RIGHTS AGREEMENT
February 26, 2004
between
PLACER DOME INC.
and
CIBC MELLON TRUST COMPANY
as Rights Agent
RIGHTS AGREEMENT
Table of Contents
Page
Article I
INTERPRETATION
Section 1.1 Certain Definitions......................................... 3
Section 1.2 Holder......................................................26
Section 1.3 Acting Jointly or in Concert................................26
Section 1.4 Application of Statutes, Regulations and Rules..............26
Section 1.5 Calculation of Percentage of Beneficially Owned
Voting Shares.............................................27
Section 1.6 Currency....................................................27
Section 1.7 Headings and References.....................................27
Section 1.8 Singular, Plural, etc.......................................28
Article II
THE RIGHTS
Section 2.1 Legend on Voting Share Certificates.........................29
Section 2.2 Initial Exercise Price: Exercise of Rights:
Detachment of Rights......................................29
Section 2.3 Adjustments to Exercise Price, Number of Rights.............34
Section 2.4 Date on Which Exercise is Effective.........................43
Section 2.5 Execution, Authentication, Delivery and
Dating of Rights Certificates.............................44
Section 2.6 Registration, Registration of Transfer and Exchange.........44
Section 2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates...45
Section 2.8 Persons Deemed Owners.......................................46
Section 2.9 Delivery and Cancellation of Certificates...................47
Section 2.10 Agreement of Rights Holders.................................47
Article III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Flip-in Event...............................................49
Article IV
THE RIGHTS AGENT
Section 4.1 General.....................................................52
Section 4.2 Merger or Amalgamation or Change of
Name of Rights Agent......................................53
Section 4.3 Duties of Rights Agent......................................54
Section 4.4 Change of Rights Agent......................................57
Article V
MISCELLANEOUS
Section 5.1 Redemption of Rights........................................59
Section 5.2 Waiver of Flip-in Events....................................60
Section 5.3 Issuance of New Rights Certificates.........................61
Section 5.4 Supplements and Amendments..................................62
Section 5.5 Fractional Rights and Fractional Common Shares..............64
Section 5.6 Rights of Action............................................65
Section 5.7 Holder of Rights Not Deemed a Shareholder...................65
Section 5.8 Notice of Proposed Actions..................................66
Section 5.9 Notices.....................................................66
Section 5.10 Costs of Enforcement........................................68
Section 5.11 Successors..................................................68
Section 5.12 Benefits of this Agreement..................................68
Section 5.13 Governing Law...............................................69
Section 5.14 Counterparts................................................69
Section 5.15 Severability................................................69
Section 5.16 Determinations and Actions by the Board of Directors........69
Section 5.17 Effective Date..............................................69
Section 5.18 Regulatory Approvals........................................70
EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of Election of Exercise)
RIGHTS AGREEMENT
RIGHTS AGREEMENT, made as of February 26, 2004, between PLACER DOME INC., a
corporation continued under the Canada Business Corporations Act (the
"Corporation"), and CIBC Mellon Trust Company, a trust company incorporated
under the laws of Canada, as rights agent (the "Rights Agent").
WHEREAS the board of directors of the Corporation determined it advisable
in the best interests of the Corporation to adopt a shareholders' rights plan
(the "Rights Plan") to replace the shareholders' rights plan of the Corporation
made as of February 15, 2001, which expires upon the termination of the 2004
annual meeting of shareholders of the Corporation;
AND WHEREAS in implementation of the Rights Plan, the board of directors of
the Corporation (a) authorized and declared a distribution of one right
("Right") in respect of each Common Share (as hereinafter defined) outstanding
as of 5:30 p.m. (Toronto Time) (the "Record Time") on the Effective Date (as
hereinafter defined) to each holder of record of Common Shares (as hereinafter
defined) at the Record Time, and (b) authorized the issuance of one Right
(subject to adjustment as hereinafter provided) in respect of each Common Share
issued after the Record Time and prior to the earlier of the Separation Time and
the Expiration Time (each as hereinafter defined);
AND WHEREAS, each Right entitles the holder thereof, after the Separation
Time, to purchase securities of the Corporation pursuant to the terms and
subject to the conditions set forth herein;
AND WHEREAS, the Rights Agent has agreed with the Corporation to act on
behalf of the Corporation in connection with the issuance, transfer, exchange
and replacement of Rights Certificates (as hereinafter defined), the exercise of
Rights and other matters referred to herein;
NOW, THEREFORE, in consideration of the premises and respective agreements
set forth herein, the parties hereby agree as follows:
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ARTICLE I - INTERPRETATION
1.1 Certain Definitions. In this Agreement, unless the context otherwise
requires:
"Acquiring Person" means any Person who is the Beneficial Owner of 20% or
more of the outstanding Voting Shares of any class of Voting Shares;
provided, however, that the term "Acquiring Person" shall not include:
(i) the Corporation or any Subsidiary of the Corporation; or
(ii) an underwriter or member of a banking or selling group that
becomes the Beneficial Owner of 20% or more of the Voting Shares
of any class as a result of an acquisition from the Corporation
in connection with a distribution of securities;
(iii)any Person who becomes the Beneficial Owner of 20% or more of
the outstanding Voting Shares of any class as a result of one or
any combination of:
(A) a Voting Share Reduction which, by reducing the number of
Voting Shares outstanding, increases the percentage of
Voting Shares Beneficially Owned by such Person to 20% or
more of the Voting Shares of any class then outstanding,
(B) a Permitted Bid Acquisition,
(C) an Exempt Acquisition,
(D) a Pro-Rata Acquisition, or
(E) a Convertible Security Acquisition,
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in each such case, until such time thereafter as such Person
shall become the Beneficial Owner (otherwise than pursuant to any
one or more of a Voting Share Reduction, a Permitted Bid
Acquisition, an Exempt Acquisition, a Pro-Rata Acquisition, or a
Convertible Security Acquisition) of additional Voting Shares
constituting more than 1% of the Voting Shares of the relevant
class then outstanding, in which event such Person shall become
an Acquiring Person as of the date and time of acquisition of
such additional Voting Shares; or
(iv) for a 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 of any class as a
result of such Person becoming disqualified from relying on
clauses (v) or (vii) of the definition of Beneficial Owner. In
this definition, "Disqualification Date" means the first date of
public announcement of facts indicating that such Person has made
or is making or has announced an intention to make a Take-over
Bid alone or by acting jointly or in concert with any other
Person;
"Affiliate", when used to indicate a relationship with a specified
corporation shall mean a Person that directly, or indirectly through one or
more controlled intermediaries, controls, or is a corporation controlled
by, or is under common control with, such a specified corporation;
"Agreement" means this agreement as the same may be supplemented, amended
or restated from time to time;
"Associate", when used to indicate a relationship with a specified Person,
means (i) a spouse of such specified Person, (ii) any Person of either sex
with whom
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such specified Person is living in a conjugal relationship outside marriage
or (iii) any relative of such specified Person or of a Person mentioned in
clauses (i) or (ii) of this definition if that relative has the same
residence as the specified Person;
A Person shall be deemed the "Beneficial Owner" and to have "Beneficial
Ownership" of and to "Beneficially Own", any securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is the owner at law or in equity;
(ii) as to which, such Person or any of such Person's Affiliates or
Associates has the right to become the owner at law or in equity,
where such right is exercisable immediately or within 60 days of
the date of the determination of Beneficial Ownership and whether
or not on condition or the occurrence of any contingency or the
making of any payment, upon the exercise of any conversion,
exchange or purchase right attaching to Convertible Securities,
or pursuant to any agreement, arrangement, pledge or
understanding, written or oral (other than customary agreements
with and between underwriters and/or banking group and/or selling
group members with respect to a distribution of securities
pursuant to a prospectus or by way of private placement and other
than pursuant to pledges of securities in the ordinary course of
business); and
(iii)which are Beneficially Owned within the meaning of clauses (i)
or (ii) of this definition by any other Person with which such
Person or any of such Person's Affiliates is acting jointly or in
concert;
provided, however, that a Person shall not be deemed the "Beneficial
Owner", or to have "Beneficial Ownership" of, or to "Beneficially Own", any
security:
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(iv) by reason of:
(A) such security having 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 referred to in
clause (iii) of this definition until the earlier of such
deposited or tendered security being accepted
unconditionally for payment or exchange or being taken up
and paid for; or
(B) the holder of such security having agreed, pursuant to a
Permitted Lock-up Agreement, to deposit or tender such
security to a Take-over Bid made by such Person or any of
such Person's Affiliates or Associates or any other Person
referred to in clause (iii) of this definition until such
deposited or tendered security is taken up or paid for,
whichever first occurs;
(v) by reason of such Person, any of such Person's Affiliates or
Associates or any other Person referred to in clause (iii) of
this definition holding such security, provided that:
(A) the ordinary business of the Person (in this definition, a
"Manager") includes the management of mutual funds or
investment funds for others (which others, for greater
certainty, may include or be limited to one or more employee
benefit plans or pension plans) and such security is held by
the Manager acting in the ordinary course of such management
business in the performance of his duties for the account of
any other Person (in this definition, a
6
"Client"), including non-discretionary accounts held on
behalf of a Client by a dealer or broker registered under
applicable law;
(B) the Person (in this definition, a "Trust Company") is
licensed to carry on the business of a trust company under
applicable law and, as such, acts as a trustee or
administrator or in a similar capacity in relation to the
estates of deceased or incompetent Persons (each, in this
definition, an "Estate Account") or in relation to other
accounts (each, in this definition, an "Other Account") and
holds such security, and is acting, in the ordinary course
of such duties for the Estate Account or for such Other
Accounts;
(C) the ordinary business of such Person includes the management
of public assets as an agent of the Crown (in this
definition, the "Crown Agent");
(D) the Person is established by statute for purposes that
include, and the ordinary business or activity of such
Person (in this definition, the "Statutory Body") includes,
the management of investment funds for employee benefit
plans, pension plans, insurance plans of various public
bodies and the Statutory Body holds such security for the
purposes of its activities as such; or
(E) the Person (in this definition, the "Administrator") is the
administrator or trustee of one or more pension funds, plans
or related trusts (each, in this definition, a "Plan")
7
registered or qualified under the laws of Canada or any
province thereof or the corresponding laws of the
jurisdiction by which such Plan is governed or is such a
Plan and the Administrator or Plan holds such security for
the purposes of its activities as such;
but only if the Manager, the Trust Company, the Crown Agent, the
Statutory Body, the Administrator or the Plan, as the case may
be, is not then making and has not announced a current intention
to make a Take-over Bid, other than an Offer to Acquire Voting
Shares or other securities pursuant to a distribution by the
Corporation or by means of ordinary market transactions
(including prearranged trades entered into in the ordinary course
of business of such Person) executed through the facilities of a
stock exchange or an organized over-the-counter market, alone or
by acting jointly or in concert with any other Person;
(vi) because such Person:
(A) is a Client of the same Manager as another Person on whose
account the Manager holds such security; or
(B) has an Estate Account or an Other Account with the same
Trust Company as another Person on whose account the Trust
Company holds such security; or
(C) is a Plan with the same Administrator as another Plan on
whose account the Administrator holds such securities; or
(vii) because such Person:
8
(A) is a Client of a Manager and such security is owned at law
or in equity by the Manager;
(B) has an Estate Account or an Other Account with a Trust
Company and such security is owned at law or in equity by
the Trust Company; or
(C) is a Plan and such security is owned at law or in equity by
the Administrator of the Plan,
but, in each case, only if the Manager, the Trust Company or the
Administrator is not acting jointly or in concert with the
Client, the Estate or Other Account or the Plan, as the case may
be, in making a Take-over Bid other than an Offer to Acquire
Voting Shares or other securities pursuant to a distribution by
the Corporation or by means of ordinary market transactions
(including prearranged trades entered into in the ordinary course
of business of such Person) executed through the facilities of a
stock exchange or an organized over-the-counter market; or
(viii) because such Person is the registered holder of securities as a
result of carrying on the business of, or acting as nominee for,
a securities depositary.
