Exhibit 10.1
SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT is dated as of April 22, 2005.
BETWEEN:
GSI LUMONICS INC.
(the "Corporation")
OF THE FIRST PART
- and -
COMPUTERSHARE TRUST COMPANY OF CANADA
(the "Rights Agent")
OF THE SECOND PART
WHEREAS:
A. The Board of Directors has determined that it is advisable to adopt a
shareholder rights plan (the "Rights Plan") to ensure, to the extent
possible, that all shareholders of the Corporation are treated fairly in
connection with any takeover offer for the Corporation or other acquisition
of control of the Corporation.
B. In order to implement the Rights Plan, the Board of Directors has:
(a) authorized and declared a distribution of one right (a "Right")
effective at the Close of Business at the Record Time in respect of
each Common Share outstanding at the Close of Business at the Record
Time;
(b) authorized the issuance of one Right in respect of each Common Share
issued after the Record Time and prior to the earlier of the
Separation Time and the Expiration Time; and
(c) authorized the issuance of Rights Certificates to holders of Rights
pursuant to the terms and subject to the conditions set forth herein.
C. Each Right entitles the holder thereof, after the Separation Time to
purchase securities of the Corporation pursuant to the terms and subject to
the conditions set forth herein.
D. The Corporation desires to appoint the Rights Agent to act on behalf of the
Corporation, and the Rights Agent is willing to so act, in connection with
the issuance, transfer, exchange and replacement of Rights Certificates,
the exercise of Rights and other matters referred to herein.
NOW THEREFORE in consideration of the premises and respective agreements
set forth herein, the parties hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 CERTAIN DEFINITIONS
For the purposes of this agreement (the "Agreement"), including the
recitals hereto, the following
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terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who is the Beneficial Owner
of 20% or more of the outstanding Voting Shares of the Corporation;
provided, however, that the term "Acquiring Person" shall not include
(i) the Corporation or any Affiliate of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or more of the
outstanding Voting Shares as a result of one or any combination
of:
(A) a Voting Share Reduction;
(B) a Permitted Bid Acquisition;
(C) an Exempt Acquisition;
(D) a Pro Rata Acquisition; and
(E) a Convertible Security Acquisition;
provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the outstanding Voting Shares by reason
of one or any combination of a Voting Share Reduction, a
Permitted Bid Acquisition, an Exempt Acquisition, a Pro Rata
Acquisition and/or a Convertible Security Acquisition, and
thereafter and as a result thereof becomes the Beneficial Owner
of more than an additional one per cent of the Voting Shares then
outstanding (otherwise than pursuant to one or any combination of
a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt
Acquisition, a Pro Rata Acquisition and/or a Convertible Security
Acquisition), then, as of the date that such Person becomes a
Beneficial Owner of such additional Voting Shares, such Person
shall become an "Acquiring Person";
(iii) for the period of 10 days after the Disqualification Date, any
Person who becomes the Beneficial Owner of 20% or more of the
outstanding Voting Shares as a result of such Person becoming
disqualified from relying on subclause 1.1(d)(B) hereof where
such disqualification results solely because such Person is
making or has announced a current intention to make a Take-over
Bid, either alone, though such Person's Affiliates or Associates,
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 such Person is making or
has announced a current intention to make a Take-over Bid, alone
or by acting jointly or in concert with another Person;
(iv) an underwriter or member of a banking or selling group that
becomes the Beneficial Owner of 20% or more of the Voting Shares
in connection with a distribution of securities by way of
prospectus or private placement;
(v) a Person (a "Grandfathered Person") who is the Beneficial Owner
of 20% or more of the outstanding Voting Shares of the
Corporation as at the Record Time, provided, however, that this
exception shall not be, and shall cease to be, applicable to a
Grandfathered Person in the event that such Grandfathered Person
shall, after the
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Record Time: (1) cease to own 20% or more of the outstanding
Voting Shares; or (2) become the Beneficial Owner (other than
pursuant to any one or a combination of (A) Voting Share
Reductions, (B) Permitted Bid Acquisitions, (C) Exempt
Acquisitions, (D) Pro Rata Acquisitions and/or (E) Convertible
Security Acquisitions) of additional Voting Shares constituting
more than 1% of the number of Voting Shares outstanding as at the
Record Time.
(b) "Affiliate", when used to indicate a relationship with a specified
Person, means a Person that directly or indirectly controls, or is
controlled by, or is under common control with, such specified Person.
(c) "Associate", when used to indicate a relationship with a specified
Person, means any relative of such specified Person who has the same
home as such specified Person, or any Person to whom such specified
Person is married, or any Person with whom such specified Person is
living in a conjugal relationship outside marriage, or any relative of
such spouse or other Person who has the same home as such specified
Person.
(d) A Person shall be deemed the "Beneficial Owner" of, and to have
"Beneficial Ownership" of, and to "Beneficially Own":
(i) any securities of which such Person or any of such Person's
Affiliates or Associates is owner at law or in equity;
(ii) any securities which such Person or any of such Person's
Affiliates or Associates has the right to acquire within 60 days
(whether such right is exercisable immediately or after the
passage of not more than 60 days thereafter or upon the
occurrence of a contingency or the making of a payment) (A) upon
the exercise of any Convertible Securities, or (B) pursuant to
any agreement, arrangement or understanding, whether or not in
writing (other than (x) customary agreements with and between
underwriters and/or banking group and/or selling group members
with respect to a distribution of securities and (y) pledges of
securities in the ordinary course of the pledgee's business); and
(iii) any securities that are Beneficially Owned within the meaning of
clauses (i) or (ii) of this Subsection 1.1 (d) by any other
Person with which such Person is acting jointly or in concert;
provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to have "Beneficial Ownership" of, or to "Beneficially
Own", any security:
(A) where (1) the holder of such security has agreed to deposit
or tender such security pursuant to a Permitted Lock-up
Agreement to a Take-over Bid made by such Person or any of
such Person's Affiliates or Associates or any other Person
referred to in clause 1.1(d)(iii), or (2) such security has
been deposited or tendered pursuant to a Take-over Bid made
by such Person or any of such Person's Affiliates or
Associates or any other Person referred to in clause
1.1(d)(iii), in each case until the earliest time at which
any such tendered security is accepted unconditionally for
payment or exchange or is taken up and paid for;
(B) where such Person, any of such Person's Affiliates or
Associates or any other Person
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referred to in clause 1.1(d)(iii), holds such security
provided that (1) the ordinary business of any such Person
(the "Investment Manager") includes the management of
investment funds for others and such security is held by the
Investment Manager in the ordinary course of such business
in the performance of such Investment Manager's duties for
the account of any other Person, including the acquisition
or holding of securities for non-discretionary accounts held
on behalf of a client by a broker or dealer registered under
applicable securities laws, or (2) such Person (the "Trust
Company") is licensed to carry on the business of a trust
company under applicable laws and, as such, acts as trustee
or administrator or in a similar capacity in relation to the
estates of deceased or incompetent Persons or in relation to
other accounts and holds such security in the ordinary
course of such duties for the estates of deceased or
incompetent Persons or for such other accounts, or (3) such
Person (the "Plan Trustee") is the administrator or trustee
of one or more pension funds or plans (each a "Plan")
registered under applicable laws and holds such security for
the purposes of its activity as such, or (4) such Person is
a Plan or is a Person established by statute (the "Statutory
Body") for purposes that include, and the ordinary business
or activity of such Person includes the management of
investment funds for employee benefit plans, pension plans,
insurance plans (other than plans administered by insurance
companies) or various public bodies, or (5) such Person is
an agent or agency of any government (the "Crown Agent") or
(6) such Person (the "Manager") is the manager or trustee of
a mutual fund ("Mutual Fund") that is registered or
qualified to issue its securities to investors under the
securities laws of any province of Canada or the laws of the
United States of America or is a Mutual Fund; provided in
any of the above cases, that the Investment Manager, the
Trust Company, the Plan Trustee, the Plan, the Statutory
Body, the Crown Agent, the Manager or the Mutual Fund, as
the case may be, is not then making a Take-over Bid or has
not announced a current intention to make a Take-over Bid,
other than an Offer to Acquire Voting Shares or other
securities pursuant to a distribution by the Corporation or
by means of ordinary market transactions (including
pre-arranged trades entered into in the ordinary course of
business of such Person) executed through the facilities of
a stock exchange, securities quotation system or organized
over-the-counter market, alone, through its Affiliates or
Associates or by acting jointly or in concert with any other
Person; or
(C) because such Person is a client of or has an account with
the same Investment Manager as another Person on whose
account the Investment Manager holds such security, or where
such Person is a client of or has an account with the same
Trust Company as another Person on whose account the Trust
Company holds such security, or where such Person is a Plan
and has a Plan Trustee who is also a Plan Trustee for
another Plan on whose account the Plan Trustee holds such
security; or
(D) where such Person is (i) a client of an Investment Manager
and such security is owned at law or in equity by the
Investment Manager, or (ii) an account of a Trust Company
and such security is owned at law or in equity by the Trust
Company, or (iii) a Plan and such security is owned at law
or in equity by the Plan Trustee; or
(E) where such Person is the registered holder of securities as
a result of carrying on the business of or acting as a
nominee of a securities depositary.
For purposes of this Agreement in determining the percentage of
the outstanding Voting
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Shares with respect to which a Person is or is deemed to be the
Beneficial Owner, any unissued Voting Shares as to which such Person
is deemed the Beneficial Owner pursuant to this Subsection 1.1(d)
shall be deemed outstanding.
(e) "Board of Directors" shall mean the board of directors of the
Corporation or any duly constituted and empowered committee thereof.
(f) "Business Corporations Act" shall mean the Business Corporations Act
(New Brunswick) as amended and the regulations thereunder, and any
comparable or successor laws or regulations thereto.
(g) "Business Day" shall mean any day, other than a Saturday or Sunday or
a day on which banking institutions in the City of Ottawa, Ontario or
the City of Boston, Massachusetts are authorized or obligated by law
to close.
(h) "Canadian Dollar Equivalent" of any amount which is expressed in
United States dollars shall mean on any day the Canadian dollar
equivalent of such amount determined by reference to the U.S. -
Canadian Exchange Rate in effect on such date.
(i) "Close of Business" on any given date shall mean the time on such date
(or, if such date is not a Business Day, the time on the next Business
Day) at which the principal office of the transfer agent for the
Common Shares in Toronto, Ontario (or after the Separation Time, the
principal office of the Rights Agent in Toronto, Ontario) is closed to
the public.
(j) "Closing Price" per security of any securities on any date of
determination shall mean:
(i) the closing board lot sale price or, if such price is not
available, the average of the closing bid and asked prices, for
such securities as reported by the stock exchange or national
securities quotation system on which such securities are listed
or admitted to trading (provided that, if at the date of
determination such securities are listed or admitted to trading
on more than one stock exchange or national securities quotation
system, such price or prices shall be determined based on the
stock exchange or quotation system on which such securities are
then listed or admitted to trading on which the largest number of
such securities were traded during the most recently completed
calendar year); or
(ii) if for any reason none of such prices is available on such day or
the securities are not listed or admitted to trading on a stock
exchange or a national securities quotation system, the last sale
price, or in case no sale takes place on such date, the average
of the high bid and low asked prices for each of such securities
in the over-the-counter market;
provided, however, that (A) if for any reason none of such prices are
available on such date, the "Closing Price" per security of such
securities on such date shall mean the fair value per security of the
securities on such date as determined by a nationally or
internationally recognized investment dealer or investment banker with
respect to the fair value per security of such securities and (B) if
the Closing Price so determined is expressed in United States dollars,
such amount shall be converted to the Canadian Dollar Equivalent.
