Sierra Mining Ltd, in the matter of Sierra Mining Ltd [2014] FCA 694
IN THE FEDERAL COURT OF AUSTRALIA | |
IN THE MATTER OF SIERRA MINING LIMITED
ACN 118 060 441
| Plaintiff |
DATE OF ORDER: | |
WHERE MADE: |
THE COURT ORDERS THAT:
1. Pursuant to section 1322(4)(a) of the Corporations Act 2001 (Cth) (Act), to the extent that annexure MCN-04 of the affidavit of Michael Choon Ming Ng sworn on 20 May 2014, as published on 20 May 2014, does not comply with the requirement to be published at least 5 days before the date fixed for the date of the hearing of the application and thereby contravenes rule 3.4 of the Federal Court (Corporations) Rules 2000 (Cth), the period for the time for the publication of the notice is abridged and any such act of the Plaintiff is not invalid by reason of such contravention.
2. Pursuant to section 411(4)(b) of the Act, the scheme of arrangement between the Plaintiff and its members, a copy of which is annexed and marked ‘A’, is approved.
3. Pursuant to section 411(4)(b) of the Act, the scheme of arrangement between the Plaintiff and its optionholders, a copy of which is annexed and marked ‘B’, is approved.
4. Pursuant to section 411(12) of the Act, the plaintiff be exempted from compliance with section 411(11) of the Act, in relation to the schemes of arrangement referred to in Orders 2 and 3 of these orders.
5. These orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
‘A’
Share Scheme of Arrangement
This scheme of arrangement is made this 20th day of May 2014.
This scheme of arrangement is made under section 411 of the Corporations Act 2001 (Cth)
Parties Sierra Mining Limited ACN 118 060 441 of Level 9, BGC Centre, 28 The Esplanade, Perth, Western Australia (Sierra)
and
The holders of fully paid ordinary shares in Sierra (other than Excluded Shareholders) recorded in the Sierra Share Register as at the Record Date (Scheme Shareholders).
1. Definitions and interpretation
The meanings of the terms used in this Share Scheme are set out below.
ASIC means the Australian Securities and Investments Commission.
ASX means ASX Limited (ABN 98 008 624 691).
Business Day means a day in Perth that is not a Saturday, Sunday or public holiday and on which banks, ASX and TSX are open for trading.
CDI means CHESS Depositary Interest, being a unit of beneficial ownership in one New RTG Share or one New RTG Option (as the context requires) registered in the name of CDN.
CDN means CHESS Depositary Nominees Pty Limited ACN 071 346 506.
CHESS means the clearing house electronic sub-register system of share transfers operated by ASX Settlement Pty Ltd.
Corporations Act means the Corporations Act 2001 (Cth).
Court means the Federal Court of Australia, Perth Registry or such other court of competent jurisdiction under the Corporations Act agreed to in writing by RTG and Sierra.
DRS means the Direct Registration System.
Effective means:
(a) when used in relation to the Share Scheme, the coming into effect, under section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) of the Corporations Act in relation to the Share Scheme; and
(b) when used in relation to the Option Scheme, the coming into effect, under section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) of the Corporations Act in relation to the Option Scheme.
Effective Date means, when used in relation to the Share Scheme or Option Scheme, the date on which the Share Scheme or Option Scheme becomes Effective (as the context requires).
Election Date means 5.00pm on the fifth Business Day after the Effective Date.
End date means 31 July 2014.
Excluded Shareholder means any Sierra Shareholder who is a member of the RTG Group or any Sierra Shareholder who holds any Sierra Shares on behalf of, or for the benefit of, any member of the RTG Group.
Government Agency means any foreign or Australian government or governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity, or any minister of the Crown in right of the Commonwealth of Australia or any other federal, state, provincial, local or other government (foreign or Australian).
Implementation Date means the fifth Business Day after the Record Date, or such other day as the parties agree.
Ineligible Foreign Optionholder means a Scheme Optionholder whose address shown in the Sierra Option Register is a place outside Australia and its external territories, New Zealand or Canada unless RTG determines that it is lawful and not unduly onerous or impracticable to issue that Scheme Optionholder with New RTG Shares or New RTG Options in the form of CDIs when the Option Scheme becomes Effective.
Ineligible Foreign Shareholder means a Scheme Shareholder whose address shown in the Sierra Share Register is a place outside Australia and its external territories, New Zealand or Canada unless RTG determines that it is lawful and not unduly onerous or impracticable to issue that Scheme Shareholder with New RTG Shares and New RTG Options in the form of CDIs when the Share Scheme becomes Effective.
New RTG Option means a right to acquire one unissued RTG Share, with an exercise price of C$0.15 and an expiry date 3 years after the date of issue, adjusted for the RTG Share Consolidation in accordance with clause 0, on the terms and conditions set out in section 6.3(a) of the Scheme Booklet and to be issued to Scheme Shareholders under the Share Scheme.
New RTG Share means a share in the capital of RTG to be issued to Scheme Shareholders under the Share Scheme.
Option Scheme means the scheme of arrangement under Part 5.1 of the Corporations Act between Sierra and the Scheme Optionholders under which the Scheme Optionholders will receive the Option Scheme Consideration, subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act and agreed to by RTG and Sierra.
Option Scheme Consideration means two New RTG Shares in the form of CDIs for every one Scheme Option held and two New RTG Options in the form of CDIs for every nine Sierra Options held on the Record Date, adjusted for the RTG Share Consolidation in accordance with clause 4.9 of the Option Scheme and subject to the terms of the Option Scheme.
Record Date means 5.00pm on the third Business Day after the Effective Date.
Registered Address has the meaning given in clause (a)(e).
RTG means RTG Mining Inc. of Level 2, 338 Barker Road, Subiaco, Western Australia.
RTG Group means RTG and each of its subsidiaries and a reference to a 'RTG Group Member' or a 'member of the RTG Group' is to RTG or any of its subsidiaries.
RTG Register means the register of shareholders or optionholders (as applicable) maintained by RTG or its agent.
RTG Registry means Computershare Investor Services Pty Ltd ACN 078 279 277 or Computershare Trust Company of Canada (as applicable) who assist RTG maintain the RTG Register.
RTG Share means a share in the capital of RTG.
RTG Share Consolidation means the consolidation of every ten RTG shares on issue into one consolidated RTG share, conditional on the Share Scheme becoming Effective.
Sale Agent means RTG or a person or persons appointed by RTG to sell the New RTG Shares and New RTG Options that are attributable to:
(a) Ineligible Foreign Shareholders;
(b) Ineligible Foreign Optionholders; and
(c) Small Shareholders or Small Optionholders who do not elect to withdraw from participating in the Sale Facility under the terms of the Share Scheme or Option Scheme.
Sale Facility means the sale facility provided for in clause 4.7.
Sale Facility Election Form means an election form for the purposes of a Small Shareholder making an election under clause (ii).
Sale Facility Participant means:
(a) each Small Shareholder who has not made an election to withdraw from participating in the Sale Facility under clause (ii) of the Share Scheme;
(b) each Small Optionholder who has not made an election to withdraw from participating in the Sale Facility under clause 4.3(b)(ii) of the Option Scheme;
(c) each Ineligible Foreign Shareholder; and
(d) each Ineligible Foreign Optionholder,
in respect of whom New RTG Shares and New RTG Options are issued to the Sale Agent as nominee in trust in the circumstances referred to in clause (a).
Sale Facility Securities has the meaning given in clause (a).
Scheme Booklet as defined in the Scheme Implementation Deed.
Scheme Implementation Deed means the implementation deed dated 24 February 2014 between Sierra and RTG relating to the implementation of the Share Scheme and Option Scheme.
Scheme Optionholder means the holders of Sierra Options recorded on the Sierra Option Register as at the Record Date.
Scheme Share means a Sierra Share held by a Scheme Shareholder at 5.00pm on the Record Date.
Scheme Shareholder means a holder of fully paid ordinary shares in Sierra (other than Excluded Shareholders) recorded in the Sierra Share Register as at the Record Date.
Second Court Date means the first day on which an application made to the Court for an order under section 411(4)(b) of the Corporations Act approving the Share Scheme is heard.
Share Election Form means an election form for the purposes of a Scheme Shareholder making an election under clause (i).
Share Scheme means the scheme of arrangement under Part 5.1 of the Corporations Act between Sierra and the Scheme Shareholders under which Scheme Shareholders will receive the Share Scheme Consideration, subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act and agreed to by RTG and Sierra.
Share Scheme Consideration means three New RTG Shares in the form of CDIs for every one Scheme Share held and one New RTG Option in the form of CDIs for every three Scheme Shares held, adjusted for the RTG Share Consolidation in accordance with clause 0 and subject to the terms of this Share Scheme.
Share Scheme Deed Poll means the deed poll under which RTG covenants in favour of the Scheme Shareholders to perform its obligations under the Share Scheme.
Sierra Option means an ASX listed option to acquire one unissued Sierra Share.
Sierra Option Register means the register of Sierra Optionholders maintained in accordance with the Corporations Act.
Sierra Registry means Computershare Investor Services Pty Ltd ACN 078 279 277 who assist Sierra maintain the Sierra Share Register and Sierra Option Register.
Sierra Share means a fully paid ordinary share in Sierra.
Sierra Share Register means the register of members of Sierra maintained in accordance with the Corporations Act.
Sierra Shareholder means a person who is registered as the holder of a Sierra Share.
Small Optionholder means a Scheme Optionholder who is entitled to receive an aggregate of 9,000 or less New RTG Shares under the Option Scheme and the Share Scheme (if applicable).
Small Shareholder means a Scheme Shareholder who is entitled to receive an aggregate of 9,000 or less New RTG Shares under this Share Scheme and the Option Scheme (if applicable).
Trading Day means a day on which the ASX or TSX is open for trading.
TSX means the Toronto Stock Exchange.
In this Share Scheme:
(a) Headings and bold type are for convenience only and do not affect the interpretation of this Share Scheme.
(b) The singular includes the plural and the plural includes the singular.
(c) Words of any gender include all genders.
(d) Other parts of speech and grammatical forms of a word or phrase defined in this Share Scheme have a corresponding meaning.
(e) An expression importing a person includes any company, partnership, joint venture, association, corporation or other body corporate and any Government Agency as well as an individual.
(f) A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to, this agreement and a reference to this agreement includes any schedule, attachment and exhibit.
(g) A reference to any legislation includes all delegated legislation made under it and amendments, consolidations, replacements or re-enactments of any of them.
(h) A reference to a document (including this Share Scheme) includes all amendments or supplements to, or replacements or novations of, that document.
(i) A reference to ‘$’, ‘A$’ or ‘dollar’ is to Australian currency.
(j) A reference to ‘C$’ is to the lawful currency of Canada.
(k) A reference to any time is a reference to that time in Perth.
