4.3 Shareholder Rights Plan
SHAREHOLDER RIGHTS PLAN AGREEMENT
BETWEEN
OFFSHORE SYSTEMS INTERNATIONAL LTD.
AND
COMPUTERSHARE TRUST COMPANY OF CANADA
DATED AS OF APRIL 19, 2001
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TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
1.1 Certain Definitions ................................................... 2
1.2 Currency .............................................................. 11
1.3 Number and Gender ..................................................... 11
1.4 Sections and Headings ................................................. 11
1.5 Statutory References .................................................. 11
1.6 Determination of Percentage Ownership ................................. 11
1.7 Acting Jointly or in Concert .......................................... 12
1.8 Generally Accepted Accounting Principles .............................. 12
ARTICLE 2
THE RIGHTS
2.1 Legend on Common Share Certificates ................................... 12
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights ...... 13
2.3 Adjustments to Exercise Price; Number of Rights ....................... 15
2.4 Date on Which Exercise is Effective ................................... 20
2.5 Execution, Authentication, Delivery and Dating of Rights
Certificateses ....................................................... 20
2.6 Registration, Transfer and Exchange ................................... 20
2.7 Mutilated, Lost, Stolen and Destroyed Rights Certificates ............. 21
2.8 Persons Deemed Owners ................................................. 21
2.9 Delivery and Cancellation of Certificates ............................. 22
2.10 Agreement of Rights Holders ........................................... 22
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS
3.1 Flip-in Event ......................................................... 22
3.2 Fiduciary Duties of the Board of Directors of the Corporation ......... 24
ARTICLE 4
THE RIGHTS AGENT
4.1 General ............................................................... 24
4.2 Merger, Amalgamation, Consolidation or Change of Name of
Rights Agent ......................................................... 25
4.3 Duties of Rights Agent ................................................ 25
4.4 Change of Rights Agent ................................................ 27
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ARTICLE 5
MISCELLANEOUS
5.1 Redemption, Waiver and Termination ................................ 27
5.2 Expiration ........................................................ 29
5.3 Issuance of New Rights Certificates ............................... 29
5.4 Supplements and Amendments ........................................ 29
5.5 Fractional Rights and Fractional Shares ........................... 30
5.6 Rights of Action .................................................. 31
5.7 Holder of Rights Not Deemed a Shareholder ......................... 31
5.8 Notice of Proposed Actions ........................................ 31
5.9 Notices ........................................................... 31
5.10 Costs of Enforcement .............................................. 32
5.11 Regulatory Approva1s .............................................. 32
5.12 Declaration as to Non-Canadian and Non-U.S. Holders ............... 32
5.13 Successors ........................................................ 32
5.14 Benefits of this Agreement ........................................ 33
5.15 Shareholder Review ................................................ 33
5.16 Determinations and Actions by the Board of Directors .............. 33
5.17 Governing Law ..................................................... 33
5.18 Language .......................................................... 33
5.19 Counterparts ...................................................... 33
5.20 Severability ...................................................... 33
5.21 Effective Date .................................................... 34
5.22 Time of the Essence ............................................... 34
EXHIBIT A
Rights Certificate ................................................ A-1
FORM OF ELECTION TO EXERCISE ...................................... A-3
FORM OF ASSIGNMENT ................................................ A-5
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SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT dated as of April 19, 2001.
BETWEEN:
OFFSHORE SYSTEMS INTERNATIONAL LTD.
(the "Corporation")
OF THE FIRST PART
-and -
COMPUTERSHARE TRUST COMPANY OF CANADA
(the "Rights Agent")
OF THE SECOND PART
WHEREAS:
A. The Board of Directors has determined that it is advisable to adopt a
shareholder rights plan (the "Rights Plan") to ensure, to the extent
possible, that all shareholders of the Corporation are treated fairly in
connection with any takeover offer for the Corporation or other acquisition
of control of the Corporation.
B. In order to implement the Rights Plan, the Board of Directors has:
(a) authorized and declared a distribution of one right (a
"Right") effective at the Close of Business at the Record Time in
respect of each Common Share outstanding at the Close of Business at
the Record Time;
(b) authorized the issuance of one Right in respect of each Common Share
issued after the Record Time and prior to the earlier of the
Separation Time and the Expiration Time; and
(c) authorized the issuance of Rights Certificates to holders of Rights
pursuant to the terms and subject to the conditions set forth herein.
C. Each Right entitles the holder thereof, after the Separation Time, to
purchase securities of the Corporation pursuant to the terms and subject to
the conditions set forth herein.
D. The Corporation desires to appoint the Rights Agent to act on behalf of the
Corporation, and the Rights Agent is willing to so act, in connection with
the issuance, transfer, exchange and replacement of Rights Certificates,
the exercise of Rights and other matters referred to herein-
NOW THEREFORE in consideration of the premises and respective agreements set
forth herein, the parties hereby agree as follows:
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ARTICLE I
INTERPRETATION
1.1 Certain Definitions
For the purposes of this Agreement, including the recitals hereto, the following
terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who is at any time after the
date hereof the Beneficial Owner of 20% or more of the outstanding
Voting Shares of the Corporation; provided, however, that the term
"Acquiring Person" shall not include:
(i) the Corporation or any corporation controlled by the
Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or more of
the outstanding Voting Shares as a result of one or any
combination of:
(A) a Voting Share Reduction;
(B) a Permitted Bid Acquisition;
(C) an Exempt Acquisition; and
(D) a Pro Rata Acquisition;
provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the outstanding Voting
Shares by reason of one or any combination of a Voting Share
Reduction, a Permitted Bid Acquisition, an Exempt Acquisition
or a Pro Rata Acquisition, and thereafter becomes the
Beneficial Owner of an additional one per cent of the Voting
Shares then outstanding (otherwise than pursuant to a Voting
Share Reduction, a Permitted Bid Acquisition, an Exempt
Acquisition or a Pro Rata Acquisition), then, as of the date
that such Person becomes a Beneficial Owner of such additional
Voting Shares, such Person shall become an "Acquiring Person"`
(iii) for the period of 10 days after the Disqualification Date (as
hereinafter defined), any Person who becomes the Beneficial
Owner of 20% or more of the outstanding Voting Shares as a
result of such Person becoming disqualified from relying on
subclause 1.1(d)(v) hereof where such disqualification results
solely because such Person is making or has announced a
current intention to make a Take-over Bid, either alone or by
acting jointly or in concert with any other Person. For the
purposes of this definition, "Disqualification Date" means the
first date of public announcement that such Person is making
or has announced a current intention to make a Take-over Bid,
alone or by acting jointly or in concert with another Person;
or
(iv) an underwriter that becomes the Beneficial Owner of 20% or
more of the Voting Shares in connection with a distribution of
securities pursuant to an underwriting agreement with the
Corporation.
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(b) "Affiliate", when used to indicate a relationship with a specified
Person, means a Person that directly or indirectly controls, or is
controlled by, or is under common control with, such specified
Person,
(c) "Associate" means, when used to indicate a relationship
with a specified Person:
(i) a corporation of which that Person Beneficially Owns shares or
securities currently convertible into shares carrying more
than 10 per cent of the voting rights exercisable with respect
to the election of directors under all circumstances or by
reason of the occurrence of an event that has occurred and is
continuing, or a currently exercisable option or right to
purchase such shares or such convertible securities;
(ii) a partner of that Person;
(iii) a trust or estate in which that Person has a substantial
beneficial interest or in respect of which he serves as a
trustee or in a similar capacity provided, however, that a
Person shall not be an Associate of a trust by reason only of
the fact that such Person serves as trustee or in a similar
capacity in relation to such trust if such person is duly
licensed to carry on the business of a trust company under the
laws of Canada or any province thereof or if a substantial
portion of the ordinary business of such Person is the
management of investment funds for unaffiliated investors and
such Person acts as trustee or in a similar capacity in
relation to such trust in the ordinary course of such
business;
(iv) a spouse of that Person or any Person of the opposite sex with
whom that Person is living in a conjugal relationship outside
marriage or a child of that Person; and
(v) a relative of a Person mentioned in Clause 1.1(c)(iv) if that
relative has the same residence as that Person;
(d) A Person shall be deemed the "Beneficial Owner" of, and to have
"Beneficial Ownership" of, and to "Beneficially Own":
(i) any securities of which such Person or any of such Person's
Affiliates or Associates is owner at law or in equity;
(ii) any securities which the Person or any of such Person's
Affiliates or Associates has the right to acquire, within 60
days (whether such right is exercisable immediately or after
the passage of not more than 60 days thereafter or upon the
occurrence of a contingency or the making of a payment)
pursuant to any Convertible Security, agreement, arrangement,
pledge or understanding, whether or not in writing (other than
(A) customary agreements with and between underwriters and/or
banking group and/or selling group shareholders with respect
to a distribution of securities and (B) pledges of securities
in the ordinary course of the pledgee's business); and
(iii) any securities that are Beneficially Owned within the meaning
of clauses (i) or (ii) of this Subsection 1.1(b) by any other
Person with which such Person is acting jointly or in concert;
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provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to have "Beneficial Ownership" of, or to "Beneficially
Own", any security:
(iv) because such security has been deposited or tendered pursuant
to a Take-over Bid made by such Person or any of such Person's
Affiliates or Associates or any other person acting jointly or
in concert with such Person until the earlier of such tendered
security being (A) accepted unconditionally for payment or
exchange and (B) taken up and paid for;
(v) because (A) such Person or any of the Affiliates or Associates
of such Person or any other Person acting jointly or in
concert with such Person, holds such security provided that
the ordinary business of any such Person (the "Fund Manager")
includes the management of investment funds for others 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"), (B) such Person (the "Trust Company") is licensed
to carry on the business of a trust company under applicable
laws and, as such, acts as trustee or administrator or in a
similar capacity in relation to the estates of deceased or
incompetent Persons (each an "Estate Account") or in relation
to other accounts (each an "Other Account") and holds such
security in the ordinary course of such duties for such Estate
Accounts or for such Other Accounts, (C) such Person (the
"Administrator") is the administrator or the trustee of one or
more pension funds or plans (a "Plan") registered under the
laws of Canada or any province thereof or the laws of the
United States of America or any state thereof, (D) such Person
(the "Crown Agent") is 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, or
various public bodies, or (E) such Person is a Plan; provided,
however, that in any of the foregoing cases the Fund Manager,
the Trust Company, the Plan Administrator, the Crown Agent or
the Plan, as the case may be, is not then making or has not
then announced an intention to make a Take-over Bid, alone or
by acting jointly or in concert with any other Person, other
than an Offer to Acquire Voting Shares or other securities (X)
pursuant to a distribution by the Corporation or (Y) by means
of a Permitted Bid, or (Z) by means of market transactions
made in the ordinary course of the business of such Person
(including pre-arranged 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;
(vi) because such Person is a Client of the same Fund Manager as
another Person on whose account the Fund Manager holds such
security, or because 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
because such Person is a Plan with the same Plan Administrator
as another Plan on whose account the Plan Administrator holds
such securities;
(vii) because such Person is a Client of a Fund Manager and such
security is owned at law or in equity by the Fund Manager or
because 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 Plan and such
security is owned at law or in equity by the Plan
Administrator; or
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(viii) because such Person is the registered holder of securities
as a result of carrying on the business of or acting as a
nominee of a securities depositary.
