UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant
x
Filed by a Party other than the Registrant
¨
Check the appropriate box:
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x
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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¨
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Definitive Proxy Statement
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¨
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Definitive Additional Materials
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Soliciting Material pursuant to §240.14a-12
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VITRAN CORPORATION INC.
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
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x
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4)
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Proposed maximum aggregate value of transaction:
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5)
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Total fee paid:
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¨
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(1)(2) and identify the filing for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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1)
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Amount Previously Paid:
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2)
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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VITRAN CORPORATION INC.
185 The West Mall
Suite 701
Toronto, Ontario
M9C 5L5
Telephone: (416) 596-7664 Fax: (416) 596-8039
www.vitran.com
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
MAY 15, 2013
NOTICE
is hereby given that the annual and special meeting of
shareholders (the Meeting) of Vitran Corporation Inc. (the Company) will be held at the offices of Vitran Corporation Inc., 185 The West Mall, Suite 701, Etobicoke, Ontario, at 4:30 pm (EDT) on Wednesday, May 15, 2013,
for the following purposes:
1.
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to receive the 2012 Annual Report on Form 10-K of the Company containing the audited consolidated financial statements of the Company for the financial years ended
December 31, 2012 and December 31, 2011, and the auditors report thereon;
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2.
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to elect five (5) directors;
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3.
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to appoint KPMG LLP as auditor and authorize the directors to fix the auditors remuneration;
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4.
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to hold a non-binding advisory vote on the compensation of our named executive officers;
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5.
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to consider and if deemed appropriate, to pass, with or without variation, a resolution to approve the amended and restated stock option plan of the Company;
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6.
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subject to and conditioned upon the approval of the resolutions described in items 7 and 8 below, to consider and if deemed appropriate, to pass, with or without
variation, a resolution to confirm By-Law No. 8 (other than the elimination of the second or casting vote in favour of the Chair of the meeting of the board of directors of the Company and the adoption of advance notice provisions
with respect to the nomination of directors, which are the subjects of items 7 and 8 below, respectively) as the new general by-law of the Company, which new general by-law effects changes to the previous by-laws of the Company that are primarily
ministerial in nature;
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7.
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subject to and conditioned upon the approval of the resolutions described in item 6 above and item 8 below, to consider and if deemed appropriate, to pass, with or
without variation, a resolution to confirm Section 4.16 of By-Law No. 8, which effects a change to the previous by-laws of the Company to eliminate the second or casting vote in favour of the Chair of the meeting of the board
of directors of the Company if there is a tie in the votes cast by directors at such meeting;
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8.
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subject to and conditioned upon the approval of the resolutions described in items 6 and 7 above, to consider and if deemed appropriate, to pass, with or without
variation, a resolution to confirm Section 10.5 of By-Law No. 8, which effects a change to the previous by-laws of the Company to provide for advance notice provisions with respect to the nomination of directors; and
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9.
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to transact such further and other business as may properly come before the Meeting or any adjournment or adjournments thereof.
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While the three resolutions related to confirming By-Law No. 8 (items 6, 7 and 8 above) are being
considered separately for purposes of voting, the resolutions are interdependent such that obtaining the requisite shareholder approval of (i) the resolution confirming the ministerial changes effected by By-Law No. 8, (ii) the
resolution confirming Section 4.16 of By-Law No. 8, which eliminates the Chairs second or casting vote, and (iii) the resolution confirming Section 10.5 of By-Law No. 8, which provides for advance notice
provisions with respect to the nomination of directors, are each a condition precedent to the effectiveness of the other resolutions and no such resolution will be effective without the approval of the other resolutions.
If all resolutions
related to confirming By-Law No. 8 are not approved, By-Law No. 8 will cease to be effective immediately following completion of the Meeting and the by-laws in effect prior to the board of directors adoption of By-Law No. 8
(namely By-Law No. 6 and By-Law No. 7) will be the by-laws of the Company.
Holders of common shares of the
Company who are unable to be present at the Meeting are kindly requested to specify on the accompanying form of proxy the manner in which the shares represented thereby are to be voted and to sign, date and return same in the enclosed return postage
prepaid envelope for delivery to the Secretary of the Company, c/o Computershare Investor Services Inc, 100 University Avenue, 9
th
Floor, North Tower, Toronto, Ontario, M5J 2Y1, no later than 4:30 pm (EDT) on May 13, 2013, or, if the Meeting is
postponed or adjourned, no later than 48 hours (excluding Saturdays, Sundays and holidays) prior to such reconvened meeting.
By Order of the
Board of Directors,
DRAFT
Secretary
Toronto, Ontario
April
[12]
, 2013
2
MANAGEMENT INFORMATION CIRCULAR
SOLICITATION OF PROXIES
AS OF THE [12
TH
]
DAY OF APRIL, 2013
(FOR USE AT THE ANNUAL AND SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 15, 2013)
THIS MANAGEMENT INFORMATION CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION BY THE MANAGEMENT OF VITRAN CORPORATION
INC. (THE COMPANY or VITRAN) OF PROXIES FOR USE AT THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS (THE MEETING)
of the Company to be held at Vitran Corporation Inc., 185 The West Mall, Suite 701, Etobicoke,
Ontario commencing at 4:30 in the afternoon (Toronto time), on Wednesday, May 15, 2013, and at any adjournment or adjournments thereof for the purposes set out in the foregoing notice of meeting (the Notice). A copy of this
Management Information Circular has been mailed on or about April 19, 2013 to shareholders of record on April 12, 2013. Holders of common shares of the Company (the Common Shares) who are unable to be present at the Meeting in
person are requested to complete, sign, date and return the accompanying form of proxy to the Secretary of the Company, c/o Computershare Investor Services Inc., 100 University Avenue, 9
th
Floor, North Tower, Toronto, Ontario, M5J 2Y1 no later than 4:30 pm (EDT) on May 13, 2013, or, if the
Meeting is postponed or adjourned, no later than 48 hours (excluding Saturdays, Sundays and holidays) prior to such reconvened meeting. An addressed envelope, with the postage prepaid, accompanies this Management Information Circular and may be used
for such purpose. The cost of solicitation by management of the Company (Management) will be borne directly by the Company. The solicitation will be primarily by mail; however, the directors, officers and employees of the Company may
also solicit proxies by telephone, by facsimile or in person.
Unless otherwise indicated, all dollar references herein are in United
States dollars.
Appointment and Revocation of Proxies
The persons named in the accompanying form of proxy are officers or directors of the Company and shall represent Management at
the Meeting.
A shareholder has the right to appoint as proxy holder a person or company other than the persons designated in the enclosed proxy form to represent him and to act on his behalf at the Meeting. A shareholder desiring to appoint some
other person or company, who need not be a shareholder, to represent him at the Meeting may do so either by inserting such persons or companys name in the blank space provided in the form of proxy or by completing another form of proxy
and in either case delivering the completed form of proxy addressed to the Secretary of Vitran Corporation Inc., c/o Computershare Investor Services Inc., 100 University Avenue, 9
th
Floor, North Tower, Toronto, Ontario, M5J 2Y1, no later than 4:30 pm (Toronto time)
on May 13, 2013, or, if the Meeting is postponed or adjourned, no later than 48 hours (excluding Saturdays, Sundays and holidays) prior to such reconvened meeting.
A proxy may be revoked by a shareholder:
(a)
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by signing another form of proxy, bearing a later date, and depositing it with the Secretary of the Company any time up to and including the last business day before
the Meeting;
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(b)
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as to any matter on which a vote shall not have already been cast pursuant to the authority conferred by such proxy, by signing a written notice of revocation and
delivering it to the Chairman or Secretary of the Meeting; or
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(c)
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by attending the Meeting in person and personally voting the Common Shares represented by the proxy.
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In addition to the revocation in accordance with any of the aforesaid procedures, a proxy may be revoked under subsection 110(4) of the
Business
Corporations Act
(Ontario) (the OBCA) (a) by depositing an instrument in writing executed by the shareholder or by his attorney who is authorized, by a document that is signed in writing or by electronic signature or, if the
shareholder is a company, by an officer or attorney thereof duly authorized, (b) by transmitting, by facsimile or electronic means, a revocation that is signed by electronic signature, and in the case of (a) or (b), such revocation is
deposited at the registered office of the Company at any time up to and including the last business day preceding the day of the Meeting, or any adjournment thereof, at which the proxy is to be used or delivered to the Chairman of the Meeting on the
day of the Meeting or an adjournment thereof, or (c) by any other manner permitted by law.
1
Exercise of Discretion by Proxies
The Common Shares represented by the accompanying form of proxy will be voted or withheld from voting on any ballot that may be called for in accordance with the instructions of the shareholder executing
it and, if such shareholder specifies a choice with respect to any matter to be acted on at the Meeting, the Common Shares will be voted accordingly.
In the absence of such instructions, such Common Shares will be voted (i) on the election
of the directors, in favour of the election of all the nominees for director named in this Management Information Circular; (ii) in favour of the appointment of KPMG LLP (KPMG) as auditor of the Company and to authorize the
directors to fix the remuneration of the auditor; (iii) in favour on the advisory vote on executive compensation (commonly called say-on-pay); (iv) in favour of the amended and restated stock option plan of the Company (the
Plan); (v) in favour of By-Law No. 8 (other than the elimination of the second or casting vote in favour of the Chair of the meeting of the board of directors of the Company (the Board of Directors or
Board) and the adoption of advance notice provisions with respect to the nomination of directors, which are the subjects of separate votes) as a by-law of the Company, which repeals and replaces all previous by-laws as the new general
bylaw of the Company and effects changes to the previous by-laws of the Company that are primarily ministerial in nature; (vi) in favour of the resolution confirming Section 4.16 of By-Law No. 8, which effects a change to the previous
by-laws of the Company to eliminate the second or casting vote in favour of the Chair of the meeting of the Board if there is a tie in the votes cast by directors at any such meeting; and (vii) in favour of the resolution confirming
Section 10.5 of By-Law No. 8, which effects a change to the previous by-laws of the Company to provide for advance notice provisions with respect to the nomination of directors.
The accompanying form of proxy confers discretionary
authority upon the persons named therein with respect to amendments or variations to matters identified in the Notice or other matters that may properly come before the Meeting. At the time of the printing of this Management Information Circular,
Management knows of no such amendments or other matters to come before the Meeting other than the matters specifically identified in the accompanying Notice. If, however, amendments or other matters properly come before the Meeting or any
adjournment thereof, the persons designated in the accompanying form of proxy will vote thereon in accordance with their judgment pursuant to the discretionary authority conferred by the form of proxy with respect to such matters.
The required quorum for the transaction of business at the Meeting is a minimum of two persons present in person, each being a shareholder of Vitran
entitled to vote at the Meeting or a duly appointed proxy holder or representative for a shareholder so entitled, holding or representing by proxy at least one-third of the Common Shares entitled to be voted at the Meeting. Common Shares represented
by proxies that indicate an abstention will be considered present for quorum purposes. A broker non-vote occurs when a broker or other nominee who holds Common Shares for another does not vote on a particular item because the nominee
does not have discretionary voting authority for that item and has not received instructions from the owner of the Common Shares. Common Shares represented by proxies returned as broker non-votes will be considered present for quorum
purposes in respect of any particular matter on which the brokers have not received instructions with respect to voting, but will not be considered votes cast in respect of the non-binding advisory vote on the compensation of our named
executive officers, or the proposed resolution to approve the amended and restated Plan, or the proposed three resolutions to, in effect, confirm By-Law No. 8 as a by-law of the Company.
Directors will be elected by a plurality of the votes properly cast in person or by proxy. Unless authority to vote is withheld, the person named in the accompanying form of proxy intends to vote for the
election of the five director nominees named herein. Abstentions and broker non-votes will not be included in vote totals and will not affect the outcome of the voting on the election of directors.
Voting by Beneficial Shareholders
The information set forth in this section is important to the shareholders of the Company who do not hold their Common Shares in their own name.
2
You are a Beneficial Shareholder if you beneficially own Common Shares that are registered in
the name of an intermediary such as a bank, trust company, securities broker or other nominee, or in the name of a depository of which the intermediary is a participant, and therefore do not have Common Shares registered in your own name. In the
United States, the vast majority of such Common Shares are registered under the name of Cede & Co. as nominee for The Depository Trust Company (which acts as depositary for many U.S. brokerage firms and custodian banks) and, in Canada,
under the name of CDS & Co. (the registration name for CDS Clearing and Depository Services Inc., which acts as nominee for many Canadian brokerage firms).
In accordance with the OBCA and applicable securities laws, the Company has distributed copies of the Notice, this Management Information Circular and the Companys audited financial statements for
the year ended December 31, 2012 and the report of the auditors thereon (the Meeting Materials) to intermediaries for onward distribution to Beneficial Shareholders who have not waived their right to receive them. Typically,
intermediaries will use a service company (such as Broadridge Investor Communications) to forward the Meeting Materials to Beneficial Shareholders. Intermediaries will also provide Beneficial Shareholders with the intermediarys voting
instruction form or a form of proxy stamped by the intermediary limited to the number of Common Shares beneficially owned by you, but that is otherwise not complete. The purpose of these documents is to permit you to direct the voting of the Common
Shares you beneficially own. You should carefully follow the instructions set out in your intermediarys voting instruction form or form of proxy, as the case may be.
If you are a Beneficial Shareholder, you may attend the Meeting and vote in person provided you insert your own name in the space provided on the voting instruction form or form of proxy to appoint
yourself as the proxyholder and follow your intermediarys instructions for return of the executed form. No other part of the voting instruction form or form of proxy should be completed as your vote will be taken at the Meeting.
DIRECTORS AND EXECUTIVE OFFICERS
Listed below are the Companys six directors:
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Name
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Age
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Position with the Company
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Director Since
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Richard D. McGraw
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69
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Director, Chairman of the Board
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1987
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William S. Deluce
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64
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Director, Interim President and Chief Executive Officer
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2004
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Anthony F. Griffiths
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82
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Director
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1987
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John R. Gossling
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47
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Director
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2005
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Georges L. Hébert
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65
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Director
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2004
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David S. McClimon
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57
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Director
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2013
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Each of the directors, except Mr. Griffiths, will be standing for re-election as a director at the Meeting; their
respective biographies are set forth under Election of Directors.
3
The following table sets forth certain information concerning our executive officers:
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Name
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Age
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Position
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History
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William S. Deluce
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64
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Interim President and Chief Executive Officer
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Biographical information for Mr. Deluce is set forth below under Election of Directors.
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Richard E. Gaetz
(Mississauga,
Canada)
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55
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Former President and Chief Executive Officer
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Mr. Gaetz was the President and Chief Executive Officer of the Company from May 2002 until April 4, 2013, the date of his resignation. From when he joined the Company in 1989 until
2002, he held the positions of President and Chief Operating Officer of the Company. Mr. Gaetz was also a director of Drive Products Income Fund until September 2010.
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Fayaz D. Suleman
(Mississauga,
Canada)
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34
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Vice President Finance and Chief Financial Officer
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Mr. Suleman joined Vitran in 2003 and was Vitrans Corporate Controller since 2005. He was appointed Vice President Finance and Chief Financial Officer in 2011. Prior to
joining Vitran, he gained his public accounting experience at KPMG in the assurance and business advisory services practice. Mr. Suleman is a Chartered Accountant with the Ontario Institute and received an Honors Bachelor of Business Administration
from Wilfrid Laurier University in Ontario.
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VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
As at the date of this Management Information Circular,
[16,399,241]
Common Shares have been issued and are outstanding as fully paid and
non-assessable, each carrying a right to one vote per Common Share. The Company has no other shares of any other class issued and outstanding.
Each holder of issued and outstanding Common Shares of record on April
[12]
, 2013 will be given notice of the Meeting and will be entitled to one
vote per Common Share at the Meeting.
The following table sets forth the information with respect to the beneficial ownership of Common
Shares for (i) each director and director nominee, (ii) each executive officer, (iii) all current directors, director nominees and executive officers as a group, and (iv) to the knowledge of the directors and officers of the
Company, the persons or companies beneficially owning, directly or indirectly, or exercising control or direction over, more than 5% of the outstanding Common Shares of the Company. Beneficial ownership includes Common Shares as to which
a person has direct or indirect voting and/or investment power and Common Shares that may be acquired pursuant to the exercise or conversion of any securities or rights held by such person, such as the exercise of vested stock options, within 60
days of the date of determination of beneficial ownership. Information for the significant shareholders listed below is based on the latest Schedule 13G reports that each such investor has filed with the United States Securities and Exchange
Commission (the SEC) on Schedule 13D or Schedule 13G pursuant to section 13(d) of the Securities Exchange Act of 1934 and the rules promulgated thereunder. Information for all other persons is provided as at April
[12]
, 2013.
Except as noted and to the knowledge of the Company, beneficial owners listed have sole voting and investment power with respect to Common Shares beneficially owned.
4
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Approximate Number of
Issued Common
Shares
Beneficially
Owned Directly or Indirectly,
Over Which Control or
Direction is Exercised
as of April
[12]
, 2013
(1)
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Common Shares Subject
to Stock
Options
Exercisable by April
[12]
, 2013
or that Become
Exercisable Within
60 Days of
April
[12]
, 2013
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Total Number of
Common Shares
Beneficially
Owned
(2)
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Beneficial Ownership
as a
% of
Outstanding
Common
Shares
(2)
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DIRECTORS and OFFICERS
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Richard D. McGraw
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43,243
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(3)
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Nil
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43,243
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(5)
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John R. Gossling
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Nil
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Nil
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Nil
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Nil
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Georges L. Hébert
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Nil
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10,000
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10,000
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(5)
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Anthony F. Griffiths
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80,800
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(4)
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Nil
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80,800
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(5)
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William S. Deluce
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Nil
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10,000
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10,000
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(5)
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David S. McClimon
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Nil
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Nil
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Nil
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Nil
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Fayaz D. Suleman
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5,000
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52,460
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57,460
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(5)
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Directors, Director Nominees and Executive Officers as a Group (7 persons)
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129,043
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72,460
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201,503
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1.2
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%
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SIGNIFICANT SHAREHOLDERS
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Pacific Global Investment Management Company
(6)
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2,212,020
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Nil
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2,212,020
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13.5
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%
|
101 N Brand Blvd
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Suite 1950
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Glendale, CA USA
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Wellington Management Company LLP
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2,132,140
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Nil
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2,132,140
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13.0
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%
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75 State St.
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Boston, MA USA
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T. Rowe Price Associates
(7)
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1,401,567
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Nil
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1,401,567
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8.6
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%
|
100 East Pratt St.
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Baltimore, MD USA
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TransForce, Inc.
(8)
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1,263,478
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Nil
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1,263,478
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7.7
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%
|
8801 Trans-Canada Highway
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Suite 500
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Laurent, Quebec Canada
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BlackRock Advisors, Inc.
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1,010,621
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Nil
|
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1,010,621
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6.2
|
%
|
40 East 52
nd
St.
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New York, NY USA
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Columbus Capital Management LLC
(9)
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889,700
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Nil
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889,700
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5.4
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%
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1 Market Street
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Suite 3790
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San Francisco, CA USA
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(1)
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The information as to the number and nature of Common Shares beneficially owned has been furnished by the respective directors, nominee directors, executive officers
and shareholders individually.
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(2)
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Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of Common Shares beneficially owned by a person and the percentage
ownership of that person, Common Shares subject to options held by that person that are currently exercisable or that are or may become exercisable within 60 days of April
[12]
, 2013 are deemed outstanding. These Common Shares, however, are
not deemed outstanding for purposes of computing the percentage ownership of any other person. As of April
[12]
, 2013 there were
[16,399,241]
Common Shares outstanding.
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5
(3)
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These Common Shares are held as to 29,543 Common Shares by Parkway Automotive Investments Limited, a corporation controlled by Mr. McGraw, and as to 13,700 Common
Shares held directly by Mr. McGraw.
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(4)
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These Common Shares are held as to 20,800 Common Shares by 3102726 Canada Inc., a corporation over which Mr. Griffiths exercises control or direction, and as to
60,000 Common Shares held directly by Mr. Griffiths.
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(6)
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Some or all of the Common Shares may be owned by entities over which Pacific Global Investment Management serves as investment adviser with power to direct investments
and/or has sole power to vote such Common Shares.
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(7)
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Some or all of the Common Shares may be owned by entities over which T. Rowe Price Associates, Inc. serves as investment adviser with power to direct investments and/or
has sole power to vote such Common Shares.
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(8)
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Some or all of the Common Shares may be owned by entities over which TransForce has power to direct investments and/or has sole power to vote such Common Shares.
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(9)
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Some or all of the Common Shares may be owned by entities over which Columbus Capital Management LLC serves as investment adviser with power to direct investments
and/or has sole power to vote such Common Shares.
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ELECTION OF DIRECTORS
The articles of incorporation of the Company provide that the Board of Directors shall consist of a minimum of three directors and a maximum of fifteen
directors. The Board of Directors has fixed the number of directors to be elected at the Meeting at five. All of the nominees are now current members of the Board of Directors and have been since the dates indicated in the table below. The term of
office for each of the Companys present directors expires at the conclusion of the Meeting.
Management does not contemplate that any of
the nominees will not be able to serve as directors but, if that should occur for any reason prior to the Meeting, the persons named in the accompanying form of proxy reserve the right to vote for another nominee at their discretion unless the
shareholder has specified in the form of proxy that his Common Shares are to be withheld from voting on the election of directors. Each director elected will hold office until the next annual meeting of the shareholders or until his successor is
duly elected unless prior thereto he resigns or his office becomes vacant by death or other cause.
Votes may be cast in favour of the
election of directors or withheld. The Board of Directors recommends that you vote FOR the election of the director nominees set forth below.
Unless authority to vote is withheld with respect to the election of directors, the persons
named in the accompanying form of proxy intend to vote FOR the election of the persons nominated herein for election as directors.
Majority Voting Policy
On March 18, 2013, the Board of Directors adopted a majority
voting policy, which requires that any nominee for director who receives a greater number of votes withheld than for his or her election shall tender his or her resignation to the Chair of the Board of Directors following the Companys meeting
of shareholders. This policy applies only to uncontested elections, meaning elections where the total number of nominees for director is equal to the number of directors to be elected. The Nominating and Governance Committee and the Board of
Directors shall consider the resignation and whether or not it should be accepted. Resignations shall be expected to be accepted except in situations where extenuating circumstances would warrant the applicable director to continue to serve as a
Board member. The Board of Directors shall disclose its decision, via press release, within 90 days of the applicable meeting. If a resignation is accepted, the Board of Directors may appoint a new director to fill any vacancy created by such
resignation. A copy of the majority voting policy is available on the Companys website at
www.vitran.com
.
Advance Notice
By-law Provisions
By-Law No. 8, which replaces and repeals the Companys former By-Laws No. 6 and No. 7, provides for
advance notice to the Company in circumstances where nominations of persons for election to the Board of Directors are made by shareholders of the Company other than pursuant to (i) a requisition of a meeting made pursuant to the provisions of
the OBCA or (ii) a shareholder proposal made pursuant to the provisions of the OBCA (the Advance Notice Provisions).
6
The purpose of the Advance Notice Provisions is to foster a variety of interests of the shareholders and the
Company by ensuring that all shareholders - including those participating in a meeting by proxy rather than in person - receive adequate notice of the nominations to be considered at a meeting and can thereby exercise their voting rights in an
informed manner. Among other things, the Advance Notice Provisions fix a deadline by which holders of Common Shares must submit director nominations to the Company prior to any annual or special meeting of shareholders and sets forth the minimum
information that a shareholder must include in the notice to the Company for the notice to be in proper written form.
The Advance Notice
Provisions also require all proposed director nominees to deliver a written representation and agreement that such candidate for nomination, if elected as a director of the Company, will comply with all applicable corporate governance, conflict of
interest, confidentiality, share ownership, majority voting and insider trading policies and other policies and guidelines of the Company applicable to directors and in effect during such persons term in office as a director.
The foregoing is merely a summary of the Advance Notice Provisions, is not comprehensive and is qualified by the full text of such provisions. The full
text of the Advance Notice Provisions is set out in Section 10.5 of By-Law No. 8, a copy of which is attached as Schedule C. See also Confirmation of Section 10.5 of By-Law No. 8.
Director Nominees
The following table
and the notes thereto state: the names of all persons proposed to be nominated for election as directors; all other positions and offices of the Company, or any of its significant affiliates, now held by them; their principal occupations or
employment for the preceding five (5) years; their periods of service as directors of the Company; and the nominees who are members of the Companys Audit Committee, Compensation Committee and Nominating and Governance Committee. For the
number of Common Shares beneficially owned by each proposed director, please see section entitled Voting Shares and Principal Holders Thereof above.
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Name
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Age
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Director Since
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Occupation & Employment Description
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Richard D. McGraw
(1)(2)(3)(4)
Ontario, Canada
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(69)
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May 27, 1987
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Mr. McGraw is the founding President and Chief Executive Officer of the Company. He served in this capacity from the inception of the Company until May of 2002 when he was appointed
the non-executive Chairman of the Board of Directors. He is currently President and CEO of Greenrock Capital Partners Inc. and The Lochan Ora Group of Companies. Mr. McGraw is a director of C2C Industrial Properties Ltd. and OutdoorPartner Media
Corporation. Mr. McGraw was formerly a director of Zenn Motor Company Inc., Exco Technologies Ltd. and Catch the Wind Inc.
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We believe that Mr. McGraws past experience as a senior officer and director of the Company, as well as his background as a successful entrepreneur and a director of other
companies, lend themselves to Mr. McGraws service as a continuing director of the Company.
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7
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Name
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Age
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Director Since
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Occupation & Employment Description
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(Continued)
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John R. Gossling
(1)
Ontario,
Canada
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(47)
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Dec. 5, 2005
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Mr. Gossling is the Executive Vice President and Chief Financial Officer of Telus Corporation. He has been with Telus Corporation since November 2012. He was the Chief Financial
Officer of CTVglobemedia Inc. from April 2008 to April 2011. From 2005 to 2008, Mr. Gossling served as the Vice President Financial Operations of Rogers Communications Inc., and from 2000 to 2005 was the Chief Financial Officer of Rogers Wireless
Communications Inc. From 1985 to 2000, Mr. Gossling was employed by KPMG and was a partner in the firm. Mr. Gossling is a Chartered Accountant with the Canadian Institute of Chartered Accountants.
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We believe that Mr. Gosslings high-level experience as a financial executive, his past experience as a partner of KPMG, and his past experience as a director of the Company,
lend themselves to Mr. Gosslings service as a continuing director of the Company.
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Georges L. Hébert
(1)(2)
Québec, Canada
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(65)
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April 21, 2004
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Since June 2003, Mr. Hébert has been the President, Chief Executive Officer and a director of Prosys Tech Corporation. From 1988 to 1998, Mr. Hébert was the President
of J.A. Provost Ltée., a company involved in alarm systems that was sold to BCE. Mr. Hébert is a director of Peak Positioning Technologies Inc. Mr. Hébert was also a director of Laurentian Bank for 20 years until March 2008, and
is a former director of MDS Aerospace.
