Takeovers Code (Jade Software Corporation Limited) Exemption Notice 2003

  • expired
  • Takeovers Code (Jade Software Corporation Limited) Exemption Notice 2003: expired, on 1 January 2011, by clause 3.

Reprint
as at 1 January 2011

Coat of Arms of New Zealand

Takeovers Code (Jade Software Corporation Limited) Exemption Notice 2003

(SR 2003/127)

  • Takeovers Code (Jade Software Corporation Limited) Exemption Notice 2003: expired, on 1 January 2011, by clause 3.


Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This notice is administered by the Takeovers Panel.


Pursuant to section 45 of the Takeovers Act 1993, the Takeovers Panel gives the following notice (to which is appended a statement of reasons of the Takeover Panel).

Notice

1 Title
  • This notice is the Takeovers Code (Jade Software Corporation Limited) Exemption Notice 2003.

2 Application
  • This notice applies to acts or omissions occurring on or after the day after the date of its notification in the Gazette.

3 Expiry
  • This notice expires on the close of 31 December 2010.

4 Interpretation
  • (1) In this notice, unless the context otherwise requires,—

    Act means the Takeovers Act 1993

    calculation date means the date specified in each annual report referred to in clause 6(b) from which the assumptions set out in clause 6(d) apply

    Code means the Takeovers Code approved by the Takeovers Code Approval Order 2000 (SR 2000/210)

    control percentage means the percentage of voting securities in Jade held by an OPS shareholder and its associates

    increased voting rights means any increase in an OPS shareholder's voting rights in Jade as a result of 1 or more OSBI

    IPO means the initial public offer of shares in Jade

    Jade means Jade Software Corporation Limited

    OPS means the 1 outperformance share in Jade before the IPO that is materially on the terms set out in Schedule 1

    OPS shareholder means a shareholder in Jade as at 14 December 2001 that is listed in Schedule 2

    OSBI means a bonus issue of ordinary shares that may be triggered under the terms and conditions of the OPS.

    (2) Any term or expression that is defined in the Act or Code and used, but not defined, in this notice has the same meaning as in the Act or the Code.

5 Exemption from rule 6(1)(a) and (b) of Code
  • Every OPS shareholder is exempt from rule 6(1)(a) and (b) of the Code in respect of the increased voting rights obtained pursuant to an OSBI.

6 Conditions
  • The exemption in clause 5 is subject to the conditions that—

    • (a) a summary of the terms of the OPS (including any OSBIs) must be included in the investment statement and prospectus issued as part of the IPO and that summary must clearly state the potential maximum control percentage of each OPS shareholder as a result of an issue of ordinary shares under the OSBIs if the potential maximum control percentage of that shareholder is greater than 20%; and

    • (b) a summary of the terms of the OPS and how it may affect the OPS shareholders' voting rights in Jade must be set out in Jade's annual report in each year the OPS is on issue, including a statement of the potential maximum control percentage of each OPS shareholder as a result of an issue of ordinary shares under the OSBIs if the potential maximum control percentage of that shareholder is greater than 20%; and

    • (c) the information to be provided under paragraph (a) must be based on the following working assumptions:

      • (i) that the OPS shareholders maintain their shareholding in Jade between the date of application and the date of expiry of this notice:

      • (ii) that no voting securities, other than those issued under the IPO, are issued by Jade while the OPS is on issue:

      • (iii) that no OPS shareholder acquires additional voting rights under the IPO; and

    • (d) the information to be provided under paragraph (b) must be based on the following working assumptions:

      • (i) that the OPS shareholders maintain their shareholding in Jade between the calculation date and the expiry of this notice:

      • (ii) that no voting securities are issued by Jade after the calculation date while the OPS is on issue:

      • (iii) that no OPS shareholder acquires additional voting rights during the period between the calculation date and the expiry of this notice; and

    • (e) the investment statement and prospectus must contain the following disclaimer:

    • By exempting the OPS shareholders of Jade Software Corporation from rule 6(1) of the Takeovers Code, the Takeovers Panel is—

      • neither endorsing nor supporting the accuracy or reliability of the contents of this investment statement and prospectus; and

      • not implying it has a view on the merits of either the offer or the potential allotments to the OPS shareholders; and

    • (f) any allotment of ordinary shares to an OPS shareholder made pursuant to an OSBI must be made in proportion to that OPS shareholder's percentage entitlement as listed in Schedule 2; and

    • (g) the key terms and conditions of the OPS (including any OSBIs) must not be altered.


