Board games 2004

Shareholder rights issues, worth 28 marks

14. Do companies allow shareholders to vote for individual directors, or only the entire slate of nominees? (This is a new question, replacing a question that has been dropped on whether companies have annual elections for all directors versus staggered board elections.)
Four marks if there is voting for individual directors.
Zero marks if there is only slate voting.

15. a) Are stock options excessively dilutive?
For 2004, ROB assessed the dilution based on the number of options outstanding at the company’s fiscal year end as a percentage of all shares outstanding. Where the company has more than one class of shares, dilution is measured for whichever class of shares is diluted by the outstanding options. (In 2003, stock option dilution was calculated with a tougher formula that also included options approved for issuance but not yet granted. As well, the maximum possible score was six marks.)
Four marks if the dilution is less than five per cent of outstanding shares.
Two marks if the dilution is between five per cent and 10 per cent of outstanding shares.
Zero marks if options are more than 10 per cent dilutive to shareholders.

15. b) Is the annual grant rate excessive?
Four marks if the number of options granted in the last fiscal year was less than 1.5 per cent of all shares outstanding. (In 2003, the threshold was two per cent, and the question carried a maximum of two marks.)
Zero marks if the grant rate exceeded 1.5 per cent annually.

15. c) Is there a vesting period before options can be exercised?
Two marks if yes.
Zero marks if some options are immediately exercisable upon granting.

16. What are other option plan features?
Four marks if there is no stock option plan.
Zero marks if the company has repriced its stock options in the past fiscal year.
Otherwise:

16. a) Does the company award options to directors?
Two marks if there are no options for directors
One mark if the company’s option plan includes a firm cap on director option grants.
Zero marks if directors participate in the option plan at the board’s discretion.

16. b) Has the company introduced performance hurdles that must be met before stock options can be exercised, or requirements that shares must be held for a period after options are exercised?
Two marks if yes to either question.
Zero marks if no.

17. Are there non-voting or subordinate voting shares?
Ten marks if there are no dual-class shares. (In 2003, ROB awarded a maximum of eight marks.)
ROB gave reduced marks depending on the gap between the percentage of votes controlled by the superior voting shares and the percentage of the company’s equity they represent, using the following guidelines:
Five marks if the ratio is less than 2:1.
Four marks if the ratio is between 2:1 and 3:1.
Three marks if the ratio is between 3:1 and 5:1.
Zero marks if the ratio is 5:1 or worse.

