EXHIBIT 1.4
CAE INC.
AND
MONTREAL TRUST COMPANY OF CANADA
AS RIGHTS AGENT
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AMENDED AND RESTATED
SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT
JUNE 14, 2000
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STIKEMAN ELLIOTT
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
Section 1.1 Certain Definitions ..................................................... 1
Section 1.2 Currency ................................................................ 12
Section 1.3 Headings ................................................................ 12
Section 1.4 Number and Gender ....................................................... 12
Section 1.5 Acting Jointly or in Concert ............................................ 12
Section 1.6 Statutory References .................................................... 13
ARTICLE 2
THE RIGHTS
Section 2.1 Legend on Common Share Certificates ..................................... 13
Section 2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights ........ 13
Section 2.3 Adjustments to Exercise Price; Number of Rights ......................... 16
Section 2.4 Date on Which Exercise is Effective ..................................... 21
Section 2.5 Execution, Authentication, Delivery and Dating of Rights Certificates ... 21
Section 2.6 Registration, Registration of Transfer and Exchange ..................... 22
Section 2.7 Mutilated, Destroyed, Lost and Stolen Right Certificates ................ 22
Section 2.8 Persons Deemed Owners ................................................... 23
Section 2.9 Delivery and Cancellation of Rights Certificates ........................ 23
Section 2.10 Agreement of Rights Holders ............................................. 23
Section 2.11 Rights Certificate Holder not Deemed a Shareholder ...................... 24
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
TRANSACTIONS
Section 3.1 Flip-in Event ........................................................... 25
ARTICLE 4
THE RIGHTS AGENT
Section 4.1 General ................................................................. 25
Section 4.2 Merger or Amalgamation or Change of Name of Rights Agent ................ 26
Section 4.3 Duties of Rights Agent .................................................. 27
Section 4.4 Change of Rights Agent .................................................. 29
ARTICLE 5
MISCELLANEOUS
Section 5.1 Redemption and Waiver ................................................... 29
Section 5.2 Expiration .............................................................. 31
Section 5.3 Issuance of New Rights Certificates ..................................... 31
(i)
Section 5.4 Supplements and Amendments .............................................. 31
Section 5.5 Fractional Rights and Fractional Shares ................................. 33
Section 5.6 Rights of Action ........................................................ 33
Section 5.7 Notice of Proposed Actions .............................................. 33
Section 5.8 Notices ................................................................. 34
Section 5.9 Successors .............................................................. 34
Section 5.10 Benefits of this Agreement .............................................. 34
Section 5.11 Governing Law ........................................................... 35
Section 5.12 Severability ............................................................ 35
Section 5.13 Effective Date .......................................................... 35
Section 5.14 Determinations and Actions by the Board of Directors .................... 35
Section 5.15 Rights of Board, Corporation and Offeror ................................ 35
Section 5.16 Regulatory Approvals .................................................... 35
Section 5.17 Declaration as to Non-Canadian Holders................................... 35
Section 5.18 Time of the Essence ..................................................... 36
Section 5.19 Execution in Counterparts ............................................... 36
SCHEDULE
SCHEDULE 2.2(3)
(ii)
SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT dated June 14, 2000 between
CAE Inc.
(the "CORPORATION"), a corporation incorporated under the laws of Canada, and
Montreal Trust Company of Canada, a trust company incorporated under the laws of
Canada, as Rights Agent (the "RIGHTS AGENT", which term shall include any
successor Rights Agent hereunder).
WITNESSES THAT:
WHEREAS the Corporation and the Rights Agent entered into a
shareholder
protection rights plan agreement dated as of March 7, 1990, as amended; and
WHEREAS the shareholders of the Corporation have determined to amend and
restate the
shareholder protection rights plan agreement dated as of March 7,
1990, as amended, as set out herein (the amended and restated
shareholder
protection rights plan agreement being referred to herein as the "RIGHTS PLAN");
NOW THEREFORE, in consideration of the foregoing premises and the
respective covenants and agreements set forth herein, the parties hereby agree
as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 CERTAIN DEFINITIONS.
For purposes of the Agreement, the following terms have the meanings
indicated:
(a) "ACQUIRING PERSON" means, any Person who is the Beneficial Owner of
twenty percent (20%) or more of the outstanding Voting Shares of the
Corporation; provided, however, that the term "ACQUIRING PERSON" shall
not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of twenty percent
(20%) or more of the outstanding Voting Shares of the
Corporation as a result of (A) Corporate Acquisitions,
(B) Permitted Bid Acquisitions, (C) Corporate Distributions,
(D) Exempt Acquisitions, or (E) Convertible Security
Acquisitions; provided, however, that if a Person shall become
the Beneficial Owner of twenty percent (20%) or more of the
Voting Shares of the Corporation then outstanding by reason
of one or more or any combination of the operation of a
Corporate Acquisition, Permitted Bid Acquisition, Corporate
Distribution, Exempt Acquisition or Convertible Security
Acquisition and, after such Corporate Acquisition, Permitted
Bid Acquisition, Corporate Distribution, Exempt Acquisition or
Convertible Security Acquisition, becomes the Beneficial Owner
of an additional one percent (1%) or more of the outstanding
Voting Shares of the Corporation other than pursuant to
Corporate Acquisitions, Permitted Bid Acquisitions, Corporate
Distributions, Exempt Acquisitions or Convertible Security
Acquisitions, then as of the date of such acquisition, such
Person shall become an Acquiring Person;
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(iii) for a period of ten (10) days after the Disqualification Date
(as hereinafter defined), any Person who becomes the Beneficial
Owner of twenty percent (20%) or more of the outstanding Voting
Shares of the Corporation as a result of such Person becoming
disqualified from relying on Clause 1.1(e)(3) hereof solely
because such Person makes or proposes to make a Take-over Bid
in respect of securities of the Corporation alone or by acting
jointly or in concert with any other Person (the first date of
public announcement (which, for the purposes of this definition,
shall include, without limitation, a report filed pursuant to
section 101 of the SECURITIES ACT (
Ontario)) by such Person or
the Corporation of a current intent to commence such a Take-over
Bid being herein referred to as the "DISQUALIFICATION DATE");
and
(iv) an underwriter or member of a banking or selling group that
acquires Voting Shares of the Corporation from the Corporation
in connection with a distribution of securities.
(b) "AFFILIATE" when used to indicate a relationship with a specified
Person, means a Person that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such specified Person.
(c) "AGREEMENT" means this agreement as amended, modified or supplemented
from time to time.
(d) "ASSOCIATE" when used to indicate a relationship with a specified
Person, means any relative of such specified Person who has the same
home as such specified Person, or any Person to whom such specified
Person is married or with whom such specified Person is living in a
conjugal relationship outside marriage, or any relative of such spouse
or other Person who has the same home as such specified Person.
(e) A Person shall be deemed the "BENEFICIAL OWNER", and to have
"BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY OWN":
(i) any securities of which such Person or any Affiliate or
Associate of such Person is the owner in law or equity;
(ii) any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to acquire (A) upon the
exercise of any Convertible Securities, or (B) pursuant to any
agreement, arrangement or understanding, if such right is
exercisable immediately or within a period of 60 days thereafter
whether or not on condition or the happening of any contingency
(other than customary agreements with and between underwriters
and banking group or selling group members with respect to a
distribution of securities or pursuant to a pledge of securities
in the ordinary course of business); and
(iii) any securities that are Beneficially Owned within the meaning of
Sections 1.1(e)(i) or (ii) hereof by any other Person with whom
such Person is acting jointly or in concert;
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provided, however, that a Person shall not be deemed the
"BENEFICIAL OWNER", or to have "BENEFICIAL OWNERSHIP" of, or to
"BENEFICIALLY OWN", any security as a result of the existence of
any one or more of the following circumstances:
(1) such security has been deposited or tendered, pursuant to a
Take-over Bid made by such Person or made by any Affiliate
or Associate of such Person or made by any other Person
acting jointly or in concert with such Person, unless such
deposited or tendered security has been taken up or paid
for, whichever shall first occur;
(2) by reason of the holder of such security having agreed to
deposit or tender such security to a Take-over Bid made by
such Person or any of such Person's Affiliates or Associates
or any other Person referred to in Clause (iii) of this
definition pursuant to a Permitted Lock-Up Agreement;
(3) such Person or any Affiliate or Associate of such Person or
any other Person acting jointly or in concert with such
Person, holds such security; provided that (i) the ordinary
business of any such Person (the "FUND MANAGER") includes
the management of investment funds for others (which others
may include or be limited to one or more employee benefit
plans or pension plans) or includes the acquisition or
holding of securities for a non-discretionary account of
of a Client (as defined below) by a dealer or broker
registered under applicable securities laws to the extent
required, and such security is held by the Fund Manager in
the ordinary course of such business in the performance of
such Fund Manager's duties for the account of any other
Person (a "CLIENT"), (ii) such Person (the "TRUST COMPANY")
is licensed to carry on the business of a trust company
under applicable law and, as such, acts as trustee or
administrator or in a similar capacity in relation to the
estates of deceased or incompetent Persons or in relation
to other accounts and holds such security in the ordinary
course of such duties for the estate of any such deceased or
incompetent Person (each an "ESTATE ACCOUNT") or for such
other accounts (each an "OTHER ACCOUNT"), (iii) the Person
(the "STATUTORY BODY") is an independent Person established
by statute for purposes that include, and the ordinary
business or activity of such person includes, the management
of investment funds for employee benefit plans, pension
plans, insurance plans of various public bodies and the
Statutory Body holds such security for the purposes of its
activities as such, (iv) the ordinary business of any such
Person includes acting as an agent of the Crown in the
management of public assets (the "CROWN AGENT"), or (v) the
Person, any of such Person's Affiliates or Associates or any
other Person acting jointly or in concert with such Person
holds such security, provided that the Person is the
administrator or the trustee of one or more pension funds or
plans (each a "PENSION FUND") registered under the laws of
Canada or any province thereof or the United States or any
state thereof (the "INDEPENDENT PERSON"), or is a Pension
Fund and holds such securities for the purposes of its
activities as an Independent Person or as a Pension Fund,
and further provided that such Person does not
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hold more than thirty percent (30%) of the Voting Shares of
the Corporation;
provided, however, that in any of the foregoing cases no one
of the Fund Manager, the Trust Company, the Statutory Body,
the Crown Agent, the Independent Person or the Pension
Fund makes or announces a current intention to make
a Take-over Bid in respect of securities of the Corporation
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 prearranged trades entered into the ordinary
course of business of such Person) executed through the
facilities of a stock exchange or organized over-the-counter
market);
(4) such Person is a Client of the same Fund Manager as another
Person on whose account the Fund Manager holds such
security, or such Person is an Estate Account or an Other
Account of the same Trust Company as another Person on whose
account the Trust Company holds such security, or such
Person is a Pension Fund with the same Independent Person as
another Pension Fund;
(5) such Person is a Client of a Fund Manager and such
security is owned at law or in equity by the Fund
Manager, or such Person is an Estate Account or an Other
Account of a Trust Company and such security is owned at law
or in equity by the Trust Company, or such Person is a
Pension Fund and such security is owned at law or in
equity by the Independent Person; or
(6) such Person is a registered holder of securities as a result
of carrying on the business of, or acting as a nominee of, a
securities depository.
