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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
FAIRFAX FINANCIAL HOLDINGS LIMITED
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(Exact name of registrant as specified in its charter)
Canada N/A
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
95 WELLINGTON STREET WEST, SUITE 800
TORONTO, ONTARIO, CANADA M5J 2N7
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(Address of principal executive offices) (Zip Code)
If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective pursuant to
General Instruction A.(c), check the following box. [x]
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant to
General Instruction A.(d), check the following box. [ ]
Securities Act registration file number to which this form relates:
N/A
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
SUBORDINATE VOTING SHARES NEW YORK STOCK EXCHANGE
Securities to be registered pursuant to Section 12(g) of the Act: NONE
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
CLASS TO BE REGISTERED
This Registration Statement on Form 8-A relates to the registration of
the Subordinate Voting Shares of the Registrant.
AUTHORIZED SHARE CAPITAL
The authorized share capital of the Registrant consists of an unlimited
number of Multiple Voting Shares carrying ten votes per share, an unlimited
number of Subordinate Voting Shares carrying one vote per share and an unlimited
number of Preferred Shares, issuable in series, of which 8,000,000 shares
consist of a series designated as fixed/floating cumulative redeemable Preferred
Shares, Series A (the "Series A Preferred Shares"), and 8,000,000 shares consist
of a series designated as cumulative redeemable Preferred Shares, Series B (the
"Series B Preferred Shares"). At October 31, 2002, there were 1,548,000 Multiple
Voting Shares, 13,391,918 Subordinate Voting Shares, 8,000,000 Series A
Preferred Shares and no Series B Preferred Shares outstanding.
MULTIPLE VOTING SHARES AND SUBORDINATE VOTING SHARES
DIVIDEND RIGHTS
Holders of Multiple Voting Shares and Subordinate Voting Shares
participate equally as to dividends and are entitled to dividends, in equal
amounts per share and at the same time, that the Registrant's board of directors
(the "Board of Directors") may declare out of legally available funds, subject
to the preferential dividend rights of the Preferred Shares.
VOTING RIGHTS
Holders of Multiple Voting Shares and Subordinate Voting Shares are
entitled to receive notice of any meeting of the Registrant's shareholders and
may attend and vote at such meetings, except those meetings where only the
holders of shares of another class or of a particular series are entitled to
vote. The Multiple Voting Shares are entitled to ten votes per share, except as
set forth below, and the Subordinate Voting Shares are entitled to one vote per
share.
The ten votes per share attached to the Multiple Voting Shares are
automatically and permanently reduced to one vote per share if:
(i) the number of the Multiple Voting Shares held by The Sixty Two
Investment Company Limited (and its 75% owned subsidiaries) falls below
1,197,480 shares, unless this results from a sale of shares to
purchasers who make an equivalent unconditional offer to purchase all
outstanding Subordinate Voting Shares; or
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(ii) the number of the Multiple Voting Shares held by purchasers referred to
in (i) above (and their 75% owned subsidiaries) falls below 1,197,480.
A change of control of The Sixty Two Investment Company Limited or a
purchaser referred to in (i) above will disqualify that shareholder's holding of
shares for the purposes of the calculations contained in (i) and (ii) above.
Except in connection with a sale to a purchaser who makes an offer to purchase
all outstanding Subordinate Voting Shares as contemplated by (i) above, The
Sixty Two Investment Company Limited has agreed with the Registrant that it will
not sell the Registrant's shares carrying multiple voting rights (except to its
75% owned subsidiaries).
The number of votes attached to the Multiple Voting Shares will
automatically but temporarily be reduced to one vote per share for any
shareholders' meeting if, during the three months ending ten days prior to the
date the Registrant sends notice of the shareholders' meeting, the weighted
average trading price in the principal trading market of the Subordinate Voting
Shares for any period of thirty consecutive trading days is less than Cdn. $4.00
per share (subject to adjustment).