(k) "Common Shares", when used with reference to the Corporation, shall
mean the Common
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Shares in the share capital of the Corporation as presently
constituted, as such shares may be subdivided, consolidated,
reclassified or otherwise changed from time to time, and "common
shares" when used with reference to any Person other than the
Corporation means the class or classes of shares (or similar equity
interest) with the greatest per share voting power entitled to vote
generally in the election of all directors of such other Person or the
equity securities or other equity interest having power (whether or
not exercised) to control or direct the management of such other
Person or, if such other Person is a corporation controlled by another
Person, the Person (other than an individual) which ultimately
controls such first mentioned other Person.
(1) "Competing Permitted Bid" means a Take-over Bid that:
(i) is made after a Permitted Bid or after another Competing
Permitted Bid has been made and prior to the expiry of such
Permitted Bid or such other Competing Permitted Bid;
(ii) satisfies all components of the definition of a Permitted Bid
other than the requirement in Clause (ii) thereof; and
(iii) contains, and the take-up and payment for securities tendered or
deposited is subject to irrevocable and unqualified provisions
that no Voting Shares shall be taken up or paid for pursuant to
such Competing Permitted Bid prior to the Close of Business on a
date that is no earlier than the later of (i) the earliest date
on which Voting Shares may be taken up or paid for under any
Permitted Bid or Competing Bid that is then in existence and (ii)
35 days (or such other minimum period of days as may be
prescribed by applicable law in Ontario) after the date of the
Take-over Bid constituting such Competing Permitted Bid.
(m) "controlled": a Person is "controlled" by another Person or two or
more other Persons acting jointly or in concert if:
(i) in the case of a body corporate, securities entitled to vote in
the election of directors of such body corporate carrying more
than 50% of the votes for the election of directors are held,
directly or indirectly, by or for the benefit of the other Person
or Persons acting jointly or in concert and the votes carried by
such securities are entitled, if exercised, to elect a majority
of the board of directors of such body corporate; or
(ii) in the case of a Person which is not a body corporate, more than
50% of the voting or equity interests of such entity are held,
directly or indirectly, by or for the benefit of the other Person
or Persons.
and "controls", "controlling" "under common control with" shall be
interpreted accordingly.
(n) "Convertible Securities" means, at any time, any securities issued by
the Corporation from time to time (other than the Rights) carrying any
exercise, conversion or exchange right pursuant to which the holder
thereof may acquire Voting Shares or other securities which are
convertible into or exercisable or exchangeable for Voting Shares.
(o) "Convertible Security Acquisition" means the acquisition of Voting
Shares upon the exercise
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of Convertible Securities received by a Person pursuant to a Permitted
Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition.
(p) "Co-Rights Agents" shall have the meaning ascribed thereto in
Subsection 4.1 (a).
(q) "Disqualification Date" has the meaning ascribed thereto in Clause 1.1
(a)(iii) hereof.
(r) "Effective Date" shall mean the Close of Business on April [___],
2005.
(s) "Election to Exercise" has the meaning ascribed thereto in Subsection
2.2(d).
(t) "Exempt Acquisition" means a share acquisition by a Person (1) in
respect of which the Board of Directors has waived the application of
Section 3.1 pursuant to Subsection 5.1(b), 5.1(c) or 5.1(d); or (2)
which was made pursuant to a dividend reinvestment plan of the
Corporation; or (3) pursuant to the receipt or exercise of rights
issued by the Corporation to all the holders of the Voting Shares
(other than holders resident in a jurisdiction where such distribution
is restricted or impracticable as a result of applicable law) to
subscribe for or purchase Voting Shares or Convertible Securities,
provided that such rights are acquired directly from the Corporation
and not from any other Person(s) and provided that such Person does
not thereby acquire a greater percentage of Voting Shares or
Convertible Securities so offered than such Person's percentage of
Voting Shares or Convertible Securities beneficially owned immediately
prior to such acquisition; or (4) pursuant to a distribution by the
Corporation of Voting Shares or Convertible Securities made pursuant
to a prospectus, provided that such Person does not thereby acquire a
greater percentage of Voting Shares or Convertible Securities so
offered than such Person's percentage of Voting Shares or Convertible
Securities beneficially owned immediately prior to such acquisition;
or (5) pursuant to a distribution by the Corporation of Voting Shares
or Convertible Securities by way of a private placement or a
securities exchange take-over bid circular 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 (i) all
necessary stock exchange approvals for such private placement, stock
option plan or share purchase plan have been obtained and such private
placement, stock option plan or share purchase plan complies with the
terms and conditions of such approvals and (ii) such Person does not
become the Beneficial Owner of more than 25% of the Voting Shares
outstanding immediately prior to the distribution, and in making this
determination, the Voting Shares to be issued to such Person in the
distribution shall be deemed to be held by such Person but shall not
be included in the aggregate number of outstanding Voting Shares
immediately prior to the distribution; or (6) pursuant to an
amalgamation, merger or other statutory procedure of the Corporation
requiring shareholder approval;
(u) "Exercise Price" shall mean, as of any date, the price at which a
holder of a Right may purchase the securities issuable upon exercise
of one whole Right and, until adjustment thereof in accordance with
the terms hereof, the Exercise Price shall be $200.00.
(v) "Expansion Factor" has the meaning ascribed thereto in subclause
2.3(b)(A)(1).
(w) "Expiration Time" shall, subject to Section 5.18 hereof, mean the
earlier of (i) the Termination Time; and (ii) the Close of Business on
the date on which the first annual meeting of shareholders of the
Corporation following the third anniversary of the date of this
Agreement is held; provided, however, that if the resolution referred
to in Section 5.15 is
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approved by the Independent Shareholders in accordance with Section
5.15 at or prior to such annual meeting, "Expiration Time" shall mean
the earlier of (i) the Termination Time; and (ii) the Close of
Business on the sixth anniversary of the date of this Agreement.
(x) "Fiduciary" shall, when acting in a fiduciary capacity, mean a trust
company registered under the trust company legislation of Canada or
any province thereof, a trust company organized under the laws of any
state of the United States, a portfolio manager registered under the
securities legislation of one or more provinces of Canada or an
investment adviser registered under the United States Investment
Advisers Act of 1940 or any other securities legislation of the United
States or any state of the United States.
(y) "Flip-in Event" shall mean a transaction or event in or pursuant to
which any Person becomes an Acquiring Person.
(z) "holder" shall have the meaning ascribed thereto in Section 2.8.
(aa) "Independent Shareholders" shall mean holders of outstanding Voting
Shares other than Voting Shares Beneficially Owned by (i) any
Acquiring Person, (ii) any Offeror other than a Person who at the
relevant time is deemed not to Beneficially Own such Voting Shares by
reason of Clause 1.1(d)(B) hereof, (iii) any Person acting jointly or
in concert with such Acquiring Person or Offeror referred to in (ii),
(iv) any Associate or Affiliate of such Acquiring Person or Offeror
referred to in (ii) and (v) any employee benefit plan, deferred profit
sharing plan and any similar plan or trust for the benefit of
employees of the Corporation unless the beneficiaries of the plan or
trust direct the manner in which Voting Shares are to be voted or
withheld from voting or direct whether Voting Shares are to be
tendered to a Take-over Bid.
(ab) "Market Price" per security of any securities on any date of
determination shall mean the average of the daily Closing Prices on
the Toronto Stock Exchange (or if the securities are not then listed
in the Toronto Stock Exchange, on such other exchange on which such
securities are listed or quoted as determined by the Board of
Directors) per security of such securities on each of the 20
consecutive Trading Days through and including the Trading Day
immediately preceding such date of determination; provided, however,
that if an event of a type analogous to any of the events described in
Section 2.3 hereof shall have caused any Closing Price used to
determine the Market Price on any Trading Day not to be fully
comparable with the Closing Price on the Trading Day immediately
preceding such date of determination, each such Closing Price so used
shall be appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.3 hereof in order to
make it fully comparable with the Closing Price on the Trading Day
immediately preceding such date of determination.
(ac) "Nominee" has the meaning ascribed thereto in Subsection 2.2(c).
(ad) "Offer to Acquire" shall include:
(i) an offer to purchase or a solicitation of an offer to sell Voting
Shares, or a public announcement of an intention to make such an
offer or solicitation; and
(ii) an acceptance of an offer to sell Voting Shares, whether or not
such offer to sell has been solicited;
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or any combination thereof, and the Person accepting an offer to
sell shall be deemed to be making an Offer to Acquire to the
Person that made the offer to sell.
(ae) "Offeror" shall mean a Person who has announced a current intention to
make, or who is making, a Take-over Bid.
(af) "Offeror's Securities" shall mean the Voting Shares Beneficially Owned
on the date of a Take-over Bid by an Offeror.
(ag) "Permitted Bid" means a Take-over Bid made by way of a Take-over Bid
circular which also complies with the following additional provisions:
(i) the Take-over Bid is made to all holders of record of Voting
Shares, other than the Offeror;
(ii) the Take-over Bid shall contain, and the provisions for the
take-up and payment for Voting Shares tendered or deposited
thereunder shall be, subject to, an irrevocable and unqualified
condition that no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid prior to the Close of Business on a
date which is not less than 60 days following the date of the
Take-over Bid;
(iii) the Take-over Bid shall contain irrevocable and unqualified
provisions that, unless the Take-over Bid is withdrawn, Voting
Shares may be deposited pursuant to the Take-over Bid at any time
prior to the Close of Business on the date of first take-up or
payment for Voting Shares and that all Voting Shares deposited
pursuant to the Take-over Bid may be withdrawn at any time prior
to the Close of Business on such date;
(iv) the Take-over Bid shall contain an irrevocable and unqualified
condition that more than 50% of the outstanding Voting Shares
held by Independent Shareholders, determined as at the Close of
Business on the date of first take-up or payment for Voting
Shares under the Take-over Bid, must be deposited to the
Take-over Bid and not withdrawn at the Close of Business on the
date of first take-up or payment for Voting Shares; and
(v) the Take-over Bid shall contain an irrevocable and unqualified
provision that in the event that more than 50% of the then
outstanding Voting Shares held by Independent Shareholders shall
have been deposited to the Take-over Bid and not withdrawn as at
the Close on Business on the date of first take-up or payment for
Voting Shares under the Take-over Bid, the Offeror will make a
public announcement of that fact and the Take-over Bid will
remain open for deposits and tenders of Voting Shares for not
less than 10 Business Days from the date of such public
announcement;
For purposes of this Agreement, (A) if a Take-over Bid which qualified
as a Permitted Bid when made should cease to be a Permitted Bid
because it ceases to meet any or all of the requirements mentioned
above prior to the time it expires (after giving effect to any
extension) or is withdrawn, any acquisition of Voting Shares made
pursuant to such Take-over Bid shall not be a Permitted Bid
Acquisition and (B) the term "Permitted Bid" shall include a Competing
Permitted Bid.
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(ah) "Permitted Bid Acquisition" means an acquisition of Voting Shares made
pursuant to a Permitted Bid or a Competing Permitted Bid.
