Simpson Oil Limited Initiates Litigation with Parkland Corporation Seeking Declaration Regarding Status of Governance Agreement
In accepting the terms of the Governance Agreement in 2019, Simpson Oil agreed to a standstill covenant and restrictions on its ability to vote its PKI shares freely. Simpson Oil accepted the standstill and voting restrictions because it was confident in the stewardship of Parkland by its then current senior management team and because under the terms of the Governance Agreement those restrictions would fall away on the occurrence of a "Material Adverse Change" or "MAC", which explicitly included "a material change in the composition of senior management at Parkland".
Since 2019, there has been substantial churn of Parkland senior management while performance of the company has suffered. As of today, seven of the ten people identified as members of Parkland's senior management team in its 2018 Annual Information Form have left or ceased to be senior managers. Simpson Oil has long maintained and made known to Parkland that a MAC has occurred under the terms of the Governance Agreement and Simpson Oil will continue to operate on the basis that the standstill and voting restrictions under the Governance Agreement are no longer in effect. However, despite the clearly material changes in the composition of Parkland's senior management, Parkland has publicly asserted that the voting and standstill restrictions under the Governance Agreement continue to apply, creating confusion and uncertainty in the market.
By incorrectly asserting that the voting restrictions and standstill provisions imposed by the Governance Agreement remain in place, Parkland is attempting to unilaterally impose restrictions on Simpson Oil that are not consistent with the restrictions to which Simpson Oil agreed. Prior to commencing this litigation, Simpson Oil requested that Parkland acknowledge that a MAC had occurred under the terms of the Governance Agreement, but Parkland declined. In maintaining its position on the MAC despite a clear factual basis to the contrary, Parkland's board has determined that engaging in unnecessary litigation with its largest shareholder is consistent with its duty to act in the best interests of the company.
Parkland continues inappropriately to seek to insulate indefinitely its board of directors and Chief Executive Officer from accountability to Parkland's shareholders. Simpson Oil remains committed to protecting shareholder rights for the benefit of all shareholders, and will hold Parkland's board and Chief Executive Officer accountable for the proper exercise and performance of their duties, including the fiduciary duties to act in the best interests of the company and to avoid conflicts of interest.
Simpson Oil welcomes the opportunity to discuss its strategic vision for Parkland with other shareholders.
This press release is being issued by
Simpson Oil holds 34,444,050 common shares ("Parkland Common Shares") in the capital of Parkland, representing approximately 19.78% of the issued and outstanding Parkland Common Shares.
Subject to compliance with applicable laws and any applicable contractual restrictions, Simpson Oil may from time to time dispose of or acquire additional securities of Parkland.
Parkland's head office address is Suite 1800,
This press release is being issued by Simpson Oil as a result of a change in a material fact set out in a previous report. In accordance with NI 62-103, an early warning report will be filed by Simpson Oil on Parkland's SEDAR profile at www.sedar.com. A copy of such report may also be obtained by contacting
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