AMENDED AND RESTATED
SHAREHOLDER RIGHTS PLAN AGREEMENT
(AMENDING AND RESTATING THE SHAREHOLDER RIGHTS PLAN AGREEMENT
DATED AS OF MAY 9, 2001)
DATED AS OF APRIL 28, 2004
BETWEEN
AGRIUM INC.
AND
CIBC MELLON TRUST COMPANY
AS RIGHTS AGENT
FASKEN ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
Toronto-Dominion Bank Tower
Box 20, Suite 4200
Toronto ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
TABLE OF CONTENTS
PAGE
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ARTICLE 1 INTERPRETATION................................................................... 2
1.1 Certain Definitions.............................................................. 2
1.2 Currency......................................................................... 15
1.3 Number and Gender................................................................ 15
1.4 Descriptive Headings and References.............................................. 15
1.5 Acting Jointly or in Concert..................................................... 15
1.6 Holder........................................................................... 16
1.7 Calculation of Voting Shares Beneficially Owned.................................. 16
ARTICLE 2 THE RIGHTS....................................................................... 16
2.1 Legend on Voting Share Certificates.............................................. 16
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights................. 17
2.3 Adjustments to Exercise Price; Number of Rights.................................. 20
2.4 Date on Which Exercise is Effective.............................................. 26
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates............ 27
2.6 Registration, Registration of Transfer and Exchange.............................. 27
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates........................ 28
2.8 Persons Deemed Owners............................................................ 29
2.9 Delivery and Cancellation of Certificates........................................ 29
2.10 Agreement of Rights Holders...................................................... 29
ARTICLE 3 ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF A FLIP-IN EVENT....................... 30
3.1 Flip-in Event.................................................................... 30
ARTICLE 4 THE RIGHTS AGENT................................................................. 32
4.1 General.......................................................................... 32
4.2 Merger, Amalgamation or Consolidation or Change of Name of Rights Agent.......... 33
4.3 Duties of Rights Agent........................................................... 33
4.4 Change of Rights Agent........................................................... 35
ARTICLE 5 MISCELLANEOUS.................................................................... 36
5.1 Redemption and Termination of Rights............................................. 36
5.2 Waiver of Flip-In Events......................................................... 37
5.3 Expiration....................................................................... 38
5.4 Issuance of New Rights Certificates.............................................. 38
5.5 Supplements and Amendments....................................................... 38
5.6 Fractional Rights and Fractional Shares.......................................... 40
5.7 Rights of Action................................................................. 40
5.8 Holder of Rights Not Deemed a Shareholder........................................ 41
5.9 Notice of Proposed Actions....................................................... 41
5.10 Notices.......................................................................... 41
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TABLE OF CONTENTS
(continued
PAGE
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5.11 Costs of Enforcement............................................................. 42
5.12 Successors....................................................................... 43
5.13 Benefits of this Agreement....................................................... 43
5.14 Governing Law.................................................................... 43
5.15 Language......................................................................... 43
5.16 Counterparts..................................................................... 43
5.17 Severability..................................................................... 43
5.18 Determinations and Actions by the Board of Directors............................. 44
5.19 Effective Date and Expiration Time............................................... 44
5.20 Regulatory Approvals............................................................. 44
5.21 Time of the Essence.............................................................. 44
5.22 Declaration as to Non-Canadian Holders........................................... 44
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AMENDED AND RESTATED
SHAREHOLDER RIGHTS PLAN AGREEMENT
AMENDED AND RESTATED SHAREHOLDER RIGHTS PLAN AGREEMENT dated as of April 28,
2004 between AGRIUM INC., a corporation organized under the laws of Canada (the
"CORPORATION"), and CIBC MELLON TRUST COMPANY, a trust company incorporated
under the laws of Canada, as rights agent (the "RIGHTS AGENT", which term shall
include any successor Rights Agent hereunder), amending and restating the
Shareholder Rights Plan Agreement dated as of May 9, 2001 between the
Corporation and the Rights Agent.
WHEREAS the Corporation and the predecessor to the Rights Agent entered
into a shareholder rights plan agreement dated March 1, 1995 respecting a
shareholder rights plan (the "ORIGINAL PLAN") that was effective until the
termination of the annual meeting of the shareholders of the Corporation held in
1998;
AND WHEREAS the Original Plan was replaced by a Shareholder Rights Plan
Agreement between the Corporation and the Rights Agent dated March 2, 1998 (the
"1998 PLAN") that was effective until the termination of the annual meeting of
the shareholders of the Corporation held in 2001;
AND WHEREAS the 1998 Plan was amended and restated pursuant to an Amended
and Restated Shareholder Rights Plan Agreement between the Corporation and the
Rights Agent dated as of May 9, 2001 (the "2001 PLAN") to be effective at the
latest until the termination of the annual meeting of the shareholders of the
Corporation held in 2004;
AND WHEREAS the Board of Directors (as hereinafter defined) has determined
that it is advisable and in the best interests of the Corporation to continue
the 1998 Plan, as amended and restated by the 2001 Plan, by adopting an Amended
and Restated Shareholder Rights Plan Agreement as provided herein (the "RIGHTS
PLAN") to take effect on the Effective Date (as hereinafter defined), subject to
approval by the Independent Shareholders (as hereinafter defined) at the annual
and special meeting of the shareholders of the Corporation scheduled to be held
on April 28, 2004, to ensure, to the extent possible, that all shareholders of
the Corporation are treated fairly in connection with any Take-Over Bid (as
hereinafter defined) and, due to the uniqueness of the Corporation's business,
to ensure that the Board of Directors are provided with sufficient time to
evaluate unsolicited Take-Over Bids and to explore and develop alternatives to
maximize shareholder value;
AND WHEREAS in order to implement the Rights Plan, the Board of Directors
has:
(a) reconfirmed the distribution of one right (a "RIGHT") effective at the
Record Time (as hereinafter defined) in respect of each Common Share (as
hereinafter defined) outstanding at the Record Time; and
(b) reconfirmed its authorization of the issuance of one Right in respect of
each Voting 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);
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AND WHEREAS each Right entitles the holder thereof, after the Separation
Time, to purchase securities of the Corporation pursuant to the terms and
subject to the conditions set forth herein;
AND WHEREAS the Rights Agent has agreed to act on behalf of the
Corporation in connection with the issuance, transfer, exchange and replacement
of Rights Certificates (as hereinafter defined), the exercise of Rights and
other matters referred to herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the Corporation and the Rights Agent hereby agree
as follows:
ARTICLE 1
INTERPRETATION
1.1 CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
indicated:
"ACQUIRING PERSON" means any Person who is the Beneficial Owner of 20% or
more of the outstanding Voting Shares; provided, however, that the term
"ACQUIRING PERSON" shall not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or more of the
outstanding Voting Shares as a result of one or any combination of:
(A) a Voting Share Reduction,
(B) a Permitted Bid Acquisition,
(C) an Exempt Acquisition,
(D) a Convertible Security Acquisition, or
(E) a Pro Rata Acquisition.
provided, however, that if a Person becomes the Beneficial Owner of
20% or more of the outstanding Voting Shares by reason of one or any
combination of a Voting Share Reduction, a Permitted Bid
Acquisition, an Exempt Acquisition, a Convertible Security
Acquisition or a Pro Rata Acquisition, and thereafter becomes the
Beneficial Owner of an additional 1% or more of the outstanding
Voting Shares (other than pursuant to a Voting Share Reduction, a
Permitted Bid Acquisition, an Exempt Acquisition, a Convertible
Security Acquisition or a Pro Rata Acquisition), then as of the date
and time that such Person becomes the Beneficial Owner of such
additional Voting Shares, such Person shall become an Acquiring
Person;
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(iii) an underwriter or member of a banking or selling group that becomes
the Beneficial Owner of 20% or more of the outstanding Voting Shares
as a result of an acquisition from the Corporation in connection
with a distribution of securities pursuant to a prospectus or by way
of a private placement; and
(iv) a Grandfathered Person, provided, however, that if after the Record
Time such Person becomes the Beneficial Owner of an additional 1% or
more of the outstanding Voting Shares (other than pursuant to a
Voting Share Reduction, a Permitted Bid Acquisition, an Exempt
Acquisition, a Convertible Security Acquisition or a Pro Rata
Acquisition), then as of the date and time that such Person becomes
the Beneficial Owner of such additional Voting Shares, such Person
shall become an Acquiring Person.
"AFFILIATE", when used to indicate a relationship with a specified
corporation, means a Person that directly, or indirectly through one or
more controlled intermediaries, controls, or is a corporation controlled
by, or is a corporation under common control with, such specified
corporation.
"AGREEMENT" means this amended and restated shareholder rights plan
agreement between the Corporation and the Rights Agent, as amended,
supplemented or restated from time to time.
"ASSOCIATE", when used to indicate a relationship with a specified Person,
means (i) a spouse of such specified Person, (ii) any Person of either sex
with whom such specified Person is living in a conjugal relationship
outside marriage, or (iii) any relative of such specified Person or of a
Person mentioned in Clause (i) or (ii) of this definition if that relative
has the same residence as the specified Person.