For purposes of this Agreement, the percentage of Voting Shares
Beneficially Owned by any Person, shall be and be deemed to be
the product of one hundred (100) and the number of which the
numerator is the number of votes for the election of all
directors generally attaching to the Voting Shares Beneficially
Owned by such Person and the denominator of which is the number
of votes for the election of all directors generally attaching to
all outstanding Voting Shares. Where any Person is deemed
to Beneficially Own unissued Voting Shares, such Voting Shares
shall be deemed to be issued and outstanding for the purpose of
calculating the percentage of Voting Shares Beneficially Owned
by such Person.
(f) "BOARD OF DIRECTORS" means, at any time, the duly constituted
board of directors of the Corporation.
(g) "BUSINESS DAY" means any day other than a Saturday, Sunday or a
day on which banking institutions in Toronto are authorized or
obligated by law to close.
(h) "CBCA" means the CANADA BUSINESS CORPORATIONS ACT R.S.C. 1985,
c. C-44, and the regulations thereunder, and any comparable or
successor laws or regulations thereto.
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(i) "CLOSE OF BUSINESS" on any given 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 Toronto (or, after the
Separation Time, the office of the Rights Agent in the City of
Toronto) is closed to the public.
(j) "COMMON SHARES", when used with reference to the Corporation,
means the common shares in the capital of the Corporation.
(k) "COMPETING BID" means a Take-over Bid that: (i) is made while
another Permitted Bid is in existence, and (ii) satisfies all the
components of the definition of a Permitted Bid, except that the
requirements set out in Clause (ii) of the definition of a
Permitted Bid shall be satisfied if the Take-over Bid shall
contain, and the take up and payment for securities tendered or
deposited thereunder shall be subject to, an irrevocable and
unqualified condition that no Voting Shares shall be taken up or
paid for pursuant to the Competing Bid prior to the close of
business on the date that is no earlier than the date which is
the later of twenty-one (21) days (or such longer minimum period
of days that a take-over bid must remain open for acceptance
under the Securities Act (
Ontario)) after the date the Competing
Bid is made or 60 days after the earliest date on which a
Permitted Bid or Competing Bid then in existence was made and only
if at that date, more than fifty percent (50%) of the then
outstanding Voting Shares held by Independent Shareholders have
been deposited to the Competing Bid and not withdrawn.
(l) "CONTROLLED": a corporation is "CONTROLLED" by another Person if:
(i) securities entitled to vote in the election of directors
carrying more than fifty percent (50%) of the votes for the
election of directors are held, directly or indirectly, by
or for the benefit of the other Person; and
(ii) the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of directors of
such corporation;
and "CONTROLS", "CONTROLLING" and "UNDER COMMON CONTROL WITH"
shall be interpreted accordingly.
(m) "CONVERTIBLE SECURITY" means at any time:
(i) any right (regardless of whether such right constitutes a
security) to acquire Voting Shares from the Corporation; and
(ii) any securities issued by the Corporation from time to time
(other than the Rights) carrying any exercise, conversion or
exchange right;
which is then exercisable or exercisable within a period of 60
days from that time pursuant to which the holder thereof may
acquire Voting Shares or other securities which are convertible
into or exercisable or exchangeable for Voting Shares (in each
case, whether such right is then exercisable or exercisable
within
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a period of 60 days from that time and whether or not on
condition or the happening of any contingency).
(n) "CONVERTIBLE SECURITY ACQUISITION" means the acquisition of
Voting Shares upon the exercise of Convertible Securities
received by a Person pursuant to a Permitted Bid Acquisition,
Exempt Acquisition or a Corporate Distribution.
(o) "CORPORATE ACQUISITION" means an acquisition by the Corporation
or the redemption by the Corporation of Voting Shares of the
Corporation which by reducing the number of Voting Shares of the
Corporation outstanding increases the proportionate number of
Voting Shares Beneficially Owned by any Person.
(p) "CORPORATE DISTRIBUTION" means an acquisition as a result of:
(i) a stock dividend or a stock split or other event pursuant to
which a Person receives or acquires Voting Shares on the
same pro rata basis as all other holders of Voting Shares of
the same class; or
(ii) any other event pursuant to which all holders of Voting
Shares of the Corporation are entitled to receive Voting
Shares or Convertible Securities on a pro rata basis,
including, without limiting the generality of the
foregoing, pursuant to the receipt or exercise of rights
issued by the Corporation and distributed to all the holders
of a class of Voting Shares to subscribe for or purchase
Voting Shares or Convertible Securities of the Corporation,
provided that such rights are acquired directly from the
Corporation and not from any other Person.
(q) "DISQUALIFICATION DATE" has the meaning ascribed thereto in
Section 1.1(a)(iii) hereof.
(r) "EFFECTIVE DATE" has the meaning ascribed thereto in Section 5.13
hereof.
(s) "ELECTION TO EXERCISE" has the meaning ascribed thereto in
Section 2.2(4) hereof.
(t) "EXEMPT ACQUISITION" means an acquisition:
(i) in respect of which the Board of Directors has waived the
application of Section 3.1 hereof pursuant to the provisions
of Section 5.1(2), 5.1(3) or 5.1(4) hereof;
(ii) which was made on or prior to the Record Time;
(iii) which was made pursuant to a dividend reinvestment plan of
the Corporation;
(iv) pursuant to a distribution to the public by the Corporation
of Voting Shares or Convertible Securities made pursuant to
a prospectus provided that the Person in question does not
thereby acquire a greater class percentage of Voting Shares,
or Convertible Securities representing the right to acquire
Voting Shares of such class, than the percentage of Voting
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Shares of the class Beneficially Owned immediately prior
to such acquisition; or
(v) pursuant to a distribution by the Corporation of Voting
Shares or Convertible Securities by way of a private
placement by the Corporation, provided that (x) all
necessary stock exchange approvals for such private
placement have been obtained and such private placement
complies with the terms and conditions of such approvals,
and (y) the purchaser does not become the Beneficial Owner
of 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
purchaser on the private placement shall be deemed to be
held by such purchaser but shall not be included in the
aggregate number of outstanding Voting Shares immediately
prior to the private placement).
(u) "EXERCISE PRICE" means, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one
whole Right. Until adjustment thereof in accordance with the
terms hereof, the Exercise Price shall be $100.
(v) "EXPIRATION TIME" means the earlier of: (i) the Termination Time,
and (ii) the close of business on the date immediately following
the date of the Corporation's annual meeting of shareholders to be
held in 2003.
(w) "FLIP-IN EVENT" means a transaction in or pursuant to which any
Person becomes an Acquiring Person.
(x) "INDEPENDENT SHAREHOLDERS" means holders of Voting Shares of the
Corporation, but shall not include any Acquiring Person or any
Offeror (other than any Person who pursuant to Clause 1.1(e)(3)
is not deemed to Beneficially Own the Voting Shares held by such
Person), or any Affiliate or Associate of such Acquiring Person
or such Offeror, or any Person acting jointly or in concert with
such Acquiring Person or such Offeror, or any employee benefit
plan, stock purchase plan, deferred profit sharing plan or any
similar plan or trust for the benefit of employees of the
Corporation or a Subsidiary of the Corporation, unless the
beneficiaries of any such plan or trust direct the manner in
which the Voting Shares are to be voted or direct whether the
Voting Shares are to be tendered to a Take-over Bid.
(y) "MARKET PRICE" per share of any securities on any date of
determination means the average of the daily closing prices per
share of such securities (determined as described below) on each
of the twenty (20) consecutive Trading Days through and including
the Trading Day immediately preceding such date; provided,
however, that if an event of a type analogous to any of the
events described in Section 2.3 hereof shall have caused the
closing prices used to determine the Market Price on any Trading
Days not to be fully comparable with the closing price on such
date of determination or, if the date of determination is not a
Trading Day, on the immediately preceding Trading Day, each such
closing price so used shall be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section
2.3 hereof in order to make it fully
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comparable with the closing price on such date of determination
or, if the date of determination is not a Trading Day, on the
immediately preceding Trading Day. The closing price per share of
any securities on any date shall be (i) the closing board lot sale
price or, if such price is not available, the average of the
closing bid and asked prices, for each share as reported by The
Toronto Stock Exchange, or (ii) if for any reason none of such
prices is available on such day or the securities are not listed
or admitted to trading on The Toronto Stock Exchange, the closing
board lot sale price or, if such price is not available, the
average of the closing bid and asked prices, for each share as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the securities exchange on which the securities are primarily
traded, or (iii) if not so listed, the last quoted price, or if
not so quoted, the average of the high bid and low asked prices
for each share of such securities in the over-the-counter
market, or (iv) if on any such date the securities are not quoted
by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a
market in the securities selected in good faith by the Board of
Directors; provided, however, that if on any such date the
securities are not traded in the over-the-counter market, the
closing price per share of such securities on such date shall mean
the fair value per share of such securities on such date as
determined in good faith by a nationally or internationally
recognized investment dealer or investment banker.
(z) "OFFER TO ACQUIRE" shall include:
(i) an offer to purchase, a public announcement of an intention
to make an offer to purchase, or a solicitation of an offer
to sell, Voting Shares of the Corporation; and
(ii) an acceptance of an offer to sell Voting Shares of the
Corporation, 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.
(aa) "OFFEROR" means a Person who has announced a current intention to
make, or who makes and has outstanding, a Take-over Bid.
(bb) "OFFEROR'S SECURITIES" means Voting Shares of the Corporation
Beneficially Owned by an Offeror, any Affiliate or Associate of
such Offeror or any Person acting jointly or in concert with the
Offeror.