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We believe that Mr. Héberts high-level experience as the chief executive officer of a public company, his experience as a successful entrepreneur, and his experience as
a director of the Company and of other companies, lend themselves to Mr. Héberts service as a continuing director of the Company.
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William S. Deluce
(5)
Ontario,
Canada
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(64)
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April 21, 2004
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Mr. Deluce has been the President and Chief Executive Officer of CSAE Inc. since 1998 and President and Chief Executive Officer of Wicklow Consulting Inc. since 2001. He also served
as the President and Chief Executive Officer of McComas Industries International Inc. and SMT Surface Modification Technologies Inc. from 1998 to 2000. Mr. Deluce was also a director of Canstar Resources Inc. and a director of Candor Ventures Corp.
until May 2005.
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We believe that Mr. Deluces experience as a successful entrepreneur, and his experience as a director of the Company and of other companies, lend themselves to Mr.
Deluces service as a continuing director of the Company.
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8
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Name
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Age
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Director Since
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Occupation & Employment Description
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(Continued)
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David S. McClimon
(3)
Michigan,
U.S.A.
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(57)
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March 27, 2013
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Mr. McClimon was the President of Central Transport International in 2011. From 2009 to 2010, he was the Chief Operating Officer of ADR North America LLC. From 2005 to 2007, he was
the President of Con-way Freight Inc. and Senior Vice-President of Con-way Inc. Prior to this, he was the President and Chief Executive Officer of Con-way Central Express from 2002 to 2005 and the President and Chief Executive Officer of Con-way
Western Express from 2000 to 2002.
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We believe that Mr. McClimons experience as a senior executive, and his extensive experience in the transportation industry, lend themselves to Mr. McClimons service as
a continuing director of the Company.
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(1)
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Denotes member of Audit Committee. Each of the members of the Audit Committee has been determined by the Board of Directors to be an independent director in accordance
with NASDAQ listing standards.
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(2)
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Denotes member of Compensation Committee. Each of the members of the Compensation Committee has been determined by the Board of Directors to be an independent director
in accordance with NASDAQ listing standards.
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(3)
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Denotes member of Nominating and Governance Committee. Each of the members of the Nominating and Governance Committee has been determined by the Board of Directors to
be an independent director in accordance with NASDAQ listing standards.
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(4)
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The Ontario Securities Commission issued cease trade orders against OutdoorPartner Media Corporation on July 8, 2011 and July 20, 2011, due to that
companys failure to file annual audited financial statements. Such cease trade orders were rescinded on October 15, 2012.
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(5)
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Until his appointment as the Companys Interim President and Chief Executive Officer on April 4, 2013, Mr. Deluce served as the Chair of the Compensation
Committee and also as a member of the Nominating and Governance Committee. Mr. Hébert has succeeded Mr. Deluce as the Chair of the Compensation Committee, and Mr. McClimon has succeeded him as a member of the Nominating and
Governance Committee.
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COMPENSATION
The Board of Directors, in their role to provide strategic oversight on compensation polices and decisions, reviews the composition of Vitrans labour force in light of the strategic objectives of
the organization. Significant changes to employee compensation, labour force composition and the work place environment are discussed and, if deemed appropriate, challenged by the Board.
The Board maintains dialogue with management and monitors industry statistics as it relates to the supply of qualified employees. The Company is dependent on its ability to hire and retain
qualified drivers including owner operators. There is significant competition for qualified drivers within the trucking industry and attracting and retaining drivers has become more challenging. The Board recognizes that there is an aging population
of qualified drivers and this could present a challenge to growth for the Company if it were unable to attract drivers and contract with owner operators. Compensation policies, with the Board oversight, are modified to ensure that the short-term
financial objectives align with the demographics and competitive wage scales in the industry.
Like many other companies,
Vitran in 2009 implemented certain salary and wage cost initiatives. Such initiatives include the suspension of our 401(k) matching program and a compensation reduction equal to 5 percent across all employees of the Company. It was Vitrans
expectation to increase wages as the freight pricing environment and corresponding financial results began to improve. Vitran had increased wages 1.25 percent for all employees at the start of each quarter in 2011 to return the 5 percent wage
reduction. These decisions were made in consultation with the Board and the decision to make future changes will be analyzed with the Board. The Board recognizes that these decisions come with risks that could materially adversely affect our
business.
Although Vitran has had a history of positive labour relations, the Board recognizes that this will continue to be important to
future success. The Board maintains dialogue with management on employee relations and outsourced labour to ensure the compositions of the labour force is consistent with the long-term strategic plan of the Company. With respect to the two labour
unions, their collective agreements expire on February 28, 2014 and on March 31, 2015, respectively. There can be no assurance that these collective bargaining agreements will be re-negotiated on terms acceptable or favourable to Vitran.
9
THE COMPENSATION COMMITTEE
Purpose, Functions, Composition, and Meetings.
The Compensation Committee reviews, analyzes, recommends, and approves all aspects of executive compensation. As more fully outlined in the
Compensation Committees charter, the primary responsibilities of the Compensation Committee include:
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reviewing and approving corporate goals and objectives relating to the compensation of the Chief Executive Officer, evaluating the Chief Executive
Officers performance in light of those objectives, and determining and approving the Chief Executive Officers compensation based upon this evaluation;
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reviewing and making recommendations to the Board regarding the compensation of the other Named Executive Officers (as defined under Statement of
Executive Compensation Summary Compensation Table);
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reviewing and approving all forms of compensation, including base salary, cash performance incentives, stock options, deferred share units
(DSUs) and benefits for the executive officers;
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reviewing and making recommendations to the Board regarding the compensation of Board of Directors and its committees; and
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administering the Companys stock option plan and DSU plan, as in effect from time-to-time.
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During 2012, Mr. Deluce, Mr. McGraw, and Mr. Griffiths served on the Compensation Committee and Mr. Deluce served as
Chair. Subsequent to Mr. Deluces appointment as the Companys Interim President and Chief Executive Officer on April 4, 2013, Mr. Hébert was appointed to replace him as the Chair of the Compensation Committee.
Mr. McGraw and Mr. Griffiths continue to serve as members of the Compensation Committee, and each of Messrs. Hébert, McGraw and Griffiths has been determined by the Board of Directors to be an independent director in accordance with
NASDAQ listing standards.
The Compensation Committee met three times in 2012.
See
Executive Compensation
Compensation Discussion and Analysis for a discussion of the processes and procedures for recommending and setting compensation for the Named Executive Officers and directors, including the role of the Compensation Committee and executive
officers.
Compensation Committee Charter.
A copy of the Compensation Committees current charter is available free of charge
on the Shareholder Relations section of our website at http://www.vitran.com and is available in print to any shareholder who requests it.
Report of the Compensation Committee.
In performing its duties, the Compensation Committee, as required by applicable rules and regulations
promulgated by the SEC and the Canadian Securities Administrators, issues a report recommending to the Board of Directors that our Compensation Discussion and Analysis be included in this Management Information Circular.
The Report of the Compensation Committee shall not be deemed to be incorporated by reference into any filing made by us under the Securities Act of
1933 or the Exchange Act, notwithstanding any general statement contained in any such filings incorporating this Management Information Circular by reference, except to the extent we incorporate such report by specific reference
.
Compensation Consultants.
During 2012, the Compensation Committee engaged Hugessen Consulting Inc. to review director compensation,
including mandatory share ownership requirements, for 2013. The Compensation Committee reviewed its relationship with Hugessen Consulting Inc. and determined that its work did not give rise to any conflicts of interest. Hugessen Consulting Inc.
completed this engagement in 2013, and its fees were less than $120,000.
10
COMPENSATION DISCUSSION AND ANALYSIS
Executive Compensation Philosophy
It is
the belief of the Compensation Committee that executive compensation should
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link pay and performance; and
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2)
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attract, motivate, reward and facilitate the retention of the executive talent required to achieve corporate objectives. The primary long-term corporate objective is to
create superior value for our shareholders.
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In support of this philosophy, the Company uses several different executive
compensation components that align rewards with the short-term and long-term performance of the Company and of each executive. These programs are structured to deliver competitive compensation levels for the achievement of specific performance
objectives. Our philosophy for each component of pay is as follows:
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Base Salaries:
Based on individual and Company performance and the level of experience of the executives;
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Annual Incentive Compensation:
Cash incentive based on individual and Company performance;
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Long-Term Incentive Compensation:
Stock option incentive based on individual and Company performance;
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Post-Employment Compensation:
DSUs serving as a substitute for a pension arrangement; and
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Benefits and Perquisites:
Provide additional compensation components consistent with the broad market practices for
executives.
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The Compensation Committee annually reviews the executive compensation levels of the Named Executive Officers
and has the responsibility to make and approve changes in the total compensation of the Named Executive Officers, including the mix of compensation elements. The Compensation Committee has decision making authority over compensation levels. In
making decisions regarding an executives total compensation, the Compensation Committee considers whether the total compensation is fair and reasonable, is internally appropriate based upon the Companys culture and is within a reasonable
range of the compensation. The Compensation Committee also bases its decisions regarding compensation upon its assessment of the executives leadership, integrity, individual performance, years of experience, skill set, level of commitment
and responsibility required in the position, contributions to the Companys financial and operating successes, the creation of stockholder value, and current and past compensation. In determining the mix of compensation components, the
Compensation Committee considers the effect of each element in relation to total compensation.
Consistent with the Companys culture,
compensation is tightly linked to Company performance and shareholder value creation and, as such, a substantial part of the compensation is at risk and is only earned if performance of our Company and the Named Executive Officer so warrants. In
determining whether to increase or decrease an element of compensation, reliance is placed upon the business experience of the members of the Compensation Committee, the Compensation Committees general understanding of compensation levels of
public companies, and the historical compensation levels of the executive officers. The Compensation Committee generally does not rely on rigid formulas, other than performance measures under our annual incentive program, or short-term changes
in business performance when setting compensation. Base salaries or total executive compensation are not formally benchmarked against the executive compensation of any other company or group of companies. The Compensation Committee considers the
proposals of the CEO when determining the compensation of the Named Executive Officers. Under NASDAQ rules, the CEO must not be present during voting or deliberations of the Compensation Committee.
Periodically, the Compensation Committee will engage an arms length third party to review the reasonableness of the compensation of an executive or
group of executives. In 2005, Mercer Inc. was engaged by the Compensation
11
Committee to review the entire compensation package of the Chief Executive Officer. In 2009, Hugessen Consulting Inc. was engaged by the Compensation Committee to review long-term incentive
compensation options for the Companys management group. Fees paid to Mercer Inc. and Hugessen Consulting Inc. were less than $120,000 for these engagements. As noted above, the Compensation Committee again engaged Hugessen Consulting Inc. in
2012 to review director compensation, including mandatory share ownership requirements, for 2013.
The following summarizes the compensation
elements for the Named Executive Officers for the year ended December 31, 2012.
Base Salary
Base salaries are paid at levels that reward executive officers for ongoing performance and that enable us to attract, motivate, and retain highly
qualified executives. Base pay is a critical element of our compensation program because it provides the Named Executive Officers with stability. Compensation stability allows the Named Executive Officers to focus their attention and
efforts on creating stockholder value and on other business objectives. In determining base salaries, the Compensation Committee considers the executives current base salary and the executives qualifications and experience,
including, but not limited to, the executives length of service with the Company, the executives industry knowledge, and the quality and effectiveness of the executives leadership, integrity, scope of responsibilities, dedication
to our stockholders and Company, past performance, and current and future potential of providing value to the stockholders. The Compensation Committee adjusts base salaries annually to reflect the abovementioned factors but does not apply a
specific weighting to such factors.
Annual Incentive Compensation
The annual incentive component represents a variable portion of the total compensation opportunity that motivates and rewards executives to achieve short-term corporate objectives. The Companys
annual incentive compensation is structured to provide cash incentives to the Named Executives Officers in the fiscal year based on the achievement of:
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key financial targets;
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specific objectives; and
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The Compensation Committee
sets, for each executive officer, one or more key financial targets and one or more specific objectives. The annual cash incentive amount earned by each Named Executive Officer is primarily dependent upon the Company reaching or exceeding the
specified financial targets and each Named Executive Officer successfully completing his specified objectives. Financial performance targets are typically established on a combined basis of income from operations, earnings per diluted share, return
on capital employed (ROCE), revenue growth, earnings before income taxes, depreciation and amortization (EBITDA) and days sales outstanding (DSO), to align cash compensation payments with performance and the
creation of shareholder value. Additionally, individual specific objectives may be based on the successful implementation of corporate policies, development of long-term business goals or strategic plans, or the exercise of specific areas of
managerial responsibility.
The Compensation Committee determined that the maximum annual cash incentive for Mr. Gaetz and
Mr. Suleman for 2012 would be 140% and 105% of their base salary, respectively, for the attainment of the key financial targets. For 2012, the annual cash incentive for the achievement of key financial targets for each Named Executive Officer
was structured to provide a cash payment based on EBITDA improvement.
12
The matrix for the 2012 key financial target incentive is as follows:
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EBITDA Improvement Target
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Maximum % of Salary
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Mr. Gaetz
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Mr. Suleman
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15% improvement or greater
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50.0
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%
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50.0
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%
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50% improvement or greater
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100.0
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%
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75.0
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%
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75% improvement or greater
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110.0
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%
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82.0
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100% improvement or greater
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125.0
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%
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93.0
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134% improvement or greater
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140.0
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%
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105.0
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%
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The Compensation Committee also reserves the right to award other cash incentives for achievements in leadership,
innovation, initiative, negotiation of significant corporate transactions, and other non-objective performance items. These awards are made on a discretionary basis by the Compensation Committee in conjunction with or in addition to the maximum
annual cash incentive.
The Compensation Committee sets the financial targets and specific objectives for the Named Executive Officers by
(i) engaging in active dialogue with our CEO concerning the Companys strategic objectives and performance, and (ii) reviewing the appropriateness of the financial measures used for the annual incentive compensation. In determining an
executive officers maximum cash bonus opportunity, the Compensation Committee considers (i) the value that achieving specific performance targets will add to the shareholders, (ii) the degree of difficulty in achieving specific
performance targets, and (iii) each of the other elements comprising the executives total compensation.
Long-Term Incentive
Compensation
The long-term incentive compensation is a stock-option-based equity plan that is used to, among other things,
(i) provide annual incentives to executive officers in a manner designed to reinforce performance goals, (ii) attract, motivate, and retain qualified executive officers by providing them with long-term incentives, and (iii) most
significantly, align the executives and stockholders long-term interests by creating a strong, direct link between executive pay and stockholder return. This allows the Compensation Committee to link compensation to performance over
a period of time by using stock options, which value a companys long-term prospects by granting stock options that have multiple-year vesting schedules. Multiple-year vesting schedules create incentive for executive officers to increase
stockholder value over an extended period of time because the value received from the stock option is based on the growth of the stock price. Such awards also incentivize executives to remain with the Company over an extended period of time.
Thus, stock options provide an effective way of aligning the interests of our executive officers with those of our stockholders.
The
Compensation Committee considers several factors when determining awards to be granted to the executive officers, including (i) the recommendations of the CEO; (ii) how the achievement of certain performance goals will help the Company
improve its financial and operating performance and add long-term value to the stockholders; (iii) the value of the award in relation to other elements of total compensation, including the number of options currently held by the executive and
the number of options granted to the executive in prior years; and (iv) the executives position, scope of responsibility, ability to affect the financial and operating performance, ability to create stockholder value, and historic and
recent performance. Stock options are typically granted to the executives subsequent to the public disclosure of the fourth quarter and annual financial results. The exercise price is set at the Companys closing share price on the last trading
day prior to the grant date.
Post-Employment Compensation
On January 1, 2006 the Compensation Committee approved the DSU plan for Senior Executives of the Company as a substitute for a pension arrangement. The Named Executive Officers are eligible to
participate in the DSU plan which the Compensation Committee believes provides a long-term retirement incentive for the Named Executive Officers. The Compensation Committee believes the benefits provided by this plan are important factors in
attracting and retaining the Named Executive Officers. The plan meets the definition of Nonqualified Deferred Compensation pursuant to Internal Revenue Code section 409A and regulation 6801(d) of the
Income Tax Act
(Canada).
13
Under this plan, Named Executive Officers as well as other senior executives receive units at the end of
each quarter equivalent to a fourth of the senior executives annual contribution entitlement, divided by the market price of Common Shares. The annual contribution entitlement amount varies based on the executives position in the Company
and the years of eligible service. The maximum annual contribution entitlement varies between $2,500 and $20,000 per annum. Units accumulate in the name of each executive within the plan and payments are made in cash upon death, resignation,
retirement or termination without cause of the executive. The Compensation Committee may from time-to-time approve discretionary awards under the DSU plan, but have never done so.
The Company operates a 401(k) plan for certain employees in the United States and makes contributions according to specific policies and financial formulae. In Canada, the Company makes contributions to a
Registered Retirement Savings Plan (RRSP) based on the same plan guidelines that are available to all the Companys employees in Canada. The Named Executive Officers are eligible to participate in the RRSP and the Company matches
contributions up to a maximum of $1,500 annually for each participant.
Benefits and Perquisites
The Company provides medical, dental, vision, life insurance and disability benefits to all eligible non-contractual employees. The Named Executive
Officers are eligible to participate in these benefit plans on the same basis as all other employees. The Company also uses perquisites for Named Executive Officers to provide a competitive offering and conveniences. Perquisites are generally
limited to situations where there is some related business benefit to the Company. As such the Named Executive Officers are eligible for annual private medical assessments beyond what is provided in the employee health plan. In addition to the
aforementioned benefits, the Company provides certain other perquisites that are limited to Named Executive Officers. The benefits and perquisites are reviewed annually by the Compensation Committee regarding their competitiveness and
appropriateness. These items are further disclosed in the All Other Compensation table on page 19.
Say-on-Pay
At our 2012 annual meeting of shareholders, in our say-on-pay advisory vote, 97.2% of the votes cast were in favor of the compensation of our
named executive officers (votes for: 12,712,027; against: 189,512; withheld: 178,032; non-votes: 1,368,855). In light of this significant show of support, the Compensation Committee has continued to make compensation decisions consistent with the
Companys stated executive compensation philosophy and objectives.
Employment Arrangements
Mr. Gaetz resigned
as President and Chief Executive Officer effective April 4, 2013. Prior to his resignation, the terms of his employment were covered by an employment agreement between the Company and Mr. Gaetz effective March 16, 2009. The employment
agreement could have been terminated: by mutual consent; if the Company has just cause at common law for termination; or with a payment if the Company does not have just cause at common law for termination as described below. Under the employment
agreement, Mr. Gaetz had agreed that during the 12 months following his termination: (i) he would not solicit any person who is employed by the Company or any affiliate; and (ii) he would not contact any customers of the Company or
any of its subsidiaries. Mr. Gaetz had also agreed all confidential records, material and information concerning the Company or its affiliates shall remain the exclusive property of the Company and Mr. Gaetz shall not divulge such
information to any person.
Compensation.
During the employment period, Mr. Gaetz was to (i) receive a base salary (subject
to annual review with increases at the sole discretion of the Board of Directors) and (ii) participate in senior executive benefit plans made available by the Company to its senior executives, including without limitation, continued entitlement
to the Companys bonus plan.
14
Termination without just cause.
If the employment of Mr. Gaetz was terminated by the Company and
the Company did not have just cause at common law for such termination, Mr. Gaetz would receive 24 months compensation. The value of compensation would be based on one-twelfth of the total base salary, bonuses, taxable and non-taxable
benefits for the 12 months prior to such termination of employment. Furthermore, on the effective date of termination of his employment, all his outstanding stock options would be deemed vested.
Change of control.
If there was a Change of Control (as defined in Mr. Gaetzs employment agreement) of the Company and the
employment of Mr. Gaetz was terminated without cause or Mr. Gaetz resigned from his said employment at any time within 1 year of the Change of Control, the Company would pay to Mr. Gaetz a lump sum amount equivalent to 30 months
compensation. The value of compensation would be based on one-twelfth of the total base salary, bonuses, taxable and non-taxable benefits for the 12 months prior to termination. Furthermore, on the effective date of termination of his employment,
all his outstanding stock options would be deemed vested.
For the purpose of Mr. Gaetzs employment agreement, a Change of
Control would be deemed to have taken place if: (i) as a result of a takeover bid or acquisition in any form, a person or entity has the legal ability to cast votes with respect to greater than 50% of the Common Shares for the purpose of
electing the directors of the Company; (ii) as a result of a merger, consolidation or sale of all or substantially all the assets of the Company the persons who were the directors of the Company before the transaction cease to constitute a
majority of the directors of the Company; or (iii) three or more directors (together or separately) are elected whose election is opposed by the then majority of the directors of the Company.
The Compensation Committees rationale for the termination without just cause and Change of Control provisions in
Mr. Gaetzs employment agreement was that after termination a longer job search period might be required to find another comparable position due to Mr. Gaetzs seniority. The Compensation Committee also felt Mr. Gaetz was at
greater risk of termination in the event of a Change of Control. Consequently, the Compensation Committee recognized the significant distraction that could arise from a possible sale or other disposition of the Company or a business unit, and
believed the Change of Control provision provided an incentive to Mr. Gaetz to remain focused on his work and act in the best interest of the Company.
With Mr. Gaetzs resignation, the employment agreement terminated on April 4, 2013.
The Company has entered
into an employment agreement with Mr. Suleman effective March 26, 2013. The employment agreement may be terminated: by mutual consent; if the Company has cause for termination; or with a payment if the Company does not have cause for
termination as described below. Under the employment agreement, Mr. Suleman has agreed that during the 12 months following his termination: (i) he will not solicit any person who is employed by the Company or any affiliate; and
(ii) he will not contact any customers of the Company or any of its subsidiaries. Mr. Suleman has also agreed all confidential records, material and information concerning the Company or its affiliates shall remain the exclusive property
of the Company and Mr. Suleman shall not divulge such information to any person.
Compensation.
During the employment period,
Mr. Suleman will: (i) receive a base salary (subject to annual review with increases at the sole discretion of the Board of Directors) and (ii) participate in senior executive benefit plans made available by the Company to its senior
executives, including without limitation, continued entitlement to the Companys bonus plan.
Termination without cause.
If the
employment of Mr. Suleman is terminated by the Company and the Company does not have cause for such termination, Mr. Suleman shall receive 12 months compensation. The value of compensation will be based on one-twelfth of the total
base salary at the date of such termination of employment and one-twelfth of the bonuses for the fiscal year preceding the date of such termination of employment. Furthermore, on the effective date of termination of his employment, all his
outstanding stock options that would have vested during the 12 months following the date of termination will be deemed vested.
15
Change of control.
If there is a Change of Control (as defined in Mr. Sulemans
employment agreement) of the Company and (i) the employment of Mr. Suleman is terminated without cause or (ii) Mr. Suleman resigns from his said employment at any time within 1 year after the Change of Control as a result of a
material diminution of title, authority, status, duties or responsibilities or, in certain circumstances, for any reason, the Company shall pay to Mr. Suleman a lump sum amount equivalent to 18 months compensation. The value of
compensation will be based on one-twelfth of the total base salary at the date of such termination of employment and one-twelfth of the bonuses for the fiscal year preceding the date of such termination of employment. Furthermore, on the effective
date of termination of his employment, all his outstanding stock options that would have vested during the 18 months following the date of termination will be deemed vested.
For the purpose of Mr. Sulemans employment agreement, a Change of Control will be deemed to have taken place if: (i) as a result of a takeover bid or other transaction that in
either case is not supported by a majority of the directors of the Company, a person or entity has the legal ability to cast votes with respect to greater than 50% of the Common Shares for the purpose of electing the directors of the Company;
(ii) as a result of a takeover bid, merger, consolidation or other business combination or sale of the assets of the Company that is supported by the directors, the persons who were the directors of the Company before the transaction cease to
constitute a majority of the directors of the Company; or (iii) three or more directors (together or separately) are elected whose election is opposed by the then majority of the directors of the Company. Potential payments, pursuant to the
employment agreement assuming that employment was terminated on December 31, 2012, the last business day of the year, are disclosed in the Potential Payments Upon Change in Control or Termination table on page 22.
The Compensation Committees rationale for the termination without cause and Change of Control provisions in
Mr. Sulemans employment agreement is that after termination a longer job search period may be required to find another comparable position due to Mr. Sulemans seniority. The Compensation Committee also feels Mr. Suleman is
at greater risk of termination in the event of a Change of Control. Consequently, the Compensation Committee recognizes the significant distraction that can arise from a possible sale or other disposition of the Company or a business unit and
believes the Change of Control provision provides an incentive to Mr. Suleman to remain focused on his work and act in the best interest of the Company.
Mr. Deluce was
appointed Interim President and Chief Executive Officer on April 4, 2013 to replace Mr. Gaetz. It has not yet been determined what Mr. Deluce will be paid for his role as Interim President and Chief Executive Officer. As at the date
of this Management Information Circular, Mr. Deluce has not entered into any executive employment agreement or management consulting agreement with the Company.
COMPENSATION PAID TO THE NAMED EXECUTIVE OFFICERS
Compensation Paid to the Chief
Executive Officer
Mr. Gaetz was the CEO of the Company from 2002 to April 4, 2013, the date of his resignation, and from 1989 to
2002 served as the Chief Operating Officer of the Company. The Compensation Committee met in March 2013 with the CEO and in camera to determine adjustments to his base salary as well as the annual incentive and long-term incentive compensation
awards.
With reference to the foregoing annual incentive financial targets, the Company did not achieve the required EBITDA improvement
targets primarily due to the U.S. LTL business unit not performing to management expectations. Consequently, Mr. Gaetz did not receive payment of the annual incentive compensation based on financial targets.
Compensation Paid to the Chief Financial Officer
Mr. Suleman was appointed CFO of the Company effective September 29, 2011, and from 2005 to 2011 served as the Corporate Controller of the Company. The Compensation Committee met in March 2013
with the CEO and in camera to determine adjustments to Mr. Sulemans base salary as well as the annual incentive and long-term incentive compensation awards.
16
With reference to the foregoing annual incentive financial targets, the Company did not achieve the required
EBITDA improvement targets primarily due to the U.S. LTL business unit not performing to management expectations. Consequently, Mr. Suleman did not receive payment of the annual incentive compensation based on financial targets. However, with
the contribution of Mr. Suleman, the Company did realize significant achievements in 2012. The Canadian LTL business unit performed extremely well in 2012. Although the aforementioned U.S. LTL business unit did not perform financially, the
management team made significant strides in improving the service product to customers, technological advancements and improvements in operating efficiencies. Subsequent to the year end, based on groundwork commenced in 2012, the Company sold its
Supply Chain Operation business and created significant value for its shareholders while significantly improving the consolidated balance sheet. Corporately, the Company obtained a credit facility secured by its U.S. real estate assets. The
Compensation Committee recognized that, while the Companys earnings had not been achieved, the management team had made significant achievements and positioned the Company for future prosperity. In that regard Mr. Suleman, in the view of
the Compensation Committee, will receive CAD$96,000 in annual incentive attributable to attaining specific objectives.
