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Technology Stocks : NewKidCo International (OTC:NKCIF) (TSE:NKC) -- Ignore unavailable to you. Want to Upgrade?

To: Link Lady who wrote (1532)	5/3/1998 7:57:00 AM
From: Link Lady	Read Replies (3) \| Respond to of 4231

If I understand correctly, one of the reasons to relocate in N.B. is to retain Richard Rabins and Mr. Drassinower as directors. This was taken from Sedar site sedar.com Shareholders are being asked to approve a special resolution authorizing the continuance of the Company under the provisions of the Business Corporations Act (New Brunswick) (the "NB Act"). The Company is presently governed by the Business Corporations Act (Ontario) (the "Ontario Act"). The majority of the Company's current directors are "resident Canadians" as defined in the Ontario Act, as the board of directors of a corporation governed by the Ontario Act must be comprised of at least a majority of Canadian residents. However, the NB Act does not require any of the directors of a corporation governed by such Act to be Canadian residents. As the focus of the Company's business has continued to move towards the United States, and given the concentration of software industry expertise in the United States, in order to provide the Company with greater flexibility to attract and retain qualified directors, including independent directors, and strengthen the Company's board of directors, management feels it would be advantageous to remove the present Canadian residency restrictions governing the composition of the Board of Directors. Unlike Ontario, certain Canadian provinces, including New Brunswick, do not require that a majority of the Board of Directors be comprised of Canadian residents. Management believes that continuing the Company into New Brunswick, which will permit removal of residency restrictions governing the Board of Directors, is in the Company's best interests. In order to continue the Company under the NB Act, the following steps must be taken: 1. pursuant to the provisions of the Ontario Act, the Company must obtain the approval of the shareholders of the Company by special resolution, being a resolution passed by a majority of not less than two-thirds of the votes cast in person or by proxy at a shareholders meeting of the Company; 2. the Company must make application to the Director under the Ontario Act and the Ontario Securities Commission for approval of the proposed continuance; and 3. the Company must make application to the Director under the NB Act for Articles of Continuance. Upon the continuance into New Brunswick becoming effective, the Company will be deemed to have been organized under and will be subject to the laws of New Brunswick and will cease to be a corporation organized under the laws of Ontario. The provisions of the Ontario Act and the NB Act regulate among other things, the incorporation, financing, management, required records and capital alterations of companies incorporated under their respective legislative jurisdictions as well as shareholders' rights and remedies in respect of the corporations of which they are shareholders. The provisions of the Ontario Act and NB Act are substantially the same in most respects. The following summary describes the significant differences between the two statutes insofar as they affect the rights of shareholders. The following is a summary only and does not purport to be, nor should it be considered to be, an exhaustive analysis of such differences and shareholders should consult their own legal advisors if they wish further information concerning these matters. Residency Requirements of Directors There is no requirement under the NB Act that directors be residents or citizens of Canada. The Ontario Act requires a majority of directors to be Canadian residents. To the extent that directors of a corporation are not residents of Canada, it may be difficult or impossible for shareholders of such corporation to initiate legal proceedings against such directors. If such legal proceedings are initiated and judgment is rendered against such non-resident directors, shareholders may be unable to successfully enforce such judgments and collect any awards granted by a court against such directors. Audited Financial Statements The NB Act does not require a corporation to appoint an auditor or that financial statements be subject to an audit. The Ontario Act requires an "offering corporation" to appoint an auditor and to prepare and deliver audited annual financial statements to shareholders. The Company is a "reporting issuer" under the Securities Act (Ontario) and the Securities Act (British Columbia) and, as such, is required to prepare audited annual financial statements and unaudited quarterly financial statements and deliver the same to its shareholders. Accordingly, notwithstanding the provisions of the NB Act, the Company will continue to prepare and deliver such financial statements. As well, the Company will continue to cause an auditor to be appointed. The NB Act does not require an audit committee to be appointed, as compared to the Ontario Act which requires an "offering company" to appoint an audit committee. However, it is intended that an audit committee will continue to be appointed following the continuance.