"BENEFICIAL OWNER": a Person shall be deemed the "BENEFICIAL OWNER" and to
have "BENEFICIAL OWNERSHIP" of and to "BENEFICIALLY OWN", any security:
(i) of which such Person or any of such Person's Affiliates or
Associates is the owner at law or in equity;
(ii) as to which such Person or any of such Person's Affiliates or
Associates has the right to become the owner at law or in equity (A)
upon the purchase, exercise, conversion or exchange of any
Convertible Securities, or (B) pursuant to any agreement,
arrangement, pledge or understanding, whether or not in writing, in
each case if such right is then exercisable or exercisable within a
period of 60 days of the date of the determination of Beneficial
Ownership, and whether or not on condition or the happening of any
contingency (other than customary agreements with and between
underwriters and members of banking groups or selling groups with
respect to a distribution of securities pursuant to a prospectus or
by way of a private placement and other than pursuant to pledges of
securities in the ordinary course of business); and
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(iii) which is Beneficially Owned within the meaning of Clause (i) or (ii)
of this definition by any other Person with which, and in respect of
which security, such Person is acting jointly or in concert;
provided, however, that a Person shall not be deemed the "BENEFICIAL
OWNER" of, or to have "BENEFICIAL OWNERSHIP" of, or to "BENEFICIALLY OWN",
any security by reason of:
(1) such security having been deposited or tendered pursuant to a
Take-Over Bid made by such Person, any of such Person's Affiliates
or Associates or any other Person with which, and in respect of
which security, such Person is acting jointly or in concert, until
such deposited or tendered security has been accepted
unconditionally for payment or exchange or has been taken up and
paid for, whichever shall first occur;
(2) the holder of such security having agreed pursuant to a Permitted
Lock-Up Agreement to deposit or tender such security pursuant to a
Take-Over Bid made by such Person, any of such Person's Affiliates
or Associates or any other Person with which, and in respect of
which security, such Person is acting jointly or in concert, until
the earliest time at which any such deposited or tendered security
has been accepted unconditionally for payment or exchange or has
been taken up and paid for, whichever shall first occur;
(3) such Person, for greater certainty, holding such security in the
ordinary course of such Person's business or activities as follows:
(A) such Person (in this definition, a "MANAGER") manages
investment funds for others (which others may include, or be
limited to, employee benefit plans and pension plans), if such
security is held by the Manager in the performance of the
Manager's duties for the account of another Person (in this
definition, a "Client", which term shall include any
non-discretionary account held on behalf of a Client by a
broker or dealer registered under applicable law);
(B) such Person (in this definition, a "TRUST COMPANY") is
licensed as a trust company under applicable law and, as such,
acts as trustee or administrator or in a similar capacity for
the estates of deceased or incompetent Persons (each, in this
definition, an "ESTATE ACCOUNT") or for other accounts (each,
in this definition, an "OTHER ACCOUNT"), if such security is
held by the Trust Company for the Estate Account or for such
Other Accounts;
(C) such Person (in this definition, a "CROWN AGENT") is a Crown
agent or agency that manages public assets, if such security
is held by the Crown Agent for the purposes of its activities
as Crown Agent;
(D) such Person (in this definition, a "STATUTORY BODY") is
established by statute for purposes that include the
management of investment funds for employee benefit plans,
pension plans and insurance plans (other than
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insurance plans administered by insurance companies) of
various public bodies, if such security is held by the
Statutory Body for the purposes of its activities as Statutory
Body; or
(E) such Person (in this definition, an "ADMINISTRATOR") is the
administrator or trustee of one or more pension funds or plans
(each, in this definition, a "PLAN") registered under the laws
of Canada or any province thereof or the corresponding laws of
the jurisdiction by which such Plan is governed, or is such a
Plan, if such security is held by the Administrator or Plan
for the purposes of its activities as Administrator or Plan;
but only if the Manager, the Trust Company, the Crown Agent, the
Statutory Body, the Administrator or the Plan, as the case may be,
is not then making or has not publicly announced a current intention
to make a Take-Over Bid, alone or by acting jointly or in concert
with any other Person, other than pursuant to a distribution by the
Corporation or by means of ordinary market transactions (including
pre-arranged trades entered into in the ordinary course of business
of such Person) executed through the facilities of a stock exchange,
securities quotation system or an organized over-the-counter market;
(4) such Person, for greater certainty, being a Client of the same
Manager as another Person on whose account the Manager holds such
security;
(5) such Person, for greater certainty, having an Estate Account or an
Other Account with the same Trust Company as another Person on whose
account the Trust Company holds such security;
(6) such Person, for greater certainty, being a Plan with the same
Administrator as another Plan on whose account the Administrator
holds such security;
(7) such Person, for greater certainty:
(A) being a Client of a Manager, if such security is owned at law
or in equity by the Manager;
(B) being an Estate Account or an Other Account of a Trust
Company, if such security is owned at law or in equity by the
Trust Company; or
(C) being a Plan, if such security is owned at law or in equity by
the Administrator of the Plan; or
(8) such Person being the registered holder of such security as a result
of carrying on the business of, or acting as nominee for, a
securities depository.
"BOARD OF DIRECTORS" means the board of directors of the Corporation or
any duly constituted or empowered committee thereof.
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"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day that
is treated as a holiday at the Corporation's principal executive offices
in the City of Calgary, Alberta.
"CANADA BUSINESS CORPORATIONS ACT" means the Canada Business Corporations
Act, R.S.C. 1985, c.C-44, as amended, and the regulations made thereunder,
as now in effect or as the same may from time to time be amended,
re-enacted or replaced.
"CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed in United
States dollars means on any date the Canadian dollar equivalent of such
amount determined by multiplying such amount by the U.S.-Canadian Exchange
Rate in effect on such date.
"CANADIAN-U.S. EXCHANGE RATE" means on any date the inverse of the
U.S.-Canadian Exchange Rate.
"CLOSE OF BUSINESS" on any date means 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 in the
City of Calgary, Alberta (or, after the Separation Time, the office of the
Rights Agent in the City of Calgary, Alberta) is closed to the public.
"COMMON SHARES" means the common shares in the capital of the Corporation.
"COMPETING PERMITTED BID" means a Take-Over Bid that:
(i) is made after a Permitted Bid or another Competing Permitted Bid has
been made and prior to the expiry, termination or withdrawal of that
Permitted Bid or Competing Permitted Bid (in this definition, the
"PRIOR BID");
(ii) satisfies all the provisions of the definition of a Permitted Bid
other than the requirements set out in Clauses (ii)(A) and (D) of
the definition of Permitted Bid; and
(iii) contains, and the take-up and payment for securities deposited or
tendered thereunder are subject to, irrevocable and unqualified
conditions that:
(A) no Voting Shares and/or Convertible Securities shall be taken
up or paid for pursuant to the Take-Over Bid (x) prior to the
Close of Business on a date that is not less than the later of
35 days after the Offer Date of such Take-Over Bid
constituting the Competing Permitted Bid and 60 days after the
Offer Date of the earliest Prior Bid then in existence, and
(y) then only if, at the Close of Business on the date Voting
Shares and/or Convertible Securities are first taken up or
paid for under such Take-Over Bid constituting the Competing
Permitted Bid, more than 50% of the outstanding Voting Shares
and/or Convertible Securities held by Independent Shareholders
have been deposited or tendered pursuant to such Take-Over Bid
and not withdrawn; and
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(B) in the event that the requirement set forth in Subclause
(iii)(A)(y) of this definition is satisfied, the Offeror will
make a public announcement of that fact and the Take-Over Bid
will remain open for deposits and tenders of Voting Shares
and/or Convertible Securities for not less than 10 Business
Days from the date of such public announcement.
"CONTROLLED": a body corporate is "CONTROLLED" by another Person or two or
more Persons acting jointly or in concert if:
(i) securities entitled to vote in the election of directors carrying
more than 50% of the votes for the election of directors are held,
directly or indirectly, by or on behalf of the other Person or two
or more Persons acting jointly or in concert; and
(ii) the votes carried by such securities are entitled, if exercised, to
elect a majority of the board of directors of such body corporate;
and "CONTROLS", "CONTROLLING" and "UNDER COMMON CONTROL WITH" shall be
interpreted accordingly.
"CONVERTIBLE SECURITIES" means at any time any securities issued by the
Corporation from time to time (other than the Rights) carrying any
purchase, exercise, conversion or exchange right pursuant to which the
holder thereof may acquire Voting Shares or other securities carrying any
purchase, exercise, conversion or exchange right pursuant to which the
holder thereof may acquire Voting Shares (in each case, whether such right
is then exercisable or exercisable within or after a specified period and
whether or not on condition or the happening of any contingency).
"CONVERTIBLE SECURITY ACQUISITION" means the acquisition of Voting Shares
by a Person upon the purchase, exercise, conversion or exchange of
Convertible Securities acquired or received by such Person pursuant to a
Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata
Acquisition.
"CO-RIGHTS AGENT" has the meaning attributed thereto in Subsection 4.1(a).
"EFFECTIVE DATE" means the time at which the annual and special meeting of
the holders of Voting Shares scheduled to be held on April 28, 2004
terminates.
"ELECTION TO EXERCISE" shall have the meaning attributed thereto in
Subsection 2.2(d).
"EXEMPT ACQUISITION" means an acquisition by a Person of Voting Shares
and/or Convertible Securities (i) in respect of which the Board of
Directors has waived the application of Section 3.1 pursuant to the
provisions of Section 5.2, (ii) pursuant to a regular dividend
reinvestment or other plan of the Corporation made available by the
Corporation to the holders of Voting Shares and/or Convertible Securities
where such plan permits the holder to direct that the dividends paid in
respect of such Voting Shares and/or Convertible Securities be applied to
the purchase from the Corporation of further securities of the
Corporation, (iii) pursuant to a distribution of Voting Shares and/or
Convertible Securities made by the Corporation (A) to the public pursuant
to a
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prospectus; provided that such Person does not thereby become the
Beneficial Owner of a greater percentage of Voting Shares so offered than
the percentage of Voting Shares Beneficially Owned by such Person
immediately prior to such distribution, or (B) by way of a private
placement; provided that (x) all necessary stock exchange approvals to
such private placement have been obtained and such private placement
complies with the terms and conditions of such approvals, and (y) such
Person does not thereby become the Beneficial Owner of Voting Shares equal
in number to more than 25% of the Voting Shares outstanding immediately
prior to the private placement and, in making this determination, the
securities to be issued to such Person on the private placement shall be
deemed to be held by such Person but shall not be included in the
aggregate number of Voting Shares outstanding immediately prior to the
private placement, or (iv) pursuant to an amalgamation, merger,
arrangement or other statutory procedure requiring shareholder approval.
"EXERCISE PRICE" means, as of any date, the price at which a holder may
purchase the securities issuable upon exercise of one whole Right in
accordance with the terms hereof and, subject to adjustment thereof in
accordance with the terms hereof, the Exercise Price shall be:
(i) until the Separation Time, an amount equal to three times the Market
Price, from time to time, per Common Share; and
(ii) from and after the Separation Time, an amount equal to three times
the Market Price, as at the Separation Time, per Common Share.
"EXPANSION FACTOR" has the meaning attributed thereto in Subsection
2.3(b)(x).
"EXPIRATION TIME" has the meaning attributed thereto in Subsection
5.19(a)(ii).
"FLIP-IN EVENT" means a transaction or event in which any Person becomes
an Acquiring Person.
"GRANDFATHERED PERSON" means any Person who is the Beneficial Owner of 20%
or more of the outstanding Voting Shares as determined at the Record Time;
provided, however, that a Person shall cease to be a Grandfathered Person
in the event that such Person ceases to Beneficially Own 20% or more of
the outstanding Voting Shares at any time after the Record Time.
"HOLDER" shall have the meaning attributed thereto in Section 1.6.
"INCLUDING" and "INCLUDES" shall be interpreted on an inclusive basis and
shall be deemed to be followed by the words "WITHOUT LIMITATION".
"INDEPENDENT SHAREHOLDERS" means holders of outstanding Voting Shares,
excluding (i) any Acquiring Person, (ii) any Offeror, (iii) any Affiliate
or Associate of any Acquiring Person or Offeror, (iv) any Person acting
jointly or in concert with any Acquiring Person or Offeror, and (v) any
employee benefit plan, share purchase plan, deferred profit sharing plan
or trust for the benefit of employees of the Corporation or a wholly-owned
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Subsidiary of the Corporation (unless the beneficiaries of such plan or
trust direct the manner in which such Voting Shares are to be voted or
direct whether the Voting Shares are to be deposited or tendered to a
Take-Over Bid, in which case such plan or trust shall be considered to be
an Independent Shareholder).