(ai) "Permitted Lock-up Agreement" means an agreement (the "Lock-up
Agreement") between a Person and one or more holders of Voting Shares
(each such holder herein referred to as a "Locked-up Person") (the
terms of which are publicly disclosed and a copy of which is made
available to the public (including the Corporation) not later than the
date of the Lock-up Bid or, if the Lock-up Bid has been made prior to
the date of the Lock-up Agreement, not later than the first Business
Day following the date of the Lock-up Agreement) pursuant to which
each Lock-up Person agrees to deposit or tender the Voting Shares held
by such holder to a Take-over Bid (the "Lock-up Bid") made by such
Person or any of such Person's Affiliates or Associates or any other
Person referred to in clause 1.1(d)(iii) provided that:
(i) the Lock-up Agreement permits the Locked-up Person to withdraw
its Voting Shares from the Lock-up Agreement in order to deposit
or tender the Voting Shares to another Take-over Bid or to
support another transaction for the Voting Shares prior to the
Voting Shares being taken up and paid for under the Lock-up Bid:
(1) at a price or value per Voting Share that exceeds the price
or value per Voting Share offered under the Lock-up Bid; or
(2) for a number of Voting Shares at least 7% greater than the
number of Voting Shares that the Offeror has offered to
purchase under the Lock-up Bid at a price or value per
Voting Share that is not less than the price or value per
Voting Share offered under the Lock-up Bid; or
(3) that (a) contains an offering price for each Voting Share
that exceeds by as much as or more than a specified amount
(the "Specified Amount") the offering price for each Voting
Share contained in or proposed to be contained in the
Lock-up Bid and (b) does not by itself provide for a
Specified Amount that is greater than 7% of the offering
price contained in or proposed to be contained in the
Lock-up Bid;
for greater clarity, the Lock-up Agreement may contain a right of
first refusal or require a period of delay to give the Person who
made the Lock-up Bid an opportunity to match a higher price in
another Take-over Bid or transaction or other similar limitation
on a Locked-up Person's right to withdraw Voting Shares from the
Lock-up Agreement, so long as the limitation does not preclude
the exercise by the Locked-up Person of the right to withdraw
Voting Shares during the period of the other Take-over Bid or
transaction; and
(ii) no "break-up" fees, "top-up" fees, penalties, expenses or other
amounts that exceed in aggregate the greater of:
(A) 2.5% of the price or value of the consideration payable
under the Lock-up Bid to a Locked-up Person; and
(B) 50% of the amount by which the price or value of the
consideration received by a Locked-up Person under another
Take-over Bid or transaction exceeds the price or value of
the consideration that the Locked-up Person would have
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received under the Lock-up Bid;
shall be payable by such Locked-up Person if the Locked-up Person
fails to deposit or tender Voting shares to the Lock-up Bid, or
withdraws Voting Shares previously rendered thereto in order to
deposit or tender such Voting Shares to another Take-over Bid or
support another transaction.
(aj) "Person" includes any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal personal
representative, government, governmental body or authority,
corporation, or other incorporated or unincorporated organization,
syndicate or other entity.
(ak) "Pro Rata Acquisition" means an acquisition by a Person as a result of
a stock dividend, a stock split or other event pursuant to which such
Person receives or acquires Voting Shares or Convertible Securities on
the same pro rata basis as all other holders of Voting Shares of the
same class.
(al) "Record Time" means the Close of Business on the Effective Date.
(am) "Redemption Price" shall have the meaning attributed thereto in
Subsection 5.1(a).
(an) "Regular Periodic Cash Dividend" means cash dividends paid on the
Common Shares at regular intervals in any fiscal year of the
Corporation to the extent that such cash dividends do not exceed in
the aggregate in any fiscal year, on a per share basis, the greatest
of:
(i) 200% of the aggregate amount of cash dividends declared payable
by the Corporation on its Common Shares in its immediately
preceding fiscal year divided by the number of Common Shares
outstanding as at the end of such fiscal year;
(ii) 300% of the arithmetic mean of the aggregate amounts of cash
dividends declared payable by the Corporation on its Common
Shares in its three immediately preceding fiscal years divided by
the arithmetic mean of the number of Common Shares outstanding as
at the end of each of such fiscal years; and
(iii) 100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its immediately
preceding fiscal year divided by the number of Common Shares
outstanding as at the end of such fiscal year.
(ao) "Right" shall mean each herein described right to purchase securities
pursuant to the terms and subject to the conditions set forth in this
Agreement.
(ap) "Rights Certificate" shall mean the certificates representing the
Rights after the Separation Time which shall be substantially in the
form attached hereto as Exhibit A.
(aq) "Rights Register" and "Rights Registrar" shall have the respective
meanings ascribed thereto in Subsection 2.6(a)
(ar) "Securities Act" shall mean the Securities Act (Ontario), R.S.O. 1990,
c.S.5, as amended and the regulations and rules made thereunder, as
now in effect or as the same may from time to time be amended,
re-enacted or replaced.
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(as) "Separation Time" means the Close of Business on the eighth Business
Day after the earliest of:
(i) the Stock Acquisition Date; and
(ii) the date of the commencement of, or first public announcement or
disclosure of the intent of any Person (other than the
Corporation or any Affiliate of the Corporation) to commence, a
Take-over Bid (other than a Permitted Bid, so long as such
Take-over Bid continues to satisfy the requirements of a
Permitted Bid) or such later Business Day as may be determined at
any time or from time to time by the Board of Directors;
provided, however, that if any such Take-over Bid expires, is
cancelled, is terminated or is otherwise withdrawn prior to the
Separation Time, such Take-over Bid shall be deemed, for purposes
of this Subsection 1.1(as) never to have been made; and
(iii) the date upon which a Permitted Bid ceases to be a Permitted
Bid;
or such later date as may be determined by the Board of Directors
acting in good faith provided that, if the foregoing results in the
Separation Time being prior to the Record Time, the Separation Time
shall be deemed to be the Record Time and if the Board of Directors
determines pursuant to Section 5.1 to waive the application of Section
3.1 to a Flip-in Event, the Separation Time in respect of such Flip-in
Event shall be deemed never to have occurred.
(at) "Stock Acquisition Date" shall mean the first date of public
announcement or disclosure by the Corporation or an Acquiring Person
of facts indicating that a Person has become an Acquiring Person
(which, for the purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 101 of the Securities
Act, National Instrument 62-103 of the Canadian Securities
Administrators or Section 13(d) of the U.S. Exchange Act (or any
successor legislation thereto) disclosing such information).
(au) "Take-over Bid" means an Offer to Acquire Voting Shares of any class,
or Convertible Securities with respect thereto, where the Voting
Shares subject to the Offer to Acquire, together with the Voting
Shares into or for which the securities subject to the Offer to
Acquire are convertible or exchangeable and the Offeror's Securities
constitute in the aggregate 20% or more of the outstanding Voting
Shares at the date of the Offer to Acquire.
(av) "Termination Time" means the time at which the right to exercise
Rights shall terminate pursuant to Section 5.1, 5.18 or 5.19 hereof.
(aw) "Trading Day", when used with respect to any securities, means the day
on which the principal Canadian or United States securities exchange
(as determined by the Board of Directors) on which such securities are
listed or admitted to trading is open for the transaction of business
or, if the securities are not listed or admitted to trading on any
Canadian or United States securities exchange, a Business Day.
(ax) "U.S. - Canadian Exchange Rate" on any date shall mean:
(i) if on such date the Bank of Canada sets an average noon spot rate
of exchange for the conversion of one United States dollar into
Canadian dollars, such rate; and
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(ii) in any other case, the rate for such date for the conversion of
one United States dollar into Canadian dollars which is
calculated in the manner which shall be determined by the Board
of Directors from time to time acting in good faith.
(ay) "U.S. Dollar Equivalent" of any amount which is expressed in Canadian
dollars shall mean on any day the United States dollar equivalent of
such amount determined by reference to the U.S. - Canadian Exchange
Rate in effect on such date.
(az) "U.S. Exchange Act" means the United States Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder as from
time to time in effect.
(ba) "Voting Share Reduction" means an acquisition or redemption by the
Corporation of Voting Shares which, by reducing the number of Voting
Shares outstanding, increases the percentage of Voting Shares
Beneficially Owned by any Person to 20% or more of the Voting Shares
then outstanding.
(bb) "Voting Shares", when used in reference to the Corporation, shall mean
the Common Shares and any other securities the holders of which are
entitled to vote generally on the election of directors of the
Corporation, and "voting shares", when used with reference to any
Person other than the Corporation, means common shares of such other
Person and any other securities the holders of which are entitled to
vote generally in the election of the directors of such other Person.
1.2 CURRENCY
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
1.3 NUMBER AND GENDER
Wherever the context will require, terms (including defined terms) used
herein importing the singular number only include the plural and vice versa and
words importing any one gender shall include all others.
1.4 SECTIONS AND HEADINGS
The division of this Agreement into Articles, Sections, Subsections,
Clauses and Subclauses and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. The terms this "Agreement", "hereunder", "hereof", and similar
expressions refer to this Agreement as amended or supplemented from time to time
and not to any particular Article, Section or other portion hereof and include
any Agreement or instrument supplemental or ancillary hereto. Unless something
in the subject matter or context is inconsistent therewith, references herein to
Articles, Sections, Subsections, Clauses and Subclauses are to Articles,
Sections, Subsections, Clauses and Subclauses of this Agreement.
1.5 STATUTORY REFERENCES
Unless the context otherwise requires, any reference to a specific Section,
Subsection, Clause or Rule of any statute or regulation shall be deemed to refer
to the same as it may be amended, reenacted or replaced or, if repealed and
there shall be no replacement therefor, to the same as it is in effect on the
date of this Agreement.
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1.6 DETERMINATION OF PERCENTAGE OWNERSHIP
The percentage of Voting Shares Beneficially Owned by any Person, shall,
for the purposes of this Agreement, be and be deemed to be the product
determined by the formula:
A
100 x ---
B
where:
A = the aggregate number of votes for the election of all directors
generally attaching to the Voting Shares Beneficially Owned by such
Person; and
B = the aggregate number of votes for the election of all directors
generally attaching to all outstanding Voting Shares.
For the purposes of the foregoing formula, where any Person is deemed to
Beneficially Own unissued Voting Shares which may be acquired pursuant to
Convertible Securities, such Voting Shares shall be deemed to be outstanding for
the purpose of calculating the percentage of Voting Shares Beneficially Owned by
such Person in both the numerator and the denominator, but no other unissued
Voting Shares which may be acquired pursuant to any other outstanding
Convertible Securities shall, for the purposes of that calculation, be deemed to
be outstanding.
1.7 ACTING JOINTLY OR IN CONCERT
For the purposes of this Agreement, a Person is acting jointly or in
concert with every Person who is a party to an agreement, commitment or
understanding, whether formal or informal and whether or not in writing, with
the first Person to acquire or offer to acquire Voting Shares or Convertible
Securities in respect thereof (other than customary agreements with and between
underwriters and banking group or selling group members with respect to a
distribution of securities by way of prospectus or private placement or pursuant
to a pledge of securities in the ordinary course of the pledgee's business).
1.8 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.
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ARTICLE 2
THE RIGHTS
2.1 LEGEND ON COMMON SHARE CERTIFICATES
(a) Certificates representing the Common Shares, including without
limitation Common Shares issued upon the conversion of Convertible
Securities, issued after the Record Time but prior to the earlier of
the Separation Time and the Expiration Time, shall evidence one Right
for each Common Share represented thereby and, commencing as soon as
reasonably practical after the Record Time, shall have impressed on,
printed on, written on or otherwise affixed to them a legend,
substantially in the following form:
"Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and entitles
the holder hereof to certain Rights as set forth in a Shareholder
Rights Plan Agreement, dated as of April ___, 2005 (the "Rights
Agreement"), between the Corporation and Computershare Trust
Company of Canada, as Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of which is on file
at the registered office of the Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
may be amended or redeemed, may expire, may become void (if, in
certain cases, they are "Beneficially Owned" by an "Acquiring
Person", as such terms are defined in the Rights Agreement, or a
transferee thereof) or may be evidenced by separate certificates
and may no longer be evidenced by this certificate. The
Corporation will mail or arrange for the mailing of a copy of the
Rights Agreement to the holder of this certificate without charge
as soon as practicable after the receipt of a written request
therefor."