For purposes of this Agreement in determining the percentage of the
outstanding Voting Shares with respect to which a Person is or is
deemed to be the Beneficial Owner, any unissued Voting Shares as to
which such Person is deemed the Beneficial Owner pursuant to this
Subsection 1.1(d) shall be deemed outstanding.
(e) "Board of Directors" shall mean the board of directors of the
Corporation or any duly constituted and empowered committee thereof.
(f) "Business Day" shall mean any day, other than a Saturday or Sunday or a
day on which banking institutions in the City of Vancouver are
authorized or obligated by law to close.
(g) "Canadian Dollar Equivalent" of any amount which is expressed in United
States dollars shall mean on any day the Canadian dollar equivalent of
such amount determined by reference to the Canadian-U.S. Exchange Rate
in effect on such date.
(h) "Close of Business" on any given date shall mean the time on such date
(or, if such date is not a Business Day, the time on the next Business
Day) at which the principal office of the transfer agent for the Common
Shares in Vancouver, British Columbia (or after the Separation Time,
the principal office of the Rights Agent in Vancouver, British
Columbia) is closed to the public.
(i) "Closing Price" per security of any securities on any date of
determination shall mean:
(i) the closing board lot sale price or, if such price is not
available, the average of the closing bid and asked prices, for
such securities as reported by the stock exchange or national
securities quotation system on which such securities are listed
or admitted to trading (provided that, if at the date of
determination such securities are listed or admitted to trading
on more than one stock exchange or national securities quotation
system, such price or prices shall be determined based on the
stock exchange or quotation system on which such securities are
then listed or admitted to trading on which the largest number of
such securities were traded during the most recently completed
calendar year); or
(ii) if for any reason none of such prices is available on such day or
the securities are not listed or admitted to trading on a stock
exchange or a national securities quotation system, the last sale
price, or in case no sale takes place on such date, the average
of the high bid and low asked prices for each of such securities
in the over-the-counter market;
provided, however, that (A) if for any reason none of such prices are
available on such date, the "Closing Price" per security of such
securities on such date shall mean the fair value per security of the
securities on such date as determined by a nationally or
internationally recognized investment dealer or investment banker with
respect to the fair value per security of such securities and (B) if
the Closing Price so determined is expressed in United States dollars,
such amount shall be converted to the Canadian Dollar Equivalent.
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(j) "Common Shares" shall mean the common shares in the share capital of
the Corporation as presently constituted, as such shares may be
subdivided, consolidated, reclassified or otherwise changed from time
to time, and "common shares" when used with reference to any Person
other than the Corporation means the class or classes of shares (or
similar equity interest) with the greatest per share voting power
entitled to vote generally in the election of all directors of such
other Person or the equity securities or other equity interest having
power (whether or not exercised) to control or direct the management
of such other Person or, if such other Person is a corporation
controlled by another Person, the Person (other than an individual)
which ultimately controls such first mentioned other Person.
(k) "Company Act" means the Company Act (British Columbia), R.S.B.C. 1996,
Chapter 62, as amended, and the regulations thereunder, and any
comparable or successor laws or regulations thereto.
(l) "Competing Permitted Bid" means a Take-over Bid that:
(i) is made after a Permitted Bid has been made and prior to the
expiry of the Permitted Bid;
(ii) satisfies all components of the definition of
a Permitted Bid other than the requirement in Clause (ii)(A)(x)
thereof; and
(iii) contains, and the take-up and payment for securities tendered
or deposited is subject to, irrevocable and unqualified
provisions that no Voting Shares shall be taken up or paid for
pursuant to the Takeover Bid prior to the Close of Business on
a date that is no earlier than the later of: (i) 21 days after
the date of the Take-over Bid, and (ii) the 60/th/ day after
the earliest date on which any other Permitted Bid that is then
in existence was made.
(m) "controlled" a body corporate is "controlled" by another Person if and
only if:
(i) securities entitled to vote in the election of directors
carrying more than 50% of the votes for the election of
directors are held, directly or indirectly, by or 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 body corporate;
and "controls", "controlling" and "under common control"; shall be
interpreted accordingly.
(n) "Convertible Security" means, with respect to any security, a security
convertible into or exchangeable for the first-mentioned security.
(o) "Co-Rights Agents" shall have the meaning ascribed thereto in
Subsection 4.1(a).
(p) "Disposition Date" has the meaning ascribed thereto in Subsection
5.1(b).
(q) "Disqualification Date" has the meaning ascribed thereto in Clause 1.1
(a)(iii) hereof.
(r) "Effective Date" shall mean the later of the Close of Business on: (i)
May 28, 2001 and (ii) the date of the Corporation being advised by
counsel that all appropriate regulatory approvals have been obtained
by the Corporation.
(s) "Election to Exercise" has the meaning ascribed thereto in Subsection
2.2(d).
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(t) "Exempt Acquisition" means an acquisition of Voting Shares: (i) a share
acquisition in respect of which the Board of Directors has waived the
application of Section 3.1 pursuant to Subsection 5.1(b), 5.1(d) or
5.1(e); (ii) which was made on or prior to the date of this Agreement;
and (iii) by way of private placement or other distribution exempt from
the prospectus requirements of applicable law and which was approved by
the Board of Directors.
(u) "Exercise Price" shall mean, as of any date, the price at which a holder
of a Right may purchase the securities issuable upon exercise of one
whole Right and, until adjustment thereof in accordance with the terms
hereof, the Exercise Price shall be $30.00.
(v) "Expansion Factor" has the meaning ascribed thereto in subclause
2.3(b)(iv)(A)(1).
(w) "Expiration Time" shall mean the earlier of (i) the Termination Time;
and (ii) the Close of Business on the date on which the first annual
meeting of shareholders of the Corporation following the third
anniversary of the date of this Agreement is held; provided, however,
that if the resolution referred to in Section 5.15 is approved by the
Independent Shareholders in accordance with Section 5.15 at or prior to
such annual meeting, "Expiration Time" means the earlier of (i) the
Termination Time; and (ii) the Close of Business on the sixth
anniversary of the date of this Agreement.
(x) "Fiduciary" shall mean a trust company registered under the trust
company legislation of Canada or any province thereof, a trust company
organized under the laws of any state of the United States, a portfolio
manager registered under the securities legislation of one or more
provinces of Canada or an investment adviser registered under the United
States Investment Advisers Act of 1940 or any other securities
legislation of the United States or any state, of the United States.
(y) "Flip-in Event" shall mean a transaction or event in or pursuant to
which any Person becomes an Acquiring Person.
(z) "holder" shall have the meaning ascribed thereto in Section 2.8.
(aa) "Independent Shareholders" shall mean holders of outstanding Voting
Shares, other than Voting Shares Beneficially Owned by (i) any Acquiring
Person; (ii) any Offeror other than a Person who at the relevant time is
deemed not to Beneficially Own such Voting Shares by reason of Clause
1.1(d)(v) hereof; (iii) any Person acting jointly or in concert with
such Acquiring Person or Offeror referred to in (ii); (iv) any Associate
or Affiliate of such Acquiring Person or Offeror referred to in (ii);
and (v) any employee benefit plan, deferred profit sharing plan and any
similar plan or trust for the benefit of employees of the Corporation
unless the beneficiaries of the plan or trust direct the manner in which
the Voting Shares are to be voted or withheld from voting or direct
whether the Voting Shares are to be tendered to a Take-over Bid.
(ab) "Market Price" per security of any securities on any date of
determination shall mean the average of the daily Closing Prices per
security of such securities on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date of
determination; provided, however, that if an event of a type analogous
to any of the events described in Section 2.3 hereof shall have caused
any Closing Price used to determine the Market Price on any Trading Day
not to be fully comparable with the Closing Price on the Trading Day
immediately preceding such date of determination, each such
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Closing Price so used shall be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section 2.3
hereof in order to make it fully comparable with the Closing Price
on the Trading Day immediately preceding such date of
determination.
(ac) "Nominee" has the meaning ascribed thereto in Subsection 2.2(c).
(ad) "Offer to Acquire" shall include:
(i) an offer to purchase or a solicitation of an offer to sell
Voting Shares, or a public announcement of an intention to
make such an offer or solicitation; and
(ii) an acceptance of an offer to sell Voting Shares, whether or
not such offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer to
sell shall be deemed to be making an Offer to Acquire to the
Person that made the offer to sell.
(ae) "Offerer" shall mean a Person who has announced a current
intention to make, or who is making, a Take-over Bid.
(af) "Offerer's Securities" shall mean the Voting Shares Beneficially
Owned on the date of a Take-over Bid by an Offerer.
(ag) "Permitted Bid" means a Take-over Bid made by way of a Take-over
Bid circular which also complies with the following additional
provisions:
(i) the Take-over Bid is made to all holders of record of
Voting Shares wherever resident as registered on the books
of the Corporation, other than the Offerer;
(ii) the Take-over Bid contains, and the take-up and payment for
securities tendered or deposited thereunder is subject to
irrevocable and unqualified conditions that:
(A) no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid (x) prior to the Close
of Business on a date which is not less than 60 days
following the date of the Take-over Bid and (y)
unless, at the Close of Business on that date, the
Voting Shares deposited or tendered pursuant to the
Take-over Bid and not withdrawn constitute more than
50% of the Voting Shares outstanding which are held by
Independent Shareholders;
(B) unless the Take-over Bid is withdrawn, Voting Shares
may be deposited pursuant to such Take-over Bid at any
time prior to the Close of Business on the date of the
first take-up of or payment for Voting Shares;
(C) any Voting Shares deposited pursuant to the Take-over
Bid may be withdrawn until taken up and paid for; and
(D) in the event that the requirement set forth in
subclause (A)(y) of this clause 1.1(ag)(ii) is
satisfied, the Offeror will make a public announcement
of that fact and the Take-over Bid will remain open
for deposits and tenders of Voting Shares for not less
than 10 Business Days from the date of such public
announcement.
