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EXHIBIT 10.3
XXXXXX ENVIRONMENTAL INC.
and
MONTREAL TRUST COMPANY OF CANADA
as Rights Agent
SHAREHOLDER RIGHTS PLAN AGREEMENT
DATED AS OF
APRIL 11, 1995
AND AMENDED AND RESTATED
AS OF MAY 19, 1995
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NOW THEREFORE in consideration of the foregoing premises and
the respective covenants and agreements set forth herein the parties hereby
agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 Certain Definitions
For purposes of the Agreement, the following terms have the meanings
indicated:
(a) "1933 SECURITIES ACT" means the Securities Act of 1933 of the United
States, as amended, and the rules and regulations thereunder, and any
comparable or successor laws or regulations thereto.
(b) "1934 EXCHANGE ACT" means the Securities Exchange Act of 1934 of the
United States, as amended, and the rules and regulations thereunder,
and any comparable or successor laws or regulations thereto.
(c) "ACQUIRING PERSON" means, any Person who is the Beneficial Owner of
twenty percent (20%) or more of the outstanding Voting Shares of the
Corporation; provided, however, that the term "Acquiring Person" shall
not include
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of twenty percent
(20%) or more of the outstanding Voting Shares of the Corporation
as a result of (A) Corporate Acquisitions, (B) Permitted Bid
Acquisitions, (C) Corporate Distributions or (D) Exempt
Acquisitions; provided, however, that if a Person shall become
the Beneficial Owner of twenty percent (20%) or more of the
Voting Shares of the Corporation then outstanding by reason of
one or more or any combination of the operation of a Corporate
Acquisition, Permitted Bid Acquisition, Corporate Distribution or
Exempt Acquisition and, after such Corporate Acquisition,
Permitted Bid Acquisition, Corporate Distribution or Exempt
Acquisition, becomes the Beneficial Owner of an additional one
percent (1%) or more of the outstanding Voting Shares of the
Corporation other than pursuant to Corporate Acquisitions,
Permitted Bid Acquisitions, Corporate Distributions or Exempt
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Acquisitions, then as of the date of such acquisition, such Person
shall become an Acquiring Person;
(iii) for a period of ten (1O) days after the Disqualification Date (as
hereinafter defined), any Person who becomes the Beneficial Owner of
twenty percent (20%) or more of the outstanding Voting Shares of the
Corporation as a result of such Person becoming disqualified from
relying on Section 1.1 (g)(4) hereof solely because such Person makes
or proposes to make a Take-over Bid in respect of securities of the
Corporation alone or by acting jointly or in concert with any other
Person (the first date of public announcement (which, for the purposes
of this definition, shall include, without limitation, a report filed
pursuant to section 101 of the Securities Act (Ontario)) by such
Person or the Corporation of the intent to commence such a Take-over
Bid being herein referred to as the "Disqualification Date");
(iv) an underwriter or member of a banking or selling group that acquires
Voting Shares of the Corporation from the Corporation in connection
with a bona fide distribution to the public of securities; and
(v) a Person (a "GRANDFATHERED PERSON") who is the Beneficial Owner of
twenty percent (20%) or more of the outstanding Voting Shares
determined as at the Record Time; provided, however, that this
exception shall not be, and shall cease to be, applicable to a
Grandfathered Person in the event that such Grandfathered Person
shall, after the Record Time, become the Beneficial Owner of any
additional Voting Shares that increase its Beneficial Ownership of
Voting Shares by more than one percent (1%) of the number of Voting
Shares outstanding as at the Record Time, other than as may be
acquired pursuant to Corporate Acquisitions, Permitted Bid
Acquisitions, Corporate Distributions or Exempt Acquisitions.
(d) "AFFILIATE" when used to indicate a relationship with a specified
Person, means a Person that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such specified Person.
(e) "AGREEMENT" means this agreement as amended, modified or supplemented
from time to time.
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(f) "ASSOCIATE" when used to indicate a relationship with a specified
Person, means any relative of such specified Person who has the same
home as such specified Person, or any Person to whom such specified
Person is married or with whom such specified Person is living in a
conjugal relationship outside marriage, or any relative of such spouse
or other Person who has the same home as such specified Person.
(g) a Person shall be deemed the "BENEFICIAL OWNER", and to have
"BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY OWN":
(i) any securities as to which such Person or any Affiliate or
Associate of such Person or any other Person acting jointly or in
concert with such Person is or may be deemed to be the owner at
law or in equity, and for this purpose, a Person shall be deemed
to be an owner at law or in equity of all securities of which
such Person or any of the Affiliates or Associates of such Person
or any other Person acting jointly or in concert with such Person
is deemed to be the beneficial owner pursuant to Part XX of the
Securities Act (Ontario) or any comparable or successor Part
thereto:
provided, however, that a Person shall not be deemed the "BENEFICIAL
OWNER", or to have "BENEFICIAL OWNERSHIP" of, or to "BENEFICIALLY
OWN", any security as a result of the existence of any one or more of
the following circumstances:
(1) such security has been deposited or tendered pursuant to any
tender or exchange offer or take-over bid made by such Person
or made by any Affiliate or Associate of such Person or made
by any other Person acting jointly or in concert with such
Person, unless such deposited or tendered security has been
taken up or paid for, whichever shall first occur; or
(2) such Person or any Affiliate or Associate of such Person or
any other Person acting jointly or in concert with such
Person has or shares the power to vote or direct the voting
of such security pursuant to a revocable proxy given in
response to a public proxy solicitation or any such Person
has an agreement, arrangement or understanding with respect
to a particular shareholder proposal or proposals or a
particular matter or matters to come before a
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meeting of shareholders, including the election of
directors; or
(3) such Person or any Affiliate or Associate of such Person or
any other Person acting jointly or in concert with such
Person has or shares the power to vote or direct the voting
of such security in connection with or in order to
participate in a public proxy solicitation; or
(4) (i) such Person or any Affiliate or Associate of such Person
or any other Person acting jointly or in concert with such
Person, holds or exercises dispositive power over such
security; provided that the ordinary business of any such
Person (the "Fund Manager") includes the management of
investment funds for others and such dispositive power over
such security is held by the Fund Manager in the ordinary
course of such business in the performance of such Fund
Manager's duties for the account of any other Person (a