(b) Certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for each
Common Share evidenced thereby, notwithstanding the absence of the
foregoing legend, until the earlier of the Separation Time and the
Expiration Time.
2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS
(a) Subject to adjustment as herein set forth including, without
limitation, as set forth in Article 3, each Right will entitle the
holder thereof, from and after the Separation Time and prior to the
Expiration Time, to purchase one Common Share for the Exercise Price,
or its U.S. Dollar Equivalent, as at the Business Day immediately
preceding the Separation Time (which Exercise Price and number of
Common Shares are subject to adjustment as set forth below).
Notwithstanding any other provision of this Agreement, any Rights held
by the Corporation or any of its subsidiaries shall be void.
(b) Until the Separation Time, (i) the Rights shall not be exercisable and
no Right may be exercised and (ii) for administrative purposes, each
Right will be evidenced by the certificate for the associated Common
Share registered in the name of the holder thereof (which certificate
shall be deemed to represent a Rights Certificate) and will be
transferable only together with, and will be transferred by a transfer
of, such associated Common Share.
(c) From and after the Separation Time and prior to the Expiration Time,
the Rights may be exercised, and the registration and transfer of the
Rights shall be separate from and
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independent of Common Shares. Promptly following the Separation Time,
the Corporation will prepare or cause to be prepared and the Rights
Agent will mail to each holder of record of Common Shares as of the
Separation Time and, in respect of each Convertible Security converted
into Common Shares after the Separation Time and prior to the
Expiration Time, promptly after such conversion, the Corporation will
prepare or cause to be prepared and the Rights Agent will mail to the
holder so converting (other than an Acquiring Person and in respect of
any Rights Beneficially Owned by such Acquiring Person which are not
held of record by such Acquiring Person, the holder of record of such
Rights (a "Nominee")) at such holder's address as shown by the records
of the Corporation (the Corporation hereby agreeing to furnish copies
of such record to the Rights Agent for this purpose):
(i) a Rights Certificate in substantially the form of Exhibit A
hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having such marks
of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem
appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any law,
rule or regulation or judicial or administrative order, or with
any article or regulation of any stock exchange or quotation
system on which the Rights may from time to time be listed or
traded, or to conform to usage; and
(ii) a disclosure statement prepared by the Corporation describing the
Rights, provided that a Nominee shall be sent the materials
provided for in (i) and (ii) only in respect of all Common Shares
held of record by it which are not Beneficially Owned by an
Acquiring Person and the Corporation may require any Nominee or
suspected Nominee to provide such information and documentation
as the Corporation may reasonably require for such purpose.
(d) Rights may be exercised in whole or in part on any Business Day after
the Separation Time and prior to the Expiration Time by submitting to
the Rights Agent, at its principal office in Toronto or any other
office of the Rights Agent designated for that purpose from time to
time by the Corporation:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise (an "Election to Exercise") substantially
in the form attached to the Rights Certificate duly completed,
and executed in a manner acceptable to the Rights Agent; and
(iii) payment by certified cheque, banker's draft or money order
payable to the order of Computershare Trust Company of Canada, of
a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer
tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or
the issuance or delivery of certificates for Common Shares in a
name other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, which is accompanied by an
appropriately completed and duly executed Election to Exercise (which
does not indicate that such Right is null and void as provided by
Subsection 3.1(b)) and payment as set forth in Subsection 2.2(d), the
Rights
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Agent (unless otherwise instructed by the Corporation) will thereupon
promptly:
(i) requisition from the transfer agent of the Common Shares
certificates representing the number of Common Shares to be
purchased (the Corporation hereby irrevocably authorizing its
transfer agent to comply with all such requisitions);
(ii) after receipt of such Common Share certificates, deliver such
certificates to, or to the order of, the registered holder of
such Rights Certificate, registered in such name or names as may
be designated by such holder;
(iii) when appropriate, requisition from the Corporation the amount of
cash, if any, to be paid in lieu of issuing fractional Common
Shares;
(iv) when appropriate, after receipt of such cash, deliver such cash
to, or to the order of, the registered holder of the Rights
Certificate; and
(v) tender to the Corporation all payments received on exercise of
the Rights.
(f) If the holder of any Rights shall exercise less than all the Rights
evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised subject to
subsection 5.5(a) will be issued by the Rights Agent to such holder or
to such holder's duly authorized assigns.
(g) The Corporation shall:
(i) take all such action as may be necessary and within its power to
ensure, that all Common Shares delivered upon the exercise of
Rights shall, at the time of delivery of the certificates for
such Common Shares (subject to payment of the Exercise Price), be
duly and validly authorized, executed, issued and delivered as
fully paid and non-assessable;
(ii) take all such action as may reasonably be considered to be
necessary and within its power to comply with any applicable
requirements of the Business Corporations Act or the Securities
Act, the U.S. Exchange Act, the United States Securities Act of
1933, as amended, and comparable legislation of each of the
provinces and territories of Canada and states of the United
States of America, or the rules and regulations thereunder or any
other applicable law, rule or regulation, in connection with the
issuance and delivery of the Rights, the Rights Certificates and
the issuance of any Common Shares upon exercise of the Rights;
(iii) use reasonable efforts to cause all Common Shares issued upon
exercise of the Rights to be listed on the stock exchanges on
which the Common Shares are listed at that time;
(iv) cause to be reserved and kept available out of its authorized and
unissued Common Shares, the number of Common Shares that, as
provided in this Agreement, will from time to time be sufficient
to permit the exercise in full of all outstanding Rights;
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(v) pay when due and payable, if applicable, any and all federal,
provincial, state and municipal taxes (not in the nature of
income, capital gains or withholding taxes) and charges which may
be payable in respect of the original issuance or delivery of the
Rights Certificates or certificates for Common Shares issued upon
the exercise of Rights, provided that the Corporation shall not
be required to pay any transfer tax or charge which may be
payable in respect of any transfer of Rights or the issuance or
delivery of certificates for Common Shares issued upon the
exercise of Rights, in a name other than that of the holder of
the Rights being transferred or exercised; and
(vi) after the Separation Time, except as permitted by Section 5.1 or
Section 5.4 hereof, not take (or permit any Affiliate of the
Corporation to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
(a) The Exercise Price, the number and kind of securities subject to
purchase upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in
this Section 2.3 and in Article 3.
(b) In the event that the Corporation shall at any time after the Record
Time and prior to the Expiration Time:
(i) declare or pay a dividend on the Common Shares payable in Voting
Shares or Convertible Securities in respect thereof other than
pursuant to any dividend reinvestment plan;
(ii) subdivide or change the then outstanding Common Shares into a
greater number of Common Shares;
(iii) consolidate or change the then outstanding Common Shares into a
smaller number of Common Shares; or
(iv) issue any Voting Shares (or Convertible Securities in respect
thereof) in respect of, in lieu of or in exchange for existing
Common Shares, whether in a reclassification, amalgamation,
statutory arrangement, consolidation or otherwise;
the Exercise Price and the number of Rights outstanding (or, if the
payment or effective date therefor shall occur after the Separation
Time, the securities purchasable upon the exercise of Rights) shall be
adjusted as follows:
(A) If the Exercise Price and number of Rights outstanding are
to be adjusted:
1) the Exercise Price in effect after such adjustment will
be equal to the Exercise Price in effect immediately
prior to such adjustment divided by the number of
Common Shares (or other securities of the Corporation)
(the "Expansion Factor") that a holder of one Common
Share immediately prior to such dividend, subdivision,
change, combination or issuance would hold thereafter
as a result thereof; and
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2) each Right held prior to such adjustment will become
that number of Rights equal to the Expansion Factor,
and the adjusted number of Rights will be deemed to be
allocated among the Common Shares with respect to which
the original Rights were associated (if they remain
outstanding) and the securities of the Corporation
issued in respect of such dividend, subdivision,
change, consolidation or issuance, so that each such
Common Share (or other security of the Corporation)
will have exactly one Right associated with it.
(B) If the securities purchasable upon exercise of Rights are to
be adjusted, the securities purchasable upon exercise of
each Right after such adjustment will be the securities that
a holder of the securities purchasable upon exercise of one
Right immediately prior to such dividend, subdivision,
change, consolidation or issuance would hold thereafter as a
result thereof.
(c) Adjustments pursuant to Subsection 2.3(b) shall be made successively,
whenever an event referred to in Subsection 2.3(b) occurs.
(d) If an event occurs which would require an adjustment under both this
Section 2.3 and Section 3.1 hereof, the adjustment provided for in
this Section 2.3 shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 3.1 hereof.
(e) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any Common Shares otherwise
than in a transaction referred to in Subsection 2.3(b), each such
Common Share so issued shall automatically have one new Right
associated with it, which Right shall be evidenced by the certificate
representing such Common Share.
(f) In the event the Corporation shall, at any time after the Record Time
and prior to the Expiration Time, fix a record date for the making of
a distribution to all holders of Common Shares of rights or warrants
entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Shares (or
Convertible Securities in respect of Common Shares) at a price per
Common Share (or, in the case of such a Convertible Security, having a
conversion, exchange or exercise price per share (including the price
required to be paid to purchase such Convertible Security)) less than
90% of the Market Price per Common Share on such record date, the
Exercise Price in effect after such record date will equal the
Exercise Price in effect immediately prior to such record date
multiplied by a fraction;
(i) of which the numerator shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares
which the aggregate offering price of the total number of Common
Shares so to be offered (and/or the aggregate initial conversion,
exchange or exercise price of the Convertible Securities so to be
offered (including the price required to be paid to purchase such
Convertible Securities)) would purchase at such Market Price per
Common Share; and
(ii) of which the denominator shall be the number of Common Shares
outstanding on such record date plus the number of additional
Common Shares to be offered for subscription or purchase (or into
which the Convertible Securities so to be offered are
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initially convertible, exchangeable or exercisable).
In case such subscription price is satisfied, in whole or in part, by
consideration other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors. Such
adjustment shall be made successively whenever such a record date is
fixed. To the extent that such rights or warrants are not exercised
prior to the expiration thereof, the Exercise Price shall be
readjusted in the manner contemplated above based on the number of
Common Shares (or securities convertible into or exchangeable for
Common Shares) actually issued on the exercise of such rights or
warrants.
For purposes of this Agreement, the granting of the right to purchase
Common Shares (whether from treasury or otherwise) pursuant to any
dividend or interest reinvestment plan or any share purchase plan
providing for the reinvestment of dividends or interest payable on
securities of the Corporation or the investment of periodic optional
payments or employee benefit or similar plans (so long as such right
to purchase is in no case evidenced by the delivery of rights or
warrants by the Corporation) shall not be deemed to constitute an
issue of rights or warrants by the Corporation; provided, however,
that in the case of any dividend or interest reinvestment or share
purchase plan, the right to purchase Common Shares is at a price per
share of not less than 90% of the current Market Price per share
(determined as provided in such plans) of the Common Shares.