(cc) "PERMITTED BID" means a Take-over Bid that is made by means of a
Take-over Bid circular and which also complies with the following
additional provisions:
(i) the Take-over Bid shall be made to all registered holders of
Voting Shares (other than the Voting Shares held by the
Offeror);
(ii) the Take-over Bid shall contain, and the take up and payment
for securities tendered or deposited thereunder shall be
subject to, an
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irrevocable and unqualified condition that no Voting Shares
shall be taken up or paid for pursuant to the Take-over Bid
prior to the close of business on the date which is not less
than sixty (60) days following the date of the Take-over Bid
and that no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid unless, at such date, more
than fifty percent (50%) of the then outstanding Voting
Shares held by Independent Shareholders have been deposited
to the Take-over Bid and not withdrawn;
(iii) the Take-over Bid shall contain an irrevocable and
unqualified provision that, unless the Take-over Bid is
withdrawn, Voting Shares of the Corporation may be deposited
pursuant to such Take-over Bid at any time during the period
of time described in Clause (ii) of this Section 1.1(cc) and
that any Voting Shares deposited pursuant to the Take-over
Bid may be withdrawn at any time until taken up and paid
for; and
(iv) the Take-over Bid shall contain an irrevocable and
unqualified provision that should the condition referred to
in Clause (ii) of this Section 1.1(cc) be met: (A) the
Offeror will make a public announcement of that fact on the
date the Take-over Bid would otherwise expire; and (B) the
Take-over Bid will be extended for a period of not less than
ten (10) Business Days from the date it would otherwise
expire.
(dd) "PERMITTED BID ACQUISITIONS" means share acquisitions made
pursuant to a Permitted Bid or a Competing Bid.
(ee) "PERMITTED LOCK-UP AGREEMENT" means an agreement between a Person
and one or more holders (each a "LOCKED-UP PERSON") of Voting
Shares or Convertible Securities (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
agreement was entered into after the date of the Lock-up Bid, not
later than the date the agreement was entered into), pursuant to
which such Locked-up Persons agree to deposit or tender Voting
Shares or Convertible Securities to a Take-over Bid (the "LOCK-UP
BID") made by the Person or any of such Person's Affiliates or
Associates or any other Person referred to in Clause (iii) of the
definition of Beneficial Owner and where the agreement:
(i) (A) permits the Locked-up Person to withdraw Voting Shares
or Convertible Securities in order to tender or deposit
Voting Shares or Convertible Securities to another Take-over
Bid or to support another transaction that contains an
offering price for each Voting Share or Convertible Security
that exceeds, or provides a value for each Voting Share or
Convertible Security that is greater than, the offering
price or value contained or proposed to be contained in the
Lock-up Bid, provided that the other Take-over Bid is made
for at least the same number of Voting Shares or Convertible
Securities as the Lock-up Bid; or
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(B) permits the Locked-up Person to withdraw Voting Shares
or Convertible Securities in order to tender or deposit the
Voting Shares or Convertible Securities to another
Take-over Bid or to support another transaction that
contains an offering price for each Voting Share or
Convertible Security that exceeds, or provides a value for
each Voting Share or Convertible Security that is greater
than, the offering price contained in or proposed to be
contained in, the Lock-up Bid by as much or more than a
specified amount (the "SPECIFIED AMOUNT") and the Specified
Amount is not greater than 7% of the offering price that
is contained in the Lock-up Bid, provided that the other
Take-over Bid is made for at least the same number of
Voting Shares or Convertible Securities as the Lock-up Bid; and
(ii) provides that 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 the Locked-up Person,
and (B) 50% of the amount by which the price or value
payable under another Take-over Bid 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 such Locked-up Person pursuant to the
agreement in the event that the Lock-up Bid is not
successfully concluded or if any Locked-up Person fails to
tender Voting Shares or Convertible Securities pursuant
thereto;
and, for greater certainty, the agreement may contain a right of
first refusal or require a period of delay to give the Offeror an
opportunity to at least match a higher consideration in another
Take-over Bid or transaction or contain other similar limitation
on a Locked-up Person's right to withdraw Voting Shares or
Convertible Securities from the agreement, so long as any such
limitation does not preclude the exercise by the Locked-up Person
of the right to withdraw Voting Shares or Convertible Securities
in sufficient time to tender to the other Take-over Bid or
transaction.
(ff) "PERSON" means any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal or personal
representative, government, governmental body, entity or
authority, group, body corporate, corporation, unincorporated
organization or association, syndicate, joint venture or any
other entity, whether or not having legal personality, and any of
the foregoing in any derivative, representative or fiduciary
capacity and pronouns have a similar extended meaning.
(gg) "RECORD TIME" means the close of business on March 7, 1990.
(hh) "REDEMPTION PRICE" has the meaning ascribed thereto in Section
5.1(1) hereof.
(ii) "REGULAR PERIODIC CASH DIVIDENDS" 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:
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(i) two hundred percent (200%) of the aggregate amount of cash
dividends declared payable by the Corporation on its Common
Shares in its immediately preceding fiscal year; and
(ii) one hundred percent (100%) of the aggregate consolidated
net income of the Corporation, before extraordinary items,
for its immediately preceding fiscal year.
(jj) "RIGHT" means a right issued pursuant to this Agreement.
(kk) "RIGHTS CERTIFICATE" has the meaning ascribed thereto in Section
2.2(3) hereof.
(ll) "RIGHTS REGISTER" has the meaning ascribed thereto in Section
2.6(1) hereof.
(mm) "SECURITIES ACT (
ONTARIO)" means the SECURITIES ACT, R.S.O.
1990, c. S.5, and the regulations, rules, policies, and notices
thereunder, and any comparable or successor laws, regulations,
rules, policies or notices thereto.
(nn) "SEPARATION TIME" means the close of business on the tenth (10th)
Trading Day after the earlier of (i) the Stock Acquisition Date,
(ii) the date of the commencement of, or first public announcement
of the intent 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 Bid) or such later date as may
be determined by the Board of Directors and (iii) the date on
which a Permitted Bid or Competing Bid ceases to qualify as such
or such later date as may be determined by the Board of Directors
provided that, if any Take-over Bid referred to in Clause (ii) of
this Section 1.1(nn) or any Permitted Bid or Competing Bid
referred to in Clause (iii) of this Section 1.1(nn) expires, is
cancelled, terminated or otherwise withdrawn prior to the
Separation Time, such Take-over Bid, Permitted Bid or Competing
Bid, as the case may be, shall be deemed, for the purposes of
this Section 1.1(nn), never to have been made and provided
further that if the Board of Directors determines pursuant to
Sections 5.1(2), (3) or (4) hereof to waive the application
of Section 3.1 hereof to a Flip-in Event, the Separation Time
in respect of such Flip-in Event shall be deemed never to
have occurred.
(oo) "STOCK ACQUISITION DATE" means the first date of public
announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to section
101 of the SECURITIES ACT (
Ontario)) by the Corporation or an
Offeror or Acquiring Person of facts indicating that a Person has
become an Acquiring Person.
(pp) "SUBSIDIARY": a corporation shall be deemed to be a Subsidiary of
another corporation if:
(i) it is controlled by:
(A) that other;
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(B) that other and one or more corporations each of which is
controlled by that other, or
(C) two or more corporations each of which is controlled
by that other; and
(ii) it is a Subsidiary of a corporation that is that other's
Subsidiary.
(qq) "TAKE-OVER BID" means an Offer to Acquire Voting Shares of the
Corporation or securities convertible into or exchangeable for or
carrying a right to purchase Voting Shares of the Corporation
where the Voting Shares of the Corporation subject to the Offer
to Acquire, together with the Voting Shares of the Corporation
into which the securities subject to the Offer to Acquire are
convertible, exchangeable or exercisable, and the Offeror's
Securities, constitute in the aggregate twenty percent (20%) or
more of the outstanding Voting Shares of the Corporation at the
date of the Offer to Acquire.
(rr) "TERMINATION TIME" means the time at which the right to exercise
Rights shall terminate pursuant to Sections 5.1(1) or (5)
hereof.
(ss) "TRADING DAY", when used with respect to any securities, means a
day on which the principal Canadian stock exchange or American
stock exchange or market on which such securities are listed or
admitted to trading is open for the transaction of business or,
if the securities are not listed or admitted to trading on any
Canadian stock exchange or American stock exchange or market, a
Business Day.
(tt) "VOTING SHARES" means the Common Shares and any other shares of
capital stock or voting interests of the Corporation entitled to
vote generally in the election of all directors.
SECTION 1.2 CURRENCY.
All sums of money which are referred to in this Agreement are expressed
in lawful money of Canada, unless otherwise specified.
SECTION 1.3 HEADINGS.
The division of this Agreement into Articles, Sections and Clauses and the
insertion of headings, subheadings and a table of contents are for convenience
of reference only and shall not affect the construction or interpretation of
this Agreement.
SECTION 1.4 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 only one
gender shall include all others.
SECTION 1.5 ACTING JOINTLY OR IN CONCERT.
For the purposes of this Agreement, a Person is acting jointly or in
concert with every Person who is a party to an agreement, commitment or
understanding, whether formal or informal, with the first Person or any
Associate or Affiliate of the second Person to acquire or to make an Offer to
Acquire Voting Shares of the Corporation (other than customary agreements
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with and between underwriters or banking group members or selling group members
with respect to a distribution of securities or to a pledge of securities in the
ordinary course of business).
SECTION 1.6 STATUTORY REFERENCES.
Unless the context otherwise requires or except as expressly provided
herein, any reference herein to a specific part, section, clause or Rule of any
statute or regulation shall be deemed to refer to the same as it may be amended,
re-enacted or replaced or, if repealed and there shall be no replacement
therefor, to the same as it is in effect on the date of this Agreement.
ARTICLE 2
THE RIGHTS
SECTION 2.1 LEGEND ON COMMON SHARE CERTIFICATES.
(1) Certificates issued for Common Shares after the Record Time but
prior to the close of business on the earlier of the Separation
Time and the Expiration Time shall evidence one Right for each
Common Share represented thereby and, commencing as soon as
reasonably practicable after the effective date of this
Agreement, shall have impressed on, printed on, written on or
otherwise affixed to them, a legend in substantially the
following form:
Until the Separation Time (defined in the Rights Agreement
referred to below), this certificate also evidences rights
of the holder described in a
Shareholder Protection Rights
Plan Agreement, dated March 7, 1990, as amended (the "RIGHTS
AGREEMENT"), between the Corporation and Montreal Trust
Company of Canada, a copy of which is on file at the
principal executive offices of the Corporation. Under
certain circumstances set out in the Rights Agreement, the
rights may be redeemed, may expire, may become null and void
or may be evidenced by separate certificates and no longer
evidenced by this certificate.
