Federal Court of Australia
Redflex Holdings Limited, in the matter of Redflex Holdings Limited [2021] FCA 417
ORDERS
Plaintiff | ||
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act), the plaintiff convene and hold a meeting (Scheme Meeting) of the holders of ordinary shares in the plaintiff (Scheme Shareholders):
(a) to consider, and, if thought fit, to approve (with or without modification) the scheme of arrangement (Scheme) proposed to be made between the plaintiff and its shareholders, the terms of which are as set out in Annexure A to these orders;
(b) to be held as a wholly virtual meeting by means of audio-visual technology, with no physical assembly; and
(c) to be held on 10 May 2021 commencing at 9.00 am (AEST).
2. The scheme booklet, substantially in the form of annexure "DM-4" to the affidavit of David Morris sworn on 6 April 2021, which comprises the explanatory statement as required by s 412(1)(a) of the Act, be and is hereby approved.
3. The Scheme Meeting be convened by sending on or before 9 April 2021:
(a) in the case of Scheme Shareholders who have elected to receive shareholder communications electronically by way of email (Email Shareholders), an email substantially in the form contained at Annexure B to these orders which contains links to:
(i) a document substantially in the form of the scheme booklet (which contains, among other things, the Notice of Scheme Meeting at Appendix F to the scheme booklet); and
(ii) a personalised proxy form for the Scheme Meeting substantially in the form contained at Annexure "DM-5" to the affidavit of David Morris sworn on 6 April 2021 (Proxy Form);
(b) in the case of Scheme Shareholders who are not Email Shareholders and whose registered address is in Australia, the following documents by pre-paid post addressed to the relevant addresses recorded in the plaintiff’s register:
(i) a document substantially in the form of the scheme booklet (which contains, among other things, the Notice of Scheme Meeting at Appendix F to the scheme booklet);
(ii) a personalised Proxy Form; and
(iii) a reply-paid envelope for the return of the Proxy Form; and
(c) in the case of Scheme Shareholders, other than Email Shareholders, whose registered address is outside Australia, the following documents by airmail or international courier service addressed to the relevant addresses recorded in the plaintiff’s register:
(i) a document substantially in the form of the scheme booklet (which contains, among other things, the Notice of Scheme Meeting at Appendix F to the scheme booklet);
(ii) a personalised Proxy Form; and
(iii) a return envelope for the return of the Proxy Form.
4. Subject to these Orders, the Scheme Meeting be convened, held, and conducted in accordance with the provisions of Pt 2G.2 of the Act (save for any applicable replaceable rule) that apply to a meeting of the plaintiff’s members.
5. Voting on the resolution to approve the Scheme is to be conducted by way of a poll.
6. A Proxy Form in respect of the Scheme Meeting will be valid and effective if, and only if, it is completed and delivered in accordance with its terms by 9.00 am (AEST) on 8 May 2021.
7. Mr Terence Winters, or failing him, Mr John Worthington, be Chair of the Scheme Meeting.
8. The Chair of the Scheme Meeting shall have the power to adjourn the meeting to such time, date and place as he or she considers appropriate.
9. Compliance with r 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules) is dispensed with.
10. Compliance with r 3.4 and Form 6 of the Rules is dispensed with.
11. The plaintiff publish in The Australian newspaper once on or before 3 May 2021 an advertisement substantially in the form of Annexure C to these orders.
12. The further hearing of the originating process is adjourned to a hearing before Yates J on 14 May 2021 at 10:15 am (AEST).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
CONTENTS | |
1. DEFINITIONS AND INTERPRETATION | ii |
2. RECITALS | v |
3. CONDITIONS | vi |
4. SCHEME BECOMING EFFECTIVE | vii |
5. IMPLEMENTATION OF SCHEME | vii |
6. SCHEME CONSIDERATION | viii |
7. DEALINGS IN SCHEME SHARES | x |
8. SUSPENSION AND TERMINATION OF QUOTATION OF SHARES | xi |
9. GENERAL PROVISIONS | xi |
10. GOVERNING LAW AND JURISDICTION | xiv |
11. SERVING DOCUMENTS | xiv |
SCHEME OF ARRANGEMENT
pursuant to section 411 of the Corporations Act 2001 (Cth)
PARTIES
Redflex Holdings Limited (ACN 069 306 216) of 31 Market Street, South Melbourne, VIC 3205, Australia (Redflex)
The registered holders of fully paid ordinary shares in the capital of Redflex as at the Record Date (Scheme Participants)
OPERATIVE PROVISIONS
1. DEFINITIONS AND INTERPRETATION
(a) Definitions
The following definitions apply in this document, unless the context requires otherwise:
ASIC means the Australian Securities and Investments Commission.
ASX means ASX Limited (ABN 98 008 624 691) or the securities market which it operates, as the context requires.
ASX Settlement means ASX Settlement Pty Limited (ABN 49 008 504 532) as the holder of a licence to operate a clearing and settlement facility.
ASX Settlement Operating Rules means the operating rules of the clearing and settlement facility operated by ASX Settlement for the time being and from time to time, as modified by any express written exemption or waiver given by ASX or ASX Settlement.
Business Day means a day on which banks are open for general banking business in Mesa, Arizona, USA and Melbourne, Victoria, Australia (not being a Saturday, Sunday or public holiday in either of those places).
CHESS means the clearing house electronic sub-register system for the electronic transfer of securities operated by ASX Settlement.
Corporations Act means the Corporations Act 2001 (Cth).
Court means the Federal Court of Australia, or such other court of competent jurisdiction under the Corporations Act agreed to in writing by Verra and Redflex.
Deed Poll means the deed poll to be executed by Verra substantially in the form of Annexure B to the Implementation Agreement or otherwise agreed by Redflex and Verra pursuant to which Verra covenants in favour of Scheme Participants to perform obligations attributed to it under this Scheme, with such amendments as are approved in accordance with its terms.
Effective means 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 this Scheme, but in any event at no time before an office copy of the order of the Court is lodged with ASIC.
Effective Date means the date on which this Scheme becomes Effective.
Encumbrance means any security for the payment of money or performance of obligations, including a mortgage, charge, lien, pledge, trust, power or title retention or flawed deposit arrangement and any “security interest” as defined in sections 12(1) or 12(2) of the PPSA (as defined in the Implementation Agreement) or any agreement to create any of them or allow them to exist.
Implementation means the implementation of this Scheme in accordance with its terms on this Scheme becoming Effective.