Company 14 15a 15b 15c 16a 16b 17 Shareholder
                rights
                                          Maximum mark 4 4 4 2 2 2 10 28
Canfor Corporation 4 4 4 2 2 2 10 28
Enbridge Inc. 4 4 4 2 2 2 10 28
Royal Bank of Canada 4 4 4 2 2 2 10 28
CIBC 4 4 4 2 2 2 10 28
Toronto-Dominion Bank 4 4 4 2 2 2 10 28
Canadian Pacific Railway 4 4 4 2 2 2 10 28
TransAlta Corp. 4 4 4 2 2 2 10 28
National Bank of Canada 4 4 4 2 2 2 10 28
Domtar Inc. 4 4 4 2 2 2 10 28
Methanex Corporation 4 4 4 2 2 2 10 28
Alcan Inc. 4 4 4 2 2 2 10 28
Norbord Inc. 4 4 4 2 2 2 10 28
Shell Canada Ltd. 4 4 4 2 2 2 10 28
Noranda Inc. 4 4 4 2 2 2 10 28
Falconbridge Limited 4 4 4 2 2 2 10 28
Sherritt International Corp. 4 4 4 2 2 2 10 28
Suncor Energy 4 4 4 2 1 2 10 27
Bank of Montreal 4 2 4 2 2 2 10 26
Finning International 4 4 4 2 2 0 10 26
Bank of Nova Scotia 4 4 4 2 2 0 10 26
Canadian National 4 2 4 2 2 2 10 26
Sun Life Financial Inc. 4 4 4 2 2 0 10 26
Placer Dome Inc. 4 4 4 2 2 0 10 26
Cameco Corporation 4 4 4 2 2 0 10 26
Terasen Inc. 4 4 4 2 0 2 10 26
Industrial Alliance 4 4 4 2 2 0 10 26
Petro-Canada 4 4 4 2 2 0 10 26
Toromont Industries 4 4 4 2 2 0 10 26
TransCanada Corp. 4 4 4 2 2 0 10 26
BCE Inc. 4 4 4 2 2 0 10 26
Aliant Inc. 4 4 4 2 2 0 10 26
CAE Inc. 4 4 4 2 2 0 10 26
Emera Incorporated 4 4 4 2 2 0 10 26
Laurentian Bank 4 4 4 2 2 0 10 26
Imperial Oil Limited 4 4 4 2 2 0 10 26
Thomson Corporation 4 4 4 2 2 0 10 26
Saputo Inc. 4 4 4 2 2 0 10 26
Norske Skog Canada 4 4 4 2 2 0 10 26
Barrick Gold Corporation  4 4 4 2 2 0 10 26
Manulife Financial 4 4 4 2 0 0 10 24
Agrium Inc. 4 2 4 2 2 0 10 24
Rothmans Inc. 0 4 4 2 2 2 10 24
CP Ships Limited 4 4 0 2 2 2 10 24
Nexen Inc. 4 2 4 2 2 0 10 24
Vincor International Inc. 0 4 4 2 2 2 10 24
Agnico-Eagle Mines 4 4 4 2 0 0 10 24
Inco Limited 4 4 4 0 2 0 10 24
Ballard Power 4 2 4 2 2 0 10 24
BCE Emergis 4 2 4 2 2 0 10 24
Gennum Corporation 0 4 4 2 2 2 10 24
Masonite International 4 2 4 2 2 0 10 24
Intrawest Corporation 4 2 4 2 2 0 10 24
Encana Corporation 4 2 4 2 2 0 10 24
Agricore United 4 4 4 0 2 0 10 24
Goldcorp Inc. 4 4 4 2 0 0 10 24
West Fraser Timber 4 2 4 2 2 0 10 24
Brookfield Properties 4 4 4 2 0 0 10 24
Sobeys Inc. 0 4 4 2 2 2 10 24
First Quantum Minerals 4 4 4 2 0 0 10 24
Ivanhoe Mines Ltd 4 4 4 2 0 0 10 24
RONA Inc. 0 4 4 2 2 2 10 24
Hudson's Bay Company 4 2 4 2 1 0 10 23
Brascan Corporation 4 4 4 2 2 2 5 23
Glamis Gold Ltd. 4 4 4 0 1 0 10 23
Great-West Lifeco 4 4 4 2 2 2 5 23
SNC-Lavalin Group 0 4 4 2 2 0 10 22
DOFASCO INC.  0 4 4 2 2 0 10 22
Fairmont Hotels 0 4 4 2 2 0 10 22
Kinross Gold  0 4 4 2 2 0 10 22
Husky Injection 0 4 4 2 2 0 10 22
TSX Group Inc. 4 4 0 2 2 0 10 22
Stratos Global 0 4 4 2 2 0 10 22
George Weston Limited 0 4 4 2 2 0 10 22