(2) Until the earlier of the Separation Time and the Expiration Time,
certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for each
Common Share evidenced thereby notwithstanding the absence of the
foregoing legend. Following the Separation Time, Rights will be
evidenced by Rights certificates issued pursuant to Section 2.2
hereof.
SECTION 2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS.
(1) RIGHT TO ENTITLE HOLDER TO PURCHASE ONE COMMON SHARE PRIOR TO
ADJUSTMENT. Subject to adjustment as herein set forth and subject
to Section 3.1(1) hereof, each Right will entitle the holder
thereof, from and after the Separation Time and prior to the
Expiration Time, to purchase, for the Exercise Price as at the
Business Day immediately preceding the date of exercise of the
Right, one Common Share (which price and number of Common Shares
are subject to adjustment as set forth below and are subject to
Section 3.1(1) hereof). Notwithstanding any other provision of
this Agreement, any Rights held by the Corporation and any of its
Subsidiaries shall be void.
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(2) RIGHTS NOT EXERCISABLE UNTIL SEPARATION TIME. 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 certificates for the
associated Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Rights
Certificates) and will be transferable only together with, and
will be transferred by a transfer of, such associated Common
Shares.
(3) DELIVERY OF RIGHTS CERTIFICATE AND DISCLOSURE STATEMENT. From and
after the Separation Time and prior to the Expiration Time, (i)
the Rights shall be exercisable, and (ii) the registration and
transfer of the Rights shall be separate from, and independent
of, Common Shares. Promptly following the Separation Time, the
Corporation will prepare and the Rights Agent will mail to each
holder of record of Rights as of the Separation Time (other than
an Acquiring Person and, in respect of any Rights Beneficially
Owned by such Acquiring Person which are not held of record by
such Acquiring Person, the holder of record of such Rights (a
"NOMINEE")) at such holder's address as shown by the records of
the Corporation (the Corporation hereby agreeing to furnish
copies of such records to the Rights Agent for this purpose), (A)
a certificate (a "RIGHTS CERTIFICATE") in substantially the form
of Schedule 2.2(3) hereto appropriately completed, representing
the number of Rights held by such holder at the Separation Time,
and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the
Corporation may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required
to comply with any law, rule, regulation or judicial or
administrative order or with any rule or regulation made pursuant
thereto or with any rule or regulation of any self-regulatory
organization, stock exchange or quotation system on which the
Rights may from time to time be listed or traded, or to conform
to usage, and (B) a disclosure statement describing the Rights,
provided that a Nominee shall be sent the materials provided for
in (A) and (B) in respect of all Common 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 Common Shares which are Beneficially Owned by another
Person, the Corporation may require such first mentioned Person
to furnish it with such information and documentation as the
Corporation considers advisable.
(4) EXERCISE OF RIGHTS. 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 the office
of the Rights Agent in the City of Toronto or any other office of
the Rights Agent in the cities designated from time to time for
that purpose by the Corporation) the Rights Certificate
evidencing such Rights together with an election to exercise such
Rights (an "ELECTION TO EXERCISE") substantially in the form
attached to the Rights Certificate duly completed, accompanied by
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 any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for Common Shares in a name other than
that of the holder of the Rights being exercised, all of the
above to be received before the Expiration Time by the Rights
Agent at its principal office in any of the cities listed on the
Rights Certificate.
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(5) DUTIES OF RIGHTS AGENT UPON RECEIPT OF ELECTION TO EXERCISE. Upon
receipt of a Rights Certificate, which is accompanied by (i) a
completed and duly executed Election to Exercise, and (ii)
payment as set forth in Section 2.2(4) above, the Rights Agent
(unless otherwise instructed by the Corporation) will thereupon
promptly:
(A) requisition from the transfer agent for the Common Shares
certificates representing the number of Common Shares to be
purchased (the Corporation hereby irrevocably authorizing
its transfer agent to comply with all such requisitions);
(B) when appropriate, requisition from the Corporation the
amount of cash to be paid in lieu of issuing fractional
Common Shares;
(C) after receipt of such certificates, deliver the same to or
upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be
designated by such registered holder;
(D) when appropriate, after receipt, deliver such cash (less
any amounts required to be withheld) to or to the order of
the registered holder of the Rights Certificate; and
(E) tender to the Corporation all payments received on exercise
of the Rights.
(6) PARTIAL EXERCISE OF RIGHTS. In case the holder of any Rights shall
exercise less than all of 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.
(7) DUTIES OF THE CORPORATION. The Corporation covenants and agrees that it
will:
(a) take all such action as may be necessary and within its power to
ensure that all Common Shares or other securities delivered upon
exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise
Price), be duly and validly authorized, executed, issued and delivered
and fully paid and non-assessable;
(b) take all such action as may be necessary and within its power to
ensure compliance with the provisions of Section 3.1 hereof
including, without limitation, all such action to comply with any
applicable requirements of the CBCA, the SECURITIES ACT (
Ontario) and
any applicable comparable securities legislation of each of the
provinces of Canada and any other applicable law, rule or
regulation, in connection with the issuance and delivery of the Rights
Certificates and the issuance of any Common Shares or other securities
upon exercise of Rights;
(c) use reasonable efforts to cause, from and after such time as the
Rights become exercisable, all Common Shares issued upon exercise of
Rights to be listed upon issuance on the principal stock exchange
on which the Common Shares were traded prior to the Stock
Acquisition Date;
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(d) 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;
(e) pay when due and payable any and all Canadian federal and provincial
transfer taxes and charges (not including any income or capital taxes
of the holder or exercising holder or any liability of the
Corporation to withhold tax) which may be payable in respect of the
original issuance or delivery of the Rights Certificates, provided
that the Corporation shall not be required to pay any transfer tax or
charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares or other securities in a name
other than that of the registered holder of the Rights being
transferred or exercised; and
(f) after the Separation Time, except as permitted by Sections 5.1 or 5.4
hereof, not take (or permit any Subsidiary 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.
SECTION 2.3 ADJUSTMENTS TO EXERCISE PRICE, NUMBER OF RIGHTS.
The Exercise Price, the number and kind of Common Shares or other
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:
(a) ADJUSTMENT TO EXERCISE PRICE UPON CHANGES TO SHARE CAPITAL. In the
event the Corporation shall at any time after the Record Time:
(i) declare or pay a dividend on the Common Shares payable in Common
Shares (or other securities exchangeable for or convertible
into or giving a right to acquire Common Shares or other
securities) other than the issue of Common Shares or such
exchangeable or convertible securities to holders of Common
Shares in lieu of but not in an amount which exceeds the value
of regular periodic cash dividends;
(ii) subdivide or change the outstanding Common Shares into a
greater number of Common Shares;
(iii) combine or change the outstanding Common Shares into a smaller
number of Common Shares; or
(iv) issue any Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares or
other securities) in respect of, in lieu of or in exchange for
existing Common Shares, except as otherwise provided in this
Section 2.3;
the Exercise Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of Common Shares, or other
securities, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any
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Right exercised after such time shall be entitled to receive, upon
payment of the Exercise Price then in effect, the aggregate number
and kind of Common Shares or other securities, as the case may be,
which, if such Right had been exercised immediately prior to such
date and at a time when the Common Share transfer books of the
Corporation were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would
require an adjustment under both this Section 2.3 and Section 3.1
hereof, the adjustment provided for in this Section 2.3 shall be in
addition to and, shall be made prior to, any adjustment required
pursuant to Section 3.1 hereof.
(b) ADJUSTMENT TO EXERCISE PRICE UPON ISSUE OF RIGHTS, OPTIONS AND
WARRANTS. In case the Corporation shall at any time after the Record
Time fix a record date for the issuance of rights, options or warrants
to all holders of Common Shares entitling them (for a period expiring
within forty-five (45) calendar days after such record date) to
subscribe for or purchase Common Shares (or shares having the same
rights, privileges and preferences as Common Shares ("EQUIVALENT
COMMON SHARES")) or securities convertible into or exchangeable for or
carrying a right to purchase Common Shares or equivalent common
shares at a price per Common Share or per equivalent common share
(or having a conversion price or exchange price or exercise price per
share, if a security convertible into or exchangeable for or
carrying a right to purchase Common Shares or equivalent common
shares) less than ninety percent (90%) of the Market Price per Common
Share on such record date, the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price
in effect immediately prior to such record date by a fraction, the
numerator of which 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 and/or equivalent
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 so to be offered) would purchase at such Market
Price per Common Share, and the denominator of which shall be the
number of Common Shares outstanding on such record date, plus the
number of additional Common Shares and/or equivalent common shares
to be offered for subscription or purchase (or into which the
convertible or exchangeable securities are initially convertible,
exchangeable or exercisable). In case such subscription price may be
paid by delivery of consideration, part or all of which may 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 certificate filed with the
Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. Such adjustment shall be made successively whenever
such a record date is fixed and, in the event that such rights or
warrants are not so issued, the Exercise Price shall be adjusted to
be the Exercise Price which would then be in effect if such record
date had not been fixed.
For purposes of this Agreement, the granting of the right to
purchase Common Shares (or equivalent common shares) (whether from
treasury shares or
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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, stock option or similar plans (so long as such right to
purchase is in no case evidenced by the delivery of rights or
warrants) shall not be deemed to constitute an issue of rights,
options or warrants by the Corporation; provided, however, that,
in the case of any dividend or interest reinvestment plan, the right
to purchase Common Shares (or equivalent common shares) is at a price
per share of not less than ninety percent (90%) of the current market
price per share (determined as provided in such plans) of the Common
Shares.
(c) ADJUSTMENT TO EXERCISE PRICE UPON CORPORATE DISTRIBUTIONS. In case the
Corporation shall at anytime after the Record Time fix a record date
for a distribution to all holders of Common Shares (including any such
distribution made in connection with a merger, amalgamation,
arrangement, plan, compromise or reorganization in which the
Corporation is the continuing or successor corporation) of evidences
of indebtedness, cash (other than a regular periodic cash dividend or
a regular periodic cash dividend paid in Common Shares, but including
any dividend payable in securities other than Common Shares), assets
or subscription rights, options or warrants (excluding those
referred to in Section 2.3(b) above), the Exercise Price to be in
effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Market Price per Common
Share on such record date, less the fair market value (as determined
in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent) of the portion
of the cash, assets or evidences of indebtedness so to be distributed
or of such subscription rights, options or warrants applicable to a
Common Share and the denominator of which shall be such Market Price
per Common Share. Such adjustments shall be made successively whenever
such a record date is fixed, and in the event that such distribution
is not so made, the Exercise Price shall be adjusted to be the
Exercise Price which would have been in effect if such record date
had not been fixed.