"Client"), (ii) such Person (the "Trust Company") is licensed
to carry on the business of a trust company under applicable
law and, as such, acts as trustee or administrator or in a
similar capacity in relation to the estates of deceased or
incompetent Persons or in relation to other accounts and
holds or exercises dispositive power over such security in
the ordinary course of such duties for the estate of any such
deceased or incompetent Person (each an "Estate Account") or
for such other accounts (each an "Other Account"),(iii) the
ordinary business of any such Person includes acting as an
agent of the Crown in the management of public assets (the
"Crown Agent"), or (iv) the Person, any of such Person's
Affiliates or Associates or any other Person acting jointly
or in concert with such Person holds or exercises dispositive
power over such security, provided that the Person exercising
such dispositive power is the administrator or the trustee of
one or more pension funds or plans (each a "Pension Fund")
registered under the laws of Canada or any province thereof
or the United States or any state thereof (the "Independent
Person") and holds such securities solely for the purposes of
its activities as an Independent Person, and further provided
that such Person:
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(a) does not hold or exercise dispositive power over more
than thirty percent (30%) of the Voting Shares of the
Corporation;
(b) holds such Voting Shares of the Corporation for
investment purposes; and
(c) is not acting jointly or in concert with any other
Person;
provided, however, that in any of the foregoing cases no one
of the Fund Manager, the Trust Company, the Crown Agent or
the Independent Person makes or proposes to make a Take-over
Bid in respect of securities of the Corporation alone or by
acting jointly or in concert with any other Person (other
than by means of ordinary market transactions (including
prearranged trades) executed through the facilities of a
stock exchange or organized over-the-counter market); or
(5) such Person is a Client of the same Fund Manager as another
Person on whose account the Fund Manager holds or exercises
dispositive power over such security, or such Person is an
Estate Account or an Other Account of the same Trust Company
as another Person on whose account the Trust Company holds or
exercises dispositive power over such security, or such
Person is a Pension Fund with the same Independent Person as
another Pension Fund; or
(6) such Person is a Client of a Fund Manager and such security
is owned at law or in equity by the Fund Manager, or such
Person is an Estate Account or an Other Account of a Trust
Company and such security is owned at law or in equity by
the Trust Company, or such Person is a Pension Fund and
such security is owned at law or in equity by the Independent
Person of the Pension Fund.
For purposes of this Agreement, the percentage of Voting Shares Beneficially
Owned by any Person, shall be and be deemed to be the product of one hundred
(100) and the number of which the numerator is the number of votes for the
election of all directors generally attaching to the Voting Shares Beneficially
Owned by such Person and the denominator of which is the number of votes for the
election of all
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directors generally attaching to all outstanding Voting Shares. Where any Person
is deemed to Beneficially Own unissued Voting Shares, such Voting Shares shall
be deemed to be issued and outstanding for the purpose of calculating the
percentage of Voting Shares Beneficially Owned by such Person.
(h) "BOARD OF DIRECTORS" means, at any time, the duly
constituted board of directors of the Corporation.
(i) "BUSINESS CORPORATIONS ACT (ONTARIO)" means the
Business Corporations Act, R.S.O. 1990, c.B.16, as amended, and
the regulations thereunder, and any comparable or successor laws
or regulations thereto,
(j) "BUSINESS DAY" means any day other than a Saturday, Sunday or a
day on which banking institutions in Toronto are authorized
or obligated by law to close.
(k) "CANADIAN DOLLAR EQUIVALENT" means any amount which is expressed
in United States dollars shall mean on any day the Canadian dollar
equivalent of such amount determined by reference to the US. -
Canadian Exchange Rate on such date.
(l) "CLOSE OF BUSINESS" on any given date means the time on such date (or,
if such date is not a Business Day, the time on the next succeeding
Business Day at which the office of the transfer agent for the Common
Shares in the City of Toronto (or, after the Separation Time, the
office of the Rights Agent in the City of Toronto is closed to the
public.
(m) "COMMON SHARES", when used with reference to the Corporation, means the
common shares in the capital of the Corporation and, when used with
reference to any Person other than the Corporation, means the class or
classes of shares (or similar equity interest) with the greatest per
share voting power entitled to vote generally in the election of all
directors of such other Person or the equity securities or other equity
interest having power (whether or not exercised) to control or direct
the management of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(n) "COMPETING BID" means a Take-over Bid that: (i) is made while another
Permitted Bid is in existence, and (ii) satisfies all the components of
the definition of a Permitted Bid, except that (1) the requirements set
out in Clause (ii) of the definition of a Permitted Bid shall be
satisfied if the Take-over Bid shall contain,
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and the take up and payment for securities tendered or
deposited thereunder shall be subject to, an irrevocable and
unqualified condition that no Voting Shares shall be taken up or paid
for pursuant to the Competing Bid prior to the close of business on the
date that is no earlier than the date which is the later of twenty-one
(21) days after the date the Competing Bid is made or the earliest date
on which Voting Shares may be taken up or paid for under any other
Permitted Bid that is then in existence for the Voting Shares and only
if at that date, more than fifty percent (50%) of the then outstanding
Voting Shares held by Independent Shareholders have been deposited to
the Competing Bid and not withdrawn, and (2) if the Permitted Bid was
made for all Voting Shares of the Corporation, the Competing Bid must
also be made for all Voting Shares of the Corporation.
(n(A))"CONTROLLED": a corporation is "CONTROLLED" by another Person or
two or more Persons if:
(i) securities entitled to vote in the election of
directors carrying more than fifty percent (50%) of the votes for
the election of directors are held, directly or indirectly, by or
for the benefit of the other Person or Persons; and
(ii) the votes carried by such securities are entitled, if exercised, to
elect a majority of the board of directors of such corporation;
and "CONTROLS", "CONTROLLING" and "UNDER COMMON CONTROL WITH" shall
be interpreted accordingly.
(o) "CORPORATE ACQUISITION" means an acquisition by the Corporation
or a Subsidiary of the Corporation or the redemption by the
Corporation of Voting Shares of the Corporation which by reducing the
number of Voting Shares of the Corporation outstanding increases the
proportionate number of Voting Shares Beneficially Owned by any
Person.
