Churchill adopts amendments to its stock option plan and shareholder rights
plan

TSX: CUQ

CALGARY, May 13 /CNW/ - The Churchill Corporation ("Churchill" or the "Corporation") confirms that it will hold its annual general and special meeting of shareholders on Thursday May, 20, 2010 (the "Meeting") at the Metropolitan Centre, Strand/Tivoli Room, 333 - 4 Avenue SW, Calgary, Alberta. The meeting will start at 2:00 PM Mountain Time and the agenda will address the usual annual business items. The Corporation will also be placing before shareholders for approval at the meeting, a resolution seeking approval of the unallocated options pursuant to Churchill's Amended 2007 Stock Option Plan (the "Option Plan") and a resolution seeking approval of amendments to Churchill's Shareholder Rights Plan, as amended and restated (the "2010 Amended and Restated Rights Plan").

It was always the intention of the Churchill Board of Directors, in recommending these plans to shareholders that they meet the criteria associated for plans that are shareholder-friendly. In consultation with RiskMetrics Group ("RiskMetrics"), an independent proxy voting advisory and corporate governance services firm, Churchill has determined to make certain amendments to the Option Plan. These amendments include: (i) excluding the non-employee Directors of Churchill from participation in the Option Plan; and (ii) modifications to the amendment provisions of the Option Plan such that without prior shareholder approval Churchill will not make any changes to the Option Plan or any options granted under the Option Plan that (A) reduce the exercise price or cancel and reissue non-insider options; (B) extend the expiry date of options for the benefit of non-insiders; (C) change eligible participants that may permit the introduction or re-introduction of non-employee directors as participants in the plan; or (D) permit options granted under the Option Plan to be transferable or assignable other than for normal estate settlement purposes. Churchill plans to propose, at its 2011 annual meeting of shareholders, amendments to the Option Plan that will give effect to these restrictions and to seek shareholder approval for such amendments. These amendments will also require the approval of the Toronto Stock Exchange.

Churchill understands that in light of the proposed amendments to the Option Plan, RiskMetrics will be recommending to its clients who hold shares of Churchill that they vote in favour of the resolution to approve unallocated options pursuant to the Option Plan.

In addition, and in consultation with RiskMetrics, Churchill has also agreed to make certain amendments to the 2010 Amended and Restated Rights Plan in order to ensure that the 2010 Amended and Restated Plan conforms to RiskMetrics' current guidelines for shareholder rights plans. Specifically, Churchill is amending certain amendments to the definitions of "Acquiring Person", "Beneficial Owner", "Acting Jointly or in Concert" and to Section 5.4, "Supplements and Amendments." Attached to this press release are the changes to the 2010 Amended and Restated Plan and the Corporation has filed on SEDAR these same pages blacklined to show the changes.

The 2010 Amended and Restated Plan was originally adopted in order to ensure fair treatment of Churchill shareholders in any transaction involving a takeover-bid, and with the primary objective to provide the Board of Directors sufficient time to explore and develop alternatives for maximizing shareholder value if a take-over bid is made for Churchill and to provide every shareholder an equal opportunity to participate in such a bid. Churchill is not aware of any pending or threatened take-over bid for the Corporation.

Churchill understands that in light of the proposed amendments, RiskMetrics will be recommending to its clients who hold shares of Churchill that they vote in favour of the amendments to the 2010 Amended and Restated Plan.

About The Churchill Corporation:

The Churchill Corporation provides building construction, industrial insulation and electrical contracting services throughout Western Canada. Churchill common shares are listed on the Toronto Stock Exchange under the symbol "CUQ".

FORWARD LOOKING STATEMENTS

Certain statements in this Press Release may constitute "forward-looking statements". Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives of the Corporation. Many of these statements can be identified by looking for words such as "believes," "expects," "may," "will," "intends," "anticipates," "estimates," "continues," or the negative thereof, or other variations thereon. Although management of Churchill believes its expectations regarding future performance of the Corporation are based on reasonable assumptions and currently available competitive, financial and economic data, market conditions and operating plans, it can give no assurance its expectations will be achieved. The Corporation cautions that, by their nature, forward-looking statements, involve risks, and uncertainties and that its actual actions, and/or results could differ materially from those expressed or implied in such forward-looking statements, and that the aforementioned risks, uncertainties and actions could affect the extent to which a particular projection materializes. The Corporation assumes no obligation to update the forward-looking statements should circumstances or the Corporation's management's estimates or opinions change.