Schedule 1
Terms of outperformance share

r 4(1)

Outperformance share
  • 1 The rights, privileges, and restrictions attaching to the outperformance share issued in Jade are set out in this schedule.

Terms of issue
  • 2 The outperformance share must be held on behalf of the persons listed in Schedule 2 by any 2 directors of Jade as nominated from time to time by Jade. The 2 directors of Jade must be entered on the share register as the holders of the outperformance share.

  • 3 The persons listed in Schedule 2 have beneficial interests in the outperformance share, with entitlements under the outperformance share as determined over 8 financial years from 1 January 2002 (the term), in the proportions set out in Schedule 2.

Bonus issues
  • 4 In any financial year falling within the term, if the earnings before interest, taxation, depreciation, and amortisation (EBITDA) of Jade meet the EBITDA targets detailed below, Jade must conduct an outperformance share bonus issue as set out in clauses 5 and 6 as soon as reasonably practicable following a determination that an EBITDA target has been met. Whether an EBITDA target has been met must be determined by reference to the audited financial statements of Jade. In the event an EBITDA target is met in financial year 8 of the term, Jade must issue the OSBI as soon as reasonably practicable after it has been determined the target has been met, and before the outperformance share is repurchased.

  • 5 Each of the 3 OSBIs must be undertaken by Jade issuing a total of 7 million ordinary shares (per OSBI and subject to clause 13) directly to the beneficial holders of the outperformance share listed in Schedule 2, in proportion to each person's beneficial interest in the outperformance share on the following targets being met:

     TargetEBITDA 
     One$55,000,000 
     Two$65,000,000 
     Three$75,000,000 
  • 6 Each triggering of an EBITDA target must result in an OSBI up to a maximum total of 21,000,000 ordinary shares that may be issued during the term, subject to clause 13. Each OSBI can be triggered only once at the attainment, in the first instance, of each of the above EBITDA targets. The following are provided as examples:

    • (a) if, during the term, EBITDA of $56,000,000 were achieved twice, the achieving of the target in the first instance triggers an OSBI but the achieving of the target in the second instance would not trigger an OSBI:

    • (b) if, during the term, EBITDA of $66,000,000 were achieved in a particular financial year, 2 OSBIs would be triggered involving the issue of a total of 14,000,000 ordinary shares:

    • (c) if, during the term, EBITDA of $56,000,000 were achieved in year 6 and EBITDA of $76,000,000 were achieved in year 8, an OSBI would be triggered at the end of year 6 and 2 OSBIs would be triggered at the end of year 8, involving in total the issuing of 21,000,000 ordinary shares:

    • (d) if, during the term, EBITDA of $76,000,000 were achieved in years 6 and 7, only in relation to the year 6 target would 3 OSBIs be triggered totalling 21,000,000 shares. No OSBI would arise from the target being achieved in year 7.

Dividends
  • 7 The outperformance share must not carry any rights to participate in any dividend or other distribution made in respect of the ordinary shares in Jade. Any ordinary shares that are issued as part of an OSBI must carry the right to receive any dividend or other distribution made from the date of issue of those ordinary shares.

Repurchase of outperformance shares
  • 8 The outperformance share must be repurchased by Jade in accordance with the Companies Act 1993 after the expiry of the term, at a time when it has been determined whether an EBITDA target has been achieved in the final financial year applying to the outperformance share, and after any OSBI has been issued by Jade.

  • 9 Jade must not be required to provide any consideration for the repurchase of the outperformance share.

  • 10 After repurchase, the outperformance share must be immediately cancelled by Jade and no person continues to have any rights or obligations in respect of the outperformance share.

Voting rights attaching to outperformance share and change to rights
  • 11 The outperformance share must not carry any rights to vote. No change to the terms of the outperformance share may occur without the consent in writing of the holders of 75% or more of the beneficial interest in the outperformance share as set out in Schedule 2.

