regarding financial
reporting and accounting compliance; |
|
|
|
|
(c) |
monitor the independence and performance of the
Corporations external auditors; |
|
|
|
|
(d) |
deal directly with the external auditors to approve
external audit plans, other services (if any) and fees; |
|
|
|
|
(e) |
directly oversee the external audit process and
results; |
- 3 -
|
(f) |
provide an avenue of communication among the external
auditors, management and the Board; |
|
|
|
|
(g) |
ensure that an effective whistle blowing procedure
exists to permit stakeholders to express any concerns regarding accounting
or financial matters to an appropriately independent individual;
and |
|
|
|
|
(h) |
ensure that an appropriate Code of Conduct is in place
and understood by employees and directors of the
Corporation. |
16. |
The Audit Committee shall have the authority
to: |
|
(a) |
inspect any and all of the books and records of the
Corporation, its subsidiaries and affiliates; |
|
|
|
|
(b) |
discuss with the management of the Corporation, its
subsidiaries and affiliates and senior staff of the Corporation, any
affected party and the external auditors, such accounts, records and other
matters as any member of the Audit Committee considers necessary and
appropriate; |
|
|
|
|
(c) |
engage independent counsel and other advisors as it
determines necessary to carry out its duties; and |
|
|
|
|
(d) |
set and pay the compensation for any advisors employed by
the Audit Committee. |
17. |
The Audit Committee shall, at the earliest opportunity
after each meeting, report to the Board the results of its activities and
any reviews undertaken and make recommendations to the Board as deemed
appropriate. |
|
|
18. |
The Audit Committee shall: |
|
(a) |
review the audit plan with the Corporations external
auditors and with management; |
|
|
|
|
(b) |
discuss with management and the external auditors any
proposed changes in major accounting policies or principles, the
presentation and impact of significant risks and uncertainties and key
estimates and judgments of management that may be material to financial
reporting; |
|
|
|
|
(c) |
review with management and with the external auditors
significant financial reporting issues arising during the most recent
fiscal period and the resolution or proposed resolution of such
issues; |
|
|
|
|
(d) |
review any problems experienced or concerns expressed by
the external auditors in performing an audit, including any restrictions
imposed by management or significant accounting issues on which there was
a disagreement with management; |
|
|
|
|
(e) |
review with senior management the process of identifying,
monitoring and reporting the principal risks affecting financial
reporting; |
- 4 -
|
(f) |
review audited annual financial statements and related
documents in conjunction with the report of the external auditors and
obtain an explanation from management of all significant variances between
comparative reporting periods; |
|
|
|
|
(g) |
consider and review with management, the internal control
memorandum or management letter containing the recommendations of the
external auditors and managements response, if any, including an
evaluation of the adequacy and effectiveness of the internal financial
controls of the Corporation and subsequent follow up to any identified
weaknesses; |
|
|
|
|
(h) |
review with financial management and the external
auditors the quarterly unaudited financial statements and management
discussion and analysis before release to the public; |
|
|
|
|
(i) |
before release, review and if appropriate, recommend for
approval by the Board, all public disclosure documents containing audited
or unaudited financial information, including any prospectuses, annual
reports, annual information forms, management discussion and analysis and
press releases; and |
|
|
|
|
(j) |
oversee any of the financial affairs of the Corporation,
its subsidiaries or affiliates, and, if deemed appropriate, make
recommendations to the Board, external auditors or
management. |
19. |
The Audit Committee shall: |
|
(a) |
evaluate the independence and performance of the external
auditors and annually recommend to the Board the appointment of the
external auditor or the discharge of the external auditor when
circumstances are warranted; |
|
|
|
|
(b) |
consider the recommendations of management in respect of
the appointment of the external auditors; |
|
|
|
|
(c) |
pre-approve all non-audit services to be provided to the
Corporation or its subsidiary entities by its external auditors, or the
external auditors of the Corporations subsidiary entities; |
|
|
|
|
(d) |
approve the engagement letter for non-audit services to
be provided by the external auditors or affiliates, together with
estimated fees, and considering the potential impact of such services on
the independence of the external auditors; |
|
|
|
|
(e) |
when there is to be a change of external auditors, review
all issues and provide documentation related to the change, including the
information to be included in the Notice of Change of Auditors and
documentation required pursuant to National Policy 31 (or any successor
legislation) of the Canadian Securities Administrators and the planned
steps for an orderly transition period; and |
|
|
|
|
(f) |
review all reportable events, including disagreements,
unresolved issues and consultations, as defined by applicable securities
policies, on a routine basis, whether or not there is to be a change of
external auditors. |
20. |
The Audit Committee shall: |
- 5 -
|
(a) |
review with management at least annually, the financing
strategy and plans of the Corporation; and |
|
|
|
|
(b) |
review all securities offering documents (including
documents incorporated therein by reference) of the
Corporation. |
21. |
The Audit Committee shall review the amount and terms of
any insurance to be obtained or maintained by the Corporation with respect
to risks inherent in its operations and potential liabilities incurred by
the directors or officers in the discharge of their duties and
responsibilities. |
|
|
22. |
The Audit Committee shall review the appointments of the
Chief Financial Officer and any key financial managers who are involved in
the financial reporting process. |
|
|
23. |
The Audit Committee shall enquire into and determine the
appropriate resolution of any conflict of interest in respect of audit or
financial matters, which are directed to the Audit Committee by any member
of the Board, a Shareholder of the Corporation, the external auditors, or
senior management. |
|
|
24. |
The Audit Committee shall periodically review with
management the need for an internal audit function. |
|
|
25. |
The Audit Committee shall establish and maintain
procedures for: |
|
(a) |
the receipt, retention and treatment of complaints
received by the Corporation regarding accounting controls, or auditing
matters; and |
|
|
|
|
(b) |
the confidential, anonymous submission by employees of
the Corporation on concerns regarding questionable accounting or auditing
matters. |
26. |
The Audit Committee shall review and approve the
Corporations hiring policies regarding employees and former employees of
the present and former external auditors or auditing matters. |
|
|
27. |
The Audit Committee shall review with the Corporations
legal counsel as required but at least annually, any legal matter that
could have a significant impact on the Corporations financial statements,
and any enquiries received from regulators, or government
agencies. |
|
|
28. |
The Audit Committee shall assess, on an annual basis, the
adequacy of this mandate and the performance of the Audit
Committee. |
|
|
29. |
In contributing to the Audit Committees discharging of
its duties under this mandate, each member of the Audit Committee shall be
entitled to rely in good faith upon: |
|
|
|
|
(a) |
accounting information of the Corporation represented to him or her by an
officer of the Corporation or in a written report of the auditors, and |
|
|
|
|
(b) |
any report of a lawyer, accountant, engineer, appraiser or other person
whose profession lends credibility to a statement made by any such
persons. |
- 6 -
30. |
In contributing to the Audit Committees discharging of
its duties under this mandate, each member of the Audit Committee shall be
obliged only to exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances. Nothing in this
mandate is intended, or may be construed, to impose on any member of the
Audit Committee a standard of care or diligence that is in any way more
onerous or extensive than the standard to which all Board members are
subject. The essence of the Audit Committees duties is the monitoring and
reviewing to gain reasonable assurance (but not to ensure) that the
Corporations business activities are being conducted effectively, that
the financial reporting objectives are being met and to enable the Audit
Committee to report thereon to the Board. |
SCHEDULE B
2014 STOCK OPTION PLAN
STEM CELL THERAPEUTICS CORP.
STOCK OPTION PLAN
July 18, 2012
Amended and Restated on
[], 2014
Unless otherwise defined herein
or the context otherwise requires, capitalized terms used have the meaning
ascribed to them in the TSX VentureToronto Stock
Exchange (TSXV) Policy
4.4.TSX) Company Manual.
The purpose of the Stem Cell
Therapeutics Corp. (the Corporation) Stock Option Plan (the
Plan) is to assist the Corporation in attracting, retaining and
motivating directors, officers, consultantsservice providers (the term
service provider having the definition ascribed thereto in the TSX Company
Manual) and employees of the Corporation and its subsidiaries and to closely
align the personal interests of such directors, officers, employees and
consultantsservice providers with those of the
shareholders of the Corporation by providing them with the opportunity, through
options (Options), to acquire common shares (Common Shares) in
the capital of the Corporation.
The Plan shall be administered by
the Board of Directors of the Corporation which shall have full and final
authority and discretion, subject to the express provisions of the Plan, to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it and to make all other determinations deemed necessary or
advisable for the administration of the Plan, subject to the rules and policies
of any exchange or quotation system upon which the Corporations Common Shares
are listed or quoted including the TSX-V. The Board of
Directors may delegate any or all of its authority and discretion with respect
to the administration of the Plan to a compensation committee of directors. When
used hereafter in the Plan, Board of Directors shall be deemed to
include the compensation committee acting on behalf of the Board of
Directors.
4. |
Number of Shares Under
Plan |
The number of authorized but
unissued Common Shares that may be issued upon the exercise of
optionsOptions granted under the Plan at any time, plus
the number of Common Shares reserved for issuance under outstanding
optionsOptions otherwise granted by the Corporation
(collectively, the Optioned Shares) shall not exceed ten percent of the
combined total of the issued and outstanding Common Shares on a
non-diluted basis at any timeand the number of Common Shares
issuable upon due exercise of the issued and outstanding Preferred Shares,
and the number of Optioned Shares reserved for issuance under the Plan shall
increase or decrease as the number of issued and outstanding Common Shares and
Preferred Shares changes. Any exercise of optionsOptions
will make new grants available under the Plan. However, the following
additional restrictions apply:
- 2 -
|
(a) |
in no event shall optionsOptions
be granted to an individual to purchase in excess of five percent of
the total of the number of then issued and outstanding Common Shares
and the number of Common Shares issuable upon due conversion of the issued
and outstanding Preferred Shares of the Corporation in any 12 month
period; |
|
|
|
|
(b) |
no more than two percent of the issued Common
Shares of the Corporation may be granted to any one Consultant in any 12
month period;the aggregate number of Common Shares issuable
(or reserved for issuance) to Insider Participants under the Plan (such
that Insider Participant shall mean any Participant
(as defined in Section 5 below) that is an Insider as defined in Section
613 of the TSX Company Manual) or any other security-based compensation
arrangement of the Corporation and its affiliates (including, without
limitation, the Corporations Deferred Share Unit Plan, which together
with this Plan shall be referred to as Security-Based
Compensation Arrangements), may not at any time exceed 10% of
the total combined issued and outstanding Common Shares and the number of
Common Shares issuable upon due conversion of the issued and outstanding
Preferred Shares;
|
|
|
|
|
(c) |
in no event shall (i) the number of Common Shares
reserved for issuance under stock options granted to Insiders; or
(ii) options be granted to Insiders, in either case, that permit the
purchase of in excess of ten percent of the then outstanding shares in any
12 month period;
|
|
|
|
|
(c) |
(d) no more than an aggregate of two percent of
the issued Common Shares of the Corporation may be granted to persons
employed to conduct Investor Relations Activities, in any 12 month period;
andthe aggregate number of Common Shares issued to Insider
Participants under the Plan or any other Security-Based Compensation
Arrangement of the Company within a one-year period, may not exceed 10% of
the total combined number of issued and outstanding Common Shares and the
number of Common Shares issuable upon due conversion of the issued and
outstanding Preferred Shares; and
|
|
|
|
|
(d) |
(e) if optionsOptions granted to
an individual under the Plan in respect of certain Optioned Shares expire
or terminate for any reason with or without having been exercised, such
Optioned Shares may be made available for other
optionsOptions to be granted under the
Plan.
|
Options may be granted under the
Plan to such directors, officers, employees of, or
consultantsservice providers to, the Corporation or its
subsidiaries as the Board of Directors may from time to time designate as
participants (the Participants) under the Plan. Subject to the
provisions of the Plan, the total number of Optioned Shares to be made available
under the Plan and to each Participant, the time or times and price or prices at
which optionsOptions shall be granted, the time or times
at which such optionsOptions are exercisable and any
conditions or restrictions on the exercise of optionsOptions
shall be in the full and final discretion of the Board of Directors.