"MARKET PRICE" per security of any securities on any date means the
average of the daily closing prices per security of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through to 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 shall have caused the closing prices used
to determine the Market Price on any Trading Day 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 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 security of any securities on any date shall be:
(i) the closing board lot sale price or, in case no such sale takes
place on such date, the average of the closing bid and asked prices
for each such security as reported by the principal stock exchange
or securities quotation system in Canada on which such securities
are listed or admitted to trading (based on the volume of securities
traded during the most recently completed financial year);
(ii) if for any reason none of the prices described in Clause (i) above
are available for such date or the securities are not listed or
admitted to trading on a stock exchange or securities quotation
system in Canada, the last board lot sale price or, if such price is
not available, the average of the closing bid and asked prices, for
each such security on such date as reported by such other securities
exchange or securities quotation system on which such securities are
listed or admitted to trading (and if such securities are listed or
admitted to trading on more than one other stock exchange or
securities quotation system such prices shall be determined based on
the stock exchange or securities quotation system on which such
securities are then listed or admitted to trading on which the
largest number of such securities were traded during the most
recently completed financial year);
(iii) if for any reason none of the prices described in Clauses (i) and
(ii) above are available for such date or the securities are not
listed or admitted to trading on a stock exchange in Canada or any
other securities exchange or securities quotation system, the last
sale price, or if no sale takes place, the average of the high bid
and low asked prices for each such security on such date in the
over-the-counter market, as quoted by any reporting system then in
use (as determined by the Board of Directors); or
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(iv) if for such date none of the prices described in Clauses (i), (ii)
and (iii) above are available or the securities are not listed or
admitted to trading on a stock exchange in Canada or any other
securities exchange and are not quoted by any reporting system, the
average of the closing bid and asked prices for such date as
furnished by a professional market maker making a market in the
securities selected in good faith by the Board of Directors;
provided, however, that if on any such date none of such prices is
available, the closing price per security of such securities on such date
shall be the fair value per security of such securities on such date as
determined in good faith by an internationally recognized investment
banking firm selected by the Board of Directors. 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 dollars, such amount shall be translated into Canadian
dollars on such date at the Canadian Dollar Equivalent thereof.
"OFFER DATE" means the date of a Take-Over Bid.
"OFFER TO ACQUIRE" shall include:
(i) an offer to purchase, or a solicitation of an offer to sell, Voting
Shares and/or Convertible Securities; and
(ii) an acceptance of an offer to sell Voting Shares and/or Convertible
Securities, 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.
"OFFEROR" means a Person who has made a public announcement of a current
intention to make or who is making a Take-Over Bid (including a Permitted
Bid or a Competing Permitted Bid), but excluding any Person referred to in
Clause (3) of the definition of Beneficial Owner in the circumstances
described therein.
"OFFEROR'S SECURITIES" means the aggregate of the Voting Shares
Beneficially Owned on the date of an Offer to Acquire by an Offeror.
"PERMITTED BID" means a Take-Over Bid that is made by means of a take-over
bid circular and that also complies with the following additional
provisions:
(i) the Take-Over Bid is made to all holders of Voting Shares of record,
other than the Offeror; and
(ii) the Take-Over Bid contains, and the provisions for take-up and
payment for securities deposited or tendered thereunder are subject
to, irrevocable and unqualified conditions that:
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(A) no Voting Shares and/or Convertible Securities shall be taken
up or paid for pursuant to the Take-Over Bid (x) prior to the
Close of Business on a date that is not less than 60 days
following the Offer Date, and (y) then only if, at the Close
of Business on the date Voting Shares and/or Convertible
Securities are first taken up or paid for under such Take-Over
Bid, more than 50% of the outstanding Voting Shares and/or
Convertible Securities held by Independent Shareholders have
been deposited or tendered pursuant to the Take-Over Bid and
not withdrawn;
(B) Voting Shares and/or Convertible Securities may be deposited
or tendered pursuant to such Take-Over Bid, unless such
Take-Over Bid is withdrawn, at any time prior to the Close of
Business on the date Voting Shares and/or Convertible
Securities are first taken up or paid for under the Take-Over
Bid;
(C) any Voting Shares and or Convertible Securities deposited or
tendered pursuant to the Take-Over Bid may be withdrawn until
taken up and paid for; and
(D) in the event that the requirement set forth in Subclause
(ii)(A)(y) of this definition is satisfied, the Offeror will
make a public announcement of that fact and the Take-Over Bid
will remain open for deposits and tenders of Voting Shares
and/or Convertible Securities for not less than 10 Business
Days from the date of such public announcement.
"PERMITTED BID ACQUISITION" means an acquisition by a Person of Voting
Shares and/or Convertible Securities pursuant to a Permitted Bid or a
Competing Permitted Bid.
"PERMITTED LOCK-UP AGREEMENT" means an agreement (the "LOCK-UP AGREEMENT")
between a Person and one or more holders of Voting Shares and/or
Convertible Securities (each a "LOCKED-UP PERSON") (the terms of which are
publicly disclosed and a copy of which is made available to the public
(including the Corporation) not later than the date the Lock-Up Bid (as
defined below) is publicly announced or, if the Lock-Up Bid has been made
prior to the date on which such Lock-Up Agreement is entered into, not
later than the date of such Lock-Up Agreement (or, if such date is not a
Business Day, on the Business Day next following such date)), pursuant to
which such Locked-Up Person agrees to deposit or tender Voting Shares
and/or Convertible Securities held by such holder to a Take-Over Bid (the
"LOCK-UP BID") made or to be made by such Person, any of such Person's
Affiliates or Associates or any other Person with which, and in respect of
which security, such Person is acting jointly or in concert; provided
that:
(i) the Lock-Up Agreement permits such Locked-Up Person to terminate its
obligation to deposit or tender to or not to withdraw Voting Shares
and/or Convertible Securities from the Lock-Up Bid in order to
deposit or tender such securities to another Take-Over Bid or
support another transaction where:
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(A) the price or value per Voting Share or Convertible Security
offered under such other Take-Over Bid or transaction exceeds
the price or value per Voting Share or Convertible Security
offered under the Lock-Up Bid;
(B) the price or value per Voting Share or Convertible Security
offered under such other Take-Over Bid or transaction exceeds
by as much as or more than a specified amount (the "SPECIFIED
AMOUNT") the price or value per Voting Share or Convertible
Security offered under the Lock-Up Bid, provided that such
Specified Amount is not greater than 7% of the price or value
per Voting Share or Convertible Security offered under the
Lock-Up Bid; or
(C) the number of Voting Shares and/or Convertible Securities to
be purchased under such other Take-Over Bid or transaction
exceeds by as much as or more than a specified number (the
"SPECIFIED NUMBER") the number of Voting Shares and/or
Convertible Securities that the Offeror has offered to
purchase under the Lock-Up Bid at a price or value per Voting
Share or Convertible Security that is not less than the price
or value per Voting Share or Convertible Security offered
under the Lock-Up Bid, provided that the Specified Number is
not greater than 7% of the number of Voting Shares and/or
Convertible Securities offered under the Lock-Up Bid;
and for greater certainty, such Lock-Up Agreement may contain a right of
first refusal or require a period of delay to give the Offeror under the
Lock-Up Bid an opportunity to match the higher price, value or number in
such other Take-Over Bid or transaction, or other similar limitation on a
Locked-Up Person's right to withdraw Voting Shares from the Lock-Up
Agreement, so long as the limitation does not preclude the exercise by the
Locked-Up Person of the right to withdraw Voting Shares and/or Convertible
Securities in sufficient time to deposit or tender to the other Take-Over
Bid or support the other transaction; and
(ii) no "break-up" fees, "top-up" fees, penalties, expenses or other
amounts that exceed in the aggregate the greater of:
(A) the cash equivalent of 2.5% of the price or value payable
under the Lock-Up Bid to a Locked-Up Person; and
(B) 50% of the amount by which the price or value payable under
another Take-Over Bid or other transaction to a Locked-Up
Person exceeds the price or value of the consideration that
such Locked-Up Person would have received under the Lock-Up
Bid,
shall be payable by a Locked-Up Person pursuant to the Lock-Up Agreement
in the event that the Locked-Up Bid is not successfully concluded or if
any Locked-Up Person fails to deposit or tender Voting Shares and/or
Convertible Securities to the Lock-Up Bid or withdraws Voting Shares
and/or Convertible Securities
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previously deposited or tendered thereto in order to deposit or tender
to another Take-Over Bid or support another transaction.
"PERSON" shall include any individual, firm, partnership, syndicate,
association, trust, trustee, executor, administrator, legal personal
representative, government, governmental body or authority, corporation or
other incorporated or unincorporated organization.
"PREDECESSOR PLANS" means, collectively, the Original Plan, the 1998 Plan
and the 2001 Plan and "PREDECESSOR PLAN" means any one of them.
"PRO RATA ACQUISITION" means an acquisition by a Person of Voting Shares
and/or Convertible Securities (i) as a result of a stock dividend, a stock
split or other event pursuant to which such Person receives or acquires
Voting Shares and/or Convertible Securities on the same pro rata basis as
all other holders of Voting Shares and/or Convertible Securities of the
same class or series; or (ii) pursuant to the receipt or exercise of
rights (other than the Rights) to subscribe for or purchase Voting Shares
and/or Convertible Securities issued by the Corporation on the same pro
rata basis to all of the holders of Voting Shares and/or Convertible
Securities of the same class or series, provided that such rights are
acquired directly from the Corporation; and further provided, in either
case, that such Person does not thereby become the Beneficial Owner of a
greater percentage of Voting Shares than the percentage of Voting Shares
Beneficially Owned by such Person immediately prior to such acquisition.
"RECORD TIME" means 5:00 p.m. (Calgary time) on April 28, 2004.
"REDEMPTION PRICE" shall have the meaning attributed thereto in Subsection
5.1(a).
"REGULAR PERIODIC CASH DIVIDEND" shall have the meaning attributed thereto
in Subsection 2.3(d).
"RIGHTS" means the herein described rights to purchase securities pursuant
to the terms and subject to the conditions set forth herein.
"RIGHTS CERTIFICATE" means a certificate representing the Rights after the
Separation Time which shall be substantially in the form attached hereto
as Exhibit A or such other form as the Corporation and the Rights Agent
may agree.
"RIGHTS REGISTER" and "RIGHTS REGISTRAR" shall each have the meaning
attributed thereto in Subsection 2.6(a).
"SECURITIES ACT (ALBERTA)" means the Securities Act, R.S.A. 2000, c.S-4,
as amended, and the rules and regulations made thereunder, as now in
effect or as the same may from time to time be amended, re-enacted or
replaced.
"SEPARATION TIME" means the Close of Business on the tenth Trading Day
after the earliest of:
(i) the Stock Acquisition Date;
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(ii) the date of the commencement of, or first public announcement of the
current intention of any Person (other than the Corporation or any
Subsidiary of the Corporation) to commence, a Take-Over Bid (other
than a Permitted Bid or Competing Permitted Bid so long as such
Take-Over Bid continues to satisfy the requirements of a Permitted
Bid or a Competing Permitted Bid); and
(iii) the date upon which a Permitted Bid or Competing Permitted Bid
ceases to be a Permitted Bid or a Competing Permitted Bid, as
applicable;
or such later date as may be determined by the Board of Directors in good
faith, provided, however, that if any Take-Over Bid referred to in Clause
(ii) above expires or is terminated or otherwise withdrawn prior to the
Separation Time, such Take-Over Bid shall be deemed, for the purposes of
this definition, never to have been made.
"STOCK ACQUISITION DATE" means the first date of public announcement
(which, for purposes of this definition, shall include a report filed
pursuant to the Securities Act (Alberta), the 1934 Exchange Act or any
other applicable securities laws) by the Corporation or an Acquiring
Person of facts indicating that a Person has become an Acquiring Person.
"SUBSIDIARY": a body corporate is a Subsidiary of another body corporate
if:
(i) it is controlled by (A) that other, or (B) that other and one or
more bodies corporate, each of which is controlled by that other, or
(C) two or more bodies corporate, each of which is controlled by
that other; or
(ii) it is a Subsidiary of a body corporate that is that other's
Subsidiary.
