Dividend Reinvestment and Optional Cash Purchase Plan

Transcription

1 ARMTEC INFRASTRUCTURE INC. Dividend Reinvestment and Optional Cash Purchase Plan Holders of common shares of Armtec Infrastructure Inc. who reside in Canada and hold their shares through a financial institution, broker or other intermediary should consult with that party to determine the procedures for participation in Dividend Reinvestment and Optional Cash Purchase Plan. The administrative practices of intermediaries may vary and, accordingly, the various dates by which actions must be taken and documentary requirements set out in the plan may not be the same as those required by intermediaries. Shareholders should consult their tax advisers about the tax consequences which will result from their participation in the plan _9

2 2. TABLE OF CONTENTS DIVIDEND REINVESTMENT PLAN OVERVIEW...2 SUMMARY...2 QUESTIONS AND ANSWERS...4 DIVIDEND REINVESTMENT AND OPTIONAL CASH PURCHASE PLAN...6 TAX CONSIDERATIONS...15 DIVIDEND REINVESTMENT PLAN OVERVIEW All capitalized terms are defined in the Plan, beginning on page 6 of this pamphlet. This pamphlet describes the Plan available to holders of Common Shares whereby Participants may reinvest their cash dividends and optional cash payments in additional Common Shares. The Plan provides a means by which the Corporation can acquire additional capital funds which will be used for general corporate purposes. This pamphlet has four parts: 1. Summary of the Plan 2. Frequently asked questions 3. The Plan 4. Income tax considerations In the event of any difference between the Plan and the information contained in the first two parts of this pamphlet, the provisions of the Plan will govern. SUMMARY The Plan provides holders of Common Shares who are residents of Canada with a convenient method of reinvesting cash dividends in additional Common Shares of the Corporation. For those who participate in the Plan, instead of receiving dividends on Common Shares in cash, the dividends are used to buy additional Common Shares. Common Shares acquired under the Plan will be automatically enrolled in the Plan. The Plan allows Participants to make optional cash purchases of additional Common Shares without brokerage costs or at reduced brokerage costs. Common Shares acquired under the Plan may be, at the option of the Corporation, purchased on the Canadian open market, which includes the facilities of the Toronto Stock Exchange or any other alternative Canadian market or from the Corporation s treasury. Common Shares will be bought at the Market Price. Common Shares purchased with cash dividends through the treasury, may be purchased at a discount of up to 5%from the Market Price. The Corporation will announce by way of press release and in dividend announcements whether Common Shares purchased under the Plan will be purchased on the open market or from treasury and, in the case of the additional Common Shares purchased with cash dividends, any applicable discount from the Market Price if Common Shares are issued from treasury. Any Common Shares purchased with the optional cash payment will be purchased at 100% of the Market Price regardless of whether the Common Shares will be purchased on the open market or

3 3. issued from treasury. Each optional cash payment must be a minimum of $100 and all optional cash payments made in any calendar year must not exceed an aggregate amount of $20,000. Common Shares acquired under the Plan will be automatically enrolled in the Plan. No brokerage or administration fees will be charged by the Corporation or the Plan Agent for participation in the Plan.