"Board of Directors" means the board of directors for the time being of the
Corporation;
"Business Day" means any day other than a Saturday, Sunday or, unless
otherwise specified, a day on which Canadian chartered banks in the Cities
of Toronto, Ontario, and Vancouver, British Columbia are generally
authorized or obligated by law to close;
9
"Canada Business Corporations Act" means the Canada Business Corporations
Act, R.S.C. 1985, c.C-44, as amended, and the regulations thereunder,
unless otherwise specified, as the same exist on the date hereof;
"Canadian Dollar Equivalent" of any amount which is expressed in United
States dollars means, on any date, the Canadian dollar equivalent of such
amount determined by reference to the Canadian-U.S. Exchange Rate on such
date;
"Canadian-U.S. Exchange Rate" means, on any date, the inverse of the
U.S.-Canadian Exchange Rate;
"Close of Business" on any given date means 5:00 p.m. (Toronto time, unless
otherwise specified), on such date; provided, however, that if such date is
not a Business Day, "Close of Business" on such date shall mean 5:00 p.m.,
(Toronto time, unless otherwise specified), on the next succeeding Business
Day;
"Common Shares" means the Common Shares in the capital of the Corporation
and any other shares of the Corporation into which such shares may be
subdivided, consolidated, reclassified or changed;
"Competing Permitted Bid" means a Take-over Bid that:
(i) is made after a Permitted Bid or another Competing Permitted Bid
has been made and prior to the expiry of that other Permitted Bid
or Competing Permitted Bid (in this definition, a "Prior Bid");
(ii) satisfies all components of the definition of a Permitted Bid
other than the requirements set out in clauses (ii)(A) of that
definition; and
10
(iii)contains, and the take up and payment for securities tendered or
deposited thereunder are 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 that is not earlier than the later of (i) 35 days after
the date of such Take-over Bid, and (ii) 60 days after the
date of the earliest Prior Bid in existence at the date of
such Take-over Bid, and (y) then only if, at the time that
such Voting Shares are first taken up or paid for, more than
50% of the then outstanding Voting Shares of each class of
Voting Shares that are the subject matter of the Take-Over
Bid that are held by Independent Shareholders have been
deposited or tendered pursuant to the Take-over Bid and not
withdrawn; and
(B) in the event that the requirement set forth in subclause
(iii)(A)(y) of this definition is satisfied, the Offeror
will make a public announcement of that fact and the
Take-over Bid will remain open for deposits and tenders of
Voting Shares for not less than 10 Business Days from the
date of such public announcement;
"controlled": a body corporate is "controlled" by another Person or by two
or more Persons acting jointly or in concert if:
(i) securities entitled to vote in the election of directors carrying
more than 50% of the votes for the election of directors are
held, directly
11
or indirectly, by or on behalf of that other Person or two or
more Persons acting jointly or in concert; and
(ii) the votes carried by such securities are entitled, if exercised,
to elect a majority of the board of directors of such body
corporate,
and "controls", "controlling" and "under common control with" shall be
interpreted accordingly;
"Convertible Securities" means at any time:
(i) any right (contractual or otherwise and regardless of whether
such right constitutes a security) to acquire Voting Shares from
the Corporation; and
(ii) any securities issued by the Corporation from time to time
(including rights, warrants and options but excluding the Rights)
carrying any purchase, exercise, conversion or exchange right;
pursuant to which the holder thereof may acquire Voting Shares or other
securities convertible into or exercisable or exchangeable for Voting
Shares (in each case, whether such right is then exercisable or is
exercisable within a specified period and whether or not on condition or
the happening of any contingency).
"Convertible Security Acquisition" means the acquisition of Voting Shares
upon the exercise, conversion or exchange of Convertible Securities
acquired by a Person pursuant to a Permitted Bid Acquisition, an Exempt
Acquisition or a Pro-Rata Acquisition;
"Effective Date" means the date that is the earlier of:
(i) May 5, 2004;
12
(ii) the date that an Acquiring Person has become an Acquiring Person;
and
(iii)the date that an event occurs that would give rise to the
subsequent separation of rights pursuant to the definition of
"Separation Time" and subsection 2.2 of that certain rights
agreement dated as of the 15th of February, 2001 between the
Corporation and CIBC Mellon Trust Company and, for this purpose,
disregarding the expiration time under that agreement;
"Election to Exercise" has the meaning attributed thereto in clause
2.2(d)(i);
"Exchange Act of 1934" means the Securities Exchange Act of 1934, as
amended, of the United States of America and the rules and regulations
thereunder, unless otherwise specified, as the same may be amended from
time to time and any successor legislation substituted therefor;
"Exempt Acquisition" means an acquisition of Voting Shares and/or
Convertible Securities (i) in respect of which the Board of Directors has
waived the application of Section 3.1 pursuant to the provisions of
subsection 5.2 hereof, (ii) pursuant to a regular dividend reinvestment or
other plan of the Corporation made available by it to all holders of Voting
Shares of a class or series of Voting Shares where such plan permits the
holder to direct that dividends paid in respect of such Voting Shares be
applied to the purchase from the Corporation of further securities of the
Corporation, or (iii) pursuant to a distribution of Voting Shares and/or
Convertible Securities made by the Corporation (a) to the public pursuant
to a prospectus (provided the purchaser does not thereby become the
Beneficial Owner of a greater percentage of Voting Shares and/or
Convertible Securities so offered then the percentage of Voting Shares
and/or Convertible Securities Beneficially Owned by such purchaser
immediately prior to such distribution), or
13
(b) pursuant to a securities exchange take-over bid circular, or (c) by way
of private placement, provided that (x) all necessary stock exchange
approvals to such private placement have been obtained and such private
placement complies with the terms and conditions of such approvals, and (y)
the purchaser does not, in the case of either a securities exchange
take-over bid circular or private placement, thereby become the Beneficial
Owner of Voting Shares equal in number to more than 25% of the Voting
Shares outstanding immediately prior to the private placement or securities
take-over bid (and in making this determination, the securities to be
issued to such purchaser on the private placement or securities take-over
bid shall be deemed to be held by such purchaser but shall not be included
in the aggregate number of outstanding Voting Shares immediately prior to
the private placement or securities take-over bid), or (iv) pursuant to an
amalgamation, arrangement or other statutory procedure requiring
shareholder approval;
"Exercise Price" means, as of any date, the price at which a holder may
purchase the securities issuable upon exercise of one whole Right in
accordance with the terms hereof which Exercise Price, subject to
adjustment thereof in accordance with the terms hereof, shall be $52;
"Expiration Time" means the earliest of (i) the Termination Time, (ii) the
termination of the annual meeting of shareholders of the Corporation in the
year 2007, and (iii) the Close of Business (Vancouver time) on the date
this Agreement becomes void pursuant to the provisions of Section 5.17
hereof;
"Flip-in Event" means a transaction or event that results in a Person
becoming an Acquiring Person;
"Independent Shareholders" means all holders of Voting Shares other than
(i) any Acquiring Person, (ii) any Offeror, (iii) any Affiliate or
Associate of any
14
Acquiring Person or Offeror, (iv) any Person acting jointly or in concert
with any Acquiring Person or Offeror, and (v) any employee benefit plan,
deferred profit sharing plan, stock participation plan or trust for the
benefit of employees of the Corporation or a wholly-owned Subsidiary of the
Corporation, unless the beneficiaries of such plan or trust direct the
manner in which such Voting Shares are to be voted or direct whether the
Voting Shares are to be tendered to a Take-over Bid;
"Market Price" per security of any securities on any date means the average
of the daily closing prices per security of such securities (determined as
described below) on each of the 20 consecutive Trading Days ending on the
third Trading Day next preceding such date; provided, however, that if an
event of a type analogous to any of the events described in Section 2.3
hereof shall have caused the closing prices used to determine the Market
Price on any Trading Days not to be fully comparable with the closing price
on such date (or, if such date is not a Trading Day, on the immediately
preceding Trading Day), each such closing price so used shall be
appropriately adjusted in a manner analogous to the applicable adjustment
provided for in Section 2.3 hereof in order to make it fully comparable
with the closing price on such date (or, if such date is not a Trading Day,
on the immediately preceding Trading Day). The closing price per security
of any securities on any date shall be:
(i) the closing board lot sale price on such date or, if no such sale
of such securities takes place on such date, the average of the
closing bid and asked prices per security, as reported in the
principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the Toronto Stock
Exchange, or
(ii) if the securities are not listed or admitted to trading on the
Toronto Stock Exchange, the last sale price, regular way, or, in
case no
15
such sale takes place on such date, the average of the closing
bid and asked prices, regular way, for each share of such
securities, in either case, as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange, or
(iii)if the securities are not listed or admitted to trading on
either of the Toronto Stock Exchange or the New York Stock
Exchange, the price on the national securities exchange in the
United States of America, or the Canadian stock exchange,
recognized for all purposes by the Ontario Securities Commission,
on which such securities are listed or admitted to trading and on
which the greatest volume of trading in such securities occurs
during the relevant period, determined, in the case of a stock
exchange in Canada, as provided in clause (i) above and, if on a
stock exchange in the United States of America, determined as
provided in clause (ii) above, or
(iv) if the securities are not listed or admitted to trading on any
such exchange, the average of the high bid and low asked prices
for each share of such securities in the over-the-counter market,
as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System or such other system then in
use, or
(v) if on any such date the securities are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
securities selected by the Board of Directors;
16
provided, however, that if on any such date the securities are
not traded in the over-the-counter market, the closing price per
security of such securities on such date shall mean the fair
value per security of such securities on such date as determined
by an internationally recognized investment banking firm as to
the fair value per security of such securities. The Market Price
shall be expressed in Canadian dollars and if initially
determined in respect of any day forming part of the 20
consecutive Trading Day period in question in United States
dollars, such amount shall be translated into Canadian dollars at
the Canadian Dollar Equivalent thereof;
"Offer to Acquire" includes:
(i) an offer to purchase, or a solicitation of an offer to sell,
Voting Shares of any class and/or Convertible Securities; and
(ii) an acceptance of an offer to sell Voting Shares of any class
and/or Convertible Securities, whether or not such offer to sell
has been solicited;
or any combination thereof, and the Person accepting an offer to sell shall
be deemed to be making an Offer to Acquire to the Person that made the
offer to sell;
"Offeror" means a Person who is making or has announced a current intention
to make a Take-over Bid (including a Permitted Bid or Competing Permitted
Bid but excluding an Offer to Acquire Voting Shares or other securities of
the Corporation made by a Manager, Trust Company, Crown Agent, Statutory
Body Administrator or Plan referred to in clause (v) of the definition of
Beneficial Owner pursuant to a distribution by the Corporation or by means
of an ordinary market transaction (including a prearranged trade in the