"TAKE-OVER BID" means an Offer to Acquire Voting Shares and/or Convertible
Securities where the Voting Shares and/or Convertible Securities subject
to the Offer to Acquire, together with the Offeror's Securities,
constitute in the aggregate 20% or more of the outstanding Voting Shares
and/or Convertible Securities at the date of the Offer to Acquire.
"TERMINATION TIME" means the time at which the right to exercise Rights
shall terminate pursuant to Section 5.1.
"TRADING DAY", when used with respect to any securities, means a day on
which the principal stock exchange or securities quotation system in
Canada 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 stock exchange or securities quotation system
in Canada, a Business Day.
"TSX" means the Toronto Stock Exchange.
"U.S.-CANADIAN EXCHANGE RATE" means on any date:
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(i) if on such date the Bank of Canada sets an average noon spot rate of
exchange for the conversion of one United States dollar into
Canadian dollars, such rate; and
(ii) in any other case, the rate on such date for the conversion of one
United States dollar into Canadian dollars which is calculated in
the manner which shall be determined by the Board of Directors from
time to time acting in good faith.
"U.S. DOLLAR EQUIVALENT" of any amount which is expressed in Canadian
dollars means on any date the United States dollar equivalent of such
amount determined by reference to the Canadian-U.S. Exchange Rate in
effect on such date.
"VOTING SHARE REDUCTION" means an acquisition or a redemption by the
Corporation of Voting Shares and/or Convertible Securities which, by
reducing the number of outstanding Voting Shares and/or Convertible
Securities, increases the percentage of Voting Shares Beneficially Owned
by any Person.
"VOTING SHARES" means collectively the Common Shares and any other shares
in the capital stock or voting interests issued by the Corporation, the
holders of which are entitled to vote generally in the election of
directors.
"1933 SECURITIES ACT" means the Securities Act of 1933 of the United
States, as amended, and the rules and regulations made thereunder, as now
in effect or as the same may from time to time be amended, re-enacted or
replaced.
"1934 EXCHANGE ACT" means the Securities Exchange Act of 1934 of the
United States, as amended, and the rules and regulations made thereunder,
as now in effect or as the same may from time to time be amended,
re-enacted or replaced.
1.2 CURRENCY
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
1.3 NUMBER AND GENDER
Wherever the context so requires, terms used herein importing the singular
number only shall include the plural and vice versa and words importing any one
gender shall include all others.
1.4 DESCRIPTIVE HEADINGS AND REFERENCES
Descriptive headings and the Table of Contents appear herein for
convenience of reference only and shall not affect the meaning or construction
of any of the provisions hereof. All references to Articles, Sections,
Subsections, Clauses and Exhibits are to the articles, sections, subsections,
clauses and exhibits forming part of this Agreement unless otherwise indicated.
The words "hereto", "herein", "hereof", "hereunder", "this Agreement" and
similar expressions refer to this Agreement including the Exhibits, as the same
may be amended, supplemented or restated from time to time.
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1.5 ACTING JOINTLY OR IN CONCERT
For purposes of this Agreement, a Person is acting jointly or in concert
with every other Person who is a party to any agreement, commitment or
understanding, whether formal or informal and whether or not in writing, with
the first mentioned Person to acquire or Offer to Acquire Voting Shares and/or
Convertible Securities (other than customary agreements with and between
underwriters and/or members of banking groups and/or selling group members with
respect to a distribution of securities pursuant to a prospectus or by way of a
private placement and other than pursuant to pledges of securities in the
ordinary course of business).
1.6 HOLDER
As used in this Agreement, unless the context otherwise requires, the term
"HOLDER" of any Rights means the registered holder of such Rights (or, prior to
the Separation Time, of the associated Common Shares).
1.7 CALCULATION OF VOTING SHARES BENEFICIALLY OWNED
For the purposes of this Agreement, the percentage of Voting Shares
Beneficially Owned by a Person shall be and be deemed to be the product
determined by the formula:
100 X A
--
B
where
A = the number of votes for the election of all
directors generally attaching to the Voting Shares
Beneficially Owned by such Person; and
B = the number of votes for the election of all
directors generally attaching to all outstanding
Voting Shares.
Where a Person is deemed to Beneficially Own unissued Voting Shares, such
Voting Shares shall be deemed to be outstanding for the purposes of both A and B
above, but no other unissued Voting Shares shall, for the purposes of such
calculation, be deemed to be outstanding.
ARTICLE 2
THE RIGHTS
2.1 LEGEND ON VOTING SHARE CERTIFICATES
Voting Share certificates issued after the Record Time and prior to the
Close of Business on the earlier of the Separation Time and the Expiration Time
shall evidence one Right for each Voting Share represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them prior to
the Effective Date the legend set forth in Section 2.1 of the
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applicable Predecessor Plan and which legend shall be deemed to be amended for
all purposes to read the same as the legend set forth below, and after the
Effective Date the following legend:
"Until the Separation Time (as such term is defined in the Shareholder
Rights Plan Agreement referred to below), this certificate also evidences
and entitles the holder hereof to certain Rights as set forth in an
Amended and Restated Shareholder Rights Plan Agreement dated as of April
28, 2004, as amended, supplemented or restated from time to time (the
"RIGHTS AGREEMENT") between AGRIUM INC. (the "CORPORATION") and CIBC
MELLON TRUST COMPANY, as Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of which is on file and may be
inspected during normal business hours at the registered office of the
Corporation. In certain circumstances, as set forth in the Rights
Agreement, such Rights may be amended, may be redeemed, may expire, may
become null and void or may be evidenced by separate certificates and may
no longer be evidenced by this certificate. The Corporation will mail or
arrange for the mailing of a copy of the Rights Agreement to the holder of
this certificate without charge as soon as practicable after the receipt
of a written request therefor."
Certificates representing Voting Shares that are issued and outstanding at the
Record Time shall also evidence one Right for each Voting Share evidenced
thereby, notwithstanding the absence of the foregoing legend, until the earlier
of the Separation Time and the Expiration Time. Following the Separation Time,
Rights will be evidenced by Rights Certificates issued pursuant to Section 2.2
hereof.
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, from and after the Separation Time and prior to
the Expiration Time, to purchase one Common Share for the Exercise
Price (which Exercise Price and number of Common Shares are subject
to adjustment as set forth below) or its U.S. Dollar Equivalent as
at the Business Day immediately preceding the day on which such
Right is exercised. Notwithstanding any other provision of this
Agreement, any Rights held by the Corporation or any of its
Subsidiaries shall be null and void.
(b) Until the Separation Time, (i) the Rights shall not be exercisable
and no Right may be exercised, and (ii) for administrative purposes,
each Right will be evidenced by the certificate for the associated
Voting Share registered in the name of the holder thereof (which
certificate shall be deemed to represent a Rights Certificate) and
will be transferable only together with, and will be transferred by
a transfer of, such associated Voting Share.
(c) From and after the Separation Time and prior to the Expiration Time,
the Rights may be exercised and the registration and transfer of the
Rights shall be separate from and independent of Voting Shares.
Promptly following the Separation Time, the Corporation will prepare
and the Rights Agent will mail to each holder
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of record of Voting Shares as of the Separation Time (other than an
Acquiring Person, any other Person whose Rights are or become null
and void pursuant to the provisions of Subsection 3.1(b) 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), at such holder's address as shown by the
records of the Corporation (the Corporation hereby agreeing to
furnish copies of such records to the Rights Agent for this
purpose):
(i) a Rights Certificate appropriately completed, representing the
number of Rights held by such holder at the Separation Time
and having such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the
Corporation may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required
to comply with any law or with any rule or regulation or
judicial or administrative order made pursuant thereto or with
any rule or regulation of any self-regulatory organization,
stock exchange or securities quotation system on which the
Rights may from time to time be listed or traded, or to
conform to usage; and
(ii) a disclosure statement prepared by the Corporation describing
the Rights;
provided, however, that a nominee shall be sent the materials
provided for in Clauses (i) and (ii) above only in respect of Voting
Shares held of record by it which are not Beneficially Owned by an
Acquiring Person. In order for the Corporation to determine whether
any Person is holding Voting Shares which are Beneficially Owned by
another Person, the Corporation may require such first-mentioned
Person to furnish such information and documentation as the
Corporation deems necessary or appropriate to make such
determination.
(d) Rights may be exercised in whole or in part on any Business Day
after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent at its principal office in the City
of Calgary, Alberta or, with the approval of the Rights Agent, at
any other office of the Rights Agent in the cities designated from
time to time for that purpose by the Corporation:
(i) the Rights Certificate evidencing such Rights with an election
to exercise (an "ELECTION TO EXERCISE") substantially in the
form attached to the Rights Certificate appropriately
completed and duly executed by the holder or his executors or
administrators or other personal representatives or his legal
attorney duly appointed by an instrument in writing in form
and executed in a manner satisfactory to the Rights Agent; and
(ii) payment by certified cheque, banker's draft or money order
payable to the order of the Corporation, 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 the transfer or
delivery of Rights Certificates or the issuance or delivery of
certificates
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for Voting Shares in a name other than that of the holder of
the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with a completed Election to
Exercise appropriately completed and duly executed which does not
indicate that such Right is null and void as provided by Subsection
3.1(b), accompanied by payment as set forth in Clause 2.2(d)(ii),
the Rights Agent (unless otherwise instructed in writing by the
Corporation) will thereupon promptly:
(i) requisition from the transfer agent of the Common Shares
certificates for the number of Common Shares to be purchased
(the Corporation hereby irrevocably agreeing to authorize its
transfer agent to comply with all such requisitions);
(ii) after receipt of such certificates referred to in Clause
2.2(e)(i), deliver such certificates 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;
(iii) when appropriate, requisition from the Corporation the amount
of cash to be paid in lieu of issuing fractional Common Shares
or fractional Rights;
(iv) after receipt, deliver such cash referred to in Clause
2.2(e)(iii) to or to the order of the registered holder of the
Rights Certificate; and
(v) tender to the Corporation all payments received upon exercise
of the Rights.
(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 Corporation covenants and agrees that it will:
(i) take all such action as may be necessary and within its power
to ensure that all securities delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such securities (subject to payment of the Exercise Price), be
duly and validly authorized, executed, issued and delivered as
fully paid and non-assessable;
(ii) take all such action as may be necessary and within its power
to comply with any applicable requirements of the Canada
Business Corporations Act, the Securities Act (Alberta), the
securities acts or comparable legislation of each of the other
provinces of Canada, the 1933 Securities Act and the 1934
Exchange Act and any other applicable law, rule or regulation,
in connection with the issuance and delivery of the Rights
-20-
Certificates and the issuance of any Common Shares upon
exercise of Rights;
(iii) use reasonable efforts to cause all Common Shares issued upon
exercise of Rights to be listed upon issuance on the TSX and
each other stock exchange and/or securities quotation system
on which the Common Shares are then listed or admitted to
trading at that time;
(iv) cause to be reserved and kept available out of its authorized
and unissued Common Shares the number of Common Shares that,
as provided in this Agreement, will from time to time be
sufficient to permit the exercise in full of all outstanding
Rights; and
(v) 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 or capital
gains of the holder or exercising holder or any liability of
the Corporation to withhold tax) and charges which may be
payable in respect of the original issuance or delivery of the
Rights Certificates or certificates for Common Shares,
provided that the Corporation shall not be required to pay any
transfer tax or charge which may be payable in respect of 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 transferred or
exercised.