    
                                  Article 1
                               INTERPRETATION

    1.1 Certain Definitions
        -------------------

        For purposes of this Agreement, the following terms have the meanings
        indicated:

        (a) "Acquiring Person" shall mean any Person who is the Beneficial
            Owner of 20% or more of the outstanding Common Shares; provided,
            however, that the term "Acquiring Person" shall not include:

            (i)  the Corporation or any Subsidiary of the Corporation;

            (ii) any Person who becomes the Beneficial Owner of 20% or more
                 of the outstanding Common Shares as a result of one or any
                 combination of:

                 (A) an acquisition or redemption by the Corporation of
                     Common Shares of the Corporation which, by reducing the
                     number of Common Shares outstanding, increases the
                     proportionate number of Common Shares Beneficially Owned
                     by such Person to 20% or more of the Common Shares of
                     the Corporation then outstanding;

                 (B) share acquisitions made pursuant to a Permitted Bid or a
                     Competing Permitted Bid ("Permitted Bid Acquisitions");

                 (C) share acquisitions (1) in respect of which the Board of
                     Directors of the Corporation has waived the application
                     of Section 3.1 pursuant to Subsections 5.1(b), (c) or
                     (d) or (2) which were made on or prior to the date of
                     this Agreement or (3) which were made pursuant to a
                     dividend reinvestment plan of the Corporation or (4)
                     pursuant to the receipt or exercise of rights issued by
                     the Corporation to all the Holders of the Common Shares
                     to subscribe for or purchase Common Shares or
                     Convertible Securities, provided that such rights are
                     acquired directly from the Corporation and not from any
                     other Person and the Person does not thereby acquire a
                     greater percentage of such Common Shares or Convertible
                     Securities than the Person's percentage of Common Shares
                     Beneficially Owned immediately prior to such acquisition
                     or (5) pursuant to a distribution by the Corporation of
                     Common Shares or Convertible Securities made pursuant to
                     a prospectus or (6) pursuant to a distribution by the
                     Corporation of Common Shares or Convertible Securities
                     pursuant to a prospectus or by way of a private
                     placement by the Corporation or upon the exercise by an
                     individual employee of stock options granted under a
                     stock option plan of the Corporation or rights to
                     purchase securities granted under a share purchase plan
                     of the Corporation, provided that in the case of (5) and
                     (6) above, such Person does not thereby acquire a
                     greater percentage of such Common Shares or Convertible
                     Securities than the Person's percentage of Common Shares
                     Beneficially Owned immediately prior to such acquisition
                     and further provided that all necessary stock exchange
                     approvals for such prospectus, private placement, stock
                     option plan or share purchase plan have been obtained
                     and such prospectus, private placement, stock option
                     plan or share purchase plan complies with the terms and
                     conditions of such approvals ("Exempt Acquisitions");

                 (D) the acquisition of Common Shares upon the exercise of
                     Convertible Securities received by such Person pursuant
                     to a Permitted Bid Acquisition, Exempt Acquisition or a
                     Pro Rata Acquisition (as defined below) ("Convertible
                     Security Acquisitions"); or

                 (E) acquisitions as a result of a stock dividend, a stock
                     split or other event pursuant to which such Person
                     receives or acquires Common Shares or Convertible
                     Securities on the same pro rata basis as all other
                     Holders of Common Shares of the same class ("Pro Rata
                     Acquisitions");

                 provided, however, that if a Person shall become the
                 Beneficial Owner of 20% or more of the Common Shares of the
                 Corporation then outstanding by reason of any one or a
                 combination of (i) share acquisitions or redemptions by the
                 Corporation or (ii) Permitted Bid Acquisitions or (iii)
                 Exempt Acquisitions or (iv) Convertible Security
                 Acquisitions or (v) Pro Rata Acquisitions and, after such
                 share acquisitions or redemptions by the Corporation or
                 Permitted Bid Acquisitions or Exempt Acquisitions or
                 Convertible Security Acquisitions or Pro Rata Acquisitions,
                 becomes the Beneficial Owner of more than an additional 1%
                 of the number of Common Shares of the Corporation
                 outstanding other than pursuant to any one or combination of
                 share acquisitions or redemptions of shares by the
                 Corporation, Permitted Bid Acquisitions, Exempt Acquisitions
                 or Convertible Security Acquisitions or Pro Rata
                 Acquisitions, then as of the date of any such acquisition
                 such Person shall become an "Acquiring Person";