COMPENSATION DECISIONS WITH RESPECT TO 2013
The Compensation Committee reviews and considers modifications in compensation of our Companys executive officers. As such the base salary for Mr. Suleman will be CAD$270,000. With respect to
the DSU plan for Senior Executives of the Company, Mr. Sulemans 2013 annual contribution entitlement will be $17,500. Mr. Sulemans 2013 annual contribution entitlement is based upon his seniority and length of service with the
Company. As noted above, the Board of Directors has not yet determined what Mr. Deluce should be paid in his capacity as Interim President and Chief Executive Officer.
The annual incentive compensation for our executive officers continues to align the incentive requirements with the interests of the Companys stakeholders. As such the Compensation Committee
introduced a new financial target matrix for executive officers annual cash incentive. The Compensation Committee determined that the maximum annual cash incentive for Mr. Suleman for 2013 will be 105% of his base salary for the
attainment of the key financial targets. For 2013, the annual cash incentive for the achievement of key financial targets for Mr. Suleman was structured to provide cash payment based on earnings before interest expense, income tax expense,
depreciation and amortization expense (EBITDA).
The matrix for Mr. Sulemans 2013 key financial target incentive is as
follows:
|
|
|
|
|
|
|
EBITDA
|
|
|
% of Mr. Sulemans
Salary
|
|
$
|
(12,000,000
|
)
|
|
|
50.0
|
%
|
$
|
(7,000,000
|
)
|
|
|
75.0
|
%
|
$
|
0
|
|
|
|
82.0
|
%
|
$
|
3,500,000
|
|
|
|
93.0
|
%
|
$
|
7,000,000
|
|
|
|
105.0
|
%
|
FREQUENCY OF SAY-ON-PAY ADVISORY VOTE
Our Company is required to hold a frequency vote at least once every six years, in order to allow our shareholders to decide how often they would like to be presented with
say-on-pay advisory votes. At our 2011 annual meeting of shareholders, the results of our advisory vote on the frequency of future say-on-pay advisory votes were as follows: 1 year: 7,426,735 votes; 2 years: 130,360 votes; 3
years: 5,770,056 votes; abstentions: 51,271. After consideration of these voting results and other factors, the Board of Directors has determined that it would be appropriate to follow the advisory vote held in 2011, and to hold future advisory
votes on executive compensation of the Companys named executive officers on an annual basis, until the next required shareholder advisory vote with respect to the frequency of future votes.
17
Brokers may not cast discretionary uninstructed votes (commonly known as broker
non-votes) in respect of executive compensation.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed with Management the foregoing Compensation Discussion and Analysis which appears in the
Companys 2013 Notice of Annual and Special Meeting and Proxy Statement.
Based on the review and discussions referred to above, the
Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be incorporated by reference into the Companys Annual Report on Form 10-K and included in the Companys 2013 Notice of Annual and
Special Meeting and Proxy Statement for filing with the SEC.
THE COMPENSATION COMMITTEE
Georges Hébert, Chair
Richard D. McGraw
Anthony F. Griffiths
STATEMENT OF EXECUTIVE COMPENSATION
Summary Compensation Table
The Companys Named Executive Officers as at
December 31, 2012 are Richard Gaetz, President and Chief Executive Officer, and Fayaz Suleman, Vice President Finance and Chief Financial Officer. The following table sets forth the total annual compensation earned for services rendered during
the last three financial years by the Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
(CAD$)
|
|
|
Bonus
(CAD$)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
(CAD$)
(1)
|
|
|
Non-
Equity
Incentive
Plan
Compen-
sation
($)
|
|
|
Change in
Pension
Value and
Non-
Qualified
Deferred
Compen-
sation
Earnings
($) (2)
|
|
|
All Other
Compen-
sation
(CAD$) (3)
|
|
|
Total
(CAD$)
|
|
Richard E. Gaetz
|
|
|
2012
|
|
|
|
600,000
|
|
|
|
nil
|
|
|
|
nil
|
|
|
|
69,292
|
|
|
|
nil
|
|
|
|
20,000
|
|
|
|
101,840
|
|
|
|
791,132
|
|
President &
Chief Executive Officer (4)
|
|
|
2011
2010
|
|
|
|
563,000
506,700
|
|
|
|
281,500
563,000
|
|
|
|
nil
nil
|
|
|
|
90,121
107,218
|
|
|
|
nil
nil
|
|
|
|
20,000
20,000
|
|
|
|
99,300
26,260
|
|
|
|
1,053,921
1,223,178
|
|
Fayaz D. Suleman
|
|
|
2012
|
|
|
|
258,000
|
|
|
|
96,000
|
|
|
|
nil
|
|
|
|
57,486
|
|
|
|
nil
|
|
|
|
15,000
|
|
|
|
47,685
|
|
|
|
474,171
|
|
Vice President Finance
& Chief Financial
Officer (5)
|
|
|
2011
|
|
|
|
62,500
|
|
|
|
75,000
|
|
|
|
nil
|
|
|
|
15,240
|
|
|
|
nil
|
|
|
|
3,750
|
|
|
|
4,846
|
|
|
|
161,336
|
|
(1)
|
Compensation expense related to Option Awards represents the fair value of the awards on the grant date. The required information concerning the Companys stock
option plan appears in the Companys 2012 Annual Report on Form 10-K, reference to which is hereby made, and the information therein is incorporated herein by reference.
|
(2)
|
Named Executive Officers received Non-Qualified Deferred Compensation Earnings pursuant to the DSU Plan for Senior Executives which is described under the heading
Nonqualified Deferred Compensation Table on page 21 of this document.
|
(3)
|
See details in the All Other Compensation table below.
|
(4)
|
Mr. Gaetz resigned as director, President and Chief Executive Officer effective April 4, 2013.
|
(5)
|
Mr. Suleman was appointed an officer effective September 29, 2011.
|
18
All Other Compensation
The following table sets forth the details of other compensation awarded to, earned by or paid to the Companys Named Executive Officers for services rendered during the last three financial years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Year
|
|
|
Vehicle
Allowance
(CAD$)
|
|
|
Member
ships
(CAD$)
|
|
|
Company
Contributions
to
RRSP
(CAD$)
|
|
|
Medical
Assessment
(CAD$)
|
|
|
Other
(CAD$)
|
|
|
Total
(CAD$)
|
|
Richard E. Gaetz
|
|
|
2012
|
|
|
|
18,000
|
|
|
|
4,800
|
|
|
|
1,500
|
|
|
|
2,540
|
|
|
|
75,000
|
|
|
|
101,840
|
|
President & Chief Executive Officer (1)
|
|
|
2011
2010
|
|
|
|
18,000
18,000
|
|
|
|
4,800
4,800
|
|
|
|
1,500
1,500
|
|
|
|
1,960
|
|
|
|
75,000
|
|
|
|
99,300
26,260
|
|
Fayaz D. Suleman
|
|
|
2012
|
|
|
|
18,000
|
|
|
|
|
|
|
|
1,500
|
|
|
|
|
|
|
|
28,185
|
|
|
|
47,685
|
|
Vice President Finance & Chief Financial Officer (2)
|
|
|
2011
|
|
|
|
4,500
|
|
|
|
|
|
|
|
346
|
|
|
|
|
|
|
|
|
|
|
|
4,846
|
|
(1)
|
Mr. Gaetz resigned as director, President and Chief Executive Officer effective April 4, 2013.
|
(2)
|
Mr. Suleman was appointed an officer effective September 29, 2011.
|
Grants of Plan Based Awards Table
The following table sets forth the stock and option
awards, including non-equity incentive awards for the Named Executive Officers for the year ended December 31, 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant
Date
|
|
|
Estimated Future Payouts
Under
Non-Equity
Incentive
Plan Awards
|
|
|
Estimated Future Payouts
Under
Equity
Incentive
Plan Awards
|
|
|
All
Other
Stock
Awards:
Number
Of
Shares
Of
Stock
Or
Units
(#)
|
|
|
All
Other
Options
Awards:
Number
Of
Securities
Under-
lying
Options
(#)
|
|
|
Exercise
Or
Base
Price of
Option
Awards
(CAD$)
|
|
|
Grant
Date Fair
Value
of
Stock
and
Option
Awards
(CAD$)
|
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maxi-
mum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maxi-mum
(#)
|
|
|
|
|
|
Richard E. Gaetz
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President & Chief Executive Officer
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
Fayaz D. Suleman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President
Finance & Chief Financial Officer
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
19
EQUITY COMPENSATION ARRANGEMENTS
Outstanding Equity Awards Table
The
following table sets forth the stock and option awards for the Named Executive Officers as at December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards (1)
|
|
|
Stock Awards (2)
|
|
Name
|
|
Number
Of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
Of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
|
Equity
Incentive
Plan
Awards:
Number
Of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Option
Exercise
Price
(CAD$)
|
|
|
Option
Expiration
Date
|
|
|
Number
Of
Shares
Or Units
Of Stock
That
Have
Not
Vested
(#)
|
|
|
Market
Value of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number
Of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value
Of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
($)
|
|
Richard E. Gaetz
President & Chief
Executive Officer
|
|
|
40,000
25,000
15,000
25,000
12,000
18,000
3,200
6,600
|
|
|
|
3,000
12,000
4,800
26,400
|
|
|
|
40,000
25,000
15,000
25,000
15,000
30,000
8,000
33,000
|
|
|
|
20.50
18.75
22.00
21.09
12.79
10.40
11.18
5.23
|
|
|
|
Mar. 9, 14
Feb. 18, 15
Feb. 16, 16
Feb. 13, 17
Feb. 19, 18
Dec. 15, 19
Oct. 26, 20
Nov. 10, 21
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
Fayaz D. Suleman
Vice President Finance
& Chief Financial Officer
|
|
|
5,000
5,000
10,000
8,000
9,000
2,000
420
10,620
|
|
|
|
2,000
6,000
3,000
1,680
42,480
|
|
|
|
5,000
5,000
10,000
10,000
15,000
5,000
2,100
53,100
|
|
|
|
20.00
22.00
21.09
12.79
10.40
11.18
11.97
5.23
|
|
|
|
Oct. 22, 14
Feb. 16, 16
Feb. 13, 17
Feb.
19, 18
Dec. 15, 19
Oct. 26. 20
Mar. 2, 21
Nov. 10, 21
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
(1)
|
The Companys stock options vest one-fifth annually on the anniversary of the stock options grant date.
|
(2)
|
During the financial year ended December 31, 2012, no Stock Awards were granted to Named Executive Officers and, as of December 31, 2012, no Stock Awards were
outstanding.
|
Option Exercises and Stock Vested Table
The following table sets forth the value realized on Options Exercised and Stock Awards vested for the Named Executive Officers for the year ended December 31, 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Number of
Shares
Acquired
On
Exercise
(#)
|
|
|
Value
Realized
On
Exercise
(CAD$)
|
|
|
Number of
Shares
Acquired
On
Vesting
(#)
|
|
Value
Realized
On
Vesting
($)
|
|
Richard E. Gaetz
President & Chief Executive Officer
|
|
|
50,000
|
|
|
|
230,500
|
(1)
|
|
n/a
|
|
|
n/a
|
|
Fayaz D. Suleman
Vice President Finance & Chief Financial Officer
|
|
|
nil
|
|
|
|
nil
|
|
|
n/a
|
|
|
n/a
|
|
(1)
|
Determined based on the difference between the closing price of the Common Shares on the Toronto Stock Exchange on date of exercise and the exercise price of the stock
options.
|
20
Nonqualified Deferred Compensation Table
The following table sets forth the contributions, earnings and balances under Nonqualified Deferred Compensation arrangements for the Named Executive Officers at December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
In Last FY
($)
|
|
|
Registrant
Contributions
In Last FY
($) (1)
|
|
|
Number
of Units
(#)
|
|
|
Aggregate
Earnings
In Last
FY
($)
|
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
|
Aggregate
Balance
At Last
FYE
($)
|
|
|
Aggregate
Number of
Units
(#)
|
|
Richard E. Gaetz
President & Chief Executive Officer
|
|
|
nil
|
|
|
|
20,000
|
|
|
|
3,378
|
|
|
|
7,016
|
|
|
|
nil
|
|
|
|
69,129
|
|
|
|
14,410
|
|
Fayaz D. Suleman
Vice President Finance & Chief Financial Officer
|
|
|
nil
|
|
|
|
15,000
|
|
|
|
2,533
|
|
|
|
9,340
|
|
|
|
nil
|
|
|
|
28,337
|
|
|
|
5,909
|
|
(1)
|
Contributions are also disclosed under the column entitled Nonqualified Deferred Compensation Earnings in the Summary Compensation Table above. Under the
DSU plan, Named Executive Officers as well as other senior executives receive units at the end of each quarter based on the market price of Common Shares equivalent to the senior executives annual contribution entitlement. The annual
contribution entitlement amount varies based on the position in the Company and the years of eligible service. The maximum entitlement contribution varies between $2,500 and $20,000 per annum. Named Executive Officers received Nonqualified Deferred
Compensation Earnings pursuant to the DSU Plan for Senior Executives which is described under the heading Post-Employment Compensation on page 13 of this document.
|
Equity Compensation Plan Information
The following table sets forth, as at
December 31, 2012, details of the Companys compensation plans under which equity securities of the Company are authorized for issuance.
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of securities to
be issued upon exercise
of outstanding
options
(#)
|
|
|
Weighted-average
exercise price of
outstanding options
($)
|
|
|
Number of Common
Shares remaining available
for future issuance
under
equity compensation plans
(#)
|
|
Equity compensation plans approved by shareholders
|
|
|
742,800
|
|
|
|
11.80
|
|
|
|
31,100
|
|
Equity compensation plans not approved by shareholders
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
742,800
|
|
|
|
11.80
|
|
|
|
31,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
POTENTIAL PAYMENTS UPON CHANGE IN CONTROL OR TERMINATION
The employment agreement between the Company and Mr. Gaetz was terminated upon Mr. Gaetzs resignation on April 4, 2013. The Company
has entered into an employment agreement with Mr. Suleman effective March 26, 2013. The agreement may be terminated by mutual consent or by the Company, without notice if the Company has cause for termination or without cause if the
Company pays a lump sum amount for such termination. Under the employment agreement with Mr. Suleman, he will receive certain compensation paid as a lump sum amount in the event of a Change of Control of the Company or termination
without cause. The terms of the employment agreement of Mr. Suleman are discussed in detail beginning on page 14 under the heading Employment Arrangements. The following table details the amounts payable under the employment
agreement as if employment was terminated on December 31, 2012, the last business day of the year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Condition
|
|
Calculated
Monthly
Entitlement
|
|
|
Months
|
|
|
Gross
Payment
|
|
|
Payment
Pursuant to
Employee
DSU Plan
|
|
|
Payment
Pursuant
to
Director
DSU Plan
|
|
|
Total
Compensation
Payment
|
|
|
Stock
Options
Vested
|
|
|
Value of
Stock
Options (1)
|
|
|
|
|
|
CAD$
|
|
|
#
|
|
|
CAD$
|
|
|
$
|
|
|
CAD$
|
|
|
CAD$
|
|
|
#
|
|
|
CAD$
|
|
Fayaz D. Suleman
Vice President Finance & Chief Financial Officer
|
|
Termination without just cause
|
|
|
27,750
|
|
|
|
12
|
|
|
|
333,000
|
|
|
|
28,337
|
|
|
|
nil
|
|
|
|
361,192
|
|
|
|
105,200
|
|
|
|
nil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change of Control
|
|
|
27,750
|
|
|
|
18
|
|
|
|
499,500
|
|
|
|
28,337
|
|
|
|
nil
|
|
|
|
527,692
|
|
|
|
105,200
|
|
|
|
Nil
|
|
(1)
|
Represents the value of in-the-money stock options based on the Companys closing stock price on the Toronto Stock Exchange (the TSX) on
December 31, 2012 of CAD $4.63.
|
COMPENSATION OF DIRECTORS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees
Earned
(CAD$)
|
|
|
Stock and
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings
(CAD$)
|
|
|
All Other
Compensation
($)
|
|
|
Total
(CAD$)
|
|
Richard D. McGraw
|
|
|
50,000
|
|
|
|
nil
|
|
|
|
nil
|
|
|
|
10,000
|
|
|
|
nil
|
|
|
|
60,000
|
|
Anthony F. Griffiths
|
|
|
39,000
|
|
|
|
nil
|
|
|
|
nil
|
|
|
|
10,000
|
|
|
|
nil
|
|
|
|
49,000
|
|
Richard E. Gaetz
|
|
|
nil
|
|
|
|
nil
|
|
|
|
nil
|
|
|
|
10,000
|
|
|
|
nil
|
|
|
|
10,000
|
|
John R. Gossling
|
|
|
53,000
|
|
|
|
nil
|
|
|
|
nil
|
|
|
|
10,000
|
|
|
|
nil
|
|
|
|
63,000
|
|
Georges L. Hébert
|
|
|
31,000
|
|
|
|
nil
|
|
|
|
nil
|
|
|
|
10,000
|
|
|
|
nil
|
|
|
|
41,000
|
|
William S. Deluce
|
|
|
42,500
|
|
|
|
nil
|
|
|
|
nil
|
|
|
|
10,000
|
|
|
|
nil
|
|
|
|
52,500
|
|
Director and committee fees are paid to independent directors. For the financial year ended December 31, 2012,
director fees were paid to five of the six directors of the Company on the basis of a retainer of CAD$15,000 plus CAD$1,000 for each meeting of the Board of Directors that was attended. Mr. McGraw was paid an annual fee of CAD$50,000 as
Chairman of the Board and was not paid for attendance at any Board or Board committee meetings. Fees for each of the Compensation and Nominating and Governance Committees were paid to two of six directors on the basis of a retainer to the Chair of
each committee (CAD$4,000 for the Chair of the Compensation Committee and CAD$3,000 for the Chair of the Nominating and Governance Committee) plus CAD$1,500 for each meeting attended. Fees for the Audit Committee were paid to two of six directors on
the basis of a retainer of CAD$8,000 to the Chair of the committee plus CAD$1,500 for each meeting attended. Fees for the Special Committee were paid to three of six directors on the basis of a retainer of CAD$8,000 for the Chair of the committee
plus CAD$1,500 for each meeting attended.
22
Commencing fiscal year 2005, the Company adopted a DSU plan for all directors. Under the DSU plan, each
director receives units at the end of every quarter based on the market price of Common Shares equivalent to CAD$2,500. The holder of the unit, upon ceasing to be a director, is entitled to redeem the units for a cash amount equal to the market
price of Common Shares on the redemption date. The Company awarded 10,278 units to the directors for the year ended December 31, 2012. The following table sets forth the balances under Nonqualified Deferred Compensation arrangements for the
directors at December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Registrant
Contributions
In Last FY
(CAD$)
|
|
|
Number
of Units
(#)
|
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
|
Aggregate
Balance
At Last
FYE
(CAD$)
|
|
|
Aggregate
Number of
Units
(#)
|
|
Richard D. McGraw
|
|
|
10,000
|
|
|
|
1,713
|
|
|
|
nil
|
|
|
|
33,828
|
|
|
|
7,309
|
|
Anthony F. Griffiths
|
|
|
10,000
|
|
|
|
1,713
|
|
|
|
nil
|
|
|
|
33,828
|
|
|
|
7,309
|
|
Richard E. Gaetz
|
|
|
10,000
|
|
|
|
1,713
|
|
|
|
nil
|
|
|
|
33,828
|
|
|
|
7,309
|
|
John R. Gossling
|
|
|
10,000
|
|
|
|
1,713
|
|
|
|
nil
|
|
|
|
32,659
|
|
|
|
7,058
|
|
Georges L. Hébert
|
|
|
10,000
|
|
|
|
1,713
|
|
|
|
nil
|
|
|
|
33,828
|
|
|
|
7,309
|
|
William S. Deluce
|
|
|
10,000
|
|
|
|
1,713
|
|
|
|
nil
|
|
|
|
33,828
|
|
|
|
7,309
|
|
With the assistance of Hugessen Consulting Inc., the Compensation Committee has determined that effective March 1,
2013, director fees will be increased to a retainer of CAD$35,000 in cash and CAD$35,000 in DSUs plus CAD$1,500 for each meeting of the Board attended. The annual fee for the non-executive Chair of the Board will be increased to a retainer of
CAD$60,000 in cash and CAD$60,000 in DSUs and no additional fee will be paid for attendance at any Board or Board committee meetings. Fees for the Compensation Committee and any other committees of the Board will consist of a retainer of CAD$6,000
to the Chair of the committee and CAD$1,500 for each meeting attended. Fees for the Audit Committee will consist of a retainer of CAD$10,000 to the Chair of the Audit Committee and CAD$1,500 for each meeting attended.
Director Share Ownership Guidelines
Effective March 1, 2013, the Company has adopted share ownership guidelines for all directors of the Company in order to further align the
directors interests with those of Vitrans shareholders. Within four years after joining the Board or the effective date of the guidelines, whichever is later, each director must own shares of the Company valued at three times the current
annual retainer fee of CAD$70,000 based on the higher of (i) the market price of the Common Shares at that time and (ii) the price at which the director acquired the shares. For purposes of the share ownership guidelines, participation in
the DSU plan shall constitute ownership of shares. However, 35% of each directors total ownership must be in Common Shares.
DIRECTORS AND OFFICERS INSURANCE
The Company has purchased a policy of insurance for the
benefit of its directors and officers, and the directors and officers of its subsidiaries, against liability incurred by them in the performance of their duties as directors and officers of the Company, or its subsidiaries, as the case may be. The
amount of premium paid with respect to this policy for the financial year ended December 31, 2012 was $194,616. The policy does not specify that any part of the premium is paid in respect of either directors as a group or officers as a group.
The entire premium is paid by the Company. The current annual policy limit is $30.0 million subject to a deductible of $0.5 million per occurrence. There have been no claims under the directors and officers insurance.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the United States Securities Exchange Act of 1934 requires directors, executive officers and persons who own beneficially more than 10% of the equity securities of the Company to
file reports concerning their ownership of the Companys equity securities with the SEC, NASDAQ and the Company. To our knowledge, based solely on a review of material provided to us, all such required reports were filed on a timely basis in
fiscal 2012.
23
SHARE PERFORMANCE GRAPHS
The following graphs compare the total shareholder return over the last five years of the Common Shares of $100 invested on January 1, 2007 assuming reinvestment of dividends at 100% of the market
price on each of the dividend payment dates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
|
|
|
|
|
|
Vitran Corporation Inc. (VTNC)
|
|
|
100.00
|
|
|
|
43.99
|
|
|
|
76.39
|
|
|
|
92.20
|
|
|
|
40.48
|
|
|
|
34.15
|
|
|
|
|
|
|
|
|
NASDAQ Total Index
|
|
|
100.00
|
|
|
|
59.46
|
|
|
|
85.55
|
|
|
|
100.02
|
|
|
|
98.22
|
|
|
|
113.85
|
|
|
|
|
|
|
|
|
Peer Group
|
|
|
100.00
|
|
|
|
88.42
|
|
|
|
103.40
|
|
|
|
121.76
|
|
|
|
116.76
|
|
|
|
128.60
|
|
24
Share Performance Graphs
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
|
|
|
|
|
|
Vitran Corporation Inc. (VTN)
|
|
|
100.00
|
|
|
|
53.00
|
|
|
|
79.92
|
|
|
|
91.28
|
|
|
|
41.00
|
|
|
|
32.29
|
|
|
|
|
|
|
|
|
S&P/TSX Composite Total Return Index
|
|
|
100.00
|
|
|
|
66.21
|
|
|
|
90.48
|
|
|
|
106.41
|
|
|
|
97.14
|
|
|
|
104.13
|
|
|
|
|
Source:
|
|
Fact Set Research Systems
|
|
|
Peer Group Index is market cap-weighted and includes ABFS, CNW, ODFL, and SAIA.
|
CORPORATE GOVERNANCE
Corporate governance is the responsibility of the Board of Directors and is accomplished in concert with committees of the Board and the senior management of the Company.
An effective system of corporate governance is recognized as a vital ingredient to the long-term financial performance of the Company. The guidelines for
effective corporate governance issued by the Canadian securities regulators are contained in National Policy 58-201 Corporate Governance Guidelines. The Companys disclosure required by National Instrument 58-101 Disclosure of
Corporate Governance Practices (NI 58-101) relating to its corporate governance practices is set out in tabular form in Schedule A to this Management Information Circular.
Composition of the Board of Directors and Leadership Structure
The Board of Directors is composed of six directors, all of whom are independent except William Deluce, the current Interim President and Chief Executive Officer of the Company. Although Vitrans
articles of incorporation allow for up to fifteen directors, it is the opinion of the Board and management that the current size of the Board allows the Company to be more responsive to operational issues, address governance requirements and assess
risk management not in isolation but with consideration to all issues and objectives confronting the Company and its strategic plan. Each member of the Board brings a strong leadership background, senior business acumen and transportation industry
experience.
25
It is the opinion of the Board that the role of the Interim President and Chief Executive Officer, William
S. Deluce, and the role of the Chairman, Richard D. McGraw, should be separated. The Board believes this creates a balance of authority and objective leadership. Furthermore, due to the separation of roles, the Board believes there is enhancement
of:
|
|
|
Director communication within the Board
|
|
|
|
Interim CEO feedback of performance
|
|
|
|
Adherence to governance requirements
|
|
|
|
Succession planning for the Interim CEO
|
|
|
|
Board leadership and operational leadership.
|
Mandate of the Board
The Board is elected by the shareholders and represents all
shareholders interests in continuously creating shareholder value. The following is the mandate of the Board of Directors:
|
|
|
Advocate and support the best interests of the Company.
|
|
|
|
Make best efforts to attend all Board and Board committee meetings and review all materials provided.
|
|
|
|
Review and approve strategic, business and capital plans for the Company and monitor managements execution of such plans.
|
|
|
|
Review whether specific and relevant corporate measurements are developed and adequate controls and information systems are in place with regard to
business performance.
|
|
|
|
Review the principal risks of the Companys business and pursue the implementation by management of appropriate systems to manage such risks.
|
|
|
|
Monitor progress and efficiency of strategic, business, and capital plans and require appropriate action to be taken when performance falls short of
goals.
|
|
|
|
Review measures implemented and maintained by the Company to ensure compliance with statutory and regulatory requirements.
|
|
|
|
Select, evaluate and compensate the President and CEO and develop a position description for such officer involving the definition of the limits to his
responsibilities.
|
|
|
|
Annually review appropriate senior management compensation programs.
|
|
|
|
Monitor the practices of management against the Companys disclosure policy to ensure appropriate and timely communication to shareholders of
material information concerning the Company.
|
|
|
|
Monitor a whistleblower hotline program.
|
|
|
|
Monitor safety and environmental programs.
|
|
|
|
Review and discuss the development and implementation of programs for management succession and development.
|
|
|
|
Develop or approve selection criteria for new candidates for directorship.
|
|
|
|
Assure shareholders of conformity with applicable statutes, regulations and standards (for example, environmental risks and liabilities and conformity
with financial statements).
|
|
|
|
Annually conduct self-appraisal of Board members against clear criteria for performance.
|
|
|
|
Establish the necessary committees to monitor the Company.
|
|
|
|
Provide advice to and act as a sounding board for the President and CEO.
|
|
|
|
Discharge such other duties as may be required for the good stewardship of the Company.
|
Board of Directors Risk Oversight Statement
The Board of Directors has the responsibility for risk oversight and has not delegated the responsibility to a committee of the Board. The Board believes tasking a single committee with enterprise risk
oversight fails to take advantage of all the directors abilities and would otherwise fail to keep all directors apprised of the risk profile of the Company.
