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Filing Process for an Exercise of an OTC Call Option

If an option is at or in-the-money on or before expiry date (depending on the type of option), the holder of the option may wish to exercise the contracts.

Exercises of an OTC call option acquired from a third party are reported in two separate transactions. The first is a decrease in the number of OTC call options held, by using the  Number or value of securities or contracts disposed of field, and the second is an increase in the number of the underlying securities held (for example common shares).

The key points are:

• Designation of class of security:

 OTC call option (insider-defined), for the first transaction reported, and

 the underlying securities (e.g. issuer-defined common shares) for the other transaction  reported.

• Nature of transaction: Code 71 - Exercise of third party derivative for both reports
• For the exercise under the OTC call option security designation, indicate the equivalent number of securities disposed of in the Equivalent number or value of underlying securities disposed of field.
• For the exercise under the underlying security designation (e.g. common shares), indicate the number of securities acquired in the Number or value of securities acquired field.
• Unit or exercise price: indicate the exercise price in both reports

Note: A third report may be required if the underlying security (e.g. common shares) was subsequently sold upon exercise of the option.

Related Documents

See:

Insider Report for Stock Options
Preliminary Information for Stock Option Filings