Implementation Agreement means the scheme implementation agreement dated 22 January 2021 between Redflex and Verra under which, amongst other things, Redflex has agreed to propose this Scheme to Shareholders and each of Verra and Redflex has agreed to take certain steps to give effect to this Scheme.
Implementation Date means the date of Implementation, being the 5th Business Day after the Record Date, or such other date as Redflex and Verra may agree in writing.
NASDAQ means The NASDAQ Stock Market LLC.
Record Date means 7:00pm on the day which is two Business Days after the Effective Date, or any other date (after the Effective Date) agreed by Redflex and Verra to be the record date for the purpose of determining entitlements to receive the Scheme Consideration under this Scheme.
Redflex means Redflex Holdings Limited (ACN 069 306 216).
Register means the register of members of Redflex maintained by or on behalf of Redflex in accordance with section 168(1) of the Corporations Act.
Registered Address means, in relation to a Scheme Participant, the address of that Scheme Participant shown in the Register as at the Record Date.
Registry means the person operating the Register, being Computershare Investor Services Pty Limited (ACN 078 279 277).
Scheme means this scheme of arrangement between Redflex and Scheme Participants under which all of the Scheme Shares will be transferred to Verra (or a Verra Nominated Acquirer) under Part 5.1 of the Corporations Act as described in clause 5, in consideration for the provision of the Scheme Consideration to Scheme Participants, subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act to the extent they are approved in writing by each of Redflex and Verra in accordance with clause 1(g)(c).
Scheme Consideration means the consideration payable under the terms of this Scheme for the transfer of Scheme Shares to Verra (or a Verra Nominated Acquirer), being an amount equal to $0.92 per Scheme Share held by a Scheme Participant on the Record Date.
Scheme Meeting means the meeting of Shareholders ordered by the Court to be convened under section 411(1) of the Corporations Act to consider approval of the Scheme Resolution and includes any meeting convened following any adjournment or postponement of that meeting.
Scheme Participant means a Shareholder registered in the Register as the holder of one or more Shares at the Record Date.
Scheme Resolution means a resolution of Shareholders to approve this Scheme under section 411(4)(a)(ii) of the Corporations Act.
Scheme Share means a Share held by a Scheme Participant as at the Record Date.
Scheme Transfer means, in relation to each Scheme Participant, a duly completed and executed instrument of transfer of the Scheme Shares held by that Scheme Participant for the purposes of section 1071B of the Corporations Act, which may be a master transfer of all the Scheme Shares.
Second Court Hearing 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 this Scheme is heard or, if the application is adjourned for any reason, the day on which the adjourned application is heard.
Share means a fully paid ordinary share in the capital of Redflex.
Shareholder means a person entered in the Register as the holder of one or more Shares.
Sunset Date has the meaning given in the Implementation Agreement.
Trust Account means an Australian dollar denominated trust account operated by Redflex (or by the Registry on behalf of Redflex) to hold the Scheme Consideration on trust for the purpose of paying the Scheme Consideration to Scheme Participants in accordance with clause (n).
Verra means Verra Mobility Corporation.
Verra Nominated Acquirer has the meaning given in clause 2.3 of the Implementation Agreement.
(b) Interpretation
In the interpretation of this document, the following provisions apply unless the context otherwise requires:
(a) The singular includes the plural and conversely.
(b) A gender includes all genders.
(c) If a word or phrase is defined, its other grammatical forms have a corresponding meaning.
(d) A reference to a “person” includes an individual, a body corporate, a corporation, trust, partnership, unincorporated body or any other entity or organisation.
(e) A reference to a clause, schedule, annexure or party is a reference to a clause of, and a schedule, annexure or party to, this document and references to this document include any schedules and annexures.
(f) A reference to an agreement or document (including a reference to this document) is to the agreement or document as amended, varied, supplemented, novated or replaced, except to the extent prohibited by this document or that other agreement or document.
(g) A reference to a person includes a reference to the person’s executors, administrators, successors, substitutes (including persons taking by novation) and assigns.
(h) A reference to legislation (including subordinate legislation) or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it.
(i) A reference to writing includes any method of representing or reproducing words, figures, drawings or symbols in a visible and tangible form (and includes a communication by electronic mail).
(j) A reference to $ or A$ is to the lawful currency of Australia.
(k) A reference to time is a reference to time in Melbourne, Australia.
(l) A period of time starting from a given day or the day of an act or event is to be calculated exclusive of that day.
(m) If a party must do something under this document on or by a given day and it is done after 5:00pm on that day, it is taken to be done on the next day.
(n) The meaning of general words is not limited by specific examples introduced by including, for example, or similar expressions.
(o) Headings (including those in brackets at the beginning of paragraphs) are for convenience only and do not affect the interpretation of this document.
(p) If the day on or by which a person must do something under this Scheme is not a Business Day, the person must do it on or by the next Business Day.
(c) Redflex
Redflex:
(a) is a public company limited by shares incorporated in Australia and its registered office is located at 31 Market Street, South Melbourne, Victoria 3205, Australia;
(b) is admitted to the official list of ASX and its shares are quoted on ASX; and
(c) as at the date of the Implementation Agreement, has the capital structure set out in Schedule 5 of the Implementation Agreement.
(d) Verra
Verra:
(a) is a public corporation formed under the laws of Delaware in the United States of America and its principal business address is located at 1150 North Alma School Road, Mesa, Arizona 85201, United States of America; and
(b) is admitted to NASDAQ and its securities are quoted on NASDAQ.
(e) Implementation Agreement and Deed Poll
(a) Redflex and Verra have entered into the Implementation Agreement which sets out the terms on which Redflex has agreed to propose this Scheme to Shareholders, and each of Redflex and Verra has agreed to take certain steps to give effect to this Scheme.
(b) This Scheme attributes actions to Verra but does not itself impose an obligation on Verra to perform those actions. Verra has executed the Deed Poll in favour of each Scheme Participant, pursuant to which it has covenanted, subject to this Scheme becoming Effective, to perform (or procure the performance of) obligations attributed to it under this Scheme, including to provide the Scheme Consideration, in accordance with the terms of this Scheme.
If this Scheme becomes Effective:
(a) in consideration of the transfer of each Scheme Share to Verra (or a Verra Nominated Acquirer), Redflex must provide or procure the provision of the Scheme Consideration to each Scheme Participant in accordance with the terms of this Scheme and the Deed Poll;
(b) all of the Scheme Shares and all of the rights and entitlements attaching to them will be transferred to Verra (or a Verra Nominated Acquirer) on the Implementation Date; and
(c) Redflex will enter the name and address of Verra (or a Verra Nominated Acquirer) in the Register as the holder of the Scheme Shares transferred to Verra (or a Verra Nominated Acquirer) in accordance with the terms of this Scheme,
subject to and in accordance with the provisions of this Scheme.