(l) A term defined in or for the purposes of the Corporations Act has the same meaning when used in this Share Scheme.
(m) A reference to a party to a document includes that party's successors and permitted assignees.
(n) No provision of this Share Scheme will be construed adversely to a party because that party was responsible for the preparation of this Share Scheme or that provision.
(o) A reference to a body, other than a party to this Share Scheme (including an institute, association or authority), whether statutory or not:
(i) which ceases to exist; or
(ii) whose powers or functions are transferred to another body,
is a reference to the body which replaces it or which substantially succeeds to its powers or functions.
1.3 Interpretation of inclusive expressions
Specifying anything in this Share Scheme after the words 'include' or 'for example' or similar expressions does not limit what else is included.
Where the day on or by which any thing is to be done is not a Business Day, that thing must be done on or by the next Business Day.
(a) Sierra is a public company registered in Western Australia, Australia.
(b) As at 27 February 2014 there are:
(i) 232,854,663 Sierra Shares on issue;
(ii) 31,970,363 Sierra Options on issue; and
(iii) 12,016,667 unlisted Sierra options on issue.
(c) RTG is a company governed under the laws of the British Virgin Islands.
(d) If the Share Scheme becomes Effective:
(i) RTG will provide the Share Scheme Consideration to Scheme Shareholders in accordance with the Share Scheme; and
(ii) all the Scheme Shares, and all the rights and entitlements attaching to them as at the Implementation Date, will be transferred to RTG and Sierra will enter the name of RTG in the Sierra Share Register in respect of the Scheme Shares.
(e) Sierra and RTG have agreed, by executing the Scheme Implementation Deed, to implement the Share Scheme.
(f) RTG has agreed, by executing the Share Scheme Deed Poll, to perform its obligations under this Share Scheme, including the obligation to provide or procure the provision of the Share Scheme Consideration to the Scheme Shareholders.
3. Conditions to the Share Scheme
(a) This Share Scheme is conditional on:
(i) all the conditions in clause 3.1 of the Scheme Implementation Deed (other than the condition precedent in clause 3.1(f) of the Scheme Implementation Deed, relating to Court approval of this Share Scheme) having been satisfied or waived in accordance with the terms of the Scheme Implementation Deed by 8.00am on the Second Court Date;
(ii) approval of this Share Scheme by the Court pursuant to section 411(4)(b) of the Corporations Act; and
(iii) the Scheme Implementation Deed not having been terminated by either party to that deed before 8.00am on the Second Court Date.
(b) The satisfaction of the conditions precedent in clause 5(a) is a condition precedent to the operation of clause 4.
(c) The Share Scheme will lapse and be of no further force or effect if the Effective Date does not occur on or before the End Date or any later date Sierra and RTG agree.
(d) Sierra and RTG will provide to the Court at the Second Court Date a certificate confirming (in respect of matters within their knowledge) whether or not the conditions precedent in the Scheme Implementation Deed and this Share Scheme (other than the condition precedent in clause 3.1(f) of the Scheme Implementation Deed) have been satisfied or waived. The certificate constitutes conclusive evidence that such conditions precedent are satisfied, waived or taken to be waived.
4. Implementation of the Share Scheme
Sierra will lodge with ASIC office copies of the Court orders under section 411(10) of the Corporations Act approving the Share Scheme by 5.00pm on the first Business Day after the day on which the Court approves the Share Scheme.
On the Implementation Date:
(a) subject to the provision of the Share Scheme Consideration in the manner contemplated by clause 0, all of the Scheme Shares, together with all rights and entitlements attaching to them as at the Implementation Date, will be transferred to RTG, without the need for any further act by any Scheme Shareholder, by:
(i) Sierra delivering to RTG duly completed and executed share transfer forms (or a master share transfer form) to transfer all the Scheme Shares to RTG; and
(ii) RTG duly executing the share transfer forms (or master share transfer form), attending to the stamping of the share transfer forms (or master share transfer form) (if required) and delivering the share transfer forms (or master share transfer form) to Sierra for registration; and
(b) immediately after receipt of the share transfer forms (or master share transfer form) in accordance with clause (a)(i), Sierra must enter, or procure the entry of, the name of RTG in the Sierra Share Register in respect of all the Scheme Shares.
(a) Subject to clauses (a), 0, 0 and 0, a Scheme Shareholder will receive the Share Scheme Consideration. A Scheme Shareholder who wishes to receive New RTG Shares and New RTG Options in the form of CDIs listed on ASX does not need to make an election under clause (a).
(b) Subject to the remaining provisions of this clause 0 and clauses 0 and 0:
(i) each Scheme Shareholder will be entitled to elect to receive New RTG Shares and New RTG Options listed on TSX rather than New RTG Shares and New RTG Options in the form of CDIs listed on ASX, by completing the Share Election Form and returning it to the address specified in the Share Election Form so that it is received by the Election Date; and
(ii) each Small Shareholder who does not wish to participate in the Sale Facility and wishes to receive the Share Scheme Consideration, must make an election to withdraw from participating in the Sale Facility by completing the Sale Facility Election Form, indicating whether they wish to receive New RTG Shares and New RTG Options in the form of CDIs listed on ASX or New RTG Shares and New RTG Options listed on TSX, and returning it to the address specified in the Sale Facility Election Form so that it is received by the Election Date.
(c) A Small Shareholder who does not make an election under clause (ii), will have their Share Scheme Consideration dealt with in accordance with clauses 0, 4.7 and 0.
(d) An Ineligible Foreign Shareholder is not entitled to make any election pursuant to clause (a) and any election purportedly made by it will be invalid. Ineligible Foreign Shareholders will have their Share Scheme Consideration dealt with in accordance with clauses 0, 4.7 and 0.
(e) An election under clause (a) must be made in accordance with the terms and conditions on the Share Election Form or Sale Facility Election Form, as the case may be.
(f) A Scheme Shareholder (who is not a Sale Facility Participant) who does not make a valid election pursuant to clause (i) will be deemed to have elected to receive New RTG Shares and New RTG Options in the form of CDIs listed on ASX.
(g) Subject to clause (g), a valid election made or deemed to be made by a Scheme Shareholder under this clause 0 will be deemed to apply in respect of the Scheme Shareholder's entire holding of Scheme Shares, regardless of whether the Scheme Shareholder's holding of Scheme Shares is greater or less than the Scheme Shareholder's holding at the time it made its election.
(h) A Scheme Shareholder (other than an Ineligible Foreign Shareholder and a Small Shareholder) who is noted on the Sierra Share Register as holding one or more parcels of Sierra Shares as trustee or nominee for, or otherwise on account of, another person may not make separate elections under clauses (i) or (ii) in relation to each of those parcels of Sierra Shares.
(i) A Scheme Shareholder may vary or withdraw any election made by it under this clause 0 by the Election Date. To vary such an election, a Scheme Shareholder must lodge a replacement Share Election Form or Sale Facility Election Form, as the case may be, by the Election Date. To withdraw such an election, a Scheme Shareholder must follow the procedure set out in the Scheme Booklet, Share Election Form or Sale Facility Election Form.
(j) Subject to clause (j), an election which is not made or deemed to have been made in accordance with this clause 0 will not be a valid election for the purpose of this Share Scheme and will not be recognised by Sierra or RTG for any purpose.
(k) Sierra may, with the agreement of RTG, settle as it thinks fit any difficulty, matter of interpretation or dispute which may arise in connection with determining the validity of any election, and any such decision will be conclusive and binding on Sierra, RTG and the relevant Scheme Shareholder.
4.4 Provision of Share Scheme Consideration
Subject to clauses (d), 0, 0, 0 and 0, the obligation of RTG to provide the Share Scheme Consideration to Scheme Shareholders will be satisfied by RTG:
(a) in the case of Share Scheme Consideration that is required to be provided to Scheme Shareholders in the form of New RTG Shares and New RTG Options listed on TSX, by RTG procuring that:
(i) the name and address of each such Scheme Shareholder is entered into the RTG Register on the Implementation Date in respect of the New RTG Shares and New RTG Options to which it is entitled under this clause 4; and
(ii) a DRS advice is sent to the Registered Address of each such Scheme Shareholder representing the number of New RTG Shares and New RTG Options issued to the Scheme Shareholder pursuant to this Share Scheme;
(b) in the case of Share Scheme Consideration that is required to be provided to Scheme Shareholders as New RTG Shares and New RTG Options in the form of CDIs listed on ASX, by RTG:
(i) issuing to CDN to be held on trust that number of New RTG Shares and New RTG Options that will enable CDN to issue CDIs as envisaged by clause (b)(iii) on the Implementation Date;
(ii) procuring that the name and address of CDN is entered into the RTG Register in respect of those New RTG Shares and New RTG Options on the Implementation Date and that a DRS advice in the name of CDN representing those New RTG Shares and New RTG Options is sent to CDN;
(iii) procuring that on the Implementation Date, CDN issues to each such Scheme Shareholder the number of CDIs to which it is entitled under this clause 4;
(iv) procuring that on the Implementation Date, the name of each such Scheme Shareholder is entered in the records maintained by CDN as the holder of the CDIs issued to that Scheme Shareholder on the Implementation Date;
(v) in the case of each such Scheme Shareholder who held Scheme Shares on the CHESS subregister - procuring that the CDIs are held on the CHESS subregister on the Implementation Date and sending or procuring the sending of a CDI holding statement to each such Scheme Shareholder which sets out the number of CDIs held on the CHESS subregister by that Scheme Shareholder; and
(vi) in the case of each such Scheme Shareholder who held Scheme Shares on the issuer sponsored subregister - procuring that the CDIs are held on the issuer sponsored subregister on the Implementation Date and sending or procuring the sending of a CDI holding statement to each such Scheme Shareholder which sets out the number of CDIs held on the issuer sponsored subregister by that Scheme Shareholder;
(c) in the case of Share Scheme Consideration that is required to be dealt with as a result of the operation of clauses 0 and 0, by RTG procuring that:
(i) the name and registered address of the Sale Agent, as nominee in trust for the Sale Facility Participants, is entered into the RTG Register on the Implementation Date in respect of the New RTG Shares and New RTG Options required to be issued to it under this clause 4;
(ii) a holding statement or DRS advice (or equivalent document) in the name of the Sale Agent, as nominee in trust for the Sale Facility Participants, is sent to the Sale Agent representing the number of New RTG Shares and New RTG Options so issued to it;
(iii) the Sale Agent, as nominee in trust for the Sale Facility Participants, sells those New RTG Shares and New RTG Options on behalf of the Sale Facility Participants, and pays the net proceeds to the RTG Registry, in trust for the Sale Facility Participants, in accordance with clause 4.7; and
(iv) the RTG Registry pays the net proceeds on to the Sale Facility Participants in accordance with clause 4.7; and
(d) in the case of joint holders of Scheme Shares:
(i) the New RTG Shares, New RTG Options or CDIs to be issued under this Share Scheme will be issued to and registered in the names of the joint holders;
(ii) any cheque required to be sent under this Share Scheme will be made payable to the joint holders and sent to the holder whose name appears first in the Sierra Share Register; and
(iii) any other document required to be sent under this Share Scheme, will be forwarded to the holder whose name appears first in the Sierra Share Register as at the Record Date.
