EXHIBIT 10.25
96
TO: Granges, Inc.
RE: Amalgamation of Granges and Hycroft
This letter records the agreement between Atlas Corporation ("Atlas") ad
Granges Inc. ("Granges") pursuant to which Atlas will agree to vote its common
shares in Granges in favor of the proposed amalgamation of Granges with Hycroft
Resources & Development Co. Ltd. ("Hycroft") and the proposed share capital
reduction to be approved b the shareholders of Granges at an extraordinary
general meeting (the "EGM") to be held on March 30, 1995 or any adjournment
thereof.
Atlas will vote its common shares in Granges in favour of the amalgamation
at the EGM provided that the amalgamation agreement to be entered into by
Granges and Hycroft to be approved by a special resolution of the shareholders
of Granges at the EGM contains the following provisions:
1. Board of Directors
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The first board of director of the amalgamated company ("Amalg Co") will
consist of the following 11 individuals:
David Sinclair
John Auston
Al Thompson
Ken Mathews
Peter Walton
David Birkenshaw
Mike Richings
James Dunnett
John Walton
Peter Steen
William Calhoun
David Sinclair will be the Chairman of the Board of Amalg Co and David
Birkenshaw will be the Vice Chairman of the Board of Amalg Co.
The amalgamation agreement will stipulate that the term of office for all
the initial directors will be until the first annual general meeting of Amalg Co
in 1996, with the exception of John Auston, Ken Mathews and James Dunnett whose
terms will expire on September 30, 1995.
The amalgamation agreement of Amalg Co will also stipulate that two of the
three vacant positions occurring on September 30, 1995 will not be filled by the
remaining directors, that one of the three vacant positions will be filled by
Keith Steeves effective October 1, 1995 and that the directors to be elected at
the first annual general meeting in 1996
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will be nine in number. The following slate of directors will be proposed for
election at the first annual general meeting of Amalg Co in 1996:
David Sinclair
Peter Walton
Al Thompson
David Birkenshaw
Mike Richings
Keith Steeves
John Walton
Peter Steen
William Calhoun
If, after September 30, 1995, any of the individuals set out above is
unable or unwilling to act as a director of Amalg Co the remaining directors
shall fill such casual vacancies in the board, up to nine, in accordance with
the articles of Amalg Co.
Atlas agrees to vote its common shares in Granges in favor of electing the
above slate of directors at the first annual general meeting of Amalg Co in
1996.
2. President and Chief Executive Officer of Amalg Co
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John Auston will be the first president and chief executive officer of
Amalg Co. His term as president and chief executive officer will end
concurrently with the end of his term as a director of Amalg Co on September 30,
1995. Mike Richings will be appointed president and chief executive officer of
Amalg Co on October 1, 1995. Mr. Richings' appointment will be subject to
approval by the board of directors of Amalg Co. Such appointment and any
employment contract or arrangement with Mike Richings will be subject to
approval of the board of directors at the time of his appointment as president
and chief executive officer.
3. Casting Vote
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The articles of Amalg Co will provide that the chairman of the board of
directors will not have a casting vote in the event if a tie, either at a
meeting of directors or at a meeting of shareholders.
4. Shareholder Rights Plan
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Atlas will cause its nominees on the board of directors of Amalg Co to vote
in favor of a shareholder rights plan to become effective immediately following
the amalgamation of Granges and Hycroft and to be made subject to shareholder
ratification at an extraordinary general meeting of Amalg Co to be held on or
before September 30, 1995, at which meeting Atlas will vote its common shares in
Granges in favor of the shareholder rights plan, subject to the shareholder
rights plan containing a grandfathering provision for Atlas on the same terms
and conditions as the grandfathering provision set out in the draft Granges
Shareholder Protection Rights Agreement dated December 1, 1993, a copy of which
was provided to Atlas.
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Atlas and Granges agree that the second paragraph contained in section no.
1 of the agreement (the "Stand-Still Agreement") between Atlas and Granges dated
May 13, 1994 is hereby amended by deleting the said second paragraph and
substituting therefor the following: "Atlas shall have the right to propose
nominees to the Granges board of directors, such number of nominees to be equal
to Atlas' proportionate holdings of common shares of Granges multiplied by the
total number of directors on the Granges board, rounded up or down to the
nearest whole number. For the purposes of rounding, all numbers ending in 0.5
shall be rounded up." Atlas and Granges hereby further agree that the Stand-
Still Agreement, as amended, shall remain binding upon Atlas and Granges and
shall be binding upon Amalg Co until such time as the shareholders rights plan
contemplated by this letter agreement shall have been ratified by the
shareholders of Amalg Co, after which time the Stand-Still Agreement, as
amended, shall cease to be of any further force or effect, save and except with
respect to Atlas' entitlement to propose nominees to the board of directors of
Amalg Co, which right shall continue in full force and effect.
5. Special Committee
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The first board of directors of Amalg Co will elect at their first meeting
following the amalgamation of Granges and Hycroft, John Auston, Peter Steen and
Mike Richings, to a committee to be known as the Special Committee. The said
committee will review and advise the board on joint exploration ventures with
Atlas, development of a South American program and the exchange of technical
information with Atlas.
6. Share Exchange Ratio
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The foregoing agreements by Atlas are subject to the share exchange ratio
upon the amalgamation of Granges and Hycroft not exceeding the ratios
recommended to the board of directors of Granges in a letter from Lancaster
Financial Corporation dated January 11, 1995.
DATED the 24th day of February , 1995.
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ATLAS CORPORATION
By: /s/ David J. Birkenshaw
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Chairman and Chief Executive Officer
Agreed and accepted this 24th day of February , 1995.
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GRANGES INC.
By: /s/ Tryggve G. Angel
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Chairman of the Board of Directors
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