Amendments to the TSX Company Manual have been adopted to extend the current exemption from security holder approval in cases where listed issuers adopt security based compensation arrangements for employees of a target issuer in the context of an acquisition, to new security based compensation arrangements created to retain employees of the target.

As we discussed last year, under the amended section 611, the number of securities issuable under the security based compensation arrangement may not exceed 2% of issued and outstanding securities of the issuer and no more than 25% of the issued and outstanding securities of the issuer may be issued as consideration for the acquisition (including those issuable under the security based compensation agreement). Ultimately, the amendments formalize an exemption currently granted by the TSX on a discretionary basis.

The amendments to the Manual also clarify the definition of a "backdoor listing" and the discretion of the TSX to consider various factors when determining whether a transaction constitutes a backdoor listing.

The amendments are effective for listed issuers on October 1, 2014.