(p) "CORPORATE DISTRIBUTION" means an acquisition of Voting Shares of
the Corporation as a result of:
(i) a stock dividend or a stock split or pursuant to any
dividend reinvestment plan or share purchase plan of the
Corporation;
(ii) any other event pursuant to which all holders of Voting
Shares of the Corporation are entitled to receive Voting Shares
on a pro rata basis, including, without limiting the
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generality of the foregoing, the acquisition or the exercise of
rights to purchase Voting Shares distributed to all the holders of
a series or class of Voting Shares of the Corporation to subscribe
for or purchase Voting Shares of the Corporation, provided that
such rights are acquired directly from the Corporation and not from
any other Person; or
(iii) a distribution of Voting Shares, or securities convertible into,
exchangeable for or carrying the right to acquire Voting Shares
(and the conversion or exchange of such convertible or
exchangeable securities or the exercise of the right to acquire
Voting Shares carried by such securities), made pursuant to a
prospectus or by way of a private placement.
(q) "DEBENTURES" means the U.S. $120,000,000 6% Convertible Subordinated
Debentures of the Corporation due October 15,2000.
(r) "DISQUALIFICATION DATE" has the meaning ascribed thereto in Clause
1.1 (c)(iii).
(s) "EFFECTIVE DATE" has the meaning ascribed thereto in Section 5.13.
(t) "ELECTION TO EXERCISE" has the meaning ascribed thereto in
Subsection 2.2(d).
(u) "EXEMPT ACQUISITION" means an acquisition of Voting Shares of the
Corporation, in respect of which the Board of Directors has waived the
application of Section 3.1 hereof pursuant to the provisions of
Subsections 5.1 (b) or 5.1 (c) hereof or which were made on or prior to
the Record Time.
(v) "EXERCISE PRICE" means, as of any date, the price at which a holder may
purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall be $75.00.
(w) "EXPIRATION TIME" means the earlier of: (i) the Termination Time,
and (ii) the close of business on June 30, 1998.
(x) "FLIP-IN EVENT" means a transaction in or pursuant to which any
Person becomes an Acquiring Person.
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(y) "GRANDFATHERED PERSON" has the meaning ascribed thereto in Clause
1.1 (c)(v).
(z) "INDEPENDENT SHAREHOLDERS" means holders of Voting Shares of the
Corporation, but shall not include any Acquiring Person or any Offeror
(including an Offeror who has announced an intention to make or who
makes a Permitted Bid or Competing Bid), or any Affiliate or Associate
of any such Acquiring Person or Offeror, or any Person acting jointly
or in concert with any such Acquiring Person or Offeror or with any
Affiliate or Associate of any such Acquiring Person or Offeror, or any
Affiliate or Associate of such Person acting jointly or in concert with
such Person or Offeror, including any employee benefit plan, stock
purchase plan, deferred profit sharing plan or any similar plan or
trust for the benefit of employees of the Corporation or a Subsidiary
of the Corporation, unless the beneficiaries of any such plan or trust
direct the manner in which the Voting Shares are to be voted or direct
whether the Voting Shares are to be tendered to a Take-over Bid.
(aa) "MARKET PRICE" per share of any securities on any date of determination
means the average of the daily closing prices per share of such
securities (determined as described below) on each of the twenty (20)
consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however, that if an event of
a type analogous to any of the events described in Section 2.3 hereof
shall have caused the closing prices used to determine the Market Price
on any Trading Days not to be fully comparable with the closing price
on such date of determination or, if the date of determination is not a
Trading Day, on the immediately preceding Trading Day, each such
closing price so used shall be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section 2.3
hereof in order to make it fully comparable with the closing price on
such date of determination or, if the date of determination is not a
Trading Day, on the immediately preceding Trading Day. The closing
price per share of any securities on any date shall be (i) the closing
board lot sale price or, if such price is not available, the average of
the closing bid and asked prices, for each share as reported by The
Toronto Stock Exchange, or (ii) if for any reason none of such prices
is available on such day or the securities are not listed or admitted
to trading on The Toronto Stock Exchange, the closing board lot sale
price, or if such price is not available, the average of the closing
bid and asked prices, for each share as reported by The Montreal
Exchange, or (iii) if for any reason none of such prices is
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available on such day or the securities are not listed or admitted to
trading on The Toronto Stock Exchange or The Montreal Exchange, the
closing board lot sale price or, if such price is not available, the
average of the closing bid and asked prices, for each share as reported
in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the securities exchange
in Canada or the United States on which the securities are primarily
traded, or (iv) if for any reason none of such prices is available on
such day or the securities are not listed or admitted to trading on The
Toronto Stock Exchange or The Montreal Exchange, the closing board lot
sale price, or if such price is not available, the average of the
closing bid and asked prices for each share as reported by the principal
stock exchange in the United States, or (v) if not so listed, the last
quoted price,or if not so quoted, the average of the high bid and low
asked prices for each share of such securities in the over-the-counter
market, as reported by Nasdaq or, if the securities are not quoted on
Nasdaq, as reported by such other system then in use, or (vi) if on any
such date the securities are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the securities selected in
good faith by the Board of Directors; provided, however, that if on any
such date the securities are not traded in the over-the-counter market,
the closing price per share of such securities on such date shall mean
the fair value per share of such securities on such date as determined
in good faith by the Board of Directors, after consultation with a
nationally or internationally recognized investment dealer or investment
banker. The Market Price shall be expressed in Canadian dollars and if
initially determined in respect of any day forming part of the twenty
(20) consecutive trading day period in United States dollars, such
amount shall be translated into Canadian dollars at the Canadian Dollar
Equivalent thereof. Notwithstanding the foregoing, where the Board of
Directors is satisfied that the Market Price of securities as determined
herein was affected by an anticipated or actual Take-over Bid or by
improper manipulation, the Board of Directors may, acting in good faith,
determine the Market Price of securities, such determination to be based
on a finding as to the price of which a holder of securities of that
class could reasonably have expected to dispose of his securities
immediately prior to the relevant date excluding any change in price
reasonably attributable to the anticipated or actual Take-over Bid or to
the improper manipulation.
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(bb) "Nasdaq" means The Nasdaq Stock Market.
(cc) "Offer to Acquire" shall include:
(i) an offer to purchase, a public announcement of an intention to make
an offer to purchase, or a solicitation of an offer to sell, Voting
Shares of the Corporation; and
(ii) an acceptance of an offer to sell Voting Shares of the Corporation,
whether or not such offer to sell has been solicited.
or any combination thereof, and the Person accepting an offer to sell
shall be deemed to be making an Offer to Acquire to the Person that made
the offer to sell;
(dd) "Offeror" means a Person who has announced an intention to make, or
who makes, a Take-over Bid.