(g) In the event the Corporation shall at any time after the Record Time
and prior to the Expiration Time fix a record date for the making of a
distribution to all holders of Common Shares of (i) evidences of
indebtedness or assets (other than a Regular Periodic Cash Dividend or
a dividend paid in Common Shares, but including any dividend payable
in securities other than Common Shares), (ii) rights or warrants
entitling them to subscribe for or purchase Voting Shares (or
Convertible Securities in respect of Voting Shares), at a price per
Voting Share (or, in the case of a Convertible Security in respect of
Voting Shares, having a conversion, exchange or exercise price per
share (including the price required to be paid to purchase such
Convertible Security)) less than 90% of the Market Price per Common
Share on such record date (excluding rights or warrants referred to in
Subsection 2.3(f)) or (iii) other securities of the Corporation, the
Exercise Price in effect after such record date shall be equal to the
Exercise Price in effect immediately prior to such record date less
the fair market value (as determined in good faith by the Board of
Directors) of the portion of the assets, evidences of indebtedness,
rights or warrants or other securities so to be distributed applicable
to each of the securities purchasable upon exercise of one Right. Such
adjustment shall be made successively whenever such a record date is
fixed.
(h) Each adjustment made pursuant to Section 2.3 shall be made as of
(i) the payment or effective date for the applicable dividend,
subdivision, change, combination or issuance, in the case of an
adjustment made pursuant to Subsection 2.3(b) above; and
(ii) the record date for the applicable dividend or distribution, in
the case of an adjustment made pursuant to Subsections 2.3(f) or
2.3(g) above, subject to readjustment to reverse the same if such
distribution shall not be made.
(i) In the event the Corporation shall at any time after the Record Time
and prior to the Expiration Time issue any shares (other than Common
Shares), or rights or warrants to
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subscribe for or purchase any such shares, or Convertible Securities
in respect of any such shares, in a transaction referred to in any of
subclauses 2.3(b)(i) to (iv) above, if the Board of Directors acting
in good faith determines that the adjustments contemplated by
Subsections 2.3(b), 2.3(f) and 2.3(g) above in connection with such
transaction will not appropriately protect the interests of the
holders of Rights, the Board of Directors may from time to time, but
subject to obtaining the prior approval of the holders of the Rights
obtained as set forth in Subsection 5.4, determine what other
adjustments to the Exercise Price, number of Rights or securities
purchasable upon exercise of Rights would be appropriate and,
notwithstanding Subsections 2.3(b), 2.3(f) and 2.3(g) above, such
adjustments, rather than the adjustments contemplated by Subsections
2.3(b), 2.3(f) and 2.3(g) above, shall be made upon the Board of
Directors providing written certification thereof to the Rights Agent
pursuant to Subsection 2.3(q).
(j) Notwithstanding anything herein to the contrary, no adjustment of the
Exercise Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in such Exercise Price;
provided, however, that any adjustments which by reason of this
Subsection 2.3(j)) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
adjustments to the Exercise Price made pursuant to this Section 2.3
shall be calculated to the nearest cent.
(k) All Rights originally issued by the Corporation subsequent to any
adjustment made to an Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of
Common Shares purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(1) Unless the Corporation shall have exercised its election, as provided
in Subsection 2.3(m), upon each adjustment of an Exercise Price as a
result of the calculations made in Subsections 2.3(f) and 2.3(g), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of Common Shares obtained by:
(i) multiplying (A) the number of Common Shares covered by a Right
immediately prior to such adjustment, by (B) the Exercise Price
in effect immediately prior to such adjustment; and
(ii) dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment.
(m) The Corporation may elect on or after the date of any adjustment of an
Exercise Price to adjust the number of Rights, in lieu of any
adjustment in the number of Common Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number
of Common Shares for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become the number of Rights obtained by
dividing the relevant Exercise Price in effect immediately prior to
adjustment of the relevant Exercise Price by the relevant Exercise
Price in effect immediately after adjustment of the relevant Exercise
Price. The Corporation shall make a public announcement of its
election to adjust the number of Rights, indicating the record date
for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the
relevant Exercise Price is adjusted or any day thereafter, but, if the
Rights Certificates
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have been issued, shall be at least 10 calendar days later than the
date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Subsection 2.3(m), the Corporation shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on
such record date, Rights Certificates evidencing, subject to Section
5.5, the additional Rights to which such holders shall be entitled as
a result of such adjustment, or, at the option of the Corporation,
shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof,
if required by the Corporation, new Rights Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and may
bear, at the option of the Corporation, the relevant adjusted Exercise
Price and shall be registered in the names of holders of record of
Rights Certificates on the record date specified in the public
announcement.
(n) In any case in which this Section 2.3 shall require that an adjustment
in an Exercise Price be made effective as of a record date for a
specified event, the Corporation may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date of the number of Common Shares and
other securities of the Corporation, if any, issuable upon such
exercise over and above the number of Common Shares and other
securities of the Corporation, if any, issuable upon such exercise on
the basis of the relevant Exercise Price in effect prior to such
adjustment; provided, however, that the Corporation shall deliver to
such holder an appropriate instrument evidencing such holder's right
to receive such additional Common Shares (fractional or otherwise) or
other securities upon the occurrence of the event requiring such
adjustment.
(o) Notwithstanding anything in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such adjustments in the Exercise
Price, in addition to those adjustments expressly required by this
Section 2.3, as and to the extent that in its good faith judgment the
Board of Directors shall determine to be advisable in order that any
(i) subdivision or consolidation of the Common Shares, (ii) issuance
wholly for cash of any Common Shares at less than the applicable
Market Price, (iii) issuance wholly for cash of any Common Shares or
securities that by their terms are exchangeable for or convertible
into or give a right to acquire Common Shares, (iv) stock dividends,
or (v) issuance of rights, options or warrants referred to in this
Section 2.3, hereafter made by the Corporation to holders of its
Common Shares, shall not be taxable to such shareholders.
(p) Irrespective of any adjustment or change in the securities purchasable
upon exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to represent the securities so
purchasable which were represented in the initial Rights Certificates
issued hereunder.
(q) Whenever an adjustment to the Exercise Price is made pursuant to this
Section 2.3, the Corporation shall
(i) promptly prepare a certificate setting forth such adjustment and
a brief statement of the facts accounting for such adjustment;
and
(ii) promptly file with the Rights Agent and with each transfer agent
for the Common Shares a copy of such certificate and mail a brief
summary thereof to each holder of
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Rights who requests a copy.
Failure to file such certificate or to cause such notice to be given
as aforesaid, or any defect therein, shall not affect the validity of
any such adjustment or change.
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE
Each Person in whose name any certificate for Common Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered (together with a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and any
applicable transfer taxes and other governmental charges payable by the
exercising Person hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Share transfer books
of the Corporation are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
Business Day on which the Common Share transfer books of the Corporation are
open.
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES
(a) The Rights Certificates shall be executed on behalf of the Corporation
by its President, Chief Executive Officer, Chief Financial Officer,
Secretary or any Vice President. The signature of any of these
officers on the Rights Certificates may be manual or facsimile. Rights
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Corporation shall bind
the Corporation, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the countersignature and
delivery of such Rights Certificates.
(b) Promptly following the Separation Time, the Corporation will notify
the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Corporation to the Rights Agent for
countersignature and a statement describing the Rights, and the Rights
Agent shall countersign (manually or by facsimile signature) and
deliver such Rights Certificates and statement to the holders of the
Rights pursuant to Section 2.2 hereof. No Rights Certificate shall be
valid for any purpose until countersigned by the Rights Agent as
aforesaid.
(c) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 REGISTRATION, TRANSFER AND EXCHANGE
(a) After the Separation Time, the Corporation shall cause to be kept a
register (the "Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Corporation will provide for the
registration and transfer of Rights. The Rights Agent is hereby
appointed "Rights Registrar" for the purpose of maintaining the Rights
Register for the Corporation and registering Rights and transfers of
Rights as herein provided and the Rights Agent hereby accepts such
appointment. In the event that the Rights Agent shall cease to be the
Rights Registrar, the Rights Agent will have the right to examine the
Rights Register at all reasonable times.
(b) After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Subsections
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2.6(d) and 3.1(b) below, the Corporation will execute, and the Rights
Agent will countersign, deliver and register, in the name of the
holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights
Certificates evidencing the same aggregate number of Rights as did the
Rights Certificates so surrendered.
(c) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be valid obligations of the Corporation, and
such Rights shall be entitled to the same benefits under this
Agreement as the Rights surrendered upon such registration of transfer
or exchange.
(d) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Corporation or the
Rights Agent, as the case may be, duly executed by the holder thereof
or such holder's attorney duly authorized in writing. As a condition
to the issuance of any new Rights Certificate under this Section 2.6,
the Corporation may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Rights Agent) in connection therewith.
2.7 MUTILATED, LOST, STOLEN AND DESTROYED RIGHTS CERTIFICATES
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, the Corporation shall execute and the
Rights Agent shall countersign and deliver in exchange therefor a new
Rights Certificate evidencing the same number of Rights as did the
Rights Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time: (i) evidence to their reasonable
satisfaction of the destruction, loss or theft of any Rights
Certificate; and (ii) such security or indemnity as may be reasonably
required by them to save each of them and any of their agents
harmless, then, in the absence of notice to the Corporation or the
Rights Agent that such Rights Certificate has been acquired by a bona
fide purchaser, the Corporation shall execute and, upon the
Corporation's request the Rights Agent shall countersign and deliver,
in lieu of any such destroyed, lost or stolen Rights Certificate, a
new Rights Certificate evidencing the same number of Rights as did the
Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.7, the Corporation may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees
and expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7 in
lieu of any destroyed, lost or stolen Rights Certificate shall
evidence a contractual obligation of the Corporation, whether or not
the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other
Rights duly issued hereunder.
2.8 PERSONS DEEMED OWNERS
The Corporation, the Rights Agent and any agent of the Corporation or the
Rights Agent may deem
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and treat the person in whose name a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby for all purposes
whatsoever. As used in this Agreement, unless the context otherwise requires,
the term "holder" of any Rights shall mean the registered holder of such Rights
(or, prior to the Separation Time, the associated Common Shares).
2.9 DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption, for
registration of transfer or exchange shall, if surrendered to any person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9 except as expressly permitted by this Agreement.
The Rights Agent shall, subject to applicable law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
2.10 AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights, by accepting such Rights, consents and agrees with
the Corporation and the Rights Agent and with every other holder of Rights:
(a) to be bound by and subject to the provisions of this Agreement, as
amended from time to time in accordance with the terms hereof, in
respect of all Rights held;
(b) that, prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the
associated Common Share;
(c) that, after the Separation Time, the Rights will be transferable only
on the Rights Register as provided herein;
(d) that, prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Share certificate) for
registration of transfer, the Corporation, the Rights Agent and any
agent of the Corporation or the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on such
Rights Certificate or the associated Common Share certificate made by
anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights Agent
shall be affected by any notice to the contrary;
(e) that such holder of Rights has waived its right to receive any
fractional Rights or any fractional Common Shares or other securities
upon exercise of a Right (except as provided herein);
(f) that, subject to the provisions of Section 5.4 without the approval of
any holder of Rights or Voting Shares and upon the sole authority of
the Board of Directors acting in good faith, this Agreement may be
supplemented or amended from time to time as provided herein; and
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(g) notwithstanding anything in this Agreement to the contrary, neither
the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS
3.1 FLIP-IN EVENT
(a) Subject to subsections 3. 1(b) and 5.1(b), 5.1(c) and 5.1(d) hereof,
in the event that prior to the Expiration Time a Flip-in Event occurs,
the Corporation shall take such action as shall be necessary to ensure
and provide, within 10 Business Days thereafter or such longer period
as may be required to satisfy the requirements of applicable
securities acts or comparable legislation so that, except as provided
below, each Right shall thereafter constitute the right to purchase
from the Corporation, upon exercise thereof in accordance with the
terms hereof, that number of Common Shares of the Corporation as have
an aggregate Market Price on the date of consummation or occurrence of
such Flip-in Event equal to twice the Exercise Price for an amount in
cash equal to the Exercise Price (such right to be appropriately
adjusted in a manner analogous to the applicable adjustment provided
for in Section 2.3 in the event that, after such date of consummation
or occurrence, an event of a type analogous to any of the events
described in Section 2.3 shall have occurred with respect to such
Common Shares).
