Motorcade Industries Limited - s. 83 of the Act, s. 1(6) of the OBCA
Headnote
MutualReliance Review System for Exemptive Relief Applications - issuerhas five common shareholders and 569 holders of special shares,which have been called for redemption - issuer deemed to haveceased to be a reporting issuer. Subsection1(6) of the OBCA - issuer deemed to have ceased to be offeringits securities to the public under the Business Corporations Act(Ontario).ApplicableOntario Statutory Provisions
SecuritiesAct, R.S.O. 1990, c.S.5, as am., ss.1(1), 6(3) and 83. BusinessCorporations Act, R.S.O. 1990, c.B.16, as am., s.1(6).INTHE MATTER OF
THESECURITIES ACT, R.S.O. 1990, CHAPTER S.5,
ASAMENDED (the "Act")
AND
INTHE MATTER OF
THEBUSINESS CORPORATIONS ACT, R.S.O. 1990,
CHAPTERB.16, AS AMENDED (the "OBCA")
AND
INTHE MATTER OF
MOTORCADEINDUSTRIES LIMITED
ORDERS
(Section83 of the Act)
(Section1(6) of the OBCA)
UPONthe application of Motorcade Industries Limited (the "Applicant")to the Ontario Securities Commission (the "Commission")for: (i)an order, pursuant to section 83 of the Act, that the Applicantbe deemed to have ceased to be a reporting issuer under the Act;and (ii)an order, pursuant to subsection 1(6) of the OBCA, that the Applicantbe deemed to have ceased to be offering its securities to thepublic under the OBCA; ANDUPON considering the application and the recommendationof staff of the Commission: ANDUPON the Applicant having represented to the Commissionthat: 1.The Applicant is an Ontario corporation, which came into existenceon January 1, 2002 as a result of the amalgamation (the "Amalgamation")under the OBCA of Motorcade Industries Limited ("Motorcade")and Winter Privatizing Corporation, an Ontario corporation. TheApplicant's head office is located in Toronto, Ontario. 2.When Motorcade first issued securities to the public, its namewas "Motorcade Stores Limited". Immediately prior to the Amalgamation,Motorcade was a reporting issuer under the Act and an offeringcorporation under the OBCA, and by virtue of the Amalgamationthe Applicant has succeeded to each such status. 3.Neither Motorcade nor the Applicant is in default of any of therequirements of the Act. Motorcade was not, and the Applicantis not, a reporting issuer under any securities legislation otherthan the Act. 4.The Applicant does not intend to seek financing by way of an offeringto the public. 5.Immediately prior to the Amalgamation, Motorcade had outstanding558,409 common shares, of which 423,934 common shares were heldby Winter Privatizing Corporation and 134,475 common shares wereheld by members of the public (collectively, the "MinorityShareholders"). None of the authorized but unissued sharesin the capital of Motorcade were, and none of the authorized butunissued shares in the capital of the Applicant are, conditionallyallotted, reserved or set aside for issuance or subject to issuance. 6.The Amalgamation was approved at a Special Meeting of the shareholdersof Motorcade (the "Special Meeting") which washeld on December 10, 2001, by unanimous vote of all of the shareholdersof Motorcade, including those of the Minority Shareholders, whowere present in person or represented by proxy at that meeting. 7.In accordance with the terms of the Amalgamation: (i)the common shares of Motorcade held by the Minority Shareholdersbecame, on a share-for-share basis, non-voting, non-dividend bearing,redeemable, retractable Special Shares in the capital of the Applicant(collectively, the "Special Shares"), redeemableand retractable at the price of $9.50 per Special Share, and theshare certificates representing those common shares became sharecertificates representing the same respective numbers of the SpecialShares; and (ii)the outstanding common shares of Winter Privatizing Corporationbecame, on a share-for-share basis, common shares in the capitalof the Applicant (the "Common Shares"). 8.Accordingly, immediately following the time on January 1, 2002that the Amalgamation became effective, the Applicant had outstanding: (i)134,475 Special Shares, redeemable and retractable at the priceof $9.50 per Special Share, all held by the Minority Shareholders;and (ii)423,935 Common Shares. 9.There are five beneficial holders of the Common Shares. Each beneficialholder of Common Shares is aware of, understands the nature of,and has no objection to this application. 