(ee) "Offeror's Securities" means Voting Shares of the Corporation
Beneficially Owned by an Offeror, any Affiliate or Associate of such
Offeror, any Person acting jointly or in concert with the Offeror or
with any Affiliate of the Offeror and any Affiliates or Associates of
such Person so acting jointly or in concert.
(ff) "Permitted Bid" means a Take-over Bid made by an Offeror that is made
by means of a Take-over Bid circular and which also complies with the
following additional provisions:
(i) the take-over Bid shall be made to all holders of record of
Voting Shares wherever resident as registered on the books of the
Corporation;
(ii) the Take-over Bid shall contain, and the take up and payment for
securities tendered or deposited thereunder shall be subject to,
an irrevocable and unqualified condition that no Voting Shares
shall be taken up or paid for pursuant to the Take-over Bid prior
to the close of business on the date which is not less than sixty
(60) days following the date of the Take-over Bid and that no
Voting Shares shall be taken up or paid for pursuant to the
Take-over Bid unless, at such date, more than fifty percent (50%)
of the then outstanding Voting Shares held by Independent
Shareholders have been deposited to the Take-over Bid and not
withdrawn;
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(iii) the Take-over Bid shall contain an irrevocable and unqualified
provision that, unless the Take-over Bid is withdrawn in accordance
with applicable law, Voting Shares of the Corporation may be
deposited pursuant to such Take-over Bid at any time during the
period of time described in Clause (ii) of this Subsection 1.1(ff)
and that any Voting Shares deposited pursuant to the Take-over Bid
may be with drawn at any time until taken up and paid for;
(iv) the Take-over Bid shall contain an irrevocable and unqualified
provision that should the condition referred to in Clause (ii) of
this Subsection 1.1(ff) be met: (A) the Offeror will make a public
announcement of that fact on the date the Take-over Bid would
otherwise expire and (B)the Take-over Bid will be extended for a
period of not less than ten (10) Business Days from the date it
would otherwise expire.
(gg) "PERMITTED BID ACQUISITIONS" means share acquisitions made
pursuant to a Permitted Bid or a Competing Bid.
(hh) "PERSON" means any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal or personal
representative, government, governmental body, entity or authority,
group, body corporate, corporation, unincorporated organization or
association, syndicate, joint venture or any other entity, whether or
not having legal personality, and any of the foregoing in any
derivative, representative or fiduciary capacity, and pronouns have
a similar extended meaning.
(ii) "RECORD TIME" means 5:00 p.m. (Toronto time) on April 11,1995.
(jj) "REDEMPTION PRICE" has the meaning ascribed thefe to in Subsection
5.1(a).
(kk) "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) two hundred percent (200%) of the aggregate amount of
cash dividends declared payable by the Corporation on its Common
Shares in its immediately preceding fiscal year; and
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(ii) one hundred percent (100%) of the aggregate
consolidated net income of the Corporation, before extraordinary
items, for its immediately preceding fiscal year.
(ll) "RIGHT" means a right issued pursuant to this Agreement.
(mm) "RIGHTS CERTIFICATE" has the meaning ascribed thereto in
Section 2.2(c).
(nn) "RIGHTS REGISTER" has the meaning ascribed thereto in
Subsection 2.6(a).
(oo) "SECURITIES ACT (ONTARIO)" means the Securities Act, R.S.O. 1990,
c. S.5, as amended, and the regulations, rules, policies, and notices
thereunder, and any comparable or successor laws, regulations, rules,
policies or notices thereto.
(pp) "SEPARATION TIME" means the close of business on the tenth (10th)
Trading Day after the earlier of (A) the Stock Acquisition Date and (B)
the date of the commencement of, or first public announcement of, the
intent of any person (other than the Corporation or any Subsidiary of
the Corporation) to commence, a Take-over Bid (other than a Permitted
Bid or Competing Bid) or such later date as may be determined by the
Board of Directors provided that, if the foregoing results in the
Separation Time being prior to the Record Time, the Separation Time
shall be the Record Time and provided further that, if any Take-over
Bid referred to in Clause (B) of this Subsection 1.1(pp) expires, is
cancelled, terminated or otherwise withdrawn prior to the Separation
Time, such Take-over Bid shall be deemed, for the purposes of this
Subsection 1.1(pp), never to have been made and provided further that
if the Board of Directors determines pursuant to Subsections 5.1 (b) or
5.1 (c) hereof to waive the application of Section 3.1 hereof to a
Flip-in Event, the Separation Time in respect of such Flip-in Event
shall be deemed never to have occurred.
(qq) "STOCK ACQUISITION DATA" means the first date of
public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to
section 101 of the Securities Act (Ontario) or Section 13(d) under
the 1934 Exchange Act) by the Corporation or an Offeror or Acquiring
Person of facts indicating that a Person has become an Acquiring
Person.
(rr) "SUBSIDIARY": a corporation shall be deemed to be a Subsidiary of
another corporation if:
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(i) it is controlled by:
(A) that other; or
(B) that other and one or more corporations each of
which is controlled by that other; or
(C) two or more corporations each of which is
controlled by that other; or
(ii) it is a Subsidiary of a corporation that is that other's
Subsidiary.
(ss) "TAKE-OVER BID" means an Offer to Acquire Voting Shares of the
Corporation or securities convertible into or exchangeable for or
carrying a right to purchase Voting Shares of the Corporation where the
Voting Shares of the Corporation subject to the Offer to Acquire,
together with the Voting Shares of the Corporation into which the
securities subject to the Offer to Acquire are convertible,
exchangeable or exercisable, and the Offeror's Securities, constitute
in the aggregate twenty percent (20%) or more of the outstanding Voting
Shares of the Corporation at the date of the Offer to Acquire.
(tt) "TERMINATION TIME" means the time at which the right to exercise Rights
shall terminate pursuant to Subsections 5.1 (a), 5.1 (d) or 5.1 (g) or
Section 5.13 hereof.
(uu) "TRADING DAY", when used with respect to any securities, means a
day on which the principal Canadian stock exchange or American stock
exchange or market on which such securities are listed or admitted to
trading is open for the transaction of business or, if the securities
are not listed or admitted to trading on any Canadian stock exchange
or American stock exchange or market, a Business Day.
(vv) "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 which
is calculated in the manner which shall be determined by the Board
of Directors from time to time acting in good faith.
