EXHIBIT 36
SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT
dated as of
April 20, 1990
between
THE ▇▇▇▇▇▇ GROUP INC.
and
THE ROYAL TRUST COMPANY
as Rights Agent
▇▇▇▇▇▇ & Elliot
TABLE OF CONTENTS
Section Description Page
------- ----------- ----
ARTICLE 1. -- INTERPRETATION........................ 1
1.1 Certain Definitions..................................................... 1
"Acquiring Person"................................................. 2
"Affiliate"........................................................ 3
"Associate"........................................................ 3
"Beneficial Owner"................................................. 3
"Beneficial Ownership"............................................. 3
"Beneficially Own"................................................. 3
"British Columbia Company Act"..................................... 4
"Business Day"..................................................... 4
"Canadian-U.S. Exchange Rate"...................................... 4
"Canadian Dollar Equivalent"....................................... 4
"close of business"................................................ 4
"Common Shares".................................................... 4
"Exempt Acquisitions".............................................. 4
"Exercise Price"................................................... 5
"Expiration Time".................................................. 5
"Flip-in Event".................................................... 5
"Flip-over Transaction or Event"................................... 5
"Grandfathered Person"............................................. 5
"Grandfathered Person Transferee".................................. 5
"Grandfathered Bidder"............................................. 5
"Independent Shareholders"......................................... 5
"Market Price"..................................................... 6
"Offer to Acquire"................................................. 7
"Offeror's Securities"............................................. 7
"Permitted Bid".................................................... 7
"Permitted Bid Acquisition"........................................ 8
"Person"........................................................... 8
"Pro Rata Acquisition"............................................. 8
"Record Time"...................................................... 8
"regular periodic cash dividend"................................... 8
"Securities Act (Ontario)"......................................... 9
"Separation Time".................................................. 9
"Stock Acquisition Date"........................................... 9
"Subsidiary"....................................................... 9
"Take-over-Bid".................................................... 9
"Termination Time"................................................. 9
"Trading Day"...................................................... 9
"U.S.-Canadian Exchange Rate"...................................... 9
"U.S. Dollar Equivalent"........................................... 10
"Voting Shares".................................................... 10
"1933 Securities Act".............................................. 10
"1934 Exchange Act"................................................ 10
1.2 Currency................................................................ 10
1.3 Grandfather Provisions.................................................. 10
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Section Description Page
------- ----------- ----
ARTICLE 2. -- THE RIGHTS
2.1 Legend on Common Share Certificates..................................... 12
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights........ 12
2.3 Adjustments to Exercise Price, Number of Rights......................... 14
2.4 Date on Which Exercise is Effective..................................... 17
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates... 17
2.6 Registration, Registration of Transfer and Exchange..................... 17
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates............... 18
2.8 Persons Deemed Owners................................................... 18
2.9 Delivery and Cancellation of Certificates............................... 18
2.10 Agreement of Rights Holders............................................. 19
ARTICLE 3. -- ADJUSTMENTS TO THE RIGHTS IN THE EVENT
OF CERTAIN TRANSACTIONS
3.1 Flip-over Transaction or Event.......................................... 19
3.2 Flip-in Event........................................................... 20
3.3 Obligations of the Company.............................................. 21
3.4 Exchange Option......................................................... 21
3.5 Special Meeting of Shareholders to Consider Permitted Bids.............. 22
ARTICLE 4. -- THE RIGHTS AGENT
4.1 General................................................................. 23
4.2 Merger, Amalgamation or Consolidation or Change of Name of Rights Agent. 24
4.3 Duties of Rights Agent.................................................. 24
4.4 Change of Rights Agent.................................................. 26
ARTICLE 5. - MISCELLANEOUS
5.1 Redemption, Waiver and Termination...................................... 26
5.2 Expiration.............................................................. 27
5.3 Issuance of New Rights Certificates..................................... 27
5.4 Supplements and Amendments.............................................. 27
5.5 Fractional Rights and Fractional Shares................................. 29
5.6 Rights of Action........................................................ 29
5.7 Holder of Rights Not Deemed a Shareholder............................... 29
5.8 Notice of Proposed Actions.............................................. 30
5.9 Notices................................................................. 30
5.10 Costs of Enforcement.................................................... 30
5.11 Successors.............................................................. 31
5.12 Benefits of this Agreement.............................................. 31
5.13 Descriptive Headings.................................................... 31
5.14 Governing Law........................................................... 31
5.15 Language................................................................ 31
5.16 Counterparts............................................................ 31
5.17 Severability............................................................ 31
5.18 Effective Date.......................................................... 31
5.19 Determinations and Actions by the Board of Directors.................... 32
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SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT
AGREEMENT made as of April 20, ▇▇▇▇
▇ ▇ ▇ ▇ ▇ ▇ ▇:
THE ▇▇▇▇▇▇ GROUP INC., a corporation incorporated under the laws of
British Columbia (hereinafter referred to as the "Company"),
OF THE FIRST PART,
-- and --
THE ROYAL TRUST COMPANY, a trust company incorporated under the laws
of Quebec (hereinafter referred to as the "Rights Agent"),
OF THE SECOND PART.
WHEREAS the Board of Directors of the Company has determined that it is
advisable to adopt a shareholder protection rights plan (the "Rights Plan");
AND WHEREAS, in order to implement the Rights Plan, the Board of Directors
of the Company has
(a) authorized and declared a distribution of one right (a "Right")
effective at the close of business on May 9, 1990 in respect of each
Common Shares (as hereinafter defined) outstanding at the close of
business on May 9, 1990 (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 (as hereinafter defined) and the Expiration Time (as
hereinafter defined),
(c) authorized the issuance of Rights Certificates (as hereinafter
defined) to holders of Rights pursuant to the terms and subject to the
conditions set forth herein;
WHEREAS each Right entitles the holder thereof, after the Separation Time,
to purchase securities of the Company (or, in certain cases, of certain other
entities) pursuant to the terms and subject to the conditions set forth herein;
and
WHEREAS the Company desires to appoint the Rights Agent to act on behalf of
the Company and the holders of Rights, and the Rights Agent is willing to so
act, in connection with the issuance, transfer, exchange, cancellation 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 following terms have the meanings
indicated:
(a) "ACQUIRING PERSON" shall mean, subject to subsections 1.3(a) and (b),
any Person who is the Beneficial Owner of 20% or more of the
outstanding Common Shares or Voting Shares of the Company; provided,
however, that the term "Acquiring Person" shall not include
(i) the Company or any Subsidiary of the Company, any employee
benefit plan, or trust for the benefit of employees, of the
Company or any Subsidiary of the Company, or any Person
organized, appointed or established by the Company for or
pursuant to the terms of any such plan or trust;
(ii) any Person who becomes the Beneficial Owner of 20% or more of
the outstanding Common Shares or Voting Shares of the Company
as a result of
(A) an acquisition or redemption by the Company of Voting
Shares of the Company which, by reducing the number of
Voting Shares outstanding, increases the proportionate
number of Voting Shares Beneficially Owned by such
Person to 20% or more of the Common Shares or Voting
Shares of the Company then outstanding, or
(B) share acquisitions made pursuant to a Permitted Bid and
approved in accordance with the provision of Section
3.5 and made after the date of such approval
("PERMITTED BID ACQUISITIONS") or
(C) share acquisitions in respect of which the Board of
Directors of the Company has waived the application of
Section 3.2 pursuant to subsection 5.1(b) or which were
made on or prior to the date of this Agreement ("EXEMPT
ACQUISITIONS");
provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the Common Shares or Voting Shares of
the Company then outstanding by reason of (i) share
acquisitions or redemptions by the Company or (ii) Permitted
Bid Acquisitions or (iii) Exempt Acquisitions and, after such
share acquisitions or redemptions by the Company or Permitted
Bid Acquisitions or Exempt Acquisitions, becomes the Beneficial
Owner of any additional Voting Shares of the Company other than
pursuant to Permitted Bid Acquisitions, Exempt Acquisitions,
acquisitions as a result of a stock dividend, a stock split or
other event pursuant to which such Person receives or acquires
Voting Shares on the same pro rata basis as all other holders
of Voting Shares of the same class ("PRO RATA ACQUISITIONS") or
acquisitions pursuant to a dividend reinvestment plan of the
Company, then as of the date of becoming the Beneficial Owner
of any additional Voting Shares, such Person shall become an
"Acquiring Person"; and
(iii) for the period of 10 days after the Disqualification Date (as
hereinafter defined), any Person who becomes the Beneficial
Owner of 10% or more of the outstanding Common Shares or Voting
Shares of the Company as a result of such Person becoming
disqualified from relying on clause 1.1(d)(vii) hereof where
such disqualification results solely because such Person has
made or proposed to make a tender or exchange offer or a Take-
over Bid in respect of securities of the Company alone or by
acting jointly or in concert with any other Person (the first
date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report
filed pursuant to Section 100 of the Securities Act (Ontario)
or Section 13(d) of the 1934 Exchange Act) by such Person or
the Company of the intent to commence such a tender or
exchange offer or Take-over Bid being herein referred
to as the "DISQUALIFICATION DATE").
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(b) "AFFILIATE" has the meaning ascribed to such term in the Securities
Act (Ontario).
(c) "ASSOCIATE" has the meaning ascribed to such term in the Securities
Act (Ontario).