Rights to participate in further issues
  • 12 The outperformance share must not carry any rights to participate in any rights issues, or other issues of shares for consideration, declared or made by Jade in respect of the ordinary shares issued in Jade, except as set out in clause 13.

  • 13 If, however, Jade undertakes a bonus issue, a share split, or consolidation in respect of the ordinary shares on issue, the number of shares to be issued under any future OSBIs must be adjusted to fully reflect the bonus issue, share split, or consolidation, as the case may be.

Transfer of outperformance share
  • 14 The outperformance share must not be transferred, except to any director of Jade as determined by Jade, and must be held at all times by 2 directors of Jade for the benefit of those persons listed in Schedule 2.

  • 15 Subject to clause 6(f) of this notice, a person's beneficial interest in the outperformance share may not be transferred to another person without the written consent of Jade. Despite this restriction on transfer, should a person with a beneficial interest in the outperformance share die, his or her beneficial interest must be transferred to the trustees and executors of his or her estate.

Extinguishing of rights on acceptance of takeover offer
  • 16 In the event of a takeover offer under the Code, if the party making the offer and its associates (as defined in the Code) receive acceptances to take their holding to 90% or more of the voting securities in Jade, then the outperformance share must be repurchased immediately under the terms set out in clauses 8, 9, and 10, and the term is deemed to have expired on the date the offeror and its associates become dominant owners of Jade (as defined in the Code) to the intent that no OBSI must occur from that date.

Non-participation on liquidation
  • 17 In the event of Jade being placed in liquidation, the outperformance share must not confer any rights to participate in the distribution of surplus assets to the shareholders of Jade.

Determination of entitlement under outperformance share
  • 18 Jade must, in good faith, make all determinations required to be made regarding the application of the outperformance share and the entitlements of the persons listed in Schedule 2, and, as long as it acts in good faith, has no liability to the persons listed in Schedule 2 in relation to any entitlement, and in this respect the decisions of Jade are final and binding.

Schedule 2
Beneficial interests in outperformance share

rr 4(1), 6(f)