(d) DE MINIMIS THRESHOLD FOR ADJUSTMENT TO EXERCISE PRICE. Notwithstanding
anything herein to the contrary, no adjustment in the Exercise Price
shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the Exercise Price; provided,
however, that any adjustments which by reason of this Section 2.3(d)
are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 2.3 shall be made to the nearest cent or to the nearest
one-hundredth of a Common Share or other share, as the case may be.
Notwithstanding the first sentence of this Section 2.3(d), any
adjustment required by this Section 2.3 shall be made no later than
the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustment or (ii) the Expiration Time.
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(e) CORPORATION MAY PROVIDE FOR ALTERNATE MEANS OF ADJUSTMENT. Subject
to the prior consent of the holders of Voting Shares or Rights
obtained as set forth in Section 5.4(2) or (3) hereof, as applicable,
in the event the Corporation shall at any time after the Record Time
issue any shares of capital stock (other than Common Shares), or
rights or warrants to subscribe for or purchase any such capital
stock, or securities convertible into or exchangeable for any such
capital stock, in a transaction referred to in Sections 2.3(a)(i) or
(iv) or 2.3(b) or (c) above, if the Board of Directors acting in good
faith determines that the adjustments contemplated by Sections
2.3(a), (b) and (c) above in connection with such transaction will not
appropriately protect the interests of the holders of Rights, the
Corporation shall be entitled to determine what other adjustments to
the Exercise Price, number of Rights and/or securities purchasable
upon exercise of Rights would be appropriate and, notwithstanding
Sections 2.3(a), (b) and (c) above, such adjustments, rather than the
adjustments contemplated by Sections 2.3(a), (b) and (c) above, shall
be made. The Corporation and the Rights Agent shall amend this
Agreement as appropriate to provide for such adjustments.
(f) ADJUSTMENT TO RIGHTS EXERCISABLE INTO SHARES OTHER THAN COMMON SHARES.
If as a result of an adjustment made pursuant to Section 3.1 hereof,
the holder of any Right thereafter exercised shall become entitled to
receive any shares other than Common Shares, thereafter the number of
such other shares so receivable upon exercise of any Right and the
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 Sections
2.3(a), (b), (c), (d), (e), (g), (h), (i), (j), (k) and (l) above and
below, as the case may be, and the provisions of this Agreement with
respect to the Common Shares shall apply on like terms to any such
other shares.
(g) RIGHTS TO EVIDENCE RIGHT TO PURCHASE COMMON SHARES AT ADJUSTED
EXERCISE PRICE. Each Right originally issued by the Corporation
subsequent to any adjustment made to the 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 such Right, all subject to further adjustment as
provided herein.
(h) ADJUSTMENT TO NUMBER OF COMMON SHARES PURCHASABLE UPON ADJUSTMENT TO
EXERCISE PRICE. Unless the Corporation shall have exercised its
election as provided in Section 2.3(i) below, upon each adjustment of
the Exercise Price as a result of the calculations made in Sections
2.3(b) and (c) above, 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 (calculated to the nearest one ten-thousandth) obtained by
(A) multiplying (x) the number of shares purchasable upon exercise of
a Right immediately prior to this adjustment by (y) the Exercise Price
in effect immediately prior to such adjustment of the Exercise Price,
and (B) dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment of the Exercise Price.
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(i) ELECTION TO ADJUST NUMBER OF RIGHTS UPON ADJUSTMENT TO EXERCISE PRICE.
The Corporation shall be entitled to elect on or after the date of
any adjustment of the 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
that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Exercise Price in effect immediately prior
to adjustment of the Exercise Price by the Exercise Price in effect
immediately after adjustment of the 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 Exercise Price is adjusted or any day
thereafter but, if Rights Certificates have been issued, shall be at
least ten (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 Section 2.3(i), the Corporation
shall, as promptly as practicable, cause to be distributed to holders
of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 5.5 hereof, 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, 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 adjusted
Exercise Price and shall be registered in the names of the holders of
record of Rights Certificates on the record date for the adjustment
specified in the public announcement.
(j) RIGHTS CERTIFICATES MAY CONTAIN EXERCISE PRICE BEFORE ADJUSTMENT.
Irrespective of any adjustment or change in the Exercise Price or the
number of Common Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to
express the Exercise Price per share and the number of shares which
were expressed in the initial Rights Certificates issued hereunder.
(k) CORPORATION MAY IN CERTAIN CASES DEFER ISSUES OF SECURITIES. 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 the occurrence of
such event the issuance to the holder of any Right exercised after
such record date the number of Common Shares and other securities of
the Corporation, if any, issuable upon such exercise over and above
the number of Common Shares and other securities of the Corporation,
if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the
Corporation shall deliver to such holder an appropriate instrument
evidencing such holder's right to receive such
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additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(l) CORPORATION HAS DISCRETION TO REDUCE EXERCISE PRICE FOR TAX
REASONS. 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 their good faith
judgment, the Board of Directors shall determine to be advisable in
order that any (A) consolidation or subdivision of the Common Shares,
(B) issuance of any Common Shares at less than the Market Price,
(C) issuance of securities convertible into or exchangeable for Common
Shares, (D) stock dividends or (E) issuance of rights, options or
warrants, referred to in this Section 2.3 hereafter made by the
Corporation to holders of its Common Shares, shall not be taxable to
such shareholders.
SECTION 2.4 DATE ON WHICH EXERCISE IS EFFECTIVE.
Each person in whose name any certificate for Common Shares is issued upon
the exercise of Rights, shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered (together with a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and
any applicable transfer taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Share transfer books
of the 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.
SECTION 2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES.
(1) The Rights Certificates shall be executed on behalf of the
Corporation by its Chairman, President or any of its Vice-Presidents
under its corporate seal reproduced thereon attested by its Secretary or
one of its Assistant Secretaries. 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.
(2) Promptly after the Corporation learns of the Separation Time, the
Corporation will notify the Rights Agent of such Separation Time and will
deliver Rights Certificates executed by the Corporation to the Rights Agent
for countersignature and a disclosure statement as described in Section
2.2(3), and the Rights Agent shall manually or by facsimile signature
countersign and mail such Rights Certificates and disclosure statement to
the holders of the Rights pursuant to Section 2.2(3) hereof. No Rights
Certificate shall be valid for any purpose until countersigned by the
Rights Agent as aforesaid.
(3) Each Rights Certificate shall be dated the date of countersignature
thereof.
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SECTION 2.6 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(1) 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 Section 2.6(3) below and the other provisions
of this Agreement, the Corporation will execute and the Rights Agent will
countersign, register and deliver, in the name of the holder or the
designated transferee or transferees as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificates so surrendered.
(2) 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.
(3) 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 registered 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 the Corporation
may require payment of a sum sufficient to cover any other expenses
(including the fees and expenses of the Rights Agent) in connection
therewith.
SECTION 2.7 MUTILATED, DESTROYED, LOST AND STOLEN RIGHT CERTIFICATES.
(1) 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 manually countersign and deliver in exchange therefor a new
Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(2) If there shall be delivered to the Corporation and the Rights Agent prior
to the Expiration Time (i) evidence to their reasonable satisfaction of
the destruction, loss or theft of any Rights Certificate, and (ii) such
indemnity or other security as may be required by them to save each of them
and any of their agents harmless then, in the absence of notice to the
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.
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(3) As a condition to the issuance of any new Rights Certificate under this
Section 2.7, 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 the Corporation may require payment of a
sum sufficient to cover any other expenses (including the fees and expenses
of the Rights Agent) in connection therewith.
(4) Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of
any destroyed, lost or stolen Rights Certificate shall evidence an original
additional contractual obligation of the Corporation, whether or not the
destroyed lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and the holder thereof shall be entitled to all the
benefits of this Agreement equally and proportionately with any and all
other holders of Rights duly issued by the Corporation.
SECTION 2.8 PERSONS DEEMED OWNERS.
Prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent shall be entitled to deem and treat the person in whose name a
Rights Certificate (or, prior to the Separation Time, the associated Common
Share certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever. As used in this Agreement,
unless the context otherwise requires, the term "HOLDER" of any Rights shall
mean the registered holder of such Rights (or, prior to the Separation Time,
the associated Common Shares).
SECTION 2.9 DELIVERY AND CANCELLATION OF RIGHTS 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 laws, destroy all cancelled
Rights Certificates and deliver a certificate of destruction to the Corporation.
SECTION 2.10 AGREEMENT OF RIGHTS HOLDERS.
Every holder of Rights, by accepting the same, consents and agrees with the
Corporation and the Rights Agent and with every other holder of Rights:
(a) to be bound by and subject to the provisions of this Agreement, as
amended or supplemented from time to time in accordance with the terms
hereof, in respect of all Rights held;
(b) that prior to the Separation Time each Right will be transferable
only together with, and will be transferred by a transfer of, the
Common Share certificate representing such Right;
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(c) that after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(d) that prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Share certificate) for
registration of transfer, the Corporation, the Rights Agent and any
agent of the Corporation or the Rights Agent shall be entitled to deem
and treat the person in whose name the Rights Certificate (or prior to
the Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on such
Rights Certificate or the associated Common Share certificate made by
anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights Agent
shall be affected by any notice to the contrary;
(e) that such holder of Rights has waived his right to receive any
fractional Rights or any fractional shares upon exercise of Right;
(f) that without the approval of any holder of Rights and upon the sole
authority of the Board of Directors acting in good faith this
Agreement may be supplemented or amended from time to time pursuant to
and as provided herein; and
(g) that notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability
to any holder of a Right or any other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute, rule, regulation, or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation.
SECTION 2.11 RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.
No holder, as such, of any Rights or Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose whatsoever the holder of
any Common Share or any other share or security of the Corporation which may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed or
deemed to confer upon the holder of any Right or Rights Certificate, as such,
any of the rights, titles, benefits or privileges of a holder of Common Shares
or any other shares or securities of the Corporation or any right to vote at any
meeting of shareholders of the Corporation whether for the election of directors
or otherwise or upon any matter submitted to holders of shares of the
Corporation at any meeting thereof, or to give or withhold consent to any action
of the Corporation, or to receive notice of any meeting or other action
affecting any holder of Common Shares or any other shares or securities of the
Corporation except as expressly provided herein, or to receive dividends,
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by Rights Certificates shall have been duly exercised in accordance
with the terms and provisions hereof.