ordinary course of business of such Person) in the circumstances
contemplated in said clause (v)) but
17
only so long as the Take-over Bid so announced or made has not been
withdrawn or terminated and has not expired;
"Permitted Bid" means a Take-over Bid made by an Offeror which is made by
means of a Take-over Bid circular and which also complies with the
following additional provisions:
(i) the Take-over Bid is made to all holders of record of Voting
Shares of one or more classes wherever resident, other than the
Offeror;
(ii) the Take-over Bid contains, and the take-up and payment for
securities tendered or deposited thereunder is subject to, an
irrevocable and unqualified condition 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
(Vancouver time) on a date which is not earlier than 60 days
following the date of the Take-over Bid and (y) then only
if, at the Close of Business on the date Voting Shares are
first taken up or paid for under the Take-over Bid, more
than 50% of the then outstanding Voting Shares of each class
of Voting Shares that are the subject matter of the
Take-over Bid that are held by Independent Shareholders have
been deposited or tendered pursuant to the Take-over Bid and
not withdrawn;
(B) Voting Shares may be deposited pursuant to such Take-over
Bid, unless such Take-over Bid is withdrawn, at any time
prior to the close of business on the date Voting Shares are
first taken up or paid for under the Take-over Bid;
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(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
(ii)(A)(y) of this definition is satisfied, the Offeror will
make a public announcement of that fact and the Take-over
Bid will remain open for deposits and tenders of Voting
Shares for not less than 10 Business Days from the date of
such public announcement;
provided always that a Permitted Bid will cease to be a Permitted Bid at
any time when such bid ceases to meet any of the provisions of this
definition and any acquisition of Voting Shares made pursuant to such
Permitted Bid, including any acquisition of Voting Shares theretofore made,
will cease to be a Permitted Bid Acquisition;
"Permitted Bid Acquisition" means a Share acquisition made pursuant to a
Permitted Bid or Competing Permitted Bid;
"Permitted Lock-Up Agreement" means an agreement between a Person and one
or more holders of Voting Shares and/or Convertible Securities (each a
"Locked-up Person") the terms of which are publicly disclosed and a copy of
which agreement is made available to the public (including the Corporation)
not later than (i) the date the Lock-up Bid (as defined below) is publicly
announced or, (ii) if the Lock-up Bid has been made prior to the date on
which such agreement is entered into then as soon as possible after it is
entered into and in any event not later than the first Business Day
following the date of such agreement, pursuant to which each Locked-up
Person agrees to deposit or tender Voting Shares and/or Convertible
Securities to a Take-over Bid (the "Lock-up Bid") to be made or made by the
Person or any of such Person's Affiliates or
19
Associates or any other Person referred to in clause (iii) of the
definition of Beneficial Owner and which provides:
(a) that any agreement to deposit or tender to, or to not withdraw
Voting Shares and/or Convertible Securities from, the Lock-up Bid
is terminable at the option of the Locked-up Person in order to
tender or deposit such Voting Shares and/or Convertible
Securities to another Take-over Bid or support another
transaction:
(i) where the price or value per Voting Share or Convertible
Security offered under such other Take-over Bid or
transaction is higher than the price or value per Voting
Share or Convertible Security offered under the Lock-up
Agreement; or
(ii) if:
(A) the price or value per Voting Share or Convertible
Security offered under the other Take-over Bid or
transaction exceeds the price or value per Voting Share
or Convertible Security offered or proposed to be
offered under the Lock-up Bid by an amount that is
equal to or greater than the lesser of (x) any amount
that is specified in the agreement, and (y) 7%; or
(B) the number of Voting Shares and/or Convertible
Securities to be purchased under the other Take-over
Bid or transaction exceeds the number of Voting Shares
and/or Convertible Securities offered to be purchased
under the Lock-up Bid by an
20
amount that is equal to or greater than the lesser of
(x)any number that is specified in the agreement, and
(y) 7%, in either case at a price or value per Voting
Share or Convertible Security, as applicable, that
is not less than the price or value per Voting
Share or Convertible Security offered under the Lock-up
Bid;
and the agreement may contain a right of first refusal or require a
period of delay to give such Person an opportunity to match a higher
price or value in another Take-over Bid or transaction or other
similar limitation on a Locked-up Person's right to withdraw Voting
Shares and/or Convertible Securities from the agreement, so long as
the limitation does not preclude the exercise by the Locked-up Person
of the right to withdraw Voting Shares and/or Convertible Securities
during the period of the other Take-over Bid or transaction; and
(b) no "break-up" fees, "top-up" fees, penalties, expenses or other
amounts that exceed in the aggregate the greater of:
(i) the cash equivalent of 2.5% of the price or value payable
under the Lock-up Bid to a Locked-up Person; and
(ii) 50% of the amount by which the price or value payable under
another Take-over Bid or transaction to a Locked-up Person
exceeds the price or value of the consideration that such
Locked-up Person would have received under the Lock-up Bid,
shall be payable by a Locked-up Person pursuant to the agreement
in the event a Locked-up Person fails to deposit or tender Voting
21
Shares and/or Convertible Securities to the Lock-up Bid or
withdraws Voting Shares and/or Convertible Securities previously
tendered thereto in order to tender to another Take-over Bid or
support another transaction;
"Person" includes any individual, firm, partnership, body corporate,
association, trust, joint venture, syndicate or other form of
unincorporated organization, governmental trustee, executor, administrator
or other legal personal representative, government, governmental agencies
and instrumentalities and any other entity or group (whether or not having
legal personality);
"Pro-Rata Acquisition" means the acquisition by a Person of Voting Shares
and/or Convertible Securities (i) as a result of a stock dividend, stock
split or other event pursuant to which such Person receives or acquires
Voting Shares and/or Convertible Securities on the same pro rata basis as
all other holders of Voting Shares or Convertible Securities of the same
class or series; (ii) pursuant to a regular dividend reinvestment or other
plan of the Corporation made available by the Corporation to the holders of
Voting Shares where such plan permits the holder to direct that dividends
paid in respect of such Voting Shares be applied to the purchase from the
Corporation of securities of the Corporation; or (iii) pursuant to the
receipt and/or exercise of rights (other than Rights) issued by the
Corporation to all of the holders of a series or class of Voting Shares on
a pro rata basis to subscribe for or purchase Voting Shares and/or
Convertible Securities; provided that (i) such rights are acquired directly
from the Corporation and not from any other Person and (ii) provided that
the Person does not thereby acquire a greater percentage of such Voting
Shares, or securities convertible or exchangeable for Voting Shares of that
class, than the Person's percentage of Voting Shares Beneficially owned
immediately prior to such acquisition;
"Record Time" has the meaning ascribed to that term in the second recital
hereto;
22
"Redemption Price" has the meaning ascribed to that term in subsection
5.1(a) hereof;
"Regular Periodic Cash Dividends" means cash dividends paid at regular
intervals in any fiscal year of the Corporation to the extent that such
cash dividends do not exceed, in the aggregate, the greatest of:
(i) 200% of the aggregate amount of cash dividends declared payable
by the Corporation on its Voting Shares in its immediately
preceding fiscal year;
(ii) 300% of the arithmetic mean of the aggregate amounts of cash
dividends declared payable by the Corporation on its Voting
Shares in its three immediately preceding fiscal years; and
(iii)100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its immediately
preceding fiscal year;
"Right" has the meaning ascribed to that term in the second recital hereto;
"Rights Agent" means CIBC Mellon Trust Company, a trust company
incorporated under the laws of Canada, and any successor Rights Agent
appointed pursuant to the provisions hereof;
"Rights Certificate" means a certificate representing the Rights after the
Separation Time which shall be substantially in the form attached hereto as
Exhibit A or in such other form as the Corporation and the Rights Agent may
agree;
"Rights Register" and "Rights Register" have the meanings ascribed to those
terms in subsection 2.6(a) hereof;
23
"Securities Act of 1933" means the Securities Act of 1933, as amended, of
the United States of America and the rules and regulations thereunder, as
the same may be amended from time to time and any successor legislation
substituted therefor;
"Securities Act (Ontario)" means the Securities Act, R.S.O. 1990, c.S.5, as
amended, and the regulations thereunder, as the same may be amended from
time to time and any successor legislation substituted therefor;
"Separation Time" means the Close of Business (Vancouver time) on the tenth
Business Day after the earliest of:
(i) the Stock Acquisition Date;
(ii) the date of the commencement of, or first public announcement of
the intent of any Person (other than the Corporation or any
Subsidiary of the Corporation) to commence, a Take-over Bid
(other than a Permitted Bid or a Competing Permitted Bid, as the
case may be); and
(iii)the date upon which a Permitted Bid or Competing Permitted Bid
ceases to be such;
or such later date as may be determined by the Board of Directors provided,
however, that if any such Take-over Bid expires, is cancelled, terminated
or otherwise withdrawn prior to the Separation Time, such Take-over Bid
shall be deemed, for purposes of this definition, never to have been made;
"Stock Acquisition Date" means the first date of public announcement
(which, for purposes of this definition, shall include a report filed
pursuant to Section 101 of the Securities Act (Ontario) or Section 13(d)
under the Exchange Act of 1934, as amended from time to time and any
provision substituted therefor) by the
24
Corporation or an Acquiring Person of facts indicating that an Acquiring
Person has become such;
"Subsidiary":
A body corporate is a Subsidiary of another body corporate if:
(i) it is controlled by (A) that other, or (B) that other and one or
more bodies corporate, each of which is controlled by that other,
or (C) two or more bodies corporate, each of which is controlled
by that other, or
(ii) it is a Subsidiary of a body corporate that is that other's
Subsidiary;
"Take-over Bid" means an Offer to Acquire Voting Shares and/or Convertible
Securities, where the Voting Shares 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, exchangeable or otherwise acquirable
together with the Voting Shares Beneficially Owned by the Offeror at the
date of the Offer to Acquire, constitute, in the aggregate, 20% or more of
any class of outstanding Voting Shares;
"Termination Time" means the time at which the right to exercise Rights
shall terminate pursuant to Section 5.1 hereof;
"Trading Day", when used with respect to any securities, means a day on
which the principal securities exchange in Canada on which such securities
are listed or admitted to trading is open for the transaction of business
or, if the securities are not listed or admitted to trading on any
securities exchange in Canada, a day on which the principal securities
exchange in the United States of America 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 securities
exchange in Canada or the United States of America, a Business Day;
25
"U.S.-Canadian Exchange Rate" means, on any date:
(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 calculated in the
manner which shall be determined by the Board of Directors from
time to time;
"U.S. Dollar Equivalent" of any amount which is expressed in Canadian
dollars means, on any date, the United States dollar equivalent of such
amount determined by reference to the U.S.-Canadian Exchange Rate on such
date;
"Voting Share Reduction" means an acquisition or a redemption by the
Corporation of Voting Shares;
"Voting Shares" means, collectively, the Common Shares and any other shares
in the capital of, or voting interests issued by, the Corporation, the
holders of which are entitled to vote generally for the election of
directors.