PREEMPTIVE, SUBSCRIPTION, REDEMPTION AND CONVERSION RIGHTS
Holders of Subordinate Voting Shares and Multiple Voting Shares have no
preemptive, subscription or redemption rights. Holders of Subordinate Voting
Shares have no conversion rights. Multiple Voting Shares are convertible at any
time into Subordinate Voting Shares on the basis of one Subordinate Voting Share
for each Multiple Voting Share being converted.
LIQUIDATION RIGHTS
Upon the liquidation, dissolution or winding up of the Registrant,
whether voluntary or involuntary, the holders of the Subordinate Voting Shares
and Multiple Voting Shares, without preference or distinction, are entitled to
receive ratably all of the Registrant's assets remaining after payment of all
debts and other liabilities, subject to the prior rights of holders of any
outstanding Preferred Shares and any other prior ranking shares.
MODIFICATIONS
Modifications to the provisions attaching to the Multiple Voting Shares
as a class, or to the Subordinate Voting Shares as a class, require the separate
affirmative vote of two-thirds of the votes cast at meetings of the holders of
the shares of each class.
No subdivision or consolidation of the Multiple Voting Shares or of the
Subordinate Voting Shares may take place unless the shares of both classes are
subdivided or consolidated at the same time in the same manner and proportion.
No rights to acquire additional shares or other securities or property
of the Registrant will be issued to holders of Multiple Voting Shares or
Subordinate Voting Shares unless the same rights are issued at the same time to
holders of shares of both classes.
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PREFERRED SHARES
VOTING RIGHTS
The prior approval of not less than two-thirds of the votes cast at a
meeting of holders of Subordinate Voting Shares is required before the
Registrant may create any class or series of shares that have voting rights
(except as required by law or allowed if dividends are in arrears).
DIVIDEND RIGHTS AND RETURN OF CAPITAL
The Preferred Shares rank prior to the Subordinate Voting Shares and
Multiple Voting Shares and to any other junior shares in the payment of
dividends and the return of capital in the event of the Registrant's
liquidation, dissolution or winding up. Preferred Shares of each series shall
rank on a parity with Preferred Shares of every other series with respect to
priority in payment of dividends and return of capital in the event of the
Registrant's liquidation, dissolution or winding up.
NUMBER, DESIGNATION, DIVIDENDS, REDEMPTION, RETRACTION, VOTING RIGHTS AND
CONVERSION
Each series of Preferred Shares is issuable in such number and with
such designation, and is entitled or subject to such rights, privileges,
restrictions, and conditions, including with respect to dividends, redemption,
retraction, voting and conversion, as may be provided in the share conditions
governing such series as established by the Board of Directors.
SERIES A PREFERRED SHARES
The Series A Preferred Shares are non-voting and are redeemable at the
Registrant's option on and after December 1, 2004. Dividends are payable at an
annual rate of 6.5% per annum until November 30, 2004 and thereafter at rates no
less than 5% per annum and based upon, among other things, the prime rate. The
Series A Preferred Shares are not retractable at the option of the holder. The
total number of authorized Series A Preferred Shares is 8,000,000, all of which
are currently issued and outstanding. Series A Preferred Shares are convertible
into Series B Preferred Shares on a one-for-one basis on December 1, 2004 and on
December 1 in every fifth year thereafter, subject to certain conditions.
SERIES B PREFERRED SHARES
The Series B Preferred Shares are non-voting and are redeemable at the
Registrant's option on December 1, 2009 and on December 1 in every fifth year
thereafter. Dividends are payable at an annual rate based upon, among other
things, the yield of five year Government of Canada bonds. The Series B
Preferred Shares are not retractable at the option of the holder. The total
number of authorized Series B Preferred Shares is 8,000,000, none of which are
currently issued and outstanding. Series B Preferred Shares are convertible into
Series A Preferred Shares on a one-for-one basis on December 1, 2009 and on
December 1 in every fifth year thereafter, subject to certain conditions.
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FOREIGN OWNERSHIP RESTRICTIONS APPLICABLE TO THE SUBORDINATE VOTING SHARES
There is no law or governmental decree or regulation in Canada that
restricts the export or import of capital, or affects the remittance of
dividends, interest or other payments to non-resident holders of Subordinate
Voting Shares, other than withholding tax requirements. See "Certain Canadian
Federal Income Tax Considerations Applicable to the Subordinate Voting Shares"
below.
