Note 19—Preferred Shares

As a portion of the consideration in the DSS Acquisition, we issued to certain former security holders of DSS approximately $116.1 million of Convertible Preferred Shares and approximately $32.7 million of Non-Convertible Preferred Shares, which shares were redeemable at our option. As of June 11, 2015, all of the outstanding Preferred Shares were redeemed for an aggregate cash payment of $151.3 million, which included accrued and unpaid dividends of $2.5 million. The aggregate cash payment was funded primarily through an issuance of our common shares, which generated cash proceeds, net of related issuance expenses, broker commissions, and tax benefit of approximately $144.6 million. The difference in the U.S. dollar and Canadian dollar exchange rates at issuance of the Preferred Shares compared to those exchange rates in effect at redemption, resulted in an adjustment to retained earnings upon redemption of approximately $12.0 million.

The following table summarizes the activity in the Convertible Preferred Shares and Non-Convertible Preferred Shares accounts for the year ended January 2, 2016:


	Convertible Preferred Shares						Non-Convertible Preferred Shares
(in millions of U.S. dollars, except number of shares)	Shares Authorized/Outstanding (in thousands)			Amount			Shares Authorized/Outstanding (in thousands)			Amount
Balance at January 3, 2015		116.1		$	116.1			32.7		$	32.7
Cumulative preferred dividends		—			—			—			—
Redemption of preferred shares		(116.1	)		(116.1	)		(32.7	)		(32.7	)

Balance at January 2, 2016		—		$	—			—		$	—

Dividends

Holders of Convertible Preferred Shares were entitled to a quarterly fixed cumulative dividend in an amount equal to 9.0% per annum of the redemption value of each Convertible Preferred Share, and such dividend shall increase by 1.0% on each of the first through fifth anniversaries of issuance. Holders of Non-Convertible Preferred Shares were entitled to a quarterly fixed cumulative dividend in an amount equal to 10.0% per annum of the redemption value of each Non-Convertible Preferred Share, and such dividend shall increase by 1.0% on each of the first through fifth anniversaries of issuance. The following table summarizes the Preferred Shares dividend activity for the year ended January 2, 2016:


	Convertible Preferred			Non-Convertible Preferred
(in millions of U.S. dollars)	Shares			Shares
Cumulative dividends at January 3, 2015	$	—		$	—
Plus: accrued dividends		4.5			1.4
Less: dividends paid		(4.5	)		(1.4	)

Cumulative dividends at January 2, 2016	$	—		$	—

Voting Rights

The Preferred Shares had the right to approve certain actions by us, with each series of Preferred Shares voting separately as a series, as long as the Preferred Shares were outstanding. The Convertible Preferred Shares had the right to vote alongside our common shares with respect to certain matters beginning on June 13, 2016 and unrestricted rights to vote alongside our common shares beginning on December 13, 2017. The Non-Convertible Preferred Shares did not have the right to vote alongside our common shares.

Following redemption, the Preferred Shares were retired by the Company and were cancelled.