1.2 Holder.
As used in this Agreement, unless the context otherwise requires, the term
"holder" when used with reference to Rights, means the registered holder of such
Rights or, prior to the Separation Time, the associated Voting Shares.
1.3 Acting Jointly or in Concert.
For purposes of this Agreement, a Person is acting jointly or in concert
with every other person who is a party to any agreement, commitment or
understanding, whether formal or informal, written or oral, with the
first-mentioned Person to acquire or offer to acquire Voting
26
Shares (other than customary agreements with and between underwriters and/or
banking group or selling group members with respect to the distribution of
securities pursuant to a prospectus or by way of private placement and other
than pursuant to pledges of securities in the ordinary course of business).
1.4 Application of Statutes, Regulations and Rules.
Where a statute, regulation or rule is referred to in a definition or other
provision of this Agreement, it shall be conclusively deemed to have application
in the contemplated circumstances notwithstanding that such statute, regulation
or rule might not, but for the provisions of this Section 1.4, have application
for want of jurisdiction or otherwise.
1.5 Calculation of Percentage of Beneficially Owned Voting Shares.
For purposes of this Agreement, the percentage of Voting Shares of any
class Beneficially Owned by any Person at any time shall be and be deemed to be
the product determined by the formula:
100 x A/B
where:
A= the number of votes for the election of all directors
generally attached to the Voting Shares Beneficially Owned
by such Person at such time; and
B= the number of votes for the election of all directors
generally attaching to all Voting Shares actually
outstanding.
Where any Person is deemed to Beneficially Own unissued Voting Shares, such
Voting Shares shall be deemed to be outstanding for the purpose of calculating
the percentage of Voting Shares Beneficially Owned by such Person, but unissued
Voting Shares which another Person may be deemed to Beneficially Own shall not
be included in the denominator of the above formula.
27
1.6 Currency.
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
1.7 Headings and References.
The headings of the Articles and Sections of this Agreement and the Table
of Contents are inserted for convenience and reference only and shall not affect
the construction or interpretation of this Agreement. All references to
Articles, Sections, clauses and Exhibits are to articles, sections and clauses
of and exhibits to, and forming part of, this Agreement. The words "hereto",
"herein", "hereof", "hereunder", "this Agreement", "the Rights Agreement" and
similar expressions refer to this Agreement including the Exhibits, as the same
may be amended, modified or supplemented at any time or from time to time.
1.8 Singular, Plural, etc.
In this Agreement, where the context so admits, words importing the
singular number include the plural and vice versa and words importing gender
include the masculine, feminine and neuter genders.
28
ARTICLE II - THE RIGHTS
2.1 Legend on Voting Share Certificates.
Certificates for Voting Shares issued after the Record Time hereof but
prior to the Separation Time shall evidence one Right for each Voting Share
represented thereby and shall have impressed, printed, or written thereon or
otherwise affixed thereto a legend in substantially the following form:
Until the Separation Time (as such term is defined in the Rights
Agreement referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in a Rights
Agreement dated February 26, 2004 (the "Rights Agreement"), between
Placer Dome Inc. (the "Corporation") and CIBC Mellon Trust Company, as
Rights Agent, the terms of which are hereby incorporated herein by
reference and a copy of which is on file and may be inspected during
normal business hours at the principal executive offices 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, 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 within five days after the
receipt of a written request therefor.
Certificates representing Common Shares that are issued and outstanding at
the Record Time shall evidence one Right for each Common Share evidenced thereby
notwithstanding the absence of a legend in substantially the foregoing form
until the earlier of the Separation Time and the Expiration Time.
2.2 Initial Exercise Price: Exercise of Rights: Detachment of Rights.
(a) Subject to adjustment as herein set forth, each Right will entitle the
holder thereof, at any time after the Separation Time and prior to the
Expiration Time, to purchase one Common Share for the Exercise Price (or its
U.S. Dollar Equivalent on the Business Day immediately preceding the date of
exercise of the Right). 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,
29
(i) the Rights shall not be exercisable and no Right may be
exercised, and
(ii) for administrative purposes, each Right shall be evidenced by the
certificate for the associated Voting Share registered in the
name of the holder thereof (which certificate shall be deemed to
represent a Rights Certificate) and shall be transferable only
together with, and shall be transferred by a transfer of, such
associated Voting Share.
(c) At any time after the Separation Time and prior to the Expiration Time,
the Rights (i) may be exercised and (ii) shall be registered and transferable
independent of Voting Shares. Promptly following the Separation Time, the
Corporation shall prepare and the Rights Agent shall mail to each holder of
record of Voting Shares as of the Separation Time (other than an Acquiring
Person, any other Person whose Rights are or become void pursuant to the
provisions of subsection 3.1(b) hereof and, in respect of any Rights
Beneficially Owned by such Acquiring Person which are not held of record by such
Acquiring Person, the holder of record of such Rights), at such holder's address
as shown in the records of the Corporation (the Corporation hereby agreeing to
furnish copies of such records to the Rights Agent for this purpose),
(i) a Rights Certificate appropriately completed and registered in
such holder's name, 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
applicable law or with any rule or regulation or judicial or
administrative order made pursuant thereto or with any rule or
regulation of any
30
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 describing the Rights;
provided however, that a nominee shall be sent the materials provided for in
clauses (i) and (ii) above only in respect of Voting Shares held of record by it
which are not Beneficially Owned by an Acquiring Person. In order for the
Corporation to determine whether any Person is holding Voting Shares which are
Beneficially Owned by another Person, the Corporation may require such
first-mentioned Person to furnish such information and documentation as the
Corporation deems necessary or appropriate to make such determination.
(d) Rights may be exercised in whole at any time or in part from time to
time on any Business Day (or other day that is not a bank holiday at the place
of exercise) after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent at its office in the City of Toronto, Canada or
at any other office of the Rights Agent or any Co-Rights Agent in the cities
specified in the Rights Certificate or designated from time to time for that
purpose by the Corporation after consultation with the Rights Agent:
(i) the Rights Certificate evidencing such Rights with an Election to
Exercise (an "Election to Exercise") substantially in the form
attached to the Rights Certificate, appropriately completed and
duly executed by the holder or his executors or administrators or
other legal personal representatives or his legal attorney duly
appointed by instrument in writing in form and executed in a
manner satisfactory to the Rights Agent, and
(ii) payment by certified cheque, bank 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
31
in respect of any transfer involved in the issuance, transfer or
delivery of Rights Certificates or the issuance, transfer 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 with or accompanied by a duly
completed and executed Election to Exercise which does not indicate that Rights
evidenced by such Rights Certificate have become void pursuant to subsection
3.1(b) hereof and payment as set forth in subsection 2.2(d) above, the Rights
Agent (unless otherwise instructed by the Corporation) shall thereupon promptly:
(i) requisition from a transfer agent of the Common Shares
certificates for the number of Common Shares to be purchased (the
Corporation hereby irrevocably authorizing its transfer agents to
comply with all such requisitions),
(ii) when appropriate, requisition from the Corporation the amount of
cash to be paid in lieu of issuing fractional Common Shares,
(iii)after receipt of the certificates referred to in clause
2.2(e)(i), deliver the same to or upon the order of the
registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder together with,
where applicable, any cash payment in lieu of a fractional
interest, and
(iv) tender to the Corporation all payments received on exercise of
the Rights.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing (subject to the
32
provisions of subsection 5.5(a) hereof) the Rights remaining unexercised will be
issued by the Rights Agent to such holder or to such holder's duly authorized
assigns.
(g) The Corporation covenants and agrees to:
(i) take all such action as may be necessary on its part and within
its powers to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the
certificates evidencing such Common Shares (subject to payment of
the Exercise Price), be duly and validly authorized, executed,
issued and delivered and be fully paid and non-assessable;
(ii) take all reasonable action as may be necessary on its part and
within its power to comply with any applicable requirements of
the Canada Business Corporations Act, the Securities Act
(Ontario) and the comparable legislation of each of the provinces
and territories of Canada, the Securities Act of 1933 and the
Exchange Act of 1934, and the rules and regulations thereunder,
and any other applicable law, rule or regulation then in force,
in connection with the issuance and delivery of Rights
Certificates and of any securities of the Corporation upon
exercise of Rights;
(iii)use its reasonable efforts to cause all Common Shares of the
Corporation issued upon exercise of Rights to be listed upon
issuance upon the Toronto Stock Exchange and each other national
securities exchange in the United States of America upon which
the Common Shares are then listed or admitted to trading;
(iv) pay when due and payable any and all Canadian and United States
federal, provincial and state transfer taxes (not including any
taxes referable to the income or profit of the holder or
exercising Person
33
or any liability of the Corporation to withhold tax) and charges
which may be payable in respect of the original issuance or
delivery of the Rights Certificates or of any Common Shares of
the Corporation 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 involved
in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for securities in a name
other than that of the holder of the Rights being transferred or
exercised; and
(v) after the Separation Time, except as permitted by Section 5.1,
not take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
2.3 Adjustments to Exercise Price, Number of Rights.
Subject to Section 5.18, 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.