- 3 -
Notwithstanding the expiration
date applicable to any Option, if an Option would otherwise expire during or
immediately after a Black-out Period, then the expiration date of such Option
shall be the tenth business day following the expiration of the Black-out
Period, provided that in no event shall the period during which said Option is
exercisable be extended beyond 10 years from the date such Option is granted to
the Participant. Where used herein, Black-out Period means the period
during which the Corporation has imposed trading restrictions on its Insiders
and certain other persons pursuant to its insider trading and disclosure
policies.
All
optionsOptions under the Plan shall be granted upon and
subject to the terms and conditions hereinafter set forth.
The exercise price to each Participant
forpayable in respect of each Optioned Share
shallmay not be lower than the Discounted Marked
Price at the time of the grant as determined by the Board of Directors
calculated using the closing marketvolume weighted average trading price of the Common Shares of the Corporation on the TSX-V on the
trading day immediately prior to the grant of the option (or, if no trades
occurred on such day, then on the next previous day on which trading took place)
less the maximum discount, if any permitted by the TSX-V or other applicable
exchange, and further provided that disinterested shareholder approval will be
obtained for any reduction in the exercise price if the
participant is an Insider of the Corporation at the time of the proposed
amendmenton the TSX over a period of five days preceding the date of
grant.
All optionsOptions granted under the
Plan shall be evidenced by means of an agreement (the Option Agreement)
between the Corporation and each Participant in a form as may be approved by the
Board of Directors, such approval to be conclusively evidenced by the execution
of the Option Agreement by any senior officer or director of the
Corporation other than the Participant. The Corporation shall represent in each
Option Agreement that the Participant is a bona fide director, officer, or
employee of, or consultantservice provider to, the
Corporation.
|
(c) |
Length of Grant and Vesting |
All optionsEach Option granted under
the Plan shall expire not later than the 10th anniversary of the date such
options wereOption was granted and may be exercised by
the Participant assubject to such varying
percentages, on a cumulative basisvesting (if any),
during the termsterm thereof as the Board of Directors
shall determine (Option Period).
- 4 -
|
(d) |
Non-Assignability of Options |
|
|
|
|
|
An optionOption granted under the
Plan shall not be transferable or assignable (whether absolutely or by way
of mortgage, pledge or other charge) by a Participant other than to a
Participants Registered Retirement Savings Plan or wholly-owned
corporation or by will or other testamentary instrument or the laws of
succession and may be exercisable during the lifetime of the Participant
only by such Participant. |
|
|
|
|
(e) |
Right to Postpone Exercise |
|
|
|
|
|
Each Participant, upon becoming entitled to exercise an
optionOption in respect of any Optioned Shares in
accordance with an Option Agreement, shall thereafter be entitled to
exercise the optionOption to purchase such
Optioned Shares at any time prior to the expiration or other termination
of the Option Agreement or the optionOption rights
granted thereunder in accordance with such agreement. |
|
|
|
|
(f) |
Exercise and Payment |
|
|
|
|
|
Any optionOption granted under
the Plan may be exercised by a Participant or the legal representative of
a Participant by giving notice to the Corporation specifying the number of
Common Shares in respect of which such optionOption
is being exercised, accompanied by payment (by cash or certified
cheque payable to the Corporation) of the entire exercise price
(determined in accordance with the Option Agreement) for the number of
Common Shares specified in the notice. Upon any such exercise of an
optionOption by a Participant, the Corporation
shall promptly deliver to such Participant or the legal representative of
such Participant, as the case may be, a share certificate in the name of
such Participant or the legal representative of such Participant, as the
case may be, representing the number of Common Shares specified in the
notice. |
|
|
|
|
|
If the Corporation is required under the Income Tax
Act (Canada) or any other applicable law to remit to any governmental
authority an amount on account of tax on the value of any taxable benefit
associated with the exercise or disposition of Options by a Participant,
then the Participant shall, concurrently with the exercise or
disposition: |
|
(i) |
pay to the Corporation, in addition to the exercise price
for the Options, if applicable, sufficient cash as is determined by the
Corporation to be the amount necessary to fund the required tax
remittance; |
|
|
|
|
(ii) |
where the Corporation so agrees, authorize the
Corporation, on behalf of the Participant, to sell in the market on such
terms and at such time or times as the Corporation determines such portion
of the Common Shares being issued upon exercise of the Options as is required to realize
cash proceeds in the amount necessary to fund the required tax remittance;
or |
- 5 -
|
(iii) |
make other arrangements acceptable to the Corporation to
fund the required tax remittance. |
|
(g) |
Rights of Participants |
|
|
|
|
|
The Participants shall have no rights whatsoever as
shareholders in respect of any of the Optioned Shares (including, without
limitation, any right to receive dividends or other distributions
therefrom, voting rights, warrants or rights under any rights offering)
other than in respect of Optioned Shares for which Participants have
exercised their optionOption to purchase and which
have been issued by the Corporation. |
|
|
|
|
(h) |
Change of Control |
|
|
|
|
|
In the event of an amalgamation, arrangement or
other form of business combination of the Corporation with another
corporation or other entity which results in the holders of voting
securities of that other corporation or entity holding, in the aggregate,
voting securities having attached thereto a number of votes which
constitutes, in the aggregate, more than 50% of the aggregate votes
attaching to all outstanding voting securities of the Corporation or
entity resulting from the business combination (a
Change of Control) all issued
options become exercisable immediately. In the event of a Change of
Control transaction which results in the Corporation being acquired
outright by another entity, the Corporation may, at its option, require
the acceleration of the time for the exercise of the option rights granted
under the Plan and the time for fulfilment of any conditions or
restrictions on such exercise.
|
|
|
|
|
|
Any Options outstanding immediately prior to the
occurrence of a Change in Control, but which are not then exercisable,
shall immediately vest and become fully exercisable upon the occurrence of
a Change in Control. The term Change of Control
shall mean any one or a combination of: |
|
(i) |
Third Party Offerany transaction at
any time and by whatever means pursuant to which (A) the Corporation goes
out of existence by any means, except for any corporate transaction or
reorganization in which the proportionate voting power among holders of
securities of the entity resulting from such corporate transaction or
reorganization is substantially the same as the proportionate voting power
of such holders of Corporation voting securities immediately prior to such
corporate transaction or reorganization or (B) any Person or any group of
two or more Persons acting jointly or in concert (other than the
Corporation, a wholly-owned Subsidiary (as defined in the
Securities Act (Ontario)) of the Corporation, an
employee benefit plan of the Corporation or of any of its wholly-owned
Subsidiaries, including the trustee of any such plan acting as
trustee) hereafter acquires the direct or indirect beneficial
ownership (as defined by the Business Corporations Act (Ontario)) of, or acquires the right to exercise control or direction
over, securities of the Corporation representing 50% or more of the
Corporations then issued and outstanding securities in any manner whatsoever,
including, without limitation, as a result of a take-over bid, an exchange of
securities, an amalgamation of the Corporation with any other entity, an
arrangement, a capital reorganization or any other business combination or
reorganization;
|
- 6 -
If at any time when an option
granted under the Plan remains unexercised with respect to any Optioned Shares,
an offer to purchase all of the Common Shares of the Corporation is made by a
third party, the Corporation shall use its best efforts to bring such offer to
the attention of the Participants as soon as practicable and the Corporation
may, at its option, require the acceleration of the time for the exercise of the
option rights granted under the Plan and of the time for the fulfilment of any
conditions or restrictions on such exercise.
|
(ii) |
the sale, assignment or other transfer of all or
substantially all of the assets of the Corporation to a Person other than
a wholly-owned Subsidiary of the Corporation; |
|
|
|
|
(iii) |
the dissolution or liquidation of the Corporation
except in connection with the distribution of assets of the Corporation to
one or more Persons which were wholly-owned Subsidiaries of the
Corporation immediately prior to such event; |
|
|
|
|
(iv) |
the occurrence of a transaction requiring approval of
the Corporations shareholders whereby the Corporation is acquired through
consolidation, merger, exchange of securities, purchase of assets,
amalgamation, arrangement or otherwise by any other Person (other than a
short form amalgamation or exchange of securities with a wholly-owned
Subsidiary of the Corporation); or |
|
|
|
|
(v) |
the Board passes a resolution to the effect that, for
the purposes of some or all of the Option Agreements, an event set forth
in (i), (ii), (iii) or (iv) above has
occurred. |
|
(i) |
(j) Alterations in Shares
|
|
|
|
|
|
In the event of a share dividend, share split, issuance
of Common Shares or instruments convertible into Common Shares (other than
pursuant to the Plan) for less than market value, share consolidation,
share reclassification, exchange of Common Shares, recapitalization,
amalgamation, merger, consolidation, corporate continuance,
reorganization, liquidation or the like of or by the Corporation, the
Board of Directors may make such adjustment, if any, of the number of
Optioned Shares, or of the exercise price, or both, as it shall deem
appropriate to give proper effect to such event, including to prevent, to
the extent possible, substantial dilution or enlargement of rights granted to Participants under the
Plan. In any such event, the maximum number of Common Shares available under the
Plan may be appropriately adjusted by the Board of Directors. If because of a
proposed merger, amalgamation or other corporate continuance or reorganization,
the exchange or replacement of Common Shares in the Corporation for those in
another corporation is imminent, the Board of Directors may, in a fair and
equitable manner, determine the manner in which all unexercised
optionOption rights granted under the Plan shall be
treated including, for example, requiring the acceleration of the time for the
exercise of such rights by the Participants and of the time for the fulfilment
of any conditions or restrictions on such exercise. All determinations of the
Board of Directors under this paragraph (j) shall be full and final, |
- 7 -
|
(j) |
(k) Termination for Cause
|
|
|
|
|
|
If a Participant is dismissed as a director, officer or
employee of, or consultantservice provider to, the
Corporation or one of its subsidiaries for cause, all unexercised
optionOption rights of that Participant under the
Plan shall immediately become terminated and shall lapse notwithstanding
the original term of the optionOption granted to
such Participant under the Plan. |
|
|
|
|
(k) |
(l) Retirement, Resignation or Termination
|
|
|
|
|
|
Subject to earlier termination pursuant to Section 6(k)
above, if a Participant ceases to be a director, officer or employee of,
or consultantservice provider to, the Corporation
or of one of its subsidiaries as a result of: |
|
(i) |
retirement at the normal retirement age prescribed by the
Corporation pension plan, if any; |
|
|
|
|
(ii) |
resignation; or |
|
|
|
|
(iii) |
termination; |
such Participant shall have the right
for a period of 90 days (or such other longer period as may be
determined by the Board of Directors in its sole discretion)120 days
from the date of ceasing to be a director, officer, employee or
consultantservice provider to exercise the
optionOption under the Plan with respect to all Optioned
Shares of such Participant to the extent they were exercisable on the date of
ceasing to hold any such position with the Corporation, or until the normal
expiry date of the optionOption rights of such
Participant, whichever is earlier. Upon the expiration of such period, all
unexercised optionOption rights of that Participant
shall immediately become terminated and shall lapse notwithstanding the original
term of the optionOption granted to such Participant
under the Plan.