For purposes of this Agreement, (A) should a Take-over Bid which
qualified as a Permitted Bid when made cease to be a Permitted Bid
because it ceases to meet any or all of the requirements mentioned
above prior to the time it expires (after giving effect to any
extension) or is withdrawn, any acquisition of Voting Shares made
pursuant to such Take-over Bid shall not be a Permitted Bid
Acquisition and (B) the term "Permitted Bid" shall include a
Competing Permitted Bid.
(ah) "Permitted Bid Acquisition" means an acquisition of Voting Shares
made pursuant to a Permitted Bid or a Competing Permitted Bid.
(ai) "Person" includes any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal personal
representative, government, governmental body or authority,
corporation, or other incorporated or unincorporated organization,
syndicate or other entity.
(aj) "Pro Rata Acquisition" means an acquisition by a Person of Voting
Shares pursuant to (i) any dividend reinvestment plan or share
purchase plan of the Corporation made available to all holders of
Voting Shares (other than holders resident in any jurisdiction
where participation in any such plan is restricted or impractical
as a result of applicable law), (ii) a stock dividend, a stock
split or other event pursuant to which such Person becomes the
Beneficial Owner of Voting Shares on the same pro rata basis as
all other holders of Voting Shares of the same class or series,
(iii) the acquisition or exercise of rights to purchase Voting
Shares distributed to all holders of Voting Shares (other than
holders resident in any jurisdiction where such distribution is
restricted or impractical as a result of applicable law) by the
Corporation pursuant to a rights offering (but only if such rights
are acquired directly from the Corporation) or (iv) a distribution
of Voting Shares or Convertible Securities in respect thereof
offered pursuant to a prospectus or by way of a private placement
or a conversion or exchange of any such Convertible Security,
provided such Person does not thereby acquire a greater percentage
of Voting Shares or Convertible Securities so offered than the
Person's percentage of Voting Shares Beneficially Owned
immediately prior to such acquisition.
(ak) "Record Time" means the Close of Business on the Effective Date.
(al) "Redemption Price" shall have the meaning attributed thereto in
Subsection 5.1(a).
(am) "Regular Periodic Cash Dividend" means cash dividends paid on the
Common Shares at regular intervals in any fiscal year of the
Corporation to the extent that such cash dividends do not exceed
in the aggregate in any fiscal year, on a per share basis, the
greatest of:
(i) 200% of the aggregate amount of cash dividends declared
payable by the Corporation on its Common Shares in its
immediately preceding fiscal year divided by the number of
Common Shares outstanding as at the end of such fiscal
year;
(ii) 300% of the arithmetic mean of the aggregate amounts of
cash dividends declared payable by the Corporation on its
Common Shares in its three immediately preceding fiscal
years divided by the arithmetic mean of the number of
Common Shares outstanding as at the end of each of such
fiscal years; and
(iii) 100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its
immediately preceding fiscal year divided by the number of
Common Shares outstanding as at the end of such fiscal
year.
(an) "Right" shall mean the herein described rights to purchase
securities pursuant to the terms and subject to the conditions set
forth herein.
(ao) "Rights Certificate" shall mean the certificates representing the
Rights after the Separation Time which shall be substantially in
the form attached hereto as Exhibit A.
(ap) "Rights Register" and "Rights Registrar" shall have the respective
meanings ascribed thereto in Subsection 2.6(a).
(aq) "Securities Act (British Columbia)" shall mean the Securities Act
(British Columbia), R.S.B.C 1996, c.418, as amended and the
regulations and rules made thereunder, as now in effect or as the
same may from time to time be amended, re-enacted or replaced.
(ar) "Separation Time" means the Close of Business on the eighth
Business Day after the earlier of:
(i) the Stock Acquisition Date; and
(ii) the date of the commencement of, or first public
announcement or disclosure of the intent of any Person
(other than the Corporation or any corporation controlled
by the Corporation) to commence, a Take-over Bid (other
than a Permitted Bid, so long as such Take-over Bid
continues to satisfy the requirements of a Permitted Bid)
or such later Business Day as may be determined at any time
or from time to time by the Board of Directors;
provided, however, that if any such Take-over Bid expires, is
cancelled, is terminated or is otherwise withdrawn prior to the
Separation Time, such Take-over Bid shall be deemed, for purposes
of this Subsection 1.1(ar) never to have been made, and, provided
further, that if the Board of Directors determines, pursuant to
Section 5.1, to waive the application of Section 3.1 to a Flip-In
Event, the Separation Time in respect of such Flip-In Event shall
be deemed never to have occurred.
(as) "Stock Acquisition Date" shall mean the first date of public
announcement or disclosure by the Corporation or an Acquiring
Person of facts indicating that a Person has become an Acquiring
Person (which, for the purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 141 of the
Securities Act (Alberta), Section 101 of the Securities Act
(British Columbia) or Section 13(d) of the U.S. Exchange Act
disclosing such information).
(at) "Take-over Bid" means an Offer to Acquire Voting Shares of any
class, or Convertible Securities with respect thereto, where the
Voting Shares subject to the Offer to Acquire, together with the
Voting Shares into or for which the securities subject to the
Offer to Acquire are convertible or exchangeable and the Offerer's
Securities constitute in the aggregate 20% or more of the
outstanding Voting Shares at the date of the Offer to Acquire.
(au) "Termination Time" means the time at which the right to exercise
Rights shall terminate pursuant to Section 5.1 hereof.
(av) "Trading Day" when used with respect to any securities, means the
day on which the principal Canadian or United States securities
exchange (as determined by the Board of Directors) on which such
securities are listed or admitted to trading is open for the
transaction
of business or, if the securities are not listed or admitted to
trading on any Canadian or United States securities exchange, a
Business Day.
(aw) "U.S. - Canadian Exchange Rate" on any date shall mean:
(i) if on such date the Bank of Canada sets an average noon
spot rate of exchange for the conversion of one United
States dollar into Canadian dollars, such rate; and
(ii) in any other case, the rate for such date for the
conversion of one United States dollar into Canadian
dollars which is calculated in the manner which shall be
determined by the Board of Directors from time to time
acting in good faith;
(ax) "U.S. Exchange Act" means the United States Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder
as from time to time in effect.
(ay) "Voting Share Reduction" means an acquisition or redemption by the
Corporation of Voting Shares which, by reducing the number of
Voting Shares outstanding, increases the percentage of Voting
Shares Beneficially Owned by any Person to 20% or more of the
Voting Shares then outstanding.
(az) "Voting Shares" shall mean the Common Shares and any other
securities the holders of which are entitled to vote generally on
the election of directors of the Corporation, and "voting shares",
when used with reference to any Person other than the Corporation,
means common shares of such other Person and any other securities
the holders of which are entitled to vote generally in the
election of the directors of such other Person.
1.2 Currency
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
1.3 Number and Gender
Wherever the context will require, terms (including defined terms) used herein
importing the singular number only include the plural and vice versa and words
importing anyone gender shall include all others.
1.4 Sections and Headings
The division of this Agreement into Articles, Sections, Subsections, Clauses and
Subclauses and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of this Agreement. The
terms this "Agreement", "hereunder", "hereof', and similar expressions refer to
this Agreement as amended or supplemented from time to time and not to any
particular Article, Section or other portion hereof and include any Agreement or
instrument supplemental or ancillary hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles,
Sections, Subsections, Clauses and Subclauses are to Articles, Sections,
Subsections, Clauses and Subclauses of this Agreement.
1.5 Statutory References
Unless the context otherwise requires, any reference to a specific Section,
Subsection, Clause or Rule of any statute or regulation shall be deemed to refer
to the same as it may be amended, 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.
1.6 Determination of Percentage Ownership
The percentage of Voting Shares Beneficially Owned by any Person, shall, for the
purposes of this Agreement, be and be deemed to be the product determined by the
formula:
A
100 x
B
where:
A = the aggregate number of votes for the election of all
directors generally attaching to the Voting Shares
Beneficially Owned by such Person; and
B = the aggregate number of votes for the election of all
directors generally attaching to all outstanding Voting
Shares.
Where any person is deemed to Beneficially Own unissued Voting
Shares pursuant to Subsection 1.1(d), such Voting Shares shall be
deemed to be outstanding for the purpose of both A and B in the
formula above.
1.7 Acting Jointly or in Concert
For the purposes of this Agreement, a Person is acting jointly or in concert
with every Person who is a party to an agreement, commitment or understanding,
whether formal or informal, with the first Person for the purpose of acquiring
or offering to acquire Voting Shares or Convertible Securities in respect
thereof (other than customary agreements with and between underwriters and
banking group or selling group shareholders with respect to a distribution of
securities; or pursuant to a pledge of securities in the ordinary course of the
pledgee's business).
1.8 Generally Accepted Accounting Principles
Wherever in this Agreement reference is made to generally accepted accounting
principles, such reference shall be deemed to be the recommendations at the
relevant time of the Canadian Institute of Chartered Accountants, or any
successor institute, applicable on a consolidated basis (unless otherwise
specifically provided herein to be applicable on an unconsolidated basis) as at
the date on which a calculation is made or required to be made in accordance
with generally accepted accounting principles. Where the character or amount of
any asset or liability or item of revenue or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purpose of this Agreement or any document, such determination or
calculation shall, to the extent applicable and except as otherwise specified
herein or as otherwise agreed in writing by the parties, be made in accordance
with generally accepted accounting principles applied on a consistent basis.
ARTICLE 2
THE RIGHTS
2.1 Legend on Common Share Certificates
(a) Certificates representing the Common Shares, including without
limitation Common Shares issued upon the conversion of Convertible
Securities, issued after the Record Time but prior to the Close of
Business on the earlier of the Separation Time and the Expiration
Time, shall also evidence one Right for each Common Share
represented thereby and shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
"Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and entitles
the holder hereof to certain Rights as set forth in a Shareholder
Rights Plan Agreement, dated as of April 19, 2001 (the "Rights
Agreement"), between the Corporation and Computershare Trust
Company of Canada, as Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of which is on file at
the registered office of the Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
may be amended or redeemed, may expire, may become void (if, in
certain cases, they are "Beneficially Owned" by an "Acquiring
Person", as such terms are defined in the Rights Agreement, or a
transferee thereof) or may be evidenced by separate certificates
and may no longer be evidenced by this certificate. The
Corporation will mail or arrange for the mailing of a copy of the
Rights Agreement to the holder of this certificate without charge
as soon as practicable after the receipt of a written request
therefor."