4.5 Ineligible Foreign Shareholders
RTG will be under no obligation to issue any New RTG Shares, New RTG Options or CDIs under this Share Scheme to any Ineligible Foreign Shareholders and must instead procure that the number of New RTG Shares and New RTG Options that would have been issued to an Ineligible Foreign Shareholder are dealt with on behalf of the Ineligible Foreign Shareholder in accordance with clauses 4.7 and 0.
Unless a Small Shareholder makes a valid election under clause (ii), a Small Shareholder will be deemed to participate in the Sale Facility. RTG will be under no obligation to issue any New RTG Shares, New RTG Options or CDIs under this Share Scheme to any Small Shareholder and must instead procure that the number of New RTG Shares and New RTG Options that would have been issued to a Small Shareholder are dealt with on behalf of the Small Shareholder in accordance with clauses 4.7 and 0.
(a) New RTG Shares and New RTG Options that:
(i) but for an election by a Small Shareholder under clause (ii), are required to be dealt with under this clause by virtue of clause 0 (rounded to the nearest whole number in accordance with clause 0); or
(ii) are required to be dealt with under this clause by virtue of clause 0 (rounded to the nearest whole number in accordance with clause 0),
must be issued by RTG to the Sale Agent, as nominee in trust for the Sale Facility Participants, on the Implementation Date (rounded, if necessary to the nearest whole number in accordance with clause 0) (together with the New RTG Shares and New RTG Options to be issued by RTG to the Sale Agent, as nominee in trust for the Sale Facility Participants, on the Implementation Date under clause 4.7(a) of the Option Scheme, the Sale Facility Securities) and subsequently sold in accordance with the remaining provisions of this clause 4.7.
(b) The Sale Facility will only be available in respect of New RTG Shares and New RTG Options issued to the Sale Agent, as nominee in trust for the Sale Facility Participants, in the circumstances referred to in clause (a). Any purported election by a Scheme Shareholder to participate in the Sale Facility in any other circumstances will be invalid and not recognised for any purpose.
(c) RTG must procure that the Sale Agent:
(i) within 8 weeks after the date of the Implementation Date, sells the Sale Facility Securities on the ASX and/or TSX in the ordinary course of trade and otherwise in such manner, including selling the Sale Facility Securities in one or more lots, at such price or prices and on such other terms as the Sale Agent determines in good faith;
(ii) deducts from the C$ or A$ gross proceeds of such sale of all Sale Facility Securities any taxes and costs (including brokerage of up to 1%) applicable to those Sale Facility Securities;
(iii) within 5 Trading Days after the last sale of the Sale Facility Securities is completed under (i) above, arranges for the conversion of the net proceeds of all such sales in C$ referred to in (ii) above from C$ to A$; and
(iv) within one Trading Day after conversion of those net proceeds to A$ under (iii) above, pays that A$ amount (after having deducted any applicable currency conversion costs) to the RTG Registry, in trust for the Sale Facility Participants, by telegraphic transfer of clear funds to an A$ account nominated by the RTG Registry.
(d) Within 7 Business Days after the date on which the Sale Agent remits the A$ amount referred to in clause (a)(c)(iv) to the RTG Registry, RTG will cause the RTG Registry to pay to each Sale Facility Participant their pro-rata share of the A$ amount referred to in clause (a)(c)(iv), being the proportion which the number of Sale Facility Securities attributable to them bears the total number of Sale Facility Securities. The amount payable to each Sale Facility Participant under this clause will, if necessary, be rounded down to the nearest whole cent, and any part of the A$ amount referred to in clause (a)(c)(iv) remaining after such rounding will be paid by the RTG Registry to a charity nominated by RTG.
(e) Sale Facility Participants agree that the amount referred to in clause (a)(d) may be paid by the Sale Agent doing any of the following at the Sale Agent's election:
(i) sending a cheque or money order for that amount (after having deducted any applicable taxes) by pre-paid post (or pre-paid airmail if the address is outside Australia) to the Sale Facility Participant’s address as shown in the Sierra Share Register as at the Record Date (the Registered Address);
(ii) depositing that amount into an account with any bank notified to Sierra (or any agent of Sierra) by an appropriate written authority from the Sale Facility Participant, whether in A$ or after having arranged for the conversion of that amount into a currency other than A$ in accordance with the written authority from the Sale Facility Participant, and after having deducted any applicable taxes or currency conversion costs; or
(iii) in the event that a Sale Facility Participant does not have a Registered Address or the RTG Registry believes a Sale Facility Participant is not known at its Registered Address, and no account has been notified in accordance with clause (a)(e)(i) or a deposit into such an account is rejected or refunded, the RTG Registry must hold the amount on trust until the Sale Facility Participant claims the amount (in which case the RTG Registry may pay that amount in accordance with (i) or (ii) above) or the amount is dealt with in accordance with unclaimed money legislation. Any benefit accruing from the amount while it is held on trust will be to the benefit of Sierra. An amount credited to the account is to be treated as having been paid to the Sale Facility Participant. Sierra must procure that records are maintained of the amounts paid, the people who are entitled to the amounts and any transfers of the amounts.
(f) Payment by the RTG Registry to a Sale Facility Participant in accordance with this clause 4.7 satisfies in full the Sale Facility Participant's right to Share Scheme Consideration.
(g) None of Sierra, RTG, the Sale Agent or the RTG Registry gives any assurance as to the price that will be achieved for the sale of the Sale Facility Securities by the Sale Agent. The sale of the Sale Facility Securities under this clause 4.7 will be at the risk of the Sale Facility Participant.
Where the calculation of the number of New RTG Shares, New RTG Options or CDIs to be issued to a particular Scheme Shareholder would result in the issue of a fraction of a New RTG Share, New RTG Option or CDI, the fractional entitlement will be rounded up or down to the nearest whole number, with entitlements to half of a New RTG Share, New RTG Option or CDI rounded down.
4.9 Adjustment for RTG Share Consolidation
Notwithstanding any other clause of this Share Scheme:
(a) If the RTG Share Consolidation becomes effective prior to the issue of the Share Scheme Consideration, the Share Scheme Consideration will be adjusted to:
(i) three New RTG Shares (on a consolidated basis) for every ten Scheme Shares held; and
(ii) one New RTG Option (on a consolidated basis) for every 30 Scheme Share held.
(b) The RTG Share Consolidation will not otherwise affect the operation of the Share Scheme (including, without limitation, clauses 0, 0 and 0).
(c) The New RTG Options issued on a consolidated basis will have an exercise price of C$1.50.
5. Issues and trading
(a) The New RTG Shares, New RTG Options and RTG Shares issued upon the exercise of a New RTG Option will be duly and validly issued in accordance with the laws of the British Virgin Islands and RTG's articles of association and memorandum of association.
(b) The RTG Shares issued upon exercise of a New RTG Option will be issued fully paid and will rank equally in all respects with all other RTG Shares then issued and outstanding.
(c) The Scheme Shareholders agree to be bound by RTG's articles of association and memorandum of association.
(d) Each Scheme Shareholder shall be deemed to have irrevocably appointed RTG and each of its directors and officers jointly and severally) as its attorneys for the purpose of executing any form of application, letter of transmittal or other instruments or documents required for the New RTG Shares, New RTG Options and CDIs.
(a) To establish the identity of the Scheme Shareholders, dealings in Sierra Shares will only be recognised if:
(i) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the Sierra Share Register as the holder of the relevant Sierra Shares by the Record Date; and
(ii) in all other cases, registrable transmission applications or transfers in respect of those dealings are received on or before the Record Date at the place where the Sierra Share Register is kept.
(b) Sierra must register registrable transmission applications or transfers of the kind referred to in clause (a)(ii) by the Record Date (provided that, for the avoidance of doubt, nothing in this clause (b) requires Sierra to register a transfer that would result in a Sierra Shareholder holding a parcel of Sierra Shares that is less than a 'marketable parcel' (as defined in the Market Rules of ASX)).
(c) If the Share Scheme becomes Effective, a holder of Scheme Shares (and any person claiming through that holder) must not dispose of or purport or agree to dispose of any Scheme Shares or any interest in them after the Record Date.
(d) Sierra will not accept for registration or recognise for any purpose any transmission application or transfer in respect of Sierra Shares received after the Record Date.
(e) For the purpose of determining entitlements to the Share Scheme Consideration, Sierra must maintain the Sierra Share Register in accordance with the provisions of this clause (c) until the Share Scheme Consideration has been paid to the Scheme Shareholders. The Sierra Share Register in this form will solely determine entitlements to the Share Scheme Consideration.
(f) All statements of holding for Sierra Shares will cease to have effect from the Record Date as documents of title in respect of those shares and, as from that date, each entry current at that date on the Sierra Share Register will cease to have effect except as evidence of entitlement to the Share Scheme Consideration in respect of the Sierra Shares relating to that entry.
(g) As soon as possible on or after the Record Date, and in any event within one Business Day after the Record Date, Sierra will ensure that details of the names, Registered Addresses and holdings of Sierra Shares for each Scheme Shareholder and details of all Share Election Forms and Sale Facility Election Forms validly submitted and not revoked are available to RTG in the form RTG reasonably requires.
(a) Sierra will apply to ASX to suspend trading on ASX in Sierra Shares from the close of trading on the day Sierra notifies ASX that the Court has approved the Share Scheme under section 411(4)(b) of the Corporations Act.
(b) On a date after the Implementation Date to be determined by RTG, Sierra will apply:
(i) for termination of the official quotation of Sierra Shares on ASX; and
(ii) to have itself removed from the official list of ASX.
8.1 Consent to amendments to the Share Scheme
If the Court proposes to approve the Share Scheme subject to any alterations or conditions, Sierra may by its counsel consent on behalf of all persons concerned to those alterations or conditions to which RTG has consented.
8.2 Scheme Shareholders' agreements and warranties
Each Scheme Shareholder:
(a) agrees to transfer to RTG their Sierra Shares in accordance with the Share Scheme and agrees to the variation, cancellation or modification of the rights attached to their Sierra Shares constituted by or resulting from the Share Scheme;
(b) acknowledges that the Share Scheme binds all Scheme Shareholders; and
(c) is taken to have warranted to Sierra and RTG, and appointed and authorised Sierra as its attorney and agent to warrant to RTG that all their Sierra Shares (including any rights and entitlements attaching to those shares) which are transferred under the Share Scheme will, at the date of transfer, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that they have full power and capacity to transfer their Sierra Shares to RTG together with any rights attaching to those shares. Sierra undertakes that it will provide such warranty to RTG as agent and attorney of each Scheme Shareholder.