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(ww) "VOTING SHARES" means, with respect to any Person, the Common
Shares of such Person and any other shares of capital stock or voting
interests of such Person entitled to vote generally in the election of
all directors.
1.2 CURRENCY
All sums of money which are referred to in this Agreement are
expressed in lawful money of Canada, unless otherwise specified.
1.3 HEADINGS
The division of this Agreement into Articles, Sections,
Subsections, Clauses and Subclauses and the insertion of headings, subheadings
and a table of contents are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
1.4 NUMBER AND GENDER
Wherever the context so requires, terms used herein importing the
singular number only shall include the plural and vice-versa and words importing
only one gender shall include all others.
1.5 ACTING JOINTLY OR IN CONCERT
For the purposes of this Agreement, a Person shall be deemed to be
acting jointly or in concert with every Person who is a party to an agreement,
commitment or understanding, whether formal or informal, with the first Person
or any Associate or Affiliate of such Person for the purpose of acquiring or
making an Offer to Acquire Voting Shares of the Corporation.
1.6 STATUTORY REFERENCES
Unless the context otherwise requires or except as expressly
provided herein, any reference herein to a specific part, section, subsection,
clause or Rule of any statute or regulation shall be deemed to refer to the same
as it may be amended, reenacted or replaced or, if repealed and there shall be
no replacement therefor, to the same as it is in effect on the date of
this Agreement.
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ARTICLE 2 - THE RIGHTS
2.1 Legend on Common Share Certificates
(a) Certificates issued for Common Shares, including Certificates issued
for Common Shares issued upon the conversion of Debentures, after the Record
Time but prior to the close of business on the earlier of the Separation Time
and the Expiration Time shall evidence one Right for each Common Share
represented thereby and shall have impressed on, printed on, written on or
otherwise affixed to them, a legend in substantially the following form:
Until the Separation Time (as defined in the Rights Plan referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Shareholder Rights Plan Agreement, dated
as of April 11, 1995 and as amended and restated on the 19th day of May,
1995 (the "Rights Plan"), between Xxxxxx Environmental Inc. (the
"Corporation") and Montreal Trust Company of Canada, as rights agent (the
"Rights Agent"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
office of the Corporation. Under certain circumstances, as set forth in
the Rights Plan, such Rights may be amended or redeemed, may expire, may
become null and void (if, in certain cases, they are issued to or
"Beneficially Owned" by any Person who is, was or becomes an "Acquiring
Xxxxxxx", as such terms are defined in the Rights Plan, whether currently
held by or on behalf of such Person or any subsequent holder) 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 Plan to the holder of this certificate without charge upon receipt
of a written request therefor.
(b) Certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for each Common Share
evidenced thereby notwithstanding the absence of the foregoing legend until the
earlier of the Separation Time and the Expiration Time.
(c) All certificates bearing Common Shares that are issued and
outstanding on May 19, 1995 and bearing a similar legend (but for the absence
of a reference to the amendment and restatement of this Agreement on May 19,
1995) shall be deemed for all purposes to bear the foregoing legend.
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2.2 Initial Exercise Price; Exercise of Rights; Detachment of
Rights
(a) Right to entitle holder to purchase one Common Share prior to
adjustment. Subject to adjustment as herein set forth, each Right will entitle
the holder thereof, from and after the Separation Time and prior to the
Expiration Time, to purchase, for the Exercise Price as at the Business Day
immediately preceding the date of exercise of the Right, one Common Share
(which price and number of Common Shares are subject to adjustment as set forth
below). Notwithstanding any other provision of this Agreement, any Rights held
by the Corporation and any of its Subsidiaries shall be void.
(b) Rights not exercisable until Separation Time. Until the Separation
Time, (A) the Rights shall not be exercisable and no Right may be exercised,
and (B) for administrative purposes each Right will be evidenced by the
certificates for the associated Common Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be Rights
Certificates) and will be transferable only together with, and will be
transferred by a transfer of, such associated Common Shares.
(c) Delivery of Rights Certificate and disclosure statement. From and
after the Separation Time and prior to the Expiration Time, (i) the Rights
shall be exercisable, and (ii) the registration and transfer of the Rights
shall be separate from, and independent of, Common Shares. Promptly following
the Separation Time, the Corporation will prepare and the Rights Agent will
mail to each holder of record of Rights as of the Separation Time, or, in the
case of Debentures converted into Common Shares after the Separation Time and
prior to the close of business on the fifteenth (15th) day following notice of
the Stock Acquisition Date having been sent by the Corporation to the holders
of Debentures, promptly after such conversions, to the holders so converting
(other than an Acquiring Person and, in respect of any Rights Beneficially
Owned by such Acquiring Person which are not held of record by such Acquiring
Person, the holder of record of such Rights (a "Nominee")), at such holder's
address as shown by the records of the Corporation (the Corporation hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (A) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time, or, in the case of the conversion
of Debentures after the Separation Time, the number of Rights attached to the
Common Shares into which the Debentures are converted, and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law, rule, regulation or judicial or administrative order or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any self-regulatory organization, stock exchange or quotation
system on which the Rights may from time to time be listed or traded, or to
conform to usage, and (B) a disclosure statement describing the Rights,
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provided that a Nominee shall be sent the materials provided for in (A) and (B)
in respect of all Common Shares held of record by it which are not Beneficially
Owned by an Acquiring Person. In order for the Corporation to determine whether
any Person is holding Common Shares which are Beneficially Owned by another
Person, the Corporation may require such first mentioned Person to furnish it
with such information and documentation as the Corporation considers advisable.
(d) Exercise of Rights. Rights may be exercised in whole or in part on
any Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
together with an election to exercise such Rights (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, by certified cheque, banker's draft or money
order payable to the order of the Corporation, of a sum equal to the Exercise
Price multiplied by the number of Rights being exercised and a sum sufficient
to cover any transfer tax or charge which may be payable in respect of any
transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for Common Shares in a name other than
that of the holder of the Rights being exercised, all of the above to be
received before the Expiration Time by the Rights Agent at its principal office
in any of the cities listed on the Rights Certificate.