(b) Certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for each
Common Share evidenced thereby, notwithstanding the
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absence of the foregoing legend, until the earlier of the
Separation Time and the Expiration Time.
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights
(a) Subject to adjustment as herein set forth, including without
limitation as set forth in Article 3, each Right will entitle the
holder thereof, from and after the Separation Time and prior to
the Expiration Time, to purchase one Common Share for the Exercise
Price as at the Business Day immediately preceding Separation Time
(which Exercise Price and number of Common Shares are subject to
adjustment as set forth below). Notwithstanding any other
provision of this Agreement, any Rights held by the Corporation or
any of its Subsidiaries shall be void.
(b) Until the Separation Time, (i) the Rights shall not be exercisable
and no Right may be exercised; and (ii) for administrative
purposes, each Right will be evidenced by the certificate for the
associated Common Share registered in the name of the holder
thereof (which certificate shall be deemed to represent a Rights
Certificate) and will be transferable only together with, and will
be transferred by a transfer of, such associated Common Share.
(c) From and after the Separation Time and prior to the Expiration
Time, the Rights may be exercised, and the registration and
transfer of the Rights shall be separate from and independent of
Common Shares. Promptly following the Separation Time, the
Corporation will prepare or cause to be prepared and the Rights
Agent will mail to each holder of record of Common Shares as of
the Separation Time and, in respect of each Convertible Security
converted into Common Shares after the Separation Time and prior
to the Expiration Time, promptly after such conversion, the
Corporation will prepare or cause to be prepared and the Rights
Agent will mail to the holder so converting (other than an
Acquiring Person and in respect of any Rights Beneficially Owned
by such Acquiring Person which are not held of record by such
Acquiring Person, the holder of record of such rights (a
"Nominee")) at such holder's address as shown by the records of
the Corporation (the Corporation hereby agreeing to furnish copies
of such record to the Rights Agent for this purpose):
(i) a Rights Certificate in substantially the form of Exhibit A
hereto appropriately completed, representing the number of
Rights held by such holder at the Separation Time and
having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the
Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as
may be required to comply with any law, rule or regulation
or judicial or administrative order, or with any article or
regulation of any stock exchange or quotation system on
which the Rights may from time to time be listed or traded,
or to conform to usage; and
(ii) a disclosure statement prepared by the Corporation
describing the Rights,
provided that a Nominee shall be sent the materials provided for
in (i) and (ii) only in respect of all Common Shares held of
record by it which are not Beneficially Owned by an Acquiring
Person and the Corporation may require any Nominee or suspected
Nominee to provide such information and documentation as the
Corporation may reasonably require for such purpose.
17
(d) Rights may be exercised in whole or in part on any Business
Day after the Separation Time and prior to the Expiration
Time by submitting to the Rights Agent, at its principal
office in Vancouver, Calgary, Toronto, or Montreal:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise (an "Election to Exercise")
substantially in the form attached to the Rights
Certificate duly completed, and executed in a manner
acceptable to the Rights Agent; and
(iii) payment in cash, or by certified check, 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.
(e) Upon receipt of a Rights Certificate, which is accompanied
by an appropriately completed and duly executed Election to
Exercise (which does not indicate that such Right is null
and void as provided by Subsection 3.1(b) and payment as
set forth in Subsection 2.2(d), the Rights Agent (unless
otherwise instructed by the Corporation) will thereupon
promptly:
(i) requisition from the transfer agent of the Common
Shares certificates representing the number of
Common Shares to be purchased (the Corporation
hereby irrevocably authorizing its transfer agent to
comply with all such requisitions);
(ii) after receipt of such Common Share certificates,
deliver such certificates to, or to the order of,
the registered holder of such Rights Certificate,
registered in such name or names as may be
designated by such holder;
(iii) when appropriate, requisition from the Corporation
the amount of cash, if any, to be paid in lieu of
issuing fractional Common Shares;
(iv) when appropriate, after receipt of such cash,
deliver such cash to, or to the order of, the
registered holder of the Rights Certificate; and
(v) tender to the Corporation all payments received on
exercise of the Rights.
(f) If the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a
new Rights Certificate evidencing the Rights remaining
unexercised will be issued by the Rights Agent to such
holder or to such holder's duly authorized assigns.
(g) The Corporation shall:
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(i) take all such action as may be necessary and within its
power to ensure, that all Common Shares delivered upon the
exercise of Rights shall, at the time of delivery of the
certificates for such Common Shares (subject to payment of
the Exercise Price), be duly and validly authorized,
executed, issued and delivered as fully paid and
non-assessable;
(ii) take all such action as may reasonably be considered to be
necessary and within its power to comply with any
applicable requirements of the Company Act, the Securities
Act (British Columbia), the U.S. Exchange Act, the United
States Securities Act of 1933, as amended, and comparable
legislation of each of the provinces and territories of
Canada and states of the United States of America, or the
rules and regulations thereunder or any other applicable
law, rule or regulation, in connection with the issuance
and delivery of the Rights, the Rights Certificates and the
issuance of any Common Shares upon exercise of the Rights;
(iii) use reasonable efforts to cause all Common Shares issued
upon exercise of the Rights to be listed on the stock
exchanges on which the Common Shares are listed at that
time;
(iv) cause to be reserved and kept available out of its
authorized and unissued Common Shares, the number of Common
Shares that, as provided in this Agreement, will from time
to time be sufficient to permit the exercise in full of all
outstanding Rights;
(v) pay when due and payable, if applicable, any and all
federal, provincial, state and municipal taxes (not in the
nature of income, capital gains or withholding taxes) and
charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or
certificates for Common Shares issued upon the exercise of
Rights, provided that the Corporation shall not be required
to pay any transfer tax or charge which may be payable in
respect of any transfer of Rights or the issuance or
delivery of certificates for Common Shares issued upon the
exercise of Rights, in a name other than that of the holder
of the Rights being transferred or exercised; and
(vi) after the Separation Time, except as permitted by Section
5.1 or Section 5.4 hereof, not take (or permit any
corporation it controls to take) any action if at the time
such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
2.3 Adjustments to Exercise Price; Number of Rights
(a) The Exercise Price, the number and kind of securities subject to
purchase upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 2.3 and in Article 3.
(b) In the event that the Corporation shall at any time after the
Record Time and prior to the Expiration Time:
19
(i) declare or pay a dividend on the Common Shares payable in
Voting Shares or Convertible Securities in respect thereof
other than pursuant to any dividend reinvestment plan;
(ii) subdivide or change the then outstanding Common Shares into
a greater number of Common Shares;
(iii) consolidate or change the then outstanding Common Shares
into a smaller number of Common Shares; or
(iv) issue any Voting Shares (or Convertible Securities in
respect thereof) in respect of, in lieu of or in exchange
for existing Common Shares, whether in a reclassification,
amalgamation, statutory arrangement, consolidation or
otherwise;
the Exercise Price and the number of Rights outstanding (or, if
the payment or effective date therefor shall occur after the
Separation Time, the securities purchasable upon the exercise of
Rights) shall be adjusted as follows:
(A) If the Exercise Price and number of Rights
outstanding are to be adjusted:
1) the Exercise Price in effect after such
adjustment will be equal to the Exercise
Price in effect immediately prior to such
adjustment divided by the number of Common
Shares (or other securities of the
Corporation) (the "Expansion Factor") that a
holder of one Common Share immediately prior
to such dividend, subdivision, change,
combination or issuance would hold thereafter
as a result thereof; and
2) each Right held prior to such adjustment will
become that number of Rights equal to the
Expansion Factor, and the adjusted number of
Rights will be deemed to be allocated among
the Common Shares with respect to which the
original Rights were associated (if they
remain outstanding) and the securities of the
Corporation issued in respect of such
dividend, subdivision, change, consolidation
or issuance, so that each such Common Share
(or other security of the Corporation) will
have exactly one Right associated with it.
(B) If the securities purchasable upon exercise of
Rights are to be adjusted, the securities
purchasable upon exercise of each Right after such
adjustment will be the securities that a holder of
the securities purchasable upon exercise of one
Right immediately prior to such dividend,
subdivision, change, consolidation or issuance would
hold thereafter as a result thereof.
(c) Adjustments pursuant to Subsection 2.3(b) shall be made
successively, whenever an event referred to in Subsection 2.3(b)
occurs.
(d) If an event occurs which would require an adjustment under both
this Section 2.3 and Section 3.1 hereof, the adjustment provided
for in this Section 2.3 shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 3.1
hereof.
20
(e) In the event the Corporation shall at any time after the
Record Time and prior to the Separation Time issue any
Common Shares otherwise than in a transaction referred to in
Subsection 2.3(b), each such Common Share so issued shall
automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing
such Common Share.
(f) In the event the Corporation shall, at any time after the
Record Time and prior to the Expiration Time, fix a record
date for the making of a distribution to all holders of
Common Shares of rights or warrants entitling them (for a
period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or
Convertible Securities in respect of Common Shares) at a
price per Common Share (or, in the case of such a
Convertible Security, having a conversion, exchange or
exercise price per share (including the price required to be
paid to purchase such Convertible Security)) that is 1ess
than 90% of the Market Price per Common Share on such record
date, the Exercise Price in effect after such record date
will equal the Exercise Price in effect immediately prior to
such record date multiplied by a fraction;
(i) of which the numerator shall be the number of Common
Shares outstanding on such record date plus the
number of Common Shares which the aggregate offering
price of the total number of Common Shares so to be
offered (and/or the aggregate initial conversion,
exchange or exercise price of the Convertible
Securities so to be offered (including the price
required to be paid to purchase such Convertible
Securities)) would purchase at such Market Price per
Common Share; and
(ii) of which the denominator shall be the number of
Common Shares outstanding on such record date plus
the number of additional Common Shares to be offered
for subscription or purchase (or into which the
Convertible Securities so to be offered are initially
convertible, exchangeable or exercisable).
In case such subscription price is satisfied, in whole or in
part, by consideration other than cash, the value of such
consideration shall be as determined in good faith by the Board
of Directors. Such adjustment shall be made successively whenever
such a record date is fixed. To the extent that such rights or
warrants are not exercised prior to the expiration thereof, the
Exercise Price shall be readjusted in the manner contemplated
above based on the number of Common Shares (or securities
convertible into or exchangeable for Common Shares) actually
issued on the exercise of such rights or warrants.
