Espial Group adopts shareholder rights plan, new bylaws Hm-m-m ...
Espial Group adopts shareholder rights plan, new bylaws
2017-02-24 10:04 ET - News Release
Mr. Carl Smith reports
ESPIAL ADOPTS SHAREHOLDER RIGHTS PLAN AND NEW BYLAWS
Espial Group Inc.'s board of directors has adopted a shareholder rights plan and new bylaws.
Rights plan
The rights plan has been adopted to ensure, to the extent possible, that all shareholders of the company are treated fairly and equally in connection with any takeover bid or other acquisition of control of the company. The rights plan has not been adopted in response to any specific takeover bid, and Espial is not aware of any such pending or contemplated bid.
Under the rights plan, one right automatically attaches to each outstanding common share of Espial without any action required by shareholders. Subject to the terms of the rights plan, these rights only become exercisable in the event that any person, together with joint actors, acquires or announces its intention to acquire 20 per cent or more of the company's outstanding common shares without complying with the permitted bid provisions of the rights plan and the application of the rights plan is not waived in accordance with its terms. The permitted bid provisions prevent the dilutive effects of the rights plan from operating if a takeover bid is made to all holders of common shares of the company (other than the bidder) by way of a takeover bid circular that remains open for acceptance for a minimum of 105 days and satisfies certain other conditions. In circumstances where a takeover bid does not comply with the requirements of the rights plan or where the application of the rights plan is not waived in accordance with its terms, the rights holders (other than the acquiring person and joint actors) will be entitled to purchase additional common shares of the company at a significant discount to the market price.
The rights plan is effective immediately. The company intends to recommend the ratification of the rights plan for approval by its shareholders at the next annual and special meeting of shareholders. If ratified by the shareholders, the rights plan will have an initial term of three years. If the rights plan is not approved by the shareholders within six months of the effective date of the rights plan, it, together with the outstanding rights, will terminate and cease to be effective.
A copy of the rights plan agreement will be made available under the company's profile on SEDAR.
New bylaws
The new bylaws replace and rescind the company's existing bylaws. Among other things, the new bylaws include advance notice requirements for director elections in connection with any annual or special meeting of the shareholders. Such advance notice requirements have been adopted to ensure that all shareholders receive adequate notice of director nominations and sufficient time and information with respect to all nominees so shareholders can exercise their voting rights in an informed manner. Such advance notice requirements are similar to the advance notice bylaws adopted by several other Canadian public companies. In particular, in the case of an annual meeting of shareholders, notice to the company must be given not less than 30 days prior to the date of the annual meeting (or 40 days prior to such meeting if notice-and-access is used for delivery of proxy-related materials). In the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice must be given not later than the close of business on the 10th day following such public announcement. In the case of a special meeting of shareholders (which is not also an annual meeting), notice to the company must be given not later than the close of business on the 15th day following the day on which the first public announcement of the date of the meeting was made.
The new bylaws also contain provisions designed to ensure that Espial's bylaws remain consistent with evolving corporate laws, governance practices and guidelines published by major proxy advisory firms. For example, the new bylaws increase the quorum requirement for Espial shareholder meetings to two or more persons holding or representing at least 25 per cent of the eligible vote.
The new bylaws are effective immediately. Espial shareholders will be asked to ratify and confirm the adoption of the new bylaws at the company's next annual and special meeting of shareholders. The full text of the new bylaws will be made available under Espial's profile on SEDAR.