           (iii) a Grandfather Person provided, however, that if such Person
                 shall thereafter become the Beneficial Owner of more than an
                 additional 1% of the number of Common Shares of the
                 Corporation outstanding other than pursuant to share
                 acquisitions or redemptions of shares by the Corporation,
                 Permitted Bid Acquisitions, Exempt Acquisitions, Convertible
                 Security Acquisitions or Pro Rata Acquisitions, then as of
                 the date of any such acquisition such Person shall become an
                 "Acquiring Person";

            (iv) for a period of ten days after the Disqualification Date (as
                 defined below), any Person who becomes the Beneficial Owner
                 of 20% or more of the outstanding Common Shares, as a result
                 of such Person becoming disqualified from relying on clause
                 1.1 (e)(B) because such Person makes or announces a current
                 intention to make a Take-Over Bid, either alone or by acting
                 jointly or in concert with any other Person. For the
                 purposes of this definition, "Disqualification Date" means
                 the first date of public announcement that any Person is
                 making or intends to make a Take-Over Bid; or

            (v)  an underwriter or member of a banking or selling group that
                 becomes the Beneficial Owner of 20% or more of the Common
                 Shares in connection with a distribution to the public of
                 securities of the Corporation;

        (b) "Affiliate" when used to indicate a relationship with a specified
            Person, shall mean a Person that directly, or indirectly through
            one or more intermediaries, controls, or is Controlled by, or is
            under common control with, such specified Person;

        (c) "Agreement" shall mean this shareholder rights plan agreement
            between the Corporation and the Rights Agent, as amended or
            supplemented from time to time; "hereof", "herein", "hereto" and
            similar expressions mean and refer to this Agreement as a whole
            and not to any particular part of this Agreement;

        (d) "Associate" of a specified Person shall mean any Person to whom
            such specified Person is married or with whom such specified
            Person is living in a conjugal relationship outside marriage, or
            any relative of such specified Person, said spouse or other
            Person who has the same home as such specified Person;

        (e) A Person shall be deemed the "Beneficial Owner" of, and to have
            "Beneficial Ownership" of, and to "Beneficially Own":

            (i)  any securities as to which such Person or any of such
                 Person's Affiliates or Associates is the owner at law or in
                 equity;

            (ii) any securities as to which such Person or any of such
                 Person's Affiliates or Associates has the right to acquire
                 (A) upon the exercise of any Convertible Securities, or (B)
                 whether such right is exercisable immediately or on the
                 happening of any contingency which has yet to occur, (where
                 such right is exercisable within a period of 60 days,
                 whether or not on condition or on the happening of any
                 contingency) pursuant to any agreement, arrangement or
                 understanding, whether or not in writing (other than
                 customary agreements with and between underwriters and
                 banking group or selling group members with respect to a
                 distribution of securities by the Corporation or pursuant to
                 a pledge of securities);

    1.4  Calculation of Number and Percentage of Beneficial Ownership
         of Outstanding Common Shares
         ----------------------------------------------------------

                 where:

                 A  -  the number of votes for the election of all directors
                       generally attaching to the Common Shares Beneficially
                       Owned by such Person; and

                 B  -  the number of votes for the election of all directors
                       generally attaching to all outstanding Common Shares.

                 The percentage of outstanding Common Shares represented by
                 any particular group of Common Shares acquired or held by
                 any Person shall be determined in like manner mutatis
                 mutandis.

        (b) For the purposes of the foregoing formula, where any person is
            deemed to Beneficially Own unissued Common Shares which may be
            acquired pursuant to Convertible Securities, such Common Shares
            shall be deemed to be outstanding for the purpose of calculating
            the percentage of Common Shares Beneficially Owned by such Person
            in both the numerator and the denominator, but no other unissued
            Common Shares which may be acquired pursuant to any other
            outstanding Convertible Securities shall, for the purposes of
            that calculation, be deemed to be outstanding.