(g) Conditions precedent to Implementation
This Scheme is conditional upon, and will have no force or effect until, the satisfaction of each of the following conditions precedent:
(a) as at 8.00am on the Second Court Hearing Date, neither the Implementation Agreement nor the Deed Poll have been terminated in accordance with their terms;
(b) as at 8:00am on the Second Court Hearing Date, each of the conditions precedent set out in clause 3.1 of the Implementation Agreement (other than the condition precedent relating to the approval of the Court set out in clause 3.1(f)) has been satisfied or (to the extent they can be) waived in accordance with the terms of the Implementation Agreement;
(c) the Court makes orders approving this Scheme under section 411(4)(b) of the Corporations Act, including with such alterations made or required by the Court under section 411(6) of the Corporations Act as are acceptable to Redflex and Verra;
(d) such other conditions made or required by the Court under section 411(6) of the Corporations Act in relation to this Scheme as are acceptable to Redflex and Verra have been satisfied; and
(e) the orders of the Court made under section 411(4)(b) (and, if applicable, section 411(6)) of the Corporations Act approving this Scheme come into effect, pursuant to section 411(10) of the Corporations Act,
and the provisions of clauses 4, 5, 6, 7 and 8 will not come into effect unless and until each of these conditions precedent in this clause (g) has been satisfied.
(h) Certificate in relation to conditions precedent
On the Second Court Hearing Date:
(a) Redflex must provide to the Court a certificate (or such other evidence as the Court may request) confirming (in respect of matters within its knowledge) whether or not as at 8:00am on the Second Court Hearing Date the conditions precedent set out in clauses 3.1(c), 3.1(d), 3.1(e) and clauses 3.1(h) to 3.1(l) of the Implementation Agreement have been satisfied or (to the extent they can be) waived and whether or not, to the best of its knowledge, the condition precedent set out in clause 3.1(g) of the Implementation Agreement has been satisfied or (to the extent it can be) waived.
(b) Verra must provide to Redflex a certificate for Redflex to provide to the Court (or such other evidence as the Court may request) confirming (in respect of matters within its knowledge) whether or not as at 8:00am on the Second Court Hearing Date the conditions precedent set out in clauses 3.1(a), 3.1(b), 3.1(c) and 3.1(m) of the Implementation Agreement have been satisfied or (to the extent they can be) waived and whether or not, to the best of its knowledge, the condition precedent set out in clause 3.1(g) of the Implementation Agreement has been satisfied or (to the extent it can be) waived.
(c) The giving of a certificate by each of Redflex and Verra under clause (h)(a) and (h)(b) respectively will, in the absence of manifest error, be conclusive evidence of whether the conditions precedent referred to in the certificate have been satisfied or waived as at 8:00am on the Second Court Hearing Date.
(i) Effective Date
Subject to clause (j), this Scheme takes effect pursuant to section 411(10) of the Corporations Act on and from the Effective Date.
This Scheme will lapse and be of no further force or effect if:
(a) the Effective Date has not occurred on or before the Sunset Date; or
(b) the Implementation Agreement or the Deed Poll is terminated in accordance with its terms,
unless Redflex and Verra otherwise agree in writing.
(k) Lodgement of Court order
If the conditions precedent set out in clause (g) are satisfied (other than the condition precedent set out clause (g)(e)), Redflex must lodge with ASIC in accordance with section 411(10) of the Corporations Act an office copy of the Court order under section 411(4)(b) approving this Scheme as soon as possible and, in any event, by no later than 5:00pm on the first Business Day after the day on which the Court approves this Scheme (or such later date as Verra may agree in writing).
(l) Transfer and registration of Scheme Shares
Subject to this Scheme becoming Effective and Verra having satisfied its obligations in clause (n), on the Implementation Date, all of the Scheme Shares, together with all rights and entitlements attaching to them at the Implementation Date, will be transferred to Verra (or a Verra Nominated Acquirer), without the need for any further act by any Scheme Participant (other than acts performed by Redflex or any of its directors and officers as attorney and agent for Scheme Participants under clause (z)), by Redflex (or by the Registry on behalf of Redflex) effecting a valid transfer or transfers of the Scheme Shares to Verra (or a Verra Nominated Acquirer) under section 1074D of the Corporations Act or, if that procedure is not available for any reason, by:
(a) Redflex delivering to Verra for execution a duly completed Scheme Transfer to transfer all of the Scheme Shares to Verra (or a Verra Nominated Acquirer), duly executed by Redflex (or any of its directors and officers) as the attorney and agent of each Scheme Participant as transferor under clause (z);
(b) Verra executing (or procuring a Verra Nominated Acquirer to execute) the Scheme Transfer as transferee and delivering it to Redflex for registration; and
(c) Redflex (as soon as practicable after receipt of the Scheme Transfer under clause (l)(b)) entering, or procuring the entry of, the name and address of Verra (or a Verra Nominated Acquirer) in the Register as the holder of all of the Scheme Shares transferred to Verra (or a Verra Nominated Acquirer) in accordance with the terms of this Scheme.
(m) Entitlement to Scheme Consideration
On the Implementation Date, subject to the terms of this Scheme, each Scheme Participant will be entitled to the Scheme Consideration for each Scheme Share held by that Scheme Participant.
(n) Provision of Scheme Consideration
Subject to the conditions precedent in clause (g) being satisfied, Verra must deposit (or procure the deposit of) in cleared funds into the Trust Account an amount equal to the aggregate amount of the Scheme Consideration payable to Scheme Participants, with such amount to be received in the Trust Account by no later than 12:00pm on the Business Day before the Implementation Date and with such amount to be held by Redflex on trust for the purpose of paying the Scheme Consideration to Scheme Participants who are entitled to receive it pursuant to clause (o)(a).
(o) Payment to Scheme Participants
(a) On the Implementation Date, subject to Verra having satisfied its obligations in clause (n), Redflex must pay or procure the payment, from the Trust Account, to each Scheme Participant the Scheme Consideration to which that Scheme Participant is entitled under this clause 6.