(b) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of any Flip-in Event, any Rights that are or were
Beneficially Owned on or after the earlier of the Separation Time and
the Stock Acquisition Date, or which may thereafter be Beneficially
Owned, by:
(i) an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any other Person acting jointly or in concert
with an Acquiring Person or any Associate or Affiliate of such
other Person); or
(ii) a transferee of Rights, direct or indirect, from an Acquiring
Person (or from any Affiliate or Associate of an Acquiring Person
or any Person acting jointly or in concert with an Acquiring
Person or any associate or Affiliate thereof) where such a
transferee becomes a transferee concurrently with or subsequent
to the Acquiring Person becoming an Acquiring Person in a
transfer that the Board of Directors has determined is part of a
plan, arrangement or scheme of an Acquiring Person (or of any
Person acting jointly or in concert with an Acquiring Person or
any Associate or Affiliate of an Acquiring Person), that has the
purpose or effect of avoiding clause 3.1(b)(i);
shall become null and void without any further action and any holder
of such Rights (including any transferee of, or other successor
entitled to, such Rights, whether directly or indirectly) shall
thereafter have no right to exercise such Rights under any provisions
of this Agreement and further shall thereafter not have any rights
whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The holder of any Rights
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represented by a Rights Certificate which is submitted to the Rights
Agent upon exercise or for registration of transfer or exchange which
does not contain the necessary certifications set forth in the Rights
Certificate establishing that such Rights are not void under this
Subsection 3.1(b) shall be deemed to be an Acquiring Person for the
purposes of this Subsection 3.1 (b) and such Rights shall become null
and void.
(c) Any Rights Certificate that represents Rights Beneficially Owned by a
Person described in either of subclauses 3.1(b)(i) or 3.1(b)(ii) or
transferred to any Nominee of any such Person, and any Rights
Certificate issued upon transfer, exchange, replacement or adjustment
of any other Rights Certificate, referred to in this sentence, shall
contain or will be deemed to contain the following legend:
"The Rights represented by this Rights Certificate were issued to
a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement) or acting jointly or in concert with any of
them. This Rights Certificate and the Rights represented hereby
shall be void in the circumstances specified in Subsection 3.1(b)
of the Shareholder Rights Plan Agreement."
The Rights Agent shall not be under any responsibility to ascertain
the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed
to do so in writing by the Corporation or if a holder fails to certify
upon transfer or exchange in the space provided to do so.
(d) After the Separation Time, the Corporation shall do all such acts and
things necessary and within its power to ensure compliance with the
provisions of this Section 3.1 including, without limitation, all such
acts and things as may be required to satisfy the requirements of the
Business Corporations Act, the Securities Act and applicable
securities laws or comparable legislation in each of the provinces of
Canada and in any other jurisdiction where the Corporation is subject
to such laws and the rules of the stock exchanges or quotation systems
where the Common Shares are listed or quoted at such time in respect
of the issue of Common Shares upon the exercise of Rights in
accordance with this Agreement.
3.2 FIDUCIARY DUTIES OF THE BOARD OF DIRECTORS OF THE CORPORATION
For clarification, it is understood that nothing contained in this Article
3 shall be considered to affect the obligations of the Board of Directors to
exercise its fiduciary duties. Without limiting the generality of the foregoing,
nothing contained herein shall be construed to suggest or imply that the Board
of Directors shall not be entitled to recommend that holders of the Voting
Shares reject or accept any Take-over Bid or take any other action including,
without limitation, the commencement, prosecution, defence or settlement of any
litigation and the submission of additional or alterative Take-over Bids or
other proposals to the shareholders of the Corporation with respect to any
Takeover Bid or otherwise that the Board of Directors believes is necessary or
appropriate in the exercise of its fiduciary duties.
ARTICLE 4
THE RIGHTS AGENT
4.1 GENERAL
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation and the
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holders of the Rights in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The
Corporation may from time to time appoint such co-rights agents
("Co-Rights Agents") as it may deem necessary or desirable subject to
the prior written approval of the Rights Agent. In the event the
Corporation appoints one or more Co-Rights Agents, the respective
duties of the Rights Agent and Co-Rights Agents shall be as the
Corporation may determine with the written approval of the Rights
Agent. The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and
other disbursements reasonably incurred in the administration and
execution of this Agreement and the exercise and performance of its
duties hereunder, including the reasonable fees and disbursements of
counsel and other experts consulted by the Rights Agent pursuant to
Subsection 4.3(a). The Corporation also agrees to indemnify the Rights
Agent, its officers, directors, employees and agents for, and to hold
it harmless against, any loss, liability, cost, claim, action, damage
or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the legal costs and
expenses, which right to indemnification will survive the termination
of this Agreement or the removal or resignation of the Rights Agent.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon
any certificate for Common Shares, Rights Certificate, certificate for
other securities of the Corporation, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
(c) The Corporation shall inform the Rights Agent in a reasonably timely
manner of events which may materially affect the administration of
this Agreement by the Rights Agent and, at any time upon request,
shall provide to the Rights Agent an incumbency certificate certifying
the then current officers of the Corporation.
4.2 MERGER, AMALGAMATION, CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or amalgamated or with which it may be
consolidated, or any corporation resulting from any merger,
amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation succeeding to
the shareholder services business of the Rights Agent or any successor
Rights Agent, will be the successor to the Rights Agent under this
Agreement without the execution or filling of any document or any
further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case at
the time such successor Rights Agent succeeds to the agency created by
this Agreement any of the Rights Certificates have been countersigned
but not delivered any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of
the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the
name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Rights Certificates will have
the full force provided in the Rights Certificates and in this
Agreement.
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(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have
been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
4.3 DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the
Corporation and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may retain and consult with legal counsel (who may be
legal counsel for the Corporation) or such other experts that the
Rights Agent considers necessary to carry out its duties under this
Agreement and the opinion of such counsel or other expert will be full
and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with
such opinion; the Rights Agent may also, with the approval of the
Corporation (such approval not to be unreasonably withheld), consult
with such other experts as the Rights Agent shall consider necessary
or appropriate to properly carry out the duties and obligations
imposed under this Agreement and the Rights Agent shall be entitled to
act and rely in good faith on the advice of any such expert.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter
be proved or established by the Corporation prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by a person believed by the Rights Agent to be the President,
Chief Executive Officer, Chief Financial Officer, a Vice President or
the Secretary or Assistant Secretary of the Corporation and delivered
to the Rights Agent; and such certificate will be full authorization
to the Rights Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Common Shares, or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, and all
such statements and recitals are and will be deemed to have been made
by the Corporation only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Common
Share certificate, or Rights Certificate (except its countersignature
thereon) nor will it be responsible for any breach by the Corporation
of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
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exercisability of the Rights (including the Rights becoming void
pursuant to Subsection 3.1(b) hereof or any adjustment required under
the provisions of Section 2.3) hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights after receipt of the certificate
contemplated by Section 2.3 describing any such adjustment or any
written notice from the Corporation or any holder that a Person has
become an Acquiring Person); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization
of any Common Shares to be issued pursuant to this Agreement or any
Rights or as to any Common Shares, when issued, being duly and validly
authorized, issued and delivered as fully paid and non-assessable.
(f) The Corporation agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any individual believed by the Rights Agent to be the President,
Chief Executive Officer, Chief Financial Officer, a Vice President or
the Secretary or Assistant Secretary of the Corporation, and to apply
to such individuals for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered by
it in good faith in accordance with instructions of any such
individual. It is understood that instructions to the Rights Agent
shall, except where circumstances make it impractical or the Rights
Agent otherwise agrees, be given in writing and, where not in writing,
such instructions shall be confirmed in writing as soon as reasonably
practicable after the giving of such instructions.
(h) Subject to applicable law, the Rights Agent and any shareholder or
director, officer or employee of the Rights Agent may buy, sell or
deal in Common Shares, Rights or other securities of the Corporation
or become pecuniarily interested in any transaction in which the
Corporation may be interested, or contract with or lend money to the
Corporation or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Corporation
or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Corporation
resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued
employment thereof.
4.4 CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties under this
Agreement by giving 60 days' prior written notice (or such lesser notice as is
acceptable to the Corporation) to the Corporation, to each transfer agent of
Common Shares and to the holders of the Rights, all in accordance with Section
5.9 and at the expense of the Corporation. The Corporation may remove the Rights
Agent by giving 30 days' prior written notice to the Rights Agent, to each
transfer agent of the Common Shares and to the holders of the Rights in
accordance with Section 5.9. If the Rights Agent should resign or be removed or
otherwise become incapable
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of acting, the Corporation will appoint a successor to the Rights Agent. If the
Corporation fails to make such appointment within a period of 30 days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
any Rights (which holder shall, with such notice, submit such holder's Rights
Certificate for inspection of the Corporation), then the holder of any Rights or
the Rights Agent may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent at the Corporation's expense. Any successor
Rights Agent, whether appointed by the Corporation or by such a court, must be a
corporation incorporated under the laws of Canada or a province thereof and
authorized to carry on the business of a trust company in the Province of
Ontario. After appointment, the successor Rights Agent will be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent, upon receipt of any outstanding fees and expenses then owing, shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Corporation will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and mail a
notice thereof in writing to the holders of the Rights in accordance with
Section 5.9. Failure to give any notice provided for in this Section 4.4,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be
ARTICLE 5
MISCELLANEOUS
5.1 REDEMPTION, WAIVER AND TERMINATION
(a) The Board of Directors acting in good faith may, with the prior
consent of holders of Voting Shares or of the holders of Rights given
in accordance with subsection 5.1(f) or 5.1(g), as the case may be, at
any time prior to the occurrence of a Flip-in Event as to which the
application of Section 3.1 has not been waived pursuant to the
provisions of this Section 5.1, elect to redeem all but not less than
all of the then outstanding Rights at a redemption price of $0.000001
per Right appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.3 in the event that an
event of the type analogous to any of the events described in Section
2.3 shall have occurred (such redemption price being herein referred
to as the "Redemption Price").
(b) The Board of Directors acting in good faith may, with the prior
consent of the holders of Voting Shares given in accordance with
subsection 5.1(f), determine, at any time prior to the occurrence of a
Flip-in Event as to which the application of Section 3.1 has not been
waived pursuant to this Section 5.1, if such Flip-in Event would occur
by reason of an acquisition of Voting Shares otherwise than pursuant
to a Take-over Bid made by means of a Take-over Bid circular to all
holders of record of Voting Shares and otherwise than in the
circumstances set forth in subsection 5.1(d), to waive the application
of Section 3.1 to such Flip-in Event. In the event that the Board of
Directors proposes such a waiver, the Board of Directors shall extend
the Separation Time to a date subsequent to and not more than ten
Business Days following the meeting of shareholders called to approve
such waiver.