The Board of Directors believes their role is balanced between compliance requirements and the strategic risk oversight of the Company. In so doing, the Board provides support, advice and oversight of
management development and implementation of the strategic plan of the Company.
26
Specifically, the Board annually reviews the strategic plan and the strategic scorecard to ensure that
management is executing the plan. The Board, at all of its meetings, further provides on-going focus that ranges across operational, financial and other matters to assess risk and the achievement of the strategic plan.
Chairman of the Board Roles and Responsibilities
To allow the Board to function independently of management, the Nominating and Governance Committee shall ensure that the Board has a Chairman who meets the requirements of NASDAQ and of the Toronto Stock
Exchange. The roles and responsibilities of the Chairman shall include, but are not limited to, the following:
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Facilitating the independent functioning of the Board and management of the Company.
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Ensuring that appropriate procedures are in place to allow the Board to work effectively and efficiently and to function independently of management.
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Ensuring that the responsibilities of the Board are understood by both the Board and management and that the boundaries between Board and management
responsibilities are understood and respected.
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|
Together with the President and CEO, establishing position descriptions for the Board and the President and CEO and defining the limits to
managements responsibilities, to be approved by the full Board.
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Maintaining an effective relationship between the Board and management of the Company.
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Ensuring that the Board develops formal charters setting out the responsibilities of the Board and all Board committees.
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Annually reviewing the charters of the Board and Board committees and recommending to the Board such amendments to those charters as the Chairman or
the committee believes are appropriate.
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Ensuring that the Board works as a cohesive team and providing leadership essential to achieve this.
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Ensuring that the resources available to the Board (in particular, timely and relevant information) are adequate to support its work.
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Working closely with senior management to ensure that the conduct of Board meetings provides adequate time for serious discussion of relevant issues.
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Setting the agenda of the Board in consultation with senior management.
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Providing direction and advice to senior management of the Company.
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Regularly evaluating the performance of the Board and Board committees (as against their charters) and reporting the results of such evaluations to the
Board.
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Regularly evaluating the contribution of individual directors and reporting the results of the evaluations to the individual directors.
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Working closely with the President and CEO to ensure that the Company is building a healthy corporate governance culture.
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Ensuring that succession planning for the Board is carried out.
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At the request of the Board, and with the agreement of the President and CEO, representing the Company to external groups such as shareholders and
other stakeholders, including local community groups and governments.
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Ensuring that, where functions (including the functions above) are delegated to appropriate Board committees, the functions are carried out and the
results reported to the Board.
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Composition of the Board
The Board is composed of six members, five of whom are independent, as currently defined by the NASDAQ and under National Instrument 52-110 Audit Committees. The related non-independent director is
William Deluce, the Interim President and Chief Executive Officer of the Company. The Chairman of the Board is not a member of management. One of the our independent directors, Anthony F. Griffiths, will not be standing for re-election as a director
at the Meeting.
Standing Committees of the Board
Immediately prior to his appointment as the Companys Interim President and Chief Executive Officer, Mr. Deluce was the Chair of the Companys Compensation Committee, and also a member of
the Companys Nominating and
27
Governance Committee. However, as a result of his new duties, he has ceased to be independent under NASDAQ
listing standards for director independence. Accordingly, the Board has appointed Georges L. Hébert to succeed him as the Chair of the Compensation Committee, and David S. McClimon has succeeded him as a member of the Nominating and
Governance Committee.
As a result of these changes, the Committees of the Board now consist of the following directors:
Audit Committee
John R. Gossling, Chair
Georges L. Hébert
Richard D. McGraw
Compensation Committee
Georges L. Hébert, Chair
Richard D. McGraw
Anthony F. Griffiths
Nominating and Governance Committee
Anthony F. Griffiths, Chair
Richard D. McGraw
David S. McClimon
Each of the members of these Committees has been determined by the Board to be
an independent director in accordance with NASDAQ listing standards.
Board and Committee Meetings
The following is a list of the Board committees and the number of meetings held in 2012.
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Committee
|
|
Number of Meetings
|
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|
1 The Audit Committee
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4
|
2 The Compensation Committee
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3
|
3 The Nominating and Governance Committee
|
|
2
|
4 The Special Committee
|
|
4
|
The charters of the Nominating and Governance Committee, Compensation Committee and Audit Committee are available free of
charge on the Companys web-site at
www.vitran.com
.
Director Attendance
The Board met eleven times during 2012, of which two meetings were held via telephonic conference call. Each director attended 100% of the total number of
Board meetings and 100% of the meetings held by committees on which such director served during 2012.
Consideration of Director Nominees
The Nominating and Governance Committee considers the criteria in the Nominating and Governance Committee charter in evaluating
prospective director nominees. The Nominating and Governance Committee ensures that the appropriate skills and qualities required of a new Board member are considered.
28
The Nominating and Governance Committee will consider qualified director nominees recommended by
shareholders when such recommendations are submitted in accordance with the Companys policies. Any shareholder wishing to submit a candidate for consideration should send the information listed below to the Secretary of the Company, Vitran
Corporation Inc., 185 The West Mall, Suite 701, Toronto, Ontario, Canada M9C 5L5. When submitting a nomination to the Company, a shareholder at the minimum must provide for each director nominee: the name and address of the shareholder submitting
the candidate; the Common Shares owned beneficially and of record by such shareholder; the name, age and address of the candidate; the candidates principal occupation over the past five years; any current directorships of the candidate on
publicly held companies and investment companies; the number of Common Shares beneficially owned and of record by the candidate; and a signed statement of the candidate indicating willingness to serve on the Board of Directors, if elected. The
Nominating and Governance Committee is composed entirely of independent directors.
Code of Conduct
The Company, together with the Nominating and Governance Committee, has established a Code of Conduct for directors, officers and employees which is
available on the Companys website at
www.vitran.com
.
The Code of Conduct signifies voluntary assumption by the Companys
senior executives, directors and employees of the obligation of ethical and professional conduct above and beyond the requirements of the law. The Code of Conduct requires that the Companys senior executives, directors and employees deal
fairly with customers, suppliers, fellow employees and the general public. Acceptance of this Code of Conduct is mandatory for the Companys senior executives, directors and employees. Failure to abide by the Code of Conduct will serve as a
basis for disciplinary action.
Any waivers of the Code of Conduct for senior executives or directors must be approved by the Board of
Directors. Under NASDAQ rules, the Company is required to disclose any such waivers within four business days by filing a current report on Form 8-K with the SEC or, in cases where a Form 8-K is not required, by distributing a press release.
Alternatively, the NASDAQ rules permit the Company to disclose waivers on the Companys website in a manner that satisfies the requirements of Item 5.05(c) of Form 8-K.
APPOINTMENT AND REMUNERATION OF AUDITOR
KPMG has served as the Companys auditor since 1989. A representative of KPMG is expected to be present at the Meeting with the opportunity to make a statement if they desire to do so and to respond
to any appropriate questions. For the fiscal years ended December 31, 2012 and 2011, the fees billed by KPMG to the Company for services were:
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Year ended December 31,
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2012
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|
2011
|
|
|
|
|
Audit
|
|
$
|
568,569
|
|
|
$
|
570,647
|
|
Tax fees
|
|
|
Nil
|
|
|
|
Nil
|
|
All other fees
|
|
|
Nil
|
|
|
|
Nil
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
568,569
|
|
|
$
|
570,647
|
|
|
|
|
|
|
|
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All services provided by KPMG to the Company for 2012 and 2011 were approved by the Audit Committee. For further details
regarding the Audit Committee approval process, please review the Companys Audit Committee charter available on the Companys website at www.vitran.com, reference to which is hereby made, and the information therein is incorporated herein
by reference. There were no services provided by KPMG approved pursuant to pre-approval waiver.
Under section 149(7) of the OBCA, the
remuneration of an auditor appointed by the shareholders is to be fixed by the shareholders, or by the directors if they are authorized to do so by the shareholders. However, Exchange Act Rule 10A-3 requires the Audit Committee, in its capacity as a
committee of the Board of Directors, to be directly responsible for the appointment, compensation, retention and oversight of the work of the auditors. Accordingly, the shareholders are being asked to authorize the Board of Directors to fix the
remuneration of the auditor. Subject to receipt of such authorization, it is intended that the Board of Directors would delegate this responsibility to the Audit Committee.
29
Votes may be cast in favour of the reappointment of KPMG or withheld. The Board of Directors recommends that
you for FOR the reappointment of KPMG.
Unless authority to vote is withheld with respect to the appointment of the auditors, the persons named in the accompanying form of proxy intend to vote FOR the reappointment of KPMG,
as auditor of the Company, to hold office until the next annual meeting of shareholders and to authorize the directors to fix the remuneration of the auditor.
Audit Committee
As more fully described in its charter, the Audit Committee is responsible
for overseeing the accounting and financial reporting processes, including the quarterly review and the annual audit of the consolidated financial statement by KPMG, the independent registered public accounting firm. Each of Messrs. Gossling, McGraw
and Hébert: (i) meets the independence criteria prescribed by applicable law and the rules of the SEC for audit committee membership and is an independent director as defined by NASDAQ rules; (ii) meets NASDAQs
financial knowledge and sophistication requirements; and (iii) has been determined by the Board of Directors to be an audit committee financial expert under SEC rules.
Report of the Audit Committee
The Audit Committee is comprised of three directors each of
whom the Board has determined to be independent and financially literate under NI 52-110 and applicable NASDAQ rules. Mr. Gossling has been designated by the Board as being the financial expert on the Audit Committee. The Audit Committee
oversees the Companys financial reporting processes on behalf of the Board of Directors and operates under a written charter, which has been adopted by the Board of Directors. Management has the primary responsibility for the financial
statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited financial statements in the Annual Report of the Company with
management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgements and the clarity of disclosures in the financial statements.
The Audit Committee reviewed and discussed with the independent auditors, who are responsible for expressing an opinion on the conformity of those
audited financial statements with generally accepted accounting principles, their judgements as to the quality, not just the acceptability, of the Companys accounting principles and such other matters as are required to be discussed with the
Audit Committee under generally accepted auditing standards and under the Statement on Auditing Standards No. 61, Codification of Statements on Auditing Standards, as currently in effect. In addition, the Audit Committee has discussed with the
independent auditors their independence from management and the Company, including the written disclosures and the letter from the independent auditors required by Independence Standards Board No. 1, Independence Discussions with Audit
Committees, as currently in effect and has considered the compatibility of non-audit services with auditors independence pursuant to the policies and procedures described in the Audit Committee charter.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board has approved) that
the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2012 for filing with the SEC.
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The Audit Committee
|
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John R. Gossling
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Committee Chairman
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30
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Richard D. McGraw
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Director
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Georges L. Hébert
|
Director
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ADVISORY VOTE ON EXECUTIVE COMPENSATION
In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act) and the related rules of the SEC, and taking
into account the results of the non-binding advisory vote of the Companys shareholders taken at the 2011 annual meeting of shareholders on the frequency of future say-on-pay advisory votes, we are providing our shareholders with
the opportunity to vote on a non-binding advisory resolution to approve the compensation of the Companys Named Executive Officers as described in this Proxy Statement in accordance with the SECs compensation disclosure rules.
As stated in the section of this Management Information Circular headed Compensation Discussion and Analysis, it is the belief of the
Companys Compensation Committee that executive compensation should: (a) link pay and performance; and (b) attract, motivate, reward and facilitate the retention of the executive talent required to achieve the Companys corporate
objectives (the primary long-term corporate objective being the creation of superior value for our shareholders). Accordingly, executive compensation continues to be tightly linked to Company performance and shareholder value creation, and, as such,
a substantial part of each Named Executive Officers compensation is at risk and is only earned if performance of our Company and the Named Executive Officer so warrants. In that section we noted that, at our 2012 annual meeting of
shareholders, in our say-on-pay advisory vote, 97.2% of the votes cast (including votes for, against or withheld, but excluding uninstructed broker non-votes) were in favor of the compensation of our named executive officers,
and that, as a result, the Compensation Committee has continued to make compensation decisions consistent with the Companys stated executive compensation philosophy and objectives.
The Company is asking our shareholders to indicate their support for our Named Executive Officer compensation as described in this Management Information Circular. This proposal, commonly known as a
say-on-pay, gives the Companys shareholders the opportunity to express their views on the compensation paid to the Companys Named Executive Officers. This vote is not intended to address any specific item of compensation, but
rather the overall compensation of our Named Executive Officers and the Companys executive compensation philosophy, policies and practices described in this Management Information Circular. Accordingly, the Company is asking our shareholders
to vote FOR the following resolution at the Meeting:
RESOLVED, that the Companys shareholders hereby
approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Companys Management Information Circular and Proxy Statement for the 2013 Annual and Special Meeting of Shareholders.
Adoption of this resolution will require the affirmative vote of a majority of the Common Shares present or represented by proxy at the Meeting and
entitled to vote on the matter. Abstentions will have the same effect as votes against the resolution. Brokers and other nominee holders do not have discretion to vote uninstructed Common Shares with respect to this resolution. Accordingly, if
brokers or other nominee holders do not receive voting instructions from beneficial owners of the Common Shares, they will not be able to vote the Common Shares and broker non-votes may occur with respect to this resolution. However, broker
non-votes will not affect the outcome of the voting on this resolution because it requires the affirmative vote of a majority of the Common Shares present or represented by proxy at the Meeting (as opposed to a majority of the Common Shares
outstanding).
This say-on-pay vote is advisory, and therefore is not binding on the Company, the Compensation Committee or the
Board of Directors. However, the Compensation Committee will consider the voting results when determining executive compensation (including compensation that will be payable to Mr. Deluce in his capacity as our Interim President and Chief
Executive Officer) for the remainder of the current fiscal year and beyond. The Compensation Committee and the Board value the opinions of our shareholders and, to the extent there is a significant vote against
31
the compensation of the Named Executive Officers as disclosed in this Proxy Statement, the Compensation Committee and the Board will consider the shareholders concerns and will evaluate
whether any actions are necessary to address those concerns.
The Board of Directors recommends a vote FOR approval of the
compensation of the Companys Named Executive Officers, as disclosed in this Management Information Circular pursuant to the SECs compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the
compensation tables and the narrative disclosures that accompany the compensation tables).
AMENDED AND RESTATED STOCK
OPTION PLAN
The Meeting has been called in part, to consider and if deemed appropriate, to approve the amended and restated Plan. The
Plan was initially approved by the shareholders of the Company at a meeting of shareholders held on May 17, 1995 and certain amendments were approved by shareholders at meetings held in May 1996, May 1999 and April 2004.
The Plan was established by the Company to assist in attracting, retaining and motivating its directors, officers, employees and consultants by
providing, through share options, an opportunity to participate in the growth and development of the Company and to acquire a proprietary interest in the Company. The Board of Directors is authorized to issue options to acquire Common Shares at such
prices and with vesting dates as the Board of Directors may determine, provided however that the option exercise price may not be less than the market price of the Companys Common Shares at the time of the grant. Market
price generally means the closing price of the Companys Common Shares on the TSX on the last trading day prior to the grant of the option.
Under the Plan, options may be granted to such bona fide officers, directors and employees of the Company or its subsidiaries or other persons or companies engaged to proving ongoing management or
consulting services to the Company or its subsidiaries, as demonstrate the potential of becoming key personnel of, or performing valuable services for, the Company and its subsidiaries, or as inducement of employment, as the Board of Directors, on
the recommendation of the Compensation Committee, in its sole discretion may determine.
Options granted under the Plan must expire no later
than 10 years after the date of grant and are not transferable or assignable other than by will or other testamentary instrument or the laws of succession.
It is proposed to amend the Plan to increase the maximum aggregate number of Common Shares issuable under the Plan by an additional 800,000 Common Shares, as there are currently no Common Shares available
for future option grants. The Board of Directors is of the view that the increase is warranted and in the best interest of the Company as it enables the Company to attract and retain key directors, officers, employees and consultants. The maximum
aggregate number of Common Shares issuable under the amended and restated Plan is 2,550,000 Common Shares (15.5% of the Companys outstanding Common Shares). As of March 31, 2013, the Company had options outstanding under the Plan to
purchase 773,900 Common Shares (4.7% of the outstanding Common Shares) at exercise prices ranging from CAD $5.23 to $7.00 per share. Options to purchase a total of 976,100 Common Shares (6.0% of the outstanding Common Shares) have previously been
exercised under the Plan. Details of the Companys outstanding stock options are disclosed in the Annual Report on Form 10K, Note 9 of the Consolidated Financial Statements of the Company. The proposed amendment to the Plan would make 800,000
additional Common Shares (an additional 4.9% of the outstanding Common Shares) available for future grants under the Plan.
The amended and
restated Plan provides that the number of Common Shares: (i) issuable to insiders of the Company at any time, under all security-based compensation arrangements, may not exceed 10% of the outstanding Common Shares; and (ii) issued to
insiders of the Company within a one-year period, under all security based compensation arrangements, may not exceed 10% of the outstanding Common Shares. With respect to the 5% limits on Common Shares issued to any one insider in any one-year
period or reserved for issuance to any one person under the current Plan, the TSX no longer requires these limits and, accordingly, the Company proposes to delete both 5% limits from the amended and restated Plan.
32
The Plan currently provides that the Board of Directors may amend, suspend or terminate the Plan, provided,
however, that any such amendment, suspension or termination shall not adversely affect any outstanding options without the consent of the optionee. However, pursuant to changes in TSX requirements, all amendments, including amendments considered to
be of a housekeeping nature, will require shareholder approval unless an amendment procedure permitting such amendments is included in the Plan. Accordingly, the amended and restated Plan includes the addition of such an amendment
procedure.
The proposed amendment procedure provides that the Board of Directors may discontinue or amend the amended and restated Plan at
any time; provided, however, that shareholder approval must be obtained to: (i) reduce the exercise price of an option; (ii) extend the period available to exercise an option beyond the normal expiration date (except in respect of blackout
periods as provided in the amended and restated Plan); (iii) increase the levels of insider participation under the amended and restated Plan; (iv) increase the number of Common Shares reserved for issuance under the amended and restated
Plan (other than pursuant to the adjustment provisions of the amended and restated Plan); (v) amend any assignment rights set forth in the Plan; and (vi) amend the matters for which shareholder approval are required to amend the amended
and restated Plan. Subject to any necessary approval of any applicable stock exchange, all other amendments to the amended and restated Plan may be made at the discretion of the Board of Directors.
With respect to the expiry of options under the Plan, the amended and restated Plan provides that in the case of resignation of an optionee or
termination of employment or service of an optionee by the Company, options that have vested prior to such resignation or termination of employment or service will remain exercisable until the earlier of (i) seven business days after the
optionees last day of active employment or service or such later date as may be determined by the Board of Directors and (ii) the original expiry date of the option.
In the case of the retirement of an optionee, and in the case of disability of an optionee to an extent and in a manner as shall be determined in each case by the Compensation Committee, all options that
have vested prior to retirement or disability, as applicable, may be exercised until the earlier of (i) the six-month anniversary date of retirement or such later date as may be determined by the Board of Directors and (ii) the date of
expiry of such options.
In the case of the death of an optionee, the personal representative, heirs or legatees of the deceased optionee may
exercise the optionees options that have vested at the date of death until the earlier of (i) the six-month anniversary of the date of death or such later date as may be determined by the Board of Directors and (ii) the date of
expiry of such options.
The proposed amendments also provide the Company with more flexibility in dealing with options in the event of a
change in control. Under the amended and restated Plan, the definition of a change in control is expanded to include circumstances where the Company sells or otherwise disposes of all or substantially all of its assets and where the Board of
Directors determines that for the purposes of the amended and restated Plan, a change in control has occurred.
Other proposed amendments to
the Plan relate to the extension to the term of an award if the award expires during or immediately after a trading blackout. Under the Companys insider trading policies, directors, officers and specified employees are restricted
from trading in securities of the Company during periodic trading blackouts imposed by the Company. The TSX recognizes that trading blackouts imposed by issuers are an example of good corporate governance practice and that issuers, their insiders
and employees should not be penalized for maintaining such practices. The proposed amendments to the Plan address the situation where an optionee is unable to exercise an option that would otherwise expire during, or within ten business days
immediately following, a trading blackout imposed by the Company, by providing that the option will continue to be exercisable until the tenth business day following the notice of the cessation of the trading blackout.
Lastly, the amended and restated Plan contemplates procedures to ensure that any tax or other statutory withholding obligations are met. These procedures
may include increased withholding from an optionees regular compensation, cash payments by an optionee or the sale of a portion of the Common Shares acquired pursuant to the exercise of an option.
33
A copy of the amended and restated Plan is attached hereto as Schedule B.
The Board of Directors approved the amended and restated Plan on March 18, 2013. The rules of the TSX requires that the amended and restated Plan be
approved by a majority of the votes cast in respect thereof at the Meeting. The Board of Directors recommends that shareholders vote for approval of the ordinary resolution as set out below:
RESOLVED THAT:
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1.
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the stock option plan of the Company, as amended and restated effective March 18, 2013 (as may be amended, varied or supplemented from time to time), be and is
hereby ratified, confirmed and approved; and
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2.
|
any one director or officer of the Company be and is hereby authorized and directed, for and on behalf of the Company, to execute and deliver all such documents and to
do all such other acts and things as he may determine to be necessary or advisable to give effect to this resolution, the execution of any such document or the doing of any such other act or thing being conclusive of such determination.
|
Proxies received in favour of Management will be voted FOR the resolution approving the amended and restated
Plan, unless the shareholder has specified in the Form of Proxy that his, her or its Common Shares are to be voted against such resolution.
Brokers may not cast discretionary uninstructed votes (commonly known as broker
non-votes) in respect of this resolution. In the event that the resolution is not approved by the requisite majority, the Plan will not be amended.
New Plan Benefits
Awards of options under the Plan are at the discretion of the Board of
Directors. As such, it is not possible to determine the benefits or the amounts to be received under the Plan in the future by the Companys officers, employees, consultants or directors. The following table sets forth the number of outstanding
options granted to our executive officers, directors and employees under the Plan:
New Plan Benefits Table
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Name of Individual or Identity of Group and Position
|
|
Shares Underlying Stock
Options Granted
|
|
|
Weighted
Average
Exercise
Price Per
Share ($)
|
|
|
Number of Shares of
Restricted
Stock
|
|
Dollar
Value ($)
1
|
Richard Gaetz, President and CEO
|
|
|
191,000
|
|
|
|
13.00
|
|
|
Nil
|
|
Nil
|
Fayez Suleman, Vice President Finance and CFO
|
|
|
105,200
|
|
|
|
9.40
|
|
|
Nil
|
|
Nil
|
All current executive officers, as a group (2 persons)
|
|
|
246,200
|
|
|
|
11.72
|
|
|
Nil
|
|
Nil
|
All non-employee directors, as a group (5 persons)
|
|
|
20,000
|
|
|
|
16.31
|
|
|
Nil
|
|
Nil
|
All other employees (including all current officers who are not executive officers), as a group
|
|
|
457,700
|
|
|
|
11.19
|
|
|
Nil
|
|
Nil
|
1
|
Based upon the closing price of the Common Shares on the NASDAQ Global Market on April 12, 2013.
|
Special Note Re: United States Income Tax Ramifications of Exercising Stock Options
For U.S. tax purposes, the Plan is not considered an Incentive Stock Option plan as defined under Section 422 of the Internal Revenue Code.
34
The stock options to acquire Common Shares of the Company are exercisable at a price, (the Exercise
Price) per share. The receipt of the stock options is not considered taxable income at the time they are granted. Upon exercise, the difference between the Exercise Price per share and the fair market value of the Common Shares acquired will
be ordinary income. The Company will be required to withhold federal income taxes on the amount of income reported. This is accomplished by withholding additional amounts of income tax from the employees wages or, alternatively, having the
employee pay for the income taxes by reimbursing the Company.
The Common Shares cost basis to the employee will be equal to the exercise
price per share plus the amount of compensation income reported. Gain or loss on the ultimate sale of the Common Shares will be the difference between the selling price and the Common Shares cost basis.
The holding period for the Common Shares will begin on the exercise date of the option and purchase of the Common Shares. If the Common Shares are held
for more than twelve months, any gain or loss on the sale of the Common Shares will be long-term capital gain or loss. If the Common Shares are sold prior to holding them for twelve months, any gain or loss on the sale will be a short-term capital
gain or loss.
CONFIRMATION OF BY-LAW NO. 8
Subject to and conditioned upon shareholders approving the resolutions set forth under Confirmation of Section 4.16 of By-Law No. 8 and Confirmation of Section 10.5 of
By-Law No. 8, shareholders are requested to approve a resolution confirming By-Law No. 8 (other than the elimination of the second or casting vote in favour of the Chair of the meeting of the Board of Directors and the
adoption of the Advance Notice Provisions, which are the subjects of separate votes), as the new general by-law of the Company, which new general by-law effects changes to the previous by-laws of the Company that are primarily ministerial in nature.
By-Law No. 8 represents a general by-law for an OBCA company relating generally to the transaction of the business and affairs of the
Company including the borrowing powers of the Company, and was adopted by the Board of Directors on March 18, 2013.
By-Law No. 8
replaces and repeals the Companys former by-laws, By-Law No. 6, which had been adopted on May 27, 1987 and amended on February 7, 2005 and February 7, 2008, and By-Law No. 7, which had been adopted on July 16,
1987. Since that time, there have been a number of amendments to the OBCA, the governing statute of the Company.
By-Law No. 8 includes
certain ministerial revisions to ensure that the Companys by-laws remain consistent with the current provisions of the OBCA. In accordance with the amendments made to the OBCA, the requirement that a majority of the directors be Canadian
residents has been revised to provide that not less than 25% of the members of the Board of Directors be Canadian residents. Also, there is no longer a requirement that each meeting of the Board of Directors requires a majority of directors who are
Canadian residents to be present. In addition, committees of the Board of Directors will no longer require that a majority of their members be Canadian residents. These changes maximize the Board of Directors flexibility in appointing members
who will be the most qualified to perform the duties and obligations of the Board of Directors and of any particular committee, without regard to country of residency. The requirement that directors of the Company disclose potentially conflicting
interests to the Board of Directors and not participate in any vote on such matters has been broadened to also provide that such persons absent themselves from that portion of the meeting where such matters are discussed.
By-Law No. 8 also includes revisions with respect to meetings of shareholders. By-Law No. 8 reflects the changes made to the OBCA in respect of
fixing record dates for voting at meetings of shareholders. Furthermore, the Chair of the meeting of shareholders no longer has a second or casting vote in the case of an equality of votes.
With respect to meetings of directors, By-Law No. 8 no longer permits the Board of Directors to determine the number of directors required for quorum.