(b) The obligations of Redflex under clauses (f)(a) and (o)(a) will be satisfied by Redflex (in its absolute discretion) doing any of the following at its election:
(i) where a Scheme Participant has, before the Record Date, made a valid election in accordance with the requirements of the Registry to receive dividend payments from Redflex by electronic funds transfer to a bank account nominated by the Scheme Participant, paying, or procuring the payment of, the relevant amount in Australian currency by electronic means in accordance with that election; or
(ii) otherwise, whether or not the Scheme Participant has made an election referred to in clause (o)(b)(i), despatching, or procuring the despatch of, a cheque for the relevant amount in Australian currency to the Scheme Participant by prepaid post to their Registered Address, such cheque being drawn in the name of the Scheme Participant (or in the case of joint holders, in accordance with the procedures set out in clause (p)), for the relevant amount.
In the case of Scheme Shares held in joint names:
(a) any Scheme Consideration will be paid to the holder whose name appears first in the Register as at the Record Date; and
(b) any other document required to be sent under this Scheme will be forwarded to either, at the sole discretion of Redflex, the holder whose name appears first in the Register as at the Record Date or to the joint holders.
Where the calculation of the Scheme Consideration to be paid to a Scheme Participant would result in the Scheme Participant becoming entitled to a fraction of a cent in cash, that fractional entitlement will be rounded down to the nearest whole cent.
(a) Redflex may cancel a cheque or electronic funds transfer issued under this clause 6 if the cheque or electronic funds transfer:
(i) is returned to Redflex or the Registry; or
(ii) in the case of a cheque, has not been presented for payment within six months after the date on which the cheque was sent.
(b) During the period of 12 months commencing on the Implementation Date, on request in writing from a Scheme Participant to Redflex or the Registry (which request may not be made until the date which is 20 Business Days after the Implementation Date), Redflex must reissue a cheque or electronic funds transfer that was previously cancelled under this clause (r).
(c) The Unclaimed Money Act 2008 (Vic) will apply in relation to any Scheme Consideration which becomes ‘unclaimed money’ (as defined in the Unclaimed Money Act 2008 (Vic)).
(s) Remaining monies (if any) in Trust Account
To the extent that, following satisfaction of Verra’s and Redflex’s obligations under the other provisions of this clause 6, there is a surplus in the Trust Account, then that surplus (less any bank fees and related charges) shall be paid by Redflex (or by the Registry on Redflex’s behalf) to Verra.
(a) If written notice is given to Redflex (or the Registry) of an order or direction made by a court of competent jurisdiction that:
(i) requires payment to be provided to a third party of a sum in respect of Scheme Shares held by a particular Scheme Participant, which would otherwise be payable to that Scheme Participant by Redflex in accordance with this clause 6, then Redflex may procure compliance with that order or direction; or
(ii) prevents Redflex from providing all or part of the Scheme Consideration to any particular Scheme Participant in accordance with this clause 6, or the payment of such consideration is otherwise prohibited by applicable law, Redflex may retain the relevant part of the Scheme Consideration to which that Scheme Participant would otherwise have been entitled to receive pursuant to this clause 6 until such time as provision of that part of the Scheme Consideration to that Scheme Participant is permitted by that order or direction or otherwise by law.
(b) To the extent that amounts are so deducted or withheld in accordance with clause (t)(a), such deducted or withheld amounts will be treated for all purposes under this Scheme as having been paid to the person in respect of which such deduction and withholding was made, provided that such deducted or withheld amounts are actually remitted as required.
(u) Determination of Scheme Participants
(a) Each Scheme Participant will be entitled to participate in this Scheme.
(b) For the purpose of establishing the persons who are Scheme Participants, dealings in Shares will only be recognised by Redflex provided that:
(i) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the Register as the holder of the relevant Shares on or before the Record Date; and
(ii) in all other cases, registrable transfers or transmission applications in respect of those dealings are received by the Registry on or before the Record Date.
(c) Redflex must register registrable transfers or transmission applications of the kind referred to in clause (u)(b)(ii) on or by the Record Date.
(d) Redflex will not accept for registration, nor recognise for any purpose, any transfer or transmission application in respect of Shares received after the Record Date, or received prior to the Record Date but not in actionable or registrable form (as appropriate), other than the transfers contemplated by clause (l).
(v) Maintenance of the Register
Redflex must, until the Scheme Consideration has been provided and the name and address of Verra (or a Verra Nominated Acquirer) has been entered in the Register as holder of all of the Scheme Shares, maintain, or procure the maintenance of, the Register in accordance with this clause 7. The Register in this form and the terms of this Scheme will solely determine entitlements to the Scheme Consideration.
(w) Effect of share certificates and holding statements
Subject to provision of the Scheme Consideration and registration of the transfer of Scheme Shares to Verra (or a Verra Nominated Acquirer) in accordance with the terms of this Scheme, from the Record Date (other than for Verra (or a Verra Nominated Acquirer) and its successors in title on and from the Implementation Date), all certificates and holding statements for Scheme Shares will cease to have effect as documents of title in respect of those Scheme Shares. After the Record Date (and other than for Verra (or a Verra Nominated Acquirer) and its successors in title on and from the Implementation Date), each entry into the Register as at the Record Date relating to Scheme Shares will cease to have any effect other than as evidence of the entitlements of Scheme Participant to the Scheme Consideration in respect of those Scheme Shares.
(x) Information to be made available to Verra
Redflex must procure that, as soon as reasonably practicable (and, in any event, within 3 Business Days) after the Record Date, details of the names, registered addresses and holdings of Shares of every Scheme Participant as shown in the Register as at the Record Date are made available to Verra in such form as Verra may reasonably require.
(y) No disposals after Record Date
If this Scheme becomes Effective, each Scheme Participant (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 (other than a transfer to Verra (or a Verra Nominated Acquirer) in accordance with this Scheme and any subsequent transfers by Verra (or a Verra Nominated Acquirer) or its successors in title), and any attempt to do so will be void and have no legal effect and Redflex shall be entitled to disregard any such disposal, purported disposal or agreement.
8. SUSPENSION AND TERMINATION OF QUOTATION OF SHARES
Redflex will:
(a) apply to ASX for the suspension of trading of Shares on ASX with effect from the close of trading on the ASX on the Effective Date; and
(b) if this Scheme has been fully implemented in accordance with its terms, if directed by Verra, apply to ASX for termination of official quotation of Shares on ASX and to have Redflex removed from the official list of ASX with effect on a Business Day (after the Implementation Date) nominated by Verra (including lodging a request for removal with ASX before the Implementation Date) and subject to Redflex and Verra satisfying any conditions reasonably required by ASX for it to act on that request.