(d) A Person shall be deemed the "BENEFICIAL OWNER", and to have
"BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY OWN"
(i) any securities as to which such Person or any of such Person's
Affiliates or Associates is or may be deemed to be the direct
or indirect beneficial owner pursuant to the Securities Act
(Ontario) for the purposes of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or take-over bids
or pursuant to Rule 13d-3 or 13d-5 under the 1934 Exchange Act
(or pursuant to any comparable or successor laws, Rules or
regulations or, if such laws, Rules or regulations shall be
rescinded and there shall be no comparable or successor laws,
Rules or regulations, pursuant to Rule 13d-3 or 13d-5 as in
effect on the date of this Agreement) whether or not such laws
or regulations apply to such Person;
(ii) any securities as to which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or after the lapse or
passage of time or otherwise) pursuant to any agreement,
arrangement, pledge or understanding (other than customary
agreements with and between underwriters and banking group or
selling group members with respect to a bona fide public
offering of securities and other than pledges of securities in
the ordinary course of business that meet all of the conditions
specified in Rule 13d-3(d)(3) under the 1934 Exchange Act), or
upon the exercise of any conversion right, exchange right,
right (other than the Rights), warrant or option, or otherwise,
or (B) the right to vote such security (whether such right is
exercisable immediately or after the lapse or passage of time
or otherwise), pursuant to any agreement, arrangement,
understanding or otherwise;
(iii) any securities that are Beneficially Owned within the meaning
of paragraph (i) or (ii) by any other Person with which such
Person or any such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in
writing) with respect to or for the purpose of acquiring,
holding, voting or disposing of any Voting Shares of the
Company (other than customary agreements with and between
underwriters and banking group or selling group members with
respect to a bona fide public offering of securities) or
acquiring, holding or disposing of a significant portion of the
property or assets of the Company or any Subsidiary of the
Company;
A person shall be deemed not to be the "Beneficial Owner", or to have
"Beneficial Ownership", of or to "Beneficially Own", any security
(iv) solely because such security has been deposited or tendered
pursuant to a tender or exchange offer or Take-over Bid made by
such Person or any of such Person's Affiliates or Associates
until the earliest of such tendered security being accepted
unconditionally for payment or exchange or being taken up and
paid for;
(v) solely because such Person or any of such Person's Affiliates
or Associates has or shares the power to vote or direct the
voting of such security pursuant to a revocable proxy given in
response to a public proxy solicitation made pursuant to, and
in accordance with, the applicable rules and regulations under
(A) the Securities Act (Ontario) or (B) the 1934 Exchange Act,
except if such power (or the arrangements relating thereto) is
then reportable under Item 6 of Schedule 13D under the 1934
Exchange Act (or any similar provision of a comparable or
successor report);
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(vi) solely because such Person or any of such Person's Affiliates
or Associates has or shares the power to vote or direct the
voting of such security in connection with or in order to
participate in a public proxy solicitation made or to be made
pursuant to and in accordance with the applicable rules and
regulations referred to in (v) above;
(vii) solely because such Person is principally engaged in the
business of managing investment funds for unaffiliated
securities investors and as part of such Person's duties as
agent for fully managed accounts, holds or exercises voting or
dispositive power over such security provided, however, that
(A) such Person does not individually Beneficially Own in
excess of 10% of the outstanding Common Shares or Voting Shares
of the Company; and (B) such Person has not made or proposed to
make a tender or exchange offer or a Take-over Bid in respect
of securities of the Company alone or by acting jointly or in
concert with any other Person; or
(viii) solely because such Person is a party to an agreement made May
28, 1986 between the Company, The Canada Trust Company, the
initial holders of the Company's subordinated debentures,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇, as amended, or an agreement
dated as of May 28, 1986 between the Company, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and the initial holders of the Company's
subordinated debentures.
For purposes of this Agreement, in determining the percentage of the
outstanding Common Shares or Voting Shares with respect to which a
Person is or is deemed to be the Beneficial Owner, all Voting Shares
as to which such Person is deemed to be the Beneficial Owner shall be
deemed outstanding.
(e) "BRITISH COLUMBIA COMPANY ACT" shall mean the Company Act, R.S.B.C.
1979, c.59, as amended and the regulations thereunder, and any
comparable or successor laws or regulations thereto.
(f) "BUSINESS DAY" shall mean any day, other than a Saturday or Sunday or
a day on which banking institutions in the City of Toronto are
authorized or obligated by law to close.
(g) "CANADIAN-U.S. EXCHANGE RATE" shall mean on any date the inverse of
the U.S.-Canadian Exchange Rate.
(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 Canadian-U.S.
Exchange Rate 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
succeeding Business Day) at which the office of the transfer agent for
the Common Shares (or, after the Separation Time, the offices of the
Rights Agent) in the City of Toronto becomes closed to the public.
(j) "COMMON SHARES" shall mean the Common shares of the Company; provided,
however, that "Common Shares", when used with reference to any Person
other than the Company, shall mean 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; if such other Person is a Subsidiary of another
Person, "SUCH OTHER PERSON" as used herein shall mean the Person or
Persons which ultimately control such first-mentioned Person.
(k) "EXEMPT ACQUISITIONS" shall have the meaning ascribed thereto by
subclause 1.1(a)(ii)(C).
4
(l) "EXERCISE PRICE" shall mean, as of any date, the price at which a
holder 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 equal $90.
(m) "EXPIRATION TIME" shall mean the earlier of the Termination Time or
the close of business on the tenth-year anniversary of the date
hereof.
(n) "FLIP-IN EVENT" shall mean the close of business on the tenth day (or
such earlier or later day as the Board of Directors of the Company may
determine) after the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 100 of the Securities Act (Ontario)
or Section 13(d) under the 1934 Exchange Act) by the Company or an
Acquiring Person of facts indicating that a Person has become an
Acquiring Person in a transaction occurring subsequent to the date of
this Agreement (disregarding, for such purpose only, that such Person
may previously have been an Acquiring Person apart from such
transaction) provided, however, that the term "Flip-in Event" shall
not include any transaction or event that constitutes a Flip-over
Transaction or Event.
(o) "FLIP-OVER TRANSACTION OR EVENT" shall mean
(i) a transaction or series of transactions in which, directly or
indirectly, the Company shall consolidate or merge with or
into, amalgamate with or into or enter into a statutory
arrangement with any other Person (other than one or more
wholly-owned Subsidiaries of the Company), or any other Person
(other than one or more wholly-owned Subsidiaries of the
Company) shall consolidate or merge with or into, amalgamate
with or into or enter into a statutory arrangement with, the
Company, and in connection therewith, all or part of the
outstanding Common Shares shall be changed in any way,
reclassified or converted into or exchanged, redeemed or
otherwise acquired for shares or other securities of the
Company or any other Person or cash or any other property, or
(ii) a transaction or series of transactions in which, directly or
indirectly, the Company shall sell or otherwise assign or
transfer, including by way of leasehold interest, (or one or
more of its Subsidiaries shall sell or otherwise assign or
transfer) assets
(A) aggregating more than 50% of the assets (measured by
either book value or fair market value); or
(B) that generated during the Company's last completed
fiscal year or are expected to generate in the
Company's then current fiscal year more than 50% of the
operating income or cash flow,
of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company or one or more of its
wholly-owned Subsidiaries).
(p) "GRANDFATHERED PERSON", "GRANDFATHERED PERSON TRANSFEREE" AND
"GRANDFATHERED BIDDER" shall have the respective meanings ascribed
thereto in subsections 1.3(a), (b) and (c).
(q) "INDEPENDENT SHAREHOLDERS" shall mean holders of Voting Shares of the
Company, but shall not include
(i) any Acquiring Person or
5
(ii) any Person that has made a tender or exchange offer or a Take-
over Bid for Voting Shares of the Company (including a
Permitted Bid) or
(iii) any Person acting jointly or in concert with such Acquiring
Person or Person or
(iv) any Associate or Affiliate of such Acquiring Person or Persons.
(r) "MARKET PRICE" per share of any securities on any date of
determination shall mean the average of the daily Closing Prices Per
Share of such securities (determined as described below) on each of
the 20 consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however, that if an event
of a type analogous to any of the events described in Section 2.3
hereof shall have caused the closing prices used to determine the
Market Price on any Trading Days not to be fully comparable with the
closing price on such date of determination or, if the date of
determination is not a Trading Day, on the immediately preceding
Trading Day, 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 such date of determination or, if the date of
determination is not a Trading Day, on the immediately preceding
Trading Day. The "CLOSING PRICE PER SHARE" of any securities on any
date shall be
(i) the closing board lot sale price or, if such price is not
available, the average of the closing bid and asked prices, for
each share as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the Toronto Stock Exchange, or if not
so listed or admitted to trading, the principal stock exchange
in Canada on which such securities are listed or admitted to
trading;
(ii) if the securities are not listed or admitted to trading on a
stock exchange in Canada, the last sale price, regular way, or,
in case no such sale takes place on such date, the average of
the closing bid and asked prices, regular way, for each share
of such securities as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the principal stock exchange in the
United States on which such securities are listed or admitted
to trading;
(iii) if for any reason none of such prices is available on such day
or the securities are not listed or admitted to trading on any
stock exchange in Canada or the United States, the last quoted
price, or if not so quoted, the average of the high bid and low
asked prices for each share of such securities as reported by
the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or, if the securities are not
quoted on NASDAQ as reported by the Canadian Over-The-Counter
Automated Trading System or another such system then in use;
(iv) if on any such date the securities are not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in
the securities selected in good faith by the Board of Directors
of the Company; or
(v) if on any such date the securities are not traded in the over-
the-counter market, the fair value per share of securities on
such date as determined in good faith by the Board of Directors
of the Company, after consultation with an internationally
recognized Canadian investment dealer or investment banker with
respect to the fair value per share of such securities.
The Market Price shall be expressed in Canadian dollars and if
initially determined in respect of any day forming part of the 20
consecutive trading day period in question in United States
6
dollars, such amount shall be translated into Canadian dollars at the
Canadian Dollar Equivalent thereof on the relevant Trading Day.
(s) "OFFER TO ACQUIRE" shall include:
(i) an offer to purchase, or a solicitation of an offer to sell,
Voting Shares; and
(ii) an acceptance of an offer to sell Voting Shares, whether or not
such offer to sell has been solicited;
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.
(t) "OFFEROR'S SECURITIES" means Voting Shares Beneficially Owned on the
date of an Offer to Acquire by any Person who makes a Take-over Bid or
by any Person acting jointly or in concert with such Person.