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ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
SECTION 3.1 FLIP-IN EVENT.
(1) Subject to Section 3.1(2) below, and Sections 5.1(2), (3) and (4) hereof,
in the event that prior to the Expiration Time a Flip-in Event shall occur,
the Corporation shall take such action as may be necessary to ensure and
provide within eight (8) Business Days of such occurrence, or such longer
period as may be required to satisfy all applicable requirements of the
SECURITIES ACT (
Ontario), and the securities legislation of each other
province of Canada that, except as provided below, each Right shall
thereafter constitute the right to purchase from the Corporation upon
exercise thereof in accordance with the terms hereof that number of Common
Shares of the Corporation having an aggregate Market Price on the date of
the 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 hereof in the event that after such date of
occurrence an event of a type analogous to any of the events described in
Section 2.3 hereof shall have occurred with respect to such Common
Shares).
(2) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of any Flip-in Event, any Rights that are Beneficially Owned by
(i) an Acquiring Person, or any Affiliate or Associate of an Acquiring
Person, or any Person acting jointly or in concert with an Acquiring Person
or any Affiliate or Associate of such Acquiring Person, or any Affiliate or
Associate of such Person so acting jointly or in concert, or (ii) a
transferee or other successor in title of Rights, directly or indirectly,
of an Acquiring Person (or of any Affiliate or Associate of an Acquiring
Person) or of any Person acting jointly or in concert with an Acquiring
Person or any Associate or Affiliate of an Acquiring Person (or of any
Affiliate or Associate of such Person so acting jointly or in concert) who
becomes a transferee or successor in title concurrently with or subsequent
to the Acquiring Person becoming such, shall become null and void without
any further action, and any holder of such Rights (including transferees or
successors in title) shall not have any rights whatsoever to exercise such
Rights under any provision of this Agreement and shall not have thereafter
any other rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise.
ARTICLE 4
THE RIGHTS AGENT
SECTION 4.1 GENERAL.
(1) The Corporation hereby appoints the Rights Agent to act as agent for the
Corporation in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Corporation may from time
to time appoint such co-Rights Agents as it may deem necessary or
desirable, subject to the prior approval of the Rights Agent. In the event
the Corporation appoints one or more co-Rights Agents, the respective
duties of the Rights Agents and co-Rights Agents shall be as the
Corporation may determine, with the approval of the Rights Agent. The
Corporation agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and
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other disbursements incurred in the administration and execution of this
Agreement (including the reasonable fees and disbursements of counsel for
the Rights Agent) and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent, its
officers, directors and employees for, and to hold such persons harmless
against, any loss, liability, cost, claim, action, suit, damage, or expense
incurred (that is not the result of negligence, bad faith or wilful
misconduct on the part of any one or all of the Rights Agent, its officers,
directors or employees) for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim
of liability, which right to indemnification will survive the termination
of this Agreement or the resignation or removal of the Rights Agent.
(2) The Rights Agent shall be protected from 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 or any Rights Certificate or 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.
(3) 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.
SECTION 4.2 MERGER OR AMALGAMATION OR CHANGE OF NAME OF RIGHTS AGENT.
(1) 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, statutory arrangement
or consolidation to which the Rights Agent or any successor Rights Agent is
a party, or any corporation succeeding to the shareholder or stockholder
services business of the Rights Agent or any successor Rights Agent, will
be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 4.4
hereof. In case at the time such successor Rights Agent succeeds to the
agency created by this Agreement any of the Rights Certificates have been
countersigned 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.
(2) In case at any time the name of the Rights Agent is changed and at such
time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so
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countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name;
and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
SECTION 4.3 DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, to 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 to be taken by it in good
faith and in accordance with such opinion. Subject to the prior
written consent of the Corporation, which consent shall not be
unreasonably withheld, the Rights Agent may also consult with such
other experts as the Rights Agent shall consider necessary or
appropriate to properly carry out the duties and obligations imposed
under this Agreement (at the expense of the Corporation) and the
Rights Agent shall be entitled to act and rely in good faith on the
advice of any such expert.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter
be proved or established by the Corporation prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proven and established by a certificate
signed by a person believed by the Rights Agent to be the Chairman of
the Board, the President or any Vice-President, Treasurer or the
Controller of the Corporation and delivered to the Rights Agent; and
such certificate will be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for events which are
the result of 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
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exercisability of the Rights (including the Rights becoming void
pursuant to Section 3.1(2) hereof) or any adjustment required under
the provisions of Section 2.3 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights after receipt of the certificate
contemplated by Section 2.3 hereof 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 or fully paid and non-assessable.
(f) The Corporation agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any person believed by the Rights Agent to be the Chairman of the
Board, President, any Vice-President or the Treasurer or Controller
of the Corporation and to apply to such persons for advice or
instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance
with instructions of any such person. It is understood that
instructions to the Rights Agent shall, except where circumstances
make it impracticable 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 or stockholder, 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,
with the prior written consent of the Corporation, by or through
its attorneys or agents. 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 the prior written consent of the Corporation was obtained
and reasonable care was exercised in the selection and continued
employment thereof.
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SECTION 4.4 CHANGE OF RIGHTS AGENT.
The Rights Agent may resign and be discharged from its duties under this
Agreement upon sixty (60) 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 of the Corporation by registered or certified mail,
and to the holders of the Rights in accordance with Section 5.8 hereof (all
of which shall be at the expense of the Corporation). The Corporation may
remove the Rights Agent upon thirty (30) days' notice in writing, mailed to
the Rights Agent and to each transfer agent of the Voting Shares of the
Corporation by registered or certified mail and to the holders of the Rights
in accordance with Section 5.8 hereof. 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 sixty (60) days after such removal or
after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of any Rights
(which holder shall, with such notice, submit such holder's Rights
Certificate for inspection by the Corporation), then the Rights Agent or the
holder of any Rights may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent at the Corporation's expense. Any successor
Rights Agent, whether appointed by the Corporation or by such a court, 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 Canada. 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 receiving from the Corporation payment in full of all amounts
outstanding under 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 each transfer agent of the Voting Shares of the Corporation,
and mail a notice thereof in writing to the holders of the Rights. The cost
of giving any notice required under this Section 4.4 shall be borne solely
by the Corporation. 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
SECTION 5.1 REDEMPTION AND WAIVER.
(1) Subject to the prior consent of the holders of Voting Shares or Rights
obtained as set forth in Section 5.4(2) or Section 5.4(3) hereof, as
applicable, the Board of Directors acting in good faith may, at any time
prior to the occurrence of a Flip-in Event, elect to redeem all but not
less than all of the then outstanding Rights at a redemption price of
$0.00001 per Right appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.3 hereof in the event
that an event of the type described in Section 2.3 hereof shall have
occurred (such redemption price being herein referred to as the
"REDEMPTION PRICE").
(2) Subject to the prior consent of the holders of Voting Shares obtained as
set forth in Section 5.4(2) hereof, the Board of Directors may, at any
time prior to the occurrence of a
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Flip-in Event as to which the application of Section 3.1 hereof has not
been waived pursuant to this Section 5.1, if such Flip-in Event would occur
by reason of an acquisition of Voting Shares otherwise than pursuant to a
Take-over Bid made by means of a Take-over Bid circular to all registered
holders of Voting Shares and otherwise than in the circumstances set forth
in Section 5.1(4) hereof, waive the application of Section 3.1 hereof to
such Flip-in Event. In such event, the Board of Directors shall extend the
Separation Time to a date at least ten (10) Business Days subsequent to the
meeting of shareholders called to approve such waiver.
(3) The Board of Directors acting in good faith, may, prior to the
occurrence of a Flip-in Event, and upon prior written notice delivered
to the Rights Agent, determine to waive the application of Section 3.1
hereof to a Flip-in Event that may occur by reason of a Take-over Bid
made by means of a Take-over Bid circular to all registered holders of
Voting Shares; provided that if the Board of Directors waives the
application of Section 3.1 hereof to a particular Flip-in Event pursuant
to this Section 5.1(3), the Board of Directors shall be deemed to have
waived the application of Section 3.1 hereof to any other Flip-in Event
occurring by reason of any Take-over Bid made by means of a Take-over
Bid circular to all registered holders of Voting Shares prior to the
expiry of any Take-over Bid in respect of which a waiver is, or is
deemed to have been granted, pursuant to this Section 5.1(3).
(4) The Board of Directors may, prior to the close of business on the tenth
(10th) day following the Stock Acquisition Date, determine, upon prior
written notice delivered to the Rights Agent, to waive or to agree to
waive the application of Section 3.1 hereof to a Flip-in Event, provided
that both of the following conditions are satisfied:
(a) the Board of Directors has determined that a Person became an
Acquiring Person by inadvertence and without any intention to become,
or knowledge that Person would become, an Acquiring Person; and
(b) such Acquiring Person has reduced its Beneficial Ownership of Voting
Shares (or has entered into a contractual arrangement with the
Corporation, acceptable to the Board of Directors, to do so within
thirty (30) days of the date on which such contractual arrangement is
entered into) such that at the time the waiver becomes effective
pursuant to this Section 5.1(4) it is no longer an Acquiring Person;
and in the event of such a waiver, for the purposes of this Agreement, the
Flip-in Event shall be deemed never to have occurred.
(5) Where a Person acquires pursuant to a Permitted Bid, a Competing Bid or an
Exempt Acquisition under Section 5.1(3) above, outstanding Voting Shares,
then the Corporation shall immediately upon the consummation of such
acquisition redeem the Rights at the Redemption Price.
(6) If the Corporation is obligated under Section 5.1(5) above to redeem the
Rights, or if the Board of Directors elects under Section 5.1(1) above or
Section 5.1(8) below to redeem the Rights, the right to exercise the Rights
will thereupon, without further action and without notice, terminate and
each Right will after redemption be null and void and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price.
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(7) Within ten (10) days after the Corporation is obligated under Section
5.1(5) above to redeem the Rights, or the Board of Directors elects under
Section 5.1(1) above or Section 5.1(8) below to redeem the Rights, the
Corporation shall give notice of redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their
last address as they appear upon the Rights Register or, prior to the
Separation Time, on the registry books of the Transfer Agent for the
Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. The Corporation may not redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 5.1 and other than in connection
with the purchase of Common Shares prior to the Separation Time.
(8) Where a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn
or otherwise terminated after the Separation Time has occurred and prior
to the occurrence of a Flip-in Event, the Board of Directors may elect to
redeem all the outstanding Rights at the Redemption Price.
