EXHIBIT 4.3
CAE INC.
AND
MONTREAL TRUST COMPANY OF CANADA
AS RIGHTS AGENT
-----------------------------------------------
AMENDED AND RESTATED
SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT
JUNE 14, 2000
-----------------------------------------------
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;
-2-
(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;
-3-
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
-4-
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.
-5-
(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
-6-
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
-7-
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
-8-
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
-9-
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
-10-
(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:
-11-
(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;
-12-
(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
-13-
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.
-14-
(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.
-15-
(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;
-16-
(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
-17-
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
-18-
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.
-19-
(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.
-20-
(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
-21-
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.
-22-
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.
-23-
(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;
-24-
(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.
-25-
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
-26-
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
-27-
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
-28-
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.
-29-
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
-30-
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.
-31-
(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.
-32-
(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.
X.X. Xxx 00, Xxxxx 0000
Royal Bank Plaza
Toronto, Ontario
M5J 2J1
Attention: President and Chief Executive Officer
Facsimile No.: (000) 000-0000
(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
000 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx, X0X 0X0
Attention: Senior Manager, Client Services
Facsimile No.: (000) 000-0000
(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/ Xxxx X. Xxxxxx
__________________________
Authorized Signing Officer
MONTREAL TRUST COMPANY OF CANADA
By: /s/ Xxxxxx Xxxxxx
__________________________
Authorized Signing Officer
Xxxxxx Xxxxxx
Senior Account Manager
Montreal Trust Company of Canada
By: /s/ X.X. Xxxxxx
__________________________
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/ Xxxxxx Xxxxxx
________________________
Per: /s/ Xxxx X. Xxxxxx
________________________
MONTREAL TRUST COMPANY
Per: /s/ Xxxxxxx Xxxx
________________________
Per: /s/ Xxxxxxxxx Xxxxxx
________________________
MONTREAL TRUST COMPANY OF CANADA
Per: /s/ Xxxxxxx Xxxx
________________________
Per: /s/ Xxxxxxxxx Xxxxxx
________________________
COMPUTERSHARE TRUST COMPANY OF CANADA
Per: /s/ Xxxxxx Xxxxx
________________________
Per: /s/ Xxxx Xx Xxxxx-Xxxxx
________________________
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