8.3 Title to and rights in Scheme Shares
(a) To the extent permitted by law, the Sierra Shares transferred under the Share Scheme will be transferred free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise.
(b) RTG will be beneficially entitled to the Sierra Shares transferred to it under the Share Scheme pending registration by Sierra of RTG in the Sierra Share Register as the holder of the Sierra Shares.
Upon the Share Scheme becoming Effective, and until Sierra registers RTG as the holder of all Scheme Shares in the Sierra Share Register, each Scheme Shareholder:
(a) is deemed to have appointed RTG as attorney and agent (and directed RTG in each such capacity) to appoint any director, officer, secretary or agent nominated by RTG as its sole proxy and, where applicable or appropriate, corporate representative to attend shareholders' meetings, exercise the votes attaching to the Scheme Shares registered in their name and sign any shareholders' resolution, and no Scheme Shareholder may itself attend or vote at any of those meetings or sign any resolutions, whether in person, by proxy or by corporate representative (other than pursuant to this clause 0); and
(b) must take all other actions in the capacity of a registered holder of Scheme Shares as RTG reasonably directs.
(a) Scheme Shareholders will be deemed to have authorised Sierra, and all its directors, officers and secretaries, to do and execute all acts, matters, things and documents on the part of each Scheme Shareholder necessary to implement the Share Scheme, including (without limitation) executing, as agent and attorney of each Scheme Shareholder, a share transfer form (or a master share transfer form) in relation to Scheme Shares as contemplated by clause (b)(a).
(b) Each Scheme Shareholder, without the need for any further act, irrevocably appoints Sierra and all of its directors, officers and secretaries jointly and severally) as its attorney and agent for the purpose of executing any document necessary to give effect to the Share Scheme including without limitation, a proper instrument of transfer of its Scheme Shares for the purposes of section 1071B of the Corporations Act which may be a master transfer of all the Scheme Shares.
RTG will pay all stamp duty payable in connection with the transfer of Sierra Shares to RTG.
The Scheme Shareholders consent to Sierra doing all things necessary or incidental to the implementation of the Share Scheme.
If a notice, transfer, transmission application, direction or other communication referred to in the Share Scheme is sent by post to Sierra, it will not be taken to be received in the ordinary course of post or on a date and time other than the date and time (if any) on which it is actually received at Sierra registered office or at the office of the Sierra Registry.
(a) The Share Scheme is governed by the laws in force in Western Australia.
(b) Each party irrevocably submits to the non-exclusive jurisdiction of courts exercising jurisdiction in Western Australia and courts of appeal from them in respect of any proceedings arising out of or in connection with this Share Scheme. Each party irrevocably waives any objection to the venue of any legal process in these courts on the basis that the process has been brought in an inconvenient forum.
Sierra must do all things and execute all documents necessary to give full effect to this Share Scheme and the transactions contemplated by it.
‘B’
Option Scheme of Arrangement
This scheme of arrangement is made this 20th day of May 2014.
This scheme of arrangement is made under section 411 of the Corporations Act 2001 (Cth).
Parties Sierra Mining Limited ACN 118 060 441 of Level 9, BGC Centre, 28 The Esplanade, Perth, Western Australia (Sierra)
and
The holders of Sierra Options recorded in the Sierra Option Register as at the Record Date (each a Scheme Optionholder)
1. Definitions and interpretation
1.1 Definitions
The meanings of the terms used in this Option Scheme are set out below.
ASIC means the Australian Securities and Investments Commission.
ASX means ASX Limited (ABN 98 008 624 691).
Business Day means a day in Perth that is not a Saturday, Sunday or public holiday and on which banks, ASX and TSX are open for trading.
CDI means CHESS Depositary Interest, being a unit of beneficial ownership in one New RTG Share or one New RTG Option (as the context requires) registered in the name of CDN.
CDN means CHESS Depositary Nominees Pty Limited ACN 071 346 506.
CHESS means the clearing house electronic sub-register system of share transfers operated by ASX Settlement Pty Ltd.
Corporations Act means the Corporations Act 2001 (Cth).
Court means the Federal Court of Australia, Perth Registry or such other court of competent jurisdiction under the Corporations Act agreed to in writing by RTG and Sierra.
DRS means the Director Registration System.
Effective means:
(a) when used in relation to the Share Scheme, the coming into effect, under section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) of the Corporations Act in relation to the Share Scheme; and
(b) when used in relation to the Option Scheme, the coming into effect, under section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) of the Corporations Act in relation to the Option Scheme.
Effective Date means, when used in relation to the Share Scheme or Option Scheme, the date on which the Share Scheme or Option Scheme becomes Effective (as the context requires).
Election Date means 5.00pm on the fifth Business Day after the Effective Date.
End date means 31 July 2014.
Government Agency means any foreign or Australian government or governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity, or any minister of the Crown in right of the Commonwealth of Australia or any other federal, state, provincial, local or other government (foreign or Australian).
Implementation Date means the fifth Business Day after the Record Date, or such other day as the parties agree.
Ineligible Foreign Optionholder means a Scheme Optionholder whose address shown in the Sierra Option Register is a place outside Australia and its external territories, New Zealand or Canada unless RTG determines that it is lawful and not unduly onerous or impracticable to issue that Scheme Optionholder with New RTG Shares or New RTG Options in the form of CDIs when the Option Scheme becomes Effective
Ineligible Foreign Shareholder means a Scheme Shareholder whose address shown in the Sierra Share Register is a place outside Australia and its external territories, New Zealand or Canada unless RTG determines that it is lawful and not unduly onerous or impracticable to issue that Scheme Shareholder with New RTG Shares and New RTG Options in the form of CDIs when the Share Scheme becomes Effective.
New RTG Option means a right to acquire one unissued RTG Share with an exercise price of C$0.15 and an expiry date 3 years after the date of issue, adjusted for the RTG Share Consolidation in accordance with clause 4.9, on the terms and conditions set out in section 6.3(a) of the Scheme Booklet and to be issued to Scheme Optionholders under the Option Scheme.
New RTG Share means a share in the capital of RTG to be issued to Scheme Optionholders under the Option Scheme.
Option Scheme means the scheme of arrangement under Part 5.1 of the Corporations Act between Sierra and the Scheme Optionholders under which the Scheme Optionholders will receive the Option Scheme Consideration, subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act and agreed to by RTG and Sierra.
Option Scheme Consideration means two New RTG Shares in the form of CDIs for every one Scheme Option held and two New RTG Options in the form of CDIs for every nine Scheme Options held on the Record Date, adjusted for the RTG Share Consolidation in accordance with clause 4.9 and subject to the terms of this Option Scheme.
Option Scheme Deed Poll means the deed poll under which RTG covenants in favour of the Scheme Optionholders to perform its obligations under the Option Scheme.
Option Scheme Meeting means the meeting of Sierra Optionholders ordered by the Court to be convened under section 411(1) of the Corporations Act.
Record Date means 5.00pm on the third Business Day after the Effective Date.
Registered Address has the meaning given in clause 4.7(e)(i).
RTG means RTG Mining Inc. of Level 2, 338 Barker Road, Subiaco, Western Australia.
RTG Group means RTG and each of its subsidiaries and a reference to a ‘RTG Group Member’ or a ‘member of the RTG Group’ is to RTG or any of its subsidiaries.
RTG Register means the register of shareholders or optionholders (as applicable) maintained by RTG or its agent.
RTG Registry means Computershare Investor Services Pty Ltd ACN 078 279 277 or Computershare Trust Company of Canada (as applicable) who assist RTG maintain the RTG Register.
RTG Share means a share in the capital of RTG.
RTG Share Consolidation means the consolidation of every ten RTG shares on issue into one consolidated RTG share, conditional on the Share Scheme becoming effective.
Sale Agent means RTG or a person or persons appointed by RTG to sell the New RTG Shares and New RTG Options that are attributable to:
(a) Ineligible Foreign Shareholders;
(b) Ineligible Foreign Optionholders; and
(c) Small Shareholders or Small Optionholders who do not elect to withdraw from participating in the Sale Facility under the terms of the Share Scheme or Option Scheme.
Sale Facility means the sale facility provided for in clause 4.7.
Sale Facility Election Form means an election form for the purposes of a Small Optionholder making an election under clause 4.3(b)(ii).
Sale Facility Participant means:
(a) each Small Shareholder who has not made an election to withdraw form participating in the Sale Facility under clause 4.3(b)(ii) of the Share Scheme;
(b) each Small Optionholder who has not made an election to withdraw from participating in the Sale Facility under clause 4.3(b)(ii) of the Option Scheme;
(c) each Ineligible Foreign Shareholder; and
(d) each Ineligible Foreign Optionholder,
in respect of whom New RTG Shares and New RTG Options are issued to the Sale Agent as nominee in trust in the circumstances referred to in clause 4.7(a).
Sale Facility Securities has the meaning given in clause 4.7(a).
Scheme Booklet as defined in the Scheme Implementation Deed.
Scheme Implementation Deed means the implementation deed dated 24 February 2014 between Sierra and RTG relating to the implementation of the Share Scheme and Option Scheme.
Scheme Option means a Sierra Option held by a Scheme Optionholder at 5.00pm on the Record Date.
Scheme Optionholder means the holders of Sierra Options recorded on the Sierra Option Register as at the Record Date.
Scheme Shareholder means a holder of fully paid ordinary shares in Sierra (other than any member of the RTG Group or any person who holds any Sierra Shares on behalf of, or for the benefit of, any member of the RTG Group) recorded in the Sierra Share Register as at the Record Date.
Second Court Date means the first day on which an application made to the Court for an order under section 411(4)(b) of the Corporations Act approving the Option Scheme is heard.
Share Election Form means an election form for the purposes of a Scheme Optionholder making an election under clause 4.3(b)(i).
Share Scheme means the scheme of arrangement under Part 5.1 of the Corporations Act between Sierra and the Scheme Shareholders under which Scheme Shareholders will receive the Share Scheme Consideration, subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act and agreed to by RTG and Sierra.
Share Scheme Consideration means three New RTG Shares in the form of CDIs for every one Scheme Share held and one New RTG Option in the form of CDIs for every three Scheme Shares held, adjusted for the RTG Share Consolidation in accordance with clause 4.9 of the Share Scheme and subject to the terms of the Share Scheme.
Sierra Option means an ASX listed option to acquire one unissued Sierra Share.
Sierra Optionholder means a holder of a Sierra Option.
Sierra Option Register means the register of Sierra Optionholders maintained in accordance with the Corporations Act.
Sierra Registry means Computershare Investor Services Pty Ltd ACN 078 279 277 who assist Sierra maintain the Sierra Share Register and Sierra Option Register.
Sierra Share means a fully paid ordinary share in Sierra.