(e) Duties of Rights Agent upon receipt of Election to Exercise. Upon
receipt of a Rights Certificate, which is accompanied by (A) a completed
Election to Exercise that does not indicate that such Right is null and void as
provided by Subsection 3.1 (b) hereof, and (B) payment as set forth in
Subsection 2.2(d) above, the Rights Agent (unless otherwise instructed by the
Corporation) will thereupon promptly:
(i) requisition from the transfer agent for the Common Shares
certificates representing the number of Common Shares to be purchased
(the Corporation hereby irrevocably authorizing its transfer agent
to comply with all such requisitions);
(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 such certificates, deliver the same to or
upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such
registered holder;
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(iv) when appropriate, after receipt, deliver such cash (less any amounts
required to be withheld) to or to the order of the registered holder
of the Rights Certificate; and
(v) tender to the Corporation all payments received on exercise of the
Rights.
(f) Partial Exercise of Rights, In case the holder of any Rights shall
exercise less than all of the Rights evidenced by such holder's Rights
Certificate, a new Rights Certificate evidencing the Rights remaining
unexercised will be issued by the Rights Agent to such holder or to such
holder's duly authorized assigns.
(g) Duties of the Corporation. The Corporation covenants and agrees that it
will:
(i) take all such action as may be necessary and within its power to
ensure that all Common Shares or other securities delivered upon
exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Exercise Price), be duly
and validly authorized, executed, issued and delivered and fully paid
and non-assessable;
(ii) take all such action as may be necessary and within its power to
ensure compliance with the provisions of Section 3.1 hereof including,
without limitation, all such action to comply with any applicable
requirements of the Business Corporations Act (Ontario), the
Securities Act (Ontario), the 1933 Securities Act, the 1934 Exchange
Act and any applicable comparable securities legislation of each of
the provinces of Canada and any other applicable law, rule or
regulation, in connection with the issuance and delivery of the Rights
Certificates and the issuance of any shares upon exercise of Rights;
(iii) use reasonable efforts to cause all Common Shares issued upon
exercise of Rights to be listed upon issuance on the principal stock
exchange on which the Common Shares were traded prior to the Stock
Acquisition Date;
(iv) cause to be reserved and kept available out of its authorized and
unissued Common Shares, the number of Common Shares that, as provided
in this Agreement, will from time to time be sufficient to permit the
exercise in full of all outstanding Rights;
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(v) pay when due and payable any and all Canadian and, if applicable, United
States, federal, provincial and state transfer taxes and charges (not including
any income or capital taxes of the holder or exercising holder or any liability
of the Corporation to withhold tax) which may be payable in respect of the
original issuance or delivery of the Rights Certificates, provided that the
Corporation shall not be required to pay any transfer tax or charge which may
be payable in respect of any transfer involved in the transfer or delivery of
Rights Certificates or the issuance or delivery of certificates for shares or
other securities in a name other than that of the registered holder of the
Rights being transferred or exercised; and
(vi) after the Separation Time, except as permitted by Sections 5.1 or 5.4
hereof, not take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
The Exercise Price, the number and kind of Common Shares or other
securities subject to purchase upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 2.3.
(a) ADJUSTMENTS TO EXERCISE PRICE UPON CHANGES TO SHARE CAPITAL. In the
event the Corporation shall at any time after the Record Time:
(A) declare or pay a dividend on the Common Shares payable in Common
Shares (or other securities exchangeable for or convertible into or
giving a right to acquire Common Shares or other securities) other than
the issue of Common Shares or such exchangeable or convertible
securities to holders of Common Shares in lieu of but not in an amount
which exceeds the value of regular periodic cash dividends;
(B) subdivide or change the outstanding Common Shares into a greater
number of Common Shares;
(C) combine or change the outstanding Common Shares into a smaller
number of Common Shares or;
(D) issue any Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common
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Shares or other securities) in respect of, in lieu of or in exchange for
existing Common Shares, except as otherwise provided in this Section
2.3;
the Exercise Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or reclassification,
and the number and kind of Common Shares, or other securities, as the case may
be, issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive, upon
payment of the Exercise Price then in effect, the aggregate number and kind of
Common Shares or other securities, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the Common
Share transfer books of the Corporation were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which would
require an adjustment under both this Section 2.3 and Section 3.1 hereof, the
adjustment provided for in this Section 2.3 shall be in addition to, and shall
be made prior to, any adjustment required pursuant to Section 3.1 hereof.
(b) ADJUSTMENT TO EXERCISE PRICE UPON ISSUE OF RIGHTS OPTIONS AND
WARRANTS. In case the Corporation shall at any time after the Record Time fix a
record date for the issuance of rights, options or warrants to all holders of
Common Shares entitling them (for a period expiring within forty- five (45)
calendar days after such record date) to subscribe for or purchase Common Shares
(or shares having the same rights, privileges and preferences as Common Shares
("equivalent common shares")) or securities convertible into or exchangeable for
or carrying a right to purchase Common Shares or equivalent common shares at a
price per Common Share or per equivalent common share (or having a conversion
price or exchange price or exercise price per share, if a security convertible
into or exchangeable for or carrying a right to purchase Common Shares or
equivalent common shares) less than ninety percent 90%) of the Market Price per
Common Share on such record date, the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Common Shares outstanding on such record date, plus the
number of Common Shares that the aggregate offering price of the total number of
Common Shares and/or equivalent common shares so to be offered (and/or the
aggregate initial conversion, exchange or exercise price of the convertible or
exchangeable securities or rights so to be offered, including the price required
to be paid to purchase such convertible or exchangeable securities or rights so
to be offered) would purchase at such Market Price per Common Share, and the
denominator of which shall be the number of Common Shares outstanding on such
record date, plus the number of additional Common Shares and/or equivalent
common shares to be offered for subscription or purchase (or into which the
convertible or exchangeable securities are initially convertible, exchangeable
or exercisable).
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In case such subscription price may be paid by delivery of consideration, part
or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors,
whose determination shall be described in a certificate filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights.
Such adjustment shall be made successively whenever such a record date is
fixed, and in the event that such rights or warrants are not so issued, the
Exercise Price shall be adjusted to be the Exercise Price which would then be
in effect if such record date had not been fixed.
For purposes of this Agreement, the granting of the right to purchase Common
Shares (or equivalent common shares) (whether from treasury shares or
otherwise) pursuant to any dividend or interest reinvestment plan and/or any
Common Share purchase plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and/or the investment of
periodic optional payments and/or employee benefit, stock option or similar
plans (so long as such right to purchase is in no case evidenced by the
delivery of rights or warrants) shall not be deemed to constitute an issue of
rights, options or warrants by the Corporation; provided, however, that, in the
case of any dividend or interest reinvestment plan, the right to purchase
Common Shares (or equivalent common shares] is at a price per share of not less
than ninety percent (90%) of the current market price per share (determined
as provided in such plans) of the Common Shares.