There is no limitation imposed by Canadian law or by the Registrant's
articles of incorporation or other charter documents on the right of a
non-resident to hold or vote Subordinate Voting Shares, other than as provided
by the Investment Canada Act, which requires notification and, in certain cases,
advance review and approval by the Government of Canada of the acquisition by a
non-Canadian of control of a Canadian business.
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS APPLICABLE TO THE
SUBORDINATE VOTING SHARES
This section summarizes the principal Canadian federal income tax
considerations generally applicable to persons who acquire Subordinate Voting
Shares and, for purposes of the Income Tax Act, hold such Subordinate Voting
Shares as capital property and deal at arm's length and are not affiliated with
the Registrant. The Subordinate Voting Shares will generally be considered to be
capital property to a holder unless such holder holds such Subordinate Voting
Shares in the course of carrying on a business, or such holder has acquired them
in a transaction or transactions considered to be an adventure in the nature of
trade.
This summary is based on the current provisions of the Income Tax Act,
the regulations thereunder, all specific proposals to amend the Income Tax Act
or the regulations publicly announced by the Minister of Finance (Canada) prior
to the date hereof, and the Registrant's understanding of the current published
administrative practices of the Canada Customs and Revenue Agency.
This summary is not exhaustive of all possible Canadian federal income
tax considerations and, except as mentioned above, does not take into account or
anticipate any changes in law, whether by legislative, administrative or
judicial decision or action, nor does it take into account provincial,
territorial or foreign tax legislation or considerations, which may differ from
the Canadian federal income tax considerations described herein. This summary is
not intended to constitute a complete analysis of all tax consequences relating
to the acquisition, ownership and disposition of the Registrant's Subordinate
Voting Shares. This summary is of a general nature only and is not intended to
be, nor should it be construed to be, legal or tax advice to any particular
holder of Subordinate Voting Shares. Accordingly, prospective purchasers of the
Registrant's Subordinate Voting Shares should consult their own tax advisors
concerning the tax consequences of their particular situations.
HOLDERS NOT RESIDENT IN CANADA
The following section summarizes the principal Canadian federal income
tax considerations generally applicable to a holder if:
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o at all relevant times, for purposes of the Income Tax Act and any
applicable tax treaty or convention, such holder is not a resident of
Canada,
o such holder does not use or hold (and will not use or hold) and is not
deemed to use or hold the Subordinate Voting Shares in, or in the
course of, carrying on a business in Canada and does not carry on an
insurance business in Canada and elsewhere, and
o such holder's shares do not constitute "taxable Canadian property" for
purposes of the Income Tax Act.
Provided that the Subordinate Voting Shares are listed on a prescribed
stock exchange (which includes the New York Stock Exchange and the Toronto Stock
Exchange) at a particular time, the Subordinate Voting Shares will generally not
constitute taxable Canadian property to a holder at that time. This rule applies
unless, at any time during the five-year period immediately preceding that time,
25% or more of the issued shares of any class or series of a class of the
Registrant's capital stock was owned by such holder, by persons with whom such
holder did not deal at arm's length or by such holder and any such persons. A
holder's Subordinate Voting Shares can be deemed to be taxable Canadian property
in certain circumstances set out in the Income Tax Act.
Taxation of Dividends
Dividends on the Registrant's Subordinate Voting Shares paid or
credited or deemed under the Income Tax Act to be paid or credited to a holder
generally will be subject to Canadian withholding tax at the rate of 25%,
subject to any applicable reduction in the rate of withholding in an applicable
tax treaty where such holder is a resident of a country with which Canada has an
income tax treaty. If a holder is a United States resident entitled to benefits
under the Canada-United States Income Tax Convention, dividends on Subordinate
Voting Shares generally will be subject to Canadian withholding tax at the rate
of 15%. Under the Canada-United States Income Tax Convention, dividends paid to
certain religious, scientific, charitable and similar tax-exempt organizations
and certain pension organizations that are resident in, and exempt from tax in,
the United States are exempt from Canadian withholding tax. Provided that
certain administrative procedures are observed regarding registration of such
organizations, the Registrant will not be required to withhold tax from
dividends paid to such organizations. Qualifying organizations that fail to
follow the required administrative procedures will have to file a claim for
refund to recover any amounts withheld.