Sierra Share Register means the register of members of Sierra maintained in accordance with the Corporations Act.
Small Optionholder means a Scheme Optionholder who is entitled to receive an aggregate of 9,000 or less New RTG Shares under this Option Scheme and the Share Scheme (if applicable).
Small Shareholder means a Scheme Shareholder who is entitled to receive an aggregate of 9,000 or less New RTG Shares under the Share Scheme and Option Scheme (if applicable).
Trading Day means a day on which the ASX or TSX is open for trading.
TSX means the Toronto Stock Exchange.
1.2 Interpretation
In this Option Scheme:
(a) Headings and bold type are for convenience only and do not affect the interpretation of this Option Scheme.
(b) The singular includes the plural and the plural includes the singular.
(c) Words of any gender include all genders.
(d) Other parts of speech and grammatical forms of a word or phrase defined in this Option Scheme have a corresponding meaning.
(e) An expression importing a person includes any company, partnership, joint venture, association, corporation or other body corporate and any Government Agency as well as an individual.
(f) A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to, this agreement and a reference to this agreement includes any schedule, attachment and exhibit.
(g) A reference to any legislation includes all delegated legislation made under it and amendments, consolidations, replacements or re-enactments of any of them.
(h) A reference to a document (including this Option Scheme) includes all amendments or supplements to, or replacements or novations of, that document.
(i) A reference to ‘$’, ‘A$’ or ‘dollar’ is to Australian currency.
(j) A reference to ‘C$’ is to the lawful currency of Canada.
(k) A reference to any time is a reference to that time in Perth.
(l) A term defined in or for the purposes of the Corporations Act has the same meaning when used in this Option Scheme.
(m) A reference to a party to a document includes that party’s successors and permitted assignees.
(n) No provision of this Option Scheme will be construed adversely to a party because that party was responsible for the preparation of this Option Scheme or that provision.
(o) A reference to a body, other than a party to this Option Scheme (including an institute, association or authority), whether statutory or not:
(i) which ceases to exist; or
(ii) whose powers or functions are transferred to another body,
is a reference to the body which replaces it or which substantially succeeds to its powers or functions.
1.3 Interpretation of inclusive expressions
Specifying anything in this Option Scheme after the words ‘include’ or ‘for example’ or similar expressions does not limit what else is included.
1.4 Business Day
Where the day on or by which any thing is to be done is not a Business Day, that thing must be done on or by the next Business Day.
2. Preliminary matters
(a) Sierra is a public company registered in Western Australia, Australia.
(b) As at 27 February 2014 there are
(i) 232,854,663 Sierra Shares on issue;
(ii) 31,970,363 Sierra Options on issue; and
(iii) 12,016,667 unlisted Sierra options on issue.
(c) RTG is a company governed under the laws of the British Virgin Islands.
(d) If the Option Scheme becomes Effective:
(i) RTG will provide the Option Scheme Consideration to Scheme Optionholders in accordance with the Option Scheme; and
(ii) all the Scheme Options, and all the rights, entitlements and obligations attaching to them as at the Implementation Date, will be transferred to RTG and Sierra will enter the name of RTG in the Sierra Option Register in respect of the Scheme Options.
(e) Sierra and RTG have agreed, by executing the Scheme Implementation Deed, to implement the Option Scheme.
(f) RTG has agreed, by executing the Option Scheme Deed Poll, to perform its obligations under this Option Scheme, including the obligation to provide or procure the provision of the Option Scheme Consideration to the Scheme Optionholders.
3. Conditions to the Option Scheme
(a) This Option Scheme is conditional on:
(i) all the conditions in clause 3.2 of the Scheme Implementation Deed (other than clauses 3.2(a) and 3.2(f) of the Scheme Implementation Deed) having been satisfied or waived in accordance with the terms of the Scheme Implementation Deed by 8.00am on the Second Court Date;
(ii) the Share Scheme becoming effective under section 411(10) of the Corporations Act, of the Court order made under section 411(4)(b) of the Corporations Act in relation to the Share Scheme;
(iii) approval of this Option Scheme by the Court pursuant to section 411(4)(b) of the Corporations Act; and
(iv) the Scheme Implementation Deed not having been terminated by either party to that deed before 8.00am on the Second Court Date.
(b) The satisfaction of the conditions precedent in clause 3(a) is a condition precedent to the operation of clause 4.
(c) The Option Scheme will lapse and be of no further force or effect if the Effective Date does not occur on or before the End Date or any later date Sierra and RTG agree.
(d) Sierra and RTG will provide to the Court at the Second Court Date a certificate confirming (in respect of matters within their knowledge) whether or not the conditions precedent in the Scheme Implementation Deed and this Option Scheme (other than the condition precedent in clauses 3.2(a) and 3.2 (f)of the Scheme Implementation Deed) have been satisfied or waived. The certificate constitutes conclusive evidence that such conditions precedent are satisfied, waived or taken to be waived.
4. Implementation of the Option Scheme
4.1 Lodgement of Court orders
Sierra will lodge with ASIC office copies of the Court orders under section 411(10) of the Corporations Act approving the Option Scheme by 5.00pm on the first Business Day after the day on which the Court approves the Option Scheme.
4.2 Transfer of Scheme Options
On the Implementation Date:
(a) subject to the provision of the Option Scheme Consideration in the manner contemplated by clause 4.4, all of the Scheme Options, together with all rights and entitlements attaching to them as at the Implementation Date, will be transferred to RTG, without the need for any further act by any Scheme Optionholders, by:
(i) Sierra delivering to RTG duly completed and executed option transfer forms (or a master option transfer form) to transfer all the Scheme Options to RTG; and
(ii) RTG duly executing the option transfer forms (or master option transfer form), attending to the stamping of the option transfer forms (or master option transfer form) (if required) and delivering the option transfer forms (or master option transfer form) to Sierra for registration; and
(b) immediately after receipt of the option transfer forms (or master option transfer form) in accordance with clause 4.2(a)(ii), Sierra must enter, or procure the entry of, the name of RTG in the Sierra Option Register in respect of all the Scheme Options.
4.3 Election Procedure
(a) Subject to clauses 4.3(b), 4.5, 4.6 and 4.8, a Scheme Optionholder will receive the Option Scheme Consideration. A Scheme Optionholder who wishes to receive New RTG Shares and New RTG Options in the form of CDIs listed on ASX does not need to make an election under clause 4.3(b).
(b) Subject to the remaining provisions of this clause 4.3 and clauses 4.5 and 4.6:
(i) each Scheme Optionholder will be entitled to elect to receive New RTG Shares and New RTG Options listed on TSX rather than New RTG Shares and New RTG Options in the form of CDIs listed on ASX, by completing the Share Election Form and returning it to the address specified in the Share Election Form so that it is received by the Election Date; and
(ii) each Small Optionholder who does not wish to participate in the Sale Facility and wishes to receive the Share Scheme Consideration, must make an election to withdraw from participating in the Sale Facility by completing the Sale Facility Election Form, indicating whether they wish to receive New RTG Shares and New RTG Options in the form of CDIs listed on ASX or New RTG Shares and New RTG Options listed on TSX, and returning it to the address specific in the Sale Facility Election Form so that it is received by the Election Date.
(c) A Small Optionholder who does not make an election under clause 4.3(b)(ii), will have their Option Scheme Consideration dealt with in accordance with clauses 4.6, 4.7 and 4.8.
(d) An Ineligible Foreign Optionholder is not entitled to make any election pursuant to clause 4.3(b) and any election purportedly made by it will be invalid. Ineligible Foreign Optionholders will have their Option Scheme Consideration dealt with in accordance with clauses 4.5, 4.7 and 4.8.
(e) An election under clause 4.3(b) must be made in accordance with the terms and conditions on the Share Election Form or Sale Facility Election Form, as the case may be.
(f) A Scheme Optionholder (who is not a Sale Facility Participant) who does not make a valid election pursuant to clause 4.3(b)(i) will be deemed to have elected to receive New RTG Shares and New RTG Options in the form of CDIs listed on ASX.
(g) Subject to clause 4.3(h), a valid election made or deemed to be made by a Scheme Optionholder under this clause 4.3 will be deemed to apply in respect of the Scheme Optionholder’s entire holding of Scheme Options, regardless of whether the Scheme Optionholder’s holding of Scheme Options is greater or less than the Scheme Optionholder’s holding at the time it made its election.
(h) A Scheme Optionholder (other than an Ineligible Foreign Optionholder and a Small Optionholder) who is noted on the Sierra Option Register as holding one or more parcels of Sierra Options as trustee or nominee for, or otherwise on account of, another person may not make separate elections under clauses 4.3(b)(i) or 4.3(b)(ii) in relation to each of those parcels of Sierra Shares.
(i) A Scheme Optionholder may vary or withdraw any election made by it under this clause 4.3 by the Election Date. To vary such an election, a Scheme Optionholder must lodge a replacement Share Election Form or Sale Facility Election Form, as the case may be, by the Election Date. To withdraw such an election, a Scheme Optionholder must follow the procedure set out in the Scheme Booklet, Share Election Form or Sale Facility Election Form.
(j) Subject to clause 4.3(k), an election which is not made or deemed to have been made in accordance with this clause 4.3 will not be a valid election for the purpose of this Option Scheme and will not be recognised by Sierra or RTG for any purpose.
(k) Sierra may, with the agreement of RTG, settle as it thinks fit any difficulty, matter of interpretation or dispute which may arise in connection with determining the validity of any election, and any such decision will be conclusive and binding on Sierra, RTG and the relevant Scheme Optionholder.
