TSX Company Manual:

TSX Company Manual
Part I Introduction
Part II Why List on the Toronto Stock Exchange?
Part III Original Listing Requirements
Part IV Maintaining a Listing — General Requirements
Part V Special Requirements for Non-Exempt Issuers
Part VI Changes in Capital Structure of Listed Issuers
Part VII Halting of Trading, Suspension and Delisting of Securities
Part VIII Fees Payable by Listed Companies
Part IX Dealing with the News Media
Part X Special Purpose Acquisition Corporations (SPACs)
Part XI Requirements Applicable to Non-Corporate Issuers
Provisions Respecting Conflict of Interest and Competitors of TMX Group Limited
Forms
Appendices
Notices of Approval
Requests for Comments
Staff Notices to Applicants, Listed Issuers, Securities Lawyers and Participating Organizations
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Location: TSX Company Manual > Part VI Changes in Capital Structure of Listed Issuers > A. General > Sec. 604. Security Holder Approval

Sec. 603. Discretion Sec. 605. Changes in Issued Securities

Sec. 604. Security Holder Approval

(a) In addition to any specific requirement for security holder approval, TSX will generally require security holder approval as a condition of acceptance of a notice under Section 602 if in the opinion of TSX, the transaction:
i) materially affects control of the listed issuer; or
ii) provides consideration to insiders in aggregate of 10% or greater of the market capitalization of the listed issuer, during any six-month period, and has not been negotiated at arm's length.
If any insider of the listed issuer has a beneficial interest, direct or indirect, in the proposed transaction which differs from other security holders of the same class TSX will regard such a transaction as not having been negotiated at arm's length.
(b) For other transactions, TSX's decision as to whether to require security holder approval will depend on the particular fact situation having specific regard to those items listed in Subsection 604(a). For the purposes of Subsection 604(a)(ii), the insiders participating in the transaction are not eligible to vote their securities in respect of such approval.
(c) If TSX requires security holder approval of a transaction, the resolution to be voted upon must relate specifically to the transaction in question, rather than an unspecified transaction that may take place in the future.
(d) Security holder approval is to be obtained from a majority of holders of voting securities at a duly called meeting of security holders. In certain circumstances in which TSX requires security holder approval of a transaction, the listed issuer may be in a position to provide TSX with written evidence that holders of more than 50% of the voting securities of the listed issuer (other than those securities excluded as required by TSX) are familiar with the terms of the proposed transaction and are in favour of it. In such circumstances, TSX will give consideration to permitting the listed issuer to proceed with the transaction without holding a meeting of security holders to formally approve it. Listed issuers using this exemption will be required to issue a press release at least five (5) business days in advance of the closing of the transaction disclosing the material terms of the transaction and that the listed issuer has relied upon this exemption. The press release must be pre-cleared with TSX. A draft copy of the information circular or form of written consent must be filed with TSX and pre-cleared prior to mailing to security holders.

This procedure will not be available for security based compensation arrangements described in Section 613, backdoor listings described in Section 626 and security holder rights plans described in Section 634.

The disclosure provided to security holders in seeking security holder approval must be pre-cleared with TSX.
(e) Other than in respect of Sections 612 and 613, a listed issuer may apply to be exempted from security holder approval requirements. The application must address why the listed issuer cannot seek security holder approval in a timely manner at a meeting or in writing and be accompanied by a resolution of the listed issuer's board of directors stating that:
i) the listed issuer is in serious financial difficulty;
ii) the application is made upon the recommendation of a committee of board member(s), free from any interest in the transaction and unrelated to the parties involved in the transaction;
iii) the transaction is designed to improve the listed issuer's financial situation; and
iv) based on the determination of the committee referred to in ii) above, that the transaction is reasonable for the listed issuer in the circumstances.
Listed issuers applying to use this exemption must also provide TSX with the information set out in Staff Notice 2009-0003.

Listed issuers applying to use this exemption will be required to issue a press release at least five (5) business days in advance of the closing of the transaction disclosing the material terms of the transaction and that the listed issuer has relied upon this exemption. The press release must be pre-cleared with TSX.

Listed issuers applying to use this exemption are expected to meet continued listing requirements as set out in Part VII of this Manual after completion of the transaction. Application to use this exemption will generally result in the issuer being placed under remedial delisting review.
(f) Security holder approval will not be required where at least ninety percent (90%) of a listed issuer's equity and outstanding voting securities are held by one person or company, together with its associates and affiliates. Listed issuers using this exemption will be required to issue a press release at least ten (10) business days in advance of the closing of the transaction disclosing the material terms of the transaction and that the listed issuer has relied upon this exemption. The press release must be pre-cleared with TSX.
(g) [Deleted.]

Sec. 603. Discretion Sec. 605. Changes in Issued Securities

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