Disposition of Subordinate Voting Shares
A holder will not be subject to tax under the Income Tax Act in respect
of any capital gain realized on the disposition of Subordinate Voting Shares.
HOLDERS RESIDENT IN CANADA
This section of the summary applies to a holder if, for purposes of the
Income Tax Act and any applicable tax treaty or convention, such holder is a
resident in Canada at all
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relevant times. Certain of such persons to whom Subordinate Voting Shares might
not constitute capital property may elect, in certain circumstances, to have the
Subordinate Voting Shares treated as capital property by making the election
permitted by subsection 39(4) of the Income Tax Act.
The Income Tax Act contains certain "mark-to-market rules" relating to
securities held by certain financial institutions. This summary does not take
into account those mark-to-market rules, and if a holder is a "financial
institution" for purposes of such rules, it should consult its own tax advisor.
Taxation of Dividends
Dividends received or deemed to be received on a Subordinate Voting
Share will be included in computing a holder's income for purposes of the Income
Tax Act (dividends received in United States dollars must be converted into
Canadian dollars). The gross-up and dividend tax credit rules normally
applicable to taxable dividends paid by taxable Canadian corporations will apply
to such dividends received by an individual, and such dividends received by a
corporation normally will be deductible in computing its taxable income. If a
holder is a "private corporation" or a "subject corporation" (as defined in the
Income Tax Act), it may be liable under Part IV of the Income Tax Act to pay a
refundable tax of 33 1/3% on such dividends to the extent that such dividends
are deductible in computing its taxable income.
Disposition of Subordinate Voting Shares
Upon a disposition or a deemed disposition of a Subordinate Voting
Share, a holder generally will realize a capital gain (or a capital loss) equal
to the amount by which the proceeds of disposition of the Subordinate Voting
Share, net of any reasonable costs of disposition, exceed (or are less than) the
adjusted cost base of the Subordinate Voting Share to such holder. The cost to a
holder of any Subordinate Voting Share will be averaged with the adjusted cost
base of any other of the Registrant's Subordinate Voting Shares owned by such
holder as capital property for purposes of determining the adjusted cost base of
each such share to such holder.
Under the provisions of the Income Tax Act, one-half of any capital
gain realized by a holder will be required to be included in computing its
income as a taxable capital gain. Similarly, one-half of any capital loss (an
"allowable capital loss") realized by a holder may normally be deducted against
taxable capital gains realized by it in the year of disposition. Allowable
capital losses not deductible in the taxation year in which they are realized
may ordinarily be deducted by a holder against net taxable capital gains
realized in any of the three preceding taxation years or any subsequent taxation
year, subject to detailed rules contained in the Income Tax Act in this regard.
Capital gains realized by an individual (other than certain trusts) may be
subject to alternative minimum tax.
The amount of any capital loss realized on the disposition or deemed
disposition of a Subordinate Voting Share by a holder if it is a corporation may
be reduced by the amount of dividends received or deemed to have been received
by it on such Subordinate Voting Share to the extent and in the circumstances
prescribed by the Income Tax Act. Similar rules may apply
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where a holder is a holder that is a corporation that is a member of a
partnership or beneficiary of a trust that owns Subordinate Voting Shares or
that is itself a member of a partnership or a beneficiary of a trust that owns
Subordinate Voting Shares.
If a holder is a Canadian-controlled private corporation (as defined in
the Income Tax Act), it may also be liable to pay a 6 2/3% refundable tax on
certain investment income, including taxable capital gains but not including
taxable dividends that are deductible in calculating taxable income.
ITEM 2. EXHIBITS
None.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized.
FAIRFAX FINANCIAL HOLDINGS LIMITED
Registrant
Date: December 5, 2002 By: /s/ Eric P. Salsberg
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Name: Eric P. Salsberg
Title: Vice President, Corporate Affairs
and Assistant Secretary