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
(a) The Exercise Price, the number and kind of securities subject to
purchase upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided
in this Section 2.3.
(b) In the event the Corporation shall at any time after the Record Time
and prior to the Expiration Time:
(i) declare or pay a dividend on the Common Shares payable in
Common Shares or other capital stock of the Corporation (or
Convertible Securities) other than pursuant to any optional
stock dividend program, dividend reinvestment plan or dividend
payable in Common Shares in lieu of a regular periodic cash
dividend;
(ii) subdivide or change the outstanding Common Shares into a
greater number of Common Shares;
(iii) consolidate or change the outstanding Common Shares into a
smaller number of Common Shares; or
(iv) issue any Common Shares or other capital stock of the
Corporation (or Convertible Securities) in respect of, in lieu
of, or in exchange for existing Common Shares;
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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 shall 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, consolidation or issuance would hold
thereafter as a result thereof (assuming the exercise of all
such purchase, exercise, conversion or exchange rights, if
any); and
(y) each Right held prior to such adjustment shall become that
number of Rights equal to the Expansion Factor and the
adjusted number of Rights will be deemed to be distributed
among the Common Shares with respect to which the original
Rights were associated (if they remain outstanding) and the
Common Shares issued or issuable in respect of such dividend,
subdivision, change, consolidation or issuance, so that each
such Common Share (or other capital stock) will have exactly
one Right associated with it.
For greater certainty, if the securities purchasable upon exercise
of Rights are to be adjusted, the securities purchasable upon
exercise of each Right after such adjustment will be the securities
that a holder of the securities purchasable upon exercise of one
Right immediately prior to such dividend, subdivision, change,
consolidation or issuance would hold thereafter as a result thereof.
To the extent that such rights of purchase, exercise, conversion or
exchange are not exercised prior to the expiration thereof, the
Exercise Price shall be readjusted to the Exercise Price which would
then be in effect based on the number of Common Shares (or
Convertible Securities) actually issued upon the exercise of such
rights.
If after the Record Time and prior to the Expiration Time the
Corporation shall issue any shares of capital stock other than
Common Shares in a transaction of a type described in Clause
2.3(b)(i) or (iv), 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 Corporation and the
Rights Agent shall amend or supplement this Agreement in order to
effect such treatment.
If an event occurs which would require an adjustment under both this
Section 2.3 and Section 3.1, the adjustment provided for in this
Section 2.3 shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 3.1. Adjustments pursuant to
Section 2.3 shall be made successively, whenever an event referred
to in Section 2.3 occurs.
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If the Corporation shall at any time after the Record Time and prior
to the Separation Time issue any Common Shares otherwise than in a
transaction referred to in this Subsection 2.3(b), each such Common
Share so issued shall automatically have one new Right associated
with it, which Right shall be evidenced by the certificate
representing such associated Common Share.
(c) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time fix a record date for the issuance
to all holders of Common Shares of rights, options or warrants
entitling them (for a period expiring within 45 days after such
record date) to subscribe for or purchase Common Shares (or
Convertible Securities pursuant to which the holder may acquire
Common Shares) at a price per Common Share (or, if a Convertible
Security having a purchase, exercise, conversion or exchange price,
including the price required to be paid to purchase such convertible
or exchangeable security or right, per share) less than 90% of the
Market Price per Common Share on such record date, the Exercise
Price shall be adjusted in the manner set forth below. The Exercise
Price in effect after such record date shall 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 that 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 purchase such convertible or
exchangeable securities or rights)) would purchase at such Market
Price per Common Share 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 by
delivery of 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 whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the
holders of Rights. To the extent that such rights of purchase,
exercise, conversion or exchange are not exercised prior to the
expiration thereof, the Exercise Price shall be readjusted to the
Exercise Price which would then be in effect based on the number of
Common Shares (or securities convertible into or exchangeable for
Common Shares) actually issued upon the exercise of such rights.
Such adjustment shall be made successively whenever such a record
date is fixed. For purposes of this Agreement, 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 Corporation
and/or the investment of periodic optional payments and/or employee
benefit or similar plans (so long as such right to purchase is in no
case evidenced by the delivery of rights or warrants) shall not be
deemed to constitute an issue of rights
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or warrants by the Corporation; provided, however, 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% of the
current market price per share (determined as provided in such
plans) of the Common Shares.
(d) In the event the Corporation shall at any time after the Record Time
and prior to the Separation 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
(as defined below) or a dividend paid in Common Shares) or rights,
options or warrants (excluding those referred to in Subsection
2.3(c)), the Exercise Price shall be adjusted. 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
portion of the assets, evidences of indebtedness, rights or warrants
so to be distributed applicable to the securities purchasable upon
exercise of one Right. Such adjustment shall be made successively
whenever such a record date is fixed.
For the purpose of this Subsection 2.3(d), "Regular Periodic Cash
Dividend" means cash dividends paid at regular intervals in any
fiscal year of the Corporation 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 Corporation 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 Corporation on its Common
Shares in its three immediately preceding fiscal years; and
(iii) 100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its immediately
preceding fiscal year.
(e) 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, consolidation or issuance, in the case of
an adjustment made pursuant to Subsection 2.3(b) above; and
(ii) the record date for the applicable dividend or distribution,
in the case of an adjustment made pursuant to Subsection
2.3(c) or (d) above subject to readjustment to reverse same if
such distribution shall not be made.
(f) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any shares of capital stock
(other than Common Shares), or rights, options or warrants to
subscribe for or purchase any such capital stock, or securities
convertible into or exchangeable for any such capital
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stock in a transaction referred to in Clause 2.3(b)(i) or (iv), or
if the Corporation shall take any other action (other than the issue
of Common Shares) which might have a negative effect on the holders
of Rights, if the Board of Directors acting in good faith determines
that the adjustments contemplated by Subsections 2.3(b), (c) and (d)
above in connection with such transaction will not appropriately
protect the interests of the holders of Rights, the Board of
Directors may determine what other adjustments to the Exercise
Price, number of Rights and/or securities purchasable upon exercise
of Rights would be appropriate and, notwithstanding Subsections
2.3(b), (c) and (d) above, but subject to the prior consent of the
holders of Common Shares or Rights obtained as set forth in
Subsection 5.5(b) or (c) as applicable, such adjustments, rather
than the adjustments contemplated by Subsections 2.3(b), (c) and (d)
above, shall be made. The Corporation and the Rights Agent shall
amend or supplement this Agreement as appropriate to provide for
such adjustments.
(g) Notwithstanding anything herein to the contrary, no adjustment of
the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such Exercise
Price; provided, however, that any adjustments which by reason of
this Subsection 2.3(g) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
adjustments made pursuant to this Section 2.3 shall be made to the
nearest cent or to the nearest ten-thousandth of a Common Share, as
the case may be.
(h) If as a result of an adjustment made pursuant to Section 3.1, the
holder of any Right thereafter exercised shall become entitled to
receive any securities other than Common Shares, thereafter the
number of such other shares so receivable upon exercise of any Right
and the applicable Exercise Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Common Shares contained in the provisions of this Section 2.3 and
the provisions of this Agreement with respect to the Common Shares
shall apply on like terms to any such other securities.
(i) All Rights originally issued by the Corporation subsequent to any
adjustment made to an Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of
Common Shares purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(j) Unless the Corporation shall have exercised its election, as
provided in Subsection 2.3(k), upon each adjustment of the Exercise
Price as a result of the calculations made in Subsections 2.3(c) and
(d), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, that number of Common Shares obtained by:
(i) multiplying (A) the number of Common Shares covered by a Right
immediately prior to such adjustment, by (B) the relevant
Exercise Price in
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effect immediately prior to such adjustment of the relevant
Exercise Price; and
(ii) dividing the product so obtained by the relevant Exercise
Price in effect immediately after such adjustment of the
relevant Exercise Price.
(k) The Corporation may elect on or after the date of any adjustment of
an Exercise Price to adjust the number of Rights, in lieu of any
adjustment in the number of Common Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the
number of Common Shares for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become the
number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the relevant Exercise Price in effect
immediately prior to adjustment of relevant Exercise Price by the
relevant Exercise Price in effect immediately after adjustment of
the relevant Exercise Price. The Corporation shall make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may
be the date on which the relevant Exercise Price is adjusted or any
day thereafter, but, if the Rights Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Subsection
2.3(k), the Corporation shall, as promptly as practicable, cause to
be distributed to holders of record of Rights Certificates on such
record date, Rights Certificates evidencing, subject to Section 5.6,
the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Corporation,
shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender
thereof if required by the Corporation, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled
after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided
for herein and may bear, at the option of the Corporation, the
relevant adjusted Exercise Price and shall be registered in the
names of holders of record of Rights Certificates on the record date
specified in the public announcement.
(l) 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 express the
securities so purchasable which were expressed in the initial Rights
Certificates issued hereunder.
(m) In any case in which this Section 2.3 shall require that an
adjustment in the Exercise Price be made effective as of a record
date for a specified event, the Corporation may elect to defer until
the occurrence of such event the issuance to the holder of any Right
exercised after such record date of the number of Common Shares and
other securities of the Corporation, if any, issuable upon
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such exercise over and above the number of Common Shares and other
securities of the Corporation, if any, issuable upon such exercise
on the basis of the relevant Exercise Price in effect prior to such
adjustment; provided, however, that the Corporation shall deliver to
such holder a due ▇▇▇▇ or other appropriate instrument evidencing
such holder's right to receive such additional Common Shares
(fractional or otherwise) or other securities upon the occurrence of
the event requiring such adjustment.
(n) Notwithstanding anything in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required
by this Section 2.3, as and to the extent that in its good faith
judgment the Board of Directors shall determine to be advisable in
order that any (i) subdivision or consolidation of the Common
Shares, (ii) issuance (wholly or in part for cash) of Common Shares
at less than the applicable Market Price, (iii) issuance (wholly for
cash) of any Common Shares or securities that by their terms are
exchangeable for or convertible into or give a right to acquire
Common Shares, (iv) stock dividends, or (v) issuance of rights,
options or warrants referred to in this Section 2.3, hereafter made
by the Corporation to holders of its Common Shares, subject to
applicable taxation laws, shall not be taxable to such shareholders.
(o) After the Separation Time, the Corporation will not, except as
permitted by the provisions hereof, take (or permit any Subsidiary
of the Corporation to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Whenever an adjustment to the Exercise Price or a change in the
securities purchasable upon the exercise of Rights is made pursuant
to this Section 2.3, the Corporation shall promptly:
(i) prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment;
(ii) file with the Rights Agent and with each transfer agent for
the Common Shares, a copy of such certificate; and
(iii) cause notice of the particulars of such adjustment or change
to be given to the holders of the Rights.
Failure to file such certificate or to cause such notice to be given
as aforesaid, or any defect therein, shall not affect the validity
of any such adjustment or change.
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE
Each Person in whose name any certificate for Common Shares or other
securities, if applicable, is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Common Shares or
other securities, if applicable, represented thereby,
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and such certificate shall be dated the date upon which the Rights Certificate
evidencing such Rights was duly surrendered in accordance with Subsection 2.2(e)
(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 Corporation are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the Common
Share transfer books of the Corporation are open.