(u) "PERMITTED BID" means a Take-over Bid made in compliance with, and not
on a basis which is exempt from or otherwise not subject to, the
provisions of Part XIX of the Securities Act (Ontario) and, if
applicable, Sections 10, 13(d) and 14 of the 1934 Exchange Act and the
regulations thereunder (or such comparable or successor laws or
regulations, or if such provisions shall be repealed and there shall
be no comparable or successor laws or regulations, pursuant to Part
XIX and, if applicable, Sections 10, 13(d) and 14 both as in effect on
the date of this Agreement) and in compliance with all other
applicable laws (including the securities laws and regulations of all
other relevant jurisdictions) and which also complies with the
following additional provisions:
(i) the Take-over Bid is made for all Common Shares to all holders
of record of Common Shares wherever resident as registered on
the books of the Company;
(ii) subject to subsection 1.3(c), the Person making the Take-over
Bid together with any other Person acting jointly or in concert
with such Person does not, and during the pendency of such
Person's Take-over Bid does not, Beneficially Own more than 5%
of the outstanding Common Shares and agrees that none of him,
any Person acting jointly or in concert with him and any
Affiliate or Associate of any of them will acquire any Common
Shares during the pendency of such Take-over Bid;
(iii) the Person making the Take-over Bid shall provide the Rights
Agent, within two Business Days of the announcement of the
Take-over Bid, with a list certified true and correct of all
securities of the Company Beneficially Owned by each of such
Person, such Person's Associates and Affiliates and any Person
acting jointly or in concert with such Person or any Associate
or Affiliate of such Person together with the particulars of
the registration and holding of all such securities and an
undertaking to update such list on a daily basis prior to the
termination or expiration of the Take-over Bid to reflect any
changes occurring or to occur in such Beneficial Ownership;
(iv) the Take-over Bid shall contain and the take up and payment for
securities tendered or deposited thereunder shall be subject to
an irrevocable and unqualified condition that no Common Shares
shall be taken up or paid for pursuant to the Take-over Bid
unless a resolution is passed to approve the Take-over Bid at a
special meeting of holders of Common Shares by a majority of
the votes cast by Independent Shareholders represented at the
meeting in person or by proxy, which special meeting shall be
called and held for that purpose in accordance with the
provisions of Section 3.5;
7
(v) the Take-over Bid is made on terms and conditions that comply
with, and which do not and will not, upon consummation of the
bid, result in a default under, or a contravention of, any
other applicable laws, including laws, regulations, rules,
policy statements, cabinet directions or conditions of license
or franchise, relating to an acquisition of an interest or an
increased interest in, or a change of ownership or effective
control of, the Company or any Subsidiary of the Company or any
undertaking carried on by the Company or any Subsidiary of the
Company;
(vi) the Take-over Bid shall not expire earlier than five clear
Business Days following the conclusion of the special meeting
of Independent Shareholders referred to in clause 1.1(u)(iv);
(vii) if the Take-over Bid is made by a Grandfathered Person
Transferee or any Person acting jointly or in concert with a
Grandfathered Person Transferee or any Person who, as regards
the Grandfathered Person Transferee, is a person or company or
a member of a combination of persons or companies referred to
in subparagraph (iii) of paragraph 11 of subsection 1(1) of the
Securities Act (Ontario) or any Affiliate or Associate of any
of the foregoing within 12 months from the date upon which the
Grandfathered Person Transferee became such, the Offeror shall
offer consideration for Common Shares deposited under the Take-
over Bid at least equal to the consideration that was paid on a
per Common Share basis to the Transferor (as defined in
subsection 1.3(b)) from whom such Grandfathered Person
Transferee acquired Voting Shares or the Offeror shall offer at
least the cash equivalent of such consideration;
and the Board of Directors of the Company acting in good faith within the
period contemplated by subsection 3.5(a) determines that the Take-over Bid
complies with the provisions of this subsection 1.1(u).
(v) "PERMITTED BID ACQUISITION" shall have the meaning ascribed thereto by
subclause 1.1(a)(ii)(B).
(w) "PERSON" shall mean any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal personal
representative, group (as such term is used in Rule 13d-5 under the
1934 Exchange Act, as in effect on the date of this Agreement), body
corporate, corporation, unincorporated organization, syndicate or
other entity.
(x) "PRO RATA ACQUISITION" shall have the meaning ascribed thereto by
clause 1.1(a)(ii).
(y) "RECORD TIME" shall have the meaning ascribed to it in paragraph (a)
of the second recital hereto.
(z) "REGULAR PERIODIC CASH DIVIDEND" shall mean cash dividends paid at
regular intervals in any fiscal year of the Company to the extent that
such cash dividends do not exceed, in the aggregate, the greatest of:
(i) 200% of the aggregate amount of cash dividends declared payable
by the Company on its Common Shares in its immediately
preceding fiscal year;
(ii) 300% of the arithmetic mean of the aggregate amounts of cash
dividends declared payable by the Company on its Common Shares
in its three immediately preceding fiscal years; and
(iii) 100% of the aggregate consolidated net income of the Company,
before extraordinary items, for its immediately preceding
fiscal year.
8
(aa) "SECURITIES ACT (ONTARIO)" shall mean the Securities Act, R.S.O. 1980,
c.466, as amended and the regulations thereunder, and any comparable
or successor laws or regulations thereto.
(bb) "SEPARATION TIME" shall mean, subject to subsection 5.1(b) and (c),
the earliest of
(i) the close of business on the tenth day after the Stock
Acquisition Date;
(ii) the close of business on the tenth day after the date of the
commencement of, or first public announcement of the intent of
any Person (other than the Company or any Subsidiary of the
Company) 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, but not subsequent to an
unfavorable vote of Independent Shareholders in respect of such
Take-over Bid pursuant to Section 3.5), provided that, if any
Take-over Bid referred to in clause (ii) of this subsection
1.1(bb) expires, is cancelled, terminated or otherwise
withdrawn prior to the Separation Time, such offer shall be
deemed, for purposes of this subsection 1.1(bb), never to have
been made; and
(iii) the occurrence or consummation of a Flip-over Transaction or
Event
or such earlier or later date as may be determined by the Board of
Directors of the Company 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 the Record Time.
(cc) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 100 of the
Securities Act (Ontario) or Section 13(d) under the 1934 Exchange Act)
by the Company or an Acquiring Person of facts indicating that a
Person has become an Acquiring Person.
(dd) "SUBSIDIARY" of any specified Person has the meaning ascribed to such
term in the Securities Act (Ontario).
(ee) "TAKE-OVER-BID" means an Offer to Acquire Voting Shares or securities
convertible into Voting Shares, where the Voting Shares subject to the
Offer to Acquire, together with the Voting Shares into which the
securities subject to the Offer to Acquire are convertible, and the
Offeror's Securities, constitute in the aggregate 20% or more of the
outstanding Common Shares or Voting Shares at the date of the Offer to
Acquire.
(ff) "TERMINATION TIME" shall mean the time at which the right to exercise
Rights shall terminate pursuant to Sections 3.4, 5.1 or 5.18 hereof.
(gg) "TRADING DAY" when used with respect to any securities, shall mean a
day on which the principal Canadian or United States securities
exchange 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.
(hh) "U.S.-CANADIAN EXCHANGE RATE" shall mean on any date:
(iv) if on such date the Bank of Canada sets an average noon spot
rate of exchange for the conversion of the United States dollar
into Canadian dollars, such rate; and
(v) in any other case, the rate for such date for the conversion of
one United Sates dollar into Canadian dollars which is
calculated in the manner which shall be determined by the Board
of Directors of the Company from time to time acting in good
faith.
9
(ii) "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 Canadian-U.S. Exchange Rate
on such date.
(jj) "VOTING SHARES" shall mean the Common Shares of the Company and any
other shares of capital stock of the Company entitled to vote
generally in the election of directors; and 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 number of votes for the election of all directors
generally attaching to the Voting Shares Beneficially Owned
by such Person.
B = the number of votes for the election of all directors
generally attaching to all outstanding Voting Shares.
Where any person is deemed to Beneficially Own unissued Voting Shares,
such Voting Shares shall be deemed to be outstanding for the purpose
of calculating the percentage of Voting Shares Beneficially Owned by
such Person.
(kk) "1933 SECURITIES ACT" shall mean the Securities Act of 1933 of the
United States, as amended and the rules and regulations thereunder,
and any comparable or successor laws or regulations thereto.
(ll) "1934 EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 of
the United States, as amended and the rules and regulations
thereunder, and any comparable or successor laws or regulations
thereto.
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 GRANDFATHER PROVISIONS
(a) A Person shall not be and shall not be deemed to be an Acquiring
Person if such Person (a "GRANDFATHERED PERSON"):
(i) is the Beneficial Owner of 20% or more of the outstanding Voting
Shares of the Company as at the date of this Agreement; or
(ii) becomes the Beneficial Owner of 20% or more of the outstanding Common
Shares or Voting Shares of the Company after the date of this
Agreement and such Person's Beneficial Ownership of Common Shares or
Voting Shares of the Company at such time does not exceed the number
of Common Shares or Voting Shares of the Company Beneficially Owned by
such Person immediately prior to the date of this Agreement by more
than 2% of the then issued and outstanding Common Shares or Voting
Shares of the Company;
provided, however, that the exceptions in clauses 13(a)(i) and (ii) shall
cease to be applicable to a Grandfathered Person who shall after the date
of this Agreement become, pursuant to one or more
10
transactions or events, the Beneficial Owner of additional Common Shares or
Voting Shares of the Company such that the number of Common Shares or
Voting Shares of the Company Beneficially Owned at such time exceeds the
number of Common Shares or Voting Shares of the Company Beneficially Owned
by such Person immediately prior to the date of this Agreement by more than
2% of the Common Shares or Voting Shares of the Company then outstanding,
other than those acquired pursuant to Permitted Bid Acquisitions, Exempt
Acquisitions or Pro Rata Acquisitions.
(b) A Person shall not be and shall not be deemed to be an Acquiring
Person if such Person (a "GRANDFATHERED PERSON TRANSFEREE") becomes the
Beneficial Owner of 20% or more of the outstanding Common Shares or Voting
Shares of the Company solely as a result of the acquisition of all but not less
than all of the Common Shares or Voting Shares of the Company Beneficially Owned
immediately prior thereto by a Grandfathered Person or a Grandfathered Person
Transferee (the "TRANSFEROR") and such Person's Beneficial Ownership of Common
Shares or Voting Shares of the Company after giving effect to such acquisitions
does not exceed the number of Common Shares or Voting Shares of the Company
Beneficially Owned by the Transferor immediately prior to such acquisition by
more than 2% of the then issued and outstanding Common Shares or Voting Shares
of the Company; provided, however, that the exception in this subsection 13(b)
shall cease to be applicable to a Grandfathered Person Transferee who shall
after the time at which he becomes a Grandfathered Person Transferee (the
"Transfer Time") become, pursuant to one or more transactions or events, the
Beneficial Owner of additional Common Shares or Voting Shares of the Company
constituting, together with the number of Common Shares to Voting Shares
Beneficially Owned by such Grandfathered Person Transferee immediately prior to
the Transfer Time, in the aggregate more than 2% of the Common Shares or Voting
Shares of the Company then outstanding, other than pursuant to Permitted Bid
Acquisitions, Exempt Actions or Pro Rata Acquisitions.
(c) For the purpose of determining whether a Person is entitled to make a
Permitted Bid, the provisions of clause 1.1(u)(ii) shall not apply to a Person
(a "Grandfathered Bidder") who is either:
(i) a Grandfathered Person or a Grandfathered Person Transferee at the
time of commencement of and at all times while such Person's Take-over
Bid remains outstanding; or
(ii) the Beneficial Owner of more than 5% but less than 20% of the
outstanding Common Shares or Voting Shares of the Company as at the
date of this Agreement; provided that the exception in this clause
1.3(c)(ii) shall cease to be applicable to a Grandfathered Bidder if
such Grandfathered Bidder shall after the date of this Agreement
become, pursuant to one or more transactions or events, the Beneficial
Owner of additional Common Shares or Voting Shares of the Company such
that the number of Common Shares or Voting Shares of the Company
Beneficially Owned at such time exceeds the number of Common Shares or
Voting Shares of the Company Beneficially Owned by such Person
immediately prior to the date of this Agreement by more than 2% of the
Common Shares or Voting Shares of the Company then outstanding, other
than those acquired pursuant to Permitted Bid Acquisitions, Exempt
Acquisitions or Pro Rata Acquisitions.