35
United States securities regulations require that each material item to be considered by shareholders be set
forth in a separate resolution. The following revisions contained in By-Law No. 8 may be deemed of such significance in comparison to the other ministerial changes effected by By-Law No. 8, with the result that the Company is providing
shareholders separate votes as described in more detail below:
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|
|
Section 4.16 of By-Law No. 8 governs the conduct of voting at meetings of the Board of Directors. Section 4.16 provides that all matters
to be decided by the Board of Directors shall be decided by a majority of the votes cast on the matter. In the case of an equality of votes, the Chair of the meeting of the Board of Directors will no longer be entitled to a second or
casting vote. The Companys prior general by-law provided the Chair of the meeting with a second or casting vote. This change to remove the casting vote was in recognition of developments in recognized best practices in
corporate governance. Shareholders will be asked to approve this provision separately. See Confirmation of Section 4.16 of By-Law No. 8.
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|
|
|
Section 10.5 of By-Law No. 8 provides for advance notice to the Company in circumstances where nominations of persons for election to the
Board of Directors are made by shareholders of the Company other than pursuant to (i) a requisition of a meeting made pursuant to the provisions of the OBCA or (ii) a shareholder proposal made pursuant to the provisions of the OBCA. The
purpose of Section 10.5 is to foster a variety of interests of the shareholders and the Company by ensuring that all shareholdersincluding those participating in a meeting by proxy rather than in personreceive adequate notice of the
nominations to be considered at a meeting and can thereby exercise their voting rights in an informed manner. Shareholders will be asked to approve this provision separately. See Confirmation of Section 10.5 of By-Law No. 8.
|
In order for By-Law No. 8 to be effective following the Meeting, the OBCA requires that the entirety of By-Law
No. 8 be confirmed by shareholders at the Meeting. As a result, although three resolutions relate to confirming By-Law No. 8 and are being considered separately for purposes of voting, the approval of each of these resolutions is a
condition precedent to the effectiveness of the other resolutions and no such resolution will be effective without the approval of the other resolutions.
If all resolutions set forth under Confirmation of By-Law No. 8,
Confirmation of Section 4.16 of By-Law No. 8 and Confirmation of Section 10.5 of By-Law No. 8 are not approved by shareholders, By-Law No. 8 will cease to be effective immediately following completion
of the Meeting and the by-laws in effect prior to the Board of Directors adoption of By-Law No. 8 (namely By-Law No. 6 and By-Law No. 7) will be the by-laws of the Company. In addition, no subsequent resolution of the directors
to make, amend or repeal a by-law having substantially the same purpose or effect will be effective until it is confirmed or confirmed as amended by the shareholders.
A copy of By-Law No. 8 is attached hereto as Schedule C and incorporated by reference into this Management Information Circular.
Vote Required and Recommendation of Board of Directors
The Board of Directors recommends
that shareholders vote for approval of the ordinary resolution as set out below:
RESOLVED THAT:
|
1.
|
subject to confirmation of Sections 4.16 and 10.5 of By-Law No. 8 by shareholders of the Company, By-Law No. 8 (other than Sections 4.16 and 10.5 thereof),
being a by-law relating generally to the transaction of the business and affairs of the Company, is hereby confirmed as a by-law of the Company; and
|
|
2.
|
any one director or officer of the Company be and is hereby authorized and directed, for and on behalf of the Company, to execute and deliver all such documents and to
do all such other acts and things as he may determine to be necessary or advisable to give effect to this resolution, the execution of any such document or the doing of any such other act or thing being conclusive of such determination.
|
36
In order to be effective, the resolution must be approved by a majority of the Common Shares present and
voting at the Meeting, whether in person or by proxy.
Proxies received in favour of Management will be voted FOR the approval of the ordinary resolution confirming By-Law No. 8 (other than Sections 4.16 and 10.5 thereof), unless
the shareholder has specified in the Form of Proxy that his, her or its Common Shares are to be voted against such resolution.
Brokers may not cast discretionary uninstructed votes (commonly known as broker non-votes) in
respect of this resolution.
CONFIRMATION OF SECTION 4.16 OF BY-LAW NO. 8
Subject to and conditioned upon shareholders approving the resolutions set forth under Confirmation of By-Law No. 8 and
Confirmation of Section 10.5 of By-Law No. 8, shareholders are requested to approve a resolution confirming Section 4.16 of By-Law No. 8, which effects a change to the previous by-laws of the Company to eliminate the
second or casting vote in favour of the Chair of the meeting of the Board of Directors if there is a tie in the votes cast by directors at such meeting.
Section 4.16 of By-Law No. 8 governs the conduct of voting at meetings of the Board of Directors. Section 4.16 provides that all matters to be decided by the Board of Directors shall be
decided by a majority of the votes cast on the matter. In the case of an equality of votes, the Chair of the meeting of the Board of Directors will no longer be entitled to a second or casting vote. The Companys prior general
by-law provided the Chair of the meeting with a second or casting vote. As noted above, this change to remove the casting vote was in recognition of developments in recognized best practices in corporate governance.
As noted above, United States securities regulations require a separate vote by shareholders to confirm Sections 4.16 and 10.5 of By-Law No. 8. Also
as noted above, the OBCA requires that the entirety of By-Law No. 8 be subject to a shareholder vote. As a result, although three resolutions relate to confirming By-Law No. 8 and are being considered separately for purposes of voting, the
approval of each of these resolutions is a condition precedent to the effectiveness of the other resolutions and no such resolution will be effective without the approval of the other resolutions.
If all resolutions set forth under
Confirmation of By-Law No. 8, Confirmation of Section 4.16 of By-Law No. 8 and Confirmation of Section 10.5 of By-Law No. 8 are not approved by shareholders, By-Law No. 8 will cease
to be effective immediately following completion of the Meeting and the by-laws in effect prior to the Board of Directors adoption of By-Law No. 8 (namely By-Law No. 6 and By-Law No. 7) will be the by-laws of the Company.
The full text of By-Law No. 8 is attached hereto as Schedule C.
Vote Required and Recommendation of Board of Directors
The Board of Directors recommends
that shareholders vote for approval of the ordinary resolution as set out below:
RESOLVED THAT:
|
1.
|
subject to confirmation of By-Law No. 8 (other than Sections 4.16 and 10.5 thereof) and the confirmation of Section 10.5 thereof, in each case by shareholders
of the Company, Section 4.16 of By-Law No. 8 of the Company is hereby confirmed as a by-law of the Company; and
|
|
2.
|
any one director or officer of the Company be and is hereby authorized and directed, for and on behalf of the Company, to execute and deliver all such documents and to
do all such other acts and things as he may determine to be necessary or advisable to give effect to this resolution, the execution of any such document or the doing of any such other act or thing being conclusive of such determination.
|
In order to be effective, the resolution must be approved by a majority of the Common Shares present and voting at the
Meeting, whether in person or by proxy.
Proxies received in favour of Management will be voted FOR the approval of the ordinary resolution confirming the adoption of Section 4.16 of By-Law No. 8, unless the
37
shareholder has specified in the Form of Proxy that his, her or its Common Shares are to be voted against such resolution.
Brokers may not cast discretionary uninstructed votes
(commonly known as broker non-votes) in respect of this resolution.
CONFIRMATION OF SECTION 10.5 OF BY-LAW
NUMBER 8
Subject to and conditioned upon shareholders approving the resolutions set forth under Confirmation of By-Law
No. 8 and Confirmation of Section 4.16 of By-Law No. 8, shareholders are requested to approve a resolution confirming Section 10.5 of By-Law No. 8, which provides for the Advance Notice Provisions described
below.
Section 10.5 of By-Law No. 8 provides for advance notice to the Company in circumstances where nominations of persons for
election to the Board of Directors are made by shareholders of the Company other than pursuant to (i) a requisition of a meeting made pursuant to the provisions of the OBCA or (ii) a shareholder proposal made pursuant to the provisions of
the OBCA.
The purpose of the Advance Notice Provisions is to foster a variety of interests of the shareholders and the Company by ensuring
that all shareholders - including those participating in a meeting by proxy rather than in person - receive adequate notice of the nominations to be considered at a meeting and can thereby exercise their voting rights in an informed manner. In
addition, the Advance Notice Provisions should assist in facilitating an orderly and efficient meeting process. The Advance Notice Provisions provide shareholders, directors and management of the Company with a clear framework for nominating
directors. Among other things, the Advance Notice Provisions fix a deadline by which holders of Common Shares must submit director nominations to the Company prior to any annual or special meeting of shareholders and sets forth the minimum
information that a shareholder must include in the notice to the Company for the notice to be in proper written form.
In
the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 nor more than 65 days prior to the date of the annual meeting; provided, however, that in the event the annual meeting is to be held on a date that is
less than 40 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10
th
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 made not later than the close of business on the 15
th
day following the day on which the first public announcement of the
date of the special meeting was made.
For purposes of the Meeting, in accordance with the terms of the Advance Notice Provisions, the Board
of Directors has determined that notice of nominations of persons for election to the Board of Directors at the Meeting pursuant to Subsection 10.5(A)(a) of By-Law No. 8 must be made by April 20, 2013. Such notice must be in the form, and
given in the manner, prescribed by the Advance Notice Provisions.
As noted above, United States securities regulations require a separate
vote by shareholders to confirm Sections 4.16 and 10.5 of By-Law No. 8. Also as noted above, the OBCA requires that the entirety of By-Law No. 8 be subject to a shareholder vote. As a result, although three resolutions relate to confirming
By-Law No. 8 and are being considered separately for purposes of voting, the approval of each of these resolutions is a condition precedent to the effectiveness of the other resolutions and no such resolution will be effective without the
approval of the other resolutions.
If all resolutions set forth under Confirmation of By-Law No. 8, Confirmation of Section 4.16 of By-Law No. 8 and Confirmation of Section 10.5 of By-Law
No. 8 are not approved by shareholders, By-Law No. 8 will cease to be effective immediately following completion of the Meeting and the by-laws in effect prior to the Board of Directors adoption of By-Law No. 8 (namely
By-Law No. 6 and By-Law No. 7) will be the by-laws of the Company.
The full text of By-Law No. 8 is attached hereto as
Schedule C.
38
Vote Required and Recommendation of Board of Directors
The Board of Directors recommends that shareholders vote for approval of the ordinary resolution as set out below:
RESOLVED THAT:
|
1.
|
subject to confirmation of By-Law No. 8 (other than Sections 4.16 and 10.5 thereof) and the confirmation of Section 4.16 thereof, in each case by shareholders
of the Company, Section 10.5 of By-Law No. 8 of the Company is hereby confirmed as a by-law of the Company; and
|
|
2.
|
any one director or officer of the Company be and is hereby authorized and directed, for and on behalf of the Company, to execute and deliver all such documents and to
do all such other acts and things as he may determine to be necessary or advisable to give effect to this resolution, the execution of any such document or the doing of any such other act or thing being conclusive of such determination.
|
In order to be effective, the resolution must be approved by a majority of the Common Shares present and voting at the Meeting,
whether in person or by proxy.
Proxies received in favour of Management will be voted FOR the approval of the ordinary resolution confirming the adoption of Section 10.5 of By-Law No. 8, unless the shareholder has specified
in the Form of Proxy that his, her or its Common Shares are to be voted against such resolution.
Brokers may not cast discretionary uninstructed votes (commonly known as broker non-votes) in respect of this resolution.
PROCESS OF SHAREHOLDER COMMUNICATIONS
Shareholders wishing to communicate with the Board of Directors should submit their written comments to the Secretary of the Company, Vitran Corporation Inc., 185 The West Mall, Suite 701, Toronto,
Ontario M9C 5L5 Canada. The Secretary of the Company will forward all communications (excluding advertisements, business solicitations, or material deemed to be for harassment purposes) to the individual director named in the communication.
DEADLINE FOR SHAREHOLDER PROPOSALS
In order to be included in proxy material for our 2014 annual meeting of shareholders, shareholder proposals must be received by the Company at its executive offices no later than December 20, 2013.
In order to be included in proxy material for a meeting, the OBCA requires that a notice of shareholder proposal be submitted to the Company
by a shareholder entitled to vote at the meeting at least 60 days before the anniversary date of the last annual meeting, if the matter is to be raised at an annual meeting, or at least 60 days before a meeting other than an annual meeting, if the
matter is to be raised at a meeting other than an annual meeting. In addition, all proposals will need to comply with Rule 14a-8 under the Securities Exchange Act of 1934, which lists the requirements for the inclusion of shareholder proposals in
company-sponsored proxy materials.
INFORMATION INCORPORATED BY REFERENCE
The Companys Annual Report on Form 10-K and the Companys Audit Committee charter are herein incorporated by reference to this Management
Information Circular.
Shareholders may obtain a copy of our Annual Report on Form 10-K as filed with the SEC for the year ended
December 31, 2012, as well as our Companys Audit Committee charter without charge, from the Companys website,
www.vitran.com
. In addition, the Company undertakes to provide, without charge, to each person to whom this
Management Information Circular is delivered, upon written or oral request, as soon as is practicable following receipt of such request, a copy of the information that has been incorporated herein by reference. Request may be made by
39
writing to Fayaz D. Suleman, Vice President Finance and Chief Financial Officer, Vitran Corporation Inc., 185 The West Mall, Suite 701, Toronto, Ontario, M9C 5L5, Canada or calling at
416-596-7664. Exhibits are not included, but copies of them may be obtained upon payment of copying charges. Financial information respecting the Company is provided in the Companys financial statements and management discussion and analysis
for the year ended December 31, 2012 which are included in its Annual Report on Form 10-K. Additional information respecting the Company can be reviewed on SEDAR at www.sedar.com.
GENERAL
Information contained herein is given as of the
[12
th
]
day of April, 2013, unless otherwise noted. If any matters which are not now known should properly come before the Meeting, the accompanying
form of proxy will be voted on such matters in accordance with the best judgement of the person voting it. Management knows of no such matters. The content and sending of this Management Information Circular have been approved by the Board of
Directors of the Company.
DATED at Toronto, this
[12
th
]
day of April, 2013.
By Order of the Board of Directors,
Fayaz D.
Suleman
Secretary
40
Schedule A
Corporate Governance Disclosure Required by National Instrument 58-101
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Corporate Governance Guideline
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Comments
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1. Board of Directors
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a)
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Disclose the identity of the directors who are independent
|
|
The independent directors are:
Richard D. McGraw
John R. Gossling
Anthony F. Griffiths
Georges L.
Hébert
David S. McClimon
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b)
|
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Disclose the identity of directors who are not independent, and describe the basis for that determination
|
|
William S. Deluce is not considered independent as he is the current Interim President and Chief Executive Officer of the Company.
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c)
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Disclose whether or not a majority of the directors are independent
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Five of the Companys six directors are independent as defined by National Instrument 58-101.
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d)
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If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction, identify both the director and the other
issuer
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All directorships with other public entities for each director are disclosed in the Management Information Circular, pages 7, 8 and 9.
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e)
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Disclose whether or not the independent directors hold regularly scheduled meetings at which non-independent directors and members of management are not in attendance. If the
independent directors hold such meetings, disclose the number of meetings held since the beginning of the issuers most recently completed financial year.
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The independent directors hold in-camera sessions at all Board and committee meetings.
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f)
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|
Disclose whether or not the chair of the board is an independent director. If the board has a chair or lead director who is an independent director, disclose the identity of the
independent chair or lead director, and describe his or her role and responsibilities
|
|
The current Board Chairman, Richard D. McGraw, is an independent director as defined by National Instrument 58-101. Mr. McGraws roles and responsibilities are disclosed in the
Management Information Circular, page 27.
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g)
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Disclose the attendance record of each director for all board meetings held since the beginning of the issuers most recently completed financial year
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Attendance is disclosed in the Management Information Circular, page 28.
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2. Board Mandate
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a)
|
|
Disclose the text of the boards written mandate
|
|
The Boards mandate is disclosed in the Management Information Circular, page 26.
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3. Position Descriptions
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a)
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Disclose whether or not the board has developed written position descriptions for the chair and the chair of each board committee
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The Board has developed written position descriptions for the Chair and the Chairs of all Board committees.
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b)
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Disclose whether or not the board and CEO have developed a written position description of the CEO
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The Board and the CEO have developed a written position description for the CEO.
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4. Orientation and Continuing Education
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a)
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Briefly describe what measures the board takes to orient new directors regarding
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i) the role of the board, its committees and its directors
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The Boards Statement of Corporate Governance Practices outlines the Companys expectations with respect to director and committee roles and responsibilities. Each
committee has a charter which further describes the specific roles and responsibilities.
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ii) the nature and operation of the issuers business
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Arrangements are made for specific briefing sessions from appropriate senior personnel. The Company organizes Board meetings at Company facilities to facilitate site visits.
Directors are provided minutes and materials presented at previous meetings.
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b)
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Briefly describe what measures the board takes to provide continuing education for its directors
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Directors may enrol in professional development courses at the Companys expense, subject to Board approval.
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A-1
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5. Ethical Business Conduct
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a)
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Disclose whether or not the board has adopted a written code for the directors, officers and employees. If the board has adopted a written code:
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The Company has a Code of Conduct that is applicable to all directors, senior management and employees.
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i) Disclose how a person or company may obtain a copy of the code
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The Code of Conduct is available free of charge on our web-site at
www.vitran.com
.
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ii) Describe how the board monitors compliance with its code
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All new employees and directors are required to read and sign the Code of Conduct as part of the orientation process.
Senior management and the Board are required to sign the Code of Conduct annually.
All signed Code of Conducts are presented to the Board annually for review.
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iii) Provide a cross-reference to any material change report filed since the beginning of the issuers most recently completed financial year
that pertains to any conduct of a director or executive officer that constitutes a departure from the code
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None.
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b)
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Describe any steps the board takes to ensure directors exercise independent judgement in considering transactions and agreements in respect of which a director or executive officer
has a material interest
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The Code of Conduct outlines the conflict of interest guidelines. Any director must disclose a conflict of interest immediately. If a director has a conflict of interest in a
specific topic, that director is not permitted to be present when the matter is discussed or voted upon.
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c)
|
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Describe any other steps the board takes to encourage and promote a culture of ethical business conduct
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|
The Board encourages senior management to publish an annual company newsletter and supports the Companys whistleblower hotline.
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6. Nomination of Directors
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a)
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Describe the process by which the board identifies new candidates for board nomination
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Step 1: Complete Current Board Analysis and Observation
Step 2: Determine Corporate Strategic and Business Objectives
Step 3: Develop Board Composition
Target
Step 4: Develop New Director Criteria
Step 5: Identification of New Director Candidates
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b)
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Disclose whether or not the board has a nominating committee composed entirely of independent directors
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The Board does have a Nominating and Governance Committee which is comprised entirely of independent directors.
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c)
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If the board has a nominating committee, describe the responsibilities, powers and operation of the nominating committee
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The responsibilities of the Nominating and Governance Committee are included in the Committees Charter which can be found on our web-site at
www.vitran.com
.
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7. Compensation
|
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a)
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Describe the process by which the board determines the compensation for the issuers directors and officers
|
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This information is disclosed in the Management Information Circular under the Compensation Discussion and Analysis and Compensation of
Directors.
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b)
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Disclose whether or not the board has a compensation committee composed entirely of independent directors
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The Board does have a Compensation Committee which is comprised entirely of independent directors. The following individuals served as
members of the Compensation Committee during the financial year which ended on December 31, 2012:
William S. Deluce;
Anthony F. Griffiths; and
Richard D.
McGraw.
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c)
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If the board has a compensation committee, describe the responsibilities, powers and operation of the compensation committee
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The responsibilities of the Compensation Committee are included in the Committees Charter which can be found on our web-site at
www.vitran.com
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A-2
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d)
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If a compensation consultant or advisor has, at any time since the beginning of the issuers most recently completed financial year, been retained to assist in determining
compensation for any of the issuers directors and officers, disclose the identity of the consultant or advisor and briefly summarize the mandate for which they have been retained
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Hugessen Consulting Inc. was retained in 2012 to review director compensation, including mandatory share ownership requirements, in 2013.
|
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8. Other Board Committees
|
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|
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a)
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If the board has standing committees other than audit, compensation, and nominating committees, identify the committees and describe their function
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None.
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9. Assessments
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a)
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Disclose whether or not the board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution. If assessments are regularly
conducted, describe the process used for the assessments. If assessments are not regularly conducted, describe how the board satisfies itself that the board, its committees, and its individual directors are performing effectively
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A Board performance review is conducted annually and the findings are reported to the Board. A questionnaire is distributed and completed by all directors. The Chairman of the Board
compiles the results and if required, discusses concerns with each individual director.
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A-3
Schedule B
Amended and Restated Stock Option Plan
VITRAN CORPORATION INC.
AMENDED AND RESTATED STOCK OPTION PLAN
ARTICLE 1 DEFINITIONS
In addition to the other terms defined herein, when
used in this Plan, unless the context otherwise requires:
(a)
|
Act
means the
Securities Act
(Ontario) as the same may be amended, re-enacted or replaced from time to time.
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(b)
|
Company
means Vitran Corporation Inc.
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(c)
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Compensation Committee
means the compensation committee of the Company as same may be constituted from time to time and any committee in succession
to the compensation committee.
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(d)
|
Board of Directors
means the board of directors of the Company for the time being and reference without more to action by the Board of Directors
shall mean action by the directors as a board of directors.
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(e)
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Holder
means a person to whom an Option or Options have been or are granted under the Plan.
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(f)
|
Insider
means such persons defined as an insider for purposes of Section 613 of the Toronto Stock Exchange Company Manual, as such provision may
be amended from time to time.
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(g)
|
Option
or
Options
means an option or options granted or issued pursuant to the Plan.
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(h)
|
Outstanding Issue
means, at the relevant time, the number of outstanding Shares from time to time.
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(i)
|
Plan
means the Vitran Corporation Inc. Employee Stock Option Plan adopted by the Board of Directors at its meeting held on March 14,
1995, as from time to time amended, restated or supplemented as herein provided.
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(j)
|
Share Compensation Arrangements
means any Option under the Plan but also include any other stock option, stock option plan, employee stock purchase
plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Shares to a Service Provider.
|
(k)
|
Shares
means common shares of the Company as presently constituted.
|
(l)
|
Service Provider
means a person eligible to receive Options under Section 2.3 hereof.
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(m)
|
Subsidiary
means any entity more than 50% of whose securities having general voting power is owned by the Company or by a Subsidiary of the Company.
|
B-1
ARTICLE 2 OPTIONS
Section 2.1 Shares Available
The Board of Directors may at any time and from time to time, in accordance with the Plan, grant Options on such number of treasury Shares, which is not in excess of 2,550,000 Shares (subject to
adjustment pursuant to Article 4 hereof) or such greater number as will have been duly approved by the Board of Directors and, if required, approved or ratified by the shareholders of the Company.
Section 2.2 Time of Issuance of Options
The Board of Directors, on the recommendation of the Compensation Committee, may from time to time grant Options pursuant to the Plan. Subject to the provisions of Section 2.4 hereof, nothing herein
will be construed to prohibit the granting of Options at different times to the same person. All Options previously issued by the Company to its Service Providers that are outstanding as at the date of the amendment and restatement of this Plan will
be deemed to be issued under this Plan and governed by the terms and conditions hereof.
Section 2.3 Persons Eligible
Persons eligible to receive Options will be such bona fide officers, directors and employees of the Company or its Subsidiaries or other
persons or entities engaged to provide ongoing management or consulting services to the Company or its Subsidiaries, as demonstrate the potential of becoming key personnel of, or performing valuable services for the Company and its Subsidiaries, or
as inducement of employment, as the Board of Directors, on the recommendation of the Compensation Committee, may determine. Notwithstanding anything to the contrary contained in the Plan, no Options may be granted to Insiders if such Options,
together with any other outstanding Share Compensation Arrangements, could result in:
|
(a)
|
the number of Shares issuable to Insiders at any time pursuant to Share Compensation Arrangements exceeding 10% of the Outstanding Issue; or
|
|
(b)
|
the issuance to Insiders pursuant to Share Compensation Arrangements, within any one-year period, of a number of Shares exceeding 10% of the Outstanding Issue.
|
Section 2.4 Number of Shares to be Optioned
The number of Shares to be optioned to any person will be determined by the Board of Directors, on the recommendation of the Compensation
Committee.
Section 2.5 Form of Options
A certificate of option (
Option Certificate
), in the form or substantially in the form set out in the schedule hereto, signed by the President or any Vice-President, or the Secretary of
the Company or any other officer of the Company appointed by the Board of Directors, will be issued to each person to whom an Option is granted.
Section 2.6 Assignability of Options
Options and all rights
thereunder will be non-assignable and non-transferable by the Holder, provided however that the representatives of a deceased Holder may exercise the rights enjoyed under any such Option at the time of the death of such Holder subject, however, to
the terms, conditions and limitations herein provided.
Section 2.7 Option Price and Term
The price at which Shares may be purchased under any Option granted pursuant to the Plan (the
Option Price
) will be the
closing price of the Shares on the Toronto Stock Exchange on the last trading day prior to the grant
B-2
of such Option, and if there is no such closing price, the price at which Shares may be purchased under any Option granted pursuant to the Plan will be the simple average of the closing bid and
ask prices of the Shares on the Toronto Stock Exchange on the last trading day prior to the grant of such Option. The term during which Shares may be purchased under any Option granted pursuant to the Plan will be determined by the Board of
Directors but will not exceed 10 years (the Normal Expiry Date).
Section 2.8 Vesting of Options
Vesting of Options and the waiver in whole or in part and at any time and from time to time of the vesting requirements contained in any
existing Option Certificate is at the discretion of the Board of Directors, and may generally be subject to:
|
(a)
|
the Service Provider remaining employed by or continuing to provide services to the Company or any of its Subsidiaries as well as, at the discretion of the Board of
Directors, achieving certain milestones which may be defined by the Board of Directors from time to time or receiving a satisfactory performance review by the Company or any of its Subsidiaries during the vesting period;
|
|
(b)
|
remaining as a director of the Company or a director of any of its Subsidiaries during the vesting period;
|
|
(c)
|
the terms and conditions of any employment agreement approved by the Board of Directors; or
|
|
(d)
|
the provisions of Section 5.2, Section 5.3 and Section 5.4.
|
Section 2.9 Tax Code Compliance
It is intended that Options granted
under the Plan will not constitute a deferral of compensation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the
Code
). In granting an Option, the Board of Directors will use its
reasonable commercial efforts to exercise its authority under the Plan with respect to the terms of such Option in a manner that the Board of Directors determines in good faith will not cause the Option to be subject to Section 409A of the Code
and, should the Option be subject to Section 409A of the Code, to comply with Section 409A of the Code and thereby avoid the imposition of penalty taxes and interest upon the Holder. For U.S. tax purposes, the Plan is not considered an
Incentive Stock Option plan as defined under the Code.
ARTICLE 3 EXERCISE OF OPTIONS
Section 3.1 When Exercised
The Board of Directors, on recommendation of the Compensation Committee, will fix the term of any Option and the rights of exercise with respect thereto.