10.No securities of Motorcade or the Applicant are listed or tradedon any exchange or market in Canada or elsewhere. 11.Computershare Trust Company of Canada (the "Transfer Agent")was the registrar and transfer agent of the common shares of Motorcade,and as such it has become the registrar and transfer agent ofthe Special Shares. 12.On December 10, 2001 Motorcade filed in accordance with the Acta Material Change Report disclosing that the Amalgamation hadbeen approved at the Special Meeting; that the Amalgamation wasintended to be effected on January 1, 2002; that as a term ofthe Amalgamation the shares of Motorcade held by the MinorityShareholders would automatically become Special Shares on a share-for-sharebasis; and that it was contemplated that such Special Shares wouldbe called for redemption on January 2, 2002 at their cash redemptionprice of $9.50 each. Such Material Change Report can be accessedthrough the SEDAR system by any member of the public. 13.On January 2, 2002 the Special Shares were called for redemptionand there was mailed to each registered holder of Special Sharesa notice of redemption together with a letter of transmittal withinstructions as to how to complete it and to return it to theTransfer Agent, as well as a return envelope addressed to theTransfer Agent. As a result of such calling for redemption, theonly right which a holder of Special Shares now has is to receivethe sum of $9.50 for each Special Share held by that holder, uponthe surrender to the Transfer Agent of the share certificatesrepresenting the holder's Special Shares. 14.The Applicant and the Transfer Agent are unaware of the currentaddresses of 441 of the Minority Shareholders (the "LostShareholders"), and at least five previous mailings tothem have been returned. Such mailings included the material mailedto shareholders in respect of the meeting held on December 10,2001 and the notice of redemption of the Special Shares. 15.In an effort to contact Lost Shareholders, the Applicant placeda display advertisement in the national editions of both the Globe& Mail and the National Post, informing shareholders of theirright to receive $9.50 for each share of Motorcade and requestingthem to contact the Applicant. As a result of such advertisements,one Lost Shareholder, holding 50 Special Shares, whose addresshad been unknown, made contact with the Applicant. 16.In a further effort to make contact with the Lost Shareholders,the Applicant has retained Georgeson Shareholder to attempt todo so. Georgeson Shareholder is an international company (withoffices in New York, London, Paris, Rome, Toronto, Calgary,Sydney and Johannesburg) specializing in making contact with shareholders.It typically is retained in proxy contests and takeover bids,but has a programme specifically designed to identify and makecontact with shareholders in cases such as this, where their currentaddresses are unknown to the issuer. 17.Holders of 29,681 Special Shares have surrendered their sharecertificates and been paid the redemption price of $9.50 for eachof such Special Shares. 18.There remain 104,794 Special Shares outstanding held by 569 holders. 19.The Applicant has sufficient funds to pay the redemption priceof $9.50 per Special Share for all of the Special Shares outstanding.The Applicant will pay the redemption price of $9.50 per SpecialShare promptly following the respective times that the share certificatesrepresenting those Special Shares are surrendered to the TransferAgent for that purpose. 20.Holders of the Special Shares have no legal rights other thanthe right to surrender their share certificates and receive theredemption price of $9.50 per Special Share from the Applicant. 21.Other than the Special Shares and the Common Shares, the Applicanthas no securities, including debt securities, outstanding. ANDUPON the Commission being satisfied that to do so wouldnot be prejudicial to the public interest; ITIS ORDERED, pursuant to section 83 of the Act, that theApplicant be deemed to have ceased to be a reporting issuer underthe Act; ANDIT IS FURTHER ORDERED, pursuant to subsection 1(6) ofthe OBCA, that the Applicant be deemed to have ceased to be offeringits securities to the public for the purposes of the OBCA. March8, 2002. "PaulMoore" "Theresa McLeod"