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, President or any Vice
President and by the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Corporation. The
signature of any of these officers on the Rights Certificates may be
manual or facsimile. Rights Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper
officers of the Corporation shall bind the Corporation,
notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such
Rights Certificates.
(b) Promptly after the Corporation learns of the Separation Time, the
Corporation will notify the Rights Agent in writing of such
Separation Time and will deliver Rights Certificates executed by the
Corporation to the Rights Agent for countersignature and a
disclosure statement as described in Subsection 2.2(c), and the
Rights Agent shall countersign (manually or by facsimile signature)
and mail such Rights Certificates and disclosure statement to the
holders of the Rights pursuant to Subsection 2.2(c). No Rights
Certificate shall be valid for any purpose until countersigned by
the Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
(a) From and after the Separation Time, the Corporation will cause to be
kept a register (the "RIGHTS REGISTER") in which, subject to such
reasonable regulations as it may prescribe, the Corporation will
provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "RIGHTS REGISTRAR" for the purpose of
maintaining the Rights Register for the Corporation and registering
Rights and transfers of Rights as herein provided. In the event that
the Rights Agent shall cease to be the Rights Registrar, the Rights
Agent will have the right to examine the Rights Register at all
reasonable times.
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
Corporation will execute, and the Rights
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Agent will countersign and deliver, in the name of the holder
thereof 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 the valid obligations of the
Corporation, and such Rights shall be entitled to the same benefits
under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(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 Corporation or
the Rights Agent, as the case may be, duly executed, by the holder
thereof or such holder's attorney duly authorized in writing. As a
condition to the issuance of any new Rights Certificate under this
Section 2.6, the Corporation or the Rights Agent 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) The Corporation shall not be required to register the transfer or
exchange of any Rights after the Rights have been terminated
pursuant to the provisions of this Agreement.
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 Corporation shall execute
and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of
the destruction, loss or theft of any Rights Certificate, and (ii)
such security or indemnity as may be required by them in their sole
discretion to save each of them and any of their agents harmless,
then, in the absence of notice to the Corporation or the Rights
Agent that such Rights Certificate has been acquired by a bona fide
purchaser, the Corporation shall execute and upon 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 Corporation may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the
fees and expenses of the Rights Agent) connected therewith.
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(d) Every new Rights Certificate issued pursuant to this Section 2.7 in
lieu of any destroyed, lost or stolen Rights Certificate shall
evidence a contractual obligation of the Corporation, whether or not
the destroyed, lost or stolen Rights Certificate shall be at any
time enforceable by anyone, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any and
all other Rights duly issued hereunder.
2.8 PERSONS DEEMED OWNERS
Prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Voting Share certificate) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent may deem and treat the Person in whose name such Rights
Certificate (or, prior to the Separation Time, such Voting Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever.
2.9 DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9, except as expressly permitted by this Agreement.
The Rights Agent shall, subject to applicable law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
2.10 AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights, by accepting such Rights, consents and agrees with
the Corporation and the Rights Agent and with every other holder of Rights that:
(a) such holder shall be bound by and subject to the provisions of this
Agreement 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 Voting Share certificate representing such Right;
(c) after the Separation Time, the Rights 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 Voting Share certificate) for
registration of transfer, the Corporation, the Rights Agent and any
agent of the Corporation or the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or,
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prior to the Separation Time, the associated Voting 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 Voting Share
certificate made by anyone other than the Corporation or the Rights
Agent) for all purposes whatsoever, and neither the Corporation nor
the Rights Agent shall be affected by any notice to the contrary;
(e) such holder of Rights is not entitled to receive any fractional
Rights or fractional Common Shares or other securities upon the
exercise of Rights;
(f) without the approval of any holder of Rights or Voting Shares and
upon the sole authority of the Board of Directors acting in good
faith, this Agreement may be amended or supplemented from time to
time in accordance with the provisions of Section 5.5 and the third
last paragraph of Subsection 2.3(b); and
(g) notwithstanding anything in this Agreement to the contrary, neither
the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or to any other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
government, regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT
OF A FLIP-IN EVENT
3.1 FLIP-IN EVENT
(a) Subject to Subsection 3.1(b) and Sections 5.1 and 5.2, in the event
that prior to the Expiration Time a Flip-in Event shall occur, each
Right shall constitute, effective from and after the Close of
Business on the tenth Trading Day following the Stock Acquisition
Date, the right to purchase from the Corporation, upon exercise
thereof in accordance with the terms hereof, that number of Common
Shares having an aggregate Market Price on the date of consummation
or occurrence of such Flip-in Event equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price (such right
to be appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 in the event that after such
date of consummation or occurrence an event of a type analogous to
any of the events described in Section 2.3 shall have occurred with
respect to such Common Shares).
(b) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of a 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:
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(i) an Acquiring Person (or an Affiliate or Associate of an
Acquiring Person, or any Person acting jointly or in concert
with an Acquiring Person); or
(ii) a transferee or other successor-in-title, directly or
indirectly, from an Acquiring Person (or an Affiliate or
Associate of an Acquiring Person, or any Person acting jointly
or in concert with an Acquiring Person) in a transfer of
Rights, whether or not for consideration, that the Board of
Directors acting in good faith has determined is part of a
plan, understanding or scheme of an Acquiring Person (or an
Affiliate or Associate of an Acquiring Person, or any Person
acting jointly or in concert with an Acquiring Person) that
has the purpose or effect of avoiding the provisions of Clause
3.1(b)(i);
shall become null and void without any further action and any holder
of such Rights (including transferees or other successors-in-title)
shall thereafter have no right to exercise or transfer such Rights
under any provision of this Agreement and shall have no other rights
whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise. The holder of any Rights represented
by a Rights Certificate which is submitted to the Rights Agent upon
exercise or for registration of transfer or exchange which does not
contain the necessary certifications set forth in the Rights
Certificate establishing that such Rights are not null and void
under this Subsection 3.1(b) shall be deemed to be an Acquiring
Person for the purposes of this Section 3.1 and such Rights shall
become null and void.
(c) Any Rights Certificate that represents Rights Beneficially Owned by
a Person described in either Clause 3.1(b)(i) or 3.1(b)(ii) or
transferred to any nominee of any such Person, and any Rights
Certificate issued upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain 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, or a
Person acting jointly or in concert with any of them (as
such terms are defined in the Shareholder Protection
Rights Agreement). This Rights Certificate and the
Rights represented hereby shall become null and void in
the circumstances specified in Subsection 3.1(b) of the
Shareholder Protection Rights Agreement."
provided, however, that the Rights Agent shall not be under any
responsibility to ascertain the existence of facts that would
require the imposition of such legend but shall be required to
impose such legend only if instructed to do so in writing by the
Corporation or if a holder fails to certify upon transfer or
exchange in the space provided on the Rights Certificate that such
holder is not a Person described in such legend. The issuance of a
Rights Certificate without the legend referred to
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in this Subsection 3.1(c) shall be of no effect on the provisions of
Subsection 3.1(b).
ARTICLE 4
THE RIGHTS AGENT
4.1 GENERAL
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation and the holders of Rights in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Corporation may from time to time appoint one
or more co-rights agents (each a "CO-RIGHTS AGENT") as it may deem
necessary or desirable, subject to the approval of the Rights Agent.
In the event the Corporation appoints one or more Co-Rights Agents,
the respective duties of the Rights Agent and Co-Rights Agents shall
be as the Corporation may determine with the approval of the Rights
Agent and the Co-Rights Agents. The Corporation agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
reasonably incurred in the execution and administration of this
Agreement and the exercise and performance of its duties hereunder
(including the reasonable fees and other disbursements of any expert
retained by the Rights Agent with the approval of the Corporation,
such approval not to be unreasonably withheld). The Corporation also
agrees to indemnify the Rights Agent, its officers, directors,
employees and agents for, and to hold it harmless against, any loss,
liability, cost, claim, action, suit, damage or expense, incurred
without negligence, bad faith or wilful misconduct on the part of
the Rights Agent, for anything done, suffered or omitted by the
Rights Agent in connection with the acceptance, execution and
administration of this Agreement and the exercise and performance of
its duties hereunder, including the legal costs and expenses of
defending against any claim of liability, which right to
indemnification will survive the termination of this Agreement and
the resignation or removal of the Rights Agent.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance
upon any certificate for Common Shares, Rights Certificate,
certificate for other securities of the Corporation, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
(c) The Corporation shall inform the Rights Agent in a reasonably timely
manner of events which may materially affect the administration of
this Agreement by the Rights Agent and, at any time upon request,
shall provide to the Rights Agent an incumbency certificate
certifying the then current officers of the Corporation.
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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 from any merger,
amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation succeeding to
the shareholder services business of the Rights Agent or any
successor Rights Agent, will be the successor to the Rights Agent
under this Agreement without the execution or 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. In case
at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates have not been
countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates will have the full force provided in
the Rights Certificates and in this Agreement.
(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 such Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates have not 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
will have the full force provided in the Rights Certificates and in
this Agreement.
4.3 DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the
Corporation and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may retain and consult with legal counsel (who may
be legal counsel for the Corporation), 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 and the Rights Agent may
also, with the approval of the Corporation (such approval not to be
unreasonably withheld), retain and consult with such other experts
or advisors as the Rights Agent shall consider necessary or
appropriate to properly carry out its duties and obligations imposed
under this Agreement (at the Corporation's expense) and the Rights
Agent shall be entitled to act and rely in good faith on the advice
of such experts or advisors.
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(b) Whenever in the performance of its duties under this Agreement, the
Rights Agent deems it necessary or desirable that any fact or matter
be proved or established by the Corporation prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate
signed by an individual believed by the Rights Agent to be the
Chairman of the Board, the Vice Chairman of the Board, the President
or any Vice President and by the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Corporation and
delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken, omitted 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 and that of its officers,
directors and employees.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Common Shares or the Rights Certificates (except
its countersignature thereof) or be required to verify the same, but
all such statements and recitals are and will be deemed to have been
made by the Corporation only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any
Common Share certificate or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach
by the Corporation of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor will it be responsible
for any change in the exercisability of the Rights (including the
Rights becoming null and void pursuant to Subsection 3.1(b)) or any
adjustment required under the provisions of Section 2.3 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 Subsection 2.3(p)
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 non-assessable.
(f) The Corporation 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.
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(g) The Rights Agent is hereby authorized and directed to accept written
instructions with respect to the performance of its duties hereunder
from any individual believed by the Rights Agent to be Chairman of
the Board, the Vice Chairman of the Board, the President, any Vice
President or the Secretary or any Assistant Secretary or the
Treasurer or any Assistant Treasurer of the Corporation, and to
apply to such individuals for advice or instructions in connection
with its duties, and it shall not be liable for any action taken,
omitted or suffered by it in good faith in accordance with
instructions of any such individual; it is understood that
instructions to the Rights Agent shall, except where circumstances
make it impossible or the Rights Agent otherwise agrees, be given in
writing and, where not in writing, such instructions shall be
confirmed in writing as soon as reasonably possible after the giving
of such instructions.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in Common Shares, Rights
or other securities of the Corporation or become pecuniarily
interested in any transaction in which the Corporation may be
interested, or contract with or lend money to the Corporation or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Corporation or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act, omission,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Corporation resulting from any such act,
omission, default, neglect or misconduct, provided reasonable care
was exercised in the selection and continued employment thereof.
