The new program allows the company to repurchase up to 5 percent of its currently 975,449,328 outstanding common shares, or a maximum of 48,772,466 shares during the next 12 months (on a post-share split basis). That total will include shares purchased for the company's employee savings plan and employee retirement plan. Shares purchased under the normal course issuer bid are cancelled.
The new program, which begins Friday, will end when the company has purchased the maximum allowable number of shares--unless it provides earlier notice of termination. If not previously terminated, the program will end on June 22, 2007. All share purchases will be made through the Toronto Stock Exchange.
Exxon Mobil Corp. has advised Imperial that it will participate in the new program, as it has in the existing one, to maintain its ownership percentage in Imperial at 69.6 percent. ExxonMobil said it will occasionally review its participation and inform Imperial of any change in its intentions.
From time to time Imperial expects to have cash in excess of its day-to- day operating and capital investment needs. After considering alternative means of distributing excess cash to shareholders, the company's board has concluded that it would be in the best interests of Imperial and its shareholders to proceed with the normal course issuer bid. It is a flexible and reasonable way of rebalancing Imperial's capital structure while distributing a portion of its cash reserves to shareholders who choose to participate by selling their shares. ExxonMobil's participation in the normal course issuer bid will permit ExxonMobil to maintain (rather than increase) its current percentage ownership level of shares.
In addition, Imperial introduced a stock option plan in 2002 for selected directors and key employees. Because there could be a dilution in the percentage ownership levels of shareholders that would result from the issue of shares on the exercise of stock options, Imperial considers that it would be in the best interests of Imperial and its shareholders to proceed with the normal course issuer bid in order to reduce or eliminate such dilution. The company has no plans to issue stock options in the future.
Share repurchases under the existing program had reached 50.2 million shares (on a post-share split basis) at a total cost of about $1.9 billion by June 20, 2006, representing an average cost of $38.52 per share. The maximum allowable number of shares that could be acquired under the program was about 51.2 million (on a post-share split basis), including shares purchased for the employee savings plan and retirement plan.
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