|
(l) |
(m) Disabled Participant
|
|
|
|
|
|
If a Participant ceases to be a director, officer or
employee of, or consultantservice provider to, the
Corporation or of one of its subsidiaries as a result of disability
or illness preventing the Participant from performing the duties
routinely performed by such Participant, such Participant shall have the right
for a period of 180 days (or until the normal expiry date of the
optionOption rights of such Participant if earlier) from
the date of ceasing to be a director, officer, employee or ConsultantService provider to exercise the optionOption under the Plan with respect to all Optioned
Shares of such Participant to the extent they were exercisable on the date of
ceasing to hold any such position. Upon the expiration of such 180 day period
all unexercised optionOption rights of that Participant
shall immediately become terminated and shall lapse notwithstanding the original
term of the option granted to such Participant under the
Plan. |
- 8 -
|
(n) |
Participant engaged in Investor Relations ActivitiesIf a
Participant who engaged in Investor Relations Activities for the
Corporation is terminated without cause or ceases to be employed by reason
of retirement, resignation or disability or illness, such Participant
shall have the right for a period of 30 days (or until the normal expiry
date of the option rights of such Participant if earlier) from the date of
ceasing to be engaged in Investor Relations Activities with the
Corporation to exercise the option under the Plan with respect to all
Optioned Shares of such Participant to the extent they were exercisable on
the date of ceasing to hold any such position with the Corporation. Upon
the expiration of such 30 day period, all unexercised option rights of
that Participant shall immediately become terminated and shall lapse
notwithstanding the original term of the optionOption
granted to such Participant under the Plan.
|
|
|
|
|
(m) |
(o) Deceased Participant
|
|
|
|
|
|
In the event of the death of any Participant, the legal
representatives of the deceased Participant shall have the right for a
period of one year (or until the normal expiry date of the
optionOption rights of such Participant if
earlier) from the date of death of the Participant to exercise the
deceased Participants optionOption with respect
to all of the Optioned Shares of the deceased Participant to the extent
they were exercisable on the date of death. Upon the expiration of such
period all unexercised optionOption rights of the
deceased Participant shall immediately become terminated and shall lapse
notwithstanding the original term of the optionOption
granted to the deceased Participant under the
Plan. |
7. |
Amendment and Discontinuance of
Plan |
The Board of Directors may from time to time amend or
revise the terms of the Plan or may discontinue the Plan at any time, provided
that no such action may in any manner adversely affect the rights under any
options earlier granted to a Participant under the Plan without the consent of
that Participant.has the discretion to make amendments to this Plan
and any Options granted hereunder which it may deem necessary, without having to
obtain shareholder approval. Such changes include, without limitation:
|
(i) |
minor changes of a housekeeping
nature; |
- 9 -
|
(ii) |
amending Options under the Plan, including with
respect to the Option Period (provided that the period during which an
Option is exercisable does not exceed ten years from the date the Option
is granted and that such Option is not held by an Insider Participant),
vesting period, exercise method and frequency, exercise price of an Option
(provided that such Option is not held by an Insider Participant) and
method of determining the exercise price, assignability and effect of
termination of a Participants employment or cessation of the
Participants directorship; |
|
|
|
|
(iii) |
changing the class of Participants eligible to
participate under the Plan; |
|
|
|
|
(iv) |
changing the terms and conditions of any financial
assistance which may be provided by the Company to Participants to
facilitate the purchase of Common Shares under the Plan; and |
|
|
|
|
(v) |
adding a cashless exercise feature, payable in cash or
securities, whether or not providing for a full deduction of the number of
underlying Common Shares from the Plan
reserve. |
Shareholder approval will be required in the case of: (i)
any amendment to the amendment provisions of the Plan; (ii) any increase in the
maximum number of Common Shares issuable under the Plan; and (iii) any
reduction in the exercise price or extension of the Option Period benefiting
an Insider Participant, in addition to such other matters that may require
shareholder approval under the rules and policies of the TSX.
Nothing contained in the Plan nor in any
optionOption granted hereunder shall give any
Participant or any other person any interest or title in or to any Common Shares
of the Corporation or any rights as a shareholder of the Corporation or any
other legal or equitable right against the Corporation whatsoever other than as
set forth in the Plan and pursuant to the exercise of any
optionOption, nor shall it confer upon the Participants
any right to continue as an officer or employee of the Corporation or of its
subsidiaries.
The obligations of the Corporation to sell Common Shares and
deliver share certificates under the Plan are subject to such compliance by the
Corporation and the Participants with all applicable corporate and securities
laws as the Corporation deems necessary or advisable.
SCHEDULE C
2014 DSU PLAN
STEM CELL THERAPEUTICS CORP. |
(the "Company") |
|
DEFERRED SHARE UNIT PLAN |
FOR DIRECTORS AND EXECUTIVE OFFICERS |
Amended and Restated on [],
2014 |
|
|
PART l - GENERAL PROVISIONS |
Purpose
1.1 1.1 The purpose of this Plan is to provide an
alternative form of compensation to satisfy annual and special bonuses payable
to Directors and Executive Officers and to satisfy fees that may be payable to
Directors for acting as directors of the Company. This form of compensation
promotes a greater alignment of interests amongst Directors and Executive
Officers and the Company's shareholders.
Definitions
1.2 1.2 In this Plan,
Annual Board Retainer means the annual retainer paid by
the Company to a Director, but does not include Chair Fees, Committee Fees and
Meeting Fees.
Applicable Withholding Tax has the meaning set forth in
Section 3.4;
Awarded Amount has the meaning set forth in Section 2.1;
Board means the Board of Directors of the Company;
Chair means the chair of the Board;
Chair Fees means the fees or retainers, other than
Meeting Fees, the Annual Board Retainer and Committee Fees, paid by the Company
to a Director for service as the Chair and as chairperson of a committee of the
Board;
Committee means the Compensation Committee of the Board,
or any other persons designated by the Board to perform the duties contemplated
herein;
Committee Fees means the fees or retainers, other than
Meeting Fees, the Annual Board Retainer and Chair Fees, paid by the Company to a
Director for service on a committee of the Board;
Company means Stem Cell Therapeutics Corp.;
Deferred Share Unit means a right granted by the Company
to an Eligible Person to receive, on a deferred payment basis, a Share or the
Fair Market Value thereof, or a combination thereof on the terms contained in
this Plan;
Director means any Director of the Company, or a
subsidiary of the Company, appointed and approved by the Board or the
shareholders;
2
Eligible Person means any person who is a Director or
Executive Officer;
Executive Officer means the Chief Executive Officer,
President, Chief Financial Officer and any senior officer of the Company, or any
subsidiary of the Company or any persons acting in any such capacity on behalf
of the Company or subsidiary of the Company;
Fair Market Value means the five-day volume weighted
average trading price as calculated, being the VWAP (as the term VWAP is
defined in accordance with the TSXV Policiesthe TSX
Company Manual), as at, and including, the relevant determination date or
such other applicable date referenced herein provided that such date is a
business day and if it is not then calculated as at and including the last
business day which proceededpreceded such applicable
date referenced herein, except that if the Shares are not listed on the
TSXVTSX, the Fair Market Value will be the value
established by the Board based on the five-day average closing price per Share
on any other public exchange on which the Shares are listed calculated as at,
and including, the relevant determination date or such other applicable date
referenced herein provided that such date is a business day and if it is not
then calculated as at and including the last business day which proceeded such
applicable date referenced herein, or if the Shares are not listed on any public
exchange, by the Board based on its determination of the fair value of a Share;
Director Fees means the aggregate total of the Annual
Board Retainer, Chair Fees, Committee Fees, Meeting Fees and any other fees
payable to a Director;
Insider means an insider as defined in
the TSXV PoliciesSection 613 of the TSX Company Manual;
Meeting Fees means the fees or retainers, other than the
Annual Board Retainer, Chair Fees, and Committee Fees, paid by the Company to a
Director for attending meetings of the Board or any committee of the Board;
Option means the right to purchase Shares granted
pursuant to the Company's stock option plan approved by the Board, as may be
amended from time to time in accordance with its terms, or any successor plan
accepted for filing by the TSXVTSX;
Outstanding Issue means the combined total number of
Shares outstanding on a non-diluted basisand the number of
Shares issuable upon conversion of the issued and outstanding First Preferred
Shares of the Company in accordance with their terms;
Plan means this Deferred Share Unit Plan, as amended
from time to time;
Reserved for Issuance refers to Shares that may be
issued in the future upon the exercise of Options granted under the Companys
stock option plan, Deferred Share Units which have been or are granted pursuant
to this Plan or pursuant to any other Share Compensation Arrangements;
Section 409A means Section 409A of the United States
Internal Revenue Code of 1986, as amended, and any applicable United States
Treasury Regulations and other binding regulatory guidance thereunder;
Separation from Service of a US Taxpayer means the date
the US Taxpayer incurs a separation from service with the Company within the
meaning of U.S. Treas. Regs. § 1.409A -1(h);
3
Service Provider means a person who is a bona fide
director, officer, employee or consultant of the Company or its affiliates, and
also includes a company, of which 100% of the share capital is beneficially
owned by one or more such persons;
Share means a common share in the capital of the
Company;
Share Compensation Arrangement means the Plan described
herein and any other stock option, stock option plan, employee stock purchase
plan or any other compensation or incentive mechanism involving the issuance or
potential issuance of shares to one or more Eligible Persons, including a share
purchase from treasury which is financially assisted by the Company by way of a
loan, guaranty or otherwise;
Specified Employee means a US Taxpayer who meets the
definition of specified employee, as defined in Section 409A(a)(2)(B)(i) of
the Code;
Terminated Service means that the Eligible Person has
ceased to be a Director or Executive Officer, other than as a result of death;
Total Compensation for a particular Eligible Person
means the aggregate of:
|
(a) |
the discretionary annual bonus determined by the Board
for which Directors or Executive Officers are eligible, and |
|
|
|
|
(b) |
a bonus, that is not an annual bonus, that may be awarded
to a Director or Executive Officer at the discretion of the Board;
and |
|
|
|
|
(c) |
Director Fees. |
TSXVTSX means the
TSX VentureToronto Stock Exchange;
US Taxpayer means an Eligible Person whose compensation
from the Company is subject to Section 409A.