(9) Upon the Rights being redeemed pursuant to Section 5.1(8) above, 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 Common 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.
SECTION 5.2 EXPIRATION.
No person shall have any rights whatsoever pursuant to or arising out of
this Agreement or in respect of any Right after the Expiration Time, except the
Rights Agent as specified in Section 4.1(1) hereof.
SECTION 5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the number or kind or class of shares
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
SECTION 5.4 SUPPLEMENTS AND AMENDMENTS.
(1) The Corporation may, prior to any shareholders' meeting called to approve
this Agreement, supplement or amend this Agreement without the approval of
any holder of Rights or Voting Shares. Thereafter, the Corporation may from
time to time supplement or amend this Agreement without the approval of any
holders of Rights or Voting Shares to correct any clerical or typographical
error or to maintain the validity of the Agreement as a result of a change
in any applicable legislation or regulations or rules thereunder.
Notwithstanding anything in this Section 5.4 to the contrary, no supplement
or amendment shall be made to the provisions of Article 4 hereof except
with the written concurrence of the Rights Agent to such supplement or
amendment.
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(2) Subject to Section 5.4(1) above, the Corporation may, with the prior
consent of the holders of the Voting Shares obtained as set forth below,
at any time prior to the Separation Time amend, vary 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
provided by the holders of Voting Shares at a meeting of the holders of
Voting Shares, which meeting shall be called and held in compliance with
applicable laws and regulatory requirements and the requirements in the
articles and by-laws of the Corporation. Subject to compliance with any
requirements imposed by the foregoing, consent shall be deemed to have
been given if the proposed amendment, variation or revision is approved
by the affirmative vote of a majority of the votes cast by all holders
of Voting Shares (other than any holder of Voting Shares who is an
Offeror pursuant to a Take-over Bid that is not a Permitted Bid or
Competing Bid with respect to all Voting Shares Beneficially Owned by
such Person), represented in person or by proxy at the meeting.
(3) The Corporation may, with the prior consent of the holders of Rights, at
any time after the Separation Time and before the Expiration Time, amend,
vary 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).
(4) Any approval of the holders of Rights shall be deemed to have been given
if the action requiring such approval is authorized by the affirmative
votes of the holders of Rights present or represented at and entitled to
be voted at a meeting of the holders of Rights and representing a
majority of the votes cast in respect thereof. For the purposes hereof,
each outstanding Right (other than Rights which are void pursuant to the
provisions hereof) shall be entitled to one vote, and the procedures for
the calling, holding and conduct of the meeting shall be those, as nearly
as may be, which are provided in the Corporation's by-laws and the CBCA
with respect to a meeting of shareholders of the Corporation.
(5) The Corporation shall be required to provide the Rights Agent with notice
in writing of any such amendment, variation or deletion to this Agreement
as referred to in this Section 5.4 within 5 days of effecting such
amendment, variation or deletion.
(6) Any supplements or amendments made by the Corporation to this Agreement
pursuant to Section 5.4(1) above which are required to maintain the
validity of this Agreement as a result of any change in any applicable
legislation or regulations or rules thereunder shall:
(a) if made before the Separation Time, be submitted to the shareholders
of the Corporation at the next meeting of shareholders and the
shareholders may, by the majority referred to in Section 5.4(2) above
confirm or reject such amendment; and
(b) if made after the Separation Time, be submitted to the holders of
Rights at a meeting to be called for on a date not later than
immediately following the next meeting of shareholders of the
Corporation and the holders of Right may, by
-33-
resolution passed by the majority referred to in Section 5.4(4)
above, confirm or reject such amendment.
A supplement or amendment of the nature referred to in this
Section 5.4(6) shall be effective from the date of the resolution
of the Board of Directors adopting such supplement or amendment until
it is confirmed or rejected or until it ceases to be effective
(as described in the next sentence) and, where such supplement or
amendment is confirmed, it continues in effect in the form so
confirmed. If such supplement or amendment is rejected by the
shareholders or the holders of Rights or is not submitted to the
shareholders or holders of Rights as required, then such supplement or
amendment shall cease to be effective from and after the termination
of the meeting at which it was rejected or to which it should have
been but was not submitted or from and after the date of the meeting
of holders of Rights that should have been but was not held, and no
subsequent resolution of the Board of Directors to amend, vary or
delete any provision of this Agreement to substantially the same
effect shall be effective until confirmed by the shareholders or
holders of Rights, as the case may be.
SECTION 5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(1) The Corporation shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. Any such
fractional Right shall be null and void and the Corporation will not have
any obligation or liability in respect thereof.
(2) The Corporation shall not be required to issue fractions of Common Shares
or other securities upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares or other securities.
In lieu of issuing fractional Common Shares or other securities, the
Corporation shall pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided, an amount in cash
equal to the same fraction of the Market Price of one Common Share. The
Rights Agent shall have no obligation to make any payments in lieu of
fractional Common Shares unless the Corporation shall have provided the
Rights Agent with the necessary funds to pay in full all amounts payable in
accordance with Section 2.2(5).
SECTION 5.6 RIGHTS OF ACTION.
Subject to the terms of this Agreement, all rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective registered holders of the Rights; and any
registered holder of any Rights, without the consent of the Rights Agent or
of the registered 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 such holder's right to exercise such
holder's Rights 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.
SECTION 5.7 NOTICE OF PROPOSED ACTIONS.
In case the Corporation shall propose after the Separation Time and prior
to the Expiration Time to effect the liquidation, dissolution or winding-up of
the Corporation or the
-34-
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 5.8 hereof, a notice of such proposed action, which
shall specify the date on which such liquidation, dissolution, winding up, or
sale is to take place, and such notice shall be so given at least twenty (20)
Business Days prior to the date of taking of such proposed action.
SECTION 5.8 NOTICES.
(1) Notices or demands authorized or required by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights to or on the
Corporation shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
CAE Inc.
▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇
Royal Bank Plaza
Toronto,
Ontario
M5J 2J1
Attention: President and Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(2) Any notice or demand authorized or required by this Agreement to be given
or made 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
first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Corporation) as follows:
Montreal Trust Company of Canada
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Attention: Senior Manager, Client Services
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(3) Notices or demands authorized or required by this Agreement to be given or
made 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 paid, addressed to such holder at the address
of such holder as it appears upon the Rights Register or, prior to the
Separation Time, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
SECTION 5.9 SUCCESSORS.
All the covenants and provisions of this Agreement by or for the benefit of
the Corporation or the Rights Agent shall bind and enure to the benefit of
their respective successors and assigns hereunder.
SECTION 5.10 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
-35-
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Corporation, the Rights Agent and the holders of the
Rights.
SECTION 5.11 GOVERNING LAW.
This Agreement and each Right issued hereunder shall be deemed to be a
contract made under the laws of the Province of
Ontario and for all purposes
shall be governed by and construed in accordance with the laws of such province.
SECTION 5.12 SEVERABILITY.
If any Section, Clause, term or provision hereof or the application
thereof to any circumstances or any right hereunder shall, in any jurisdiction
and to any extent, be invalid or unenforceable, such Section, Clause, term or
provision or such right shall be ineffective only in such jurisdiction and to
the extent of such invalidity or unenforceability in such jurisdiction without
invalidating or rendering unenforceable or ineffective the remaining Sections,
Clauses, terms and provisions hereof or rights hereunder in such jurisdiction or
the application of such Section, Clause, term or provision or rights hereunder
in any other jurisdiction or to circumstances other than those as to which it is
specifically held invalid or unenforceable.
SECTION 5.13 EFFECTIVE DATE.
This Agreement is effective and in full force and effect in accordance
with its terms and conditions as of and from March 7, 1990 (the "EFFECTIVE
DATE").
SECTION 5.14 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, in relation to or in connection with this Agreement, shall not
subject the Board of Directors or any director of the Corporation to any
liability to the holders of the Rights.
SECTION 5.15 RIGHTS OF BOARD, CORPORATION AND OFFEROR.
Without limiting the generality of the foregoing, nothing contained herein
shall be construed to suggest or imply that the Board of Directors shall not be
entitled to recommend that holders of Voting Shares reject or accept any
Take-over Bid or take any other action (including, without limitation, the
commencement, prosecution, defence or settlement of any litigation and the
submission of additional or alternative Take-over Bids or other proposals to the
Shareholders of the Corporation) with respect to any Take-over Bid or otherwise
that the Board of Directors believes is necessary or appropriate in the exercise
of its fiduciary duties.
SECTION 5.16 REGULATORY APPROVALS.
Any obligation of the Corporation or action or event contemplated by this
Agreement shall be subject in any jurisdiction to the prior receipt of any
required approval or consent from any governmental or regulatory authority in
such jurisdiction including, without limiting the generality of the foregoing,
any necessary approval of any securities regulatory authority or stock exchange.
SECTION 5.17 DECLARATION AS TO NON-CANADIAN HOLDERS.
If in the opinion of the Board of Directors (who may rely upon the advice
of counsel) any action or event contemplated by this Agreement would require
compliance with the securities laws or comparable legislation of a jurisdiction
outside Canada, the Board of Directors
-36-
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 Rights or securities issuable on 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 of the relevant Persons or securities for such
purposes.
SECTION 5.18 TIME OF THE ESSENCE.
Time shall be of the essence in this Agreement.
SECTION 5.19 EXECUTION IN 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 one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement.
CAE INC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Authorized Signing Officer
MONTREAL TRUST COMPANY OF CANADA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Authorized Signing Officer
▇▇▇▇▇▇ ▇▇▇▇▇▇
Senior Account Manager
Montreal Trust Company of Canada
By: /s/ ▇.▇. ▇▇▇▇▇▇
--------------------------------
Authorized Signing Officer
SCHEDULE 2.2(3)
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 RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED
IN SECTION 3.1(2) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON, ANY PERSON ACTING JOINTLY OR IN CONCERT WITH AN ACQUIRING
PERSON OR THEIR RESPECTIVE ASSOCIATES AND AFFILIATES (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND THEIR RESPECTIVE TRANSFEREES SHALL BECOME VOID
WITHOUT ANY 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 Protection Rights Plan
Agreement dated June 14, 2000, as amended and restated from time to time (the
"RIGHTS AGREEMENT"), between
CAE Inc., a corporation incorporated under the
laws of Canada (the "CORPORATION"), and Montreal Trust Company of Canada, a
trust company incorporated under the laws of Canada, as rights agent (the
"RIGHTS AGENT", which term shall include any successor Rights Agent under the
Rights Agreement) to purchase from the Corporation at any time after the
Separation Time (as such term is defined the Rights Agreement) and prior to
the Expiration Time (as such term is defined in the Rights Agreement) (or
such earlier expiration time as is provided in the Rights Agreement) one
fully paid and non-assessable Common Share of the Corporation (a "COMMON
SHARE") at the Exercise Price referred to below, upon presentation and
surrender of this Rights Certificate together with the Form of Election to
Exercise duly executed and submitted to the Rights Agent at its principal
offices in any of the City of Toronto. The Exercise Price shall initially be
$100 (Canadian) per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, each Right
evidenced hereby may entitle the registered holder thereof to purchase or
receive assets, debt securities or other equity securities of the Corporation
(or a combination thereof) all as provided in the Rights Agreement.