GSI Lumonics Inc. 4 2 4 2 0 0 10 22
Miramar Mining 4 4 4 0 0 0 10 22
CI Fund Management Inc. 0 4 4 2 2 0 10 22
Eldorado Gold 4 4 4 0 0 0 10 22
Loblaw Companies 0 4 4 2 2 0 10 22
Intertape Polymer Group 4 2 4 2 0 0 10 22
Northgate Minerals 4 4 4 0 0 0 10 22
Power Financial 0 4 4 2 2 0 10 22
Cascades Inc. 0 4 4 2 2 0 10 22
Shoppers Drug Mart Corp. 0 4 4 2 0 2 10 22
Ivanhoe Energy Inc. 4 2 4 2 0 0 10 22
Neurochem Inc. 4 2 4 2 0 0 10 22
IGM Financial Inc 0 4 4 0 2 2 10 22
Potash Corporation 4 0 4 2 1 0 10 21
Patheon Inc. 0 2 4 2 1 2 10 21
QLT Inc. 4 0 4 2 1 0 10 21
Bombardier Inc. 4 4 4 2 2 2 3 21
Cinram International Inc.  0 4 4 2 1 0 10 21
MacDonald, Dettwiler 4 2 0 2 2 0 10 20
MDS Inc. 0 2 4 2 2 0 10 20
Abitibi-Consolidated Inc. 0 4 4 2 0 0 10 20
Fortis Inc. 0 4 4 2 0 0 10 20
ATS Automation 0 4 4 2 0 0 10 20
IPSCO Inc. 0 2 4 2 2 0 10 20
Cambior Inc. 0 4 4 2 0 0 10 20
Kingsway Financial 0 4 4 2 0 0 10 20
Manitoba Telecom 0 4 4 2 0 0 10 20
Inmet Mining Corporation  0 2 4 2 0 2 10 20
Gildan Activewear Inc. 0 4 4 2 0 0 10 20
Tembec Inc. 0 4 4 2 0 0 10 20
Western Oil Sands Inc. 0 4 4 2 0 0 10 20
Canadian Natural 0 2 4 2 2 0 10 20
Meridian Gold Inc. 0 4 4 2 0 0 10 20
ID Biomedical 4 0 4 2 0 0 10 20
Cott Corporation 4 2 4 0 0 0 10 20
Aur Resources Inc. 0 4 4 2 0 0 10 20
Mega Bloks Inc. 4 0 4 2 0 0 10 20
Sears Canada Inc. 0 4 4 2 0 0 10 20
Iamgold Corp. 0 4 4 2 0 0 10 20
Husky Energy Inc. 0 4 4 2 0 0 10 20
LionOre Mining 0 4 4 2 0 0 10 20
Southwestern Resources 4 2 4 0 0 0 10 20
Zarlink Semiconductor 4 2 0 2 1 0 10 19
Precision Drilling 0 2 4 2 1 0 10 19
Empire Company Limited 0 4 4 2 2 2 5 19
St. Lawrence Cement 0 4 4 2 2 2 5 19
Tundra Semiconductor 4 2 0 2 1 0 10 19
Nova Chemicals 4 0 4 0 0 0 10 18
Creo Inc. 4 0 0 2 2 0 10 18
Cogeco Cable Inc. 0 4 4 2 2 2 4 18
Ensign Resource 0 2 4 2 0 0 10 18
ATI Technologies Inc. 0 0 4 2 2 0 10 18
Axcan Pharma Inc. 0 2 4 2 0 0 10 18
Home Capital Group Inc. 0 4 4 0 0 0 10 18
Aber Diamond 0 4 4 0 0 0 10 18
Sierra Wireless 4 2 0 2 0 0 10 18
Golden Star Resources 4 4 0 0 0 0 10 18
Biovail Corporation 0 4 4 0 0 0 10 18
Pan American Silver 4 4 0 0 0 0 10 18
SouthernEra Resources 0 2 4 0 0 2 10 18
Bennett Environmental 4 2 0 2 0 0 10 18
PetroKazakhstan Inc. 0 2 4 2 0 0 10 18
Bema Gold Corporation 4 4 0 0 0 0 10 18
Aastra Technologies 0 2 4 2 0 0 10 18
Sino-Forest Corporation 0 4 4 0 0 0 10 18
ZENON Environmental  4 4 4 0 0 0 5 17
Vasogen Inc. 0 4 0 2 1 0 10 17
Wescast Industries Inc. 4 0 4 2 2 0 5 17
Jean Coutu Group 0 4 4 2 2 0 5 17
CFM Corporation 0 2 0 2 2 0 10 16
Canadian Western Bank 0 2 0 2 2 0 10 16
Geac Computer 4 0 0 2 0 0 10 16
WestJet Airlines Ltd. 0 2 0 2 2 0 10 16
Open Text Corporation 0 0 4 2 0 0 10 16