Effective Date
1.3 1.3 Subject to the acceptance by the
TSXVTSX, this Plan will be effective immediately upon
the approval of the shareholders of the Company at the Companys Annual and
Special Meeting to be held October 17, 2013.[],
2014.
Administration
1.4 1.4 The Board will, in its sole and absolute
discretion, but taking into account relevant corporate, securities and tax
laws,
|
(a) |
(a) interpret and administer this Plan,
|
|
|
|
|
(b) |
(b) establish, amend and rescind any rules and
regulations relating to this Plan, and
|
|
|
|
|
(c) |
(c) make any other determinations that the Board deems
necessary or desirable for the administration of this
Plan.
|
4
The Board may correct any defect or any omission or reconcile
any inconsistency in this Plan in the manner and to the extent the Board deems,
in its sole and absolute discretion, necessary or desirable. Any decision of the
Board in the interpretation and administration of this Plan will be final,
conclusive and binding on all parties concerned. All expenses of administration
of this Plan will be borne by the Company.
Delegation
1.5 1.5 The Board may, to the extent permitted by law,
delegate any of its responsibilities under this Plan and powers related thereto
(including, without limiting the generality of the foregoing, those referred to
under Section 1.4) to the Committee or to one or more officers of the Company
and all actions taken and decisions made by the Committee or by such officers in
this regard will be final, conclusive and binding on all parties concerned,
including, but not limited to, the Company, the Eligible Person, and their legal
representatives.
PART 2 - AWARDS UNDER THIS PLAN
Determination of Deferred Share Units
2.1 2.1 The Board will, in its sole and absolute
discretion, decide at the time of declaring or awarding any Total Compensation
to any Eligible Person the amount (the "Awarded Amount") of the Total
Compensation that will be satisfied in the form of Deferred Share Units.
Issue of Deferred Share Units
2.2 2.2 The number of Deferred Share Units (including
fractional Deferred Share Units, computed to three digits) to be credited to an
Eligible Person for services will be determined by dividing the Awarded Amount
by the Fair Market Value as at the last trading day before the date the Awarded
Amount is declared by the Board.
Maximum Shares Reserved
2.3 2.3 Subject to adjustment as provided for herein,
the maximum aggregate number of Shares that may be Reserved for Issuance
pursuant to this Plan is 2,000,000 Shares (subject to adjustment as provided
for herein).
2.4 2.4 In no event may the number of Shares that are
Reserved for Issuance to any one person pursuant to Deferred Share Units and
Options exceed 5% of the Outstanding Issue.
2.5 2.5 The maximum aggregate number of Shares that,
under all Share Compensation Arrangements,
|
(a) |
(a) may be Reserved for Issuance to Insiders of the
Company, may not exceed 10% of the Outstanding Issue at any time,
and
|
|
|
|
|
(b) |
(b) may be issued to Insiders within a one-year period,
may not exceed 10% of the Outstanding Issue.
|
5
2.6 2.6 For the purposes of Section 2.5, Shares issuable
to an Insider pursuant to a Deferred Share Unit or other entitlement that was
granted before the person became an Insider will be excluded in determining the
number of Shares issuable to Insiders.
Shares Not Acquired
2.7 2.7 Any Shares not acquired under a Deferred Share
Unit granted under the Plan which has expired or been cancelled or terminated
may be made the subject of a further Deferred Share Unit pursuant to the
provisions of the Plan.
Dividend Equivalents
2.8 2.8 On any date on which a cash dividend is paid on
Shares, an Eligible Person's account will be credited with the number of
Deferred Share Units (including fractional Deferred Share Units, computed to
three digits) calculated by,
|
(a) |
(a) multiplying the amount of the dividend per Share by
the aggregate number of Deferred Share Units that were credited to the
Eligible Person's account as of the record date for payment of the
dividend, and
|
|
|
|
|
(b) |
(b) dividing the amount obtained in Section 2.8(a) by the
Fair Market Value on the date on which the dividend is
paid.
|
Eligible Person's Account
2.9 2.9 A written confirmation of the balance in each
Eligible Person's account will be sent by the Company to the Eligible Person
upon request of the Eligible Person.
Adjustments and Reorganizations
2.10 2.10 In the event of any dividend paid in shares,
share subdivision, combination or exchange of shares, merger, consolidation,
spin-off or other distribution of Company assets to shareholders, or any other
change in the capital of the Company affecting Shares, the Board, in its sole
and absolute discretion, will make, with respect to the number of Deferred Share
Units outstanding under this Plan, any proportionate adjustments as it considers
appropriate to reflect that change.
PART 3 - TERMINATION OF SERVICE
Termination of Service
3.1 3.1 An Eligible Person who has Terminated Service
may elect to receive one Share in respect of each whole Deferred Share Unit
credited to the Eligible Person's account (determined in accordance with Section
3.2), by filing with the President of the Company a notice of redemption in the
form prescribed from time to time by the Company on or before December 15 of the
first calendar year commencing after the date on which the Eligible Person has
Terminated Service. If the Eligible Person fails to file such notice on or
before that December 15, the Eligible Person will be deemed to have filed with
the President of the Company a notice of redemption on that December 15 and will
be deemed to have elected to redeem all of his or her Deferred Share Units. The
date on which a notice is filed or deemed to be filed with the Secretary of the
Company is the "Filing Date". The Company may defer the Filing Date to
any other date if such deferral is, in the sole opinion of the Company,
desirable to ensure compliance with Section 4.3.
6
Issuance of Shares
3.2 3.2 The issuance of the Shares will be made by the
Company as soon as reasonably possible following the Filing Date. In no event
will the issuance be made later than December 31 of the first calendar year
commencing after the Eligible Person has Terminated Service. Fractional Shares
may not be issued, and where an Eligible Person would be entitled to receive a
fractional Share in respect of any fractional Deferred Share Unit, the Company
will pay to such Eligible Person, in lieu of such fractional Share, cash equal
to its Fair Market Value, calculated as at the Filing Date.
3.3 3.3. Notwithstanding the foregoing provisions of
Section 3.1 and Section 3.2, if an Eligible Person is a US Taxpayer, then the
following rules shall apply relating to the redemption of Deferred Share Units
and issuance of Shares:
|
(a) |
(a) Deferred Share Units which become redeemable under
Section 3.1 shall be redeemed only if the event giving rise to Terminated
Service is a Separation from Service; and
|
|
|
|
|
(b) |
(b) the redemption date shall be any date determined by
the Company (and not the US Taxpayer) to occur as soon as
reasonably possible (but not later than two months) after the Separation
from Service, without a notice of filing required by the Eligible Person,
except that if the US Taxpayer is determined to be a Specified Employee,
the redemption date shall be the first day of the seventh month after the
Separation from Service of the US Taxpayer.
|
Death
3.4 3.4 In the event of the death of an Eligible Person,
the Company will, within two months of the Eligible Person's death, pay cash
equal to the Fair Market Value of the Shares which would be deliverable to the
Eligible Person if the Eligible Person had Terminated Service in respect of the
Deferred Share Units credited to the deceased Eligible Person's account (net of
any Applicable Withholding Tax) to or for the benefit of the legal
representative of the Eligible Person. The Fair Market Value will be calculated
on the date of death of the Eligible Person.
Applicable Withholding Tax
3.5 3.5 The Company is authorized to deduct such taxes
and other amounts as it may be required by law to withhold ("Applicable
Withholding Tax"), in such manner as it determines, including, without
limiting the generality of the foregoing, by delivering fewer Shares than an
Eligible Person otherwise would have received. In addition to, or as an
alternative to the foregoing, the Company may require Eligible Persons, as a
condition precedent to the issuance and delivery of Shares otherwise to be
delivered to them under this Plan, to deliver payment in full of the Applicable
Withholding Tax to the Company or undertakings to, or indemnities in favour of,
the Company respecting the payment by such Eligible Persons of applicable income
or other taxes.
7
PART 4 - GENERAL
Non-Transferability
4.1 4.1 Deferred Share Units and all other rights,
benefits or interests in this Plan are non-transferable and may not be pledged
or assigned or encumbered in any way and are not subject to attachment or
garnishment, except that if the Eligible Person dies, the legal representatives
of the Eligible Person will be entitled to receive the amount of any payment
otherwise payable to the Eligible Person hereunder in accordance with the
provisions hereof.
No Right to Service
4.2 4.2 Neither participation in this Plan nor any
action under this Plan will be construed to give any Eligible Person a right to
be retained in the service of the Company.
Applicable Trading Policies
4.3 4.3 The Board and each Eligible Person will ensure
that all actions taken and decisions made by the Board or the Eligible Person,
as the case may be, pursuant to this Plan comply with any applicable securities
laws and policies of the Company relating to insider trading or "blackout"
periods.
Successors and Assigns
4.4 4.4 This Plan will enure to the benefit of and be
binding upon the respective legal representatives of the Eligible Person.
Plan Amendment
4.5 The Board reserves the right, in its absolute discretion,
to at any time amend, modify or terminate the Plan without obtaining
shareholder approval as it deems necessary or appropriate, but no amendment
will, without the consent of the Eligible Person or unless required by law,
adversely affect the rights of an Eligible Person with respect to Deferred Share
Units to which the Eligible Person is then entitled under this
Plan.
4.6 Notwithstanding Section 4.5, the Board may not, without
approval of the holders of a majority of the issued and outstanding
equity securities of the Company present and voting in person or by proxy at a
meeting of holders of such securities, amend the Plan or a Deferred Share Unit
to:
(a) increase the number of Shares
reserved for issuance under the Plan;
(b) permit assignments, or exercises
other than by the Eligible Person, of Deferred Share Units beyond that
contemplated by Section 4.1, except for an amendment that would permit the
assignment of a Deferred Share Unit for estate planning or estate settlement
purposes; and
8
(c) amend the Plan to provide for other
types of compensation through equity issuance, unless the change to the
Plan or a Deferred Share Unit results from the application of Section
2.10.
4.7 Without limiting the generality of Section 4.5, the Board
may make the following amendments to the Plan without obtaining
shareholder approval:
(a) amendments to the terms and
conditions of the Plan necessary to ensure that the Plan complies with
the applicable regulatory requirements, including without limitation the TSXV
Policies or the rules of any national securities exchange or system on which the
Shares are then listed or reported, or by any regulatory body having
jurisdiction with respect thereto;
(b) making adjustments to outstanding
Deferred Share Units in the event of certain corporate transactions;
(c) a change to the termination
provisions of a security or the Plan which does not entail an extension
beyond the original termination date;
4.5 The Board has the
discretion to make amendments to this Plan and any Deferred Share Units granted
hereunder which it may deem necessary, without having to obtain shareholder
approval. Such changes may include, without limitation:
|
(a) |
minor changes of a housekeeping
nature; |
|
|
|
|
(b) |
amending the terms of Deferred Share Units under the
Plan and method of determining the Awarded Amount and the number of
Deferred Share Units that may be issued to an Eligible Person, and the
assignability and effect of Terminated Service of an Eligible
Person; |
|
|
|
|
(c) |
(d) amendments to the provisions of the Plan respecting
administration of the Plan and eligibility for participation under
the Plan, including, without limitation, to expandchanging
the class of Eligible Persons to include any or all Service
Providers; and
|
|
|
|
|
(d) |
changing the method and procedures to be followed with
regard to the issuance of Deferred Share Units under the
Plan. |
4.6 (e) amendments to the Plan that are of a
"housekeeping nature".Shareholder approval will be required in the case of:
(i) any amendment to the amendment provisions of the Plan; (ii) any increase in
the maximum number of Common Shares issuable under the Plan; and (iii) such
other matters that may require shareholder approval under the rules and policies
of the TSX.