(c) ADJUSTMENT TO EXERCISE PRICE UPON CORPORATE DISTRIBUTIONS. In case the
Corporation shall at anytime after the Record Time fix a record date for a
distribution to all holders of Common Shares (including any such distribution
made in connection with a merger, amalgamation, arrangement, plan, compromise
or reorganization in which the Corporation is the continuing or successor
corporation) of evidences of indebtedness, cash (other than a regular periodic
cash dividend or a regular periodic cash dividend paid in Common Shares, but
including any dividend payable in securities other than Common Shares), assets
or subscription rights, options or warrants (excluding those referred to in
Subsection 2.3(b) above), the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Market Price per Common Share on such record date, less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights, options or warrants applicable to a
Common Share and the denominator of which shall be such Market Price per Common
Share. Such adjustments shall be made successively whenever such a record date
is fixed, and in the event that such distribution is not so made, the Exercise
Price shall be adjusted to be the Exercise Price which would have been in
effect if such record date had not been fixed.
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(d) DE MINIMIS THRESHOLD FOR ADJUSTMENT TO EXERCISE PRICE. Notwithstanding
anything herein to the contrary, no adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least one percent (1%) in the Exercise Price; provided, however, that any
adjustments which by reason of this Subsection 2.3(d) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 2.3 shall be made to the
nearest cent or to the nearest one-hundredth of a Common Share or other share,
as the case may be. Notwithstanding the first sentence of this Subsection
2.3(d), any adjustment required by this Section 2.3 shall be made no later than
the earlier of (A) three (3) years from the date of the transaction which
mandates such adjustment or (B) the Expiration Time.
(e) CORPORATION MAY PROVIDE FOR ALTERNATE MEANS OF ADJUSTMENT. Subject to
the prior consent of the holders of Voting Shares or Rights obtained as set
forth in Subsections 5.4(b) or 5.4(c) hereof, as applicable, in the event the
Corporation shall at any time after the Record Time issue any shares of capital
stock (other than Common Shares), or rights or warrants to subscribe for or
purchase any such capital stock, or securities convertible into or exchangeable
for any such capital stock, in a transaction referred to in Clauses 2.3(a)(A)
or 2.3(a)(D) or Subsections 2.3(b) or 2.3(c) above, if the Board of Directors
acting in good faith determines that the adjustments contemplated by
Subsections 2.3(a), (b) and (c) above in connection with such transaction will
not appropriately protect the interests of the holders of Rights, the
Corporation shall be entitled to determine what other adjustments to the
Exercise Price, number of Rights and/or securities purchasable upon exercise of
Rights would be appropriate and, notwithstanding Subsections 2.3(a), (b) and
(c) above, such adjustments, rather than the adjustments contemplated by
Subsections 2.3(a), (b) and (c) above, shall be made. The Corporation and the
Rights Agent shall amend this Agreement as appropriate to provide for such
adjustments.
(f) ADJUSTMENT TO RIGHTS EXERCISABLE INTO SHARES OTHER THAN COMMON SHARES.
If as a result of an adjustment made pursuant to Section 3.1 hereof, the holder
of any Right thereafter exercised shall become entitled to receive any shares
other than Common Shares, thereafter the number of such other shares so
receivable upon exercise of any Right and the Exercise Price thereof shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Shares
contained in Subsections 2.3(a), (b), (c), (d), (g), (h), (j), and (m) above
and below, as the case may be, and the provisions of this Agreement with
respect to the Common Shares shall apply on like terms to any such other
shares.
(g) RIGHTS TO EVIDENCE RIGHT TO PURCHASE COMMON SHARES AT ADJUSTED
EXERCISE PRICE. Each Right originally issued by the Corporation subsequent to
any adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of Common Shares
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purchasable from time to time hereunder upon exercise of such Right, all
subject to further adjustment as provided herein.
(h) ADJUSTMENT TO NUMBER OF COMMON SHARES PURCHASABLE UPON ADJUSTMENT TO
EXERCISE PRICE. Unless the Corporation shall have exercised its election as
provided in Subsection 2.3(i) below, upon each adjustment of the Exercise Price
as a result of the calculations made in Subsections 2.3(b) and (c) above, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Exercise Price, that
number of Common Shares (calculated to the nearest one ten-thousandth) obtained
by (A} multiplying (x) the number of shares purchasable upon exercise of a
Right immediately prior to this adjustment by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price, and (B) dividing
the product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
(i) ELECTION TO ADJUST NUMBER OF RIGHTS UPON ADJUSTMENT TO EXERCISE
PRICE. The Corporation shall be entitled to elect on or after the date of any
adjustment of the Exercise Price to adjust the number of Rights, in lieu of any
adjustment in the number of Common Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Exercise Price in effect immediately prior to adjustment of the Exercise Price
by the Exercise Price in effect immediately after adjustment of the Exercise
Price. The Corporation shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Exercise Price is adjusted or any day
thereafter, but, if Rights Certificates have been issued, shall be at least ten
(10) days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment, of the number of Rights
pursuant to this 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, subject to
Section 5.5 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Corporation,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, new Rights Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and may bear, at the option of
the Corporation, the adjusted Exercise Price and shall be registered in the
names of the holders of record of
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Rights Certificates on the record date for the adjustment specified in the
public announcement.
(j) RIGHTS CERTIFICATES MAY CONTAIN EXERCISE PRICE BEFORE ADJUSTMENT.
Irrespective of any adjustment or change in the Exercise Price or the number of
Common Shares issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Exercise Price
per share and the number of shares which were expressed in the initial Rights
Certificates issued hereunder.
(k) CORPORATION MAY IN CERTAIN CASES DEFER ISSUES OF SECURITIES. In any
case in which this Section 2.3 shall require that an adjustment in the Exercise
Price be made effective as of a record date for a specified event, the
Corporation may elect to defer until the occurrence of such event the issuance
to the holder of any Right exercised after such record date the number of
Common Shares and other securities of the Corporation, if any, issuable upon
such exercise over and above the number of Common Shares and other securities
of the Corporation, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the
Corporation shall deliver to such holder an appropriate instrument evidencing
such holder's right to receive such additional shares (fractional or otherwise)
or securities upon the occurrence of the event requiring such adjustment.