4 4. QUESTIONS AND ANSWERS Question: What is the Dividend Reinvestment and Optional Cash Purchase Plan? Answer: The Plan enables holders of Common Shares who are residents of Canada to acquire additional Common Shares through the automatic reinvestment of cash dividends and investment of optional cash payments in a convenient manner. Common Shares acquired under the Plan will be automatically enrolled in the Plan. Shareholders who do not enroll in the Plan will continue to receive dividends in the usual manner. Question: What are some benefits of participating in the Plan? Answer: The Plan offers Participants a cost-effective and simple way to increase their investment in the Corporation by purchasing Common Shares through the reinvestment of dividends and optional cash payments. Participants are able to dollar-cost-average their Common Share purchases by reinvesting dividends and making optional cash purchases under the Plan on a regular quarterly basis. In addition, all brokerage commissions, fees and transaction costs incurred by the Plan Agent to acquire the Common Shares under the Plan are paid for by the Corporation. Question: Who is eligible to participate in the Plan? Answer: Holders of Common Shares who reside in Canada and hold at least one whole Common Share are eligible to participate in the Plan. Question: How do I participate in the Plan? Answer: If you re a resident of Canada, simply contact the intermediary through which you hold your Common Shares to request participation in the Plan. Once you have enrolled in the Plan, participation continues automatically until you terminate it, or until the Plan is terminated. Question: What is the purchase price of the Common Shares acquired under the Plan? Answer: The Common Shares acquired under the Plan are purchased, at the Corporation s discretion, either on the Canadian open market which includes the facilities of the Toronto Stock Exchange or any other alternative Canadian market or from the Corporation s treasury. If Common Shares are purchased on the open market, the Market Price will be equal to the average of the actual purchase price paid (excluding brokerage commissions, fees and transaction costs) per Common Share by the Plan. If the Corporation issues the Common Shares purchased with cash dividends from treasury, the Market Price will be equal to the volume-weighted average trading price of the Common Shares on the Toronto Stock Exchange on the five trading days preceding the Dividend Payment Date, subject to a possible discount of up to 5% to the Market Price at the sole discretion of the board of directors of the Corporation. If the Corporation issues Common Shares purchased with optional cash payments, there will not be a discount from the Market Price. The Corporation will announce by way of press release and in dividend announcements whether Common Shares acquired under the Plan will be bought on the open market or from treasury and any applicable discount from the Market Price.

5 5. All brokerage commissions, fees and transaction costs incurred by the Plan Agent to acquire the Common Shares under the Plan will be paid for by the Corporation. Question: When will Common Shares be acquired under the Plan? Answer: Common Shares will be purchased beginning on each Dividend Payment Date. The Corporation intends to pay dividends on a quarterly basis, with such dividends payable to shareholders of record at the end of March, June, September and December. However, the declaration of dividends and the corresponding dividend record and payment dates are determined by the Corporation s board of directors in its sole discretion.

6 6. DIVIDEND REINVESTMENT AND OPTIONAL CASH PURCHASE PLAN Purpose The Dividend Reinvestment and Optional Cash Purchase Plan (the Plan ) provides eligible holders of common shares ( Common Shares ) of Armtec Infrastructure Inc. (the Corporation ) the opportunity to automatically reinvest all cash dividends paid on Common Shares in additional Common Shares at a discount of up to 5% from the Market Price (as defined below). The Plan also allows eligible holders of Common Shares to make optional cash payments to purchase additional Common Shares at the Market Price without brokerage costs or at reduced brokerage costs. Each optional cash payment must be a minimum of $100 and all optional cash payments made in any calendar year must not exceed an aggregate amount of $20,000. Definitions Unless the context otherwise requires, capitalized terms used in this Plan have the following definitions: Authorization Form means an authorization form acceptable to a CDS Participant or intermediary that the shareholder holds their shares for purposes of a Shareholder communicating the Shareholder s intention to become a Participant in the Plan. Business Day means any day on which the Plan Agent s offices are generally open for the transaction of commercial business, but does not include a Saturday, Sunday, civic or statutory holiday in the Province of Ontario or a day on which the Toronto Stock Exchange is not open for trading. CDS means CDS Clearing and Depository Services Inc. and includes any successor corporation or any other depository subsequently appointed by the Corporation as the depository in respect of the global certificate representing the Common Shares. CDS Participant means a participant in CDS, being a broker, dealer, bank, other financial institution or other person for whom, from time to time, CDS effects book entries for the Common Shares deposited with CDS. Close of Business means 5:00 p.m. (Toronto time) on a Business Day. Common Shares means common shares of the Corporation. Corporation means Armtec Infrastructure Inc. Dividend Payment Date means a date on which cash dividends are paid on Common Shares. Dividend Record Date means a record date for the payment of cash dividends on Common Shares. Market Price has the meaning set out in Section 14 of the Plan. Market Purchase has the meaning set out in Section 12 of the Plan.