(a) If the Corporation shall at any time after the Record Time and prior to
the Expiration Time:
(i) declare or pay a dividend on the Common Shares payable in Common
Shares (or other securities of the Corporation exchangeable for
or convertible into or giving a right to acquire Common Shares or
other shares of capital of the Corporation) otherwise than
pursuant to any optional share dividend program,
34
(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 Common Shares (or other shares of capital of the
Corporation or securities exchangeable for or convertible into or
giving a right to acquire Common Shares or other shares of
capital of the Corporation) in respect of, in lieu of, or in
exchange for, existing Common Shares except as otherwise provided
in this Section 2.3,
the Exercise Price and the number of Rights outstanding, or, if the payment or
effective date therefor shall occur after the Separation Time, the securities
purchasable upon exercise of Rights shall be adjusted in the manner set forth
below. If an event occurs which would require an adjustment under both this
Section 2.3 and subsection 3.1(a), the adjustment provided for in this Section
2.3 shall be in addition to, and shall be made prior to, any adjustment required
under subsection 3.1(a).
If the Exercise Price and number of Rights outstanding are to be adjusted,
(x) the Exercise Price in effect after such adjustment shall be equal to
the Exercise Price in effect immediately prior to such adjustment
divided by the number of Common Shares (or other shares of capital)
(the "Expansion Factor") that a holder of one Common Share immediately
prior to such dividend, subdivision, change, consolidation or issuance
would hold immediately thereafter as a result thereof (assuming the
exercise of all such exchange, conversion or acquisition rights, if
any), and
35
(y) each Right held prior to such adjustment shall become that number of
Rights equal to the Expansion Factor,
and the adjusted number of Rights shall be deemed to be distributed among the
Common Shares with respect to which the original Rights were associated (if they
remain outstanding) and the Common Shares issued in respect of such dividend,
subdivision, change, consolidation or issuance, so that each such Common Share
(or other whole share of capital) shall have exactly one Right associated with
it.
If the securities purchasable upon exercise of Rights are to be adjusted,
the securities purchasable upon exercise of each Right after such adjustment
shall 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 immediately thereafter as a result thereof.
If, after the Record Time and prior to the Expiration Time, the Corporation
shall issue any shares of its authorized capital other than Common Shares in a
transaction of a type described in the first sentence of clauses 2.3(a)(i) or
(iv), such shares shall be treated herein as nearly equivalent to Common Shares
as may be practicable and appropriate under the circumstances and the
Corporation and the Rights Agent agree to amend this Agreement in order to
effect such treatment.
To the extent that any such rights of exchange, conversion or acquisition
are not exercised prior to the expiration thereof, the Exercise Price shall be
readjusted to the Exercise Price which would then be in effect based upon the
number of Common Shares (or Convertible Securities) actually issued upon the
exercise of such rights.
If the Corporation shall at any time after the Record Time and prior to the
Separation Time issue any Common Shares otherwise than in a transaction referred
to in this subsection 2.3(a), each such Common Share so issued shall
automatically have one new Right associated with it, which Right shall be
evidenced by the certificate representing such share.
36
(b) If the Corporation shall at any time after the Record Time and prior to
the Separation Time fix a record date for the issuance to all holders of Common
Shares of rights, options or warrants entitling them (for a period expiring
within 45 days after such record date) to subscribe for or purchase Common
Shares (or Convertible Securities) at a price per Common Share (or, in the case
of a Convertible Security, having a conversion, exchange or exercise price
(including the price required to be paid to purchase such Convertible Security)
per share) that is less than 90% of the Market Price per Common Share on such
record date, the Exercise Price shall be adjusted. The Exercise Price in effect
after such record date shall equal the Exercise Price in effect immediately
prior to such record date multiplied by a fraction:
(i) the numerator of which shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares
that the aggregate offering price of the total number of Common
Shares so 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) the denominator of which shall be the number of Common Shares
outstanding on such record date plus the number of additional
Common Shares to be offered for subscription of purchase (or into
which the Convertible Securities so offered are initially
convertible, exchangeable or exercisable).
In case such subscription price may be paid by delivery of consideration, part
or all of which shall be in a form other than cash, the value of such
consideration shall be determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of Rights. Such adjustment
shall be made successively whenever such a record date is fixed and in the event
that
37
such rights, options or warrants are not so issued, or if issued, are not
exercised prior to the expiration thereof, the Exercise Price shall be
readjusted to the Exercise Price that would then be in effect if such record
date had not been fixed, or to the Exercise Price which would be in effect based
upon the number of Common Shares (or Convertible Securities) actually issued
upon the exercise of such rights, options or warrants, as the case may be.
For purposes of this Agreement, the granting of the right to purchase
Common Shares (whether previously unissued, treasury shares or otherwise)
pursuant to any optional dividend reinvestment plan and/or any Common Share
purchase plan providing for the reinvestment of dividends payable on securities
of the Corporation and/or employee stock option, stock purchase or other
employee benefit plan (so long as such right to purchase is in no case evidenced
by the delivery of rights or warrants) shall not be deemed to constitute an
issue of rights or warrants by the Corporation; provided, however, that, in the
case of any dividend reinvestment plan, the right to purchase Common Shares is
at a price per share of not less than 90% of the then current market price per
share (determined as provided in such plan) of the Common Shares.
(c) If the Corporation shall at any time after the Record Time and prior to
the Separation Time fix a record date for the making of a distribution to all
holders of Common Shares (including in connection with a merger, amalgamation or
plan of arrangement) of evidences of indebtedness or assets, cash (other than a
Regular Periodic Cash Dividend or a dividend paid in Common Shares) or rights,
options or warrants (excluding those referred to in subsection 2.3(a) or
2.3(b)), the Exercise Price shall be adjusted. The Exercise Price in effect
after such record date shall be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction:
(i) the numerator of which shall be the Market Price per Common Share
on such record date less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall
be
38
binding on the Rights Agent and the holders of Rights), on a per
share basis, of the portion of the cash, assets, evidences of
indebtedness, rights, options or warrants so to be distributed;
and
(ii) the denominator of which shall be such Market Price per Common
Share.
Such adjustments shall be made successively whenever such a record date is fixed
and if such distribution is not so made, the Exercise Price shall be adjusted to
be the Exercise Price which would have been in effect if such record date had
not been fixed.
(d) Each adjustment made pursuant to this Section 2.3 shall be made as of:
(i) the payment or effective date for the applicable dividend,
subdivision, change, consolidation or issuance in the case of an
adjustment made pursuant to subsection 2.3(a) above, and
(ii) the record date for the applicable dividend or distribution, in
the case of an adjustment made pursuant to subsections 2.3(b) or
(c) above.
(e) Subject to the prior consent of the holders of Voting Shares or Rights
obtained in accordance with the provisions of subsection 5.4(b) or (c), as
applicable, if the Corporation shall at any time after the Record Time and prior
to the Expiration Time issue any shares in the capital of the Corporation (other
than Common Shares), or rights, options or warrants to subscribe for or purchase
any such shares, or securities convertible into or exchangeable for any such
shares, in a transaction referred to in clause (a)(i) or (a)(iv) above and if
the Board of Directors determines that the adjustments contemplated by
subsections 2.3(a), (b) and (d) above in connection with such transaction will
not appropriately protect the interests of the holders of Rights, the Board of
Directors, acting in good faith, may determine what other adjustments to the
Exercise Price, number of Rights and/or securities purchasable upon exercise
39
of Rights would be appropriate and, notwithstanding such clauses, such
adjustments (rather than the adjustments contemplated by subsections 2.3(a), (b)
and (d) above) shall be made and the Corporation and the Rights Agent shall
amend this Agreement as appropriate to provide for such adjustments.
(f) Anything herein to the contrary notwithstanding, no adjustment to 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(f) are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. Each adjustment made pursuant to this Section 2.3 shall be
calculated to the nearest cent or to the nearest one ten-thousandth of a Common
Share or Right, as the case may be.
(g) Each Right originally issued by the Corporation subsequent to any
adjustment made to an Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of a Right immediately
prior to such issue, all subject to further adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election as provided in
subsection 2.3(i), upon each adjustment of the Exercise Price as a result of the
calculations made in subsections 2.3(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that number of Common Shares
(calculated to the nearest one ten-thousandth) obtained by:
(i) multiplying (A) the number of Common Shares covered by a Right
immediately prior to this adjustment, by (B) the Exercise Price
in effect immediately prior to such adjustment of the Exercise
Price; and
40
(ii) dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
(i) 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 immediately
prior to such adjustment of the number of Rights shall become the number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Exercise Price in effect immediately prior to the adjustment of the Exercise
Price by the Exercise Price in effect immediately after adjustment of the
Exercise Price. The Corporation shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Exercise Price is adjusted or any date
thereafter, but, if the Rights Certificates have been issued, shall be at least
10 calendar days after 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(i), the Corporation shall, as promptly as
practicable, cause to be distributed to holders of record of Rights Certificates
on such record date, Rights Certificates evidencing the additional Rights to
which such holder 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 or 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 adjusted
Exercise Price and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.
41
(j) Irrespective of any adjustment or change in the Exercise Price or the
number of Common Shares purchasable upon exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Exercise Price or the number of Common Shares so purchasable which were
expressed in the initial Rights Certificates issued hereunder.
(k) If, as a result of an adjustment made pursuant to Section 3.1, the
holder of any Right thereafter exercised shall become entitled to receive any
securities other than Common Shares, thereafter the number of such other
securities so receivable upon exercise of any Right and the applicable Exercise
Price thereof shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as may be practicable to the provisions with
respect to the Common Shares contained in the foregoing subsections of this
Section 2.3 and the provisions of this Agreement with respect to the Common
Shares shall apply on like terms to any such other securities.
(l) In any case in which this Section 2.3 shall require that any adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Corporation may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of the
number of Common Shares and other securities of the Corporation, if any,
issuable upon such exercise over and above the number of Common Shares and other
securities of the Corporation, if any, issuable upon such exercise on the basis
of the Exercise Price in effect prior to such adjustment; provided, however,
that the Corporation shall deliver to such holder an appropriate instrument
evidencing such holder's right to receive such additional Common Shares
(fractional or otherwise) or other securities upon the occurrence of the event
requiring such adjustment.