Cognos Incorporated 4 0 0 0 2 0 10 16
International Forest 4 4 4 2 2 0 0 16
Linamar Corporation 0 2 4 0 0 0 10 16
Angiotech 4 2 0 0 0 0 10 16
CanWest Global 0 4 4 2 2 0 4 16
Quebecor Inc. 0 4 4 2 2 0 4 16
Quebecor World Inc. 0 4 4 2 2 0 4 16
Martinrea International 0 2 4 0 0 0 10 16
Enerflex Systems Ltd. 0 4 0 2 0 0 10 16
Research In Motion  0 4 0 2 0 0 10 16
Gabriel Resources Ltd 4 0 0 2 0 0 10 16
Nevsun Resources Ltd. 4 2 0 0 0 0 10 16
Minefinders Corporation 4 2 0 0 0 0 10 16
Trican Well Service Ltd. 0 2 0 2 2 0 10 16
Niko Resources Ltd. 0 2 4 0 0 0 10 16
Isotechnika Inc. 0 2 4 0 0 0 10 16
ONEX Corp. 0 2 4 2 2 0 5 15
Penn West Petroleum 0 2 0 2 1 0 10 15
Transcontinental Inc. 0 4 4 2 2 0 3 15
Esprit Exploration Ltd. 0 2 0 2 0 0 10 14
Compton Petroleum 0 0 4 0 0 0 10 14
Talisman Energy 0 2 0 2 0 0 10 14
Alimentation Couche-Tard 0 2 4 2 2 0 4 14
TLC Vision Corporation 4 0 0 0 0 0 10 14
ConjuChem Inc. 0 2 0 2 0 0 10 14
Tesco Corp. 0 2 0 2 0 0 10 14
Fairfax Financial Holdings 0 4 4 2 2 2 0 14
Telesystem International 0 2 0 2 0 0 10 14
Cequel Energy Inc. 0 2 0 2 0 0 10 14
AEterna Zentaris Inc. 0 2 0 2 0 0 10 14
Wheaton River Minerals 0 4 0 0 0 0 10 14
First Calgary Petroleums 0 2 0 2 0 0 10 14
Hummingbird Ltd. 0 0 0 2 2 0 10 14
TELUS Corporation 4 0 0 2 2 0 5 13
Dorel Industries Inc. 0 4 4 2 0 0 3 13
Extendicare Inc. 0 4 4 2 0 0 3 13
Forzani Group Ltd., The 0 2 0 0 1 0 10 13
Teck Cominco Ltd. 0 4 4 2 2 0 0 12
CGI Group Inc. 4 2 4 0 0 2 0 12
Magna International Inc. 4 4 4 0 0 0 0 12
ShawCor Ltd. 0 4 4 0 1 0 3 12
AGF Management Ltd. 0 4 4 2 2 0 0 12
Paramount Resources 0 2 0 0 0 0 10 12
FNX Mining Company Inc. 0 2 0 0 0 0 10 12
Rio Narcea Gold Mines 0 2 0 0 0 0 10 12
Canadian Utilities Limited 0 4 4 0 0 0 4 12
Power Corporation 0 4 4 2 2 0 0 12
TVA Group Inc. 0 4 4 2 2 0 0 12
Maple Leaf Foods Inc. 0 0 0 2 2 2 5 11
Royal Group 0 0 4 2 2 0 3 11
Torstar Corporation 0 2 4 2 2 0 0 10
Canadian Tire 0 2 4 2 2 0 0 10
FirstService Corporation 0 2 4 2 2 0 0 10
Metro Inc. 0 2 4 2 2 0 0 10
Shaw Communications 0 4 4 2 0 0 0 10
CORUS Entertainment Inc. 0 2 4 2 2 0 0 10
Tesma International Inc. 4 2 0 0 0 0 4 10
ATCO Ltd. 0 4 4 2 0 0 0 10
CHC Helicopter 0 0 4 0 0 0 5 9
Celestica Inc. 0 0 4 2 0 0 3 9
Rogers Communications 4 0 0 2 0 0 3 9
Rogers Wireless 0 2 0 2 0 0 5 9
CCL Industries 0 2 4 2 0 0 0 8
Four Seasons Hotels Inc. 0 0 4 2 0 0 2 8
Dundee Bancorp Inc. 0 2 4 2 0 0 0 8
Molson Inc. 0 2 4 2 0 0 0 8
Alliance Atlantis 0 2 4 2 0 0 0 8
MI Developments Inc. 4 0 4 0 0 0 0 8
Astral Media Inc. 0 2 0 2 2 2 0 8
Van Houtte Inc. 0 2 0 0 0 2 4 8
CoolBrands International  0 2 0 2 0 0 0 4
n/a=not applicable
dash=was not ranked
5-year return from Bloomberg, as of Aug. 31/04