(d) For greater certainty, for the purposes of this Section 1.3, a Person
shall be deemed to have become the Beneficial Owner of additional Common Shares
or Voting Shares of the Company if the Person becomes the Beneficial Owner of
such Common Shares or Voting Shares pursuant to a transaction or event and, as a
result, such Person is the Beneficial Owner of a greater number of Common Shares
or Voting Shares than the number of Common Shares or Voting Shares that he
Beneficially Owned immediately prior to such transaction or event.
11
ARTICLE 2. -- THE RIGHTS
2.1 LEGEND ON COMMON SHARE CERTIFICATES
Certificates for the Common Shares issued after the Record Time but prior
to the close of business on the earlier of the Separation Time and the
Expiration Time shall evidence one Right for each Common Share represented
thereby and shall have impressed on, printed on, written on or otherwise affixed
to them the following legend:
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 Rights Agreement, dated as of April 20,
1990 (the "Rights Agreement"), between The ▇▇▇▇▇▇ Group Inc. (the
"Company") and The Royal Trust Company, as Rights Agent, the terms of which
are hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Company. 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 Company will mail or arrange for the mailing of a copy of
the Rights Agreement to the holder of this certificate without charge
within five days after the receipt of a written request therefor.
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, each Right will entitle the
holder thereof, after the Separation Time and prior to the Expiration
Time, to purchase, for the Exercise Price, or its U.S. Dollar
Equivalent as at the Business Day immediately preceding the date of
exercise of the Right, one Common Share.
(b) Until the Separation Time,
(i) no Right may be exercised; and
(ii) each Right will be evidenced by the certificate for the
associated Common Share and will be transferable only together
with, and will be transferred by a transfer of, such associated
share.
(c) After the Separation Time and prior to the Expiration Time, the Rights
(i) may be exercised; and (ii) will be transferable independently of
Common Shares. Promptly following the Separation Time the Rights
Agent will mail to each holder of record Voting Shares as of the
Separation Time (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 Company (the Company hereby agreeing to furnish copies of such
records to the Rights Agent for this purpose), (x) a certificate (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 Company may deem appropriate and
as are not inconsistent with the provisions of this Agreement, or as
may be required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock
exchange or quotation system on which the Rights may from time to
12
time be listed or traded, or to conform usage, and (y) a disclosure
statement describing the Rights provided that a Nominee shall be sent
the materials provided for in (x) and (y) only in respect of all
Common Shares held of record by him which are not Beneficially Owned
by an Acquiring Person.
(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 the Rights Certificate evidencing such Rights with an
Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by
payment in cash, or by certified cheque, banker's draft or money order
payable to the order of the Company, 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 (x) a
completed Election to Exercise that does not indicate that such Right
is null and void as provided by subsection 3.2(b) and (y) payment as
set forth in subsection 2.2(d) above, the Rights Agent will thereupon
promptly
(i) requisition from a transfer agent of the Common Shares
certificates for the number of Common Shares to be purchased
(the Company hereby irrevocably authorizing its transfer agents
to comply with all such requisitions),
(ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuing fractional Common Shares,
(iii) after receipt of such certificates, deliver the same to or upon
the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such
holder, and
(iv) when appropriate, after receipt, deliver such cash to or to the
order of the registered holder of the Rights Certificate.
(f) In case 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 will be issued
by the Rights Agent to such holder or to such holder's duly authorized
assigns.
(g) The Company covenants and agrees that it will
(i) take all such action as may be necessary and within its power
to ensure that all shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and
validly authorized, executed, issued and delivered and fully
paid and nonassessable;
(ii) take all such action as may be necessary and within its power
to comply with any applicable requirements of the British
Columbia Company Act and the Securities Acts or comparable
legislation of each of the provinces of Canada and the 1933
Securities Act or the 1934 Exchange Act, or the rules and
regulations thereunder or any other applicable law, rule or
regulation, in connection with the issuance and delivery of the
Rights Certificates and the issuance of any shares upon
exercise of Rights;
13
(iii) use reasonable efforts to cause all shares
issued upon exercise of Rights to be listed on the principal
exchanges on which the shares were traded prior to the Stock
Acquisition Date; and
(iv) pay when due and payable any and all Canadian and United States
federal, provincial and state transfer taxes (for greater
certainty not including any income taxes of the holder or
exercising holder or any liability of the Company to withhold
tax) and charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates or
certificates for shares, provided that the Company shall not be
required to pay 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 shares in a name other than that of the holder
of the Rights being transferred or exercised.
2.3 ADJUSTMENTS TO EXERCISE PRICE, NUMBER OF RIGHTS
The Exercise Price, the number and kind of shares 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.
(a) If the Company 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
Common Shares (or other capital stock or securities
exchangeable for or convertible into or giving a right to
acquire Common Shares or other capital stock) other than
pursuant to any optional stock dividend program,
(ii) subdivide or change the then outstanding Common Shares into a
greater number of Common Shares,
(iii) combine or change the then outstanding Common Shares into a
smaller number of Common Shares, or
(iv) issue any Common Shares (or other capital stock or securities
exchangeable for or convertible into or giving a right to
acquire Common Shares or other capital stock) in respect of, in
lieu of or in exchange for existing Common Shares in a
reclassification, amalgamation, statutory arrangement or
consolidation,
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 exercise of Rights shall be
adjusted in the manner set forth below. If the Exercise Price and
number of Rights outstanding are to be adjusted, (x) 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 capital stock) (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 (y) 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 shares
issued in respect of such dividend, subdivision, change, combination
or issuance, so that each such Common Share (or other capital stock)
will have exactly one Right associated with it. 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, combination or issuance would hold thereafter as a result
thereof. If after
14
the Record Time and prior to the Expiration Time the Company shall
issue any shares of capital stock other than Common Shares in a
transaction of a type described in this subsection 2.3(a), shares of
such capital stock shall be treated herein as nearly equivalent to
Common Shares as may be practicable and appropriate under the
circumstances and the Company and the Rights Agent agree to amend this
Agreement in order to effect such treatment, and the Company will not
consolidate with, amalgamate with or into or enter into a statutory
arrangement with, any other Person unless such Person agrees to be
bound by the terms of an amendment effecting such treatment. If an
event occurs which would require an adjustment under both this Section
2.3 and Section 3.2 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 3.2 hereof.
If the Company 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 the preceding paragraph, 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 share.
(b) If the Company 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 securities convertible
into or exchangeable for or carrying a right to purchase or subscribe
for Common Shares) at a price per Common Share (or, if a security
convertible into or exchangeable for or carrying a right to purchase
or subscribe for Common Shares, having a conversion, exchange or
exercise price (including the price required to be paid to purchase
such convertible or exchangeable security or right per share)) less
than the Market Price per Common Share on such record date, the
Exercise Price shall be adjusted in the manner provided in this
subsection 2.3(b). 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, 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 or
exchangeable securities or rights so to be offered (including the
price required to be paid to the purchase such convertible or
exchangeable securities or rights)) would purchase at such Market
Price and 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 or exchangeable securities or rights so to be
offered are initially convertible, exchangeable or exercisable). In
case such subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company whose determination shall be described in a
statement filed with the Rights Agent and shall be bidding on the
Rights Agent and the holders of the Rights. Such adjustment shall be
made successively whenever such a record date is fixed.
For purposes of this subsection (b) the granting of the right to
purchase Common Shares (whether from treasury shares or otherwise)
pursuant to any dividend or interest reinvestment plan and/or any
Common Share purchase plan providing for the reinvestment of dividends
or interest payable on securities of the Company and/or the investment
of periodic optional payments and/or employee share purchase or
employee share option or similar plans (so long as such right to
purchase is in no case evidenced by the delivery of rights or
warrants) shall not be deemed to constitute an issue of rights or
warrants by the Company, provided that in the case of any dividend or
interest reinvestment plan, the right to purchase Common Shares is at
a price per share of not less than 90 percent of the current market
price per share (determined as provided in such plans) of the Common
Shares.
15
(c) If the Company 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 evidences of indebtedness or assets
(other than a regular periodic cash dividend or a dividend paid in
Common Shares) or rights or warrants (excluding those referred to in
subsection 2.3(b)), the Exercise Price shall be adjusted in the manner
provided for in this subsection 2.3(c). The Exercise Price in effect
after such record date will equal 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 Company) of
the portion of the assets, evidences of indebtedness, rights or
warrants so to be distributed applicable to each of the securities
purchasable upon exercise of one Right (such determination to be
described in a statement filed with the Rights Agent and to be binding
on the Rights Agent and the holders of the Rights). Such adjustment
shall be made successively whenever such a record date is fixed.
(d) Each adjustment made pursuant to this 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 (a) above; and
(ii) the record date for the applicable distribution, in the case of
an adjustment made pursuant to subsection (b) or (c) above,
subject to readjustment to reverse the same if such
distribution shall not be made.
(e) If the Company shall at any time after the Record Time and prior to
the Separation Time issue any shares (other than Common Shares), or
rights or warrants to subscribe for or purchase any such capital
stock, or securities convertible into or exchangeable for any such
capital stock, in a transaction referred to in clause (a)(i) or
(a)(iv) of this Section 2.3, or if the Company shall take any other
action (other than the issue of Common Shares) which might have a
negative effect on the holders of Rights, and, in either case, if the
Board of Directors acting in good faith determines that the
adjustments contemplated by subsections (a), (b) and (c) of this
Section 2.3 in connection with such transaction will not appropriately
protect the interests of the holders of Rights, the Company may
determine what other adjustments, rather than the adjustments
contemplated by subsections (a), (b) and (c) of this Section 2.3,
shall be made. The Company and the Rights Agent shall amend this
Agreement as appropriate to provide for such adjustments.
(f) Each adjustment to the Exercise Price made pursuant to this Section
2.3 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price is made pursuant to this Section 2.3, the
Company 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 bolder of Rights.
(g) 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.
16
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 holder
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 Company 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 succeeding Business Day
on which the Common Share transfer books of the Company are open.
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES
(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman, President or one of its Senior Vice-Presidents, under
its corporate seal reproduced thereon attested by its Secretary or one
of its Assistant Secretaries or any other one of the foregoing. The
signature of any of these officers on the Rights Certificates may be
manual or facsimile.
(b) Rights Certificates bearing the manual or facsimile signatures of
Individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the countersignature
and delivery of such Rights Certificates.
(c) Promptly after the Company learns of the Separation Time, the Company
will notify the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights Agent for
countersignature, and the Rights Agent shall countersign and deliver
such Right Certificates to the holders of the Rights pursuant to
subsection 2.2(c) hereof. No Rights Certificate shall be valid for
any purpose until countersigned by the Rights Agent as aforesaid.