(m) Notwithstanding anything in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 2.3, as and to
the extent that, in their good faith judgment, the Board of Directors determines
advisable in order that any (i) subdivision or
42
consolidation of the Common Shares, (ii) issuance wholly or in part for cash of
any Common Shares at less than applicable Market Price, (iii) issuance wholly
for cash of any Common Shares or Convertible Securities, (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, and subject
to applicable taxation laws, shall not be taxable to such shareholders.
(n) Whenever an adjustment to the Exercise Price or a change in the
securities purchasable upon the exercise of Rights is made pursuant to this
Section 2.3, the Corporation shall promptly:
(i) prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment;
(ii) file with the Rights Agent and with each transfer agent for the
Common Shares, a copy of such certificate; and
(iii)cause notice of the particulars of such adjustment or change to
be given to the holders of the Rights.
Failure to file such certificate or to cause such notice to be given as
aforesaid, or any defect therein, shall not affect the validity of any such
adjustment or change.
2.4 Date on Which Exercise is Effective.
Each Person in whose name any certificate for Common Shares or other
securities, if applicable, is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Common Shares or
other securities represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered in accordance with subsection 2.2(e) (together with a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and any
applicable transfer taxes and other charges payable by the exercising holder
hereunder) was
43
made; provided, however, that if the date of such surrender and payment is a
date upon which the Common Share or other relevant transfer books of the
Corporation are closed, such Person shall be deemed to have become the recorded
holder of such Common Shares or other securities, if applicable on, and such
certificate shall be dated, the next succeeding Business Day on which the
relevant transfer books of the Corporation are open.
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates.
(a) The Rights Certificates shall be executed on behalf of the Corporation
by its Chairman, President and Chief Executive Officer or one of its
Vice-Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile.
(b) Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Corporation shall
bind the Corporation, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.
(c) Promptly after the Corporation learns of the Separation Time, the
Corporation shall notify the Rights Agent of such Separation Time and shall
deliver to the Rights Agent Rights Certificates executed by the Corporation for
countersignature and a disclosure statement describing the Rights, and the
Rights Agent shall countersign (manually or by facsimile signature in a manner
satisfactory to the Corporation) such Rights Certificates and deliver such
Rights Certificates and such disclosure statement to the holders of the Rights
pursuant to subsection 2.2(c) hereof. No Rights Certificate shall be valid for
any purpose until countersigned by the Rights Agent in the manner described
above.
(d) Each Rights Certificate shall be dated the date of countersignature
thereof.
44
2.6 Registration, Registration of Transfer and Exchange.
(a) From and 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 shall 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.
If the Rights Agent shall cease to be the Rights Registrar, the Rights Agent
shall have the right to examine the Rights Register at all reasonable times.
After the Separation Time and prior to the Expiration Time, upon surrender
for registration of transfer or exchange of any Rights Certificate, and subject
to the provisions of subsection 2.6(c) below, the Corporation shall execute, and
the Rights Agent shall countersign and deliver, in the name of the holder
thereof or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(b) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be the valid obligations of the Corporation, and such
Rights shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or
exchange shall have the form of assignment thereon duly completed and 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 other
expenses (including the reasonable fees and expenses of its Rights Agent)
connected therewith.
45
(d) The Corporation shall not be required to register the transfer or
exchange of any Rights after the Rights have been terminated pursuant to the
provisions of this Agreement.
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, the Corporation shall execute and the Rights Agent
shall countersign and deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so
surrendered.
(b) If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and their respective
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 reasonable 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 an
original additional contractual obligation of the Corporation, whether or not
the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Rights duly issued
hereunder.
46
2.8 Persons Deemed Owners.
Prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated security certificate) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent may deem and treat the Person in whose name such Rights
Certificate (or, prior to the Separation Time, such security certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever.
2.9 Delivery and Cancellation of Certificates.
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificates shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9, except as expressly permitted by this Agreement.
The Rights Agent shall destroy all cancelled Rights Certificates and deliver a
certificate of destruction to the Corporation.
2.10 Agreement of Rights Holders.
Every holder of Rights, by accepting such Rights, consents and agrees with
the Corporation and the Rights Agent and with every other holder of Rights that:
(a) such holder is 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;
47
(b) prior to the Separation Time, each Right shall be transferable only
together with, and shall be transferred by a transfer of, the
associated Voting Share or other security evidencing such Right;
(c) after the Separation Time, the Rights Certificates shall be
transferable only on the Rights Register as provided herein;
(d) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated 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 Voting Share or other security certificate) is registered
as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on such Rights
Certificate or the associated Voting Share or other security
certificate made by anyone other than the Corporation or the Rights
Agent) for all purposes whatsoever, and neither the Corporation nor
the Rights Agent shall be affected by any notice to the contrary;
(e) such holder is not entitled to receive any fractional Right or
fractional Share upon exercise of a Right;
(f) this Agreement may be supplemented or amended from time to time
pursuant to subsection 5.4(a) or the third last paragraph of
subsection 2.3(a) hereof upon the sole authority of the Board of
Directors without the approval of any holder of Rights or Voting
Shares; and
(g) notwithstanding anything in this Agreement to the contrary, neither
the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or to any other Person as a result of its inability
to perform any of its
48
obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a
court of competent jurisdiction or by a government, regulatory or
administrative agency or commission or any statute, rule, regulation
or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such
obligation.
49
ARTICLE III - ADJUSTMENTS TO THE RIGHTS
IN THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in Event.
(a) Subject to the provisions of Sections 2.2, 5.1 and 5.2 hereof and
except as provided in subsection (b) below, if prior to the Expiration Time a
Flip-in Event shall occur, each Right shall thereafter constitute, effective at
the Close of Business on the tenth Business Day after the Stock Acquisition
Date, the right to purchase from the Corporation, upon exercise thereof in
accordance with the terms hereof, that number of Common Shares 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
hereof 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 hereof
shall have occurred with respect to such Common Shares).
(b) Anything in this Agreement to the contrary notwithstanding, upon the
occurrence of a Flip-In Event, any Rights that are or were Beneficially Owned on
or after the earlier of the Separation Time and the Stock Acquisition Date by:
(i) an Acquiring Person (or any Person acting jointly or in concert
with an Acquiring Person or with an Affiliate or Associate of an
Acquiring Person), or
(ii) a direct or indirect transferee of, or other successor in title
to, Rights transferred from an Acquiring Person (or from any
Affiliate or Associate of an Acquiring Person, or any Person
acting jointly or in concert with an Acquiring Person or with an
Associate or Affiliate of an Acquiring Person) in a transfer of
Rights, whether
50
or not for consideration, that the Board of Directors has
determined is part of a plan, understanding or scheme of an
Acquiring Person (or of an Affiliate or Associate or an Acquiring
Person or any Person acting jointly or in concert with an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person) that has the purpose or effect of avoiding the provisions
of this subsection 3.1(b) applicable in the circumstances
contemplated in clause (i) hereof,
shall thereupon become and be void and any holder of such Rights
(including any Transferee) shall thereafter have no 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, or any
Co-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 be
null and void.
(c) Any Rights Certificate that represents Rights Beneficially Owned by a
Person described in either clauses (i) or (ii) of subsection 3.1(b) hereof or
transferred to any nominee of any such Person, and any Rights Certificate issued
upon the transfer, exchange or replacement of any other Rights Certificate
referred to in this sentence shall contain the following legend:
"The Rights represented by this Rights Certificate were issued to a
Person who was an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person (as such terms are defined in the Rights
Agreement) or was acting jointly or in concert with any of them. This
Rights Certificate and the Rights represented hereby shall become null
and void in the circumstances specified in subsection 3.1(b) of the
Rights Agreement."
provided, however, that the Rights Agent shall not be under any responsibility
to ascertain the existence of facts that would require the imposition of such
legend but shall be required to
51
impose such legend only if instructed to do so in writing by the Corporation or
if a holder fails to certify upon transfer or exchange in the space provided on
the Rights Certificate that such holder is not a Person described in such
legend. The issuance of a Rights Certificate without the legend referred to in
this subsection 3.1(c) shall not affect the provisions of subsection 3.1(b).
52
ARTICLE IV - THE RIGHTS AGENT
4.1 General.
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation and the holders of Rights in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Corporation may from time to time appoint one or more co-rights agents (each, a
"Co-Rights Agent") as it may deem necessary or desirable after consultation with
the Rights Agent. In such event, the respective duties of the Rights Agent and
any Co-Rights Agent shall be as the Corporation may determine with the approval
of the Rights Agent and Co-Rights Agent. The Corporation agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent, its
officers, directors, employees and agents for, and to hold them harmless
against, any loss, liability, cost, claim, action, suit, damage or expense (each
a "Claim"), incurred without negligence, bad faith or wilful misconduct on the
part of the Rights Agent, its officers, directors, employees or agents, for
anything done or omitted by them in connection with the acceptance and
performance of this Agreement, including legal costs and expenses incurred in
defending against any Claim, which right to indemnification shall survive the
termination of this Agreement or the resignation or removal of the Rights Agent.
(b) The Rights Agent shall be protected from, and shall incur no liability
for or in respect of, any action taken, suffered or omitted by it in connection
with its performance of this Agreement in reliance upon any certificate for
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, opinion, statement, or other
53
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 written request, shall
provide to the Rights Agent an incumbency certificate certifying the then
current officers of the Corporation.
4.2 Merger or Amalgamation or Change of Name of Rights Agent.
(a) Any body corporate into which the Rights Agent or any successor Rights
Agent may be merged or amalgamated or consolidated with or into, or any body
corporate succeeding to the securityholder services business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such body corporate
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 shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at such
time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver such Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name
54
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 retain and consult with legal counsel (who may be
legal counsel for the Corporation), and the opinion of such counsel
will be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion and the Rights Agent, at the
Corporation's expense, may also retain and consult with such other
experts and advisors as the Rights Agent, acting reasonably, shall
consider necessary or appropriate to properly carry out its duties and
obligations under this Agreement and the Rights Agent shall be
entitled to act and rely in good faith on the advice of such experts
and advisors.
(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 or refraining from taking any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by an individual
believed by the Rights Agent to be the Chairman, the President and
Chief Executive Officer or a Vice-President and by the Treasurer or
the Secretary of the Corporation and delivered to the Rights
55
Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken, omitted or suffered in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or wilful misconduct.
(d) The Rights Agent shall 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 Voting Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and will be deemed to have been made
by the Corporation only.