7 7. Optional Cash Receipt Date means the date upon which the optional cash payments must be received by the Plan Agent from a CDS Participant which is no later than five (5) Business Days prior to the Dividend Payment Date. Plan Participant means an eligible Shareholder who has elected, in accordance with the terms hereof, to participate in the Plan by submitting a properly completed Authorization Form to such Shareholder s CDS Participant or intermediary that the shareholder holds their shares. Plan means this Dividend Reinvestment Plan, as amended from time to time. Plan Agent means the agent appointed by the Corporation from time to time to administer the Plan. Plan Shares has the meaning set out in Section 11 of the Plan. Shareholder means any person for whose benefit a CDS Participant holds Common Shares, provided that all rights of such person in respect of such Common Shares must be registered solely through CDS as the registered holder thereof and that the Plan Agent may deal solely with CDS in respect of such Common Shares registered in the name of CDS as though CDS were the sole Shareholder in respect thereof. Tax Act means the Income Tax Act (Canada) and includes the regulations promulgated thereunder. Treasury Purchase has the meaning set out in Section 12 of the Plan. Participation in the Plan 1. General Registrations and transfers of Common Shares are made only through the book-entry system in which all of the outstanding Shares are held through CDS only. As a result, Shareholders who hold their shares through a CDS participant may not directly enroll in the Plan through the Corporation or the Plan Agent. Enrolment and participation in the Plan must be effected only through CDS Participants. 2. Eligibility In order to be eligible to participate in the Plan, a Shareholder must be a resident of Canada for purposes of the Tax Act and be the beneficial holder of at least one Common Share. Upon becoming a non-resident of Canada, a Plan Participant must notify the applicable CDS Participant and terminate participation in the Plan immediately. The Plan Agent will not have any duty to inquire into the residency status of Participants, nor will the Plan Agent be required to know the residency status of Participants other than as notified by CDS or the Corporation. 3. Enrolment A Shareholder that is a resident of Canada for purposes of the Tax Act and holds at least one Common Share may enroll in the Plan at any time up to the Close of Business five (5) Business Days prior to a Dividend Record Date, by contacting the CDS Participant or intermediary through which the Shareholder holds Common Shares to request participation in the Plan and/or delivering to the Shareholder s CDS Participant a properly completed Authorization Form. Shareholders should contact their CDS

8 8. Participants for further information since the administrative practices of the CDS Participant through which their Common Shares are held will determine the manner in which Shareholders can participate in the Plan. CDS, in turn, is required to notify the Plan Agent prior to 11:00 a.m. (Toronto time) on the Dividend Record Date in respect of the initial Dividend in respect of which such Shareholder intends to participate in the Plan. 4. Date of Enrolment A Shareholder will become a Participant in the Plan following receipt by the Plan Agent of the request for enrolment submitted by the Shareholder s CDS Participant. Requests from CDS for enrolment submitted at least 5 Business Days prior to a Dividend Record Date will be processed and implemented for the corresponding Dividend Payment Date, otherwise they will be processed and implemented for the next Dividend Record Date. Shareholders should contact their CDS Participants for further information since the administrative practices of the CDS Participant through which their Common Shares are held will determine the manner/dates for enrolment and Shareholder s participation in the Plan. 5. Restrictions The Corporation may deny the right to participate or continue in the Plan to any Shareholder or group of Shareholders, if such Shareholder s participation would cause a violation of any applicable laws or if the Corporation has reason to believe that such Shareholder has been engaging in market activities, or has been artificially accumulating securities of the Corporation, for the purpose of taking undue advantage of the Plan to the detriment of the Corporation. Optional Cash Purchase 6. Optional Cash Purchases Plan Participants will be entitled to make optional cash payments only via the applicable CDS Participant through whom the Participant holds Common Shares. On behalf of the Plan Participant, the CDS Participant must submit an optional cash payment form, together with the requisite funds to the Plan Agent. Such optional cash payments will be invested by the Plan Agent to acquire additional Common Shares. Each optional cash payment must be a minimum of $100 and all optional cash payments made in any calendar year must not exceed an aggregate amount of $20,000. Optional cash payments must be received by the Plan Agent via the applicable CDS Participant prior to the Optional Cash Receipt Date. All optional cash purchases will be made at 100% of the Market Price with no discount. There is no obligation on a Participant to make optional cash payments, nor to make all such payments in the same amount. The aggregate number of Common Shares purchased by all Participants with the optional cash payments in a financial year of the Corporation may not exceed two (2%) percent of the outstanding Common Shares at the beginning of the financial year. If necessary, available Common Shares will be allocated by the Agent on a pro rata basis to avoid exceeding this limit.