(d) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
(a) The Company will cause to be kept a register (the "Rights Register")
in which, subject to such reasonable regulations as it may prescribe,
the Company 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 Company and
registering Rights and transfers of Rights as herein provided. In the
event that the Rights Agent shall cease to be the Rights Registrar,
the Rights Agent win have the right to examine the Rights Register at
all reasonable times.
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 subsection 2.6(c), the
Company will execute, and the Rights Agent will countersign and
deliver, 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.
(b) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be valid obligations of the Company, and
such Rights shall be entitled to the same benefits under this
Agreement as the Rights surrendered upon such registration or transfer
or exchange.
17
(c) 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 Company 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 Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation
thereto.
2.7 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, the Company 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 Company and the Rights Agent prior
to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such
security or indemnity as may be required by them to save each of them
and any of their agents harmless, then, in the absence of notice to
the Company or the Rights Agent that such Rights Certificate has been
acquired by a bona fide purchaser, the Company shall execute and upon
its 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 Company 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 the contractual obligation of the Company, 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 Company, the Rights Agent and any agent of the Company or the Rights
Agent may deem and treat the person in whose name a Rights Certificate (or,
prior to the Separation Time, a 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 or
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 Company may at any time deliver
to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Company 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 destroy all cancelled Rights Certificates and deliver a certificate of
destruction to the Company.
18
2.10 AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights by accepting the same consents and agrees with the
Company and the Rights Agent and every other holder of Rights that
(a) he will 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) 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) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(d) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for
registration of transfer, the Company, the Rights Agent and any agent
of the Company 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
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to
the contrary;
(e) such holder of Rights has waived his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (except as
provided herein); and
(f) without the approval of any holder of Rights and upon the sole
authority of the Board of Directors of the Company acting in good
faith this Agreement may be supplemented or amended from time to time
as provided herein.
ARTICLE 3. -- ADJUSTMENTS TO THE RIGHTS IN THE EVENT
OF CERTAIN TRANSACTIONS
3.1 FLIP-OVER TRANSACTION OR EVENT
(a) Subject to Sections 3.3 and 3.4 and subsection 5.1(b), if prior to the
Expiration Time the Company enters into, consummates or permits to
occur any Flip-over Transaction or Event, the Company must take such
action as is necessary to ensure, and shall not enter into, consummate
or permit to occur such Flip-over Transaction or Event until it shall
have entered into a supplement agreement with the Person engaging in
such Flip-over Transaction or Event, for the benefit of the holders of
the Rights, providing, that upon consummation of the Flip-over
Transaction or Event:
(i) each Right, from and after the date upon which any Flip-over
Transaction or Event becomes effective, constitutes the right
to purchase from the Person into which or with which the
Company will be consolidated, merged or amalgamated or with
which the Company shall enter into a statutory arrangement or
to which the Company will sell assets (the "Flip-over Entity"),
upon exercise thereof in accordance with the terms hereof, that
number of Common Shares of such Flip-over Entity having an
aggregate Market Price on the date of consummation or
occurrence of such Flip-over Transaction or 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
19
the applicable adjustment to the Rights provided for in Section
2.3 if 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);
and
(ii) the Flip-over Entity is to be liable for, and shall assume, by
virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the
Company pursuant to this Agreement.
(b) The Company shall do all such acts and things and shall take all steps
within its control to ensure that the Flip-Over Entity does all such
acts and things as shall be necessary to ensure compliance with the
provisions of subsection 3.1(a) of this Agreement.
3.2 FLIP-IN EVENT
(a) Subject to Sections 3.3 and 3.4 and subsections 5.1(b) and (c), if
prior to the Expiration Time a Flip-in Event occurs, the Company shall
take such action as shall be necessary to ensure and provide, within
five Business Days of such occurrence or such longer period as may be
required to satisfy the requirements of the Securities Act (Ontario)
or comparable legislation of each of the provinces of Canada or the
1933 Securities Act, so that, except as provided below, each Right
shall thereafter constitute the right to purchase from the Company,
upon exercise thereof in accordance with the terms hereof, that number
of Common Shares of the Company having an aggregate Market Price on
the date of 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 if after such date
of 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 the foregoing, 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 or the Stock Acquisition Date by
(i) an Acquiring Person (or 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 of an
Acquiring Person); or
(ii) a transferee, direct or indirect, of an Acquiring Person (or
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 of an Acquiring Person) in a transfer,
whether or not for consideration, that the Board of Directors
of the Company acting in good faith has determined is part of a
plan, arrangement or scheme of an Acquiring Person (or any
Affiliate or Associate of an Acquiring Person) that has the
purpose or affect of avoiding clause (i) of this subsection
3.2(b),
become null and void and any holder of such Rights (including
transferees) shall thereafter have no right to exercise such Rights
under any provision of this Agreement.
(c) Any Rights Certificate that represents Rights Beneficially Owned by a
Person described in either clauses (i) or (ii) of subsection 3.2(b) 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
20
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 3.2(b) of the Rights Agreement.
provided that the Rights Agent is not to be under any responsibility
to ascertain the existence of facts that would require the imposition
of such legend but is required to impose such legend only if
instructed to do so by the Company or if a holder fails to certify
upon transfer or exchange in the space provided on the Rights
Certificate that such holder is not an Acquiring Person or an
Affiliate or Associate thereof.
3.3 OBLIGATIONS OF THE COMPANY
The Company shall not enter into or engage in any transaction of the kind
referred to in this Article 3 if at the time of such transaction there are any
rights, warrants or securities outstanding or any other arrangements, agreements
or instruments which would eliminate or otherwise diminish in any respect the
benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction. The provisions of this Article 3
shall apply to successive amalgamation, arrangements or consolidations or sales
or other transfers.
3.4 EXCHANGE OPTION
(a) If the Board of Directors acting in good faith shall determine that
conditions exist which would eliminate or otherwise materially
diminish in any respect the benefits intended to be afforded to the
holders of Rights pursuant to this Agreement, the Board of Directors
may, at its option, at any time after a Flip-in Event, issue or
deliver in respect of each Right which is not void pursuant to
subsection 3.2(b), either
(i) in return for the Exercise Price and the Right, debt or equity
securities or other assets (or a combination thereof) having a
value equal to twice the Exercise Price; or
(ii) in return for the Right and without further charge, subject to
any amounts that may be required to be paid under applicable
law, debt or equity securities or other assets (or a
combination thereof) having a value equal to the Exercise
Price,
where in either case the value of such debt or equity securities shall
be determined by an internationally recognized Canadian investment
dealer or investment banker selected by the Board of Directors of the
Company. To the extent that the Board of Directors determines in good
faith that some action need be taken pursuant to this Section 3.4, the
Board of Directors may suspend the exercisability of the Rights for a
period of up to 90 days following the date of the occurrence of the
relevant Flip-in Event in order to decide the appropriate form of
distribution to be made and to determine the value thereof. In the
event of any such suspension, the Company shall notify the Rights
Agent and issue as promptly as practicable a public announcement
stating that the exercisability of the Rights has been temporarily
suspended.
(b) If the Board of Directors of the Company authorizes the exchange of
debt or equity securities or other assets (or a combination thereof)
for Rights pursuant to subsection 3.4(a), without any further action
or notice the right to exercise the Rights will terminate and the only
right thereafter of a holder of Rights shall be to receive such debt
or equity securities or other assets (or combination thereof) in
accordance with the exchange formula authorized by the Board of
Directors. Within 10 Business Days after the Board of Directors has
authorized the exchange of such debt or equity securities or other
assets (or combination thereof) for rights pursuant to subsection
3.4(a), the Company shall give notice of such exchange to the holders
of such Rights by mailing such notice to all such holders at their
last addresses as they appear upon the
21
register of Rights holders maintained by the Rights Agent. Each such
notice of exchange will state the method by which the exchange of such
debt or equity securities or other assets (or a combination thereof)
for Rights will be effected.
3.5 SPECIAL MEETING OF SHAREHOLDERS TO CONSIDER PERMITTED BIDS
(a) If a Person (the "Offeror") makes a Take-over Bid which would be a
Permitted Bid within the meaning of subsection 1.1(u) but for
obtaining the shareholder approval mentioned in clause 1.1(u)(iv) and
the Board of Directors of the Company acting in good faith concludes
that upon receipt of the approval of the Independent Shareholders
referred to in subsection 1.1(u) acquisitions of shares pursuant to
such Take-over Bid shall be Permitted Bid Acquisitions, the Board of
Directors of the Company shall, as soon as practicable after the date
(the "Offer Date") on which all of the documents referred to in
subsection 1.1(u) and which have otherwise been sent to the holders of
Common Shares by the Offeror in connection with such Take-over Bid
have been delivered to the Company, call a special meeting (the
"Special Meeting") of holders of Common Shares who are Independent
Shareholders in order for them to consider and if thought fit to
approve a resolution (the "Referendum") on the question of whether
such Take-over Bid (as such Take-over Bid may be amended or revised by
the Offeror from time to time either (a) to waive a condition thereof
of (b) to increase the price per share to be paid to holders of Common
Shares, without reduction in amount or change in terms of any security
or reduction in amount of cash that are components thereof) should be
approved. The Special Meeting shall be held on a date fixed by the
Board of Directors, which date shall be as soon as practicable after
the mailing of the Take-over Bid, taking into account
(i) the time required to prepare a management proxy statement or
information circular and to comply with applicable securities
laws and other regulatory requirements relating to the holding
of meetings of shareholders, record dates and the distribution
of proxy related materials to shareholders and intermediaries;
(ii) other actual or pending Take-over Bids including Permitted
Bids, if any; and
(iii) other factors considered relevant by the Board of Directors of
the Company,
but not less than 90 nor more than 120 days after the Offer Date;
provided further that if the Board of Directors receives a competing
Take-over Bid which is a Permitted Bid after a special meeting has
been called for another Take-over Bid, the Board in its discretion may
delay the date on which the meeting is to be held, or adjourn the
meeting, to a date not more than 45 days after the originally
scheduled meeting date, so that shareholders may consider the merits
of the competing Take-over Bid and the other Take-over Bid at such
other special meeting. The Board of Directors of the Company shall
fix a record date for determining the Independent Shareholders
entitled to receive notice of the Special Meeting in accordance with
the procedures set forth in National Policy No. 41 of the Canadian
Securities Administrators and the rules of any stock exchange on which
the Common Shares are then listed, and the Articles and By-laws of the
Company. The Special Meeting shall be conducted in accordance with
the rules for holding meetings of shareholders set forth in this
Articles and By-Laws of the Company. At the Offeror's request, the
Company shall include with its proxy statement or information circular
prepared in connection with the Special Meeting, proxy solicitation
materials submitted by the Offeror provided that the Offeror by
written agreement with the Company in form and substance satisfactory
to the Company shall indemnify and hold the Company harmless from and
against all costs, damages, expenses, fees and liabilities whatsoever,
directly or indirectly, resulting from or arising out of any
misstatements, misrepresentations, misleading statements or untrue
statements contained in or omissions to state any fact in the
Offeror's proxy solicitation materials necessary to make any statement
contained therein not misleading in light of the circumstances in
which it was made and shall
22
have agreed to pay the Company's incremental costs incurred as a
result of including such materials with the Company's proxy statement
or information circular. Notwithstanding the foregoing, no Special
Meeting shall be held from and after such time as any Person becomes
an Acquiring Person, and any Special Meeting scheduled prior to such
time and not theretofore held shall be cancelled.