(e) The Rights Agent shall 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 share
certificate or Rights Certificate (except its countersignature
thereof); nor will it be responsible for any breach by the Corporation
of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and
void pursuant to subsection 3.1(b) 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 subsection 2.3(n) hereof describing any
such adjustment); nor will it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation
of any shares to be issued pursuant to this Agreement or any Rights or
as to
56
whether any shares shall, when issued, be duly and validly authorized,
executed, issued and delivered and be 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 to rely upon and directed to
accept written instructions with respect to the performance of its
duties hereunder from any individual believed by the Rights Agent to
be the Chairman, the President and Chief Executive Officer or any
Vice-President or the Secretary or the Treasurer of the Corporation,
and to apply to such individuals for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken, omitted or suffered by it in good faith in accordance with
instructions of any such individual.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in Voting Shares, Rights or
other securities of the Corporation or become pecuniarily interested
in any transaction in which the Corporation may be interested, or
contract with or lend money to the Corporation or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Corporation or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
57
answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Corporation
resulting from any such act, omission, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
4.4 Change of Rights Agent.
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days' notice (or such lesser notice as is acceptable to the
Corporation) in writing delivered or mailed to the Corporation and to each
transfer agent of Shares by registered mail, and mailed or delivered to the
holders of the Rights in accordance with Section 5.9 hereof. The Corporation may
remove the Rights Agent upon 30 days' notice in writing, delivered or mailed to
the Rights Agent and to each transfer agent of the Voting Shares by registered
mail, and mailed to the holders of the Rights in accordance with Section 5.9
hereof. If the Rights Agent should resign or be removed or otherwise become
incapable of acting, the Corporation shall 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 by the Corporation), then the holder
of any Rights or the retiring Rights Agent may apply, at the Corporation's
expense, to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Corporation
or by such a court, shall be a body corporate incorporated under the laws of
Canada or a province thereof authorized to carry on the business of a trust
company in the Provinces of Ontario and British Columbia. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent, upon receipt of all
amounts owing to it pursuant to this Agreement, mailed or shall deliver and
transfer to the successor Rights
58
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 shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Voting Shares, and mail a notice thereof in writing to the holders
of the Rights. Failure to give any notice provided for in this Section 4.4,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
59
ARTICLE V - MISCELLANEOUS
5.1 Redemption of Rights.
(a) With the prior consent of the holders of Voting Shares or Rights
obtained in accordance with subsection 5.4(b) or (c), as applicable, the Board
of Directors, at any time prior to the occurrence of a Flip-in Event as to which
the application of Section 3.1 has not been waived pursuant to Section 5.2, may
elect to redeem all, but not less all, of the then outstanding Rights at a
redemption price of $0.001 per Right, appropriately adjusted in a manner
analogous to the applicable adjustment to the Exercise Price provided for in
Section 2.3 hereof if an event analogous to any of the events described in
Section 2.3 shall have occurred (such redemption price being herein referred to
as the "Redemption Price").
(b) If a Person acquires, pursuant to a Permitted Bid or a Competing
Permitted Bid or pursuant to an Exempt Acquisition occurring under subsection
5.2(a) or (b), outstanding Voting Shares, the Board of Directors shall,
notwithstanding the provisions of subsection 5.1(a), immediately upon such
acquisition and without further formality, be deemed to have elected to redeem
the Rights at the Redemption Price.
(c) Where a Take-over Bid that is not a Permitted Bid or Competing
Permitted Bid expires, is withdrawn or otherwise terminated after the Separation
Time has occurred and prior to the occurrence of a Flip-in Event, the Board of
Directors may elect to redeem and reissue all of the outstanding Rights at the
Redemption Price.
(d) If the Board of Directors elects to or is deemed to have elected to
redeem the Rights and, in circumstances where subsection 5.1(a) is applicable,
the requisite consent is given by the holders of Voting Shares or Rights, as
applicable, (i) the right to exercise the Rights will thereupon, without further
action and without notice, terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price, and (ii) subject to
subsection 5.1(f), no further Rights shall thereafter be issued.
60
(e) Within 10 Business Days of the Board of Directors electing or having
been deemed to have elected to redeem the Rights or, if subsection 5.1(a) is
applicable, within 10 Business Days after the requisite consent is given by the
holders of Voting Shares or Rights, as applicable, the Corporation shall give
notice of redemption to the holders of the then outstanding Rights by mailing
such notice to each such holder at his last address as it appears on the Rights
Register or, prior to the Separation Time, on the register of Voting Shares
maintained by the Corporation's transfer agent or transfer agents. Each such
notice of redemption shall state the method by which the payment of the
Redemption Price shall be made.
(f) Upon the Rights being redeemed pursuant to subsection 5.1(c), all the
provisions of this Agreement shall continue to apply as if the Separation Time
had not occurred and Rights Certificates representing the number of Rights held
by each holder of record of Voting Shares as of the Separation Time had not been
mailed to each such holder and, for all purposes of this Agreement, the
Separation Time shall be deemed not to have occurred.
5.2 Waiver of Flip-in Events.
(a) With the prior consent of the holders of Voting Shares obtained in
accordance with subsection 5.4(b), the Board of Directors may, at any time prior
to the occurrence of a Flip-in Event that would occur by reason of an
acquisition of Voting Shares otherwise than in the circumstances described in
subsection 5.2(b) or (c), waive the application of Section 3.1 to such Flip-in
Event by written notice delivered to the Rights Agent.
(b) The Board of Directors may, at any time prior to the occurrence of a
Flip-in Event that would occur by reason of a Take-over Bid made by means of a
take-over bid circular sent to all holders of Voting Shares of one or more
classes of Voting Shares (which, for greater certainty, shall not include the
circumstances described in subsection 5.2(c)), waive the application of Section
3.1 to such Flip-in Event by written notice delivered to the Rights Agent,
provided however, that if the Board of Directors waives the application of
Section 3.1 to such Flip-in Event, the Board of Directors shall be deemed to
have waived the application of Section
61
3.1 to any other Flip-in Event occurring by reason of any Take-over Bid which is
made by means of a take-over bid circular sent to all holders of the same class
or classes 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
5.2(b).
(c) The Board of Directors may waive the application of Section 3.1 to a
Flip-in Event provided that the following conditions are satisfied:
(i) the Board of Directors has determined that the Acquiring Person
became an Acquiring Person by inadvertence and without any
intention to become, or knowledge that it would become, an
Acquiring Person; and
(ii) such an Acquiring Person has reduced its Beneficial Ownership of
Voting Shares such that, at the time of the waiver pursuant to
this subsection 5.2(c), it is no longer an Acquiring Person.
5.3 Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board of Directors to
reflect any adjustment or change in the number or kind or class of Shares
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
5.4 Supplements and Amendments.
(a) The Corporation, without the approval of the holders of Rights or
Voting Shares, may from time to time supplement or amend this Agreement (i) as
specifically contemplated in subsection 2.10(f), (ii) to correct any clerical or
typographical error, or (iii) subject to subsection 5.4(d), to maintain the
validity and effectiveness of the Agreement as a
62
result of any change in any applicable laws, rule or regulatory requirements.
The Corporation may, prior to the date of the shareholders meeting referred to
in Section 5.17, supplement, amend, vary or delete any of the provisions of this
Agreement without the approval of any holder of Rights or Voting Shares (whether
or not such action would materially adversely affect the interests of the
holders of Rights generally), where the Board of Directors deems such action
necessary or desirable. Notwithstanding anything in this Section 5.4 to the
contrary, no supplement or amendment shall be made to the provisions of Article
4 except with the written concurrence of the Rights Agent to such supplement or
amendment.
(b) Subject to subsection 5.4(a), with the prior consent of the holders of
Voting Shares obtained as set forth below, the Corporation may, at any time
prior to the Separation Time, amend, vary or rescind any of the provisions of
this Agreement and the Rights (whether or not such action would materially
adversely affect the interests of the holders of Rights generally). Such consent
shall be deemed to have been given if the action requiring such approval is
authorized by the affirmative vote of a majority of the votes cast by
Independent Shareholders present or represented at and entitled to vote at a
meeting of the holders of Voting Shares duly called and held in compliance with
the applicable laws and the articles and by-laws of the Corporation.
(c) Subject to subsection 5.4(a), with the prior consent of the holders of
Rights obtained as set forth below, the Corporation may, at any time after the
Separation Time and before the Expiration Time, amend, vary or rescind any of
the provisions of this Agreement and the Rights (whether or not such action
would materially adversely affect the interests of the holders of Rights
generally). Such consent shall be deemed to have been given if the action
requiring such approval is authorized by the affirmative vote of a majority of
the votes cast by the holders of Rights (other than any holder of Rights whose
Rights have become null and void pursuant to the provisions hereof) present or
represented at and entitled to vote at a meeting of the holders of Rights. For
the purposes hereof, the procedures for the calling, holding and conduct of a
meeting of the holders of Rights shall be those, as nearly as may be
practicable, as
63
those contained in the Corporation's by-laws with respect to meetings of its
shareholders and each Right shall be entitled to one vote at any such meeting.
(d) Any supplements or amendments made by the Corporation to this Agreement
pursuant to subsection 5.4(a) which are required to maintain the validity and
effectiveness of this Agreement as a result of any change in any applicable
laws, rules or regulatory requirements shall:
(i) if made before the Separation Time, be submitted to the holders
of Voting Shares at the next meeting of shareholders and the
shareholders may, by the majority referred to in subsection
5.4(b), confirm or reject such supplement or amendment;
(ii) if made after the Separation Time, be submitted to the holders of
Rights at a meeting to be called in accordance with the
provisions of subsection 5.4(c) hereof and the holders of Rights
may, by the majority referred to in subsection 5.4(c), confirm or
reject such supplement or amendment.
Any such supplement or amendment shall, unless the Board of Directors otherwise
stipulates, be effective from the date of the resolution of the Board of
Directors adopting such amendment, until it is confirmed or rejected or until it
ceases to be effective (as described in the next sentence) and, where such
supplement or amendment is confirmed, it continues in effect in the form so
confirmed. If such supplement or amendment is rejected by the holders of Voting
Shares or the holders of Rights or is not submitted to the holders of Voting
Shares or holders of Rights as required, then such supplement or amendment shall
cease to be effective from and after the termination of the meeting at which it
was rejected or to which it should have been but was not submitted or if such a
meeting of the holders of Rights is not called within a period of 90 days of the
making of any such amendment, at the end of such period and no subsequent
resolution of the Board of Directors to supplement or amend this Agreement to
substantially the
64
same effect shall be effective until confirmed by the shareholders of the
Corporation or holders of Rights as the case may be.
(e) The Corporation shall provide the Rights Agent with notice in writing
of any amendment, rescission or variation of this Agreement contemplated in this
Section 5.4 within five days of effecting such amendment, rescission or
variation.
5.5 Fractional Rights and Fractional Common Shares.
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
issuing fractional Rights, the Corporation shall pay, or cause to be paid, to
the registered holders of the Right Certificates, after the Separation Time and
when such fractional Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the Market Price of one whole Right that the fraction of
a Right that would otherwise be issuable is of one whole Right.