4.4 Provision of Option Scheme Consideration
Subject to clauses 4.4(d), 4.5, 4.6, 4.8 and 4.9, the obligation of RTG to provide the Option Scheme Consideration to Scheme Optionholders will be satisfied by RTG:
(a) in the case of Option Scheme Consideration that is required to be provided to Scheme Optionholders in the form of New RTG Shares and New RTG Options listed on TSX, by RTG procuring that:
(i) the name and address of each such Scheme Optionholder is entered into the RTG Register on the Implementation Date in respect of the New RTG Shares and New RTG Options to which it is entitled under this clause 4; and
(ii) a DRS advice is sent to the Registered Address of each such Scheme Optionholder representing the number of New RTG Shares issued to the Scheme Optionholder pursuant to this Option Scheme;
(b) in the case of Option Scheme Consideration that is required to be provided to Scheme Optionholders as New RTG Shares and New RTG Options in the form of CDIs listed on ASX, by RTG:
(i) issuing to CDN to be held on trust that number of New RTG Shares that will enable CDN to issue CDIs as envisaged by clause 4.4(b)(iii) on the Implementation Date;
(ii) procuring that the name and address of CDN is entered into the RTG Register in respect of those New RTG Shares and New RTG Options on the Implementation Date and that a DRS advice in the name of CDN representing those New RTG Shares and New RTG Options is sent to CDN;
(iii) procuring that on the Implementation Date, CDN issues to each such Scheme Optionholder the number of CDIs to which it is entitled under this clause 4;
(iv) procuring that on the Implementation Date, the name of each such Scheme Optionholder is entered in the records maintained by CDN as the holder of the CDIs issued to that Scheme Optionholder on the Implementation Date;
(v) in the case of each such Scheme Optionholder who held Scheme Options on the CHESS subregister - procuring that the CDIs are held on the CHESS subregister on the Implementation Date and sending or procuring the sending of a CDI holding statement to each such Scheme Optionholder which sets out the number of CDIs held on the CHESS subregister by that Scheme Optionholder; and
(vi) in the case of each such Scheme Optionholder who held Scheme Options on the issuer sponsored subregister - procuring that the CDIs are held on the issuer sponsored subregister on the Implementation Date and sending or procuring the sending of a CDI holding statement to each such Scheme Optionholder which sets out the number of CDIs held on the issuer sponsored subregister by that Scheme Optionholder;
(c) in the case of Option Scheme Consideration that is required to be dealt with as a result of the operation of clauses 4.5 and 4.6, by RTG procuring that:
(i) the name and registered address of the Sale Agent, as nominee in trust for the Sale Facility Participants, is entered into the RTG Register on the Implementation Date in respect of the New RTG Shares and New RTG Options required to be issued to it under this clause 4;
(ii) a holding statement or DRS advice (or equivalent document) in the name of the Sale Agent, as nominee in trust for the Sale Facility Participants, is sent to the Sale Agent representing the number of New RTG Shares and New RTG Options so issued to it;
(iii) the Sale Agent, as nominee in trust for the Sale Facility Participants, sells those New RTG Shares and New RTG Options on behalf of the Sale Facility Participants, and pays the net proceeds to the RTG Registry, in trust for the Sale Facility Participants, in accordance with clause 4.7; and
(iv) the RTG Registry pays the net proceeds on to the Sale Facility Participants in accordance with clause 4.7; and
(d) in the case of joint holders of Scheme Options:
(i) the New RTG Shares, New RTG Options or CDIs to be issued under this Option Scheme will be issued to and registered in the names of the joint holders;
(ii) any cheque required to be sent under this Option Scheme will be made payable to the joint holders and sent to the holder whose name appears first in the Sierra Option Register; and
(iii) any other document required to be sent under this Option Scheme, will be forwarded to the holder whose name appears first in the Sierra Option Register as at the Record Date.
4.5 Ineligible Foreign Optionholders
RTG will be under no obligation to issue any New RTG Shares, New RTG Options or CDIs under this Option Scheme to any Ineligible Foreign Optionholder and must instead procure that the number of New RTG Shares and New RTG Options that would have been issued to an Ineligible Foreign Optionholder are dealt with on behalf of the Ineligible Foreign Optionholder in accordance with clauses 4.7 and 4.8.
4.6 Small Optionholders
Unless a Small Optionholder makes a valid election under clause 4.3(b)(ii), a Small Optionholder will be deemed to participate in the Sale Facility. RTG will be under no obligation to issue any New RTG Shares, New RTG Options or CDIs under this Option Scheme to any Small Optionholder and must instead procure that the number of New RTG Shares and New RTG Options that would have been issued to a Small Optionholder are dealt with on behalf of the Small Optionholder in accordance with clauses 4.7 and 4.8.
4.7 Sale Facility
(a) New RTG Shares and New RTG Options that:
(i) but for an election by a Small Optionholder under clause 4.3(b)(ii), are required to be dealt with under this clause by virtue of clause 4.6 (rounded to the nearest whole number in accordance with clause 4.8); or
(ii) are required to be dealt with under this clause by virtue of clause 4.5 (rounded to the nearest whole number in accordance with clause 4.8),
must be issued by RTG to the Sale Agent, as nominee in trust for the Sale Facility Participants, on the Implementation Date (rounded, if necessary, to the nearest whole number in accordance with clause 4.8) (together with the New RTG Shares and New RTG Options to be issued by RTG to the Sale Agent, as nominee in trust for the Sale Facility Participants, on the Implementation Date under clause 4.7(a) of the Share Scheme, the Sale Facility Securities) and subsequently sold in accordance with the remaining provisions of this clause 4.7.
The Sale Facility will only be available in respect of New RTG Shares and New RTG Options issued to the Sale Agent, as nominee in trust for the Sale Facility Participants, in the circumstances referred to in clause 4.7(a). Any purported election by a Scheme Optionholder to participate in the Sale Facility in any other circumstances will be invalid and not recognised for any purpose.
(b) RTG must procure that the Sale Agent:
(i) within 8 weeks after the date of the Implementation Date, sells the Sale Facility Securities on the ASX and/or TSX in the ordinary course of trade and otherwise in such manner, including selling the Sale Facility Securities in one or more lots, at such price or prices and on such other terms as the Sale Agent determines in good faith;
(ii) deducts from the C$ or A$ gross proceeds of such sale of all Sale Facility Securities any taxes and costs (including brokerage of up to 1%) applicable to those Sale Facility Securities;
(iii) within 5 Trading Days after the last sale of the Sale Facility Securities is completed under (i) above, arranges for the conversion of the net proceeds of all such sales in C$ referred to in (ii) above from C$ to A$; and
(iv) within one Trading Day after conversion of those net proceeds to A$ under (iii) above, pays that A$ amount (after having deducted any applicable currency conversion costs) to the RTG Registry, in trust for the Sale Facility Participants, by telegraphic transfer of clear funds to an A$ account nominated by the RTG Registry.
(c) Within 7 Business Days after the date on which the Sale Agent remits the A$ amount referred to in clause 4.7(c)(iv) to the RTG Registry, RTG will cause the RTG Registry to pay to each Sale Facility Participant their pro-rata share of the A$ amount referred to in clause 4.7(c)(iv), being the proportion which the number of Sale Facility Securities attributable to them bears the total number of Sale Facility Securities. The amount payable to each Sale Facility Participant under this clause will, if necessary, be rounded down to the nearest whole cent, and any part of the A$ amount referred to in clause 4.7(c)(iv) remaining after such rounding will be paid by the RTG Registry to a charity nominated by RTG.
(d) Sale Facility Participants agree that the amount referred to in clause 4.7(d) may be paid by the Sale Agent doing any of the following at the Sale Agent's election:
(i) sending a cheque or money order for that amount (after having deducted any applicable taxes) by pre-paid post (or pre-paid airmail if the address is outside Australia) to the Sale Facility Participant’s address as shown in the Sierra Option Register as at the Record Date (the Registered Address);
(ii) depositing that amount into an account with any bank notified to Sierra (or any agent of Sierra) by an appropriate written authority from the Sale Facility Participant, whether in A$ or after having arranged for the conversion of that amount into a currency other than A$ in accordance with the written authority from the Sale Facility Participant, and after having deducted any applicable taxes or currency conversion costs; or
(iii) in the event that a Sale Facility Participant does not have a Registered Address or the RTG Registry believes a Sale Facility Participant is not known at its Registered Address, and no account has been notified in accordance with clause 4.7(e)(ii) or a deposit into such an account is rejected or refunded, the RTG Registry must hold the amount on trust until the Sale Facility Participant claims the amount (in which case the RTG Registry may pay that amount in accordance with (i) or (ii) above) or the amount is dealt with in accordance with unclaimed money legislation. Any benefit accruing from the amount while it is held on trust will be to the benefit of Sierra. An amount credited to the account is to be treated as having been paid to the Sale Facility Participant. Sierra must procure that records are maintained of the amounts paid, the people who are entitled to the amounts and any transfers of the amounts.
(e) Payment by the RTG Registry to a Sale Facility Participant in accordance with this clause 4.7 satisfies in full the Sale Facility Participant’s right to Option Scheme Consideration.
(f) None of Sierra, RTG, the Sale Agent or the RTG Registry gives any assurance as to the price that will be achieved for the sale of the Sale Facility Securities by the Sale Agent. The sale of the Sale Facility Securities under this clause 4.7 will be at the risk of the Sale Facility Participant.
4.8 Fractional entitlements
Where the calculation of the number of New RTG Shares, New RTG Options or CDIs to be issued to a particular Scheme Optionholder would result in the issue of a fraction of a New RTG Share, New RTG Option or CDI, the fractional entitlement will be rounded up or down to the nearest whole number, with entitlements to half of a New RTG Share, New RTG Option or CDI rounded down.
4.9 Adjustment for RTG Share Consolidation
(a) If the RTG Share Consolidation becomes effective prior to the issue of the Option Scheme Consideration, the Option Scheme Consideration will be adjusted to:
(i) two New RTG Shares (on a consolidated basis) for every ten Scheme Options held; and
(ii) two New RTG Options (on a consolidated basis) for every 90 Scheme Options held.
(b) The RTG Share Consolidation will not otherwise affect the operation of the Option Scheme (including, without limitation, clauses 4.5, 4.6 and 4.8).
(c) The New RTG Options issued on a consolidated basis will have an exercise price of C$1.50.
5. Issue and trading
(a) The New RTG Shares, New RTG Options and RTG Shares issued upon the exercise of a New RTG Option will be duly and validly issued in accordance with the laws of the British Virgin Islands and RTG's articles of association and memorandum of association.
(b) The RTG Shares issued upon exercise of a New RTG Options, will be issued fully paid and will rank equally in all respects with all other RTG Shares then issued and outstanding.
(c) The Scheme Optionholders agree to be bound by RTG’s articles of association and memorandum of association.
(d) Each Scheme Optionholder shall be deemed to have irrevocably appointed RTG and each of its directors and officers (jointly and severally) as its attorneys for the purpose of executing any form of application, letter of transmittal or other instruments or documents required for the New RTG Shares, New RTG Options and CDIs.
6. Dealings in Sierra Options
6.1 Exercise prior to Share Scheme Record Date
For the purpose of establishing who are Scheme Optionholders, Sierra will not accept as valid, nor recognise for any purpose, any notice of exercise of a Sierra Option registered in the name of a Sierra Optionholder:
(a) received after 5.00pm on the day which is the Business Day immediately before the Share Scheme Record Date; or
(b) which is not in accordance with the terms of grant of the Sierra Options.
6.2 Registration as holder of ordinary shares
Sierra will issue, and register the Sierra Optionholder as the holder of, a Sierra Share in respect of the exercise of a Sierra Option registered in the name of the Sierra Optionholder permitted by clause 6.1 and in accordance with the terms of grant of the Sierra Options, and the Sierra Optionholder acknowledges and agrees that, if the Share Scheme becomes Effective, the Sierra Optionholder will be bound by the terms of the Share Scheme in respect of each such Sierra Share and, accordingly, each such Sierra Share will be transferred to RTG in accordance with the Share Scheme on the Implementation Date.