9 9. The Plan Agent 7. Administration of the Plan The Corporation may from time to time appoint a Plan Agent to administer the Plan on behalf of the Corporation and the Participants pursuant to a plan services agreement between the Corporation and the Plan Agent which may be terminated by the Corporation or the Plan Agent in accordance with its terms. 8. Dealing in Corporation Securities The Plan Agent or its affiliates may, from time to time, for their own account or on behalf of accounts managed by them, deal in securities of the Corporation and will not be liable to account to the Corporation or to Participants in respect of such dealings. 9. Adherence to Regulation The Plan Agent is required to comply with applicable laws, orders or regulations of any governmental authority which impose on the Plan Agent a duty to take or refrain from taking any action under the Plan and to permit any properly authorized person to have access to and to examine and make copies of any records relating to the Plan. 10. Resignation of Plan Agent The Plan Agent may resign as Plan Agent under the Plan in accordance with any plan services agreement in place between the Corporation and the Plan Agent, in which case the Corporation will designate another agent as the Plan Agent. Purchase of Common Shares 11. Aggregation of Dividends and Allocation to Registered Participants Accounts On each Dividend Payment Date, for any dividend declared solely in cash, the Corporation will pay all cash dividends payable on Common Shares enrolled in the Plan (including Plan Shares, as defined below) to the Plan Agent, and such cash dividends will be aggregated and, together with any optional cash payments received, will be used by the Plan Agent to purchase Common Shares ( Plan Shares ) on behalf of Participants on each Dividend Payment Date. The Plan Shares will, in turn, be enrolled in the Plan. Following each Dividend Payment Date, Plan Shares will be credited by CDS for the benefit of a Plan Participant to the account of the applicable CDS Participant through whom a Plan Participant holds Common Shares. No fractional Common Shares will be issued under the Plan. A cheque for any remaining portion of the cash dividend will be issued in lieu of fractional Common Shares by the Plan Agent to CDS following each Dividend Payment Date. CDS will, in turn, credit the Participant, via the applicable CDS Participant as per CDS rules.

10 Source of Plan Shares The Plan Shares acquired by the Plan Agent under the Plan will be, at the Corporation s discretion, either newly issued Common Shares purchased from the Corporation (a Treasury Purchase ) or Common Shares purchased on the Canadian open market, which includes the facilities of the Toronto Stock Exchange or any other alternative Canadian market (a Market Purchase ). 13. Purchase Date The Plan Agent will make Market Purchases or Treasury Purchases, as the case may be, beginning on each Dividend Payment Date. 14. Price of Plan Shares The price that will be paid for Common Shares under the Plan in connection with any Dividend Payment Date (the Market Price ) will be determined as follows: (a) (b) in the case of Treasury Purchases, the Market Price will be equal to the volumeweighted average trading price of the Common Shares on the Toronto Stock Exchange on the five trading days preceding the Dividend Payment Date, subject to a possible discount of up to 5% from that Market Price that may, at the sole discretion of the board of directors of the Corporation, be applied on Treasury Purchases made with cash dividends; and in the case of Market Purchases, the Market Price will be equal to the average of the actual purchase price paid (excluding brokerage commissions, fees and transaction costs) per Common Share by the Plan Agent for all Common Shares purchased on the open market in connection with the Dividend Payment Date under the Plan. The Corporation will announce by press release and in divided announcements whether Common Shares acquired under the Plan will be Market Purchases or Treasury Purchases and the applicable discount, in the case of Treasury Purchases made with cash dividends. Disposition or Withdrawal 15. Withdrawal of Shares Plan Participants may withdraw some or all of their Common Shares enrolled in the Plan at any time (provided that Plan Participants may not withdraw fractions of Common Shares). Plan Participants should contact their CDS Participant to determine the procedures for withdrawing Common Shares from the Plan. 16. Sale of Common Shares on Behalf of Participants Plan Participants may request via the CDS Participant the sale of any number of the Common Shares enrolled in the Plan on their behalf so long as they have at least one Common Share enrolled in the Plan. Participants should contact their CDS Participant to determine the procedures for the sale of their Common Shares enrolled in the Plan and for any brokerage/commission charges that may apply.

