1998 Annual Report - Four Seasons Hotels and Resorts

UnlimitedUnlimitedUnlimitedthat results in a person other than a member of the family of Isadore Sharp holding VMVS or after IsadoreSharp ceases to be the Chief Executive Officer of FSHI.The VMVS rank equally with the LVS as to distributions on liquidation, dissolution or winding-upof FSHI. Effective from October 3, 1996, dividends declared and paid on the VMVS are in amounts pershare equal to 50% of the dividends per share declared and paid on the LVS, regardless of whether thenumber of votes attaching to the VMVS is further increased.VMVS are convertible into LVS on a one-for-one basis at the option of the holder. The shares automaticallyconvert into LVS upon any transfer outside of the family of Isadore Sharp, except a transfer of a majority of theshares to a purchaser who makes an equivalent offer to purchase all outstanding VMVS and LVS.LVS, voting (one vote per share) and ranking equally with the VMVS as to distributions on liquidation,dissolution or winding-up of FSHI.First Preference Shares, issuable in series, non-voting and ranking prior to all other shares with respect topayment of dividends and distributions on liquidation or winding-up of FSHI. The dividend rate,redemption and conversion rights, if any, are to be determined prior to issuance by the directors of FSHI.Second Preference Shares, issuable in series, non-voting and ranking prior to all other shares except the FirstPreference Shares with respect to payment of dividends and distributions on liquidation or winding-upof FSHI. The dividend rate, redemption and conversion rights, if any, are to be determined prior to issuanceby the directors of FSHI.Issued and fully paid:VMVSLVSStatedStatedShares value Shares value TotalDecember 31, 1996 4,171,924 $ 46 24,554,963 $ 177,711 $ 177,757Public issue — — 4,370,000 113,699 113,699Options exercised for cash — — 622,493 6,926 6,926December 31, 1997 4,171,924 46 29,547,456 298,336 298,382Options exercised for cash — — 190,902 2,423 2,423December 31, 1998 4,171,924 $ 46 29,738,358 $ 300,759 $ 300,805At the Special Meeting of Shareholders on December 19, 1989, the shareholders approved a Long-Term IncentivePlan whereby the chief executive officer of FSHI was granted the right to receive a special payment on an arm’s length saleof control of FSHI (the “sale”). The amount of the payment is determined with reference to the sale price and the tradingprice of LVS on The Toronto Stock Exchange in the period preceding the sale. The right to receive the payment may betransferred among members of the officer’s family, their holding companies and trusts.Under executive share option plans, eligible directors, executives and employees may be granted options to acquireLVS at a price which is not less than the weighted average price of board lots traded on The Toronto Stock Exchange inthe five trading days preceding the date of grant. The options are not transferable, have a term of 10 years, and generallybecome exercisable in varying proportions on the first, second, third, fourth and fifth anniversaries of the date of grant.All such options become exercisable within specified periods in the event of retirement, termination other than for cause(including as a result of a change of control of FSHI), incapacity or death of the director, executive or employee. As atDecember 31, 1998, there were options outstanding on 3,416,562 LVS (1997 – 3,113,464 LVS) at prices varying between$11.30 and $49.33 per share (1997 – ranging from $8.90 to $48.34 per share). During 1998, 511,000 options(1997 – 1,391,572 options) were granted to officers and employees at prices ranging from $30.00 to $49.33 per share(1997 – ranging from $24.95 to $48.34 per share), 190,902 options (1997 – 622,493 options) were exercised for cashproceeds of $2,423 (1997 – $6,926), and 17,000 options (1997 – 112,169 options) were cancelled.75Four Seasons Hotels Inc.