6.3 Transfer of Sierra Options
(a) To establish the identity of the Scheme Optionholders, dealings in Sierra Options will only be recognised if:
(i) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the Sierra Option Register as the holder of the relevant Sierra Options by the Record Date; and
(ii) in all other cases, registrable transmission applications or transfers in respect of those dealings are received on or before the Record Date at the place where the Sierra Option Register is kept.
(b) Sierra must register registrable transmission applications or transfers of the kind referred to in clause 6(a)(ii) by the Record Date (provided that, for the avoidance of doubt, nothing in this clause 6(b) requires Sierra to register a transfer that would result in a Sierra Optionholder holding a parcel of Sierra Option that is less than a 'marketable parcel' (as defined in the Market Rules of ASX)).
(c) If the Option Scheme becomes Effective, a holder of Scheme Options (and any person claiming through that holder) must not dispose of or purport or agree to dispose of any Scheme Option or any interest in them after the Record Date.
(d) Sierra will not accept for registration or recognise for any purpose any transmission application or transfer in respect of Sierra Options received after the Record Date.
6.4 Register
(a) For the purpose of determining entitlements to the Option Scheme Consideration, Sierra must maintain the Sierra Option Register in accordance with the provisions of this clause 6 until the Option Scheme Consideration has been paid to the Scheme Optionholders. The Sierra Option Register in this form will solely determine entitlements to the Option Scheme Consideration.
(b) All statements of holding for Sierra Options will cease to have effect from the Record Date as documents of title in respect of those options and, as from that date, each entry current at that date on the Sierra Option Register will cease to have effect except as evidence of entitlement to the Option Scheme Consideration in respect of the Sierra Options relating to that entry.
(c) As soon as possible on or after the Record Date, and in any event within one Business Day after the Record Date, Sierra will ensure that details of the names, Registered Addresses and holdings of Sierra Options for each Scheme Optionholder and details of all Share Election Forms and Sale Facility Election Forms validly submitted and not revoked are available to RTG in the form RTG reasonably requires.
7. Quotation of Sierra Options
(a) Sierra will apply to ASX to suspend trading on ASX in Sierra Options from the close of trading on the day Sierra notifies ASX that the Court has approved the Option Scheme under section 411(4)(b) of the Corporations Act.
(b) On a date after the Implementation Date to be determined by RTG, Sierra will apply:
(i) for termination of the official quotation of Sierra Options on ASX; and
(ii) to have itself removed from the official list of ASX.
8. General provisions
8.1 Consent to amendments to the Option Scheme
If the Court proposes to approve the Option Scheme subject to any alterations or conditions, Sierra may by its counsel consent on behalf of all persons concerned to those alterations or conditions to which RTG has consented.
8.2 Scheme Optionholders’ agreements and warranties
Each Scheme Optionholder:
(a) agrees to transfer to RTG their Sierra Options in accordance with the Option Scheme and agrees to the transfer to RTG of the rights attached to their Sierra Options constituted by or resulting from the Option Scheme;
(b) acknowledges that the Option Scheme binds all Scheme Optionholders; and
(c) is taken to have warranted to Sierra and RTG, and appointed and authorised Sierra as its attorney and agent to warrant to RTG, that all their Sierra Options (including any rights and entitlements attaching to those options) which are transferred to RTG under the Option Scheme will, at the date of transfer, be free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and, subject only to the relevant option terms, restrictions on transfer of any kind, and that, subject only to the relevant option terms, they have full power and capacity to transfer their Sierra Options to RTG together with any rights attaching to those options. Sierra undertakes that it will provide such warranty to RTG as agent and attorney of each Scheme Optionholder
8.3 Title to and rights in Scheme Options
(a) To the extent permitted by law, the Sierra Options transferred under the Option Scheme will be transferred free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise.
(b) RTG will be beneficially entitled to the Sierra Options transferred to it under the Option Scheme pending registration by Sierra of RTG in the Sierra Option Register as the holder of the Sierra Options.
8.4 Appointment of sole proxy
Upon the Option Scheme becoming Effective, and until Sierra registers RTG as the holder of all Scheme Options in the Sierra Option Register, each Scheme Optionholder must take all other actions in the capacity of a registered holder of Scheme Options as RTG reasonably directs.
8.5 Authority given to Sierra
(a) Scheme Optionholders will be deemed to have authorised Sierra, and all its directors, officers and secretaries, to do and execute all acts, matters, things and documents on the part of each Scheme Optionholder necessary to implement the Option Scheme, including without limitation executing, as agent and attorney of each Scheme Optionholder, a option transfer form (or master option transfer form) in relation to Scheme Options as contemplated by clause 8.4(b).
(b) Each Scheme Optionholder, without the need for any further act, irrevocably appoints Sierra and all of its directors, officers and secretaries (jointly and severally) as its attorney and agent for the purpose of executing any document necessary to give effect to the Option Scheme, including without limitation, a proper instrument of transfer of its Scheme Options for the purposes of section 1071B of the Corporations Act which may be a master transfer of all the Scheme Options.
9. General
9.1 Stamp duty
RTG will pay all stamp duty payable in connection with the transfer of Sierra Options to RTG.
9.2 Consent
The Scheme Optionholders consent to Sierra doing all things necessary or incidental to the implementation of the Option Scheme.
9.3 Notices
If a notice, transfer, transmission application, direction or other communication referred to in the Option Scheme is sent by post to Sierra, it will not be taken to be received in the ordinary course of post or on a date and time other than the date and time (if any) on which it is actually received at Sierra registered office or at the office of the Sierra Registry.
9.4 Governing law
(a) The Option Scheme is governed by the laws in force in Western Australia.
(b) Each party irrevocably submits to the non-exclusive jurisdiction of courts exercising jurisdiction in Western Australia and courts of appeal from them in respect of any proceedings arising out of or in connection with this Option Scheme. Each party irrevocably waives any objection to the venue of any legal process in these courts on the basis that the process has been brought in an inconvenient forum.
9.5 Further action
Sierra must do all things and execute all documents necessary to give full effect to this Option Scheme and the transactions contemplated by it.
WESTERN AUSTRALIA DISTRICT REGISTRY | |
GENERAL DIVISION | WAD 66 of 2014 |
IN THE MATTER OF SIERRA MINING LIMITED
ACN 118 060 441
SIERRA MINING LIMITED Plaintiff |
JUDGE: | GILMOUR J |
DATE: | 2 July 2014 |
PLACE: | PERTH |
REASONS FOR JUDGMENT
1 I made orders in this matter on 22 May 2014, at which time I indicated that I would deliver written reasons in due course. These are my reasons.
2 The Court on 9 April 2014 (the first court hearing) granted approval to Sierra Mining Limited (ACN 118 060 441) (Sierra) for the convening of:
(a) a members scheme meeting (Shareholders Meeting) to consider a proposed members scheme of arrangement (Shareholders Scheme); and
(b) an optionholders scheme meeting (Optionholders Meeting) to consider a proposed creditors scheme of arrangement (Optionholders Scheme),
(collectively, the Schemes).
3 The Schemes, if implemented, will result in Sierra becoming a wholly owned subsidiary of RTG Mining Inc (RTG). RTG is a company incorporated under the laws of the British Virgin Islands.
4 The meetings have occurred and Sierra, pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth), now applies for orders approving the Schemes.
5 The application is supported by the following affidavits:
Affidavits that were before the Court at the first court hearing on 9 April 2014
(a) the affidavit of Matthew Gordon Syme sworn 19 March 2014 (the First Syme Affidavit);
(b) the affidavit of Justine Alexandria Magee sworn 21 March 2014;
(c) the affidavit of Michael Phillip Bowen sworn 19 March 2014;
(d) the affidavit of Scott Douglas Gibson sworn 8 April 2014; and
(e) the affidavit of Scott Douglas Gibson sworn 8 April 2014.
Affidavits filed since the first court hearing on 9 April 2014
(a) the affidavit of Michael Choon Ming Ng sworn 20 May 2014;
(b) the affidavit of Michael Phillip Bowen sworn 20 May;
(c) the affidavit of Vanessa McAuley sworn 20 May;
(d) the affidavit of Jonathan Sek Han Foo sworn 20 May 2014;
(e) the affidavit of Marvi Adolfina Douglas sworn 21 May 2014;
(f) the affidavit of Michael Choon Ming Ng sworn 22 May 2014; and
(g) the affidavit of Matthew Gordon Syme sworn 22 May 2014.
6 Sierra applies for orders:
(a) approving the members scheme of arrangement between Sierra and each registered holder (Shareholders) of ordinary shares in Sierra (Sierra Shares) pursuant to s 411(4)(b) of the Corporations Act;
(b) approving the creditors scheme of arrangement between Sierra and holders of listed options (Optionholders) in Sierra (Sierra Options) pursuant to s 411(4)(b) of the Corporations Act; and
(c) exempting the plaintiff, pursuant to s 411(12) of the Corporations Act, from compliance with s 411(11) of the Corporations Act.
7 Sierra also seeks orders pursuant to s 1322(4)(a) of the Corporations Act that to the extent that the publication of the notice of hearing to approve the scheme of arrangement between Sierra and its Optionholders in The Australian newspaper on 20 May 2014 does not comply with the requirement to be published at least 5 days before the second hearing of Sierra's application, the period of time for the publication of the notice is abridged and any act of the plaintiff is not invalid by reason of such contravention.
Key features of the Schemes
8 The First Syme Affidavit broadly, at [17]-[30], sets out the background to, reasons for, the structure of and benefits of the Schemes. It also attaches certain of the key documents relevant to the Schemes. These are:
(a) a Certificate of Registration issued by the Australian Securities and Investments Commission (ASIC) in respect of Sierra dated 27 January 2006;
(b) an ASIC company extract pertaining to Sierra dated 10 March 2014;
(c) the constitution of Sierra dated 30 November 2006;
(d) a letter from Computershare Investor Services Pty Ltd dated 28 February 2014;
(e) an ASX market release dated 24 February 2014; and
(f) the Scheme Booklet, which annexes:
(i) the report by BDO Corporate Finance (WA) Pty Ltd (Independent Expert's Report);
(ii) Solicitor's Report on Tenements by Cruz Marcelo & Tenefrancia;
(iii) the Scheme Implementation Deed dated 24 February 2014;
(iv) the Share Scheme of Arrangement;
(v) the Share Scheme Deed Poll to be executed by RTG;
(vi) the Option Scheme of Arrangement;
(vii) the Option Scheme Deed Poll to be executed by RTG;
(viii) the Notice of Share Scheme Meeting and Explanatory Memorandum;
(ix) the Notice of Option Scheme Meeting and Explanatory Memorandum; and
(x) RTG's audited financial statements for the year ended 31 December 2013.