11 No Pledge of Common Shares Enrolled in the Plan Common Shares enrolled in the Plan may not be pledged, hypothecated, assigned or otherwise disposed of or transferred. Participants who wish to pledge hypothecate, assign, dispose of or otherwise transfer their Common Shares must withdraw such shares from the Plan prior to such pledge, hypothecation, assignment, disposal or transfer. 18. Common Shares Remaining in the Plan If a Plan Participant sells or withdraws less than all its Common Shares enrolled in the Plan, cash dividends paid on the remaining Common Shares enrolled in the Plan will continue to be reinvested in Common Shares under the Plan. Termination of Participation 19. Termination of Participation Plan Participants may voluntarily terminate their participation in the Plan as of a particular Dividend Record Date by notifying their CDS Participant sufficiently in advance of that Dividend Record Date to allow such CDS Participant to notify CDS. Plan Participants should contact their CDS Participant for appropriate procedures. Beginning on the first Dividend Payment Date after such notice is received by CDS, dividends payable to Shareholders who have terminated their participation in the Plan will be paid in cash. Any expenses associated with the preparation and delivery of a termination notice will be for the account of the Participant exercising the right to terminate participation in the Plan. Administration 20. Registration of Plan Shares All Plan Shares acquired under the Plan will be registered in the name of CDS and will be credited by CDS for the benefit of a Participant to the account of the applicable CDS Participant through which a Participant holds Common Shares. Shareholders will receive confirmation of their acquisition of Plan Shares under the Plan from their CDS Participants only, in accordance with their usual practice. 21. Fees Except as otherwise specifically provided herein, the Corporation will be responsible for all administrative costs of the Plan, including any brokerage commissions or fees payable in connection with the purchase of Plan Shares under the Plan. Individual Participants are responsible for all applicable brokerage commissions and taxes, if any, incurred in connection with any sale of Common Shares enrolled in the Plan pursuant to Section 15 of the Plan. Participants may also be charged additional fees by the CDS Participant through which their Common Shares enrolled in the Plan are held.

12 Statements of Account Each Participant should receive from his or her CDS Participant, for tax reporting purposes, confirmation of the number of Plan Shares issued to such Plan Participant under the Plan in accordance with the CDS Participant s usual practice. These statements will be the Participant s continuing record of purchases made and Plan Shares issued to such Participant under the Plan and should be retained for income tax purposes. In addition, each Participant will be sent annually the appropriate information for tax reporting purposes from his or her CDS Participant. 23. Liabilities of the Corporation and Plan Agent Neither the Corporation nor the Plan Agent will be liable for any act or omission to act, or will have any duties, responsibilities or liabilities except as expressly set forth in the Plan or required by law. Neither the Corporation nor the Plan Agent will be liable in respect of the prices at which Common Shares are acquired on behalf of Participants under the Plan or the timing of acquisitions or sales made under the Plan. Neither the Corporation nor the Plan Agent can assure a profit or protect against a loss on Common Shares purchased or sold under the Plan. The Corporation and the Plan Agent shall have the right to reject any request regarding enrolment in this Plan if such request is not received in the proper form. Any such request will be deemed to be invalid until any irregularities have been resolved to the satisfaction of the Corporation and/or the Plan Agent. The Corporation and the Plan Agent are under no obligation to notify any Shareholder of an invalid request. Miscellaneous 24. Voting of Common Shares Enrolled in the Plan Participants may vote whole Common Shares enrolled in the Plan, including Plan Shares held by the Plan Agent on their behalf, in the same manner as any other Common Shares held by them may be voted. 25. Rights Offerings, Stock Splits and Stock Dividends If the Corporation makes available to holders of record of Common Shares rights to subscribe for additional Common Shares or other securities, rights certificates will be issued by the Corporation to CDS in respect of the Plan Shares held in the name of CDS on the record date for such rights issue, subject to the terms and conditions of the rights offering. If Common Shares are distributed pursuant to a stock split or a stock dividend on Common Shares, those Common Shares issued to CDS under the Plan will be retained by CDS or its nominee and credited proportionately to the accounts of the Participants in the Plan by their respective CDS Participants.

13 No Certificates As registrations and transfers of Common Shares are made only through the book-entry system operated by CDS, no certificates representing Common Shares issued pursuant to the Plan will be provided to Plan Participants. 27. Termination or Amendment of Plan Subject to any required regulatory or Toronto Stock Exchange approval, the Corporation may amend or suspend, in whole or in part, or terminate the Plan at any time upon notice thereof to CDS, CDS Participants and all Participants. In the event of suspension of the Plan, the Plan Agent will make no investments on the Dividend Payment Date following the effective date of such suspension. 28. Assignment A Shareholder may not assign such holder s right, if any, to participate in the Plan. 29. Rules The Corporation may make rules and regulations to facilitate the administration of the Plan and reserves the right to regulate and interpret the Plan text as the Corporation deems necessary or desirable. The Corporation may adopt rules and regulations concerning the establishment of Internet-based or other electronic mechanisms with respect to the enrolment in the Plan, the communication of information concerning the Plan to the Participants and any other aspect of the Plan. 30. Electronic Communications References in the Plan to the delivery of instructions, notices or other documents in writing will be deemed to include, subject to the adoption of rules or regulations by the Corporation, delivery by electronic means, including the Internet. 31. Use of Proceeds The proceeds received by the Corporation from the issue of new Common Shares from treasury under the Plan will be used for general corporate purposes. 32. Governing Law The Plan will be governed by and construed in accordance with the laws of Ontario and the laws of Canada applicable therein. 33. Notices and Correspondence All notices required to be given to Participants by the Corporation will be given to CDS, to be further provided to the CDS Participants through which such Participants hold their Common Shares. Participants should contact their CDS Participants for information on the procedures followed by CDS Participants to relay communications in respect of the Plan received by them from the Corporation. Communications to the Plan Agent should be addressed as follows: Computershare Trust Company of

14 14. Canada, Attention: Dividend Reinvestment Dept., 100 University Ave, 9th Floor North Tower, Toronto, Ontario M5J 2Y1. or by calling National Customer Contact Centre at: Or by contacting us at: Or by visiting us at: Effective Date 34. Effective Date The effective date of this Plan is March 14, 2011.

15 15. TAX CONSIDERATIONS This summary is of a general nature only, is not exhaustive of all possible income tax considerations and is not intended nor should it be construed to be legal or tax advice to any particular Participant. Participants are advised to consult their own tax advisor with respect to their particular circumstances. The following is a summary of the principal Canadian federal income tax considerations, as of the date hereof, that generally apply to Participants in respect of their participation under the Plan. This summary only applies to a Participant who, for the purposes of the Tax Act, (i) is a resident of Canada, (ii) is not exempt from paying Part I tax, (iii) will hold the Common Shares as capital property, (iv) is not subject to mark-to-market rules relating to securities held by certain financial institutions as defined for purposes of those rules, (v) and deals at arm s length and is not affiliated with the Corporation. This summary is based on the current provisions of the Tax Act, all specific proposals to amend the Tax Act (including the regulations made thereunder) publicly announced by or on behalf of the Minister of Finance (Canada) prior to the effective date of the Plan and the current published administrative policies and assessing practices of the Canada Revenue Agency ( CRA ) that have been made publicly available prior to the date hereof. This summary does not take into account or anticipate any changes in law or any changes in the administrative practices of the CRA and does not take into account Canadian provincial or territorial income tax laws or those of any country other than Canada. Participants will be subject to tax under the Tax Act on all dividends which are reinvested in Common Shares in the same manner as they would have been if they had received the dividends directly in cash. The cost of Common Shares purchased on the reinvestment of dividends (whether on a Treasury Purchase or Market Purchase) will be the price paid by the Plan Agent for the Common Shares plus any costs of acquisition. The cost of such Common Shares will be averaged with the adjusted cost base of all of the Common Shares a Participant holds as capital property for purposes of computing the adjusted cost base of a Common Share to the Participant pursuant to the averaging provisions contained in the Tax Act. Based on the current administrative assessing policies and practices of the CRA, the Participant will not realize a taxable benefit upon a Treasury Purchase as long as the amount paid for the Common Shares under the Plan is not less than 95% of their fair market value. Under the Plan, if a discount applies, it will not be greater than 5%. A disposition or deemed disposition of Common Shares, whether by Participants directly or through the Plan Agent, may give rise to a capital gain or capital loss, subject to the details rules in the Tax Act in this regard. The payment of cash in settlement of a fraction of a Common Share on termination of participation in the Plan will constitute a disposition of such fraction of a Common Share for proceeds of disposition equal to the cash payment.