NameBeneficial interest
(%)
Ainsworth Paul0.1192
Amor Murray0.0035
Aoraki Nominees Limited15.9472
Ascroft John0.1037
Bankier Selwyn0.0736
Bardsley Colleen0.0691
Barker Stephen0.0138
Barr Robert0.0490
Begg Jan0.0366
Bellamy Roger0.0346
Black Stephen0.0487
Blair David0.0346
Bonne David0.0346
Borrie Adrien0.0691
Boyle Thomas0.0505
Brand Wayne0.0346
Bremmers Pieter0.0346
Brown Glenis0.0035
Bruce Chris0.0346
Buick Peter0.1383
Burbidge Peter0.0515
Burt David0.0104
Callaghan Kevin0.1037
Campbell John0.0563
Campbell Peter0.0242
Candy David0.0138
Clark Adrian0.0138
Cocco Morris0.0069
Cooper Dean0.1040
Cowan Keith0.0968
Davis Robert0.0346
DeCourcey Anthony0.0346
Denhard Gary0.0291
Dixon Colin0.0346
Doak Peter0.0864
Domigan Keith0.0465
Donaldson Tony0.0035
Doolan Brendon0.0726
Douglas Kevin0.0432
Draper Richard0.0035
Duke Charles0.1728
Duniam Darrell0.0763
Engelken Robert0.1037
Ewing Lee0.0346
Eyers John0.1044
Ferguson Daniel0.0356
Fitchett Peter0.0691
Fitzgerald Edward0.0874
Franklin John0.0346
Gamperle Victor0.0415
Garlick Douglas0.0173
Gleeson Patrick0.0439
Glover Chris0.0518
Glynn Kerry0.0104
Graham Richard0.0196
Gray Colin0.0346
Greaves Colin0.0138
Greer Richard0.0112
Grice Stephen0.0454
Grueber Anne0.0691
Gulbransen Geraldine0.0346
Harliwich Julie0.0484
Harriss Marion0.0035
Helms Peter0.1728
Hemsworth David0.0213
Henwood Brian0.0104
Herring Charlene0.0786
Hickin Russell0.0173
Hitchcock Alison0.0346
Howie Bill0.4148
Humm Jeffrey0.0069
Hutchins Carolyn0.0190
Jagers Martin0.0173
Jarquin Roger0.1210
Johnstone Brian0.0218
Johnstone Margaret0.0346
Jones Nigel0.1797
Joyce Graeme0.0518
Joyce Sean0.0346
Kershaw Peter0.0254
Lay Greg0.0987
Leadley Martyn0.0173
Ligeti Zsolt0.0207
Lindsay David0.3456
Lipinski Lynne0.0985
Lipinski Nelson0.1038
Little Heather0.0346
Lund Darren0.0622
Lund Nancy0.0242
Lynskey Tim0.0171
Marsh Nick0.0346
Mathews Jane0.0564
Mattsen Patricia0.0346
Maynard Michael0.0069
McColl Hugh0.0346
McDonald Rod0.0200
McDonald William0.0346
McKane Shona0.0069
McManus John0.0691
McMurtry Alan0.0173
McNamara Kevin0.0864
Meynell Ross0.0346
Mitchell Richard0.1555
Morrison David0.0173
Mulick Anthony0.0691
Neilson Murray0.0425
Newman Julian0.0518
Ng Paul0.0346
Nicholson Michelle0.0243
O'Brien Gerard0.0294
O'Brien Nick0.0346
O'Keefe David0.0138
Parfield Trust No 1 Limited0.8136
Parfield Trust No 2 Limited0.8136
Paterson Graeme0.0307
Patterson Mark0.0173
Paul Victor0.0518
Pearce Clarrie0.0691
Peters Tony0.0601
Pirie Brian0.0236
Pooch Vincent0.0346
Porter John0.0173
Poulton Joyce0.0035
Quennell David0.0691
Rae Don0.0193
Rathgen Gray0.0173
Reeves Mark0.0242
Riach Lorraine0.0249
Richardson Hon Ruth0.1728
Ridout Richard0.0810
Roberts Leigh0.0264
Robinson James0.0086
Robinson Martin0.1037
Russel Matthew0.1037
Ryall Madeleine0.0346
Sault Nicholas0.0346
Saunders Jeanette0.0069
Schwalger Peter0.0346
Scott Nicholas0.0207
Scott Owen0.0972
Segaran Chendra0.0277
Shore Colin0.0173
Simpson Sir Gilbert71.9252
Simpson Hugo0.6528
Smith Mike0.1728
Smith Peter0.0508
Smith Stephen0.0207
Snell Brian0.2074
South Jackie0.0644
South Jeffrey0.0068
Sullivan Denis0.1027
Tamplin Marie0.0691
Taylor Harvey0.0196
Thompson Faye0.0992
Thompson Trevor0.0518
Thomson Alan0.0035
Tully Wendy0.0109
Uys Anne0.0518
Valentine Murray0.3456
Van Soest Adele0.0691
Varga Judith0.0311
Voorwinde Lisa0.0346
Vukelic Milan0.0432
Walden Bernie0.1037
Ward Simon0.1728
Watson David0.0363
Weeds Graeme0.0346
White Michael0.3456
Williams Lucy0.0346
Williamson Greg0.0162
Winsloe Owen0.0173
Winter Brian0.0035
Wohlers Alan0.1857
Wright Dot0.0035
Wright Gavin0.0705
Yamagishi Fumiaki0.0069
Yorke Shirely0.0093
Young Peter0.1068

Dated at Auckland this 28th day of May 2003.

The Common Seal of the Takeovers Panel was affixed in the presence of:

[Seal]

J C King,
Chairperson.


Statement of reasons of Takeovers Panel

This notice applies to acts or omissions occurring on or after the day after the date of its notification in the Gazette and expires on the close of 31 December 2010.

This notice exempts the outperformance share (OPS) holders from rule 6(1)(a) and (b) of the Takeovers Code (the Code).

Issue of OPS

On 14 December 2001, mandatory convertible notes were issued by Jade Software Corporation Limited (Jade) to certain parties. The terms and conditions of the OPS were determined as part of the contractual negotiations that involved the issuing of mandatory convertible notes.

OSBIs

This exemption applies to the bonus issues of ordinary shares (OSBIs) that may be triggered under the terms and conditions of the OPS. The OSBIs are the potential issue of an additional 21 million ordinary shares (in 3 possible tranches of 7 million ordinary shares) to OPS shareholders, according to their beneficial interest in the OPS.