(c) The Board of Directors acting in good faith may, prior to the
occurrence of a Flip-in Event as to which the application of Section
3.1 has not been waived under this clause, determine, upon prior
written notice to the Rights Agent, to waive the application of
Section 3.1 to that Flip-in Event provided that the Flip-in Event
would occur by reason of a Take-over Bid made by means of a Take-over
Bid circular sent to all holders of record of Common Shares and
-31-
provided, further, that if the Board of Directors waives the
application of Section 3.1 to such a Flip-in Event, the Board of
Directors shall be deemed to have waived the application of Section
3.1 to any other Flip-in Event occurring by reason of any Take-over
Bid made by means of a Take-over Bid circular to all holders of record
of Common Shares which is made prior to the expiry of any Take-over
Bid in respect of which a waiver is, or is deemed to have been,
granted under this subsection 5.1(c).
(d) The Board of Directors acting in good faith may, in respect of any
Flip-in Event waive the application of Section 3.1 to that Flip-in
Event, provided that both of the following conditions are satisfied:
(i) the Board of Directors has determined that the Acquiring Person
became an Acquiring Person by inadvertence and without any intent
or knowledge that it would become an Acquiring Person; and
(ii) such Acquiring Person has reduced its Beneficial Ownership of
Common Shares such that at the time of waiver pursuant to this
subsection 5.1(d) it is no longer an Acquiring Person.
(e) The Board of Directors shall, without further formality, be deemed to
have elected to redeem the Rights at the Redemption Price on the date
that a Person who has made a Permitted Bid or a Take-over Bid in
respect of which the Board of Directors has waived, or is deemed to
have waived, pursuant to subsection 5.1(c), the application of Section
3.1, takes up and pays for the Common Shares pursuant to the Permitted
Bid or Take-over Bid, as the case may be.
(f) If a redemption of Rights pursuant to subsection 5.1(a) or a waiver of
a Flip-in Event pursuant to subsection 5.1(b) is proposed at any time
prior to the Separation Time, such redemption or waiver shall be
submitted for approval to the holders of Common Shares. Such approval
shall be deemed to have been given if the redemption or waiver is
approved by the affirmative vote of a majority of the votes cast by
Independent Shareholders represented in person or by proxy at a
meeting of such holders duly held in accordance with applicable laws
and the Corporation's by-laws.
(g) If a redemption of Rights pursuant to subsection 5.1(a) is proposed at
any time after the Separation Time, such redemption shall be submitted
for approval to the holders of Rights. Such approval shall be deemed
to have been given if the redemption is approved by holders of Rights
by a majority of the votes cast by the holders of Rights represented
in person or by proxy at and entitled to vote at a meeting of such
holders. For the purposes hereof, each outstanding Right (other than
Rights which are Beneficially Owned by any Person referred to in
clauses (i) to (v) inclusive of the definition of Independent
Shareholders) 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.
(h) Where a Take-over Bid that is not a Permitted Bid is withdrawn or
otherwise terminated after the Separation Time has occurred and prior
to the occurrence of a Flip-in Event, the Board of Directors may elect
to redeem all the outstanding Rights at the Redemption Price.
Notwithstanding such redemption, all of the provisions of this
Agreement shall continue to apply as if the Separation Time had not
occurred and the Separation Time shall be deemed not to have occurred
and Rights shall remain attached to the outstanding Common Shares,
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subject to and in accordance with the provisions of this Agreement.
(i) If the Board of Directors elects or is deemed to have elected to
redeem the Rights, and, in circumstances where subsection 5.1(a) is
applicable, such redemption is approved by the holders of Common
Shares or the holders of Rights in accordance with subsection 5.1(f)
or (g), as the case may be, the right to exercise the Rights will
thereupon, without further action and without notice, terminate and
the only right thereafter of the holders of Rights will be to receive
the Redemption Price.
(j) Within 10 Business Days of the Board of Directors electing or having
been deemed to have elected to redeem the Rights or, if subsection
5.1(a) is applicable within 10 Business Days after the holders of
Common Shares or the holders of Rights have approved a redemption of
Rights in accordance with subsection 5.1(f) or 5.1(g), as the case may
be, the Corporation shall give notice of redemption to the holders of
the then outstanding Rights by mailing such notice to each such holder
at its last address as it appears upon the register of the Rights
Agent or, prior to the Separation Time, on the register of the
transfer agent for the Common Shares. Any notice which is mailed in
the manner herein provided will be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
The Corporation may not redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set
forth in this Section 5.1 or in connection with the purchase of Common
Shares prior to the Separation Time.
(k) The Corporation shall give prompt written notice to the Rights Agent
of any waiver of the application of Section 3.1 made by the Board of
Directors under this Section 5.1.
5.2 EXPIRATION
No person will have any rights pursuant to this Agreement or in respect of
any Right after the Expiration Time, except in respect of any right to receive
cash, securities or other property which has accrued at the Expiration Time and
except as specified in Subsections 4.1(a) and 4.1(b) hereof.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the number or kind or class of shares
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
5.4 SUPPLEMENTS AND AMENDMENTS
(a) Subject to Subsections 5.4(b) and (c) and this Subsection 5.4(a), the
Corporation may from time to time amend, vary or delete any of the
provisions of this Agreement and the Rights provided that no
amendment, variation or deletion made on or after the date of the
meeting of Shareholders at which the resolution referred to in Section
5.18 is to be considered shall be made without the prior consent of
the holders of the Rights, given as provided in this Section 5.4,
except that amendments, variations or deletions made for any of the
following purposes shall not require such prior approval but shall be
subject to subsequent ratification in accordance with Subsection
5.4(b):
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(i) in order to make such changes as are necessary in order to
maintain the validity of this Agreement and the Rights as a
result of any change in any applicable legislation, regulations
or rules; or
(ii) in order to make such changes as are necessary in order to cure
any clerical or typographical error.
(b) Any amendment, variation or deletion made by the Board of Directors
pursuant to Subsections 5.4(a)(i) or (ii) shall:
(i) if made prior to the Separation Time, be submitted to the
shareholders of the Corporation at the next meeting of
shareholders and the shareholders may, by resolution passed by a
majority of the votes cast by Independent Shareholders who vote
in respect of such amendment, variation or deletion, confirm or
reject such amendment or supplement; or
(ii) if made after the Separation Time, be submitted to the holders of
Rights at a meeting to be held on a date not later than the date
of the next meeting of shareholders of the Corporation and the
holders of Rights may, by resolution passed by a majority of the
votes cast by the holders of Rights which have not become void
pursuant to Subsection 3.l(b) who vote in respect of such
amendment, variation or deletion, confirm or reject such
amendment or supplement.
Any amendment, variation or deletion pursuant to Subsection 5.4 shall
be effective only when so consented to by the holders of Voting Shares
or Rights, as applicable (except in the case of an amendment,
variation or deletion referred to in any of Clauses 5.4(a)(i) or (ii),
which shall be effective from the date of the resolution of the Board
of Directors adopting such amendment, variation or deletion and shall
continue in effect until it ceases to be effective (as in this
paragraph described) and, where such amendment, variation or deletion
is confirmed, it shall continue in effect in the form so confirmed).
If an amendment, variation or deletion pursuant to Clause 5.4(a)(i) or
(ii) is rejected by the shareholders or the holders of Rights or is
not submitted to the shareholders or holders of Rights as required,
then such amendment, variation or deletion shall cease to be effective
from and after the termination of the meeting at which it was rejected
or to which it should have been but was not submitted or from and
after the date of the meeting of holders of Rights that should have
been but was not held, and no subsequent resolution of the Board of
Directors to amend, vary or delete any provision of this Agreement to
substantially the same effect shall be effective until confirmed by
the shareholders or holders of Rights, as the case may be.
(c) For greater certainty, (i) no amendment, variation or deletion to the
provisions of Article 4 shall be made except with the concurrence of
the Rights Agent thereto, and (ii) neither the exercise by the Board
of Directors of any power or discretion conferred on it hereunder nor
the making by the Board of Directors of any determination or the
granting of any waiver it is permitted to make or give hereunder shall
constitute an amendment, variation or deletion of the provisions of
this Agreement or the Rights, for purposes of this Section 5.4 or
otherwise.
(d) The approval, confirmation or consent of the holders of Rights with
respect to any matter arising hereunder shall be deemed to have been
given if the action requiring such approval, confirmation or consent
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
-34-
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 or which, prior to the
Separation Time, are held otherwise than by Independent Shareholders)
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 Bylaws and the Business
Corporations Act with respect to meetings of shareholders of the
Corporation.
(e) The Corporation shall be required to provide the Rights Agent with
notice in writing of any such amendment, rescission or variation to
this Agreement as referred to in this Section 5.4 within 5 days of
effecting such amendment, variation or deletion.
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Corporation will not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights.
After the Separation Time there shall be paid, in lieu of such
fractional Rights, to the registered holders of the Rights
Certificates with regard to which fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Market
Price of a whole Right. The Rights Agent shall have no obligation to
make payments in lieu of fractional Rights unless the Corporation
shall have provided the Rights Agent with the necessary funds to pay
in full all amounts payable in accordance with subsection 2.2(e)
hereof.
(b) The Corporation shall not be required to issue fractional Common
Shares upon exercise of the Rights or to distribute certificates that
evidence fractional Common Shares. In lieu of issuing fractional
Common Shares, the Corporation shall pay to the registered holder of
Rights Certificates at the time such Rights are exercised as herein
provided, an amount in cash equal to the same fraction of the Market
Price of one Common Share at the date of such exercise. The Rights
Agent shall have no obligation to make payments in lieu of fractional
Common Shares unless the Corporation shall have provided the Rights
Agent with the necessary funds to pay in full all amounts payable in
accordance with subsection 2.2(e) hereof.
5.6 RIGHTS OF ACTION
Subject to the terms of this Agreement, rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain any
suit, action or proceeding against the Corporation to enforce, or otherwise act
in respect of, such holder's right to exercise such holder's Rights in the
manner provided in this Agreement and in such holder's Rights Certificate.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER
No holder, as such, of any Rights or Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of Common
Shares or any other securities which may at any time be issuable on the exercise
of Rights, nor shall anything contained herein or in any Rights Certificate be
construed
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to confer upon the holder of any Rights, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in Section
5.8 hereof) or to receive dividends or subscription rights or otherwise, until
such Rights shall have been exercised in accordance with the provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS
In case the Corporation proposes after the Separation Time and prior to the
Expiration Time to effect the liquidation, dissolution or winding up of the
Corporation or the sale of all or substantially all of the Corporation's assets,
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 5.9 hereof, a notice of such proposed action, which
shall specify the date on which such liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 10 Business Days prior
to the date of the taking of such proposed action by the Corporation.
5.9 NOTICES
Notices or demands authorized or required by this Agreement to be given or
made to or by the Rights Agent, the holder of any Rights or the Corporation will
be sufficiently given or made and shall be deemed to be received if delivered or
sent by first-class mail, postage prepaid, or by fax machine or other means of
printed telecommunication, charges prepaid and confirmed in writing by mail or
delivery, addressed (until another address is filed in writing with the Rights
Agent or the Corporation, as applicable), as follows:
(a) if to the Corporation:
GSI Lumonics Inc.