(z) Appointment of Redflex as agent and attorney
Each Scheme Participant, without the need for any further action by that Scheme Participant, irrevocably appoints Redflex and each of the directors and officers of Redflex, jointly and severally, as its attorney and agent for the purposes of doing all things and executing all deeds, instruments, transfers and other documents that may be necessary or desirable to give full effect to this Scheme and the transactions contemplated by it, including:
(a) in the case of Scheme Shares in a CHESS holding:
(i) causing a message to be transmitted to ASX Settlement in accordance with the ASX Settlement Operating Rules so as to transfer the Scheme Shares held by the Scheme Participant from the CHESS sub-register of Redflex to the issuer sponsored sub-register operated by Redflex or the Registry at any time after Verra has provided (or procured the provision of) the Scheme Consideration which is due under this Scheme to Scheme Participants; and
(ii) completing and signing on behalf of Scheme Participants any required form of transfer of Scheme Shares;
(b) in the case of Scheme Shares registered in the issuer sponsored sub-register operated by Redflex or the Registry, completing and signing on behalf of Scheme Participants any required form of transfer;
(c) in all cases, executing any document or doing any other act necessary or desirable to give full effect to this Scheme and the transactions contemplated by it, including the execution and delivery of documents required to give effect to the transfers contemplated under clause (l); and
(d) enforcing the Deed Poll against Verra,
and Redflex accepts such appointment. Redflex, as agent and attorney of each Scheme Participant, may sub delegate its functions, authorities or powers under this clause (z) to all or any of its directors and officers (jointly, severally, or jointly and severally).
(aa) Scheme Participant’s agreement and consent
Under this Scheme, each Scheme Participant:
(a) irrevocably agrees to the transfer of its Scheme Shares, together with all rights and entitlements attaching to them, to Verra (or a Verra Nominated Acquirer) in accordance with the terms of this Scheme; and
(b) agrees to the variation, cancellation or modification (if any) of the rights attached to its Shares constituted by or resulting from this Scheme,
without the need for any further act by that Scheme Participant.
(ab) Warranty by Scheme Participants
Each Scheme Participant warrants to Verra, and is deemed to have appointed and authorised Redflex as that Scheme Participant’s agent and attorney to warrant to Verra, that:
(a) all of its Scheme Shares (including any rights and entitlements attaching to them) transferred to Verra (or a Verra Nominated Acquirer) under this Scheme will, on the date of the transfer, be free from all Encumbrances;
(b) all of its Scheme Shares will be fully paid on the date of transfer; and
(c) it has full power and capacity to sell and transfer its Scheme Shares (including all rights and entitlements attaching to them) to Verra (or a Verra Nominated Acquirer) under this Scheme.
(ac) Transfer free of Encumbrances
To the extent permitted by law, all Scheme Shares (including any rights and entitlements attaching to those shares) which are transferred to Verra (or a Verra Nominated Acquirer) under this Scheme will, at the date of the transfer of them to Verra (or a Verra Nominated Acquirer), vest in Verra (or a Verra Nominated Acquirer) free from all Encumbrances and interests of third parties of any kind, whether legal or otherwise, and free from any restrictions on transfer of any kind not referred to in this Scheme.
(ad) Title to Scheme Shares
On and from the Implementation Date, subject to provision of the Scheme Consideration, Verra (or a Verra Nominated Acquirer) will be beneficially entitled to all of the Scheme Shares pending registration by Redflex of Verra (or a Verra Nominated Acquirer) in the Register as the holder of all of the Scheme Shares.
(ae) Appointment of Verra as sole proxy
Subject to provision of the Scheme Consideration in the manner contemplated by clause (n), on and from the Implementation Date, until Redflex registers Verra (or a Verra Nominated Acquirer) in the Register as the holder of all of the Scheme Shares, each Scheme Participant:
(a) is deemed to have irrevocably appointed Redflex as attorney and agent (and directs Redflex in such capacity) to appoint Verra and each of its directors, officers and any secretary or agent nominated by Verra from time to time (jointly and each of them individually) as its sole proxy and, where applicable, corporate representative, to attend shareholders’ meetings of Redflex, exercise the votes attached to the Scheme Shares registered in its name and sign any shareholders’ resolutions of Redflex, whether in person, by proxy or by corporate representative;
(b) must not itself attend or vote at any shareholders’ meetings of Redflex, or sign any resolutions, whether in person, by proxy or by corporate representative, other than under this clause (ee);
(c) must take all other actions in the capacity of the registered holder of Scheme Shares as Verra reasonably directs; and
(d) acknowledges and agrees that in exercising the powers referred to in clause (ee)(a), Verra and any director, officer, secretary or agent nominated under clause (ee)(a) may act in the best interests of Verra as the intended registered holder of the Scheme Shares.
Redflex undertakes in favour of each Scheme Participant that it will appoint Verra and each of its directors, officers and any secretary or agent nominated by Verra from time to time (jointly and each of them individually) as that Scheme Participant’s proxy or, where applicable, corporate representative in accordance with clause (ee)(a) of this Scheme.
(af) Scheme alterations and conditions
If the Court proposes to approve this Scheme subject to any alterations or conditions, Redflex may, by its counsel or solicitors, and with the consent of Verra, consent to those alterations or conditions on behalf of all persons concerned, including, for the avoidance of doubt, all Scheme Participants. Each Scheme Participant agrees to any such alterations or conditions which Redflex consents to under this clause (ff).
(ag) No liability when acting in good faith
Each Scheme Participant agrees that neither Redflex nor Verra, nor any of their respective officers or agents, will be liable for anything done or omitted to be done in the performance of this Scheme or the Deed Poll in good faith.
(ah) Effect of Scheme
This Scheme binds Redflex and all Scheme Participants (including those who do not attend the Scheme Meeting, do not vote at the Scheme Meeting or vote against this Scheme) and, to the extent of any inconsistency and to the extent permitted by law, overrides the constitution of Redflex.
(ai) Consent
Each Scheme Participant consents to Redflex and Verra doing all things necessary or expedient for or incidental to the implementation of this Scheme.
(aj) Notices
Where a notice, transfer, transmission application, direction or other communication referred to in this Scheme is sent by post to Redflex, it is deemed to have been received on the date (if any) on which it is actually received at Redflex’s registered office or at the place where the Register is kept and on no other date.
(ak) Omission to give notice
The accidental omission to give notice of the Scheme Meeting or non-receipt of such notice by any Shareholder will not, unless so ordered by the Court, invalidate the Scheme Meeting or any proceedings of the Scheme Meeting.
(al) Further assurances
(a) Each party must at its own expense, whenever requested by the other party, promptly do or, to the extent reasonably practicable, arrange for others to do everything, including executing all documents, reasonably necessary or desirable to give full effect to this Scheme and the transactions contemplated by it.