4.4 CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice (or such lesser notice as is acceptable to the
Corporation) in writing mailed to the Corporation and to each transfer agent of
Voting Shares by registered or certified mail. The Corporation may remove the
Rights Agent upon 30 days' notice in writing, given to the Rights Agent and to
the transfer agent of the Common Shares (by personal delivery or registered or
certified mail), and to the holders of the Rights in accordance with Section
5.10. If the Rights Agent should resign or be removed or otherwise become
incapable of acting, the Corporation will appoint a successor to the Rights
Agent. If the Corporation fails to make such appointment within a period of 30
days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent (at the
Corporation's expense) or by the holder of any Rights (which holder shall, with
such notice if given after the Separation Time, submit such holder's Rights
Certificate for inspection by the Corporation), then the resigning Rights Agent
or 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 Corporation or by such a court, shall be a corporation
incorporated under the laws of Canada or a province thereof authorized to carry
on the business of a trust company in
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the Province of Alberta. After appointment, the successor Rights Agent will be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent, upon receipt of any and all outstanding amounts owing
to it pursuant to this Agreement, shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Corporation will file notice thereof in writing with the predecessor Rights
Agent and the transfer agent of the Common 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 AND TERMINATION OF RIGHTS
(a) With the prior consent of the holders of Voting Shares or Rights
obtained in accordance with Subsection 5.5(b) or (c), as applicable,
the Board of Directors may, at any time prior to the occurrence of a
Flip-in Event as to which the application of Section 3.1 has not
been waived pursuant to Section 5.2, elect to redeem all but not
less than all of the outstanding Rights at a redemption price of
$0.00001 per Right, appropriately adjusted in a manner analogous to
the applicable adjustment to the Exercise Price provided for in
Section 2.3 if an event analogous to any of the events described in
Section 2.3 shall have occurred (such redemption price being herein
referred to as the "REDEMPTION PRICE").
(b) If a Person acquires, pursuant to a Permitted Bid, a Competing
Permitted Bid or an Exempt Acquisition occurring under Subsection
5.2(a) or (b), outstanding Voting Shares, the Board of Directors
shall, notwithstanding the provisions of Subsection 5.1(a),
immediately upon such acquisition and without further formality, be
deemed to have elected to redeem the Rights at the Redemption Price.
(c) Where a Take-Over Bid that is not a Permitted Bid or Competing
Permitted Bid expires, is terminated or is otherwise withdrawn after
the Separation Time has occurred and prior to the occurrence of a
Flip-in Event, the Board of Directors may elect to redeem all of the
outstanding Rights at the Redemption Price.
(d) If the Board of Directors elects or is deemed to have elected to
redeem the Rights and, in circumstances where Subsection 5.1(a) is
applicable, the requisite consent is given by the holders of Voting
Shares or Rights, as applicable, (i) 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
shall be to receive the Redemption Price, and (ii) subject to
Subsection 5.1(f), no further Rights shall thereafter be issued.
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(e) Within 10 Business Days of the Board of Directors electing or having
been deemed to have elected to redeem the Rights or, in
circumstances where Subsection 5.1(a) is applicable, within 10
Business Days after the requisite consent is given by the holders of
Voting Shares or Rights, as applicable, the Corporation shall give
notice of redemption to the holders of the outstanding Rights by
mailing such notice to each such holder at his last address as it
appears upon the Rights Register or, prior to the Separation Time,
on the register of Voting Shares maintained by the Corporation's
transfer agent or transfer agents. Each such notice of redemption
shall state the method by which the payment of the Redemption Price
shall be made.
(f) Upon the Rights being redeemed pursuant to Subsection 5.1(c), all
the provisions of this Agreement shall continue to apply as if the
Separation Time had not occurred and Rights Certificates
representing the number of Rights held by each holder of record of
Voting Shares as of the Separation Time had not been mailed to each
such holder and, for all purposes of this Agreement, the Separation
Time shall be deemed not to have occurred and Rights shall remain
attached to the outstanding Voting Shares, subject to and in
accordance with the provisions of this Agreement.
5.2 WAIVER OF FLIP-IN EVENTS
(a) With the prior consent of the holders of Voting Shares obtained in
accordance with Subsection 5.5(b), the Board of Directors may, at
any time prior to the occurrence of a Flip-in Event that would occur
by reason of an acquisition of Voting Shares otherwise than in the
circumstances described in Subsection 5.2(b) or (c), waive the
application of Section 3.1 to such Flip-in Event by written notice
delivered to the Rights Agent.
(b) The Board of Directors may, at any time prior to the occurrence of a
Flip-in Event that would occur by reason of a Take-Over Bid made by
means of a take-over bid circular sent to all holders of record of
Voting Shares (which, for greater certainty, shall not include the
circumstances described in Subsection 5.2(c)), waive the application
of Section 3.1 to such Flip-in Event by written notice delivered to
the Rights Agent, provided, however, that if the Board of Directors
waives the application of Section 3.1 to such a Flip-in Event, the
Board of Directors shall be deemed to have waived the application of
Section 3.1 to any other Flip-in Event occurring by reason of any
Take-Over Bid which is made by means of a take-over bid circular
sent to all holders of record of Voting Shares prior to the expiry,
termination or withdrawal of any Take-Over Bid in respect of which a
waiver is, or is deemed to have been, granted under this Subsection
5.2(b).
(c) The Board of Directors may waive the application of Section 3.1 to a
Flip-in Event provided that the following conditions are satisfied:
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(i) the Board of Directors has determined that the Acquiring
Person became an Acquiring Person by inadvertence and without
any intention to become, or knowledge that it would become, an
Acquiring Person; and
(ii) such Acquiring Person has reduced its Beneficial Ownership of
Voting Shares such that, at the time of the waiver pursuant to
this Subsection 5.2(c), it is no longer an Acquiring Person.
5.3 EXPIRATION
No Person shall have any rights pursuant to this Agreement in respect of
any Right after the Expiration Time, except the Rights Agent as specified in
Subsection 4.1(a).
5.4 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the 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.
5.5 SUPPLEMENTS AND AMENDMENTS
(a) The Corporation may from time to time prior to or after the
Separation Time amend, supplement or restate this Agreement without
the approval of any holders of Rights or Voting Shares in order to
correct any clerical or typographical error or, subject to
Subsection 5.5(d), to maintain the validity and effectiveness of
this Agreement as a result of any change in applicable laws, rules
or regulatory requirements. The Corporation may, prior to the date
of the shareholders' meeting referred to in Subsection 5.19(b),
amend, supplement or restate this Agreement without the approval of
any holders of Voting Shares or Rights in order to make any changes
which the Board of Directors acting in good faith may deem necessary
or desirable. Notwithstanding anything in this Section 5.5 to the
contrary, no such amendment, supplement or restatement shall be made
to the provisions of Article 4 except with the written concurrence
of the Rights Agent to such amendment, supplement or restatement.
(b) Subject to Subsection 5.5(a), the Corporation may, with the prior
consent of the holders of Voting Shares obtained as set forth below,
at any time prior to the Separation Time, amend, supplement, restate
or rescind any of the provisions of this Agreement and the Rights
(whether or not such action would materially adversely affect the
interests of the holders of Rights generally). Such consent shall be
deemed to have been given if the action requiring such approval is
authorized by the affirmative vote of a majority of the votes cast
by Independent Shareholders present or represented at and entitled
to vote at a meeting of the holders of Voting Shares duly called and
held in compliance with applicable laws and the articles and by-laws
of the Corporation.
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(c) Subject to Subsection 5.5(a), the Corporation may, with the prior
consent of the holders of Rights obtained as set forth below, at any
time after the Separation Time, amend, supplement, restate or
rescind any of the provisions of this Agreement and the Rights
(whether or not such action would materially adversely affect the
interests of the holders of Rights generally). Such consent shall be
deemed to have been given if the action requiring such approval is
authorized by the affirmative vote of a majority of the votes cast
by the holders of Rights (other than any holder of Rights whose
Rights have become null and void pursuant to the provisions hereof)
present or represented at and entitled to vote at a meeting of the
holders of Rights. For the purposes hereof, the procedures for the
calling, holding and conduct of a meeting of the holders of Rights
shall be those, as nearly as may be, which are provided in the
Corporation's by-laws with respect to meetings of its shareholders
and each Right shall be entitled to one vote at any such meeting.
(d) Any amendments, supplements or restatements made by the Corporation
to this Agreement pursuant to Subsection 5.5(a) which are required
to maintain the validity and effectiveness of this Agreement as a
result of any change in any applicable laws, rules or regulatory
requirements shall:
(i) if made before the Separation Time, be submitted to the
holders of Voting Shares at the next meeting of holders of
Voting Shares and the holders of Voting Shares may, by the
majority referred to in Subsection 5.5(b), confirm or reject
such amendment, supplement or restatement; and
(ii) if made after the Separation Time, be submitted to the holders
of Rights at a meeting to be called and held in accordance
with the provisions of Subsection 5.5(c) and the holders of
Rights may, by a majority referred to in Subsection 5.5(c),
confirm or reject such amendment, supplement or restatement.
Any such amendment, supplement or restatement shall, unless the
Board of Directors otherwise stipulates, be effective from the date
of the resolution of the Board of Directors adopting such amendment,
supplement or restatement, until it is confirmed or rejected or
until it ceases to be effective (as described in the next sentence)
and, where such amendment, supplement or restatement is confirmed,
it shall continue in effect in the form so confirmed. If such
amendment, supplement or restatement is rejected by the holders of
Voting Shares or the holders of Rights or is not submitted to the
holders of Voting Shares or holders of Rights as required, then such
amendment, supplement or restatement shall cease to be effective
from and after the termination of the meeting at which it was
rejected or to which it should have been but was not submitted or if
such a meeting of the holders of Rights is not called within 90 days
after the date of the resolution of the Board of Directors adopting
such amendment, supplement or restatement, at the end of such
period, and no subsequent resolution of the Board of Directors to
amend, supplement or restate this Agreement to substantially the
same effect shall
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be effective until confirmed by the holders of Voting Shares or
holders of Rights as the case may be.
(e) The Corporation shall give notice in writing to the Rights Agent of
any amendment, supplement or restatement to this Agreement pursuant
to Section 5.5 within five Business Days of the date of any such
amendment, supplement or restatement, provided that failure to give
such notice, or any defect therein, shall not affect the validity of
any such amendment, supplement or restatement.
5.6 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Corporation shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional
Rights. Subject to Section 5.3, after the Separation Time there
shall be paid 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 at
the Separation Time of a whole Right in lieu of such fractional
Rights. The Rights Agent shall have no obligation to make any
payments in lieu of fractional Rights unless the Corporation shall
have provided the Rights Agent with the necessary funds to pay in
full all amounts payable in accordance with Subsection 2.2(e).
(b) The Corporation shall not be required to issue fractional Common
Shares upon exercise of the Rights or to distribute certificates
which evidence fractional Common Shares. In lieu of issuing
fractional Common Shares, the Corporation shall pay to the
registered holder of Rights Certificates at the time such Rights are
exercised as herein provided, an amount in cash equal to the same
fraction of the Market Price at the date of such exercise of one
Common Share. The Rights Agent shall have no obligation to make any
payments in lieu of fractional Voting Shares unless the Corporation
shall have provided the Rights Agent with the necessary funds to pay
in full all amounts payable in accordance with Subsection 2.2 (e).