The OSBIs will be triggered should earnings before interest, taxes, depreciation, and amortisation (EBITDA) of Jade, in any of the 8 financial years beginning from 1 January 2002, reach certain targets. These targets are $55 million, $65 million, and $75 million.

In order to comply with the exemption, allotments made under an OSBI must be made in the same proportions as the beneficial interests set out in Schedule 2.

IPO

Jade is intending to conduct an initial public offer during 2003 subject to market conditions. One effect of the initial public offer will be that shareholders will invest in Jade who were not shareholders at the time that the OPS was issued.

As a result of the issue of ordinary shares under an OSBI, it is likely that 1 or more OPS shareholders will become the holder or controller of an increased percentage of voting rights in Jade. Without the present exemption, an OPS shareholder that holds 20% or less and that increases its holding or control above 20%, or that holds in excess of 20% and that increases its holding or control, would probably be in breach of rule 6 of the Code.

Takeovers Code (Class Exemptions) Notice (No 2) 2001

Clause 7 of the Takeovers Code (Class Exemptions) Notice (No 2) 2001 provides a class exemption from rule 6(1) in respect of issues of shares within 6 months of an initial public offering subject to, amongst other matters, disclosure in the relevant prospectus and investment statement. It is not possible for Jade to rely on the exemption provided in clause 7 of the Takeovers Code (Class Exemptions) Notice (No 2) 2001 with respect to the OPS, as the OSBIs will not occur within 6 months of the initial public offer.

Rule 7(d) of Code

It is not appropriate for Jade to rely on the exception provided in rule 7(d) of the Code. Under rule 7(d) of the Code, any allotment of ordinary shares would need to be approved at a shareholders' meeting by ordinary resolution of Jade. Under rule 17(2) of the Code, no OPS shareholders or their associates would be able to vote on the resolution. There is no certainty that such a resolution would be approved. By voting against the issue of ordinary shares under the OSBI, the future shareholders in Jade would be able to avoid the dilutionary effect of the OSBIs despite the fact that the existence of the OPS was disclosed as part of the initial public offer.

Disclosure

As part of this exemption, Jade is required to disclose the terms and conditions of the OPS and the potential impact of the OSBIs in—

  • the investment statement and prospectus that are issued in respect of the initial public offer; and

  • Jade's annual reports (while the OPS is on issue).

The Takeovers Panel considers that it is appropriate to grant the exemption from rule 6(1)(a) and (b) of the Code because, while shareholders at the time of an OSBI will not have an opportunity to vote to approve the allotment or allotments of ordinary shares to the OPS shareholders that might otherwise have occurred under rule 7(d) of the Code, those shareholders have the opportunity to express their approval (or otherwise) of the OPS in deciding whether or not to invest in Jade through the initial public offer or at a future time.

The Takeovers Panel considers that the exemption is consistent with the objectives of the Code because—

  • it ensures that the holders of securities in Jade are fairly treated; and

  • it recognises that potential investors in Jade will ultimately decide for themselves the merits of the potential allotments when deciding whether to invest in the initial public offer.


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 5 June 2003.


Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)


Notes
1 General
  • This is a reprint of the Takeovers Code (Jade Software Corporation Limited) Exemption Notice 2003. The reprint incorporates all the amendments to the notice as at 1 January 2011, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order. For more information, see http://www.pco.parliament.govt.nz/reprints/ .

2 Status of reprints
  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared
  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989
  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • omission of unnecessary referential words (such as of this section and of this Act)

    • typeface and type size (Times Roman, generally in 11.5 point)

    • layout of provisions, including:

      • indentation

      • position of section headings (eg, the number and heading now appear above the section)

    • format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • format of dates (eg, a date formerly expressed as the 1st day of January 1999 is now expressed as 1 January 1999)

    • position of the date of assent (it now appears on the front page of each Act)

    • punctuation (eg, colons are not used after definitions)

    • Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • case and appearance of letters and words, including:

      • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • small capital letters in section and subsection references are now capital letters

    • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • running heads (the information that appears at the top of each page)

    • format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)
  • Takeovers Code (Jade Software Corporation Limited) Exemption Notice 2003 (SR 2003/127): clause 3