    1.5 Acting Jointly or in Concert
        ----------------------------

        For purposes of this Agreement a Person is acting jointly or in
        concert with another Person if such Person has any agreement,
        arrangement or understanding, whether formal or informal and whether
        or not in writing, with such other Person to acquire or to Offer to
        Acquire any Common Shares or Convertible Securities (other than
        customary agreements with and between underwriters and banking group
        or selling group members with respect to a distribution of securities
        by the Corporation or pursuant to a pledge of securities in the
        ordinary course of business or pursuant to Permitted Lock-Up
        Agreements).

    1.6 Generally Accepted Accounting Principles
        ----------------------------------------

        Wherever in this Agreement reference is made to generally accepted
        accounting principles, such reference shall be deemed to be the
        recommendations at the relevant time of the Canadian Institute of
        Chartered Accountants, or any successor institute, applicable on a
        consolidated basis (unless otherwise specifically provided herein to
        be applicable on an unconsolidated basis) as at the date on which a
        calculation is made or required to be made in accordance with
        generally accepted accounting principles. Where the character or
        amount of any asset or liability or item of revenue or expense is
        required to be determined, or any consolidation or other accounting
        computation is required to be made for the purpose of this Agreement
        or any document, such determination or calculation shall, to the
        extent applicable and except as otherwise specified herein or as
        otherwise agreed in writing by the parties, be made in accordance
        with generally accepted accounting principles applied on a consistent
        basis.

    5.4 Supplements and Amendments
        --------------------------

        (a) The Corporation may make amendments to this Agreement to correct
            any clerical or typographical error or which are required to
            maintain the validity of this Agreement as a result of any change
            in any applicable legislation or regulations thereunder. The
            Corporation may, prior to the date of the shareholders' meeting
            referred to in Section 5.15, supplement or amend any of the
            provisions of this Agreement and the Rights without the approval
            of any Holders of Rights or Common Shares in order to make any
            changes which the Board of Directors acting in good faith may
            deem necessary or desirable. Notwithstanding anything in this
            Section 5.4 to the contrary, no such supplement or amendment
            shall be made to the provisions of Article 4 except with the
            written concurrence of the Rights Agent thereto.

        (b) Subject to Subsection 5.4(a), the Corporation may, with the prior
            consent of the Holders of Common Shares obtained as set forth
            below, at any time before the Separation Time, supplement or
            amend any of the provisions of this Agreement and the Rights
            (whether or not such action would materially adversely affect the
            interests of the Holders of Rights generally). Such consent shall
            be deemed to have been given if the action requiring such
            approval is authorized by the affirmative vote of a majority of
            the votes cast by Independent Shareholders present or represented
            at and entitled to be voted at a meeting of the Holders of Common
            Shares duly called and held in compliance with applicable laws
            and the articles and by-laws of the Corporation.

        (c) Subject to subsection 5.4(a), the Corporation may, with the prior
            consent of the Holders of Rights, at any time on or after the
            Separation Time, supplement or amend any of the provisions of
            this Agreement and the Rights (whether or not such action would
            materially adversely affect the interests of the Holders of
            Rights generally), provided that no such supplement or amendment
            shall be made to the provisions of Article 4 except with the
            written concurrence of the Rights Agent thereto.

        (d) Any approval of the Holders of Rights shall be deemed to have
            been given if the action requiring such approval is authorized by
            the affirmative votes of the Holders of Rights present or
            represented at and entitled to be voted at a meeting of the
            Holders of Rights and representing a majority of the votes cast
            in respect thereof. For the purposes hereof, each outstanding
            Right (other than Rights which are void pursuant to the
            provisions hereof) shall be entitled to one vote, and the
            procedures for the calling, holding and conduct of the meeting
            shall be those, as nearly as may be, which are provided in the
            Corporation's by-laws and the Business Corporations Act with
            respect to meetings of shareholders of the Corporation.
    

SOURCE Stuart Olson Inc.

For further information: For further information: Andrew Apedoe, Vice President Investor Relations & Secretary, The Churchill Corporation, (403) 685-7775, Email: inquiries@churchill-cuq.com; Website: www.churchillcorporation.com


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