Plan Termination
4.7 4.8 The Board may terminate this Plan at any time,
but no termination will, without the consent of the Eligible Person or unless
required by law, adversely affect the rights of an Eligible Person with respect to Deferred Share Units to
which the Eligible Person is then entitled under this Plan. In no event will a
termination of this Plan accelerate the time at which the Eligible Person would
otherwise be entitled to receive any Shares or cash in respect of Deferred Share
Units hereunder.
9
Governing Law
4.8 4.9 This Plan and all matters to which reference is
made in this Plan will be governed by and construed in accordance with the laws
of Ontario and the laws of Canada applicable therein.
Reorganization of the Company
4.9 4.10 The existence of this Plan or Deferred Share
Units will not affect in any way the right or power of the Company or its
shareholders to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, or to create or issue any bonds, debentures, shares or other
securities of the Company or to amend or modify the rights and conditions
attaching thereto or to effect the dissolution or liquidation of the Company, or
any amalgamation, combination, merger or consolidation involving the Company or
any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar nature or otherwise.
No Shareholder Rights
4.10 4.11 Deferred Share Units are not considered to be
Shares or securities of the Company, and an Eligible Person whose account is
credited with Deferred Share Units will not, as such, be entitled to exercise
voting rights or any other rights attaching to the ownership of Shares of other
securities of the Company, or be considered the owner of Shares by virtue of
such crediting of Deferred Share Units.
No Other Benefit
4.11 4.12 No amount will be paid to, or in respect of,
an Eligible Person under this Plan to compensate for a downward fluctuation in
the price of a Share, nor will any other form of benefit be conferred upon, or
in respect of, an Eligible Person for such purpose.
Unfunded Plan
4.12 4.13 For greater certainty, this Plan will be an
unfunded plan, including for tax purposes. Any Eligible Person holding Deferred
Share Units or related accruals under this Plan will have the status of a
general unsecured creditor of the Company with respect to any relevant rights
hereunder.
SCHEDULE D
AMENDED AND RESTATED BY-LAW NO.
1
BY-LAW NO. 1
A by-law relating generally to the transaction of the business
and affairs
of
Stem Cell Therapeutics Corp.
amended and restated on April [],
2014
CONTENTS
|
Section 1 |
- |
Interpretation |
|
Section 2 |
- |
Business of the Corporation |
|
Section 3 |
- |
Borrowing and Securities |
|
Section 4 |
- |
Directors |
|
Section 5 |
- |
Delegation |
|
Section 6 |
- |
Officers |
|
Section 7 |
- |
Protection of Directors, Officers and Others
|
|
Section 8 |
- |
Shares |
|
Section 9 |
- |
Dividends and Rights |
|
Section 10 |
- |
Meetings of Shareholders |
|
Section 11 |
- |
Notices |
|
Section 12 |
- |
Repeal |
|
Section 13 |
|
Effective Date |
BE IT ENACTED as a by-law of the Corporation as
follows:
SECTION 1
INTERPRETATION
1.1 Definitions - In the by-laws of the Corporation,
unless the context otherwise requires, capitalized terms used but not defined in
this By-Law shall have the meanings attributed to them in the Act, except that:
"Act" means the Business
Corporations Act (Ontario), and any statute that may be substituted
therefor, as amended, restated or in effect from time to time;
"appoint" includes
"elect" and vice-versa;
"articles" means the original or
restated articles of incorporation, articles of amendment, articles of
amalgamation, articles of continuance, articles of reorganization, articles of
arrangement, articles of dissolution or articles of revival and includes any
amendments thereto;
"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 Stem Cell
Therapeutics Corp.;
"meeting of shareholders"
includes an annual meeting of shareholders or a special meeting of shareholders;
"special meeting of shareholders" includes a meeting of any class or
classes of shareholders and a special 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) and any statute that may be substituted
therefor, as amended, restated or in effect from time to time;
"recorded address" means:
|
(a) |
in the case of a shareholder, that person's address as
recorded in the securities register; |
|
|
|
|
(b) |
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 are more than one; and |
|
|
|
|
(c) |
in the case of a director, officer, auditor or member of
a committee of the Board, that individual's latest address as recorded in
the records of the Corporation; |
"Regulations" means the
regulations made under the Act, as amended, restated or in effect from time to
time;
"signing officer" means, in
relation to any instrument, any person authorized to sign the instrument on
behalf of the Corporation by Section 2.2 or by a resolution passed pursuant
thereto; and
"unanimous shareholder
agreement" means:
|
(a) |
an otherwise lawful written agreement among all the
shareholders of the Corporation, or among all the shareholders and one or
more persons who are not shareholders, that restricts, in whole or in
part, the powers of the directors to manage, or supervise the management
of, the business and affairs of the Corporation, as amended, supplemented,
restated and replaced from time to time in accordance with its provisions;
or |
|
|
|
|
(b) |
a written declaration made by a person who is the
beneficial owner of all of the issued shares of the Corporation that
restricts in whole or in part, the powers of the directors to manage, or
supervise the management of, the business and affairs of the Corporation,
as amended, supplemented, restated and replaced from time to time in
accordance with its provisions. |
1.2 Interpretation Words in the singular include the
plural and vice-versa, words in one gender include all genders, and words
importing persons include individuals, bodies corporate, partnerships, trusts
and unincorporated organizations.
- 2 -
SECTION 2
BUSINESS OF THE CORPORATION
2.1 Corporate Seal - The Corporation may have one or
more different corporate seals which may be adopted or changed from time to time
by the Board, on which the name of the Corporation appears in the language or
one or more of the languages set out in the articles.
2.2 Execution of Instruments - Deeds, transfers,
assignments, contracts, obligations, certificates and other instruments may be
signed on behalf of the Corporation by any one of the directors or officers. In
addition, the Board may from time to time direct the manner in which and the
person or persons by whom any particular instrument or class of instruments may
or shall be signed. Any signing officer may affix the corporate seal (if any) to
any instrument. Any signing officer may certify a copy of any instrument,
resolution, by-law or other document of the Corporation to be a true copy
thereof.
2.3 Execution in Counterpart - Any articles, notice,
resolution, requisition, statement or other document required or permitted to be
executed in several documents of like form each of which is executed by all
persons required or permitted, as the case may be, to do so, shall be deemed to
constitute one document and to bear date as of the date of execution thereof by
the last person.
2.4 Banking Arrangements - The banking business of the
Corporation including, without limitation, the borrowing of money and the giving
of security therefor, shall be transacted with such banks, trust companies or
other bodies corporate or organizations as may from time to time be designated
by or under the authority of the Board. Such banking business or any part
thereof shall be transacted under such agreements, instructions and delegations
of powers as the Board may from time to time prescribe or authorize.
2.5 Voting Rights in Other Bodies Corporate - The
signing officers of the Corporation may execute and deliver proxies and arrange
for the issuance of voting certificates or other evidence of the right to
exercise the voting rights attaching to any securities held by the Corporation.
Such instruments, certificates or other evidence shall be in favour of such
person or persons as may be determined by the officers executing such proxies or
arranging for the issuance of voting certificates or such other evidence of the
right to exercise such voting rights. In addition, the Board may from time to
time direct the manner in which and the person or persons by whom any particular
voting rights or class of voting rights may or shall be exercised.
2.6 Withholding Information from Shareholders - Subject
to the Act, no shareholder shall be entitled to discovery of any information
respecting any details or conduct of the Corporation's business which, in the
opinion of the Board, it would be inexpedient in the interests of the
shareholders or the Corporation to communicate to the public. The Board may from
time to time determine whether and to what extent and at what time and place and
under what conditions or regulations the accounts, records and documents of the
Corporation or any of them shall be open to the inspection of shareholders and
no shareholder shall have any right of inspecting any account, record or
document of the Corporation except as conferred by the Act or authorized by the
Board or by resolution passed at a meeting of shareholders.
SECTION 3
BORROWING AND SECURITIES
3.1 Borrowing Power - Without limiting the borrowing
powers of the Corporation as provided by the Act, but subject to the articles
and any unanimous shareholder agreement, the Board may from time to time on
behalf of the Corporation, without authorization of the shareholders:
- 3 -
(a) |
borrow money on the credit of the Corporation; |
|
|
(b) |
issue, reissue, sell, pledge or hypothecate bonds,
debentures, notes or other evidences of indebtedness of the Corporation,
whether secured or unsecured; |
|
|
(c) |
give a guarantee on behalf of the Corporation to secure
performance of any present or future indebtedness, liability or obligation
of any person; and |
|
|
(d) |
mortgage, hypothecate, pledge or otherwise create a
security interest in all or any currently owned or subsequently acquired
real or personal, movable or immovable, property of the Corporation
including book debts, rights, powers, franchises and undertakings, to
secure any such bonds, debentures, notes or other evidences of
indebtedness or guarantee or any other present or future indebtedness,
liability or obligation of the Corporation. |
The Board may from time to time delegate to one or more of the
directors and officers of the Corporation as may be designated by the Board all
or any of the powers conferred on the Board in this Section 3.1 to the extent
and in the manner as the Board shall determine at the time of such delegation.
Nothing in this Section limits or restricts the borrowing of
money by the Corporation on bills of exchange or promissory notes made, drawn,
accepted or endorsed by or on behalf of the Corporation.
3.2 Delegation - Subject to any unanimous shareholder
agreement, the Board may from time to time delegate to a committee of the Board,
a director or an officer of the Corporation or any other person as may be
designated by the Board all or any of the powers conferred on the Board by
Section 3.1 or by the Act to such extent and in such manner as the Board shall
determine at the time of each such delegation.
SECTION 4
DIRECTORS
4.1 Number of Directors and Quorum Subject to the
articles, the Board shall consist of the number of directors specified in the
articles, except that if the articles provide for a minimum and maximum number
of directors, the board shall consist of the number of directors determined from
time to time by a special resolution of the shareholders (or, if the directors
are empowered by a special resolution to determine the number, by a resolution
of the Board) within such minimum and maximum. Subject to Section 4.18, a
majority of the number of directors so specified or determined shall constitute
a quorum at any meeting of the Board.