Section 3.2 How Exercisable
Options will be exercised by delivery of a duly signed notice in writing to such effect, together with the Option Certificate and the full price of the Shares purchased pursuant to the exercise of the
Option, to the President or any Vice-President, or the Secretary of the Company or any other officer of the Company appointed by the Board of Directors for the purposes of receiving the same.
Section 3.3 Issuance of Shares
Within a reasonable time after
exercise of an Option and payment of the price for the Shares purchased pursuant to such exercise, the Company will cause to be delivered to the person exercising the Option a certificate for the Shares purchased pursuant to the exercise of the
Option and an Option Certificate for a number of Shares
B-3
equivalent to the difference between the number of Shares of the Option Certificate surrendered at the time of the exercise of the Option and the number of Shares with respect to which the Option
was so exercised, or the Company may, at its election and in lieu of issuing a new Option Certificate, endorse on the original Option Certificate a memorandum of the number of Shares in respect of which the Option has been exercised.
Section 3.4 Termination of Options
Subject to Section 3.1 hereof, any Option not exercised within the period fixed for its exercise will terminate and become void and of no effect.
Section 3.5 Lapsed Options
In the event that Options granted under the Plan are surrendered, terminate or expire without being exercised in full, the unpurchased Shares subject thereto may again be used and available for
reservation for the purposes of the Plan.
Section 3.6 Holder Ceasing to be Service Provider
Unless otherwise determined by the Board of Directors or the Compensation Committee, or otherwise provided in an employment agreement
approved by the Board of Directors, no Option may be exercised after the Holder has ceased to be employed by or hold office with the Company or any of its Subsidiaries or has been advised that his or her services are no longer required or that his
or her service contract has expired, except as follows:
|
(a)
|
in the case of the death of a Holder, any vested Option held by such Holder at the date of his or her death will be exercisable by such Holders lawful personal
representatives, heirs or executors until the earlier of (i) the date that is six months following the date of death of such Holder or such later date as determined by the Board of Directors and (ii) the Normal Expiry Date of such Option,
and all unvested Options will immediately terminate without right to exercise such unvested Option unless otherwise provided for or contemplated under Section 2.8;
|
|
(b)
|
in the case of disability of a Holder to an extent and in a manner as will be determined in each case by the Compensation Committee, any vested Option held by such
Holder at the date of his or her disability will be exercisable by such Holder until the earlier of (i) the date that is six months following the date of disability of such Holder or such later date as determined by the Board of Directors and
(ii) the Normal Expiry Date of such Option, and all unvested Options will immediately terminate without right to exercise such unvested Option unless otherwise provided for or contemplated under Section 2.8;
|
|
(c)
|
in the case of the retirement of a Holder, any vested Option held by such Holder at the date of his or her retirement will be exercisable by such Holder until the
earlier of (i) the date that is six months following the date of retirement of such Holder or such later date as determined by the Board of Directors and (ii) the Normal Expiry Date of such Option, and all unvested Options will immediately
terminate without right to exercise such unvested Option unless otherwise provided for or contemplated under Section 2.8;
|
|
(d)
|
in the case of the resignation of a Holder from the employment of or service to the Company or any of its Subsidiaries in any circumstance other than those described in
subsection 3.6(c), any vested Option held by such Holder immediately prior to his or her resignation will be exercisable by such Holder until the earlier of (i) the date that is seven business days following the date on which the Holder ceases
to be a Service Provider or such later date as determined by the Board of Directors and (ii) the Normal Expiry Date of such Option, and all unvested Options will immediately terminate without right to exercise such unvested Option unless
otherwise provided for or contemplated under Section 2.8; and
|
|
(e)
|
in the case of the termination of a Holder from the employment of or service to the Company or any of its Subsidiaries with or without cause, any vested Options held by
such Holder immediately prior to his or her termination of employment or service will be exercisable by such Holder until the earlier of (i) the date that is seven business days following the date on which the Holder ceases to be a Service
Provider or such later date as determined by the Board of Directors and (ii) the Normal Expiry Date of such Option, and all unvested Options will immediately terminate without right to exercise such unvested Option unless otherwise provided for
or contemplated under Section 2.8.
|
B-4
Notwithstanding any of the foregoing, no Option may be exercised after the Normal Expiry
Date of such Option. For greater certainty, for the purposes of subsections 3.6(d) and 3.6(e), the date on which a Holder ceases to be a Service Provider will be the Holders last day of active employment or service, as the case may be, and
will not include any period of statutory, reasonable or contractual notice or any period of deemed employment or salary continuation.
Section 3.7 Expiry During Blackout Periods
Notwithstanding the provisions of Section 2.7 and Section 3.6 hereof, no Option will terminate and cease to be exercisable, whether as a result of the occurrence of the Normal Expiry Date or as
a result of the cessation of employment or service of a Holder with the Company or a Subsidiary, prior to the tenth business day following notice of the cessation of any restricted trading period imposed by the Company by which officers and
employees of the Company are prohibited from trading in securities of the Company (a
Trading Blackout
) then in effect and if a Trading Blackout is not then in effect, prior to the tenth business day following notice of the
cessation of the most recent Trading Blackout.
ARTICLE 4 ADJUSTMENTS
Section 4.1 Adjustment of Optioned Shares
If prior to the complete exercise of any Option there will be declared and paid a stock dividend upon the Shares or if such Shares will be consolidated or subdivided or converted, exchanged or
reclassified, or in any way substituted for, then the Option, to the extent that it has not been exercised, will entitle the Holder upon the future exercise of the Option to such number and kind of securities or other property, subject to the terms
of the Option, to which the Holder would have been entitled had the Holder actually owned the Shares subject to the unexercised portion of the Option at the time of the occurrence of such stock dividend, consolidation, conversion, subdivision,
exchange, reclassification or substitution; and the aggregate purchase price upon the future exercise of the Option will be the same as if originally optioned Shares were being purchased hereunder. If any such event should occur, the number of
Shares with respect to which Options remain to be issued or with respect to which Options may be reissued, will be similarly adjusted.
Section 4.2 Amalgamation or Merger
If the Company amalgamates, consolidates or combines with or merges with or into another body corporate, whether by way of amalgamation, arrangement, consolidation, combination, merger or otherwise (the
right to do so being hereby expressly reserved), any Share receivable on the exercise of an Option will be converted into the securities, property or cash which the Holder would have received upon such amalgamation, arrangement, consolidation,
combination or merger if the Holder had exercised his or her Option immediately prior to the effective date of such amalgamation, arrangement, consolidation, combination or merger and the Option Price will be adjusted as may be deemed necessary or
equitable by the Board of Directors and such adjustment will be binding for all purposes of the Plan.
B-5
Section 4.3 Redesignation of Shares
In the event of a change in the Companys currently authorized Shares, which is limited to a change in the designation thereof, the
shares resulting from any such change will be deemed to be Shares within the meaning of the Plan.
Section 4.4 Other Adjustments
In the event of any other change affecting the Shares, such adjustment, if any, will be made as may be deemed necessary or
equitable by the Board of Directors to properly reflect such event and such adjustment will be binding for all purposes of the Plan.
ARTICLE 5 CHANGE IN CONTROL
Section 5.1 Change in Control
For the purpose of this Article 5, a
Change in Control
of the Company will be deemed to have
occurred each time that:
|
(a)
|
any person, or group of persons acting jointly or in concert (as defined in the Act), whether directly or indirectly, acquires ownership of or control or direction over
voting securities of the Company which, together with all other voting securities of the Company held by such person or persons, carry more than fifty percent (50%) of the votes attached to all voting securities of the Company;
|
|
(b)
|
an amalgamation, arrangement or other form of business combination of the Company with another corporation or corporations is completed with the result that any person
or group of persons acting jointly or in concert (as defined in the Act) owns or exercises control or direction over voting securities of the resulting entity carrying more than fifty percent (50%) of the votes attached to all voting securities
of the resulting entity;
|
|
(c)
|
the Company sells or otherwise disposes of all or substantially all of its assets; or
|
|
(d)
|
the Board of Directors of the Company, by resolution duly adopted by the affirmative vote of a simple majority of the votes cast by directors, determines that for
purposes of the Plan, a Change in Control of the Company has occurred.
|
Section 5.2 Take-over Bid
If, at any time when Options granted under the Plan remain unexercised, a take-over bid made by means of a formal take-over bid circular
is made for such number of Shares that if accepted by sufficient offerees and completed by the offeror (as defined in the Act) would result in a Change in Control, then the Board of Directors will use its reasonable commercial efforts to bring such
offer to the attention of the Holders as soon as practicable and the Board of Directors may, in a fair and equitable manner, at its discretion, require the acceleration of the time for the exercise of the Options outstanding under the Plan and of
the time for the fulfillment of any conditions or restrictions on such exercise (including without limitation, vesting requirements). All determinations of the Board of Directors under this Section 5.2 will be binding for all purposes of the
Plan.
Section 5.3 Business Combination
Notwithstanding any other provision in the Plan, if because of a proposed merger, amalgamation or other corporate arrangement or reorganization, the exchange or replacement of Shares in the Company with
securities of another corporation is imminent (
Business Combination
), the Board of Directors may, in a fair and equitable manner, determine the manner in which all outstanding and unexercised Options under the Plan will be treated
including, for example but without limitation, requiring the acceleration of the time for the exercise of such Options
B-6
by the Holders and of the time for the fulfillment of any conditions or restrictions on such exercise (including without limitation, vesting requirements). All determinations of the Board of
Directors under this Section 5.3 will be binding for all purposes of the Plan.
Section 5.4 Conditional Vesting and Exercise
In order to permit Holders to participate in a proposed take-over bid made by means of a formal take-over bid circular or
a proposed Business Combination that could result in a Change in Control, the Board of Directors may make appropriate provisions for the exercise of Options (whether vested or not) conditional upon the Shares issued on exercise of such Options being
taken up and paid for under the take-over bid or the completion of the Business Combination, as applicable.
ARTICLE 6
FRACTIONAL SHARES
No fractional Shares will be issued upon the exercise of an Option nor will any scrip
certificates in lieu thereof be issuable at any time. Accordingly, if as a result of any adjustment pursuant to Article 4 a Holder would become entitled to a fractional Share, he or she will have the right to purchase only the next lower whole
number of Shares and no payment or other adjustment will be made with respect to the fractional interest so disregarded.
ARTICLE 7 LIMITATIONS
The Companys obligations to issue Shares in accordance with the terms of the Plan is subject to compliance with the laws, rules and regulations of all public agencies and authorities applicable to
the issuance and distribution of such Shares and to the listing of such Shares on any stock exchange on which the Shares may be listed. The Holder agrees to comply with all such laws, rules and regulations and agrees to furnish to the Company all
information and such undertakings as may be required to permit compliance with such laws, rules and regulations.
ARTICLE 8 AMENDMENT AND INTERPRETATION
Section 8.1 Amendment and Discontinuance
|
(a)
|
The Board of Directors may:
|
|
i.
|
discontinue the Plan at any time except that such discontinuance may not alter or impair any Option previously granted to a Holder under the Plan; and
|
|
ii.
|
subject to any necessary approval of the Toronto Stock Exchange or any other stock exchange on which the Shares may then be listed and subject to subsection 8.1(b)
hereof, from time to time amend the Plan in its absolute discretion without the approval of the Companys shareholders.
|
|
(b)
|
The Companys shareholders will approve any amendment to the Plan or any Option which:
|
|
i.
|
reduces the exercise price of an Option;
|
|
ii.
|
extends the period available to exercise an Option beyond the Normal Expiry Date, other than as provided in Section 3.7 hereof;
|
|
iii.
|
increases the levels of Insider participation under the Plan as set forth in Section 2.3 hereof;
|
|
iv.
|
increases the number of Shares reserved for issuance under the Plan (other than pursuant to the provisions of Article 4 hereof);
|
B-7
|
v.
|
amends Section 2.6 hereof; or
|
|
vi.
|
amends subsection 8.1(b) hereof.
|
|
(c)
|
Subject to subsection 8.1(b) hereof, the Board of Directors may from time to time amend the terms and conditions of any Option (and the terms of the Plan solely in
respect thereof) which has been theretofore granted, provided that no amendment which could adversely affect a Holder will be made without the consent of the affected Holder.
|
ARTICLE 9 WITHHOLDING OBLIGATIONS
Notwithstanding anything to the contrary in the Plan, to the extent that the exercise of an Option gives rise to any tax or other statutory withholding obligation (including, without limitation, income
and payroll withholding taxes imposed by any jurisdiction), the Board of Directors may implement appropriate procedures to ensure that such withholding obligations are met. These procedures may include, without limitation, increased withholding from
a Holders regular compensation, cash payments by a Holder, or the sale of a portion of the Shares acquired pursuant to the exercise of an Option, which sale may be required and initiated by the Board of Directors. Any such procedure, including
offering choices among procedures, will be applied consistently with respect to all similarly situated Holders except to the extent any procedure may not be permitted under the laws of the applicable jurisdiction.
B-8
Adopted effective March 18, 2013.
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|
VITRAN CORPORATION INC.
|
|
|
By:
|
|
Richard E. Gaetz
|
|
|
Name:
|
|
Richard E. Gaetz
|
|
|
Title:
|
|
Chief Executive Officer
|
|
|
By:
|
|
Fayaz D. Suleman
|
|
|
Name:
|
|
Fayaz D. Suleman
|
|
|
Title:
|
|
Chief Financial Officer and Secretary
|
B-9
Schedule C
By-law No. 8
BY-LAW NO. 8
VITRAN CORPORATION INC.
INDEX
|
|
|
|
|
|
|
Section 1 Interpretation
|
|
|
4
|
|
1.1
|
|
Definitions
|
|
|
4
|
|
1.2
|
|
Additional Definitions
|
|
|
4
|
|
1.3
|
|
Interpretations
|
|
|
5
|
|
Section 2 Business of the Corporation
|
|
|
5
|
|
2.1
|
|
Registered Office
|
|
|
5
|
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2.2
|
|
Corporate Seal
|
|
|
5
|
|
2.3
|
|
Financial Year
|
|
|
5
|
|
2.4
|
|
Execution of Instruments
|
|
|
5
|
|
2.5
|
|
Banking Arrangements
|
|
|
5
|
|
2.6
|
|
Voting Rights in Other Bodies Corporate
|
|
|
5
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2.7
|
|
Withholding Information from Shareholders
|
|
|
5
|
|
Section 3 Borrowing and Security
|
|
|
6
|
|
3.1
|
|
Borrowing Power
|
|
|
6
|
|
3.2
|
|
Delegation
|
|
|
6
|
|
Section 4 Directors
|
|
|
6
|
|
4.1
|
|
Number of Directors and Quorum
|
|
|
6
|
|
4.2
|
|
Qualification
|
|
|
6
|
|
4.3
|
|
Election and Term
|
|
|
7
|
|
4.4
|
|
Removal of Directors
|
|
|
7
|
|
4.5
|
|
Vacation of Office
|
|
|
7
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|
4.6
|
|
Vacancies; Appointment of Additional Directors
|
|
|
7
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|
4.7
|
|
Action by the Board
|
|
|
7
|
|
4.8
|
|
Meetings by Telephone, Electronic or Other Communication Facility
|
|
|
7
|
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4.9
|
|
Place of Meetings
|
|
|
8
|
|
4.10
|
|
Calling of Meetings
|
|
|
8
|
|
4.11
|
|
Notice of Meeting
|
|
|
8
|
|
4.12
|
|
First Meeting of New Board
|
|
|
8
|
|
4.13
|
|
Adjourned Meeting
|
|
|
8
|
|
4.14
|
|
Regular Meetings
|
|
|
8
|
|
4.15
|
|
Chair
|
|
|
8
|
|
4.16
|
|
Votes to Govern
|
|
|
8
|
|
4.17
|
|
Conflict of Interest
|
|
|
8
|
|
4.18
|
|
Remuneration and Expenses
|
|
|
9
|
|
Section 5 Committees
|
|
|
9
|
|
5.1
|
|
Committee of Directors
|
|
|
9
|
|
5.2
|
|
Transaction of Business
|
|
|
9
|
|
5.3
|
|
Advisory Bodies
|
|
|
9
|
|
5.4
|
|
Procedure
|
|
|
9
|
|
5.5
|
|
Audit Committee
|
|
|
9
|
|
Section 6 Officers
|
|
|
9
|
|
6.1
|
|
Appointment
|
|
|
9
|
|
6.2
|
|
Chair of the Board
|
|
|
10
|
|
6.3
|
|
Vice Chair of the Board
|
|
|
10
|
|
6.4
|
|
Chief Executive Officer
|
|
|
10
|
|
6.5
|
|
President
|
|
|
10
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|
C-1
|
|
|
|
|
|
|
6.6
|
|
Vice-President
|
|
|
10
|
|
6.7
|
|
Chief Financial Officer
|
|
|
10
|
|
6.8
|
|
Secretary
|
|
|
10
|
|
6.9
|
|
Treasurer
|
|
|
11
|
|
6.10
|
|
Powers and Duties of Other Officers
|
|
|
11
|
|
6.11
|
|
Variation of Powers and Duties
|
|
|
11
|
|
6.12
|
|
Term of Office
|
|
|
11
|
|
6.13
|
|
Terms of Employment and Remuneration
|
|
|
11
|
|
6.14
|
|
Conflict of Interest
|
|
|
11
|
|
6.15
|
|
Agents and Attorneys
|
|
|
11
|
|
6.16
|
|
Fidelity Bonds
|
|
|
11
|
|
Section 7 Protection Of Directors, Officers and Others
|
|
|
12
|
|
7.1
|
|
Limitation of Liability
|
|
|
12
|
|
7.2
|
|
Indemnity
|
|
|
12
|
|
7.3
|
|
Advance of Costs
|
|
|
12
|
|
7.4
|
|
Insurance
|
|
|
12
|
|
7.5
|
|
Legal Proceedings
|
|
|
12
|
|
7.6
|
|
Derivative Actions
|
|
|
13
|
|
Section 8 Shares
|
|
|
13
|
|
8.1
|
|
Allotment
|
|
|
13
|
|
8.2
|
|
Commissions
|
|
|
13
|
|
8.3
|
|
Registration of Transfer
|
|
|
13
|
|
8.4
|
|
Transfer Agents and Registrars
|
|
|
14
|
|
8.5
|
|
Lien for Indebtedness
|
|
|
14
|
|
8.6
|
|
Non-Recognition of Trusts
|
|
|
14
|
|
8.7
|
|
Share Certificates and Uncertificated Securities
|
|
|
14
|
|
8.8
|
|
Replacement of Share Certificates
|
|
|
14
|
|
8.9
|
|
Joint Shareholders
|
|
|
15
|
|
8.10
|
|
Deceased Shareholders
|
|
|
15
|
|
Section 9 Dividends and Rights
|
|
|
15
|
|
9.1
|
|
Dividends
|
|
|
15
|
|
9.2
|
|
Dividend Cheques
|
|
|
15
|
|
9.3
|
|
Non-Receipt of Cheques
|
|
|
15
|
|
9.4
|
|
Record Date for Dividends and Rights
|
|
|
15
|
|
9.5
|
|
Unclaimed Dividends
|
|
|
16
|
|
Section 10 Meetings of Shareholders
|
|
|
16
|
|
10.1
|
|
Annual Meetings
|
|
|
16
|
|
10.2
|
|
Special Meetings
|
|
|
16
|
|
10.3
|
|
Place of Meetings
|
|
|
16
|
|
10.4
|
|
Notice of Meetings
|
|
|
16
|
|
10.5
|
|
Nomination of Directors
|
|
|
16
|
|
10.6
|
|
List of Shareholders Entitled to Notice
|
|
|
19
|
|
10.7
|
|
Record Date for Notice
|
|
|
20
|
|
10.8
|
|
Meetings without Notice
|
|
|
20
|
|
10.9
|
|
Chair, Secretary and Scrutineers
|
|
|
20
|
|
10.10
|
|
Persons Entitled to be Present
|
|
|
20
|
|
10.11
|
|
Quorum
|
|
|
20
|
|
10.12
|
|
Right to Vote and Record Date for Voting
|
|
|
21
|
|
10.13
|
|
Proxies
|
|
|
21
|
|
10.14
|
|
Time for Deposit of Proxies
|
|
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21
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10.15
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Joint Shareholders
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21
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10.16
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Votes to Govern
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21
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10.17
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Show of Hands
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21
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10.18
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Electronic Voting
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22
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10.19
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Ballots
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22
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C-2
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10.20
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Adjournment
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22
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10.21
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Resolution in Writing
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22
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10.22
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Only One Shareholder
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22
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Section 11 Divisions and Departments
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22
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11.1
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Creation and Consolidation of Divisions
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22
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11.2
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Name of Division
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22
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11.3
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Officers of Divisions
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23
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Section 12 Notices
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23
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12.1
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Method of Giving Notice
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23
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12.2
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Notice to Joint Shareholders
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23
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12.3
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Computation of Time
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23
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12.4
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Undelivered Notices
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23
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12.5
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Omissions and Errors
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23
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12.6
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Persons Entitled by Death or Operation of Law
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24
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12.7
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Waiver of Notice
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24
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Section 13 Repeal
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24
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13.1
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Repeal
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24
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Section 14 Effective Date
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24
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14.1
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Effective Date
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24
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C-3
BY-LAW NO. 8
A by-law relating generally to the conduct
of the business and affairs of
VITRAN CORPORATION INC.
BE IT ENACTED
as a by-law of the Corporation as follows:
SECTION 1
INTERPRETATION
In the by-laws of the
Corporation, unless the context otherwise requires:
Act
means the
Business Corporations Act
(R.S.O. 1990, c.B.16)
and the regulations thereto, and any statute that may be substituted therefor, as from time to time amended;
articles
means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of arrangement, articles of continuance, articles of dissolution, articles of reorganization and articles of revival, letters patent,
supplementary letters patent and a special Act of the Corporation;
board
means the board of directors of the Corporation;
business day
means a day that is a not a Saturday, Sunday or any other day that is a holiday as defined in the
Interpretation Act
(Ontario);
by-laws
means this by-law and all other by-laws of the Corporation from time to time
in force and effect;
Corporation
means the corporation incorporated under the Act and named Vitran Corporation Inc.;
Electronic Commerce Act
means the
Electronic Commerce Act
, 2000 (S.O. 2000, c.17) as amended from time to time;
meeting of shareholders
means any meeting of shareholders, whether annual or special;
offering corporation
means a corporation that is offering its securities to the public within the meaning of the Act and that is not
the subject of an order of the Ontario Securities Commission deeming it to have ceased to be offering its securities to the public;
recorded address
means, in the case of a shareholder, the shareholders address as recorded in the securities register; and in
the case of joint shareholders, the address appearing in the securities register in respect of such joint holding or the first address so appearing if there are more than one; and in the case of a director, officer, auditor or member of a committee
of the board, the latest address of such person as recorded in the records of the Corporation;
resident Canadian
has the
meaning ascribed thereto in the Act;
Securities Transfer Act
means the
Securities Transfer Act
, 2006 (S.O. 2006,
c.8) as amended from time to time;
signing officer
means, in relation to any instrument, any person authorized to sign the
same on behalf of the Corporation by section 2.4 or by a resolution passed pursuant thereto; and
special meeting of
shareholders
includes a special meeting of all shareholders entitled to vote at an annual meeting of shareholders and a meeting of any class or classes of shareholders entitled to vote on the question at issue.
1.2
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Additional Definitions
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Save as
aforesaid, words and expressions defined in the Act have the same meanings when used herein.
C-4
Words importing the
singular number include the plural and vice versa; words importing gender include the masculine, feminine and neuter genders; and words importing persons include individuals, bodies corporate, partnerships, trusts and unincorporated organizations.
SECTION 2
BUSINESS OF THE CORPORATION
Until changed in
accordance with the Act, the registered office of the Corporation shall be in the City of Toronto in the Province of Ontario and at such location therein as the board may from time to time determine.
The Corporation may have
a corporate seal which shall be adopted and may be changed by resolution of the board.
The
financial year of the Corporation shall end on such date in each year as determined from time to time by resolution of the board and initially, such financial year shall end on the 31
st
day of December.
2.4
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Execution of Instruments
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Deeds,
transfers, assignments, bills of sale, contracts, obligations, certificates and other instruments may be signed on behalf of the Corporation by any two directors or officers or any director together with any officer. In addition, the board may from
time to time direct the manner in which and the person or persons by whom any particular instrument or class of instruments may or shall be signed. Any signing officer may affix the corporate seal to any instrument requiring the same.
The banking
business of the Corporation including, without limitation, the borrowing of money and the giving of security therefor, shall be transacted with such banks, trust companies or other bodies corporate or organizations as may from time to time be
designated by or under the authority of the board. Such banking business or any part thereof shall be transacted under such agreements, instructions and delegations of powers as the board may from time to time prescribe or authorize.
2.6
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Voting Rights in Other Bodies Corporate
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The signing officers of the Corporation may execute and deliver proxies and arrange for the issuance of voting certificates or other evidence of the right
to exercise the voting rights attaching to any securities held by the Corporation. Such instruments, certificates or other evidence shall be in favour of such person or persons as may be determined by the officers executing such proxies or arranging
for the issuance of voting certificates or such other evidence of the right to exercise such voting rights. In addition, the board may from time to time direct the manner in which and the person or persons by whom any particular voting rights or
class of voting rights may or shall be exercised.
2.7
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Withholding Information from Shareholders
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Subject to the provisions of the Act, no shareholder shall be entitled to discovery of any information respecting any details or conduct of the
Corporations business which, in the reasonable opinion of the board, could be inexpedient in the interests of the shareholders or the Corporation to communicate to the public. The board may from time to time determine whether and to what
extent and at what time and place and under what conditions or regulations the accounts, records and documents of the Corporation or any of them shall be open to the inspection of shareholders and no shareholder shall have any right to inspect any
account, record or document of the Corporation except as conferred by the Act or authorized by the board.
C-5
SECTION 3
BORROWING AND SECURITY
Without limiting the
borrowing powers of the Corporation as set forth in the Act, the board may, without authorization of the shareholders, from time to time:
|
(a)
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borrow money upon the credit of the Corporation;
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(b)
|
issue, reissue, sell, pledge or hypothecate bonds, debentures, notes or other evidence of indebtedness or guarantee of the Corporation, whether secured or unsecured;
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(c)
|
subject to the Act, give a guarantee on behalf of the Corporation to secure performance of an obligation of any person; and
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(d)
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mortgage, hypothecate, pledge or otherwise create a security interest in or charge upon all or any real or personal, movable or immovable property of the Corporation,
owned or subsequently acquired, including book debts, rights, powers, franchises and undertakings by way of mortgage, hypothec, pledge or otherwise, to secure payment of any such evidence of indebtedness, guarantee or other obligation of the
Corporation, whether present or future.
|
Nothing in this section limits or restricts the borrowing of money by the Corporation
on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the Corporation.
The board may from time to
time by resolution delegate to one or more directors, a committee of directors or one or more officers of the Corporation all or any of the powers conferred on the board by section 3.1 or by the Act to such extent and in such manner as the
board shall determine at the time of each such delegation.