(b) Without limiting Redflex’s other powers under this Scheme, Redflex has power to do all things that it considers necessary or desirable to give effect to this Scheme and the Implementation Agreement.
(am) Costs and stamp duty
Subject to the terms of the Implementation Agreement, Redflex will pay the costs of this Scheme, except that Verra will pay (or procure the payment of) any stamp duty and any related fines, penalties or interest payable on or in connection with the transfer by Scheme Participants of the Scheme Shares to Verra (or a Verra Nominated Acquirer) pursuant to this Scheme (other than to the extent that any fines, penalties or interest have been imposed as a consequence of delay by Redflex).
10. GOVERNING LAW AND JURISDICTION
This Scheme is governed by the laws of New South Wales, Australia. The parties irrevocably submit to the non-exclusive jurisdiction of its courts and courts of appeal from them. The parties will not object to the exercise of jurisdiction by those courts on any basis.
Without preventing any other method of service, any document in an action in connection with this document may be served on Redflex by being delivered or left at Redflex’s address set out in the ‘Parties’ section of this document.
ANNEXURE C
Notice of Second Court Hearing
Notice of hearing to approve a compromise or arrangement
TO all members of Redflex Holdings Limited ACN 069 306 216 (Redflex)
TAKE NOTICE that at 10:15am on 14 May 2021 the Federal Court of Australia (New South Wales Registry) at Law Courts Building, 184 Phillip Street, Queens Square Sydney will hear an application by Redflex seeking the approval of a compromise or arrangement between Redflex and its members, if agreed to by a resolution to be considered and, if thought fit, passed at a meeting of such members to be held as a virtual meeting by means of audio-visual technology on 10 May 2021 commencing at 9:00am (AEST). Note that the hearing on 14 May 2021 may be conducted as a remote hearing. If you wish to attend the hearing, you should check the Daily Court List on the Federal Court of Australia Website beforehand to ascertain hearing arrangements.
If you wish to oppose the approval of the compromise or arrangement, you must file and serve on Redflex a notice of appearance, in the prescribed form, together with any affidavit on which you wish to rely at the hearing. The notice of appearance and affidavit must be served on Redflex at its address for service by 5:00pm on 13 May 2021. The address for service of Redflex is c/o KPMG Law, International Towers Sydney 3, 300 Barangaroo Avenue, Sydney NSW 2000 [Attn: David Morris]
YATES J:
Introduction
1 The plaintiff, Redflex Holdings Limited, seeks orders for the convening of a meeting of its shareholders pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) to consider and, if thought fit, approve a scheme of arrangement, which will effect a transfer of the shareholders’ shares in the plaintiff to Verra Mobility Corporation (Verra) or its nominee (the scheme).
2 The plaintiff is a public company which is registered under the Act and listed on the Australian Securities Exchange (ASX). It develops, manufactures, and operates a range of sensor and image capture technologies that enable active management of roads and traffic systems. Its products and services are designed to improve roadway safety, alleviate congestion, and reduce the harmful impacts of vehicle emissions. It operates throughout Asia Pacific, North America, the United Kingdom, Europe, and the Middle East.
3 As at 31 March 2021, the plaintiff had a market capitalisation of $133,751,603, represented by 151,990,560 issued shares at their closing share price of $0.88 on that date. For the half-year ending 31 December 2020, the plaintiff reported revenue of $52,313,000 and EBITDA of $6,668,000.
4 Verra is a company formed under the laws of Delaware in the United States of America. It is a global operator in smart transportation, enabling smart roadways by providing integrated technology to manage tolls, violations, and vehicle registrations for commercial customers. As at 31 December 2020, it had a market capitalisation of approximately US$2.2 billion and employed 640 people in six countries.
5 On 23 November 2020, the plaintiff received a non-binding indicative offer from Verra for the acquisition of its entire share capital at the indicative offer price of $0.92 per share, to be implemented by a scheme of arrangement under Pt 5.1 of the Act.
6 On 22 January 2021, the plaintiff and Verra entered into a Scheme Implementation Agreement which provided for the plaintiff to propose and implement the scheme in accordance with the terms of that agreement. The Scheme Implementation Agreement was announced to the ASX on the same day.
7 Clause 2.3 of the Scheme Implementation Agreement gave Verra the right to nominate one of its wholly-owned subsidiaries as the acquirer of the shares. On 11 February 2021, Verra nominated VM Consolidated, Inc (VM Consolidated).
Overview of the scheme
8 The scheme is a standard transfer scheme in which VM Consolidated will acquire 100% of the plaintiff’s issued shares for a cash consideration of $0.92 per share.
9 Performance risk is managed by clause 6.2 of the scheme, which provides that, subject to satisfaction of the conditions precedent referred to in clause 3.1, Verra must deposit (or procure the deposit of) an amount equal to the aggregate of the scheme consideration, in cleared funds, into a trust account operated by the plaintiff for the benefit of the participating shareholders, before their shares are transferred to VM Consolidated.
10 Verra has also entered into a deed poll in favour of the participating shareholders in which it undertakes to provide (or procure the provision of) the scheme consideration, in accordance with the scheme, and gives certain warranties and undertakes other relevant obligations in relation to the scheme.
11 The deed poll is expressed to be governed by the laws of New South Wales. Verra has agreed to submit to the non-exclusive jurisdiction of the courts in that State in respect of the enforcement of its obligations under the deed. An expert opinion has been provided by an attorney specialising in Delaware corporate law that the deed poll has been duly executed by Verra with the requisite power and authority to enter into the obligations imposed on it by that instrument: see the affidavit of Stephanie Marie Norman made 1 April 2021.
12 The scheme includes the giving of certain warranties by the participating shareholders. These warranties are to the effect that the shares to be transferred will, at the date of the transfer, be free from all encumbrances and fully paid, and that each participating shareholder has full power and capacity to sell and transfer the relevant shares. The existence and effect of these warranties is brought to the shareholders’ attention in Section 8.8 of the scheme booklet, which contains the explanatory statement to be given to the shareholders.
13 An expert report, provided by BDO Corporate Finance (East Coast) Pty Ltd (BDO), expresses the opinion that, as proposed, the scheme is fair and reasonable, and in the best interests of the plaintiff’s shareholders, in the absence of a superior offer. The cash consideration is above the fair market value of a Redflex share prior to the proposed scheme, as assessed by BDO on a control basis, and represents a significant premium to the trading prices of Redflex shares in the period leading up to the announcement of the scheme on 22 January 2021.
14 The opinions expressed in the report have been verified by a director of BDO, David McCourt, who is the author of the report.