(b) If at the Special Meeting the Referendum receives the affirmative vote
of a majority of the votes cast by Independent Shareholders
represented at the meeting in person or by proxy and such vote has
been confirmed by independent election inspectors retained by the
Company then acquisitions of Common Shares made under the Permitted
Bid referred to in the Referendum shall be deemed to be Permitted Bid
Acquisitions.
(c) For clarification it is understood that nothing contained in this
Section 3.5 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 Common 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 alternative Take-
over Bids or other proposals to the Special Meeting) with respect to
any Take-over Bid or otherwise that the Board of Directors believes is
necessary or appropriate in the exercise of its fiduciary duties.
(d) Nothing contained in this Section 3.5 shall be construed as limiting
or prohibiting the Company or any Offeror from proposing or engaging
in any acquisition, disposition or other transfer of any securities of
the Company, any merger, amalgamation, arrangement, recapitalization
or business combination or transaction involving the Company, any sale
or other transfer of assets of the Company, any liquidation,
dissolution or winding-up of the Company or any other business
combination or other transaction, or any other action by the Company
or such Offeror, provided that the holders of Rights shall have the
rights set forth in this Agreement with respect to any such
acquisition, disposition, transfer, merger, amalgamation, arrangement,
recapitalization, sale, liquidation, dissolution, winding-up, business
combination or transaction or action.
ARTICLE 4. -- THE RIGHTS AGENT
4.1 GENERAL
(a) The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of Rights in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable. In the event the
Company appoints one or more Co-Rights Agents, the respective duties
of the Rights Agent and Co-Rights Agents shall be as the Company may
determine. The Company 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
counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or wilful 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 costs and expenses of defending against
any claim of liability, which right to indemnification will survive
the termination of this Agreement.
23
(b) The Rights Agent will be protected and will 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 Company, 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 the genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
4.2 MERGER, AMALGAMATION OR 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 form 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 or stockholder 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 filing of any
paper 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 by 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.
(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 which the Company, the
holders of Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel 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.
(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 Company 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 Chairman, the President
or any Senior Vice-President and by any other of the foregoing or the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate will be full authorization to the Rights Agent
24
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 wilful 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
certificate for Common Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and will be deemed to have been made
by the Company 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 Certificates (except it countersignature
thereof); nor will it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any Rights
Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to subsection 3.2(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); 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 whether any Common
Shares will, when issued, be duly and validly authorized, executed,
issued and delivered and fully paid and nonassessable.
(f) The Company 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 person believed by the Rights Agent to be the Chairman, the
President, any Senior Vice-President or the Secretary or any Assistant
Secretary or the Treasurer or any Assistant Treasurer of the Company,
and to apply to such persons 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 person.
(h) The Rights Agent and any shareholder or stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in Common
Shares, Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company 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 Company
resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued
employment thereof.
25
4.4 CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 90 days notice (or such lesser notice as is acceptable to the
Company) in writing mailed to the Company and to each transfer agent of Common
Shares by registered or certified mail, and to the holders of the Rights in
accordance with Section 5.9. The Company may remove the Rights Agent upon 30
days notice in writing, mailed to the Rights Agent and to each transfer agent of
the Common Shares by registered or certified mail, 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 of acting, the Company will appoint a
successor to the Rights Agent. If the Company fails to make such appointment
within a period 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 by the Company),
then the holder of any Rights may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company 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 British Columbia. 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 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 Company will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of any class of Voting Shares
and mail a notice thereof in writing to the holders of the Rights. 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 of the Company acting in good faith may, at its
option, at any time prior to the provisions of Section 3.1 or 3.2
becoming applicable as a result of the occurrence of a Flip-in Event
or a Flip-over Transaction or Event, elect to redeem all but not less
than all of the then outstanding Rights at a redemption price of $0.01
per Right appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.3 if 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"). The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may
establish.
(b) The Board of Directors of the Company may, until the first to occur of
a Flip-in Event or a Flip-over Transaction or Event, upon prior
written notice delivered to the Rights Agent, determine to waive the
application of subsection 1.1(bb) and Section 3.1 or 3.2 to any
particular Flip-over Transaction or Event or Flip-in Event.
(c) The Board of Directors of the Company may waive the application of
subsection 1.1(bb) and Section 3.2 to any 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 he would become an Acquiring Person;
and
26
(ii) such Acquiring Person has reduced his Beneficial Ownership of
Voting Shares such that at the time of waiver pursuant to this
subsection 5.1(c) he is no longer an Acquiring Person.
(d) If the Board of Directors of the Company elects to redeem the Rights,
the right to exercise the Rights will thereupon, without further
action and without notice, terminate and each Right will after
redemption be null and void.
(e) If a Person makes a Permitted Bid and, within 120 days after the
making of the Permitted Bid, has taken up and paid for not less than
90 per cent of the Common Shares pursuant to a Permitted Bid
Acquisition, other than Common Shares already held at the date of the
Permitted Bid by, or by a nominee for, such Person or any of its
Affiliates, then the Board of Directors of the Company shall without
further formality be deemed to have elected to redeem the rights at
the Redemption Price.
(f) If the Board of Directors of the Company elects or is deemed to have
elected to redeem the Rights, 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.
(g) Within 10 days after the Board of Directors electing or having been
deemed to have elected to redeem the Rights, the Company must 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 registry books of the Rights Agent or, prior to the
Separation Time, on the registry books 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 Company 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 and
other than in connection with the purchase of Common Shares prior to
the Separation Time.
5.2 EXPIRATION
No person will have any rights pursuant to this Agreement or in respect of
any Right after the Expiration Time, except the Rights Agent as specified in
subsection 4.1(a) of this Agreement.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company 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) The Company may from time to time supplement or amend this Agreement:
(i) to make any changes which the Board of Directors acting in good
faith may deem necessary or desirable, provided that no such
supplement or amendment which would change the Expiration Time
or increase the Exercise Price or change the percentage
referred to in subsection 1.1(a) hereof shall be effective
until confirmed by the holders of the Rights as hereinafter set
forth and no such supplement or amendment made on or after the
Stock Acquisition Date shall materially adversely affect the
interests of the holders of Rights generally and provided
further that no such supplement or
27
amendment shall be made to the provisions of Article 4 except
with the written concurrence of the Rights Agent to such
supplement or amendment, or
(ii) in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be inconsistent with any
other provisions herein or otherwise defective.
(b) The confirmation of a supplement or amendment to this Agreement
required by clause 5.4(a)(i) hereof may be given by a resolution
proposed at a meeting of Rights holders duly convened for that purpose
and held in accordance with the provisions of this Section or, prior
to the Separation Time, at a meeting of shareholders of the Company
duly convened for any purpose, and passed by a majority of the votes
cast by the Rights holders or shareholders, as the case may be, who
voted in respect of that resolution.
(c) The Right Agent shall on receipt of a written request of the Company
and upon being indemnified to its reasonable satisfaction by the
Company against the cost which may be incurred in connection with the
calling and holding of such meeting, convene a meeting of the Rights
holders. In the event of the Rights Agent failing so to convene a
meeting within 15 days after receipt of such request and indemnity,
the Company may convene such meeting.
(d) At least 21 days' prior notice of any meeting of Rights holders shall
be given to the Rights holders and a copy of such notice shall be sent
by mail to the Company (unless the meeting has been called by the
Company, in which case the copy shall be sent to the Rights Agent).
Such notice shall state the time and place of the meeting and the
general nature of the business to be transacted thereat and shall
contain such information as is reasonably necessary to enable the
Rights holders to make a reasoned decision on the matter, but it shall
not be necessary for any such notice to set out the terms of any
resolution to be proposed or any of the provisions of this Section.
(e) An individual (who need not be a Rights holder) designated in writing
by the Rights Agent shall be chairman of the meeting and if no
individual is so designated, or if the individual so designated is not
present within 15 minutes from the time fixed for the holding of the
meeting, the Rights holders present in present or by proxy shall
choose some individual present to be chairman.
(f) At any meeting of the Rights holders a quorum shall consist of holders
present in person or by proxy of at least 20% of the Rights, provided
that at least two Persons entitled to vote thereat are personally
present. If a quorum of the Rights holders shall not be present
within 30 minutes from the time fixed for holding any meeting, the
meeting shall be adjourned to the same day in the next week (unless
such day is not a Business Day, in which case it shall be adjourned to
the next Business Day) at the same time and place and no notice of the
adjournment need be given. Any business may be brought before or
dealt with at an adjourned meeting which might have been dealt with at
the original meeting in accordance with the notice calling the same.
No business shall be transacted at any meeting unless a quorum is
present at the commencement of business. At the adjourned meeting the
Rights holders present in person or by proxy shall form a quorum and
may transact the business for which the meeting was originally
convened, notwithstanding that they may not hold 20% of the Rights.
The chairman of any meeting at which a quorum of the Rights holders is
present may, with the consent of the meeting, adjourn any such
meeting, and no notice of such adjournment need be given except such
notice, if any, as the meeting may prescribe.
(g) Votes of Rights holders on any matter may be given on a show of hands,
unless a poll is duly demanded. On a show of hands, every person who
is present and entitled to vote, whether as a Rights holder or as
proxy for one or more absent Rights holders, or both, shall have one
vote.
28
On a poll, each Rights holder present in person or represented by a
proxy duly appointed by instrument in writing shall be entitled to one
vote in respect of each whole Right then held or represented by him.
A proxy need not be Rights holder. The chairman of any meeting shall
be entitled, both on a show of bands and on a poll, to vote in respect
of the Rights, if any, held or represented by him, but shall not have
a second or deciding vote. The Rights Agent or the Company with the
approval of the Rights holders may from time to time make and vary
such regulations as it shall think fit for the form of the required
instrument of proxy and generally for the calling of meetings of
Rights holders and the conduct of business thereat. The Company and
the Rights Agent, by their respective directors and officers, and the
counsel for the Company and for the Rights Agent and for any Rights
holder may attend any meeting of the Rights holders, but shall have no
vote as such.
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Company will not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights.
Subject to Section 5.2, 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.
(b) The Company will 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 Company 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.