This Rights Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights. Copies of the
Rights Agreement are on file at the registered head 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
-2-
Rights Certificate or Rights Certificates of like tenor and date evidencing an
aggregate number of Rights entitling the holder to purchase a like aggregate
number of Common Shares as the 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 Rights Certificate may be, and under certain circumstances are required to
be, redeemed by the Corporation at a redemption price of $0.00001 per Right.
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby.
No holder of this Rights Certificate, as such, shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities of the Corporation 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 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 of the Corporation 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 of the
Corporation (except as expressly provided in the Rights Agreement), or to
receive dividends, distributions 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 manually countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation.
Dated --
CAE INC.
By:
---------------------------------
Authorized Signing Officer
By:
---------------------------------
Authorized Signing Officer
-3-
MONTREAL TRUST COMPANY OF CANADA
By:
---------------------------------
Authorized Signing Officer
By:
---------------------------------
Authorized Signing Officer
NOTICE
In the event the certification set forth in the Form of Election to
Exercise is not completed, the Corporation will deem the Beneficial Owner of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and
accordingly such Rights shall be null and void.
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED hereby sells,
-----------------------------------------------
assigns and transfers unto
---------------------------------------
---------------------------------------------------
(Please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein and does hereby irrevocably constitute and appoint
----------------------------------------------------------------------------
as attorney to transfer the within Rights on the books of the Corporation,
with full power of substitution.
Dated
-----------------------------
Signature Guaranteed ------------------------------------------------------
Signature
(Signature must correspond to name as written upon the
face of this Rights Certificate in every particular,
without alteration or enlargement or any change
whatsoever)
Signature must be guaranteed by a Canadian chartered bank, or Medallion
guaranteed by a Canadian trust company or a member of a recognized stock
exchange or a member of the Transfer Association Medallion (Stamp) 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 any Person acting jointly or in consent with any of the foregoing
(as defined in the Rights Agreement).
------------------------------------------------------
Signature
-2-
NOTICE
In the event the certification set forth in the Form of Assignment is not
completed, the Corporation will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and accordingly such
Rights shall be null and void.
(To be attached to each Rights Certificate)
FORM OF ELECTION TO EXERCISE
TO:
CAE INC.
The undersigned hereby irrevocably elects to exercise ________ whole Rights
represented by the attached Rights Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that certificates for
such Shares be issued to:
----------------------------
(NAME)
----------------------------
(ADDRESS)
----------------------------
(CITY AND STATE OR PROVINCE)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
----------------------------
(NAME)
----------------------------
(ADDRESS)
----------------------------
(CITY AND STATE OR PROVINCE)
----------------------------------------------------------
SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER NUMBER
Dated
---------------------
Signature Guaranteed ------------------------------------------------------
Signature
(Signature must correspond to name as written upon the
face of this Rights Certificate in every particular,
without alteration or enlargement or any change
whatsoever)
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company or a member of a recognized stock exchange or a member of the Securities
Transfer Association Medallion Program (Stamp).
-2-
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 any Person acting
jointly or in consent with any of the foregoing or any Affiliate or Associate of
such Person (as defined in the Rights Agreement).
------------------------------------------
Signature
ASSIGNMENT OF AGENCIES AGREEMENT
THIS AGREEMENT made as of the 15th day of January, 2001
BETWEEN:
CAE INC.,
a company incorporated under the laws of C.B.C.A
(hereinafter called the "Company")
PARTY OF THE FIRST PART
AND: MONTREAL TRUST COMPANY,
a trust company existing under the laws of Canada
PARTY OF THE SECOND PART
AND: MONTREAL TRUST COMPANY OF CANADA,
a trust company existing under the laws of Canada
(Montreal Trust Company and Montreal Trust Company of
Canada being hereinafter referred to, either
individually or collectively as the context may require,
as "Montreal Trust")
PARTY OF THE THIRD PART
AND: COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company
existing under the laws of Canada with an office in the
City of Toronto, in the Province of
Ontario
(hereinafter called "Computershare")
PARTY OF THE FOURTH PART
WHEREAS Montreal Trust is currently under contract to act as the Company's duly
appointed Transfer Agent and Registrar, and provides various ancillary services
to the Company in connection therewith;
AND WHEREAS Montreal Trust may currently be under contract to provide certain
additional agency and administrative services to the Company, under agreements
or arrangements entered into through its former Stock Transfer operations;
AND WHEREAS the aforementioned agencies and services (hereinafter called "the
Agencies") are provided principally under the agreement(s) set forth on Schedule
"A" hereto (the "Contracts");
AND WHEREAS Computershare and Montreal Trust represent that Computershare
acquired the Stock Transfer business of Montreal Trust pursuant to an Asset
Purchase Agreement dated as of June 30, 2000;
AND WHEREAS both the Company and Montreal Trust are desirous of having the
rights, powers, duties and obligations of the Agencies transferred and assigned
to, and assumed by, Computershare, and Computershare is desirous of accepting
same, all with effect from the close of business on March 16, 2001,
(hereinafter, the "Transfer Date");
AND WHEREAS to give effect to the foregoing, Montreal Trust desires to transfer
and assign, and to formally resign from, the Agencies; and the Company is
prepared to accept such resignations and to appoint Computershare as the
successor to the Agencies under the terms of the applicable Contracts, all with
effect upon the Transfer Date;
NOW, THEREFORE, THIS AGREEMENT WITNESSES THAT IN CONSIDERATION OF THE PREMISES
AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH
ARE HEREBY ACKNOWLEDGED BY THE PARTIES HERETO, THE PARTIES COVENANT AND AGREE AS
FOLLOWS:
1. Montreal Trust hereby transfers and assigns to Computershare all of its
rights, powers, duties and obligations under the Agencies and the Contracts, and
immediately thereafter resigns therefrom, all with effect upon the Transfer
Date.
2. The Company hereby consents to such transfers and assignments from Montreal
Trust to Computershare, accepts such resignations, waiving any periods of notice
that may be set forth in the Contracts, and appoints Computershare as its
Transfer Agent and Registrar and as its agent and/or administrator under the
other Agencies, if any, all with effect upon the Transfer Date. The Company
further releases Montreal Trust from any duties and liabilities that may arise
pursuant to Computershare's administration of the Agencies, from and after the
Transfer Date.
3. Computershare hereby accepts such appointments, transfers and assignments,
effective upon the Transfer Date and upon such terms as are set forth in the
Contracts, and agrees to perform all of the obligations of Montreal Trust under
the Agencies and the Contracts which are required to be performed from and after
the Transfer Date.
4. Montreal Trust shall transfer and deliver to Computershare, and Computershare
shall accept, any and all records, documents, property, monies and other
holdings as may be held by Montreal Trust in connection with the Agencies. Such
transfers, deliveries and acceptances shall be made as soon as practicable upon,
after, or in anticipation of, the Transfer Date as may be agreed between such
parties.
5. Each party hereto agrees to execute and deliver all such documents and
instruments and to do such other acts as may be necessary or advisable to give
effect to the assignments, transfers, and deliveries referred to herein.
6. For greater certainty, the parties acknowledge and agree that any Agencies
currently performed by Montreal Trust, or in its name by Computershare, which
are ancillary to and/or related to those set forth in the Contracts but which
may not be expressly provided for in the Contracts, are intended to be
transferred to Computershare along with the Agencies expressly created by the
Contracts, and they shall transfer to Computershare upon the Transfer Date.
7. Notwithstanding any other provision hereof, to the extent that any of the
Contracts expressly require the consent of any third party or parties, the
parties hereto agree that the transfer and assignments of such Contract(s) shall
not be effective until such consent(s) are provided.
8. The parties hereto acknowledge that Computershare, having been continued as a
federal trust company on January 9, 2001, expects to obtain all registrations,
licenses and approvals required for it to carry on its business in all
jurisdictions in Canada (the "required approvals") on or before the Transfer
Date. If, however, the receipt of the required approvals has not occurred by the
Transfer Date, then notwithstanding any other provision of this Agreement,
Computershare may elect by written notice to the other parties hereto that all
resignations, releases, appointments, transfers and assignments contemplated
hereunder shall not occur on the Transfer Date but shall occur on such later
date as Computershare shall determine and communicate to the other parties,
provided that if Computershare's determination and communication of such later
date have not occurred by December 31, 2001, this Agreement shall be null and
void in its entirety. This Agreement shall ensure to the benefit of and be
binding upon the parties hereto and their successors and permitted assigns.
9. This Agreement shall be governed by the laws of the Province of
Ontario and
the laws of Canada applicable therein.
IN WITNESS WHEREOF THIS AGREEMENT HAS BEEN DULY EXECUTED BY THE PARTIES HERETO
AS OF THE DATE FIRST ABOVE WRITTEN.
CAE INC.
Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Per: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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MONTREAL TRUST COMPANY
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Per: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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MONTREAL TRUST COMPANY OF CANADA
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Per: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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COMPUTERSHARE TRUST COMPANY OF CANADA
Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Per: /s/ ▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇▇
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SCHEDULE "A"
TO ASSIGNMENT OF AGENCIES AGREEMENT BETWEEN
CAE INC.,
MONTREAL TRUST COMPANY, MONTREAL TRUST COMPANY OF CANADA AND
COMPUTERSHARE TRUST COMPANY OF CANADA
TITLE AND DATE OF AGREEMENT ADDITIONAL IDENTIFIERS
(e.g.. Capacity. Type of Agreement etc.,
as may be required to identify Agreement)
Transfer Agent, Registrar & Dividend 1996
Disbursing Agent
Shareholder Protection 14-Jun-00
Rights Plan Agreement (Amended and Restated)
Sedar Solutions Agreement 01-Apr-97