9 Since the 9 April 2014 orders were made the following has occurred.
Dispatch of the Scheme Booklet
10 On 16 April 2014 iPrintplus assembled packages of the materials in relation to the Schemes and posted them to Shareholders and Optionholders. The materials sent to each Shareholder and Optionholder were:
(a) a copy of the Scheme Booklet; and
(b) personalised proxy forms for the Shareholders Meeting and Optionholders Meeting.
Scheme Booklet lodged with ASIC
11 On 10 April 2014, the solicitors for Sierra lodged a copy of the Scheme Booklet with ASIC for registration under s 412(6).
Advertisement regarding the scheme meetings and the second court hearing
12 Advertisements of the Shareholders Meeting and the hearing before this Court on 22 May 2014 to consider and, if thought fit, approve the Shareholders Scheme were published in The West Australian and The Australian newspapers on 17 May 2014.
13 The advertisement of the Optionholders Meeting and the hearing before this Court on 22 May 2014 to consider and, if thought fit, approve the Optionholders Scheme was published in The West Australian newspaper on 17 May 2014.
14 Due to an error at The Australian, the advertisement of this hearing and the Optionholders Meeting was not published in The Australian newspaper on 17 May 2014.
15 The advertisement was published in The Australian newspaper on 20 May 2014.
Scheme meetings and approval of schemes
16 The Shareholders Meeting and Optionholders Meeting were held on 16 May 2014.
17 At the Shareholders Meeting, 110 Shareholders who between them hold 135,391,217 Sierra Shares were present in person or by proxy.
18 Article 5.12 of the constitution of Sierra, which forms Annexure MGS - 03 of the First Syme Affidavit, provides that on a poll at a meeting of members every member present by person or proxy has one vote for every fully paid share held.
19 The resolution to approve the Shareholders Scheme was conducted by poll.
20 Of the 110 Shareholders present in person or by proxy at the Shareholders Meeting, 100% of Shareholders voted in favour of the Shareholders Scheme and 0% Shareholders voted against the Shareholders Scheme. The votes in favour of the Shareholders Scheme therefore represented 100% of the votes cast on the resolution.
21 At the Optionholders Meeting, 25 Optionholders who between them hold 18,435,257 Sierra Options were present in person or by proxy.
22 The resolution to approve the Optionholders Scheme was conducted by poll.
23 Of the 25 Optionholders present in person or by proxy at the Optionholders Meeting, 100% of Optionholders voted in favour of the Optionholders Scheme and 0% of Optionholders voted against the Optionholders Scheme. The votes in favour of the Optionholders Scheme therefore represented 100% of the votes cast on the resolution.
24 Accordingly, the tests under s 411(4)(a) are satisfied in respect of each of the Schemes.
Conditions to Schemes
25 All of the conditions precedent to the Shareholders Scheme and Optionholders Scheme have been satisfied or waived.
No notice of intention to appear
26 Despite the advertisements referred to above, as at the date of this hearing neither Sierra nor the solicitors for Sierra have received any notice of appearance or other communication from any party intending to appear in this proceeding.
27 I am satisfied that all the Shareholders and Optionholders have received sufficient notification of this hearing and have been adequately informed of their right to be heard at, and to oppose the application for approval of, the Schemes.
ASIC - No objection to the Scheme
28 A letter from ASIC confirming that it has no objection to the Schemes was received on 21 May 2014. ASIC did not appear at the second court hearing.
Legal principles
29 The considerations generally applicable to such an application are well established.
30 At the approval stage, the Court considers matters that do not precisely correlate to those considered at the first meeting approval stage. The matters to which the Court is required to have regard at the first meeting approval stage are identified in Re Applications of NRMA Ltd [No 1] (2000) 156 FLR 349 at [13]-[26].
31 At the approval stage, the Court must be satisfied that:
(a) the meetings convened by the company were convened and held in accordance with the orders made at the first court hearing;
(b) with every notice of such meeting, the explanatory statement and Scheme Booklet were sent;
(c) the resolutions were passed at the meetings by the majorities required by s 411(4)(a) of the Corporations Act; and
(d) Sierra has otherwise complied with those orders.
32 In addition to the matters noted above, the Court has, in exercising its power of approval, a residual discretion to withhold approval unless satisfied that the Schemes are "at least so far fair and reasonable, as that an intelligent and honest man, who is a member of that class, and acting alone in respect of his interest as such a member, might approve of it": In re Alabama, New Orleans, Texas and Pacific Junction Railway Company [1891] 1 Ch 213 at 247; or, as is often put, that there has been no oppression and that the arrangement is one capable of being accepted: see, e.g., Central Pacific Minerals NL [2002] FCA 239 at [13].
33 This residual discretion is a long standing and recognised power: see In re Alabama, New Orleans, Texas and Pacific Junction Railway Company at 243-244. It has more recently been confirmed in Re Application of NRMA Ltd [No 2] (2000) 156 FLR 412 at [21]-[24]; Re Kalgoorlie Lake View Pty Ltd (2005) 56 ACSR 144 at [12].
Application to this matter
34 The formal requirements of Part 5.1 have been satisfied.
35 The Schemes have been overwhelmingly approved by Shareholders and Optionholders.
36 No Shareholder or Optionholder has provided any indication to Sierra that it proposes to oppose the orders sought.
37 ASIC has been kept fully and thoroughly informed at all stages of the process.
38 There is no basis for the Court to exercise its residual power to withhold approval of the Schemes.
39 The evidence discloses that Shareholders and Optionholders will receive substantial benefits from the Schemes.
40 The independent expert has concluded that the Schemes are in the best interests of Shareholders and Optionholders.
41 Although the independent expert concluded that the consideration for the Schemes was not fair but reasonable, the basis of this conclusion was expressed clearly and openly in the Independent Expert’s Report.
42 The independent expert's opinion was (broadly) that the:
(a) Shareholders Scheme (being the offer of 3 RTG shares for every 1 Sierra Share together with 1 RTG option for every 3 Sierra Shares) is "in the best interests of [Sierra] Shareholders", and “not fair but reasonable”; and
(b) Optionholders Scheme (being the offer of 2 RTG shares for every 1 Sierra Option together with 2 RTG options for every 9 Sierra Options) is "in the best interests of [Sierra] Optionholders", and "not fair but reasonable".
43 The Court at the first court hearing was referred to the decision of Dodds-Streeton J in Zenyth Therapeutics Ltd v Smith (2006) 60 ACSR 548, in particular, at [109]-[114]:
[109] In Re Rancoo Ltd [(1995) 17 ACSR 206] Hayne J referred to ASIC Policy Statement 75 and expressed reservations about the attribution of different meanings to the concepts "fair" and "reasonable". He acknowledged the difficulty in accepting that an offer which was not fair could still be reasonable.
[110] Hayne J stated:
Policy Statement 75 expresses the views of the commission about the expression "fair and reasonable". It does so in a way that seeks to attribute different meanings to the words "fair and reasonable". The policy statement does not treat the expression "fair and reasonable" as a single portmanteau statement conveying a meaning to the listener but, rather, seeks to take each element of the expression and attribute a different meaning to it. Thus, the policy statement expressly contemplates the circumstance that an expert might conclude that a particular offer is not fair but nevertheless is reasonable.
I must say that, for myself, I find the proposition that an offer may be “not fair” and yet still “reasonable” one which presents some difficulty. Perhaps that view stems from the impression I have that the expression “fair and reasonable” is but a single expression intended to convey a single overall meaning which is not to be identified by reference to particular constituent elements.
[111] Hayne J observed that "the net effect of the two transactions is thus, an effect which leads to the overall benefit of the remaining shareholders of Rancoo by a considerable sum, and it is on that basis that the expert concluded that the selective capital reduction is reasonable".
[112] Despite his reservations, Hayne J confirmed the reduction of capital, which was unopposed. He stated that "Thus the reduction that has been proposed is a step that is to be taken, as a part of that overall transaction".
[113] There is great force in Hayne J's reservations about an offer which, although not fair, is nevertheless reasonable. Although Re Rancoo Ltd constitutes an example of a reduction of capital which was recognised to be such, persuasive applications of the distinction are likely to be rare.
[114] Courts should adopt a cautious approach to the approval of any scheme which the independent expert considers "not fair", particularly when it may involve expropriation at an undervalue. In my opinion, a scheme involving an offer of an undervalue, which is not fair, should generally not be considered reasonable unless it is accompanied by some positive compensatory feature. The fact that the security holders are unable to exact fair, or better, consideration through any avenue alternative to the scheme would not necessarily render an unfair scheme reasonable in the relevant sense.
(Footnotes omitted).
44 The independent expert expressed more precisely the basis of the opinion that the Schemes though not fair were reasonable and therefore in the best interests of Shareholders and Optionholders.
45 It was disclosed at the first court hearing that ASIC was content with the Independent Expert's Report and the form of the Scheme Booklet.
46 On this basis, and having regard to the vote at the Shareholders Meeting and Optionholders Meeting, there is no suggestion that the Schemes are not being proposed in good faith or that they are commercially immoral in any respect. The reasons underlying the Schemes have been clearly stated and put to all Shareholders and Optionholders.
47 All conditions to the Schemes will, on the making of the orders sought in the minute of proposed orders, either have been satisfied or waived, or, in the case of “negative conditions”, will not have occurred.
The Sierra unlisted options
48 All the holders of Sierra unlisted options have entered into transfer deeds under which their Sierra unlisted options will be transferred to RTG upon the Schemes becoming effective.
Exemption from s 411(11) of the Corporations Act
49 Section 411(11) requires, subject to s 411(12), that a copy of the Court's order approving the Schemes be annexed to every copy of the relevant company's constitution issued after the order is made. Section 411(12) allows the Court to exempt a body from compliance with this provision or to determine the period during which it shall comply.
50 Orders under s 411(12) have been made in a number of cases, including Re Hudson Conway Ltd (2000) 33 ACSR 657 at [83]; Re Amcor Ltd (2000) 34 ACSR 199 at [40]; Re Glencore Nickel Pty Ltd (2003) 44 ACSR 210 at [93]; Re Anaconda Nickel Holdings Pty Ltd (2003) 44 ACSR 229 at [65].
51 I have concluded that exemption from compliance with s 411(11) is appropriate given that current Shareholders and Optionholders have been fully informed of the Schemes. Once the Schemes become binding on Shareholders and Optionholders, any purported transfers of Sierra Shares and Sierra Options will not be accepted for registration, other than a transfer to RTG in accordance to the Schemes. Therefore new shareholders and optionholders (apart from RTG) will not be entered into Sierra's register of members or optionholders once the Schemes become binding. Upon full implementation of the Schemes, Sierra will become a wholly owned subsidiary of RTG. Further, the Court’s order approving the Schemes would effect no alteration to the constitution of the plaintiff.
Orders
52 For all these reasons I will make the orders substantially in accordance with the minute of proposed orders lodged by the plaintiff.
I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. |
Associate:
