Amendments to Alimentation Couche-Tard articles to be made in favor of non-founding shareholders.
Alimentation Couche‑Tard Inc. has filed its management proxy circular, in connection with its annual general and special meeting of shareholders scheduled for Sept. 22, 2015 (the “Meeting”).
In addition to the annual general matters to be voted on at the Meeting, Couche-Tard will seek shareholder approval in order to make certain amendments to its articles. The proposed amendments consist of, among other things, removing the automatic termination of the dual class structure of Couche-Tard when the youngest of Messrs. Alain Bouchard (founder of Couche-Tard and executive chairman of the board), Jacques D’Amours (founder of Couche-Tard and former vice president of administration), Richard Fortin (founder of Couche-Tard and former chief financial officer) and Réal Plourde (founder of Couche-Tard and former chief operating officer) (collectively, the “Founders”) will have reached the age of 65 (or earlier in the case of death).
Instead, Couche-Tard will seek shareholder approval to maintain its dual class structure until the earlier to occur of (a) the date on which no Founder is a director of Couche-Tard; or (b) the date on which the Founders and/or their family members (collectively, the “Founder Group”) directly or indirectly collectively cease to hold more than 50% of the voting rights attached to all outstanding voting shares of Couche-Tard.
In addition, the holders of Class B subordinate voting shares of Couche-Tard (the “Subordinate Voting Shares”) would be granted the right to elect separately the nearest whole number to 30% of the directors of Couche-Tard (being initially 3 of the current 11 directors). In connection with that right, the minimum number of directors of Couche-Tard to be elected annually would be increased from 3 to 11 and the holders of Class A multiple voting shares of Couche-Tard (the “Multiple Voting Shares”) and the holders of Subordinate Voting Shares, each voting separately as a class, would be entitled to modify such minimum number of directors.
The four Founders have a strong vested interest in Couche-Tard. Together, as at July 10, 2015, they owned approximately 22.7% of the issued and outstanding shares of Couche-Tard. Currently, most of these shares are Multiple Voting Shares to which are attached ten votes per share and which are subject to a sunset provision. This provision stipulates that the Multiple Voting Shares will lose their superior voting status upon the earliest to occur of (i) the day upon which all the four Founders will have reached the age of 65 (year 2021), or (ii) the day when the four Founders hold, directly or indirectly, collectively less than 50% of the voting rights attached to all outstanding voting shares of Couche-Tard.
“The four founders of Couche-Tard have been involved with the company since inception”, said Alain Bouchard, Founder and executive chairman of the board. We want to continue growing our company and creating value for our shareholders. When the company became publicly listed in 1986, the shares were priced at $2.25; as at July 17, 2015, these same shares (now Subordinate Voting Shares) are worth $1,392 taking into account the series of share splits, an increase of almost 650 times!”
“I believe that our continued involvement will allow Couche-Tard to build on its strong foundation. We would like to continue focusing on long-term value creation, which has been key to our success. We want to work closely with the new generation of employees, mentoring them to the best of our knowledge, sharing with them our expertise and know-how. We also want to preserve the 40-plus year relationship the four of us have built with industry leaders and suppliers”, continued Mr. Bouchard.
Special Committee and Board Unanimous Recommendations
The proposed amendments are the result of a thorough and careful process conducted by a special committee comprised of three independent members of the Board of Directors. Following a series of formal meetings, discussions with legal counsel as well as discussions with the Founders over several months, the special committee (i) unanimously concluded that the proposed amendments are in the best interests of Couche-Tard; (ii) unanimously concluded that the proposed amendments are fair to the shareholders of Couche‑Tard, other than the Founder Group and (iii) unanimously recommended that the Board of Directors approve the proposed amendments and recommend that holders of Multiple Voting Shares and Subordinate Voting Shares (other than the Founder Group) vote in favor of the proposed amendments.
As a result of its deliberations and after careful consideration of, among other things, the report of the special committee and its unanimous recommendation, the Board of Directors (excluding the Founders and one additional director who abstained) unanimously concluded that the proposed amendments are in the best interests of Couche-Tard and unanimously recommended that holders of Multiple Voting Shares and Subordinate Voting Shares (other than the Founder Group and their respective associated and affiliated entities) vote in favor of the proposed amendments.