For purposes of this Agreement, the granting of the right to
purchase Common Shares (whether from treasury or otherwise)
pursuant to any dividend or interest reinvestment plan or any
share purchase plan providing for the reinvestment of dividends
or interest payable on securities of the Corporation or the
investment of periodic optional payments or employee benefit or
similar plans (so long as such right to purchase is in no case
evidenced by the delivery of rights or warrants by the
Corporation) shall not be deemed to constitute an issue of rights
or warrants by the Corporation; provided, however, that in the
case of any dividend or interest reinvestment or share purchase
plan, the right to purchase Common Shares is at a price per share
of not less than 90% of the current market price per share
(determined as provided in such plans) of the Common Shares.
21
(g) In the event the Corporation shall at any time after the
Record Time and prior to the Expiration Time fix a record
date for the making of a distribution to all holders of
Common Shares of (i) evidences of indebtedness or assets
(other than a Regular Periodic Cash Dividend or a dividend
paid in Common Shares, but including any dividend payable in
securities other than Common Shares), (ii) rights or
warrants entitling them to subscribe for or purchase Voting
Shares (or Convertible Securities in respect of Voting
Shares), at a price per Voting Share (or, in the case of a
Convertible Security in respect of Voting Shares, having a
conversion, exchange or exercise price per share (including
the price required to be paid to purchase such Convertible
Security)) less than 90% of the Market Price per Common
Share on such record date (excluding rights or warrants
referred to in Subsection 2.3(f)) or (iii) other securities
of the Corporation, the Exercise Price in effect after such
record date shall be equal to the Exercise Price in effect
immediately prior to such record date less the fair market
value (as determined in good faith by the Board of
Directors) of the portion of the assets, evidences of
indebtedness, rights or warrants or other securities so to
be distributed applicable to each of the securities
purchasable upon exercise of one Right. Such adjustment
shall be made successively whenever such a record date is
fixed.
(h) Each adjustment made pursuant to Section 2.3 shall be made
as of:
(i) the payment or effective date for the applicable
dividend, subdivision, change, combination or issuance,
in the case of an adjustment made pursuant to
Subsection 2.3(b) above; and
(ii) the record date for the applicable dividend or
distribution, in the case of an adjustment made
pursuant to Subsections 2.3(f) or 2.3(g) above, subject
to readjustment to reverse the same if such
distribution shall not be made.
(i) In the event the Corporation shall at any time after the
Record Time and prior to the Expiration Time issue any
shares (other than Common Shares), or rights or warrants to
subscribe for or purchase any such shares, or Convertible
Securities in respect of any such shares, in a transaction
referred to in any of subclauses 2.3(b)(i) to (iv) above, if
the Board of Directors acting in good faith determines that
the adjustments contemplated by Subsections 2.3(b), 2.3(f)
and 2.3(g) above in connection with such transaction will
not appropriately protect the interests of the holders of
Rights, the Board of Directors may from time to time, but
subject to obtaining the prior approval of the holders of
the Rights obtained as set forth in Subsection 5.4(b),
determine what other adjustments to the Exercise Price,
number of Rights or securities purchasable upon exercise of
Rights would be appropriate and, notwithstanding Subsections
2.3(b), 2.3(f) and 2.3(g) above, such adjustments, rather
than the adjustments contemplated by Subsections 2.3(b),
2.3(f) and 2.3(g) above, shall be made upon the Board of
Directors providing written certification thereof to the
Rights Agent pursuant to Subsection 2.3(q).
(j) Notwithstanding anything herein to the contrary, no
adjustment of the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at
least 1% in such Exercise Price; provided, however, that any
adjustments which by reason of this Subsection 2.3(j) are
not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All adjustments
to the Exercise Price made pursuant to this Section 2.3
shall be calculated to the nearest cent.
(k) All Rights originally issued by the Corporation subsequent
to any adjustment made to an Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Exercise
Price,
22
the number of Common Shares purchasable from time to time
hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(l) Unless the Corporation shall have exercised its election, as
provided in Subsection 2.3(m), upon each adjustment of an
Exercise Price as a result of the calculations made in
Subsections 2.3(f) and 2.3(g), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Exercise Price, that
number of Common Shares obtained by:
(i) multiplying (A) the number of Common Shares covered by a
Right immediately prior to such adjustment, by (B) the
Exercise Price in effect immediately prior to such
adjustment; and
(ii) dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment.
(m) The Corporation may elect on or after the date of any adjustment
of an Exercise Price to adjust the number of Rights, in lieu of
any adjustment in the number of Common Shares purchasable upon
the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the
number of Common Shares for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become the
number of Rights obtained by dividing the relevant Exercise Price
in effect immediately prior to adjustment of the relevant
Exercise Price by the relevant Exercise Price in effect
immediately after adjustment of the relevant Exercise Price. The
Corporation shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which
the relevant Exercise Price is adjusted or any day thereafter,
but, if the Rights Certificates have been issued, shall be at
least 10 calendar days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Subsection
2.3(m), the Corporation shall, as promptly as practicable, cause
to be distributed to holders of record of Rights Certificates on
such record date, Rights Certificates evidencing, subject to
Section 5.5, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Corporation, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Corporation, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and
may bear, at the option of the Corporation, the relevant adjusted
Exercise Price and shall be registered in the names of holders of
record of Rights Certificates on the record date specified in the
public announcement.
(n) In any case in which this Section 2.3 shall require that an
adjustment in an Exercise Price be made effective as of a record
date for a specified event, the Corporation may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date of the number of
Common Shares and other securities of the Corporation, if any,
issuable upon such exercise over and above the number of Common
Shares and other securities of the Corporation, if any, issuable
upon such exercise on the basis of the relevant Exercise Price in
effect prior to such adjustment; provided, however, that the
Corporation shall deliver to such holder an appropriate
instrument evidencing such holder's right to
23
receive such additional Common Shares (fractional or otherwise)
or other securities upon the occurrence of the event requiring
such adjustment.
(o) Notwithstanding anything in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such adjustments in the
Exercise Price, in addition to those adjustments expressly
required by this Section 2.3, as and to the extent that in its
good faith judgment the Board of Directors shall determine to be
advisable in order that any (i) subdivision or consolidation of
the Common Shares, (ii) issuance wholly for cash of any Common
Shares at less than the applicable Market Price, (iii) issuance
wholly for cash of any Common Shares or securities that by their
terms are exchangeable for or convertible into or give a right to
acquire Common Shares, (iv) stock dividends, or (v) issuance of
rights, options or warrants referred to in this Section 2.3,
hereafter made by the Corporation to holders of its Common
Shares, shall not be taxable to such shareholders.
(p) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to represent the
securities so purchasable which were represented in the initial
Rights Certificates issued hereunder.
(q) Whenever an adjustment to the Exercise Price is made pursuant to
this Section 2.3, the Corporation shall:
(i) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such
adjustment; and
(ii) promptly file with the Rights Agent and with each transfer
agent for the Common Shares a copy of such certificate and
mail a brief summary thereof to each holder of Rights who
requests a copy.
Failure to file such certificate or to cause such notice to be
given as aforesaid, or any defect therein, shall not affect the
validity of any such adjustment or change.
2.4 Date on Which Exercise is Effective
Each Person in whose name any certificate for Common Shares is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Common Shares represented thereby on, and such certificate shall
be dated, the date upon which the Rights Certificate evidencing such Rights was
duly surrendered (together with a duly completed Election to Exercise) and
payment of the Exercise Price for such Rights (and any applicable transfer taxes
and other governmental charges payable by the exercising Person hereunder) was
made; provided, however, that if the date of such surrender and payment is a
date upon which the Common Share transfer books of the Corporation are closed,
such Person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next Business Day on which the Common
Share transfer books of the Corporation are open.
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its Chief Executive Officer, its Chief Financial
Officer or its Secretary. 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
24
individuals or any of them have ceased to hold such offices
prior to the countersignature and delivery of such Rights
Certificates.
(b) Promptly following the Separation Time, the Corporation will
notify the Rights Agent of such Separation Time and will
deliver Rights Certificates executed by the Corporation to the
Rights Agent for countersignature, and the Rights Agent shall
countersign (manually or by facsimile signature in a manner
satisfactory to the Corporation) and deliver such Rights
Certificates to the holders of the Rights pursuant to Section
2.2 hereof. No Rights Certificate shall be valid for any
purpose until countersigned by the Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.6 Registration, Transfer and Exchange
(a) After the Separation Time, the Corporation shall cause to be
kept a register (the "Rights Register") in which, subject to
such reasonable regulations as it may prescribe, the
Corporation will provide for the registration and transfer of
Rights. The Rights Agent is hereby appointed "Rights
Registrar" for the purpose of maintaining the Rights Register
for the Corporation and registering Rights and transfers of
Rights as herein provided and the Rights Agent hereby accepts
such appointment. In the event that the Rights Agent shall
cease to be the Rights Registrar, the Rights Agent will have
the right to examine the Rights Register at all reasonable
times.
(b) After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any
Rights Certificate, and subject to the provisions of
Subsections 2.6(d) and 3.1(b) below, the Corporation will
execute, and the Rights Agent will countersign, deliver and
register, in the name of the holder or the designated
transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the
Rights Certificates so surrendered.
(c) All Rights issued upon any registration of transfer or
exchange of Rights Certificates shall be valid obligations of
the Corporation, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon
such registration of transfer or exchange.
(d) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to
the Corporation or the Rights Agent, as the case may be, duly
executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any
new Rights Certificate under this Section 2.6, the Corporation
may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and
expenses of the Rights Agent) in connection therewith.
2.7 Mutilated, Lost, Stolen and Destroyed Rights Certificates
(a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, the Corporation
shall execute and the Rights Agent shall countersign and
deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights
Certificate so surrendered.
25
(b) If there shall be delivered to the Corporation and the
Rights Agent prior to the Expiration Time: (i) evidence to
their reasonable satisfaction of the destruction, loss or
theft of any Rights Certificate; and (ii) such security or
indemnity as may be reasonably required by them to save each
of them and any of their agents harmless, then, in the absence
of notice to the Corporation or the Rights Agent that such
Rights Certificate has been acquired by a bona fide purchaser,
the Corporation shall execute and, upon the Corporation's
request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate,
a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Corporation may
require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and
expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.7 in lieu of any destroyed, lost or stolen Rights
Certificate shall evidence a contractual obligation of the
Corporation, whether or not the destroyed, lost or stolen
Rights Certificate shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Agreement
equally and proportionately with any and all other Rights duly
issued hereunder.