4.2 Qualification - No person shall be qualified for
election as a director:
(a) |
if the person is less than 18 years of age; |
|
|
(b) |
if the person has been found under the Substitute
Decisions Act, 1992 (Ontario) or under the Mental Health Act
(Ontario) to be incapable of managing property or who has been found
to be incapable by a court in Canada or elsewhere; |
|
|
(c) |
if the person is not an individual; or |
|
|
(d) |
if the person has the status of a
bankrupt. |
- 4 -
Subject to the articles, a director need not be a shareholder.
Subject to the Act, at least 25% of the directors must be resident Canadians. If
the Corporation has less than four directors, at least one director must be a
resident Canadian.
4.3 Election and Term - The election of directors shall
take place at the first meeting of shareholders and at each annual meeting of
shareholders and all the directors then in office shall retire but, if
qualified, shall be eligible for re-election. The election shall be by
resolution. If an election of directors is not held at the proper time, the
incumbent directors shall continue in office until their successors are
elected.
4.4 Removal of Directors - Subject to the Act, the
shareholders may by ordinary resolution passed at an annual or special meeting
remove any director from office and the vacancy created by such removal may be
filled at the same meeting failing which it may be filled by the Board.
4.5 Vacation of Office - A director ceases to hold
office when such director: (a) dies or, subject to the Act, resigns; (b) is
removed from office by the shareholders in accordance with the Act; or (c)
ceases to be qualified for election as a director in accordance with the Act. A
resignation of a director becomes effective at the time a written resignation is
sent or delivered to the Corporation or the time specified in such resignation,
whichever is later.
4.6 Vacancies - Subject to the Act and the articles, a
quorum of the Board may fill a vacancy in the Board, except a vacancy resulting
from:
(a) |
an increase in the number of directors, unless the
directors are authorized to determine the number of directors and the
appointment of an additional director would not result in a total number
of directors greater than one and one-third times the number of directors
required to have been elected at the last annual meeting of
shareholders; |
|
|
(b) |
an increase in the maximum number of directors;
or |
|
|
(c) |
a failure of the shareholders to elect the number of
directors required to be elected at any meeting of
shareholders. |
In the absence of a quorum of the Board, or if the vacancy has
arisen from a failure of the shareholders to elect the number of directors
required to be elected at any meeting of shareholders, the Board shall forthwith
call a special meeting of shareholders to fill the vacancy. If the Board fails
to call such meeting or if there are no directors then in office, any
shareholder may call the meeting.
4.7 Action by the Board - Subject to any unanimous
shareholder agreement, the Board shall manage, or supervise the management of,
the business and affairs of the Corporation. Subject to Section 4.8, the powers
of the Board may be exercised by resolution passed at a meeting at which a
quorum is present or by resolution in writing signed by all the directors
entitled to vote on that resolution at a meeting of the Board. Where there is a
vacancy in the Board, the remaining directors may exercise all the powers of the
Board so long as a quorum remains in office. Where the Corporation has only one
director, that director may constitute a meeting.
4.8 Meeting by Communications Facilities - If all the
directors of the Corporation consent, a meeting of the Board or of a committee
of the Board may be held by means of such telephone, electronic or other
communications facilities as permit all persons participating in the meeting to
communicate with each other simultaneously and instantaneously, and a director
participating in such a meeting by such means is deemed to be present at the
meeting. Any such 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 committees of the
Board. If a majority of directors participating in a meeting held under this
Section are then in Canada, the meeting shall be deemed to be held in
Canada.
- 5 -
4.9 Place of Meetings - Meetings of the Board may be
held at any place within or outside Ontario. In any financial year of the
Corporation, a majority of the meetings of the Board need not be held in
Canada.
4.10 Calling of Meetings - Meetings of the Board shall
be held from time to time at such time and at such place as the Board, the chair
of the Board, the chief executive officer, the president, a vice-president or
any two directors may determine.
4.11 Notice of Meeting - Notice of the time and place of
each meeting of the Board shall be given in the manner provided in Section 11.1
to each director not less than 48 hours before the time when the meeting is to
be held. A notice of a meeting of directors need not specify the purpose of or
the business to be transacted at the meeting except where the Act requires such
purpose or business to be specified. A director may in any manner waive notice
of a meeting of the Board, and attendance of a director at a meeting constitutes
a waiver of notice, except where the director attends a meeting for the express
purpose of objecting to the transaction of any business on the grounds that the
meeting is not lawfully called.
4.12 First Meeting of New Board - Provided a quorum of
directors is present, each newly elected Board may without notice hold its first
meeting immediately following the meeting of shareholders at which such Board is
elected.
4.13 Adjourned Meeting - Notice of an adjourned meeting
of the Board is not required if the time and place of the adjourned meeting is
announced at the original meeting.
4.14 Regular Meetings - The Board may appoint a day or
days in any month or months for regular meetings of the Board at a place and
hour to be named. 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 be required for any such regular meeting
except where the Act requires the purpose thereof or the business to be
transacted thereat to be specified.
4.15 Meetings Without Notice. A meeting of the Board may
be held at any time and place permitted by the Act or the articles or the
by-laws without notice or on shorter notice than that provided for in this
by-law, and proceedings at such meeting shall not be invalidated if all or if
all the directors are present in person (except where a director attends the
meeting for the express purpose of objecting to the transaction of any business
on the grounds that the meeting is not lawfully called) or if not so present
have received notice, or before or after the meeting or the time prescribed for
the notice of such meeting, in writing waive notice of or accept short notice of
such meeting.
4.16 Chair - The chair of any meeting of the Board shall
be the first mentioned of such of the following officers as have been appointed
and who is a director and is present at the meeting: chair of the Board, chief
executive officer, president, or a vice-president. If no such officer is
present, the directors present shall choose one of their number to be chair.
4.17 Votes to Govern - At all meetings of the Board
every question shall be decided by a majority of the votes cast on the question
of those directors entitled to vote. In case of an equality of votes the chair
of the meeting shall not be entitled to a second or casting vote.
- 6 -
4.18 Conflict of Interest - A director or officer
who:
(a) |
is a party to; or |
|
|
(b) |
is a director or an officer of, or has a material
interest in, any person who is a party to; |
a material contract or transaction or proposed material
contract or transaction with the Corporation shall disclose the nature and
extent of such director's or officer's interest at the time and in the manner
provided by the Act. Any such contract or transaction or proposed material
contract or transaction shall be referred to the Board or shareholders for
approval in accordance with the Act even if such contract or proposed material
contract or transaction is one that in the ordinary course of the Corporation's
business would not require approval by the Board or shareholders, and a director
interested in a contract or transaction so referred to the Board shall not
attend any part of a meeting of the Board during which the contract or
transaction is discussed and shall not vote on any resolution to approve such
contract or transaction except as provided by the Act.
4.19 Remuneration and Expenses - Subject to the articles
and any unanimous shareholder agreement, the directors shall be paid such
remuneration for their services as the Board may from time to time determine.
The directors shall also be entitled to be reimbursed for travelling and other
expenses properly incurred by them in attending meetings of the Board or any
committee thereof. Nothing herein contained shall preclude any director from
serving the Corporation in any other capacity and receiving remuneration
therefor in that capacity.
SECTION 5
DELEGATION
5.1 Committee of Directors - The Board may appoint a
committee of directors and delegate to such committee any of the powers of the
Board except those which, under the Act, a committee of directors has no
authority to exercise.
5.2 Transaction of Business - The powers of a committee
of directors may be exercised by a meeting at which a quorum is present or by
resolution in writing signed by all the members of such committee who would have
been entitled to vote on that resolution at a meeting of the committee. Meetings
of such committee may be held at any place within or outside Ontario.
5.3 Procedure - 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 chair and to regulate its procedure.
- 7 -
SECTION 6
OFFICERS
6.1 Appointment - Subject to the articles and any
unanimous shareholder agreement, the Board may from time to time appoint a chief
executive officer, president, chief financial officer, one or more
vice-presidents (to which title may be added words indicating seniority or
function), a secretary, a treasurer and such other officers as the Board may
determine, including one or more assistants to any of the officers so appointed.
The Board may specify the duties of and, in accordance with this by-law and
subject to the Act, the articles and any unanimous shareholder agreement,
delegate to such officers powers to manage the business and affairs of the
Corporation. Subject to Section 6.2, an officer may but need not be a director
and one person may hold more than one office.
6.2 Chair of the Board - The Board may from time to time
also appoint a chair of the Board who shall be a director. If appointed, the
Board may assign to the chair any of the powers and duties that are by any
provision of this by-law assigned to the chief executive officer; and the chair
shall, subject to the Act, have such other powers and duties as the Board may
specify. During the absence or disability of the chair of the Board, the chair's
duties shall be performed and the chair's powers exercised by the chief
executive officer if the chief executive officer is a director, failing which,
such other director as the majority of the directors shall determine.
6.3 Chief Executive Officer If appointed, the chief
executive officer, subject to the authority of the Board, shall be responsible
for implementing the strategic plans and policies of the Corporation as
established by the Board; and the chief executive officer shall have such other
powers and duties as the Board may specify. During the absence or disability of
the chair, or if no chair has been appointed, the chief executive officer shall
have the powers and duties of that office as contemplated in Section 6.2.
6.4
President - If appointed, the president shall have general supervision of
the business of the Corporation and shall have such other powers and duties as
the Board may specify. During the absence or disability of the chief executive
officer, or if no chief executive officer has been appointed, the president
shall also have the powers and duties of that office.
6.5 Chief Financial Officer If appointed, the chief
financial officer shall keep proper accounting records in compliance with the
Act and shall be responsible for the deposit of money, the safekeeping of
securities and the disbursement of the funds of the Corporation; the chief
financial officer shall render to the Board whenever required an account of all
transactions as chief financial officer and of the financial position of the
Corporation; and shall have such other powers and duties as the Board or the
chief executive officer may specify.
6.6 Vice-President - If appointed, a vice-president
shall have such powers and duties as the Board or the chief executive officer
may specify.
6.7 Secretary - If appointed, the secretary shall attend
and be the secretary of all meetings of the Board, shareholders and committees
of the Board and shall enter or cause to be entered in records kept for that
purpose minutes of all proceedings thereat; the secretary shall give or cause to
be given, as and when instructed, all notices to shareholders, directors,
officers, auditors and members of committees of the Board; the secretary 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 instruments belonging to the Corporation, except when some other
officer or agent has been appointed for that purpose; and the secretary shall
have such other powers and duties as the Board or the chief executive officer
may specify.
- 8 -
6.8 Treasurer - If appointed, the treasurer shall have
such powers and duties as the Board or the chief financial officer may specify.
During the absence or disability of the chief financial officer, or if no chief
financial officer has been appointed, the treasurer shall have the powers and
duties of that office.
6.9 Powers and Duties of Other Officers - The powers and
duties of all other officers shall be such as the terms of their engagement call
for or as the Board or the chief executive officer may specify. Any of the
powers and duties of an officer to whom an assistant has been appointed may be
exercised and performed by such assistant, unless the Board or the chief
executive officer otherwise directs.
6.10 Variation of Powers and Duties - The Board may from
time to time and subject to the Act, vary, add to or limit the powers and duties
of any officer.