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 Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights, or Rights to
which he is entitled, 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 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 to
confer upon the holder of any Rights, as such, any of the rights of a
shareholder of the Company 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,
or Rights to which such holder is entitled, shall have been exercised in
accordance with the provisions hereof.
29
5.8 NOTICE OF PROPOSED ACTIONS
If the Company proposes after the Separation Time and prior to the
Expiration Time
(i) to effect or permit (in cases where the Company's permission is
required) any Flip-in Event or Flip-over Transaction or Event; or
(ii) to effect the liquidation, dissolution or winding up of the Company or
the sale of all or substantially all of the Company's assets,
then, in each such case, the Company 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 Flip-in Event or Flip-over Transaction or
Event, liquidation, dissolution, or winding up is to take place, and such notice
shall be so given at least 20 Business Days prior to the date of taking of such
proposed action by the Company.
5.9 NOTICES
Notices or demands authorized or required by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights to or on the Company
will be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
The ▇▇▇▇▇▇ Group Inc.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Senior Vice President, Law and General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or demand authorized or required by this Agreement to be given
or made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
The Royal Trust Company
Concourse Level
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Manager, Corporate Trust Services
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notices or demands authorized or required by this Agreement to be given or
made by the Company or the Rights Agent to or on the holder of any Rights shall
be sufficiently given or made if delivered or sent by first-class mail, postage
prepaid addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the Company for the Common Shares. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice.
5.10 COSTS OF ENFORCEMENT
If the Company 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 Company or such Person will reimburse the
30
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 of this
agreement.
5.11 SUCCESSORS
All the covenants and provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and ensure to the benefit of their
respective successors and assigns hereunder.
5.12 BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the holders of the Rights any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
holders of the Rights.
5.13 DESCRIPTIVE HEADINGS
Descriptive headings appear herein for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
5.14 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.
5.15 LANGUAGE
Les parties aux presentes ont exige que la presente convention ainsi que
tous les documents et avis qui s'y rattachent et/ou qui en decoulent soient
rediges 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.
5.16 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 but one and the same instrument.
5.17 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 application of such term or provision to circumstances other
than those as to which it is held invalid or unenforceable.
5.18 EFFECTIVE DATE
This Agreement is effective from the date hereof. If this Agreement is not
confirmed by resolution passed by a majority of the votes cast by Independent
Shareholders, and by a majority of the votes cast by Independent Shareholders
other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ and their respective Associates, in
each case who vote in respect of confirmation of this Agreement at a meeting of
shareholders to be held not later than the date of the 1990 Annual Meeting of
Shareholders of the Company, then this Agreement and any then outstanding Rights
shall be of no further force and effect, and such Rights shall terminate, from
the date
31
which is the earlier of (a) the date of such meeting and (b) the date of the
1990 Annul Meeting of Shareholders of the Company.
If neither a Flip-in Event nor a Flip-over Transaction or Event to which
Section 3.1 or 3.2 is applicable has occurred prior to the 1995 Annual Meeting
of Shareholders of the Company and this Agreement is not re-confirmed by
resolution passed by a majority of the votes cast by Independent Shareholders
who vote in respect of confirmation of this Agreement at the 1995 Annual Meeting
of Shareholders of the Company, then this Agreement and any then outstanding
Rights shall be of no further force and effect, and such Rights shall terminate
from the date of the 1995 Annual Meeting of Shareholders of the Company.
5.19 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
The Board of Directors of the Company will have the exclusive power and
authority to administer and amend this Agreement and to exercise all rights and
powers specifically grant to the Board or the Company, or as may be necessary or
advisable in the administration of this Agreement, including without limitation,
the rights and power to
(i) interpret the provisions of this Agreement; and
(ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem
or not to redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations
(including, for purposes of clause (b) below, all omissions with respect to the
foregoing) which are done or made by the Board, in good faith, shall (a) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (b) not subject the Board to any liability
to the holders of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
THE ▇▇▇▇▇▇ GROUP INC.
By:
-----------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President, Law and
General Counsel
THE ROYAL TRUST COMPANY
By:
-----------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇, Senior Corporate Trust Officer
and:
----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Senior Corporate Trust Officer
32
EXHIBIT A
[Form of Rights Certificate]
Certificate No. Rights
------------------------ ------------------------
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.2(b) OF THE RIGHTS
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
TRANSFEREES OF AN ACQUIRING PERSON OR ITS AFFILIATES OR ASSOCIATES (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY PERSON ACTING
JOINTLY OR IN CONCERT WITH ANY OF THEM MAY BECOME VOID.
RIGHTS CERTIFICATE
This certifies that ________________________________________________,
or registered assigns, 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 Rights Agreement dated as of April
20, 1990 (the "Rights Agreement") between The ▇▇▇▇▇▇ Group Inc., a corporation
incorporated under the British Columbia Company Act (the "Company") and The
Royal Trust Company, a trust company incorporated under the laws of Quebec, as
Rights Agent (the "Rights Agent", which term shall include any successor Rights
Agent under the Rights Agreement), to purchase from the Company at any time
after the Separation Time (as such term is defined in the Rights Agreement) and
prior to the close of business on April 20, 2000, one fully paid Common Share of
the Company (a "Common Share") at the Exercise Price referred to below, upon
presentation and surrender of this Rights Certificate with the Form of Election
to Exercise duly executed and submitted to the Rights Agent at its principal
office in any of the Cities of Vancouver, Toronto or Montreal. The Exercise
Price will initially be $90 (Canadian) per Right and shall be subject to
adjustment in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, each Right
evidenced hereby may entitle the registered holder thereof to receive Common
Shares in exchange for the Right or to purchase or receive securities of an
entity other than the Company or other securities or assets of the Company other
than Common Shares all as provided in the Right Agreement.
This Rights Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement which terms, provisions and conditions are
hereby incorporated herein 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 Company and the holders or the Rights Certificates. Copies of
the Rights Agreement are on file at the registered office of the Company and are
available upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at any of the offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date 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, and under certain circumstances are
required to be, redeemed by the Company at a redemption price of $0.01 per
Right, subject to adjustment in certain events, under certain circumstances.
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 of any other securities that 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 Company or any right to vote for the election of directors or
upon any matter submitted to shareholders of the Company 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 the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by the Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Date:
-------------------------
THE ▇▇▇▇▇▇ GROUP INC.
Per: By:
-------------------------- ------------------------------------
Countersigned:
THE ROYAL TRUST COMPANY
By:
---------------------------
Authorized Signature
2
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to assign or
transfer the Rights Certificates.)
FOR VALUE RECEIVED
---------------------------------------------------------
hereby sells, assigns and transfers to
------------------------------------------
(Please print name and address of transferee)
the Rights represented by the Rights Certificate, together with all right, title
and interest therein, and hereby irrevocably constitutes and
appoints
------------------------------------------------------------------------
an attorney, to transfer the within Rights on the books of the Company, with
full power of substitution.
Dated:
--------------------------
Signature Guaranteed: ----------------------------------------
Signature
(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 member firm of a recognized stock
exchange in Canada, a registered national securities exchange in the United
States, a member of the Investment Dealers Association of Canada or National
Association of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in Canada or the United States.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of 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 an Affiliate or Associate thereof or by any Person acting
jointly or in concert with any of the foregoing (all as defined in the Rights
Agreement).
----------------------------------------
Signature
NOTICE
If the certification set forth above in the Form of Assignment is not
completed upon the assignment of the Right(s) evidenced by this Rights
Certificate, the Company will deem the Beneficial Owner of such Rights to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and will affix a legend to that effect on any Right Certificates
issued in exchange for this Rights Certificate.
3
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
TO: THE ▇▇▇▇▇▇ GROUP INC.
The undersigned hereby irrevocably elects to exercise
__________________________________ whole Rights represented by the attached
Rights Certificate to purchase the Common Shares issuable upon the exercise of
such Rights and requests that certificates for such shares by issued in the name
of:
---------------------------------------------------------------------------
(Name)
---------------------------------------------------------------------------
(Street)
---------------------------------------------------------------------------
(City and State or Province) (Postal Code)
---------------------------------------------------------------------------
SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER
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)
---------------------------------------------------------------------------
(Street)
---------------------------------------------------------------------------
(City and State or Province) (Postal Code)
---------------------------------------------------------------------------
SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER
Dated:
------------------------
Signature Guaranteed: ----------------------------------------
Signature
(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 member firm of a recognized stock
exchange in Canada, a registered national securities exchange in the United
States, a member of the Investment Dealers Association of Canada or National
Association of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in Canada or the United States.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of 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 an Affiliate or Associate thereof or by any Person acting
jointly or in concert with any of the foregoing (all as defined in the Rights
Agreement).
----------------------------------------
Signature
NOTICE
If the certification set forth above in the Form of Election to Exercise is
not completed upon the exercise of the Right(s) evidenced by this Rights
Certificate, the Company will deem the Beneficial Owner of such Right(s) to be
an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
4
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
AMENDMENTS made as of the 24th day May, 1990 to Agreement made as of April 20,
1990.
BETWEEN:
THE ▇▇▇▇▇▇ GROUP INC., a corporation incorporated under the
laws of British Columbia
(hereinafter referred to as the "Company")
OF THE FIRST PART,
- and -
THE ROYAL TRUST COMPANY, a trust company incorporated under
the laws of Quebec
(hereinafter referred to as the "Rights Agent")
OF THE SECOND PART.
WHEREAS at the meeting of shareholders of the Company, held on the 24th day
of May, 1990, called to consider, among other things, the resolution to confirm
the Shareholder Protection Rights Plan Agreement made as of April 20, 1990 (the
"Rights Plan") (the "Main Resolution") a resolution (the "Amending Resolution")
was made to amend the Main Resolution so as to authorize and direct the Company
to amend the definition of "Acquiring Person" in the Rights Plan in the manner
herein set out;
AND WHEREAS the Amending Resolution and the Main Resolution were passed by
a majority of the votes cast by Independent Shareholders (as defined in the
Rights Plan) and by a majority of the votes cast by Independent Shareholders,
other than ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ and their respective Associates (as defined in the Rights
Plan), at such meeting;
NOW THEREFORE in consideration of the premises the parties hereby agree
that:
1. The definition of "Acquiring Person" in subsection 1.1(a) of the Rights
Plan shall be amended:
(a) by deleting the word "and" at the end of clause (ii) thereof;
(b) by replacing the period at the end of clause (iii) thereof with a
semi-colon and by adding the word "and" at the end thereof; and
(c) by adding the following after clause (iii) thereof:
"(iv) any pension plan or fund registered under the Pension
Benefits Standards Act, 1985 (Canada), the Employment Pension
Plans Act (Alberta), an Act respecting supplemental pension plans
(Quebec) or the Pension Benefits Act, 1987 (Ontario) or any
comparable or successor laws thereto so long as (A) such
legislation prohibits such pension plan or fund from owning more
than 30% of the Common Shares or Voting Shares and (B) such
pension plan or fund
- 2 -
holds its Common Shares or Voting Shares for investment purposes only
and is not acting jointly or in concert with any other Person."