15 The plaintiff’s directors unanimously consider the scheme to be in the best interests of shareholders and unanimously recommend that the shareholders approve the scheme, in the absence of a superior proposal, and subject to BDO continuing to conclude that the scheme is in the best interests of shareholders.
Some matters for comment
16 I have been assisted in my consideration of the present application by detailed written submissions filed by the plaintiff. Those submissions canvass a number of potential issues. It is only necessary for me to comment on some of them.
Options and Performance Rights
17 The plaintiff’s Group CEO and Managing Director, Mr Talbot, holds 3,004,369 outstanding Options for shares in the plaintiff’s capital. The details concerning these Options, the vesting conditions, and the manner in which the Options can be exercised, are discussed in an affidavit made on 5 April 2021 by Clark Davey, one of the plaintiff’s non-executive directors, and in an affidavit made on 6 April 2021 by Craig Durham, the plaintiff’s Group General Counsel and Company Secretary. The details are also disclosed in the scheme booklet: see, in that regard, the Chairman’s letter to shareholders and, for example, Section 10.4 of the booklet.
18 It is not necessary for me to record these details, other than to note that all outstanding Options will vest if the shareholders approve the scheme and, if the Options are to be exercised, they must be exercised before the proposed Record Date (the date for determining entitlements to receive the scheme consideration).
19 Mr Talbot and other senior executives of the plaintiff also hold, in aggregate, 3,809,846 Performance Rights, which entitle them to subscribe for, and to be issued, shares in the plaintiff’s capital upon certain conditions being met. The Performance Rights are also discussed in Mr Davey’s affidavit and disclosed in Section 10.4 of the scheme booklet.
20 Once again, it is not necessary for me to record the relevant details, other than to note that all unvested Performance Rights will vest if the shareholders approve the scheme and, if the Performance Rights are to be exercised, they must be exercised by a date before the Record Date.
21 It is important to emphasise that the arrangements in place for the Options and Performance Rights are not such as to influence, directly, the voting at the proposed meeting because the respective rights will not vest until after approval is given to the scheme by the shareholders at that meeting.
22 Further, the respective rights must be exercised before the Record Date, with the consequence that there will be no outstanding Options or Performance Rights at that date, thereby satisfying the plaintiff’s obligations to Verra under clause 4.6 of the Scheme Implementation Agreement.
Additional remuneration
23 If the scheme is approved by the shareholders and the Court, and if Mr Durham and the plaintiff’s Group Chief Financial Officer, Neville Joyce, continue to be employed by the plaintiff at the time and date of the Court’s approval, they will each receive additional remuneration of $150,000 in cash (less applicable taxes) in recognition of the additional workload they have undertaken, and will continue to undertake, in respect of the transaction.
24 This fact has been brought to the shareholders’ attention in Section 10.2 of the scheme booklet.
Class issues?
25 The plaintiff’s submissions address whether the arrangements in respect of the Options and Performance Rights, and the financial benefits to be received by Mr Durham and Mr Joyce, are class-creating for the purpose of voting in respect of the scheme.
26 The plaintiff submits that, as a matter of legal principle, there is no ground for subdividing shareholders and creditors into separate classes for voting purposes if the only basis for differentiation is their respective interests, rather than a differentiation concerning rights: First Pacific Advisors LLC v Boart Longyear Ltd [2017] NSWCA 116 at [80].
27 The plaintiff submits that, here, there is no basis to treat the holders of Options and/or the Performance Rights as constituting separate classes for the purposes of the voting at the proposed meeting. This is because the scheme will not affect the contractual arrangements between the holders of the Options or the holders of the Performance Rights, and the plaintiff. Instead, under existing contractual arrangements, those securities, which have not yet vested, will vest upon approval of the scheme by the shareholders and entitle the holders to receive shares in the plaintiff’s capital upon the valid exercise of the rights granted. If those rights are not then validly exercised, they will lapse. Those holders who receive the plaintiff’s shares in place of their Options and/or Performance Rights will be entitled, like all other shareholders, to receive the scheme consideration in exchange for the transfer of their shares under the scheme.
28 I accept this submission. In In the matter of Skilled Group Limited (No 1) [2015] VSC 789; 113 ACSR 525, Robson J held (at [82]), in circumstances substantially similar to the present case:
[82] I am satisfied that the performance rights or options held by some employees do not give rise to a separate class of members. It is worth noting at the outset that the rights will not vest until after the meeting to approve the scheme is held. Accordingly, the issue of additional shares will not influence the voting at the meeting directly. The question is whether the rights and options themselves (and the prospect of additional shares upon their vesting) gives rise to a divergence of interests with other shareholders. I do not consider that it does. The shares to be issued if the rights or options vest are not of a different type than those of other shareholders. Moreover, it appears to me that the employees with performance rights or options are in no different position from any other employee of the company who would be impacted by the scheme’s implementation in different ways on the basis of various interests extraneous to their status as members.
29 In a similar vein, in Xplore Wealth Limited, in the matter of Xplore Wealth Limited [2020] FCA 1868, Markovic J held (at [37]):
[37] Scheme Shareholders who also hold Scheme Options may have different commercial interests to those shareholders who do not. However, that circumstance is not class creating. The existence of different commercial interests which is likely to be the case for all Scheme Shareholders, each of whom will face their own unique commercial circumstances, does not of itself mean that the Scheme Shareholders are “so dissimilar as to make it impossible for them to consult together with a view to their common interest”: Sovereign Life Assurance Company v Dodd [1892] 2 QB 573 at 583 ; Re Nine Entertainment Group Ltd (No 1) (2012) 211 FCR 439 at [53] ; see also Boart Longyear at [78]–[83].
30 In the case of the Options, the plaintiff also submits that the line of cases which treats option holders as contingent creditors of the company, requiring a separate creditors’ scheme of arrangement, is not applicable to the present case because the scheme will not involve an adjustment of such rights—for example, by the existing options being cancelled or replaced by new options. Moreover, the holders of the Options and Performance Rights have no entitlement to attend the proposed meeting to consider the scheme on the basis of those securities alone. I accept those submissions.
31 As to the prospective financial benefits to be conferred on Mr Durham and Mr Joyce, the plaintiff submits that benefits of this kind are collateral, commercial benefits which are not, in and of themselves, class-creating: Re Boart Longyear Ltd [2017] NSWSC 567 at [68] – [70]. I accept that submission, but note that considerations of this kind can be relevant when the Court is called upon to approve a scheme at a second court hearing.