6.11 Term of Office - The Board, in its discretion, may
remove any officer of the Corporation, without prejudice to such officer's
rights under any employment contract. Otherwise each officer appointed by the
Board shall hold office until such officer's successor is appointed, or until
such officer's earlier resignation.
6.12 Terms of Employment and Remuneration - The terms of
employment and the remuneration of officers appointed by the Board shall be
settled by it from time to time.
6.13 Conflict of Interest - An officer who:
(a) |
is a party to; or |
|
|
(b) |
is a director or an officer of, or has a material
interest in, any person who is a party to; |
a material contract or transaction or proposed material
contract or transaction with the Corporation shall disclose the nature and
extent of such officer's interest at the time and in the manner provided by the
Act.
6.14 Agents and Attorneys - The Board shall have power
from time to time to appoint agents or attorneys for the Corporation in or
outside Canada with such powers of management or otherwise (including the power
to sub-delegate) as may be thought fit.
6.15 Fidelity Bonds - The Board may require such
officers, employees and agents of the Corporation as the Board deems advisable
to furnish bonds for the faithful discharge of their powers and duties, in such
form and with such surety as the Board may from time to time determine.
SECTION 7
PROTECTION OF DIRECTORS, OFFICERS AND
OTHERS
7.1 Limitation of Liability - No director or officer
shall be liable for the acts, receipts, neglects or defaults of any other
director or officer or employee, or for joining in any receipt or other act for
conformity, or for any loss, damage or expense happening to the Corporation
through the insufficiency or deficiency of title to any property acquired for or
on behalf of the Corporation, or for the insufficiency or deficiency of any
security in or on 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 for any loss occasioned by any error of
judgment or oversight on such individual's part, or for any other loss, damage
or misfortune whatever which shall happen in the execution of the duties of such
individual's office or in relation thereto; provided that
nothing herein shall relieve any director or officer from the duty to act in
accordance with the Act and the Regulations or from liability for any breach
thereof.
- 9 -
7.2 Indemnity - Subject to the Act, the Corporation
shall indemnify a director or officer of the Corporation, a former director or
officer of the Corporation or another individual who acts or acted at the
Corporation's request as a director or officer, or an individual acting in a
similar capacity, of another entity, and such person's heirs and legal
representatives, against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by the
individual in respect of any civil, criminal, administrative, investigative or
other proceeding in which the individual is involved because of that association
with the Corporation or other entity, if:
(a) |
the individual acted honestly and in good faith with a
view to the best interests of the Corporation or, as the case may be, to
the best interest of the other entity for which the individual acted as a
director or officer or in a similar capacity at the Corporation's request;
and |
|
|
(b) |
in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, the person had
reasonable grounds for believing that the individual's conduct was
lawful. |
7.3 Insurance - Subject to the Act, the Corporation may
purchase and maintain such insurance for the benefit of its directors and officers as such, as the Board
may from time to time determine.
SECTION 8
SHARES
8.1 Allotment - Subject to the Act, the articles and any
unanimous shareholder agreement, the Board may from time to time allot or grant
options to purchase the whole or any part of the authorized and unissued shares
of the Corporation at such times and to such persons and for such consideration
as the Board shall determine, provided that no share shall be issued until it is
fully paid as provided by the Act.
8.2 Commissions - The Board may from time to time
authorize the Corporation to pay a reasonable commission to any person in
consideration of such person purchasing or agreeing to purchase shares of the
Corporation, whether from the Corporation or from any other person, or procuring
or agreeing to procure purchasers for any such shares.
8.3 Registration of Transfer - Subject to the Act, no
transfer of shares shall be registered in a securities register except on
presentation of the certificate or acknowledgment of the right to
receive a certificate representing such shares with an endorsement
which complies with the Act, together with such reasonable assurance or evidence
of signature, identification and authority to transfer as the Board may from
time to time prescribe, on payment of all applicable taxes and any fees
prescribed by the Board, on compliance with such restrictions on transfer as are
authorized by the articles and on satisfaction of any lien referred to in
Section 8.5.
8.4 Transfer Agents and Registrars - The Board may from
time to time 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.
- 10 -
8.5 Lien for Indebtedness - If the articles provide that
the Corporation shall have a lien on shares registered in the name of a
shareholder indebted to the Corporation, such lien may be enforced, subject to
any other provision of the articles and to any unanimous shareholder agreement,
by the sale of the shares thereby affected or by any other action, suit, remedy
or proceeding authorized or permitted by law or by equity and, pending such
enforcement, the Corporation may refuse to register a transfer of the whole or
any part of such shares.
8.6 Non-recognition of Trusts - Subject to the Act, the
Corporation may treat the person in whose name a share is registered in the
securities register as the person exclusively entitled to vote, to receive
notices, to receive any dividend or other payments in respect of the share and
otherwise to exercise all the rights and powers of an owner.
8.7 Security Certificates - Every holder of one or more
securities of the Corporation shall be entitled, at the security
holder'Corporations option, to a security certificate, or to a
non-transferable written acknowledgement of such security holder's right to
obtain a security certificate, stating the number and class or series of
securities held by such security holder as shown on the securities register.
Security certificates and acknowledgements of a security holder's right to a
security certificate, respectively, shall be in such form as the Board shall
from time to time approve. Any security certificate shall be signed in
accordance with Section 2.2 and need not be under the corporate seal; provided
that, unless the Board otherwise determines, certificates representing
securities in respect of which a transfer agent and/or registrar has been
appointed shall not be valid unless 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 security certificates which are not valid unless
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 on security 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 on the Corporation. A security 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.
8.8 Replacement of Security Certificates - The Board or
any officer or agent designated by the Board may in its or such person's
discretion direct the issue of a new security certificate in lieu of and on
cancellation of a security certificate that has been mutilated or in
substitution for a security certificate claimed to have been lost, destroyed or
wrongfully taken on payment of such fee, not exceeding the amount prescribed by
the Regulations, and on such terms as to indemnity, reimbursement of expenses
and evidence of loss and of title as the Board may from time to time prescribe,
whether generally or in any particular case.
8.9 Joint Security Holders - If two or more persons are
registered as joint holders of any security, 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 effectual receipts for the certificate issued
in respect thereof or for any dividend, bonus, return of capital or other money
payable or warrant issuable in respect of such security.
8.10 Deceased Security Holders - In the event of the
death of a holder, or of one of the joint holders, of any security, the
Corporation shall not be required to make any entry in the securities register
in respect thereof or to make payment of any dividends thereon except on
production of all such documents as may be required by law and on compliance
with the reasonable requirements of the Corporation and its transfer agents.
- 11 -
SECTION 9
DIVIDENDS AND RIGHTS
9.1 Dividends - Subject to the Act, the Board may from
time to time declare dividends payable to the shareholders according to 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.
9.2 Dividend Cheques - A dividend payable in money 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 such registered holder's 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 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 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.
9.3 Non-receipt of Cheques - In the event of non-receipt
of any dividend cheque by the person to whom it is sent as aforesaid, the
Corporation shall issue to such person a replacement cheque for a like amount on
such terms as to indemnity, reimbursement of expenses and evidence of
non-receipt and of title as the Board may from time to time prescribe, whether
generally or in any particular case.
9.4 Record Date for Dividends and Rights - The Board may
fix in advance a date, preceding by not more than 50 days, the date for the
payment of any dividend or the date for the issue of any warrant or other
evidence of the 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 shall be given, not less than 7
days before such record date. Where no record date is fixed so, the record date
for the determination of the persons entitled to receive payment of any dividend
or to exercise the right to subscribe for securities of the Corporation shall be
at the close of business on the day on which the resolution relating to such
dividend or right to subscribe is passed by the Board.
9.5 Unclaimed Dividends - Any dividend unclaimed after
the expiry of the applicable limitation period shall be forfeited and shall
revert to the Corporation.
SECTION 10
MEETINGS OF SHAREHOLDERS
10.1 Annual Meetings - The annual meeting of
shareholders shall be held at such time in each year and, subject to Section
10.3, at such place as the Board, may from time to time determine, for the
purpose of considering the financial statements and reports required by the Act
to be placed before the annual meeting, electing directors, appointing auditors
and for the transaction of such other business as may properly be brought before
the meeting.
10.2 Special Meetings - The Board, the chair of the
Board, the chief executive officer, or the
president shall have power to call a special meeting of
shareholders at any time.
10.3 Place of Meetings Subject to the articles and any
unanimous shareholder agreement, meetings of shareholders shall be held at the
registered office of the Corporation or, if the Board shall so determine, at
some other place in Ontario or, at some place outside Ontario if all the
shareholders entitled to vote at the meeting so agree. A meeting of
shareholders held under Section 10.4 is deemed to be held at the place where the
registered office is located.
- 12 -
10.4 Participation by Electronic Means - If the
Corporation chooses to make available a telephonic or electronic facility that
permits all participants to communicate adequately with each other during a
meeting of shareholders, any shareholder entitled to attend such meeting may
participate in the meeting by means of such telephonic or electronic
communication facility. A shareholder, who through such means votes at the
meeting or establishes a communications link to the meeting is deemed to be
present at the meeting. Notwithstanding any other provision of this by-law, any
person participating in a meeting of shareholders pursuant to this Section who
is entitled to vote at that meeting may vote, in accordance with the Act and the
Regulations, by means of any telephonic, electronic or other communication
facility that the Corporation has made available for that purpose.
10.5 Notice of Meetings - Notice of the time and place
of each meeting of shareholders shall be given in the manner provided in Section
11.1 not less than 10 nor more than 50 days before the date of the meeting, or
within such other period as may be provided by the Act or prescribed by the
Regulations to each director, to the auditor and to each shareholder who at the
close of business on the record date for notice, is entered in the securities
register as the holder of one or more shares carrying the right to vote at the
meeting. Notice of a meeting of shareholders called for any purpose other than
consideration of the financial statements and auditors report, election of
directors and reappointment of the incumbent auditors shall state the nature of
such 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.
10.6 List of Shareholders Entitled to Notice - For every
meeting of shareholders, the Corporation shall prepare within the time specified
by the Act 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. If a record date for notice is fixed pursuant to Section 10.7, the
shareholders listed shall be those registered at the close of business on such
record date. If no record date for notice is so fixed, the shareholders listed
shall be those registered (a) at the close of business on the day immediately
preceding the day on which notice of the meeting is given, or (b) on the day on
which the meeting is held where no such notice is given. The list 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 central
securities register is maintained and at the meeting for which the list was
prepared.
10.7 Record Date for Notice The Board may fix in advance
a date, preceding the date of any meeting of shareholders by not less than 21
days and not more than 50 days, as a record date for the determination of the
shareholders entitled to notice of the meeting, and notice of any such record
date shall be given not less than 7 days before such record date by newspaper
advertisement and written notice in the manner provided by the Act. If no record
date for notice is so fixed, the record date for the determination of the
shareholders entitled to notice of the meeting shall be (a) at the close of
business on the day immediately preceding the day on which notice of the meeting
is given, or (b) on the day on which the meeting is held where no such notice is
given.