5.7 RIGHTS OF ACTION
Subject to the terms of this Agreement, rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any other
Rights, may, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Corporation to enforce, or otherwise
act in respect of, such holder's right to exercise such holder's Rights, or
Rights to which such holder is entitled, in the manner provided in such holder's
Rights Certificate and in this Agreement. 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.
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5.8 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 such 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 Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in Section
5.9), 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.
5.9 NOTICE OF PROPOSED ACTIONS
If after the Separation Time and prior to the Expiration Time:
(i) there shall occur an adjustment in the rights attaching to the
Rights pursuant to Section 3.1 as a result of the occurrence
of a Flip-in Event; or
(ii) the Corporation proposes to effect the liquidation,
dissolution or winding up of the Corporation or the sale of
all or substantially all of the Corporation's assets;
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 5.10, a notice of such event or proposed action,
which shall specify the date on which such adjustment to the Rights occurred or
liquidation, dissolution or winding up is to take place, and such notice shall
be so given within 10 Business Days after the occurrence of an adjustment to the
Rights and not less than 20 Business Days prior to the date of taking such
proposed action by the Corporation.
5.10 NOTICES
Notices or demands to be given or made in connection with this Agreement
by the Rights Agent or by the holder of any Rights to or on the Corporation
shall be sufficiently given or made if delivered or sent by mail, postage
prepaid or by fax (with, in the case of fax, an original copy of the notice or
demand sent by first class mail, postage prepaid, to the Corporation following
the giving of the notice or demand by fax), addressed (until another address is
filed in writing with the Rights Agent) as follows:
Agrium Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: General Counsel and Corporate Secretary
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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Notices or demands to be given or made in connection with this Agreement
by the Corporation or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by mail, postage
prepaid, or by fax (with, in the case of fax, an original copy of the notice or
demand sent by first class mail, postage prepaid, to the Rights Agent following
the giving of the notice or demand by fax), addressed (until another address is
filed in writing with the Corporation) as follows:
CIBC Mellon Trust Company
▇▇▇, ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Assistant Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Notices or demands to be given or made in connection with this Agreement
by the Corporation 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, or by fax (with, in the case of fax, an original copy of the notice or
demand sent by first class mail, postage prepaid, to such holder following the
giving of the notice or demand by fax), addressed to such holder at the address
of such holder as it appears upon the register of the Rights Agent or, prior to
the Separation Time, on the register of the Corporation for the Common Shares.
Any notice given or made in accordance with this Section 5.10 shall be
deemed to have been given and to have been received on the day of delivery, if
so delivered, on the third Business Day (excluding each day during which there
exists any general interruption of postal service due to strike, lockout or
other cause) following the mailing thereof, if so mailed, and on the day of
faxing (provided such sending is during the normal business hours of the
addressee on a Business Day and if not, on the first Business Day thereafter).
Each of the Corporation and the Rights Agent may from time to time change its
address for notice by notice to the other given in the manner aforesaid.
If mail service is or is threatened to be interrupted at a time when the
Corporation or the Rights Agent wishes to give a notice or demand hereunder to
or on the holders of the Rights, the Corporation or the Rights Agent may,
notwithstanding the foregoing provisions of this Section 5.10, give such notice
by means, of publication once in each of two successive weeks in the business
section of the Financial Post and, so long as the Corporation has a transfer
agent in the United States, in a daily publication in the United States
designated by the Corporation, or in such other publication or publications as
may be designated by the Corporation and notice so published shall be deemed to
have been given on the date on which the first publication of such notice in any
such publication has taken place.
5.11 COSTS OF ENFORCEMENT
The Corporation agrees that, if the Corporation fails to fulfil any of its
obligations pursuant to this Agreement, then the Corporation will reimburse the
holder of any Rights for the
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costs and expenses (including legal fees) reasonably incurred by such holder in
actions to enforce his rights pursuant to any Rights or this Agreement.
5.12 SUCCESSORS
All the covenants and provisions of this Agreement by or for the benefit
of the Corporation or the Rights Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
5.13 BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person other
than the Corporation, the Rights Agent and the holders of the Rights any legal
or equitable right, remedy or claim under this Agreement; this Agreement shall
be for the sole and exclusive benefit of the Corporation, the Rights Agent and
the holders of the Rights.
5.14 GOVERNING LAW
This Agreement and each Right issued hereunder shall be deemed to be a
contract made under the laws of the Province of Alberta and for all purposes
shall 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 decouleront 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 the English language.
5.16 COUNTERPARTS
This Agreement may be executed in any number of counterparts and each of
such counterparts shall 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 shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
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5.18 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
All actions, calculations and determinations (including all omissions with
respect to the foregoing) which are done or made by the Board of Directors in
good faith pursuant to this Agreement, shall not subject the Board of Directors
to any liability to the holders of the Rights.
5.19 EFFECTIVE DATE AND EXPIRATION TIME
(a) Notwithstanding its amendment and restatement as at the date hereof,
and subject to Subsection 5.19(b), this Agreement:
(i) shall be effective and in full force and effect in accordance
with its terms from and after the Effective Date and shall
replace and supercede the 1998 Plan, as amended and restated
by the 2001 Plan, and shall constitute the entire agreement
between the parties pertaining to the subject matter hereof as
of the Effective Date; and
(ii) shall expire and be of no further force or effect from and
after the Close of Business on the date (the "EXPIRATION
TIME") that is the earlier of (i) the Termination Time, and
(ii) the date upon which the annual meeting of the holders of
Voting Shares terminates in 2007.
(b) Notwithstanding Subsection 5.19(a), if the Agreement is not approved
by a resolution passed by a majority of the votes cast by
Independent Shareholders who vote in respect of approval of this
Agreement at the annual and special meeting of the holders of Voting
Shares scheduled to be held on April 28, 2004, then the 2001 Plan
and all outstanding Rights shall terminate and be null and void and
of no further force and effect from and after the Effective Date.
5.20 REGULATORY APPROVALS
Any obligation of the Corporation or action or event contemplated by this
Agreement, or any amendment, supplement or restatement of this Agreement, shall
be subject to receipt of any requisite approval or consent from any governmental
or regulatory authority having jurisdiction including, while any securities of
the Corporation are listed and admitted to trading thereon, the TSX.
5.21 TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
5.22 DECLARATION AS TO NON-CANADIAN HOLDERS
If in the opinion of the Board of Directors (who may rely on the advice of
counsel) any action or event contemplated by this Agreement would require
compliance with the securities laws or comparable legislation of a jurisdiction
outside of Canada or the United States, the Board of Directors acting in good
faith may take such actions as it may deem appropriate to ensure such
compliance. In no event shall the Corporation or the Rights Agent be required to
issue or deliver
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Rights or securities issuable on the exercise of Rights to Persons who are
citizens, residents or nationals of any jurisdiction other than Canada or the
United States in which such issue or delivery would be unlawful without
registration or the relevant Persons or securities for such purposes, or (until
such notice is given as required by law) without advance notice to any
regulatory or self-regulatory body.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
AGRIUM INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President & CEO
By: /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇
Title: Vice President, General Counsel
& Corporate Secretary
CIBC MELLON TRUST COMPANY
By: /s/ ▇▇▇▇▇▇▇ VAN DER ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ van der ▇▇▇▇▇
Title: Manager, Client Relations
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager, Client Relations
EXHIBIT A
(Form of Rights Certificate)
Certificate No. ______________ ____________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE
TERMS SET FORTH IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b) OF THE SHAREHOLDER RIGHTS PLAN
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ITS AFFILIATES
OR ASSOCIATES OR ANY PERSON ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM (AS
SUCH TERMS ARE DEFINED IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT) OR TRANSFEREES
OF ANY OF THE FOREGOING WILL BECOME NULL AND VOID WITHOUT FURTHER ACTION.
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 Amended and
Restated Shareholder Rights Plan Agreement dated as of April 28, 2004 amending
and restating the Shareholder Rights Plan Agreement dated as of May 9, 2001, as
amended, supplemented or restated from time to time (the "Rights Agreement")
between AGRIUM INC., a corporation incorporated under the laws of Canada (the
"Corporation") and CIBC MELLON TRUST COMPANY, a trust company incorporated under
the laws of Canada, as Rights Agent (the "Rights Agent", which term shall
include any successor Rights Agent under the Rights Agreement), to purchase from
the Corporation at any time after the Separation Time and prior to the
Expiration Time (as such terms are defined in the Rights Agreement), one fully
paid common share of the Corporation (a "Common Share") at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate
with the Form of Election to Exercise duly executed and submitted to the Rights
Agent at its principal office in the City of Calgary, Alberta or, with the
approval of the Rights Agent, at any other office of the Rights Agent in the
cities designated from time to time by the Corporation. Until adjustment thereof
in certain events as provided in the Rights Agreement, the Exercise Price shall
be $<*> (Canadian) per Right.
In certain circumstances described in the Rights Agreement, each Right evidenced
hereby may entitle the registered holder thereof to purchase more or less than
one Common Share, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement which terms, provisions and conditions are
hereby incorporated 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 Corporation and the holders of the Rights. Copies of the
Rights Agreement are on file at the registered office of the Corporation and are
available upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights
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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 Corporation at a redemption price of Cdn.$0.00001 per Right, subject to
adjustment in certain events.
No fractional Common Shares will be issued upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof, a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Shares or
any other securities which may at any time be issuable upon the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a shareholder of
the Corporation or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meeting or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid 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 Corporation
and its corporate seal.
Date: _________________________
AGRIUM INC.
By:______________________________________
Name:
Title:
By:______________________________________
Name:
Title:
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CIBC MELLON TRUST COMPANY
By:______________________________________
Name:
Title:
By:______________________________________
Name:
Title:
(To be attached to each Rights Certificate)
FORM OF ELECTION TO EXERCISE
TO:
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 be
issued in the name of:
_________________________________
Name
_________________________________
Address
_________________________________
_________________________________
Social Insurance, Social Security or other Taxpayer Identification Number ______
_________________________ Per:______________________________________________
Dated 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 Guaranteed
Signature must be guaranteed by a Schedule 1 Canadian chartered bank, a major
Canadian trust company or by a medallion guarantee by a member firm of a
recognized Medallion Guarantee Program.
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(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
In the event the certification set forth above is not completed, the Corporation
will deem the Beneficial Owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person (as defined in the Rights Agreement) and,
accordingly, such Rights shall be null and void and not transferable or
exercisable.
(To be executed by the registered holder if such holder desires to transfer
the Rights evidenced by this Rights Certificate.)
FORM OF ASSIGNMENT
FOR VALUE RECEIVED_________________________hereby sells, assigns and transfers
unto____________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print name and address of transferee)
the Rights evidenced by this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
______________________________ attorney, to transfer the within Rights on the
books of the within-named Corporation, with full power of substitution.
__________________________ Per:______________________________________________
Dated 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 Guaranteed
Signature must be guaranteed by a Schedule 1 Canadian chartered bank, a major
Canadian trust company or by a medallion guarantee by a member firm a recognized
Medallion Guarantee Program.
(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 (as defined in the Rights
Agreement).
_____________________________________________
Signature
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NOTICE
In the event the certification set forth above is not completed, the Corporation
will deem the Beneficial Owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person (as defined in the Rights Agreement) and,
accordingly, such Rights shall be null and void and not transferable or
exercisable.