(b) The Corporation shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of issuing fractional Common Shares, the
Corporation shall pay to the registered holders of Right 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 that the fraction of a
Common Share that would otherwise be issuable upon the exercise of such Right is
of a whole Common Share.
(c) The Rights Agent shall have no obligation to make any payments in lieu
of fractional Rights or fractional Voting Shares unless the Corporation shall
have provided the Rights Agent with the necessary funds to make such payment in
full.
65
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 such holder's Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to, this Agreement.
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 Voting Shares or any other
securities which may at any time be issuable on the exercise of such Rights, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in Section
5.8 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.
If after the Separation Time and prior to the Expiration Time:
66
(i) there shall occur an adjustment in the rights attaching to the
Rights pursuant to Section 3.1 as a result of the occurrence of a
Flip-in Event, or
(ii) the Corporation proposes to effect the liquidation, dissolution
or winding up of the Corporation or the sale of all or
substantially all of the Corporation's assets,
then, in each such case, the Corporation shall give to each holder of a
Right, in accordance with Section 5.9, a notice of such event or proposed
action, which shall specify the date on which such adjustment to the Rights
occurred, or liquidation, dissolution or winding up is to take place, and
such notice shall be so given within 10 Business Days after the occurrence
of an adjustment to the Rights and not less than 20 Business Days prior to
the date of taking such proposed action by the Corporation.
5.9 Notices.
Any notice, demand or other communication required or permitted to be given
or made by the Rights Agent or by the holder of any Rights to or on the
Corporation or by the Corporation or by the holder of any Rights to or on the
Rights Agent shall be in writing and shall be well and sufficiently given or
made if:
(i) delivered in person during normal business hours on a Business
Day and left with the receptionist or other responsible employee
at the relevant address set forth below; or
(ii) except during any general interruption of postal services due to
strike, lockout or other cause, sent by registered mail; or
67
(iii)sent by facsimile or other form of recorded electronic
communication, charges prepaid and confirmed in writing as
aforesaid;
if to the Corporation, addressed to it at:
1600-1055 Dunsmuir Street,
Vancouver, British Columbia
(mailing address)
X.X. Xxx 00000
Xxxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: The Secretary
Fax No. (000) 000-0000
and if to the Rights Agent, addressed to it at:
Suite 1600 - The Oceanic Plaza
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
(mailing address)
X.X. Xxx 0000 Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Manager
Fax No. (000) 000-0000
Notices, demands or other communications required or permitted to be given or
made by the Corporation or the Rights Agent to or on the holder of any Rights
shall be in writing and shall be well and sufficiently given or made if
delivered personally to such holder or delivered or mailed by first class mail
to the address of such holder as it appears on the Rights Register maintained by
the Rights Registrar, or, prior to the Separation Time, in the register of
Shareholders maintained by the transfer agent for the Common Shares.
Any notice so given or made shall be deemed to have been given and to have
been received on the day of delivery, if so delivered; on the third Business Day
(excluding each day
68
during which there exists any general interruption of postal service due to
strike, lockout, or other cause) following the mailing thereof, if so mailed;
and on the day of telecopying or sending of the same by other means of recorded
electronic communication (provided such sending is during the normal business
hours of the addressee on a Business Day and if not, on the first Business Day
thereafter). Each of the Corporation and the Rights Agent may from time to time
change its address for notice by notice to the other given in the manner
aforesaid.
5.10 Costs of Enforcement.
The Corporation agrees that if the Corporation fails to fulfill any of its
obligations pursuant to this Agreement, then the Corporation shall reimburse the
holder of any Rights for the costs and expenses (including legal fees)
reasonably incurred by such holder and actions to enforce his rights pursuant to
any Rights or this Agreement.
5.11 Successors.
All the covenants and provisions of this Agreement by or for the benefit of
the Corporation or the Rights Agent shall bind and inure to the benefit of their
respective successors and permitted assigns hereunder. Except as otherwise
specifically provided in this Agreement, neither party hereto may assign any of
its rights or benefits hereunder without the prior written consent of the other
party hereto.
5.12 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; but this Agreement
shall be for the sole and exclusive benefit of the Corporation, the Rights Agent
and the holders of the Rights.
69
5.13 Governing Law.
This Agreement and each Right issued hereunder shall be deemed to be a
contract made under the laws of the Province of Ontario and for all purposes
shall be governed by and construed in accordance with the laws of such Province
applicable to contracts to be made and performed entirely within such Province.
5.14 Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
5.15 Severability.
If any term or provision hereof or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
5.16 Determinations and Actions by the Board of Directors.
All actions, calculations and determinations (including all omissions with
respect to the foregoing) in connection with the administration of this
Agreement which are done or made by the Board of Directors, in good faith, shall
not subject the Board of Directors to any liability to the holders of the
Rights.
5.17 Effective Date.
This Agreement is effective in accordance with its terms from the Effective
Date; provided that unless confirmed by ordinary resolution passed by a majority
of the votes cast by
70
Independent Shareholders present in person or voting by proxy and who vote in
respect of confirmation of this Agreement at the 2004 annual and special meeting
of shareholders of the Corporation to be held not later than July 31, 2004, this
Agreement shall be of no further force or effect and all Rights issued hereunder
shall be null and void from the first to occur of (i) the termination of such
meeting, and (ii) the Close of Business (Vancouver time) on July 31, 2004.
5.18 Regulatory Approvals.
Any obligation of the Corporation or action or event contemplated by this
Agreement, or any amendment or supplement to this Agreement, shall be subject to
receipt of any requisite approval or consent from any governmental or regulatory
authority having jurisdiction including the Toronto Stock Exchange and New York
Stock Exchange while any securities of the Corporation are listed and posted for
trading thereon and for a period of six months thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
PLACER DOME INC.
By
--------------------------------
By
--------------------------------
CIBC MELLON TRUST COMPANY
By
--------------------------------
By
--------------------------------
71
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 RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY PERSON ACTING JOINTLY
OR IN CONCERT WITH AN ACQUIRING PERSON OR WITH AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL BECOME
NULL AND VOID WITHOUT FURTHER ACTION.
RIGHTS CERTIFICATE
This certifies that ________, or registered assigns, is the registered
holder of the number of Rights set forth above, each of which entitles the
registered holder thereof, subject to the terms, provisions and conditions of a
Rights Agreement, made as of February 26, 2004 (the "Rights Agreement") between
Placer Dome Inc., a corporation continued under the Canada Business Corporations
Act (the "Corporation"), and CIBC Mellon Trust Company, as Rights Agent, 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 in the capital of the Corporation (a "Common Share")
(subject to adjustment as provided in the Rights Agreement) at the Exercise
Price referred to below, upon presentation and surrender of this Rights
Certificate with a duly completed and executed Form of Election to Exercise at
the principal office of the Rights Agent in any of the Cities of Toronto,
Montreal, Winnipeg, Calgary or Vancouver, Canada or ______ the Co-Rights Agent
at its principal office in the City of New York, New York, U.S.A., or _________,
the Co-Rights Agent at its office in Sydney, Australia. The Exercise Price shall
initially be $52 per right and shall be subject to adjustment in certain events
as provided in the Rights Agreement.
(i)
This Rights Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement which terms, provisions and conditions are
hereby incorporated herein by this reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights 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 any office of the Rights Agent or any Co-Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates so surrendered. If this Rights Certificate shall be
exercised in part, the registered holder shall be entitled to receive, upon
surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provision 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.
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby nor will Rights Certificates be issued for less than
one whole Right. 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 Voting Shares or of
any other securities which may at any time be issuable on 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 meetings or other
actions affecting shareholders
(ii)
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation
and its corporate seal.
Date:
------------------
ATTEST: PLACER DOME INC.
By
---------------------------------
Secretary
Countersigned:
CIBC MELLON TRUST COMPANY
By
----------------------------
Authorized Signature
(iii)
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificates.)
FOR VALUE RECEIVED
-------------------------------------------------------------
hereby sells, assigns and transfers
unto
---------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Corporation, with full power of substitution.
Dated: ,
------------------------------------- ------------
Signature Guaranteed:
__________________________________
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration
or enlargement or any change
whatsoever)
Signatures must be guaranteed by a member firm of a recognized stock
exchange in Canada or a registered national securities exchange in the United
States, a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in Canada or
the United States.
(iv)
-----------------------------------------------------------------------------
(To be completed if true)
CERTIFICATION
The undersigned hereby represents and certifies, for the benefit of all
holders of Rights and Common Shares, that the Rights evidenced by this Rights
Certificate are not, and, to the knowledge of the undersigned, have not been,
Beneficially Owned by an Acquiring Person or any Person acting jointly or in
concert with any Acquiring Person or with any Affiliate or Associate thereof
(all as defined in the Rights Agreement).
____________________
Signature
-----------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported assignment, the Beneficial Owner of the Rights
evidenced by this Rights Certificate will be deemed to be an Acquiring Person or
a Person acting jointly or in concert with such Acquiring Person or an Affiliate
or Associate of such Acquiring Person (all as defined in the Rights Agreement)
and accordingly the Rights evidenced by this Rights Certificate will be null and
void.
(v)
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO:
The undersigned hereby irrevocably elects to exercise ____________ whole
Rights represented by the attached Rights Certificate to purchase the Voting
Shares issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
--------------------------------------------------------------------------------
Address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Social Insurance, Social Security or
Other Taxpayer Identification Number:
------------------------------------------
If such number of Rights shall not be all the whole Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such whole
Rights shall be registered in the name of and delivered to:
--------------------------------------------------------------------------------
Address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Social Insurance, Social Security or
Other Taxpayer Identification Number:
------------------------------------------
Dated: ,
------------------------------------- ------------
Signature Guaranteed:
___________________________________
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration
or enlargement or any change
whatsoever)
(vi)
Signatures must be guaranteed by a member firm of a recognized stock
exchange in Canada or a registered national securities exchange in the United
States, a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in Canada or
the United States.
-----------------------------------------------------------------------------
(To be completed if true)
CERTIFICATION
The undersigned hereby represents, for the benefit of all holders of Rights
and 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 any Person acting jointly or in concert with any Acquiring
Person or with any Affiliate or Associate thereof (all as defined in the Rights
Agreement).
_______________________________
Signature
-----------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Beneficial Owner of the Rights
evidenced by this Rights Certificate will be deemed to be an Acquiring Person or
a Person acting jointly or in concert with an Acquiring Person or an Affiliate
or Associate of an Acquiring Person (all as defined in the Rights Agreement) and
accordingly will deem the Rights evidenced by this Rights Certificate will be
null and void.
(vii)