10.8 Meetings without Notice - A meeting of shareholders
may be held at any time and place permitted by the Act without notice or on
shorter notice than that provided for herein, and proceedings thereat shall not
be invalidated (a) if all the shareholders entitled to vote thereat are present
in person or represented by proxy (other than as expressly to object that the
meeting is not lawfully called) or if those not present in person or represented
by proxy waive notice before or after the meeting or the time prescribed for the
notice thereof, in writing of such meeting being held, and (b) if the auditors
and the directors are present or if those not present, waive notice of or
otherwise consent to such meeting being held. At such a meeting any business may be transacted which
the Corporation at a meeting of shareholders may transact. If the meeting is
held at a place outside Ontario, shareholders not present in person or
represented by proxy, but who have waived notice of such meeting, shall also be
deemed to have consented to the meeting being held at such place.
- 13 -
10.9 Chair, Secretary and Scrutineers - The chair of any
meeting of shareholders shall be the first mentioned of such of the following
officers as have been appointed and who is present at the meeting: chief
executive officer, president, chair of the Board, or a vice-president who is a
director. If no such officer is present within 15 minutes from the time fixed
for holding the meeting, the persons present and entitled to vote shall choose
one of their number to be chair. If the secretary of the Corporation is absent,
the chair shall appoint some person, who need not be a shareholder, to act as
secretary of the meeting. If desired, one or more scrutineers, who need not be
shareholders, may be appointed by a resolution or by the chair with the consent
of the meeting.
10.10 Persons Entitled to be Present - The only persons
entitled to attend a meeting of shareholders shall be those entitled to vote
thereat, the directors and auditor of the Corporation and others who, although
not entitled to vote, are entitled or required under the Act or the articles or
by-laws to be present at the meeting. Any other person may be admitted only on
the invitation of the chair of the meeting or with the consent of the
meeting.
10.11 Quorum - Subject to the Act, a quorum for the
transaction of business at any meeting of shareholders shall be one
persontwo or more persons present in person,
each being a shareholder entitled to vote thereat,
or a duly appointed representative or proxyholderproxy or proxy
holder for an absent shareholder so entitled, and holding or
representing in the aggregate not less than
a majority331/3% of the issued
and outstanding shares of the Corporation entitled to vote at the
meeting..
If a quorum is present at the opening of any meeting of
shareholders, the shareholders present in person or represented by proxy may
proceed with the business of the meeting notwithstanding that a quorum is not
present throughout the meeting. If a quorum is not present at the opening of any
meeting of shareholders, the shareholders present in person or represented by
proxy may adjourn the meeting to a fixed time and place, but may not transact
any other business.
10.12 Right to Vote - Subject to the Act as to
authorized representatives of any other body corporate or association, at any
meeting of shareholders for which the Corporation must prepare a list referred
to in Section 10.6, every person who is named in such list shall be entitled to
vote the shares shown opposite such person's name.
10.13 Proxies - Every shareholder entitled to vote at a
meeting of shareholders may appoint a proxyholder, or one or more alternate
proxyholders, who need not be shareholders, to attend and act at the meeting in
the manner and to the extent authorized and with the authority conferred by the
proxy. A proxy shall be in writing executed by the shareholder or such
shareholder's attorney and shall conform with the Act. Every such shareholder
which is a body corporate or association may by resolution of its directors or
governing body authorize an individual who need not be a shareholder to
represent it at a meeting of shareholders and such individual may exercise on
the shareholder's behalf all the powers it could exercise if it were an
individual shareholder. The authority of such an individual shall be established
by depositing with the Corporation a certified copy of such resolution, or in
such other manner as may be satisfactory to the secretary of the Corporation or
the chair of the meeting.
10.14 Time for Deposit of Proxies - The Board may
specify in a notice calling a meeting of shareholders a time, preceding the time
of such meeting by not more than 48 hours exclusive of non-business days, before
which time proxies to be used at such meeting must be deposited. A proxy shall
be acted on only if, prior to the time so specified, it shall have been
deposited with the Corporation or an agent thereof specified in such notice or, if no such
time is specified in such notice, unless it has been received by the secretary
of the Corporation or by the chair of the meeting or any adjournment thereof
prior to the time of voting.
- 14 -
10.15 Joint Shareholders - If two or more persons hold
shares jointly, one of them present in person or represented by proxy at a
meeting of shareholders may, in the absence of the other or others, vote the
shares; but if two or more of those persons are present in person or represented
by proxy and vote, they shall vote as one on the shares jointly held by
them.
10.16 Votes to Govern - At any meeting of shareholders
every question shall, unless otherwise required by the articles or by-laws or by
law, be determined by a majority of the votes cast on the question. In case of
an equality of votes either on a show of hands or on a ballot or on results of
electronic voting, the chair of the meeting shall not be entitled to a second or
casting vote.
10.17 Show of Hands - Subject to the Act, any question
at a meeting of shareholders shall be decided by a show of hands unless a ballot
thereon is required or demanded as hereinafter provided. On a show of hands
every person who is present and entitled to vote shall have one vote. Whenever a
vote by show of hands shall have been taken on a question, unless a ballot
thereon is so required or demanded, a declaration by the chair of the meeting
that the vote on the question has been carried or carried by a particular
majority or not carried and an entry to that effect in the minutes of the
meeting shall be prima facie evidence of the fact without proof of the
number or proportion of the votes recorded in favour of or against any
resolution or other proceeding in respect of the question, and the result of the
vote so taken shall be the decision of the shareholders on the question.
10.18 Ballots - On any question proposed for
consideration at a meeting of shareholders, and whether or not a show of hands
has been taken thereon, the chair may require a ballot of any person present or
any shareholder or proxyholder entitled to vote on such question at the meeting
may demand a ballot. A ballot so demanded shall be taken in such manner as the
chair shall direct. A demand for a ballot may be withdrawn at any time prior to
the taking of the ballot. If a ballot is taken each person present shall be
entitled, in respect of the shares which such person is entitled to vote at the
meeting on the question, to that number of votes provided by the Act or the
articles, and the result of the ballot so taken shall be the decision of the
shareholders on the question.
10.19 Adjournment - If a meeting of shareholders is
adjourned by one or more adjournments for an aggregate of less than 30 days it
is not necessary to give notice of the adjourned meeting other than by
announcement at the time of an adjournment. If a meeting of shareholders is
adjourned by one or more adjournments for an aggregate of 30 days or more but
not more than 90 days, notice of the adjourned meeting shall be given as for an
original meeting but the management of the Corporation shall not be required to
send a form of proxy in the form provided by the Act to each shareholder who is
entitled to receive notice of the meeting.
10.20 Resolution in Writing - A resolution in writing
signed by all the shareholders entitled to vote on that resolution at a meeting
of shareholders is as valid as if it had been passed at a meeting of the
shareholders unless a written statement with respect to the subject matter of
the resolution is submitted by a director or the auditors in accordance with the
Act.
10.21 Only One Shareholder - Where the Corporation has
only one shareholder or only one holder of any class or series of shares, the
shareholder present in person or by proxy constitutes a meeting.
- 15 -
SECTION 11
NOTICES
11.1 Method of Giving Notices - Any notice (which term
includes any communication or document) to be given (which term includes sent,
delivered or served) pursuant to the Act, the Regulations, the articles, the
by-laws or otherwise to a shareholder, director, officer or member of a
committee of the Board or to the auditors shall be sufficiently given if
delivered personally to the person to whom it is to be given or if delivered to
such person's recorded address or if mailed to such person at such person's
recorded address by prepaid ordinary or air mail or if sent to such person at
such person's recorded address by facsimile or if provided to such person by
electronic means in accordance with the Electronic Commerce Act, 2000
(Ontario). 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 received by the addressee on the fifth day
after mailing; and a notice so provided by electronic means (including by
facsimile) shall be deemed to have been sent and received in the manner and at
the time specified in the Electronic Commerce Act, 2000 (Ontario). 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 the secretary to be reliable.
11.2 Notice to Joint Shareholders - If two or more
persons are registered as joint holders of any share, any notice shall be
addressed to all of such joint holders but notice to one of such persons shall
be sufficient notice to all of them.
11.3 Computation of Time - In computing the date when
notice must be given under any provision requiring a specified number of days
notice of any meeting or other event, the date of giving the notice shall be
excluded and the date of the meeting or other event shall be included.
11.4 Undelivered Notices - If any notice given to a
shareholder pursuant to Section 11.1 is returned on two consecutive occasions
because such shareholder cannot be found, the Corporation shall not be required
to give any further notices to such shareholder until such shareholder informs
the Corporation in writing of such shareholder's new address.
11.5 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 taken at any meeting held pursuant to such notice or otherwise
founded thereon.
11.6 Persons Entitled by Death or Operation of Law -
Every person who, by operation of law, transfer, death of a shareholder or any
other means whatsoever, shall become entitled to any share, shall be bound by
every notice in respect of such share which shall have been duly given to the
shareholder from whom such person derives title to such share prior to such
person's name and address being entered on the securities register (whether such
notice was given before or after the happening of the event on which such person
became so entitled) and prior to such person furnishing to the Corporation the
proof of authority or evidence of entitlement provided by the Act.
11.7 Waiver of Notice - Any shareholder, (or such
shareholder's duly appointed proxyholder), director, officer, auditors 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 such person under the
Act, the Regulations, the articles, the by-laws or otherwise and such waiver or
abridgement, whether given before or after the meeting or other event of which
notice is required to be given, shall cure any default in the giving or in the
time of such notice, as the case may be. Any such waiver or abridgement shall be
in writing or by electronic means in accordance with the
Electronic Commerce Act, 2002 (Ontario) except a waiver of notice of a
meeting of shareholders or of the Board or of a committee of the Board which may
be given in any manner.
- 16 -
SECTION 12
REPEAL
12.1 Repeal - By-law No. 2, entitled A by-law relating
generally to the transaction of the business and affairs of Stem Cell
Therapeutics Corp. and made as of August 23, 2005, is repealed as of the coming
into force of this by-law provided that such repeal shall not affect the
previous operation of any by-law so repealed or affect the validity of any act
done or right, privilege, obligation or liability acquired or incurred under or
the validity of any contract or agreement made pursuant to any such by-law prior
to its repeal. All officers and persons acting under any by-law so repealed
shall continue to act as if appointed by the directors under the provisions of
this by-law or the Act until their successors are appointed.
SECTION 13
EFFECTIVE DATE
13.1 Effective Date - This by-law shall be effective
when made by the Board.
Dated as of the 16th [day] day of
September, 2013.[Month], [Year].
David
AllanCalvin Stiller |
Chairman |
- 17 -
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption “Experts” and to the incorporation by reference of our report dated March 23, 2015 in the prospectus included in the Registration Statement on Form F-10 of Trillium Therapeutics Inc. for the registration of common shares, first preferred shares, warrants to purchase common shares and units.
Toronto, Canada
May 29, 2015 |
/s/ Ernst & Young LLP
Chartered Professional Accountants
Licensed Public Accountants |
Trillium Therapeutics (NASDAQ:TRIL)
Historical Stock Chart
From Apr 2024 to May 2024
Trillium Therapeutics (NASDAQ:TRIL)
Historical Stock Chart
From May 2023 to May 2024