ββ βββββββ ββββ
βββββββββ, ββ βββββ βββ
Attention: Chief Financial Officer
Facsimile No. (βββ) βββ-ββββ
(b) if to the Rights Agent:
Computershare Trust Company of Canada
Stock Transfer Department
βββ ββββββββββ ββββββ, βββ βββββ
βββββββ, βββββββ βββ βββ
Attention: Manager, Client Services
Facsimile No. (βββ) βββ-ββββ
(c) if to the holder of any Rights, to the address of such holder as it
appears on the registry books of the Rights Agent or, prior to the
Separation Time, on the registry books of the Corporation for the
Common Shares.
Any notice given or made in accordance with this Section 5.9 shall be deemed to
have been given and to have been received on the day of delivery, if so
delivered, on the third Business Day (excluding each day during which there
exists any general interruption of postal service due to strike, lockout or
other cause) following the mailing thereof, if so mailed, and on the day of
faxing (provided such sending is during the normal business hours of the
addressee on a Business Day and if not, on the first Business Day thereafter).
Each of the Corporation and the Rights Agent may from time to time change its
address for notice by notice to the other
-36-
given in the manner aforesaid.
If mail service is or is threatened to be interrupted at a time when the
Corporation or the Rights Agent wishes to give a notice or demand hereunder to
or on the holders of the Rights, the Corporation or the Rights Agent may,
notwithstanding the foregoing provisions of this Section 5.9, give such notice
by means, of publication once in each of two successive weeks in the business
section of The Globe and Mail and, so long as the Corporation has a transfer
agent in the United States, in a daily publication in the United States
designated by the Corporation, or in such other publication or publications as
may be designated by the Corporation and notice so published shall be deemed to
have been given on the date on which the first publication of such notice in any
such publication has taken place.
5.10 COSTS OF ENFORCEMENT
The Corporation agrees that if the Corporation or any other Person the
securities of which are purchasable upon exercise of Rights fails to fulfill any
of its obligations pursuant to this Agreement, then the Corporation or such
Person will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce his rights
pursuant to any Rights or this Agreement.
5.11 REGULATORY APPROVALS
Any obligation of the Corporation or action or event contemplated by this
Agreement, shall be subject to applicable law and to the receipt of any
requisite approval or consent from any governmental or regulatory authority.
Without limiting the generality of the foregoing, any issuance or delivery of
debt or equity securities (other than non-convertible debt securities) of the
Corporation upon the exercise of Rights and any amendment to this Agreement
shall be subject to any required prior consent of the stock exchange(s) on which
the Corporation is from time to time listed or has been listed during the six
months prior to such amendment.
5.12 DECLARATION AS TO NON-CANADIAN AND NON-U.S. HOLDERS
If in the opinion of the Board of Directors (who may rely upon the advice
of counsel), any action or event contemplated by this Agreement would require
compliance with the securities laws or comparable legislation of a jurisdiction
outside Canada and the United States of America, its territories and
possessions, the Board of Directors acting in good faith may take such actions
as it may deem appropriate to ensure that such compliance is not required,
including without limitation establishing procedures for the issuance to a
Canadian resident Fiduciary of Rights or securities issuable on exercise of
Rights, the holding thereof in trust for the Persons entitled thereto (but
reserving to the Fiduciary or to the Fiduciary and the Corporation, as the
Corporation may determine, absolute discretion with respect thereto) and the
sale thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. In no event shall the Corporation or the Rights Agent be
required to issue or deliver Rights or securities issuable on exercise of Rights
to Persons who are citizens, residents or nationals of any jurisdiction other
than Canada and a province or territory thereof and the United States of America
and any state thereof in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes.
5.13 SUCCESSORS
All the covenants and provisions of this Agreement by or for the benefit of
the Corporation or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.
-37-
5.14 BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person other
than the Corporation, the Rights Agent and the holders of the Rights any legal
or equitable right, remedy or claim under this Agreement; this Agreement shall
be for the sole and exclusive benefit of the Corporation, the Rights Agent and
the holders of the Rights.
5.15 SHAREHOLDER REVIEW
At or prior to the first annual meeting of shareholders of the Corporation
following the third anniversary of the date of this Agreement, provided that a
Flip-in Event has not occurred prior to such time, the Board of Directors shall
submit a resolution ratifying the continued existence of this Agreement to the
Independent Shareholders for their consideration and, if thought advisable,
approval. Unless a majority of the votes cast by Independent Shareholders who
vote in respect of such resolution are voted in favour of the continued
existence of this Agreement, the Board of Directors shall, immediately upon the
confirmation by the chairman of such shareholders' meeting of the result of the
vote on such resolution and without further formality, be deemed to have elected
to redeem the Rights at the Redemption Price.
5.16 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS
All actions, calculations, interpretations and determinations (including
all omissions with respect to the foregoing) which are done or made by the Board
of Directors, in good faith, (x) may be relied on by the Rights Agent, and (y)
shall not subject the Board of Directors to any liability to the holders of the
Rights or to any other parties.
5.17 GOVERNING LAW
This Agreement and the Rights issued hereunder shall be deemed to be a
contract made under the laws of the Province of Ontario and for all purposes
will be governed by and construed in accordance with the laws of such province
applicable to contracts to be made and performed entirely within such province.
5.18 EFFECTIVE DATE
This Agreement (subject to receipt of the approval of the Independent
Shareholders as set forth below) is effective from the Effective Date. If this
Agreement is not approved by resolution passed by a majority of the votes cast
by Independent Shareholders who vote at a meeting of shareholders to be held not
later than the date on which the 2005 annual meeting of shareholders of the
Corporation terminates, then this Agreement shall terminate and be void and of
no further force and effect.
5.19 LANGUAGE
Les parties aux presentes ont exige que la presente convention ainsi que
tons les documents et avis qui s'y rattachent et ou qui en coulent soient
redieds en langue anglaise. The parties hereto have required that this Agreement
and all documents and notices related thereto and or resulting therefrom be
drawn up in English.
5.20 COUNTERPARTS
This Agreement may be executed in any number of counterparts and each of
such counterparts will for all purposes be deemed to be an original, and all
such counterparts shall together constitute one and the same instrument.
-38-
5.21 SEVERABILITY
If any term or provision hereof or the application thereof to any
circumstance is, in any jurisdiction and to any extent, invalid or
unenforceable, such term or provision will be ineffective only to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining terms and provisions hereof or the application of
such term or provision to circumstances other than those as to which it is held
invalid or unenforceable.
5.22 TIME OF THE ESSENCE
Time shall be of the essence hereof.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective April 22, 2005.
GSI LUMONICS INC.
By:
------------------------------------
By:
------------------------------------
COMPUTERSHARE TRUST COMPANY OF CANADA
By:
------------------------------------
By:
------------------------------------
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EXHIBIT A
Form of Rights Certificate
Certificate No. ____ ______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE
TERMS SET FORTH IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b) OF SUCH AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON, CERTAIN RELATED PARTIES OF AN
ACQUIRING PERSON OR A TRANSFEREE OF AN ACQUIRING PERSON OR ANY SUCH RELATED
PARTIES WILL BECOME VOID WITHOUT FURTHER ACTION.
RIGHTS CERTIFICATE
This certifies that ______________ is the registered holder of the number
of Rights set forth above, each of which entitles the registered holder thereof,
subject to the terms, provisions and conditions of the Shareholder Rights Plan
Agreement made as of April ___, 2005 (the "Rights Agreement") between GSI
Lumonics Inc., a corporation existing under the laws of New Brunswick (the
"Corporation") and Computershare Trust Company of Canada, a trust company
incorporated under the laws of Canada, as Rights Agent (the "Rights Agent"),
which term shall include any successor Rights Agent under the Rights Agreement,
to purchase from the Corporation, at any time after the Separation Time and
prior to the Expiration Time (as such terms are defined in the Rights
Agreement), one fully paid common share of the Corporation (a "Common Share") at
the Exercise Price referred to below, upon presentation and surrender of this
Rights Certificate, together with the Form of Election to Exercise appropriately
completed and duly executed, to the Rights Agent at its principal office in
Toronto. Until adjustment thereof in certain events as provided in the Rights
Agreement, the Exercise Price shall be $200.00 per Right (payable by certified
cheque, bankers draft or money order payable to the order of the Corporation).
The number of Common Shares which may be purchased for the Exercise Price is
subject to adjustment as set forth in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holder of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office of the Rights Agent in Toronto, Ontario may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement the Rights evidenced by
this Certificate may be redeemed by the Corporation at a redemption price of
$0.000001 per Right subject to adjustment in certain events.
-41-
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby, but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Shares or
any other securities which may at any time be issuable upon the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a shareholder of
the Corporation or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of any meeting or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid for any purpose until it shall
have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation.
Date:
-------------------
GSI LUMONICS INC.
Per:
-----------------------------------
Per:
-----------------------------------
Countersigned:
COMPUTERSHARE TRUST COMPANY OF CANADA,
in the City of Toronto
Per:
-----------------------------------
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FORM OF ELECTION TO EXERCISE
TO: GSI LUMONICS INC.
The undersigned hereby irrevocably elects to exercise _________________
whole Rights represented by this Rights Certificate to purchase the Common
Shares issuable upon the exercise of such Rights and requests that certificates
for such Common Shares be issued in the name of and delivered to:
--------------------------------------
Name
--------------------------------------
Address
--------------------------------------
City and Province
--------------------------------------
Social Insurance No. or other taxpayer
identification number
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If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
--------------------------------------
Name
--------------------------------------
Address
--------------------------------------
City and Province
--------------------------------------
Social Insurance No. or other taxpayer
identification number
Date:
-------------------
----------------------------------------
Signature
Signature Guaranteed
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signature must be guaranteed by a Canadian chartered bank or trust company,
a member of a recognized stock exchange in Canada or a member of the Securities
Transfer Association Medallion (Stamp) Program.
(To he completed by the holder if true)
The undersigned hereby represents, for the benefit of the Corporation and
all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or by an Affiliate or Associate
of an Acquiring Person, any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of any such other Person (as such
terms are defined in the Rights Agreement).
----------------------------------------
Signature
NOTICE
IN THE EVENT THAT THE CERTIFICATIONS SET FORTH ABOVE IN THE FORM OF
ELECTION TO EXERCISE AND ASSIGNMENT ARE NOT COMPLETED, THE CORPORATION SHALL
DEEM THE BENEFICIAL OWNER OF THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
TO BE AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND, ACCORDINGLY,
SUCH RIGHTS SHALL BE NULL AND VOID.
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
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(Please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein.
Date:
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Signature
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(Signature Guaranteed (Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signature must be guaranteed by a Canadian chartered bank or trust company,
a member of a recognized stock exchange in Canada or a member of the Securities
Transfer Association Medallion (Stamp) Program.
(To be completed by the assignor if true)
The undersigned hereby represents, for the benefit of the Corporation and
all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not and, to the knowledge of the undersigned have never
been, Beneficially Owned by an Acquiring Person or by an Affiliate or Associate
of an Acquiring Person, any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of any such other Person (as such
terms are deemed in the Rights Agreement).
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Signature
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(Please print name below signature)
NOTICE
IN THE EVENT THAT THE CERTIFICATIONS SET FORTH ABOVE IN THE FORM OF
ELECTION TO EXERCISE AND ASSIGNMENT ARE NOT COMPLETED, THE CORPORATION SHALL
DEEM THE BENEFICIAL OWNER OF THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
TO BE AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND, ACCORDINGLY,
SUCH RIGHTS SHALL TO BE NULL AND VOID.
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