2.8 Persons Deemed Owners
The Corporation, the Rights Agent and any agent of the Corporation or the Rights
Agent may deem and treat the person in whose name a Rights Certificate (or,
prior to the Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever. As used in this Agreement, unless the context otherwise
requires, the term "holder" of any Rights shall mean the registered holder of
such Rights (or, prior to the Separation Time, the associated Common Shares).
2.9 Delivery and Cancellation of Certificates
All Rights Certificates surrendered upon exercise or for redemption, for
registration of transfer or exchange shall, if surrendered to any person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9 except as expressly permitted by this Agreement.
The Rights Agent shall, subject to applicable law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
2.10 Agreement of Rights Holders
Every holder of Rights, by accepting such Rights, consents and agrees with the
Corporation and the Rights Agent and with every other holder of Rights:
(a) to be bound by and subject to the provisions of this
Agreement, as amended from time to time in accordance with the
terms hereof, in respect of all Rights held;
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(b) that, prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a
transfer of, the associated Common Share;
(c) that, after the Separation Time, the Rights will be
transferable only on the Rights Register as provided herein;
(d) that, prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Share
certificate) for registration of transfer, the Corporation,
the Rights Agent and any agent of the Corporation or the
Rights Agent may deem and treat the Person in whose name the
Rights Certificate (or, prior to the Separation Time, the
associated Common Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on such
Rights Certificate or the associated Common Share certificate
made by anyone other than the Corporation or the Rights Agent)
for all purposes whatsoever, and neither the Corporation nor
the Rights Agent shall be affected by any notice to the
contrary;
(e) that such holder of Rights has waived its right to receive any
fractional Rights or any fractional Common Shares or other
securities upon exercise of a Right (except as provided
herein); and
(f) that, without the approval of any holder of Rights or Voting
Shares and upon the sole authority of the Board of Directors
acting in good faith, this Agreement may be supplemented or
amended from time to time as provided herein.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS
3.1 Flip-in Event
(a) Subject to Sections 3.1(b) and 5.1, in the event that prior to
the Expiration Time a Flip-in Event occurs, 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 consummation
or occurrence of such Flip-in Event equal to twice the
Exercise Price for an amount in cash equal to the Exercise
Price (such right to be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section
2.3 in the event that, after such date of consummation or
occurrence, an event of a type analogous to any of the events
described in Section 2.3 shall have occurred with respect to
such Common Shares).
(b) Notwithstanding anything in this Agreement to the contrary,
upon the occurrence of any Flip-in Event, any Rights that are
or were Beneficially Owned on or after the earlier of the
Separation Time and the Stock Acquisition Date, or which may
thereafter be Beneficially Owned, by:
(i) an Acquiring Person (or any Affiliate or Associate of
an Acquiring Person or any other Person acting
jointly or in concert with an Acquiring Person or any
Associate or Affiliate of such other Person); or
27
(ii) a transferee, direct or indirect, of an Acquiring
Person (or any Affiliate or Associate of an Acquiring
Person or any Person acting jointly or in concert
with an Acquiring Person or any Associate or
Affiliate thereon in a transfer of Rights occurring
subsequent to the Acquiring Person becoming such;
shall become null and void without any further action and any
holder of such Rights (including any transferee of, or other
successor entitled to, such Rights, whether directly or
indirectly) shall thereafter have no right to exercise such
Rights under any provisions of this Agreement and further
shall thereafter not have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement
or otherwise. The holder of any Rights represented by a Rights
Certificate which is submitted to the Rights Agent upon
exercise or for registration of transfer or exchange which
does not contain the necessary certifications set forth in the
Rights Certificate establishing that such Rights are not void
under this Subsection 3.1(b) shall be deemed to be an
Acquiring Person for the purposes of this Subsection 3.1(b)
and such Rights shall become null and void.
(c) Any Rights Certificate that represents Rights Beneficially
Owned by a Person described in either of subclauses 3.1(b)(i)
or 3.1(b)(ii) or transferred to any Nominee of any such
Person, and any Rights Certificate issued upon transfer,
exchange, replacement or adjustment of any other Rights
Certificate, referred to in this sentence, shall contain or
will be deemed to contain the following legend:
"The Rights represented by this Rights Certificate were issued
to a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement) or acting jointly or in concert with any
of them. This Rights Certificate and the Rights represented
hereby shall be void in the circumstances specified in
Subsection 3.1(b) of the Rights Agreement."
The Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the
imposition of such legend but shall be required to impose such
legend only if instructed to do so by the Corporation or if a
holder fails to certify upon transfer or exchange in the space
provided to do so.
(d) After the Separation Time, the Corporation shall do all such
acts and things necessary and within its power to ensure
compliance with the provisions of this Section 3.1 including,
without limitation, all such acts and things as may be
required to satisfy the requirements of the Company Act, the
Securities Act (British Columbia) and the securities laws or
comparable legislation in each of the provinces of Canada and
in any other jurisdiction where the Corporation is subject to
such laws and the rules of the stock exchanges where the
Common Shares are listed at such time in respect of the issue
of Common Shares upon the exercise of Rights in accordance
with this Agreement.
3.2 Fiduciary Duties of the Board of Directors of the Corporation
For clarification it is understood that nothing contained in this Article 3
shall be considered to affect the obligations of the Board of Directors to
exercise its fiduciary duties. Without limiting the generality of the foregoing,
nothing contained herein shall be construed to suggest or imply that the Board
of Directors shall not be entitled to recommend that holders of the Voting
Shares reject or accept any Take-over Bid or take any other action including,
without limitation, the commencement, prosecution, defense or settlement of any
litigation and the submission of additional or alterative Take-over Bids or
other proposals to the shareholders of the Corporation with respect to any
Takeover Bid or otherwise that the Board of Directors believes is necessary or
appropriate in the exercise of its fiduciary duties.
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ARTICLE 4
THE RIGHTS AGENT
4.1 General
(a) The Corporation hereby appoints the Rights Agent to act as
agent for the Corporation and the holders of the Rights in
accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Corporation
may from time to time appoint such co-rights agents
("Co-Rights Agents") as it may deem necessary or desirable. In
the event the Corporation appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and
Co-Rights Agents shall be as the Corporation may determine.
The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its
reasonable expenses and other disbursements reasonably
incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder,
including the reasonable fees and disbursements of counsel and
other experts consulted by the Rights Agent pursuant to
Subsection 4.3(a). The Corporation also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence, bad
faith or wilful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any
claim of liability, which right to indemnification will
survive the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any certificate for Common Shares,
Rights Certificate, certificate for other securities of the
Corporation, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper
Person or Persons.
(c) The Corporation shall inform the Rights Agent in a reasonably
timely manner of events which may materially affect the
administration of this Agreement by the Rights Agent and, at
any time upon request, shall provide to the Rights Agent an
incumbency certificate certifying the then current officers of
the Corporation.
4.2 Merger, Amalgamation, Consolidation or Change of Name of Rights Agent
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or amalgamated or with which it may
be consolidated, or any corporation resulting from any merger,
amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation
succeeding to the shareholder services business of the Rights
Agent or any successor Rights Agent, will be the successor to
the Rights Agent under this Agreement without the execution or
filing of any document or any further act on the part of any
of the parties hereto, provided that such
29
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.
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name;
and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this
Agreement.
4.3 Duties of Rights Agent
The Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Corporation and the
holders of Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Corporation) and the opinion of such
counsel will be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion; the Rights
Agent may also, with the approval of the Corporation (such
approval not to be unreasonably withheld), consult with such
other experts as the Rights Agent shall consider necessary or
appropriate to properly carry out the duties and obligations
imposed under this Agreement and the Rights Agent shall be
entitled to rely in good faith on the advice of any such
expert.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable
that any fact or matter be proved or established by the
Corporation prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by
a person believed by the Rights Agent to be the Chief
Executive Officer, Chief Financial Officer or the Secretary or
Assistant Secretary of the Corporation and delivered to the
Rights Agent; and such certificate will be full authorization
to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or wilful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement
or in the certificates for Common Shares, or the Rights
Certificates (except its countersignature thereof) or be
required to verify the same,
30
and all such statements and recitals are and will be deemed to have
been made by the Corporation only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Common
Share certificate, or Rights Certificate (except its countersignature
thereon) nor will it be responsible for any breach by the Corporation
of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Subsection 3.1(b) hereof or any adjustment required under
the provisions of Section 2.3) hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights after receipt of the certificate
contemplated by Section 2.3 describing any such adjustment or any
written notice from the Corporation or any holder that a Person has
become an Acquiring Person); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization
of any Common Shares to be issued pursuant to this Agreement or any
Rights or as to any Common Shares, when issued, being duly and validly
authorized, issued and delivered as fully paid and non-assessable.
(f) The Corporation agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any individual believed by the Rights Agent to be the Chief
Executive Officer, Chief Financial Officer or the Secretary or
Assistant Secretary of the Corporation, and to apply to such
individuals for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered by it in
good faith in accordance with instructions of any such individual. It
is understood that instructions to the Rights Agent shall, except
where circumstances make it impractical or the Rights Agent otherwise
agrees, be given in writing and, where not in writing, such
instructions shall be confirmed in writing as soon as reasonably
practicable after the giving of such instructions.
(h) Subject to applicable law, the Rights Agent and any shareholder or
director, officer or employee of the Rights Agent may buy, sell or
deal in Common Shares, Rights or other securities of the Corporation
or become pecuniarily interested in any transaction in which the
Corporation may be interested, or contract with or lend money to the
Corporation or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Corporation
or for any other legal entity.
4.4 Change of Rights Agent
The Rights Agent may resign and be discharged from its duties under this
Agreement by giving 60 days' prior written notice (or such lesser notice as is
acceptable to the Corporation) to the Corporation, to each transfer agent of
Common Shares and to the holders of the Rights, all in accordance with Section
5.9 and at the expense of the Corporation. The Corporation may remove the Rights
Agent by giving 30 days' prior written notice to the Rights Agent, to each
transfer agent of the Common Shares and to the holders of the Rights in
accordance with Section 5.9.
