Rogers 2006 Annual Report Download - page 107

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RO GER S CO MMU NIC AT ION S IN C . 20 0 6 ANN UA L RE POR T
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(A) C APITAL STOCK:
(i) Preferred shares:
Rights and conditions:
There are 400 million authorized Preferred shares without par
value, issuable in series, with rights and terms of each series to be
fixed by the Board of Directors prior to the issue of such series. The
Preferred shares have no rights to vote at any general meeting of
the Company. No Preferred shares have been issued.
(ii) Common shares:
Rights and conditions:
On October 30, 2006, subject to shareholder approval, the Board
of Directors approved a resolution effecting a two-for-one split of
the Company’s Class A Voting and Class B Non-Voting shares where
shareholders of record as of the close of business on December 29,
2006 would receive one additional share of the relevant class for
each share held upon distribution. The Board also approved reso-
lutions, again subject to shareholder approval, increasing the
maximum number of Class A Voting shares authorized to be issued
by 56,233,894 and requiring that all of the authorized and issued and
fully paid Class B Non-Voting shares with a par value, prior to the
split, of $1.62478 each be changed into shares without par value.
These resolutions were approved at a shareholder meeting held on
December 15, 2006.
All prior period common stock and applicable share and per share
amounts have been retroactively adjusted to reflect the split.
Reflecting the approval of these resolutions, there are 112,474,388
authorized Class A Voting shares without par value. Each Class A
Voting share is entitled to 50 votes per share. The Class A Voting
shares are convertible on a one-for-one basis into Class B Non-Voting
shares.
There are 1.4 billion authorized Class B Non-Voting shares.
During 2006, 140 Class A Voting shares were converted into Class B
Non-Voting shares.
The Articles of Continuance of the Company under the Company
Act (British Columbia) impose restrictions on the transfer, voting and
issue of the Class A Voting and Class B Non-Voting shares in order to
ensure that the Company remains qualified to hold or obtain licences
required to carry on certain of its business undertakings in Canada.
The Company is authorized to refuse to register transfers of any
shares of the Company to any person who is not a Canadian in order
to ensure that the Company remains qualified to hold the licences
referred to above.
(B) DIVIDENDS:
On April 25, 2006, the Company declared a semi-annual dividend
of $0.0375 per share on each of its outstanding Class B Non-Voting
shares and Class A Voting shares. This semi-annual dividend totalling
$24 million was paid on July 4, 2006 to the shareholders of record on
June 14, 2006.
On October 30, 2006, the Board approved an increase in the annual
dividend from $0.075 to $0.16 per Class A Voting and Class B Non-
Voting share. Additionally, the Company’s dividend distribution
policy was modified to make dividend distributions on a quarterly
basis instead of semi-annually. At the same time, the Board declared
the first quarterly dividend of $0.04 per share to be paid on January 2,
2007 to shareholders of record on December 20, 2006 reflecting the
increased $0.16 per share annual dividend level and the new quar-
terly distribution schedule. The dividend payment on January 2, 2007
totalled $25 million.
The Class A Voting shares may receive a dividend at a quarterly rate
of up to $0.04 per share only after the Class B Non-Voting shares
have been paid a dividend at a quarterly rate of $0.04 per share. The
Class A Voting and Class B Non-Voting shares share equally in divi-
dends after payment of a dividend of $0.04 per share for each class.
(C ) STOCK OPTIONS, SHARE UNITS AND SHARE
PURCHASE PL ANS:
As a result of the Company’s two-for-one stock split (note 20(a)(ii)),
the numbers of options, restricted share units and directors’ deferred
share units outstanding were adjusted, in accordance with existing
provisions of the plans for these awards, such that the holders of
these awards would be in the same economic position before and
after effecting the stock split. Consequently, these adjustments did
not result in a new measurement date for these awards.
All prior period numbers of options, restricted share units and direc-
tors’ deferred share units as well as exercise prices and fair values
per individual award have been retroactively adjusted to reflect the
two-for-one stock split.
(i) Stock options:
(a) Stock option plans:
Options to purchase Class B Non-Voting shares of the Company on a
one-for-one basis may be granted to employees, directors and offi-
cers of the Company and its affiliates by the Board of Directors or by
the Company’s Management Compensation Committee. There are
30 million options authorized under the 2000 plan, 25 million options
authorized under the 1996 plan, and 9.5 million options authorized
under the 1994 plan. The term of each option is 7 to 10 years and
the vesting period is generally four years but may be adjusted by
the Management Compensation Committee on the date of grant.
The exercise price for options is equal to the fair market value of the
Class B Non-Voting shares determined as the five-day average before
the grant date as quoted on The Toronto Stock Exchange.
Effective July 1, 2006, non-executive directors will no longer receive
stock options.
On July 1, 2005, all stock options of Call-Net were exchanged for
fully-vested options of RCI (note 4(b)).