IN WITNESS WHEREOF, these amendments have been duly executed as of the date
first above written.
THE ▇▇▇▇▇▇ GROUP INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice-President, Law and
General Counsel
THE ROYAL TRUST COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇, Senior Corporate Trust Officer
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Senior Corporate Trust Officer
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CERTIFICATE
RE: SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT
made as of April 20, 1990 between THE ▇▇▇▇▇▇
GROUP INC. and THE ROYAL TRUST COMPANY, as
amended ("Rights Plan Agreement")
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The undersigned, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice-President, Finance and
Corporate Development of The ▇▇▇▇▇▇ Group Inc. (the "Company") hereby certifies
on behalf of the Company that there has been an adjustment to the Exercise Price
(as defined in the Rights Plan Agreement). Effective as at the close of
business on June 18, 1991 at each of the respective locations of The Royal Trust
Company, registrar and transfer agent for the Common shares of the Company the
Exercise Price shall equal $45.
The adjustment has been made because of the subdivision of the issued and
unissued Common shares of the Company on a 2 for 1 basis. The record date for
such subdivision is the close of business on June 18, 1991, as described in the
preceding paragraph. The effect of the subdivision is to double the number of
Common shares and therefore to halve the Exercise Price, which was equal to $90
prior to such subdivision.
Dated this ______ day of June, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice-President, Finance
and Corporate Development
CERTIFIED COPY OF RESOLUTION
I, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice-President, Law and General Counsel of
The ▇▇▇▇▇▇ Group Inc., hereby certify that the attached Schedule "A" is a true
and correct copy of a duly passed resolution of the Directors of The ▇▇▇▇▇▇
Group Inc. on April 7, 1994 and that the said resolution has not been rescinded,
amended or modified and is in full force and effect as at May 27, 1994.
"▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇"
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice-President, Law
and General Counsel
SCHEDULE "A"
4. SHAREHOLDER PROTECTION RIGHTS PLAN
The Directors then considered three suggested amendments to the Shareholder
Protection Rights Plan, outlined in the memo to Directors of April 5, 1994
from ▇▇▇▇▇▇ & Elliot and previously circulated to Directors.
UPON MOTION duly proposed and unanimously carried (▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇), it
was resolved that:
(a) SUCCESSION PLANNING
WHEREAS The ▇▇▇▇▇▇ Group Inc. (the "Company") and The Royal Trust
Company (the "Rights Agent") entered into a Shareholder Protection
Rights Plan Agreement made as of April 20, 1990 (the "Rights Plan");
AND WHEREAS the Rights Plan was amended as evidenced by an amendment
thereto made as of the 24th day of May, 1990;
AND WHEREAS the Rights Plan provides, pursuant to section 5.4 thereof,
that the Company may from time to time supplement or amend the Rights
Plan to make any changes which the Board of Directors acting in good
faith may deem necessary or desirable;
AND WHEREAS the Board of Directors acting in good faith has determined
that the amendments set out in the following resolution are necessary
or desirable;
(i) the Rights Plan be amended as follows:
(A) Clause (ii) of subsection 1.1(a) is hereby amended to read
as follows:
"(ii) any Person who becomes the Beneficial Owner of 20%
or more of the outstanding Common Shares or Voting
Shares of the Company as a result of
(A) an acquisition or redemption by the Company of
Voting Shares of the Company which, by reducing
the number of Voting Shares outstanding, increases
the proportionate number of Voting Shares
Beneficially Owned by such Person to 20% or more
of the
Common Shares or Voting Shares of the Company then
outstanding, or
(B) share acquisitions made pursuant to a Permitted
Bid and approved in accordance with the provision
of Section 3.5 and made after the date of such
approval ("PERMITTED BID ACQUISITIONS") or
(C) share acquisitions in respect of which the Board
of Directors of the Company has waived the
application of Section 3.2 pursuant to subsection
5.1(b) or which were made on or prior to the date
of this Agreement ("EXEMPT ACQUISITIONS"); or
(D) acquisitions of Common Shares or Voting Shares
made as a result of the death of the Beneficial
Owner of such Common Shares or Voting Shares of
the Company ("INHERITED ACQUISITIONS").
provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the Common Shares or
Voting Shares of the Company then outstanding by reason
of (i) share acquisitions or redemptions by the Company
or (ii) Permitted Bid Acquisitions or (iii) Exempt
Acquisitions or (iv) Inherited Acquisitions and, after
such share acquisitions or redemptions by the Company
or Permitted Bid Acquisitions or Exempt Acquisitions or
Inherited Acquisitions, becomes the Beneficial Owner of
any additional Voting Shares of the Company other than
pursuant to Permitted Bid Acquisitions, Exempt
Acquisitions, Inherited Acquisitions, acquisitions as a
result of a stock dividend, a stock split or other
event pursuant to which such Person receives or
acquires Voting Shares in the same pro rata basis as
all other holders of Voting Shares of the same class
("PRO RATA ACQUISITIONS") or acquisitions pursuant to a
dividend reinvestment plan of the Company, then as of
the date of becoming the Beneficial Owner of any
additional
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Voting Shares, such Person shall become an "Acquiring
Person"; and"
(ii) Subsection 1.1(q.l) shall be added immediately after
subsection 1.1(q) to read as follows:
"(q.l) "INHERITED ACQUISITION" shall have the
meaning ascribed thereto by subclause 1.1(a)(ii)(D)."
(iii) Section 1.3(a) is amended by replacing the words "or Pro
Rata Acquisitions" at the end thereof with the following: ",
Pro Rata Acquisitions or Inherited Acquisitions".
(iv) Subsection 1.3(b) is amended to read as follows:
" (b) A Person shall not be and shall not be deemed
to be an Acquiring Person if such Person (a
"GRANDFATHERED PERSON TRANSFEREE") becomes the
Beneficial Owner of 20% or more of the outstanding
Common Shares or Voting Shares of the Company solely as
a result of
(i) the acquisition of all but not less than all of
the Common Shares or Voting Shares of the Company
Beneficially Owned immediately prior thereto by a
Grandfathered Person or a Grandfathered Person
Transferee (the "TRANSFEROR") and such Person's
Beneficial Ownership of Common Shares or Voting
Shares of the Company after giving effect to such
acquisition does not exceed the number of Common
Shares or Voting Shares of the Company
Beneficially Owned by the Transferor immediately
prior to such acquisition by more than 2% of the
then issued and outstanding Common Shares or
Voting Shares of the Company or
(ii) as a result of the death of a Grandfathered Person
or a Grandfathered Person Transferee;
provided, however, that the exception in this
subsection 1.3(b) shall cease to be applicable to a
Grandfathered Person Transferee who shall after the
time at which he becomes a Grandfathered Person
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Transferee (the "Transfer Time") become, pursuant to
one or more transactions or events, the Beneficial
Owner of additional Common Shares or Voting Shares of
the Company constituting, together with the number of
Common Shares or Voting Shares Beneficially Owned by
such Grandfathered Person Transferee immediately prior
to the Transfer Time, in the aggregate more than 2% of
the Common Shares or Voting Shares of the Company then
outstanding, other than pursuant to Permitted Bid
Acquisitions, Exempt Acquisitions, Pro Rata
Acquisitions or Inherited Acquisitions."
(v) Section 1.3(c) is amended by replacing the words "or Pro
Rata Acquisitions" at the end thereof with the following: ",
Pro Rata Acquisitions or Inherited Acquisitions'.
(b) EXERCISE PRICE
WHEREAS The ▇▇▇▇▇▇ Group Inc. (the "Company") and The Royal Trust
Company (the "Rights Agent") entered into a Shareholder Protection
Rights Plan Agreement made as of April 20, 1990 (the "Rights Plan");
AND WHEREAS the Rights Plan was amended as evidenced by an amendment
thereto made as of the 24th day of May, 1990;
AND WHEREAS the Rights Plan provides, pursuant to section 5.4 thereof,
that the Company may from time to time supplement or amend the Rights
Plan to make any changes which the Board of Directors acting in good
faith may deem necessary or desirable, provided that no such
supplement or amendments which would increase the Exercise Price (as
defined therein) shall be effective until confirmed by the holders of
the Rights;
AND WHEREAS the Board of Directors acting in good faith has determined
that the amendments set out in the following resolution are necessary
or desirable;
(i) the Rights Plan be amended so that subsection 1.1(l) shall read
as follows:
"EXERCISE PRICE" shall mean, as of any date, the price at which a
holder 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 equal $125.";
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(ii) such amendment be placed before the shareholders of the Company
at the annual general meeting to be held on May 16, 1994.
(c) WAIVER
WHEREAS The ▇▇▇▇▇▇ Group Inc. (the "Company") and The Royal Trust
Company (the "Rights Agent") entered into a Shareholder Protection
Rights Plan Agreement made as of April 20, 1990 (the "Rights Plan");
AND WHEREAS pursuant to the terms of the Rights Plan, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ is a Grandfathered Person, as defined therein;
AND WHEREAS it is proposed that ▇▇. ▇▇▇▇▇▇ participate in the
Company's Management Equity Investment Plan (the "MEIP");
AND WHEREAS if ▇▇. ▇▇▇▇▇▇ participates in the MEIP, pursuant to the
terms of the Rights Plan, he would be deemed to Beneficially Own an
additional 2,000,000 Common Shares of the Company and would,
therefore, become an Acquiring Person under the terms of the Rights
Plan such that, at the close of business on the tenth day after his
agreeing to participate in the MEIP a Separation Time (as defined in
subsection 1.1(bb) of the Rights Plan) would occur and the terms of
the Rights would change pursuant to section 3.2 of the Rights Plan;
AND WHEREAS pursuant to subsection 5.1(b) of the Rights Plan, the
Board of Directors may, until the first to occur of a Flip-in Event
(as defined in the Rights Plan) or a Flip-over Transaction or Event
(as defined in the Rights Plan) upon prior written notice delivered to
the Rights Agent (as defined in the Rights Plan) determine to waive
the application of subsection 1.1(bb) and Section 3.1 or 3.2 to any
particular Flip-over Transaction or Event or Flip-in Event.
(i) the Board of Directors of the Company hereby determine to waive
the application of subsection 1.1(bb) and section 3.2 of the
Rights Plan to the Flip-in Event that would arise as a result of
▇▇. ▇▇▇▇▇▇'▇ acquisition of Beneficial Ownership of 2,000,000
Common Shares pursuant to the MEIP;
(ii) the proper officers of the Company be hereby directed to give
notice of this waiver to the Rights Agent under the Rights Plan.
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