31
If the Rights Agent should resign or be removed or otherwise become incapable of
acting, the Corporation will appoint a successor to the Rights Agent. If the
Corporation fails to make such appointment within a period of 30 days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
any Rights (which holder shall, with such notice, submit such holder's Rights
Certificate for inspection of the Corporation), then the holder of any Rights
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Corporation
or by such a court, must be a corporation incorporated under the laws of Canada
or a province thereof and authorized to carry on the business of a trust company
in the Province of British Columbia. After appointment, the successor Rights
Agent will be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Corporation will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares and mail a notice thereof in
writing to the holders of the Rights in accordance with Section 5.9. Failure to
give any notice provided for in this Section 4.4, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
ARTICLE 5
MISCELLANEOUS
5.1 Redemption, Waiver and Termination
(a) The Board of Directors acting in good faith may, after having obtained
the approval of the holders of Voting Shares or Rights as set forth in
Section 5.4, at any time prior to the later of the Stock Acquisition
Date and the Separation Time, elect to redeem all but not less than
all of the then outstanding Rights at a redemption price of $0.001 per
Right appropriately adjusted in a manner analogous to the applicable
adjustments provided for in Section 2.3 in the event that an event of
the type analogous to any of the events described in Section 2.3 shall
have occurred (such redemption price being herein referred to as the
"Redemption Price").
(b) The Board of Directors shall waive the application of Section 3.1 in
respect of the occurrence of any Flip-in Event if the Board of
Directors has determined, following the Stock Acquisition Date and
prior to the Separation Time, that a Person became an Acquiring Person
by inadvertence and without any intention to become, or knowledge that
it would become, an Acquiring Person under this Agreement and, in the
event that such a waiver is granted by the Board of Directors, such
Stock Acquisition Date shall be deemed not to have occurred. Any such
waiver pursuant to this Subsection 5.1(b) may only be given on the
condition that such Person, within 10 days after the foregoing
determination by the Board of Directors or such later date as the
Board of Directors may determine (the "Disposition Date"), has reduced
its Beneficial Ownership of Voting Shares such that the Person is no
longer an Acquiring Person. If the Person remains an Acquiring Person
at the Close of Business on the Disposition Date, the Disposition Date
shall be deemed to be the date of occurrence of a further Stock
Acquisition Date and Section 3.1 shall apply thereto.
(c) In the event that a Person acquires Voting Shares pursuant to a
Permitted Bid or an Exempt Acquisition referred to in Subsection
5.1(d), then the Board of Directors of the Corporation shall,
immediately upon the consummation of such acquisition and without
further formality, be deemed to have elected to redeem the Rights at
the Redemption Price.
32
(d) The Board of Directors acting in good faith may, prior to the
occurrence of the relevant Flip-in Event, upon prior written notice
delivered to the Rights Agent, determine to waive the application of
Section 3.1 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 holders of record
of Voting Shares provided that if the Board of Directors waives the
application of Section 3.1 in respect of a Take-over Bid pursuant to
this Subsection 5.1(d), the Board of Directors shall also be deemed to
have waived the application of Section 3.1 in respect of any other
Take-over Bid made by means of a circular to all holders of record 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 under this
Subsection 5.1(d).
(e) The Board of Directors may, prior to the Close of Business on the
eighth Business Day following a Stock Acquisition Date or such later
Business Day as they may from time to time determine, upon prior
written notice delivered to the Rights Agent, waive the application of
Section 3.1 to the related Flip-in Event, provided that the 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 10 days of the
date on which such contractual arrangement is entered into or such
later date as the Board of Directors may determine) such that at the
time the waiver becomes effective pursuant to this Subsection 5.1(e)
such Person is no longer an Acquiring Person. In the event of such a
waiver becoming effective prior to the Separation Time, for the
purposes of this Agreement, such Flip-in Event shall be deemed not to
have occurred.
(f) 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, or if the
Board of Directors grants a waiver under Subsection 5.1(e) after the
Separation Time, the Board of Directors may elect to redeem all the
outstanding Rights at the Redemption Price. Upon the Rights being
redeemed pursuant to this Subsection 5.1(f), 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 at the Separation Time
had not been mailed to each such holder, for all purposes of this
Agreement the Separation Time shall be deemed not to have occurred and
the Corporation shall be deemed to have issued replacement Rights to
the holders of its then outstanding Common Shares.
(g) If the Board of Directors is deemed under Subsection 5.1(c) to have
elected or elects under Subsection 5.1(a) to redeem the Rights, the
right to exercise the Rights will thereupon, without further action
and without notice, terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price.
(h) Within 10 days after the Board of Directors is deemed under Subsection
5.1(c) to have elected or elects under Subsection 5.1(a) or (f) to
redeem the Rights, the Corporation shall give notice of redemption to
the holders of the then outstanding Rights by mailing such notice to
each such holder at his last address as it appears upon the registry
books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Voting 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.
33
5.2 Expiration
No person will have any rights pursuant to this Agreement or in respect of any
Right after the Expiration Time, except in respect of any right to receive cash,
securities or other property which has accrued at the Expiration Time and except
as specified in Subsections 4.1(a) and 4.1(b) hereof.
5.3 Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the number or kind or class of shares
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
5.4 Supplements and Amendments
(a) Subject to Subsections 5.4(b) and (c) and this Subsection 5.4(a), the
Corporation may from time to time amend, vary or delete any of the
provisions of this Agreement and the Rights provided that no
amendment, variation or deletion made on or after the date of the
meeting of Shareholders at which the resolution referred to in Section
5.21 is to be considered shall be made without the prior consent of
the holders of the Rights, given as provided in Subsection 5.4(b)
below, except that amendments, variations or deletions made for any of
the following purposes shall not require such prior approval but shall
be subject to subsequent ratification in accordance with Subsection
5.4(b):
(i) in order to make such changes as are necessary in order to
maintain the validity of this Agreement and the Rights as a
result of any change in any applicable legislation, regulations
or rules;
(ii) in order to make such changes as are necessary in order to cure
any clerical or typographical error.
(b) Any amendment, variation or deletion made by the Board of Directors
pursuant to Subsection 5.4(a) shall:
(i) if made prior to the Separation Time, be submitted to the
shareholders of the Corporation at the next meeting of
shareholders and the shareholders may, by resolution passed by
a majority of the votes cast by Independent Shareholders who
vote in respect of such amendment, variation or deletion,
confirm or reject such amendment or supplement; or
(ii) if made after the Separation Time, be submitted to the holders
of Rights at a meeting to be held on a date not later than the
date of the next meeting of shareholders of the Corporation and
the holders of Rights may, by resolution passed by a majority
of the votes cast by the holders of Rights which have not
become void pursuant to Subsection 3.1(b) who vote in respect
of such amendment, variation or deletion, confirm or reject
such amendment or supplement.
Any amendment, variation or deletion pursuant to Subsection 5.4(a)
shall be effective only when so consented to by the holders of Voting
Shares or Rights, as applicable
34
(except in the case of an amendment, variation or deletion
referred to in any of Clauses 5.4(a)(i) or (ii), which shall be
effective from the date of the resolution of the Board of
Directors adopting such amendment, variation or deletion and
shall continue in effect until it ceases to be effective (as in
this paragraph described) and, where such amendment, variation or
deletion is confirmed, it shall continue in effect in the form so
confirmed). If an amendment, variation or deletion pursuant to
Clause 5.4(a)(i) or (ii) is rejected by the shareholders or the
holders of Rights or is not submitted to the shareholders or
holders of Rights as required, then such amendment, variation or
deletion shall cease to be effective from and after the
termination of the meeting at which it was rejected or to which
it should have been but was not submitted or from and after the
date of the meeting of holders of Rights that should have been
but was not held, and no subsequent resolution of the Board of
Directors to amend, vary or delete any provision of this
Agreement to substantially the same effect shall be effective
until confirmed by the shareholders or holders of Rights, as the
case may be.
(c) For greater certainty, (i) no amendment, variation or deletion to
the provisions of Article 4 shall be made except with the
concurrence of the Rights Agent thereto, and (ii) neither the
exercise by the Board of Directors of any power or discretion
conferred on it hereunder nor the making by the Board of
Directors of any determination or the granting of any waiver it
is permitted to make or give hereunder shall constitute an
amendment, variation or deletion of the provisions of this
Agreement or the Rights, for purposes of this Section 5.4 or
otherwise.
(d) The approval, confirmation or consent of the holders of Rights
with respect to any matter arising hereunder shall be deemed to
have been given if the action requiring such approval,
confirmation or consent is authorized by the affirmative votes of
the holders of Rights present or represented at and entitled to
be voted at a meeting of the holders of Rights and representing a
majority of the votes cast in respect thereof. For the purposes
hereof, each outstanding Right (other than Rights which are void
pursuant to the provisions hereof or which, prior to the
Separation Time, are held otherwise than by Independent
Shareholders) shall be entitled to one vote, and the procedures
for the calling, holding and conduct of the meeting shall be
those, as nearly as may be, which are provided in the
Corporation's by-laws and the Company Act with respect to
meetings of shareholders of the Corporation.
5.5 Fractional Rights and Fractional Shares
(a) The Corporation will not be required to issue fractions of Rights
or to distribute Rights Certificates, which evidence fractional
Rights. After the Separation Time there shall be paid, in lieu of
such fractional Rights, to the registered holders of the Rights
Certificates with regard to which fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the Market Price of a whole Right.
(b) The Corporation shall not be required to issue fractional Common
Shares upon exercise of the Rights or to distribute certificates
that evidence fractional Common Shares. In lieu of issuing
fractional Common Shares, the Corporation shall pay to the
registered holder of Rights Certificates at the time such Rights
are exercised as herein provided, an amount in cash equal to the
same fraction of the Market Price of one Common Share at the date
of such exercise.
35
5.6 Rights of Action
Subject to the terms of this Agreement, rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain any
suit, action or proceeding against the Corporation to enforce, or otherwise act
in respect of, such holder's right to exercise such holder's Rights in the
manner provided in this Agreement and in such holder's Rights Certificate.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
5.7 Holder of Rights Not Deemed a Shareholder
No holder, as such, of any Rights shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Common Shares or any other securities
which may at any time be issuable on the exercise of Rights, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights, as such, any of the rights of a shareholder of the
Corporation or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 5.8 hereof) or to
receive dividends or subscription rights or otherwise, until such Rights shall
have been exercised in accordance with the provisions hereof.
5.8 Notice of Proposed Actions
In case the Corporation proposes after the Separation Time and prior to the
Expiration Time to effect the liquidation, dissolution or winding up of the
Corporation or the sale of all or substantially all of the Corporation's assets,
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 5.9 hereof, a notice of such proposed action, which
shall specify the date on which such liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action by the Corporation.