SECTION 4
DIRECTORS
4.1
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Number of Directors and Quorum
|
Until
changed in accordance with the Act, the board shall consist of not fewer than the minimum number and not more than the maximum number of directors provided in the articles. Subject to the Act and to section 4.8 hereof, the quorum for the
transaction of business at any meeting of the board shall consist of a majority of such number of directors as determined from time to time according to the Act.
No person shall be
qualified for election as a director if such person is less than 18 years of age; if such person has been found under the
Substitute Decisions Act
, 1992 or under the
Mental Health Act
to be incapable of managing property or who
has been found to be incapable by a court in Canada or elsewhere; if such person is not an individual; or if such person has the status of a bankrupt. A director need not be a shareholder. At least 25 per cent of the directors shall be resident
Canadians but where the Corporation has less than four directors, at least one shall be a resident Canadian. For so long as the Corporation is an offering corporation, the minimum number of directors shall not be less than three and at least
one-third of the directors shall not be officers or employees of the Corporation or any of its affiliates.
C-6
Directors shall be
elected yearly to hold office until the close of the next annual meeting of shareholders. Where directors fail to be elected at any such meeting of shareholders, then notwithstanding the preceding sentence, the incumbent directors shall continue in
office until their successors are elected. The number of directors to be elected at any such meeting shall be the number of directors as shall be determined from time to time by special resolution or, if a special resolution empowers the directors
to determine the number, by resolution of directors. The election shall be by resolution.
Subject to the
provisions of the Act, the shareholders may by ordinary resolution passed at a meeting of shareholders remove any director or directors from office and the vacancy created by such removal may be filled at the same meeting at which a director was
removed, failing which it may be filled by a quorum of directors.
A person ceases to
hold the office of director of the Corporation when such person dies; subject to the Act, such person resigns; such person is removed from office by the shareholders; or such person ceases to be qualified for election as a director. A resignation of
a director becomes effective at the time a written resignation is received by the Corporation or at the time specified in the resignation, whichever is later.
4.6
|
Vacancies; Appointment of Additional Directors
|
Subject to the Act, a quorum of the board may fill a vacancy in the board, except a vacancy resulting from an increase in the number or maximum number of directors or from a failure to elect the number of
directors required to be elected at any meeting of shareholders. In the absence of a quorum of the board, or if there has been a failure to elect the number of directors required by the articles or by the Act, the board shall forthwith call a
special meeting of shareholders to fill the vacancy. If the board fails to call such meeting or if there are no directors then in office, any shareholder may call the special meeting of shareholders. Any director appointed or elected to fill such
vacancy holds office for the unexpired term of such directors predecessor. Where the board has been empowered to fix the number of directors within the minimum and maximum number of directors as specified in the articles, the board may appoint
one or more additional directors who shall hold office until the close of the next annual meeting but the total number of additional directors so appointed may not exceed one-third of the number of directors elected at the previous annual meeting of
shareholders of the Corporation.
The board shall
manage or supervise the management of the business and affairs of the Corporation. Subject to section 4.8, the powers of the board may be exercised by resolution passed at a meeting at which a quorum is present or by resolution in writing
signed by all the directors entitled to vote on that resolution at a meeting of the board. Where there is a vacancy in the board, the remaining directors may exercise all the powers of the board so long as a quorum remains in office. A resolution in
writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or a committee of directors, is as valid as if it had been passed at a meeting of directors or a committee of directors.
4.8
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Meetings by Telephone, Electronic or Other Communication Facility
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If all the directors present at or participating in the meeting consent, a meeting of the board or of a committee of the board may be held by means of such telephone, electronic or other communications
facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and a director participating in such a meeting by such means is deemed to be present at the meeting. Any such consent
shall be effective whether given before or after the meeting to which it relates and may be given with respect to all meetings of the board and of committees of the board held while a director holds office.
C-7
Meetings of the board
may be held at any place within or outside Ontario and it shall not be necessary that, in any financial year of the Corporation, a majority of the meetings of the board be held at a place within Canada.
Meetings of the
board shall be held from time to time at such time and at such place as the chair of the board, the chief executive officer, the president, or any two directors may determine.
Notice of the time and
place of each meeting of the board shall be given in the manner provided in section 12.1 to each director not less than 48 hours before the time of the meeting. A notice of a meeting of directors need not specify the purpose of or the
business to be transacted at the meeting except where the Act requires such purpose or business to be specified. A director may in any manner and at any time waive a notice of a meeting of the board. Attendance of a director at a meeting of
directors is a waiver of notice of the meeting except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.
4.12
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First Meeting of New Board
|
Provided a
quorum of directors is present, each newly elected board may without notice hold its first meeting immediately following the meeting of shareholders at which such board is elected.
Notice of an adjourned
meeting of the board is not required to be given if the time and place of the adjourned meeting is announced at the original meeting.
The board may appoint a
day or days in any month or months for regular meetings of the board at a place and hour to be named. A copy of any resolution of the board fixing the place and time of such regular meetings shall be sent to each director forthwith after being
passed, but no other notice shall be required for any such regular meeting except where the Act requires the purpose thereof or the business to be transacted thereat to be specified.
The chair of any meeting of the
board shall be the first mentioned of such of the following officers as have been appointed and who is a director and is present at the meeting: chair of the board, vice-chair of the board, lead director, chief executive officer, president, or a
vice-president who is a director. If no such officer is present, the directors present shall choose one of their number to be chair.
At all meetings of the
board every question shall be decided by a majority of the votes cast on the question.
4.17
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Conflict of Interest
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A director or
officer who is a party to, or who is a director or officer of or has a material interest in any person who is a party to, a material contract or transaction or proposed material contract or transaction with the Corporation shall disclose the nature
and extent of the individuals interest at the time and in the manner provided by the Act. Any such contract or transaction or proposed contract or transaction shall be referred to the board or the shareholders for approval even if such
contract is one that in the ordinary course of the Corporations business would not require approval by the board or the shareholders, and a director interested in a contract so referred to the board shall not attend any part of a meeting of
directors during which the contract or transaction is discussed and shall not vote on
C-8
any resolution to approve the same except as provided by the Act. If no quorum exists for the purpose of voting on a resolution to approve a contract or transaction only because a director is not
permitted to be present at the meeting by reason of the foregoing, the remaining directors shall be deemed to constitute a quorum for the purposes of voting on the resolution. Where all of the directors are required to disclose their interests
pursuant to this section and the Act, the contract or transaction may be approved only by the shareholders.
4.18
|
Remuneration and Expenses
|
The directors
shall be paid such remuneration for their services as the board may from time to time determine. The directors shall also be entitled to be reimbursed for traveling and other expenses properly incurred by them in attending meetings of the board or
any committee thereof. Nothing herein contained shall preclude any director from serving the Corporation in any other capacity and receiving remuneration therefor.
SECTION 5
COMMITTEES
5.1
|
Committee of Directors
|
The board may
appoint from its members one or more committees of directors, however designated, and delegate to any such committee any of the powers of the board except those which, under the Act, a committee of directors has no authority to exercise.
5.2
|
Transaction of Business
|
The powers of a
committee of directors may be exercised by a meeting at which a quorum of the committee is present or by resolution in writing signed by all the members of such committee who would have been entitled to vote on that resolution at a meeting of the
committee. Meetings of such committee may be held at any place within or outside Ontario.
The board may from time
to time appoint such advisory bodies as it may deem desirable.
Unless otherwise determined by
the board, each committee of directors and advisory body shall have the power to fix its quorum at not less than a majority of its members, to elect its chair and to regulate its procedure.
If the Corporation is an
offering corporation, the board shall elect annually from among its number an audit committee to be composed of not fewer than 3 directors of whom a majority shall not be officers or employees of the Corporation or any of its affiliates. The
audit committee shall have the powers and duties provided in the Act. If the Corporation is a reporting issuer under the securities laws of Ontario or another jurisdiction in Canada, then all the members of the audit committee shall be independent
directors, if so required by applicable securities laws at any time, subject to any exceptions or exemptions provided in such securities laws.
SECTION 6
OFFICERS
The board may from time to
time appoint a chief executive officer, a president, one or more vice-presidents (to which title may be added words indicating seniority or function), a chief financial officer, a secretary, a treasurer and such other officers as the board may
determine, including one or more assistants to any of the officers so appointed. The board may specify the duties of and, in accordance with this by-law and subject to the provisions of the Act, delegate to such officers powers to manage the
business and affairs of the Corporation. Subject to sections 6.2 and 6.3, an officer may but need not be a director and one person may hold more than one office.
C-9
The board may from
time to time also appoint a chair of the board who shall be a director. If appointed, the board may assign to him any of the powers and duties that are by any provisions of this by-law capable of being assigned to the chief executive officer or to
the president; and the individual shall, subject to the provisions of the Act, have such other powers and duties as the board may specify. During the absence or disability of the chair of the board, the individuals duties shall be performed
and the individuals powers exercised by the vice-chair of the board, if any, or if there is no vice-chair of the board, the lead director, if any, or by the chief executive officer, if any, or the president.
6.3
|
Vice Chair of the Board
|
The board may
from time to time appoint a vice-chair of the board who shall be a director. During the absence or disability of the chair of the board, the chairs duties shall be performed and his powers exercised by the vice-chair of the board. The
vice-chair of the board shall, subject to the provisions of the Act, have such other powers and duties as the board may specify.
6.4
|
Chief Executive Officer
|
The board may
from time to time appoint a chief executive officer. Subject to the authority of the board and any limitations the board may prescribe, the chief executive officer shall have general supervision of the business of the Corporation; and the chief
executive officer shall, subject to the provisions of the Act, have such other powers and duties as the board may specify. During the absence or disability of the president, or if no president has been appointed, the chief executive officer shall
also have the powers and duties of that office.
The board may from time to
time appoint a president who shall have such powers and duties as the board may specify, and subject to the authority of the board, the president shall be the chief operating officer. During the absence or disability of the chief executive officer,
or if no chief executive officer has been or is otherwise to be appointed, subject to the authority of the board and any limitations the board may prescribe, the president shall also have the powers and duties of that office, unless the board
otherwise determines.
The board may from time
to time appoint one or more vice-presidents. Any vice-president so appointed shall have such powers and duties as the board or the chief executive officer may specify.
6.7
|
Chief Financial Officer
|
The board may
from time to time appoint a chief financial officer. If so appointed, the chief financial officer will cause the preparation and maintenance of proper accounting records in compliance with the Act and shall be responsible for the deposit of money,
the safekeeping of securities and the disbursement of funds of the Corporation and at the request of the board, will render an account of the Corporations financial transactions and the financial position of the Corporation. The chief
financial officer shall have such other powers and duties as the board or the chief executive officer may specify.
The board may from time to
time appoint a secretary. If so appointed, the secretary shall attend and be the secretary of all meetings of the board, shareholders and committees of the board and shall enter or cause to be entered in records kept for that purpose minutes of all
proceedings thereat; the secretary shall give or cause to be given, as and when instructed, all notices to shareholders, directors, officers, the auditor and members of committees of the board; the secretary shall be the custodian of the stamp or
mechanical device generally used for affixing the corporate seal of the Corporation and of all books, papers, records, documents and instruments belonging to the Corporation, except when some other officer or agent has been appointed for that
purpose; and the secretary shall have such other powers and duties as the board or the chief executive officer may specify.
C-10
The board may from time to
time appoint a treasurer. If so appointed, the treasurer, in the absence of a chief financial officer, shall keep proper accounting records in compliance with the Act and shall be responsible for the deposit of money, the safekeeping of securities
and the disbursement of the funds of the Corporation; the treasurer shall render to the board whenever required an account of all of the treasurers transactions as treasurer and of the financial position of the Corporation; and the treasurer
shall have such other powers and duties as the board or the chief executive officer may specify.
6.10
|
Powers and Duties of Other Officers
|
The
powers and duties of all other officers shall be such as the terms of their engagement call for or as the board or the chief executive officer may specify. Any of the powers and duties of an officer to whom an assistant has been appointed may be
exercised and performed by such assistant, unless the board or the chief executive officer otherwise directs.
6.11
|
Variation of Powers and Duties
|
The board
may from time to time and subject to the provisions of the Act, vary, add to or limit the powers and duties of any officer.
The board, in its
discretion, may remove any officer of the Corporation, without prejudice to such officers rights under any employment contract. Otherwise, each officer appointed by the board shall hold office until such officers successor is appointed,
or until such officers earlier resignation or death.
6.13
|
Terms of Employment and Remuneration
|
The
terms of employment and the remuneration of officers appointed by the board shall be settled by it from time to time.
6.14
|
Conflict of Interest
|
An officer shall
disclose the officers interest in any material contract or transaction or proposed material contract or transaction with the Corporation in accordance with section 4.17.
6.15
|
Agents and Attorneys
|
The board shall
have power from time to time to appoint agents or attorneys for the Corporation in or outside Canada with such powers of management or otherwise (including the power to sub-delegate) as may be thought fit.
The board may require
such officers, employees and agents of the Corporation as the board deems advisable to furnish bonds for the faithful discharge of their powers and duties, in such form and with such surety as the board may from time to time determine.
C-11
SECTION 7
PROTECTION OF DIRECTORS, OFFICERS AND OTHERS
7.1
|
Limitation of Liability
|
Each director
and officer of the Corporation in exercising his or her powers and discharging his or her duties shall act honestly and in good faith with a view to the best interests of the Corporation and exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances. Subject to the foregoing, no director or officer shall be liable for the acts, receipts, neglects or defaults of any other director or officer or employee, or for joining in any receipt or
other act for conformity, or for any loss, damage or expense happening to the Corporation through the insufficiency or deficiency of title to any property acquired for or on behalf of the Corporation, or for the insufficiency or deficiency of any
security in or upon which any of the monies of the Corporation shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious acts of any person with whom any of the monies, securities or effects of the Corporation
shall be deposited, or for any loss occasioned by any error of judgment or oversight on such directors or officers part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of such
persons office or in relation thereto, unless the same are occasioned by such persons own wilful neglect or default; provided that nothing herein shall relieve any director or officer from the duty to act in accordance with the Act or
from liability for any breach thereof.
Subject to the limitations
contained in the Act, the Corporation shall indemnify a director or officer, a former director or officer, or a person who acts or acted at the Corporations request as a director or officer or in a similar capacity of another entity (including
without limitation, a body corporate) and such individuals heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in
respect of any civil, criminal, administrative, investigative or other proceeding in which he or she is involved because of that association with the Corporation or other entity, if:
|
(a)
|
he or she acted honestly and in good faith with a view to the best interests of the Corporation or, as the case may be, with a view to the best interests of the other
entity for which the individual acted as a director or officer or in a similar capacity at the Corporations request; and
|
|
(b)
|
in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he or she had reasonable grounds for believing that his or her
conduct was lawful.
|
The Corporation shall also indemnify such person in such other circumstances as the Act permits or
requires.
The Corporation, if
authorized by the board, may advance money to a director, officer or other individual referred to in section 7.2 hereof for the costs, charges and expenses of a proceeding referred to in section 7.2. The individual shall repay the money if
the individual does not fulfill the conditions set out in paragraphs 7.2(a) and 7.2(b).
Subject to the limitations
contained in the Act, the Corporation may purchase and maintain insurance for the benefit of any person referred to in section 7.2 hereof.
The board is
authorized from time to time to: (a) retain and instruct legal counsel to commence or defend legal proceedings on behalf of the Corporation and to authorize any settlement, compromise, waiver of privilege, plea in criminal or quasi-criminal
matters, proceedings or other steps whatsoever on behalf of the Corporation as the board considers expedient; and (b) delegate to such directors, officers or employees of the Corporation as the board may designate, any or all of the foregoing
powers to such extent and in such manner as the board may determine.
C-12
The Corporation may
with the approval of a court authorized to give such approval by the Act, indemnify an individual referred to in section 7.2, or advance money under section 7.3, in respect of action by or on behalf of the Corporation or other entity to
obtain a judgment in its favour, to which the individual is made a party because of the individuals association with the Corporation or other entity as described in section 7.2, against all costs, charges and expenses reasonably incurred
by the individual in connection with such action, if the individual fulfils the conditions set out in paragraphs 7.2(a) and 7.2(b).
SECTION 8
SHARES
Subject to the provisions of
the Act and the articles, the board may from time to time grant options to purchase or allot the whole or any part of the authorized and unissued shares of the Corporation at such times and to such persons and for such consideration as the board
shall determine, provided that no share shall be issued until it is fully paid as prescribed by the Act.
The board may from time to
time authorize the Corporation to pay a reasonable commission to any person in consideration of the person purchasing or agreeing to purchase shares of the Corporation from the Corporation or from any other person, or procuring or agreeing to
procure purchasers for any such shares.
8.3
|
Registration of Transfer
|
All transfer of
securities of the Corporation shall be made in accordance with the Act and the Securities Transfer Act. Subject to the provisions of the Act and the Securities Transfer Act, if a certificated security in registered form is presented to the
Corporation with a request to register a transfer of the certificated security or an instruction is presented to the Corporation with a request to register a transfer of an uncertificated security, the Corporation shall register the transfer as
requested provided that:
|
(a)
|
under the terms of the security, the proposed transferee is eligible to have the security registered in that persons name;
|
|
(b)
|
the endorsement or instruction is made by the appropriate person (as determined in accordance with the Securities Transfer Act) or by an agent who has
actual authority to act on behalf of the appropriate person;
|
|
(c)
|
reasonable assurance, in a manner determined by the board (or by any person or persons designated by the board) and in accordance with the Securities Transfer Act, is
given that the endorsement or instruction is genuine and authorized;
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|
(d)
|
any applicable law relating to the collection of taxes has been complied with and upon any fees prescribed by the board;
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(e)
|
the transfer does not violate any restriction on transfer imposed by statute or by the Corporation, including a lien imposed by the Corporation in accordance with
section 8.5 hereof; and
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(f)
|
the transfer is rightful or is to a protected purchaser, as determined in accordance with the Securities Transfer Act.
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8.4
|
Transfer Agents and Registrars
|
The board
may from time to time appoint a registrar to maintain the securities register and a transfer agent to maintain the register of transfers and may also appoint one or more branch registrars to maintain branch securities registers and one or more
branch transfer agents to maintain branch registers of transfers, but one person may be appointed both registrar and transfer agent. The board may at any time terminate any such appointment.
8.5
|
Lien for Indebtedness
|
If the articles
provide that the Corporation shall have a lien on shares registered in the name of a shareholder indebted to the Corporation, such lien may be enforced, subject to any other provisions of the articles and to the Act, by the sale of the shares
thereby affected or by any other action, suit, remedy or proceeding authorized or permitted by law or by equity and pending such enforcement, the Corporation may refuse to register a transfer of the whole or any part of such shares.
8.6
|
Non-Recognition of Trusts
|
Subject to the
provisions of the Act, the Corporation shall treat the registered holder of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payments in respect of such security, and otherwise to
exercise all the rights and powers of an owner of such security.
8.7
|
Share Certificates and Uncertificated Securities
|
A share issued by the Corporation may be represented by a share certificate or may be an uncertificated security in accordance with the Act and the Securities Transfer Act. Unless the articles of the
Corporation otherwise provide, the board may determine that any class or series of the Corporations securities shall be uncertificated securities, provided that such determination by the board shall not apply to securities represented by a
certificate until such certificate is surrendered to the Corporation. Every holder of one or more shares of the Corporation that are certificated securities shall be entitled, at the holders option, to a share certificate, or to a
non-transferable written acknowledgment of the holders right to obtain a share certificate, stating the number and class or series of shares held by the holder as shown on the securities register. Share certificates and acknowledgements of a
shareholders right to a share certificate, respectively, shall be in such form as the board shall from time to time approve. Any share certificate shall be signed in accordance with section 2.4 and need not be under the corporate seal;
provided that, unless the board otherwise determines, certificates representing shares in respect of which a transfer agent and/or registrar has been appointed shall not be valid unless countersigned by or on behalf of such transfer agent and/or
registrar. The signature of one of the signing officers or, in the case of share certificates which are not valid unless countersigned by or on behalf of a transfer agent and/or registrar, the signatures of both signing officers, may be printed or
mechanically reproduced in facsimile upon share certificates and every such facsimile signature shall for all purposes be deemed to be the signature of the officer whose signature it reproduces and shall be binding upon the Corporation. A share
certificate executed as aforesaid shall be valid notwithstanding that the person whose facsimile signature appears thereon has ceased to be a director or an officer of the Corporation at the date of issue of the certificate.
8.8
|
Replacement of Share Certificates
|
The
board or any officer or agent designated by the board may in its or such persons discretion direct the issue of a new share certificate in lieu of and upon cancellation of a share certificate that has been mutilated or in substitution for a
share certificate claimed to have been lost, destroyed or wrongfully taken if the owner:
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(a)
|
so requests before the Corporation has notice that the share certificate has been acquired by a protected purchaser;
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|
(b)
|
unless the board otherwise determines in a particular case, furnishes the Corporation with an indemnity bond sufficient, in the opinion of the board, to protect the
Corporation and any transfer agent, registrar or other agent of the Corporation from any loss that the Corporation or any of them may suffer by complying with the request to issue the new share certificate; and
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|
(c)
|
satisfies any other reasonable requirements imposed by the Corporation from time to time, whether generally or in any particular case.
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If two or more
persons are registered as joint holders of any share, the Corporation shall not be bound to issue more than one certificate or written acknowledgment referred to in section 8.7 in respect thereof, and delivery of such certificate to one of such
persons shall be sufficient delivery to all of them. Any one of such persons may give effectual receipts for the certificate issued in respect thereof or for any dividend, bonus, return of capital or other money payable or warrant issuable in
respect of such share.
8.10
|
Deceased Shareholders
|
In the event of
the death of a holder, or of one of the joint holders, of any share, the Corporation shall not be required to make any entry in the securities register in respect thereof or to make payment of any dividends thereon except upon production of all such
documents as may be required by law and upon compliance with the reasonable requirements of the Corporation and its transfer agents.
SECTION 9
DIVIDENDS AND RIGHTS
The board may from time to
time declare dividends payable to the shareholders according to their respective rights and interests in the Corporation. Dividends may be paid by issuing fully paid shares of the Corporation and, subject to the provisions of the Act, in money or
property.
A dividend payable in
cash shall be paid by cheque of the Corporation drawn on the Corporations bankers or one of them or if the Corporation has appointed a disbursement agent, by cheque of the disbursement agent drawn on the disbursement agents bankers or
one of them (or by other means by which such agent effects such payments in the normal course of its business as a disbursement agent) to the order of each registered holder of shares of the class or series in respect of which it has been declared
and mailed by prepaid ordinary mail to such registered holder at such holders recorded address, unless such holder otherwise directs. In the case of joint holders the cheque shall, unless such joint holders otherwise direct, be made payable to
the order of all of such joint holders and mailed to them at their recorded address. The mailing of such cheque as aforesaid, unless the same is not paid on due presentation, shall satisfy and discharge the liability for the dividend to the extent
of the sum represented thereby plus the amount of any tax which the Corporation is required to and does withhold.
9.3
|
Non-Receipt of Cheques
|
In the event of
non-receipt of any dividend cheque by the person to whom it is sent as aforesaid, the Corporation shall issue or cause to be issued to such person a replacement cheque for a like amount on such terms as to indemnity, reimbursement of expenses and
evidence of non-receipt and of title as the board may from time to time prescribe, whether generally or in any particular case.
9.4
|
Record Date for Dividends and Rights
|
Subject to the Act and the rules of any stock exchange on which the shares of the Corporation are listed, the board may fix in advance, within the period
prescribed by the Act, a date as a record date for the determination of the persons entitled to receive payment of any dividend or to exercise the right to subscribe for securities, provided that, unless notice of the record date is waived in
writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the board fixes the record date, notice of any such record date shall be given by the Corporation
within the period prescribed by the Act, by newspaper advertisement in the manner provided in the Act and by written notice to each stock exchange on which the shares of
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the Corporation are listed for trading. Where no record date is fixed in advance as aforesaid, the record date for the determination of the persons entitled to receive payment of any dividend or
to exercise the right to subscribe for securities of the Corporation shall be at the close of business on the day on which the resolution relating to such dividend or right to subscribe is passed by the board.
Subject to the Act,
any dividend unclaimed after a period of 6 years from the date on which the same has been declared to be payable shall be forfeited and shall revert to the Corporation.
SECTION 10
MEETINGS OF SHAREHOLDERS
Subject to
section 10.21, the board shall call an annual meeting of shareholders not later than eighteen months after the Corporation comes into existence and subsequently not later than fifteen months after holding the last preceding annual meeting, for
the purpose of considering the financial statements and reports required by the Act to be placed before the annual meeting, electing directors, appointing an auditor and for the transaction of such other business as may properly be brought before
the meeting.
The board shall have
power to call a special meeting of shareholders at any time.
Meetings of
shareholders shall be held at such place in or outside Ontario as the board, or any person to whom such decision is delegated by the board, may from time to time determine or, in the absence of such a determination, at the place where the registered
office of the Corporation is located.
Notice of the time
and place of each meeting of shareholders shall be given in the manner provided in section 12.1 and shall be sent:
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(a)
|
if the Corporation is an offering corporation, not less than 21 days; and
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(b)
|
if the Corporation is not an offering corporation, not less than 10 days;
|
and in either case, not more than 50 days before the date of the meeting, to each director, to the auditor and to each shareholder who at the close of business on the record date for notice is
entered in the securities register as the holder of one or more shares carrying the right to vote at the meeting. Subject to the Act and any other applicable law, notice of a meeting of shareholders called for any purpose other than consideration of
the minutes of an earlier meeting, consideration of the financial statements and auditors report, election of directors and reappointment of the incumbent auditor, shall state or be accompanied by a statement of the nature of such business in
sufficient detail to permit the shareholder to form a reasoned judgment thereon, and the text of any special resolution or by-law to be submitted to the meeting. A shareholder and any other person entitled to attend a meeting of shareholders may in
any manner and at any time waive notice of or otherwise consent to a meeting of shareholders.
10.5
|
Nomination of Directors
|
Subject only to
the Act, only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the board may be made at any annual meeting of shareholders,
or at any special meeting of shareholders (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting), (a) by or at the direction of the board or
an authorized officer of the Corporation, including pursuant to a notice of meeting,
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(b) by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Act or a requisition of the shareholders made in accordance
with the provisions of the Act or (c) by any person (a
Nominating Shareholder
) (i) who, at the close of business on the date of the giving of the notice provided for below in this section 10.5 and on the record date for
notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting and (ii) who complies with
the notice procedures set forth below in this section 10.5:
(A)
|
In addition to any other applicable requirements, for a nomination to be made by a Nominating Shareholder, such person must have given (a) timely notice thereof in
proper written form to the secretary of the Corporation at the principal executive offices of the Corporation in accordance with this section 10.5 and (b) the representation and agreement with respect to each candidate for nomination as
required by, and within the time period specified in, subsection 10.5(D).