Exclusivity provisions
32 The Scheme Implementation Agreement contains exclusivity (“no-shop”, “no talk”, and “no due diligence”) and matching right provisions. The “no talk” and “no due diligence” provisions are subject to a “fiduciary carve-out”: see clause 10.5. These provisions have been brought to the shareholders’ attention in Section 9.1 of the scheme booklet.
33 The Exclusivity Period to which these provisions are referable is defined as the period commencing on 22 January 2021 and ending on the earlier of the termination of the agreement (in accordance with its terms); the Implementation Date; and the Sunset Date.
34 The Sunset Date appears to set the outer limits of the period, being: six months after the date of the agreement; a limited, extended date to allow for any outstanding regulatory approvals (that have not been waived) to be obtained; or an extended agreed date.
35 Having regard to similar provisions in similar transactions, I do not consider the Exclusivity Period to be unreasonable in the circumstances.
Break fees
36 The plaintiff and Verra are each potentially liable to pay break fees should certain events transpire, as provided for in clauses 11 and 12 of the Scheme Implementation Agreement. Of particular relevance to these reasons is the break fee that might be payable by the plaintiff.
37 This fee is the sum of $1,461,000. It is payable in the circumstances stipulated in clause 11.2 of the agreement (a change in a director’s recommendation; the completion of a third-party competing proposal; or the termination of the agreement for material breach by the plaintiff). Importantly, no break fee is payable by the plaintiff simply because the shareholders might not approve the scheme at the proposed meeting. Therefore, it is not likely that the arrangements for payment of the break fee could influence the shareholders’ voting intentions at the proposed meeting.
38 Clause 11.5 of the Scheme Implementation Agreement acknowledges that the fee has been set as an amount to compensate Verra for advisory costs; the costs of management and directors’ time; out-of-pocket expenses; opportunity costs; and damage to Verra’s reputation in association with a failed transaction and the implications of that damage to Verra’s business. There is no reason to go behind this acknowledgement.
39 The amount of the break fee represents 1.09% of the plaintiff’s market capitalisation as at 31 March 2021. This amount is in line with clause 9 of the Takeovers Panel Guidance Note 7 – Lock-up devices. Although slightly in excess of the Panel’s guidance, there is nothing in the evidence to suggest that the amount of the fee is unreasonable. To the contrary, the evidence given through Mr Davey’s affidavit is that the obligation to pay this fee was entered into after substantial arm’s-length negotiations, in which the plaintiff and Verra were independently advised.
40 The existence of this break fee, and the circumstances in which it might be payable, have been brought to the shareholders’ attention in Section 9.2 of the scheme booklet.
The holding of the proposed meeting
41 The plaintiff seeks an order that the proposed meeting be held as a wholly virtual meeting by means of audio-visual technology, with no physical assembly.
42 In support of the order it seeks, the plaintiff has adduced evidence of applicable legislation, particularly pertaining to Victoria where its registered office and principal place of business are located, which imposes restrictions on public gatherings, and which places limits on persons entering Australian territory (the plaintiff has a number of overseas shareholders) due to the continuing COVID-19 pandemic. But perhaps more fundamentally, the plaintiff points to the unpredictability that remains in relation to the possibly sudden imposition of local restrictions on travel movements and public gatherings as justification alone for the order.
43 While there were temporary measures in place to facilitate the holding of virtual meetings—the Corporations (Coronavirus Economic Response) Determination (No 1) 2020 (Cth), as renewed by the Commonwealth Treasurer from time to time—these measures have now lapsed and have not yet been replaced. In light of this, the Australian Securities and Investments Commission (ASIC) announced on 29 March 2021 its time-limited “no-action” position with respect to the non-compliance with provisions of the Act that may restrict the holding of virtual meetings, where an entity elects to hold a meeting using such technology.
44 Be that as it may, it is to be borne in mind that a meeting convened for the purposes of s 411(1) of the Act is one convened by the Court and, as the plaintiff correctly submits, the Court has broad powers under s 1319 of the Act to direct how such a meeting is to be conducted. Thus, the lapse of the temporary measures previously in force poses no obstacle to the Court making the order that the plaintiff seeks, provided the Court is satisfied that it is appropriate to make that order.
45 The plaintiff has adduced evidence of the procedures it proposes to implement should the Court be minded to make such an order: see the affidavit of Christopher Dedrick made 1 April 2021. Mr Dedrick’s affidavit includes details of the platform the plaintiff wishes to use; the procedures for gaining access to that platform for the purposes of the proposed meeting; the procedures for casting votes at the proposed meeting; and the procedures for shareholders to ask questions at the proposed meeting. Importantly, Mr Dedrick’s affidavit makes clear that the software to be used will identify cases where a shareholder, and any proxy appointed by that shareholder, have both accessed the platform and are attending the meeting. Where this happens, and should the shareholder vote, then only the shareholder’s vote will be counted, and any voting by the proxy of those shares will be eliminated: in this regard, see clause 33(j) of the plaintiff’s Constitution. A report will be produced detailing any and which parcels of shares have been removed from a proxy holder, should these circumstances arise. The report will be available to the Chairperson following the poll being concluded.
46 I am satisfied that it is appropriate to make the order that the plaintiff seeks.
Other matters
47 Terence Ronald Winters, who is one of the plaintiff’s non-executive directors, has consented to act as Chairperson of the proposed meeting. John MacDonald Worthington, who is also one of the plaintiff’s non-executive directors, has consented to act in Mr Winters’ place should Mr Winters become unable or unwilling to act in the role. Each has made an affidavit fulfilling the requirements of r 3.2 of the Federal Court (Corporations) Rules 2000 (Cth).
48 ASIC has provided a letter which signifies that it considers that the requirements of s 411(2)(a) and (b) of the Act have been satisfied. I will proceed accordingly.
Conclusion
49 I am satisfied that the plaintiff is a Part 5.1 body and that, as proposed, the scheme is an “arrangement” for the purposes of s 411(1) of the Act. I am satisfied that the formal requirements that are preliminary to the Court convening a meeting under s 411(1) of the Act have been complied with. I am also satisfied that the scheme is of such a nature and is cast in such terms that, if it receives the requisite statutory majorities, the Court would be likely to approve it on an unopposed application.
50 There is extensive evidence before the Court in relation to the verification of statements made in the explanatory statement contained in the scheme booklet. Subject to my consideration of any matter that might be raised at a second court hearing, I am satisfied that the explanatory statement sufficiently discloses the details and effect of the scheme so as to enable the shareholders to make an informed decision on how to vote on the resolution to be put at the proposed meeting. For this reason, I will also make an order approving the explanatory statement, as permitted by s 411(1).
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Yates. |
