Shareholders approve AC plan

Shareholders have voted to approve proposed amendments to Air Canada’s shareholder rights plan during the company’s annual and special meeting held on June 4, 2012. The proposed amendments were previously announced on May 4 and are described in the management proxy circular sent to Air Canada’s shareholders prior to the meeting. Subject to certain exceptions identified in the Rights Plan, the Rights Plan, as currently amended, would be triggered in the event of an offer to acquire 20% or more of the outstanding Class A variable voting shares and Class B voting shares of Air Canada calculated on a combined basis, instead of 20% or more of the outstanding Class A variable voting shares or Class B voting shares calculated on a per class basis as was the case under the Rights Plan prior to the amendments that came into effect on June 4. A copy of the amended Rights Plan is available on SEDAR at http://www.sedar.com . As previously announced by Air Canada, the amendments to the Rights Plan were proposed in order to render effective a decision issued by Canadian securities regulatory authorities (pursuant to an application of Air Canada) that effectively treats Air Canada’s Class A variable voting shares and Class B voting shares as a single class for the purposes of applicable take-over bid requirements and early warning reporting requirements contained under Canadian securities laws. The decision grants exemptive relief from: (i) applicable take-over bid requirements, as contained under Canadian securities laws, such that those requirements would only apply to an offer to acquire 20% or more of the outstanding Class A variable voting shares and Class B voting shares of Air Canada on a combined basis, and (ii) applicable early warning reporting requirements, as contained under Canadian securities laws, such that those requirements would only apply to an acquirer who acquires or holds beneficial ownership of, or control or direction over 10% or more of the outstanding Class A variable voting shares and Class B voting shares of Air Canada on a combined basis (or 5% in the case of acquisitions during a take-over bid). A copy of the decision is available on SEDAR at http://www.sedar.com . The decision was conditional upon shareholder approval of the proposed amendments to the Rights Plan, which modified the Rights Plan to render it consistent with the Decision. The Rights Plan, originally approved at Air Canada’s 2011 annual and special shareholders meeting, is designed to provide Air Canada’s shareholders and the Board of Directors additional time to assess an unsolicited take-over bid for the company and, where appropriate, to give the Board of Directors additional time to pursue alternatives for maximizing shareholder value. It also encourages fair treatment of all shareholders by providing them with an equal opportunity to participate in a take-over bid.