5.9 Notices
Notices or demands authorized or required by this Agreement to be given or made
to or by the Rights Agent, the holder of any Rights or the Corporation will be
sufficiently given or made and shall be deemed to be received if delivered or
sent by first-class mail, postage prepaid, or by fax machine or other means of
printed telecommunication, charges prepaid and confirmed in writing by mail or
delivery, addressed (until another address is filed in writing with the Rights
Agent or the Corporation, as applicable), as follows:
(a) if to the Corporation:
107 - 000 Xxxx 0/xx/ Xxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: President
36
Facsimile No. (000) 000-0000
(b) if to the Rights Agent:
0/xx/ Xxxxx, 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Corporate Services Department
Facsimile No. (000) 000-0000
(c) if to the holder of any Rights, to the address of such holder
as it appears on the registry books of the Rights Agent or,
prior to the Separation Time, on the registry books of the
Corporation for the Common Shares.
5.10 Costs of Enforcement
The Corporation agrees that if the Corporation or any other Person the
securities of which are purchasable upon exercise of Rights fails to fulfil any
of its obligations pursuant to this Agreement, then the Corporation or such
Person will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce his rights
pursuant to any Rights or this Agreement.
5.11 Regulatory Approvals
Any obligation of the Corporation or action or event contemplated by this
Agreement, shall be subject to applicable law and to the receipt of any
requisite approval or consent from any governmental or regulatory authority.
Without limiting the generality of the foregoing, any issuance or delivery of
debt or equity securities (other than non-convertible debt securities) of the
Corporation upon the exercise of Rights and any amendment to this Agreement
shall be subject to the prior consent of the stock exchanges on which the
Corporation is from time to time listed or has been listed during the six months
prior to such amendment.
5.12 Declaration as to Non-Canadian and Non-U.S. Holders
If in the opinion of the Board of Directors (who may rely upon the advice of
counsel), any action or event contemplated by this Agreement would require
compliance with the securities laws or comparable legislation of a jurisdiction
outside Canada and the United States of America, its territories and
possessions, the Board of Directors acting in good faith may take such actions
as it may deem appropriate to ensure that such compliance is not required,
including without limitation establishing procedures for the issuance to a
Canadian resident Fiduciary of Rights or securities issuable on exercise of
Rights, the holding thereof in trust for the Persons entitled thereto (but
reserving to the Fiduciary or to the Fiduciary and the Corporation, as the
Corporation may determine, absolute discretion with respect thereto) and the
sale thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. In no event shall the Corporation or the Rights Agent be
required to issue or deliver Rights or securities issuable on exercise of Rights
to Persons who are citizens, residents or nationals of any jurisdiction other
than Canada and a province or territory thereof and the United States of America
and any state thereof in
37
which such issue or delivery would be unlawful without registration of the
relevant Persons or securities for such purposes.
5.13 Successors
All the covenants and provisions of this Agreement by or for the benefit of the
Corporation or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.
5.14 Benefits of this Agreement
Nothing in this Agreement shall be construed to give to any Person other than
the Corporation, the Rights Agent and the holders of the Rights any legal or
equitable right, remedy or claim under this Agreement; this Agreement shall be
for the sole and exclusive benefit of the Corporation, the Rights Agent and the
holders of the Rights.
5.15 Shareholder Review
At or prior to the first annual meeting of shareholders of the Corporation
following the third anniversary of the date of this Agreement, provided that a
Flip-in Event has not occurred prior to such time, the Board of Directors shall
submit a resolution ratifying the continued existence of this Agreement to the
Independent Shareholders for their consideration and, if thought advisable,
approval. Unless a majority of the votes cast by Independent Shareholders who
vote in respect of such resolution are voted in favor of the continued existence
of this Agreement, the Board of Directors shall, immediately upon the
confirmation by the chairman of such shareholders' meeting of the result of the
vote on such resolution and without further formality, be deemed to have elected
to redeem the Rights at the Redemption Price.
5.16 Determination and Actions by the Board of Directors
The Board of Directors shall have the authority to administer and, subject to
Section 5.4, amend this Agreement and to exercise all rights and powers
specifically granted to the Board or the Corporation hereunder or as may be
necessary or advisable in the administration of this Agreement.
All such actions, calculations, interpretations and determinations (including
all omissions with respect to the foregoing) which are done or made by the Board
of Directors, in good faith, (x) may be relied on by the Rights Agent, and (y)
shall not subject the Board of Directors to any liability to the holders of the
Rights or to any other parties.
5.17 Governing Law
This Agreement and the Rights issued hereunder shall be deemed to be a contract
made under the laws of the Province of British Columbia and for all purposes
will be governed by and construed in accordance with the laws of such province
applicable to contracts to be made and performed entirely within such province.
5.18 Language
Les parties aux presentes ont exige que la presente convention ainsi que tous
les documents et avis qui s'y rattachent et/ou qui en coulent soient redieds en
langue anglaise. The parties hereto have required that
38
this Agreement and all documents and notices related thereto and/or resulting
therefrom be drawn up in English.
5.19 Counterparts
This Agreement may be executed in any number of counterparts and each of such
counterparts will for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.
5.20 Severability
If any term or provision hereof or the application thereof to any circumstance
is, in any jurisdiction and to any extent, invalid or unenforceable, such term
or provision will be ineffective only to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or unenforceable.
5.21 Effective Date
This Agreement is effective as of the Effective Date. If the Rights Plan is not
confirmed by resolution passed by a majority of the votes cast by Independent
Shareholders who vote in respect of such Rights Plan at a meeting to be held not
later than August 31, 2001 then this Agreement and any outstanding Rights shall
be of no further force and effect from the earlier of (a) the date of the
meeting, and (b) August 31, 2001.
5.22 Time of the Essence
Time shall be of the essence hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed effective as of the day first above written.
OFFSHORE SYSTEMS INTERNATIONAL LTD.
Per:
__________________________________________
Xxxx X. Xxxxxxxx
President and Chief Executive Officer
COMPUTERSHARE TRUST COMPANY OF CANADA
39
Per:
____________________________________________
Authorized Signatory
EXHIBIT A
[Form of Rights Certificate]
Certificate No.
Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION,
ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b) OF SUCH
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, CERTAIN
RELATED PARTIES OF AN ACQUIRING PERSON OR A TRANSFEREE OF AN ACQUIRING
PERSON OR ANY SUCH RELATED PARTIES WILL BECOME VOID WITHOUT FURTHER
ACTION.
Rights Certificate
This certifies that __________________ is the registered holder of the
number of Rights set forth above, each of which entitles the registered holder
thereof, subject to the terms, provisions and conditions of the Shareholder
Rights Plan Agreement made as of April 19, 2001 (the "Rights Agreement") between
Offshore Systems International Ltd., a corporation subsisting under the laws of
the Province of British Columbia (the "Corporation") and Computershare Trust
Company of Canada, a trust company incorporated under the laws of Canada, as
Rights Agent (the "Rights Agent"), which term shall include any successor Rights
Agent under the Rights Agreement, to purchase from the Corporation, at any time
after the Separation Time and prior to the Expiration Time (as such terms are
defined in the Rights Agreement), one fully paid common share of the Corporation
(a "Common Share") at the Exercise Price referred to below, upon presentation
and surrender of this Rights Certificate, together with the Form of Election to
Exercise appropriately completed and duly executed, to the Rights Agent at its
principal office in each of (Vancouver, Calgary, Toronto and Montreal). Until
adjustment thereof in certain events as provided in the Rights Agreement, the
Exercise Price shall be $30 per Right (payable in cash, certified check or money
order payable to the order of the Corporation). The number of Common Shares
which may be purchased for the Exercise Price is subject to adjustment as set
forth in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holder of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent in (Vancouver,
Calgary, Toronto and Montreal), may be exchanged for another Rights Certificate
or Rights Certificates of like tenor evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates surrendered. If
40
this Rights Certificate shall be exercised in part, the registered holder shall
be entitled to receive, upon surrender hereof, another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement the Rights evidenced
by this Certificate may be redeemed by the Corporation at a redemption price of
$0.001 per Right subject to adjustment in certain events.
41
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Common
Shares or any other securities which may at any time be issuable upon the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
any meeting or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation.
Date: ____________________
OFFSHORE SYSTEMS INTERNATIONAL LTD.
Per:
_____________________________
Authorized Signatory
Countersigned:
COMPUTERSHARE TRUST COMPANY OF CANADA
Per:
Authorised Signatory _________________________________________________________
FORM OF ELECTION TO EXERCISE
OFFSHORE SYSTEMS INTERNATIONAL LTD.
The undersigned hereby irrevocably elects to exercise whole Rights
represented by this Rights Certificate to purchase the Common Shares issuable
upon the exercise of such Rights and requests that certificates for such Common
Shares be issued in the name of and delivered to:
Rights Certificate No. _______
______________________________________________
Name
42
__________________________________________________
Address
__________________________________________________
City and Province
__________________________________________________
Social Insurance No. or other taxpayer
identification number
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
__________________________________________________
Name
__________________________________________________
Address
__________________________________________________
City and Province
__________________________________________________
Social Insurance No. or other taxpayer
identification number
Date: __________________________________________________________________________
Signature
Signature Guaranteed
(Signature must correspond to name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever)
Signature must be guaranteed by a Canadian chartered bank or trust
company, a shareholders of a recognized stock exchange in Canada or a member of
the Securities Transfer Association Medallion Program (Stamp).
43
(To be completed by the holder if true)
The undersigned hereby represents, for the benefit of the Corporation
and all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or by an Affiliate or Associate
of an Acquiring Person, any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of any such other Person (as such
terms are defined in the Rights Agreement).
___________________________
Signature
NOTICE
In the event that the certifications set forth above in the Form of
Election to Exercise and Assignment are not completed, the Corporation shall
deem the Beneficial Owner of the Rights represented by this Rights Certificate
to be an Acquiring Person (as defined in the Rights Agreement) and, accordingly,
such Rights shall be null and void.
44
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned 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.
Date: ______________________________
________________________________
Signature
(Signature Guaranteed) (Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration or
enlargement or any change
whatsoever)
Signature must be guaranteed by a Canadian chartered bank or trust
company, a member of a recognized stock exchange in Canada or a member of the
Securities Transfer Association Medallion Program (Stamp).
(To be completed by the assignor if true)
The undersigned hereby represents, for the benefit of the Corporation
and all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not and, to the knowledge of the undersigned have never
been, Beneficially Owned by an Acquiring Person or by an Affiliate or Associate
of an Acquiring Person, any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of any such other Person (as such
terms are deemed in the Rights Agreement).
________________________________
Signature
________________________________
(Please print name below signature)
NOTICE
In the event that the certifications set forth above in the Form of
Election to Exercised Assignment are not completed, the Corporation shall deem
the Beneficial Owner of the Rights represented by this Rights Certificate to be
an Acquiring Person (as defined in the Rights Agreement) and, accordingly, such
Rights shall to be null and void.
45