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(B)
|
To be timely under subsection 10.5(A)(a), a Nominating Shareholders notice to the secretary of the Corporation must be made (a) in the case of an annual
meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is called for a date that is less than 40 days
after the date (the
Notice Date
) on which the first public announcement of the date of the annual meeting was made, notice by the Nominating Shareholder may be made not later than the tenth (10th) day following the Notice
Date; and (b) in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the fifteenth (15th) day following
the day on which the first public announcement of the date of the special meeting of shareholders was made. Notwithstanding the foregoing, the board may, in its sole discretion, waive any requirement in this paragraph (B).
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(C)
|
To be in proper written form, a Nominating Shareholders notice to the secretary of the Corporation, under subsection 10.5(A)(a), must set forth (a) as to
each person whom the Nominating Shareholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the
class or series and number of shares in the capital of the Corporation which are controlled or which are owned beneficially or of record by the person as of the record date for the Meeting of Shareholders (if such date shall then have been made
publicly available and shall have occurred) and as of the date of such notice, (iv) a statement as to whether such person would be independent of the Corporation (within the meaning of sections 1.4 and 1.5 of National Instrument
52-110 Audit Committees of the Canadian Securities Administrators, as such provisions may be amended from time to time) if elected as a director at such meeting and the reasons and basis for such determination and (v) any other
information relating to the person that would be required to be disclosed in a dissidents proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws; and (b) as
to the Nominating Shareholder giving the notice, (i) any information relating to such Nominating Shareholder that would be required to be made in a dissidents proxy circular in connection with solicitations of proxies for election of
directors pursuant to the Act and Applicable Securities Laws, and (ii) the class or series and number of shares in the capital of the Corporation which are controlled or which are owned beneficially or of record by the Nominating Shareholder as
of the record date for the Meeting of Shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice.
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(D)
|
To be eligible to be a candidate for election as a director of the Corporation and to be duly nominated, a candidate must be nominated in the manner prescribed in this
section 10.5 and the candidate for nomination, whether nominated by the board or otherwise, must have previously delivered to the secretary of the Corporation at the principal executive offices of the Corporation, not less than 5 days prior to the
date of the Meeting of Shareholders, a written representation and agreement (in form provided by the Corporation) that such candidate for nomination, if elected as a director of the Corporation, will comply with all applicable corporate governance,
conflict of interest, confidentiality, share ownership, majority voting and insider trading policies and other policies and guidelines of the Corporation applicable to directors and in effect during such persons term in office as a director
(and, if requested by any candidate for nomination, the secretary of the Corporation shall provide to such candidate for nomination all such policies and guidelines then in effect).
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(E)
|
No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the provisions of this section 10.5; provided, however,
that nothing in this section 10.5 shall be deemed to preclude discussion by a shareholder (as distinct from nominating directors) at a meeting of shareholders of any matter in respect of which it would have been entitled to submit a proposal
pursuant to the provisions of the Act. The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not
in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.
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(F)
|
For purposes of this section 10.5:
|
|
(a)
|
Affiliate, when used to indicate a relationship with a person, shall mean a person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such specified person;
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|
(b)
|
Applicable Securities Laws means (i) the United States Securities Exchange Act of 1934, as amended, and the notes and regulations promulgated from time
to time thereunder and (ii) the
Securities Act
(Ontario) and the equivalent legislation in the other provinces and in the territories of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any
such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commissions and similar regulatory authorities of each of the applicable provinces and territories of Canada;
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|
(c)
|
Associate, when used to indicate a relationship with a specified person, shall mean (i) any corporation or trust of which such person owns
beneficially, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all voting securities of such corporation or trust for the time being outstanding, (ii) any partner of that person, (iii) any
trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity, (iv) a spouse of such specified person, (v) any person of either sex with whom such specified
person is living in conjugal relationship outside marriage or (vi) any relative of such specified person or of a person mentioned in clauses (iv) or (v) of this definition if that relative has the same residence as the specified
person;
|
|
(d)
|
Derivatives Contract shall mean a contract between two parties (the Receiving Party and the Counterparty) that is designed to expose
the Receiving Party to economic benefits and risks that correspond substantially to the ownership by the Receiving Party of a number of shares in the capital of the Corporation or securities convertible into such shares specified or referenced in
such contract (the number corresponding to such economic benefits and risks, the Notional Securities), regardless of whether obligations under such contract are required or permitted to be settled through the delivery of cash, shares in
the capital of the Corporation or securities convertible into such shares or other property, without regard to any short position under the same or any other Derivatives Contract. For the avoidance of doubt, interests in broad-based index options,
broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate governmental authority shall not be deemed to be Derivatives Contracts;
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|
(e)
|
Meeting of Shareholders shall mean such annual shareholders meeting or special shareholders meeting, whether general or not, at which one or more persons
are nominated for election to the board by a Nominating Shareholder;
|
|
(f)
|
owned beneficially or owns beneficially means, in connection with the ownership of shares in the capital of the Corporation by
a person, (i) any such shares as to which such person or any of such persons Affiliates or Associates owns at law or in equity, or has the right to acquire or become
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C-18
|
the owner at law or in equity, where such right is exercisable immediately or after the passage of time and whether or not on condition or the happening of any contingency or the making of any
payment, upon the exercise of any conversion right, exchange right or purchase right attaching to any securities, or pursuant to any agreement, arrangement, pledge or understanding whether or not in writing; (ii) any such shares as to which
such person or any of such persons Affiliates or Associates has the right to vote, or the right to direct the voting, where such right is exercisable immediately or after the passage of time and whether or not on condition or the happening of
any contingency or the making of any payment, pursuant to any agreement, arrangement, pledge or understanding whether or not in writing; (iii) any such shares which are beneficially owned, directly or indirectly, by a Counterparty (or any of
such Counterpartys Affiliates or Associates) under any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to which such person or any of such persons Affiliates or
Associates is a Receiving Party; provided, however that the number of shares that a person owns beneficially pursuant to this clause (iii) in connection with a particular Derivatives Contract shall not exceed the number of Notional Securities
with respect to such Derivatives Contract; provided, further, that the number of securities owned beneficially by each Counterparty (including their respective Affiliates and Associates) under a Derivatives Contract shall for purposes of this clause
be deemed to include all securities that are owned beneficially, directly or indirectly, by any other Counterparty (or any of such other Counterpartys Affiliates or Associates) under any Derivatives Contract to which such first Counterparty
(or any of such first Counterpartys Affiliates or Associates) is a Receiving Party and this proviso shall be applied to successive Counterparties as appropriate; and (iv) any such shares which are owned beneficially within the meaning of
this definition by any other person with whom such person is acting jointly or in concert with respect to the Corporation or any of its securities; and
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|
(g)
|
public announcement shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the
Corporation or its agents under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com.
|
(G)
|
Notwithstanding section 12, notice or any delivery given to the secretary of the Corporation pursuant to this section 10.5 may only be given by personal delivery,
facsimile transmission or by email (provided that the secretary of the Corporation has stipulated an email address for purposes of this notice, at such email address as stipulated from time to time), and shall be deemed to have been given and made
only at the time it is served by personal delivery, email (at the address as aforesaid) or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received) to the secretary at the address of the principal
executive offices of the Corporation; provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Toronto time) on a day which is a business day, then such delivery or electronic
communication shall be deemed to have been made on the subsequent day that is a business day.
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(H)
|
In no event shall any adjournment or postponement of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a Nominating
Shareholders notice as described in subsection 10.5(B) or the delivery of a representation and agreement as described in subsection 10.5(D).
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10.6
|
List of Shareholders Entitled to Notice
|
For every meeting of shareholders, the Corporation shall prepare or cause to be prepared a list of shareholders entitled to receive notice of the meeting,
arranged in alphabetical order and showing the number of shares entitled to vote at the meeting held by each shareholder. If a record date for the meeting is fixed pursuant to section 10.7, the shareholders listed shall be those registered at
the close of business on such record date. If no record date is fixed, the shareholders listed shall be those registered at the close of business on the day immediately preceding the day on which notice of the meeting is given, or where no such
notice is given, on the day on which the meeting is held. Such list shall be prepared, if a record date for the determination of shareholders entitled to notice of the meeting is fixed pursuant to section 10.7, not later than 10 days after
such record date and if no record date is fixed, at the close of business on the day on which notice is given or where no notice is given, on the day on which the meeting is held. The
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list shall be available for examination by any shareholder during usual business hours at the registered office of the Corporation or at the place where the central securities register is
maintained and at the meeting for which the list was prepared. Where a separate list of shareholders has not been prepared, the names of persons appearing in the securities register at the requisite time as the holder of one or more shares carrying
the right to vote at such meeting shall be deemed to be a list of shareholders.
10.7
|
Record Date for Notice
|
The board may fix
in advance a date, preceding the date of any meeting of shareholders by not more than 60 days and not less than 30 days, as a record date for the determination of the shareholders entitled to notice of the meeting. If a record date is
fixed, unless notice thereof is waived in writing by every holder of a share of the class or series affected whose name is set out in the share register at the close of business on the day the board fixes the record date, notice thereof shall, not
less than seven days before the date so fixed, be given in the manner provided in the Act. If no record date is so fixed, the record date for the determination of the shareholders entitled to receive notice of the meeting shall be the close of
business on the day immediately preceding the day on which the notice is given or if no notice is given, the day on which the meeting is held.
10.8
|
Meetings without Notice
|
A meeting of
shareholders may be held without notice at any time and place permitted by the Act:
|
(a)
|
if all the shareholders entitled to vote thereat are present in person or represented by proxy except where they attend the meeting for the express purpose of objecting
that the meeting is not duly called or if those not present or represented by proxy waive notice of or otherwise consent to such meeting being held; and
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|
(b)
|
if the auditor and the directors are present except where they attend the meeting for the express purpose of objecting that the meeting is not duly called or waive
notice of or otherwise consent to such meeting being held.
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At such a meeting any business may be transacted which the
Corporation at a meeting of shareholders may transact.
10.9
|
Chair, Secretary and Scrutineers
|
The
chair of any meeting of shareholders shall be the first mentioned of such of the following officers as have been appointed and who is present at the meeting and prepared to act as chair of the meeting: chair of the board, vice-chair of the board,
chief executive officer, president, or a vice-president who is a shareholder. If none of such officers is present within 15 minutes after the time fixed for the holding of the meeting, or none of such officers that are present are prepared to
act as chair of the meeting, the persons present and entitled to vote shall choose a person from their number to be the chair. If the secretary of the Corporation is absent, the chair shall appoint some person, who need not be a shareholder, to act
as secretary of the meeting. If desired, one or more scrutineers, who need not be shareholders, may be appointed by a resolution or by the chair with the consent of the meeting.
10.10
|
Persons Entitled to be Present
|
The only
persons entitled to be present at a meeting of shareholders shall be those entitled to vote thereat, the directors and the auditor of the Corporation and others who, although not entitled to vote, are entitled or required under any provision of the
Act or the articles or by-laws of the Corporation to be present at the meeting. Any other person may be admitted only on the invitation of the chair of the meeting or with the consent of the meeting.
A quorum for the transaction of
business at any meeting of shareholders shall be two persons present in person, each being a shareholder entitled to vote thereat or a duly appointed proxyholder for a shareholder so entitled, holding or representing in the aggregate not less than
one-third of the issued and outstanding shares of the Corporation entitling the holders thereof to vote at such meeting. If a quorum is present at the opening of any meeting of shareholders, the shareholders present or represented may proceed with
the business of the meeting notwithstanding that a quorum is
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not present throughout the meeting. If a quorum is not present at the time appointed for the meeting or within a reasonable time thereafter as the shareholders may determine, the shareholders
present or represented may adjourn the meeting to a fixed time and place but may not transact any other business.
10.12
|
Right to Vote and Record Date for Voting
|
Subject to the provisions of the Act as to authorized representatives of any other body corporate, at any meeting of shareholders in respect of which the
Corporation has prepared the list referred to in section 10.6, every person who is named in such list shall be entitled to vote the shares shown thereon opposite such persons name at the meeting to which the list relates.
In the absence of a list prepared as aforesaid in respect of a meeting of shareholders, every person shall be entitled to vote at the meeting whose name
appears in the securities register as the holder of one or more shares carrying the right to vote at such meeting.
Every shareholder entitled to
vote at a meeting of shareholders may by means of a proxy appoint a proxyholder, or one or more alternate proxyholders, who need not be shareholders, as such shareholders nominees to attend and act at the meeting in the manner, to the extent
and with the authority conferred by the proxy. To be effective, each proxy must be signed in writing or by electronic signature in accordance with the Act by the shareholder or his attorney authorized by a document that is signed in writing or by
electronic signature in accordance with the Act or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized. Every form of proxy shall comply with the Act.
10.14
|
Time for Deposit of Proxies
|
The board
may by resolution fix a time not exceeding 48 hours, excluding Saturdays and holidays, preceding any meeting or adjourned meeting of shareholders, before which time proxies to be used at that meeting must be deposited with the Corporation or an
agent thereof, and any period of time so fixed shall be specified in the notice calling the meeting. A proxy shall be acted upon only if, prior to the time so specified, it shall have been deposited with the Corporation or an agent thereof specified
in such notice or, if no such time is specified in such notice, unless it has been received by the secretary of the Corporation or by the chair of the meeting or any adjournment thereof prior to the time of voting.
If two or more
persons hold shares jointly, any one of them present in person or represented by proxy at a meeting of shareholders may, in the absence of the other or others, vote the shares; but if two or more of those persons are present in person or represented
by proxy and vote, they shall vote as one on the shares jointly held by them.
At any meeting of
shareholders every question shall, unless otherwise required by the articles or by-laws of the Corporation or by the Act, or by the requirements of any stock exchange on which the Corporations shares are then listed, be determined by the
majority of the votes cast on the question. In case of an equality of votes, whether upon a show of hands, a poll or a vote conducted by means of a telephonic, electronic or other communication facility, the chair presiding at the meeting shall not
be entitled to a second or casting vote.
Subject to the provisions
of the Act, any question at a meeting of shareholders shall be decided by a show of hands unless a ballot thereon is required or demanded as hereinafter provided. Upon a show of hands every person who is present and entitled to vote shall have one
vote. Whenever a vote by show of hands shall have been taken upon a question, unless a ballot thereon is so required or demanded, a declaration by the chair of the meeting that the vote upon the question has been carried or carried by a particular
majority or not carried and an entry to that effect in the minutes of the meeting shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against any resolution or other proceeding in
respect of the said question, and the result of the vote so taken shall be the decision of the shareholders upon the said question.
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Despite
section 10.17, any vote referred to in section 10.17, if so permitted by and in accordance with the Act, may be held entirely by means of telephonic, electronic or other communication facility, if the Corporation elects to make available
such a communication facility.
On any question proposed for
consideration at a meeting of shareholders, and whether or not a show of hands has been taken thereon, any shareholder or proxyholder entitled to vote at the meeting or the chair of the meeting, may require or demand a ballot. A ballot so required
or demanded shall be taken in such manner as the chair shall direct. A requirement or demand for a ballot may be withdrawn at any time prior to the taking of the ballot. If a ballot is taken, each person present shall be entitled, in respect of the
shares which such person is entitled to vote at the meeting upon the question, to that number of votes provided by the Act or the articles, and the result of the ballot so taken shall be the decision of the shareholders upon the said question.
If a quorum is not present
at the time appointed for a meeting of shareholders or within such reasonable time thereafter as the shareholders present may determine, the shareholders present may adjourn the meeting to a fixed time and place but may not transact any other
business. If a meeting of shareholders is adjourned for less than 30 days, it shall not be necessary to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned. If a meeting of shareholders is
adjourned by one or more adjournments for an aggregate of 30 days or more, notice of the adjourned meeting shall be given as for an original meeting.
10.21
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Resolution in Writing
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A resolution in
writing signed by all the shareholders (or their attorneys authorized in writing) entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders unless a written statement with
respect to the subject matter of the resolution is submitted by a director or the auditor of the Corporation in accordance with the Act.
10.22
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Only One Shareholder
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Where the
Corporation has only one shareholder or only one holder of any class or series of shares, the shareholder present in person or by proxy constitutes a meeting.
SECTION 11
DIVISIONS AND DEPARTMENTS
11.1
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Creation and Consolidation of Divisions
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The board may cause the business and operations of the Corporation or any part thereof to be divided or to be segregated into one or more divisions upon
such basis, including without limitation, character or type of operation, geographical territory, product manufactured or service rendered, as the board may consider appropriate in each case. The board may also cause the business and operations of
any such division to be further divided into sub-units and the business and operations of any such divisions or sub-units to be consolidated upon such basis as the board may consider appropriate in each case.
Any division or its
sub-units may be designated by such name as the board may from time to time determine and may transact business under such name, provided that the Corporation shall set out its name in legible characters in all contracts, invoices, negotiable
instruments and orders for goods or services issued or made by or on behalf of the Corporation.
C-22
11.3
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Officers of Divisions
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From time to time
the board or, if authorized by the board, the chief executive officer, may appoint one or more officers for any division, prescribe their powers and duties and settle their terms of employment and remuneration. The board or, if authorized by the
board, the chief executive officer, may remove at its or the chief executive officers pleasure any officer so appointed, without prejudice to such officers rights under any employment contract. Officers of divisions or their sub-units
shall not, as such, be officers of the Corporation.
SECTION 12
NOTICES
12.1
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Method of Giving Notice
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Any notice
(which term includes any communication or document) to be given (which term includes sent, delivered or served) pursuant to the Act, the articles, the by-laws or otherwise to a shareholder, director, officer, auditor or member of a committee of the
board shall be sufficiently given if delivered personally to the person to whom it is to be given or if delivered to the persons recorded address or if mailed to the person at their recorded address by prepaid ordinary or air mail or if sent
to the person at their recorded address by any means of transmitted or recorded communication or if transmitted or accessed by the person in accordance with the provisions of the Act and the Electronic Commerce Act governing electronic documents. A
notice so delivered shall be deemed to have been given when it is delivered personally or to the recorded address as aforesaid; a notice so mailed shall be deemed to have been received on the fifth day after mailing; a notice so sent by any
means of transmitted or recorded communication shall be deemed to have been given when dispatched or delivered to the appropriate communication company or agency or its representative for dispatch; and a notice so given in accordance with provisions
of the Act and the Electronic Commerce Act governing electronic documents shall be deemed to have been given in accordance with the rules contained in such provisions. The secretary may change or cause to be changed the recorded address of any
shareholder, director, officer, auditor or member of a committee of the board in accordance with any information believed by the secretary to be reliable.
12.2
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Notice to Joint Shareholders
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If two or
more persons are registered as joint holders of any share, any notice shall be addressed to all of such joint holders but notice to one of such persons shall be sufficient notice to all of them.
In computing the
date when notice must be given under any provision requiring a specified number of days notice of any meeting or other event, day means a clear day and a period of days shall be deemed to commence the day following the event that
began the period and shall be deemed to terminate at midnight of the last day of the period except that if the last day of the period falls on a Sunday or holiday, the period shall terminate at midnight of the day next following that is not a Sunday
or holiday.
If any notice given
to a shareholder pursuant to section 12.1 is returned on three consecutive occasions because the shareholder cannot be found, the Corporation shall not be required to give any further notices to such shareholder until the shareholder informs
the Corporation in writing of the shareholders new address.
12.5
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Omissions and Errors
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The accidental
omission to give any notice to any shareholder, director, officer, auditor or member of a committee of the board or the non-receipt of any notice by any such person or any error in any notice not affecting the substance thereof shall not invalidate
any action taken at any meeting held pursuant to such notice or otherwise founded thereon.
C-23
12.6
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Persons Entitled by Death or Operation of Law
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Every person who, by operation of law, transfer, death of a shareholder or any other means whatsoever, shall become entitled to any share, shall be bound by every notice in respect of such share which
shall have been duly given to the shareholder from whom such person derives such persons title to such share prior to such persons name and address being entered on the securities register (whether such notice was given before or after
the happening of the event upon which such person became so entitled) and prior to such person furnishing to the Corporation the proof of authority or evidence of such persons entitlement prescribed by the Act.
Any shareholder (or the
shareholders duly appointed proxyholder), director, officer, auditor or member of a committee of the board may at any time waive the sending of any notice, or waive or abridge the time for any notice, required to be given to the person under
any provision of the Act, the regulations thereunder, the articles, the by-laws or otherwise and such waiver or abridgement shall cure any default in the giving or in the time of such notice, as the case may be. Any such waiver or abridgement shall
be in writing or by electronic means in accordance with the Act and the Electronic Commerce Act except a waiver of notice of a meeting of shareholders or of the board or a committee of the board which may be given in any manner.
SECTION 13
REPEAL
By-Laws No. 6 and 7 of the
Corporation is repealed as of the coming into force of this by-law. Such repeal shall not affect the previous operation of any by-law so repealed or affect the validity of any act done or right, privilege, obligation or liability acquired or
incurred under, or the validity of any contract or agreement made pursuant to, any such by-law prior to its repeal. All officers and persons acting under any by-law so repealed shall continue to act as if appointed under the provisions of this
by-law and all resolutions of the shareholders or the board or a committee of the board with continuing effect passed under any repealed by-law shall continue to be good and valid except to the extent inconsistent with this by-law and until amended
or repealed.
SECTION 14
EFFECTIVE DATE
This by-law shall come
into force when enacted by the directors, subject to the Act.
C-24
ENACTED
by the Board the 18
th
day of March, 2013.
WITNESS
the corporate seal of the Corporation.
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Richard E. Gaetz
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Fayaz D. Suleman
c/s
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Chief Executive Officer Richard E. Gaetz
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Chief Financial Officer and Secretary Fayaz D. Suleman
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CONFIRMED
by the shareholders the day of
, 2013.
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c/s
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Chief Financial Officer and Secretary Fayaz D. Suleman
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C-25
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Computershare
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9
th
Floor, 100 University Avenue
Toronto, Ontario M5J 2Y1
www.computershare.com
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Security Class
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COMMON
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Holder Account Number
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Form of Proxy Annual General and Special Meeting to
be held on May 15, 2013
This Form of Proxy is solicited by and on behalf of Management.
Notes to proxy
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Every holder has the right to appoint some other person or company of their choice, who need not be a shareholder, to attend and act on their behalf at the meeting or any
adjournment or postponement thereof. If you wish to appoint a person or company other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided (see reverse).
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2.
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If the securities are registered in the name of more than one owner (for example, joint ownership, trustees, executors, etc.), then all those registered should sign this proxy.
If you are voting on behalf of a corporation or another individual you may be required to provide documentation evidencing your power to sign this proxy with signing capacity stated.
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3.
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This proxy should be signed in the exact manner as the name appears on the proxy.
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4.
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If this proxy is not dated in the space provided (see reverse), it will be deemed to bear the date on which it is mailed by Management to the holder.
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5.
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The securities represented by this proxy will be voted as directed by the holder, however, if such a direction is not made in respect of any matter, this proxy will be voted
FOR all of the resolutions set forth in this proxy (see reverse).
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6.
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The securities represented by this proxy will be voted or withheld from voting, in accordance with the instructions of the holder, on any ballot that may be called for and, if
the holder has specified a choice with respect to any matter to be acted on, the securities will be voted accordingly.
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7.
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This proxy confers discretionary authority in respect of amendments or variations to matters identified in the Notice of Meeting or other matters that may properly come before
the meeting or any adjournment or postponement thereof.
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8.
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This proxy should be read in conjunction with the accompanying documentation provided by Management.
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Proxies submitted must be received by 4:30 p.m., Toronto time, on May 13, 2013.
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Appointment of Proxyholder
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OR
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I/We being holder(s) of common shares of Vitran Corporation Inc. (the Company) hereby appoint:
William S. Deluce, the Interim President and Chief Executive
Officer of the Company, or failing this person, Richard D. McGraw, a director of the Company
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Print the name of the person or company you are appointing if this person or company is someone other than the Management Nominees listed herein.
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as my/our proxyholder with full power of substitution and to vote in accordance with the following direction (or if no directions
have been given, as the proxyholder sees fit) and all other matters that may properly come before the Annual General and Special Meeting of VITRAN CORPORATION INC. to be held at the offices of the Company, 185 The West Mall, Suite 701, Toronto,
Ontario, M9C 5L5 on May 15, 2013 at 4:30 p.m., Eastern Standard Time, and at any adjournment thereof.
1.
Election of Directors
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For
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Withhold
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For
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Withhold
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01. Richard D. McGraw
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02. William S. Deluce
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03. John R. Gossling
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04. Georges L. Hébert
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¨
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05. David S. McClimon
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¨
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For
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Withhold
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2.
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Appointment of Auditors
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Appointment of KPMG LLP as Auditors of the Company and authorizing the directors of the Company to fix their remuneration.
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For
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Against
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Abstain
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3.
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Advisory Vote on Compensation of Named Executive Officers
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Advisory resolution to approve the compensation of the named executive officers as disclosed in the accompanying Management Information Circular.
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¨
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¨
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For
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Against
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Abstain
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4.
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Amended and Restated Stock Option Plan
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Approval of the Companys amended and restated option plan as described in the accompanying Management Information Circular.
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For
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Against
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Abstain
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5.
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Resolution Approving By-Law No. 8, other than the elimination of the Chairs casting vote and the adoption of advance notice provisions
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Approval of a resolution confirming By-Law No. 8 (other than the elimination of the casting vote in favour of the Chair of the meeting of the board of directors
and the adoption of advance notice provisions with respect to the nomination of directors, which are the subjects of resolutions 6 and 7, respectively) as the new general by-law of the Company, which new general by-law effects changes to the
previous by-laws that are primarily ministerial in nature.
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¨
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¨
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For
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Against
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Abstain
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6.
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Resolution Approving Section 4.16 of By-Law No. 8, which eliminates the Chairs casting vote
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Approval of a resolution confirming Section 4.16 of By-Law No. 8, which effects a change to the previous by-laws of the Company to eliminate the second or
casting vote in favour of the Chair of the meeting of the board of directors of the Company if there is a tie in the votes cast by directors at such meeting.
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¨
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For
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Against
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Abstain
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7.
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Resolution Approving Section 10.5 of By-Law No. 8, which provides for the adoption of advance notice provisions
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Approval of a resolution confirming Section 10.5 of By-Law No. 8, which effects a change to the previous by-laws of the Company to provide for advance notice provisions
with respect to the nomination of directors.
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¨
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¨
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¨
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Each of resolutions 5, 6 and 7 is mutually conditioned upon the approval of all three resolutions as set forth in the accompanying Management Information Circular.
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Authorized Signature(s) - This section must be completed for your instructions to be executed.
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Signature(s)
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Date
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I/We authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given with respect to the Meeting.
If no voting
instructions are indicated above, this Proxy will be voted as recommended by Management.
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Interim Financial Statements
- Mark this box if you would like to receive interim financial statements and related Managements Discussion and Analysis by mail
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Annual Report
- Mark this box if you would like to receive the Annual Report and related Managements Discussion and Analysis by mail.
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If you are not mailing back your proxy, you may register online to receive the above financial report(s) by mail at
www.computershare.com/mailinglist.
Grafico Azioni Vitran (NASDAQ:VTNC)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Vitran (NASDAQ:VTNC)
Storico
Da Giu 2023 a Giu 2024