TSX: DXI        OTCQB: DXIE

 

Significant Differences in DXI’s Corporate Governance Practices Compared to NYSE MKT Corporate Governance Standards

 

As a Canadian corporation listed on the NYSE MKT, DXI is not required to comply with most of the NYSE MKT corporate governance standards, so long as it complies with Canadian and TSX corporate governance requirements.  In order to claim such an exemption, however, DXI must disclose the significant difference between its corporate governance practices and those required to be followed by U.S. domestic companies under the NYSE MKT corporate governance standards.

DXI’s corporate governance practices meet or exceed all applicable Canadian requirements.  They also incorporate some best practices derived from the NYSE MKT rules, and comply with applicable United States securities laws and rules adopted by the United States Securities and Exchange Commission (the “SEC”).  Further information about DXI’s corporate governance practices is included in DXI’s Information Circulars prepared in respect of its annual meetings of shareholders.

The following is a summary of the significant ways in which DXI’s corporate governance practices differ from those required to be followed by U.S. domestic issuers under NYSE MKT’s corporate governance standards.  Except as described in this summary, DXI is in compliance with the NYSE MKT corporate governance standards in all significant respects.

Quorum Requirements

The rules of the NYSE MKT require a quorum of at least 33-1/3% of the shares issued and outstanding and entitled to vote for a meeting of a listed company's shareholders. The TSX does not specify a quorum requirement for a meeting of a listed company's shareholders. DXI’s current required quorum at any meeting of shareholders (unless a greater number of persons are required to be present or a greater number of shares are required to be represented by the Business Corporations Act (British Columbia) (the “BCBCA”) or any special rights attached to any class or series of shares issued by DXI), as set forth in DXI’s Articles, is one or more shareholders present in person or represented by proxy.  DXI’s current quorum requirement is not prohibited by, and does not constitute a breach of, the BCBCA, applicable Canadian securities laws or the rules and policies of the TSX.

Approval of Equity Compensation Plans

Subject to certain exceptions, the rules of the NYSE MKT require shareholder approval of all equity compensation plans and material amendments to such plans.  The circumstances in which the NYSE MKT rules require shareholder approval with respect to equity compensation plans are broader than under the rules of the TSX.  For example, the NYSE MKT rules require shareholder approval for any compensation arrangement in which an officer, director, employee or consultant may receive options or stock (including stock purchased in the open market for re-distribution), while the TSX rules provide that only the creation of or certain material amendments to equity compensation plans that provide for new issuances of securities are subject to shareholder approval.  DXI follows the TSX rules with respect to the requirements for shareholder approval of equity compensation plans and material amendments to such plans.

Approval of Certain Private Placements

The rules of the NYSE MKT require a listed company to obtain shareholder approval for certain types of securities issuances, including private placements that may result in the issuance of common shares (or securities convertible into common shares) equal to 20% or more of presently outstanding shares, for a price that is less than the greater of the book or market value of the common shares. Under TSX rules, shareholder approval is required only for issuances of securities in excess of 25% of the issued and outstanding shares.  In the event that the NYSE MKT's shareholder approval requirements are triggered by an issuance of DXI’s securities, DXI will, if permitted by the TSX, seek an exemption from the NYSE MKT shareholder approval requirements on the basis that it should be allowed to rely on the TSX shareholder approval rules.

Proxy Solicitation Requirements

The rules of the NYSE MKT require the solicitation of proxies and delivery of proxy statements for all shareholder meetings of a listed company, and that proxies be solicited pursuant to a proxy statement that conforms to the proxy rules of the SEC.  As a "foreign private issuer" as defined under the United States Securities Exchange Act of 1934, as amended, DXI is exempt from the proxy rules of the SEC, and instead DXI solicits proxies in accordance with the BCBCA, applicable Canadian securities laws and the rules and policies of the TSX, which are consistent in material respects with the SEC’s proxy rules..

 

 

 

DXI ENERGY