(l) CORPORATION HAS DISCRETION TO REDUCE EXERCISE PRICE FOR TAX REASONS.
Notwithstanding anything in this Section 2.3 to the contrary, the Corporation
shall be entitled to make such reductions in the Exercise Price, in addition to
those adjustments expressly required by this Section 2.3, as and to the extent
that in their good faith judgment, the Board of Directors shall determine to be
advisable in order that any (A) consolidation or subdivision of the Common
Shares, (B) issuance of any Common Shares at less than the Market Price, (C)
issuance of securities convertible into or exchangeable for Common Shares, (D)
stock dividends or (E) issuance of rights, options or warrants, referred to in
this Section 2.3 hereafter made by the Corporation to holders of its Common
Shares, shall not be taxable to such shareholders.
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE
Each person in whose name any certificate for Common Shares is issued upon
the exercise of Rights, shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered (together with a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and
any applicable transfer taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Share transfer
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books of the Corporation are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which the Common Share transfer books of the
Corporation are open.
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND
DATING OF RIGHTS CERTIFICATES
(a) The Rights Certificates shall be executed on behalf of the Corporation
by its President or any of its Vice-Presidents, together with its Secretary or
Assistant Secretary. The signature of any of these officers on the Rights
Certificates may be manual or facsimile. Rights Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Corporation shall bind the Corporation, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
countersignature and delivery of such Rights Certificates.
(b) Promptly after the Corporation learns of the Separation Time, the
Corporation will notify the Rights Agent of such Separation Time and will
deliver Rights Certificates executed by the Corporation to the Rights Agent for
countersignature, and the Rights Agent shall manually countersign and send such
Rights Certificates 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 as aforesaid.
(c) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
(a) The Corporation will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Corporation will provide for the registration and transfer of
Rights. The Rights Agent is hereby appointed "Rights Registrar" for the purpose
of maintaining the Rights Register for the Corporation and registering Rights
and transfers of Rights as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate
and subject to the provisions of Subsection 2.6(c) below and the other
provisions of this Agreement, the Corporation will execute and the Rights Agent
will manually countersign and deliver, in the name of the holder or the
designated transferee or transferees as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the same aggregate
number of Rights as did the Rights Certificates so surrendered.
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(b) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be the valid obligations of the Corporation, and such
Rights shall be entitled to the same benefits under this Agreement as the
Rights surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Corporation or the Rights Agent, as the
case may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing, As a condition to the issuance of any new Rights
Certificate under this Section 2.6, the Corporation or the Rights Agent may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and the Corporation may require
payment of a sum sufficient to cover any other expenses (including the fees and
expenses of the Rights Agent) in connection therewith.
2.7 Mutilated, Destroyed, Lost and Stolen Right 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 manually 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 reasonable satisfaction of
the destruction, loss or theft of any Rights Certificate, and (ii) such
indemnity or other security as may be required by them to save each of them and
any of their agents harmless, then, in the absence of notice to the Corporation
or the Rights Agent that such Rights Certificate has been acquired by a bona
fide purchaser, the Corporation shall execute and upon its request the Rights
Agent shall countersign and deliver, in lieu of any such destroyed, lost or
stolen Rights Certificate, a new Rights Certificate evidencing the same number
of Rights as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under this
Section 2.7, the Corporation or the Rights Agent may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and the Corporation may require payment of a sum
sufficient to cover any other expenses (including the fees and expenses of the
Rights Agent) in connection therewith.
(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 the holder thereof shall be entitled to all the
benefits of this
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Agreement equally and proportionately with any and all other holders of Rights
duly issued by the Corporation.
2.8 PERSONS DEEMED OWNERS
Prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent shall be entitled to deem and treat the person in whose name a
Rights Certificate (or, prior to the Separation Time, the associated Common
Share certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated Common Shares).
2.9 DELIVERY AND CANCELLATION OF RIGHTS CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired
in any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled
as provided in this Section 2.9 except as expressly permitted by this
Agreement. The Rights Agent shall 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 the same, consents and agrees with
the Corporation and the Rights Agent and with every other holder of Rights:
(i) to be bound by and subject to the provisions of this Agreement, as
amended or supplemented from time to time in accordance with the terms
hereof, in respect of all Rights held;
(ii) that prior to the Separation Time each Right will be transferable
only together with, and will be transferred by a transfer of, the Common
Share certificate representing such Right;
(iii) that after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
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(iv) that prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Share certificate} for
registration of transfer, the Corporation, the Rights Agent and any agent
of the Corporation or the Rights Agent shall be entitled to deem and treat
the person in whose name the Rights Certificate (or prior to the Separation
Time, the associated Common Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on such Rights Certificate or the
associated Common Share certificate made by anyone other than the
Corporation or the Rights Agent) for all purposes whatsoever, and neither
the Corporation nor the Rights Agent shall be affected by any notice to the
contrary;
(v) that such holder of Rights has waived his right to receive any
fractional Rights or any fractional shares upon exercise of Right; and
(vi) that without the approval of any holder of Rights and upon the sole
authority of the Board of Directors acting in good faith this Agreement may
be supplemented or amended from time to time pursuant to and as provided
herein.
2.11 RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER
No holder, as such, of any Rights or Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose whatsoever the holder
of any Common Share or any other share or security of the Corporation which may
at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed or
deemed to confer upon the holder of any Right or Rights Certificate, as such,
any of the rights, titles, benefits or privileges of a holder of Common Shares
or any other shares or securities of the Corporation of any right to vote at
any meeting of shareholders of the Corporation whether for the election of
directors or otherwise or upon any matter submitted to holders of shares of the
Corporation at any meeting thereof, or to give or withhold consent to any
action of the Corporation, or to receive notice of any meeting or other action
affecting any holder of Common Shares or any other shares or securities of the
Corporation except as expressly provided herein, or to receive dividends,
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by Rights Certificates shall have been duly exercised in accordance
with the terms and provisions hereof.
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ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS
IN THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in Event
(a) Subject to Subsection 3.1 (b) below, and Subsections 5.1 (b), 5.1 (c)
and 5.1 (d) hereof, in the event that prior to the Expiration Time a Flip-in
Event shall occur, the Corporation shall take such action as may be necessary to
ensure and provide within eight (8) Business Days of such occurrence, or such
longer period as may be required to satisfy all applicable requirements of the
Securities Act (Ontario), and the securities legislation of each other province
of Canada and, if applicable, of the United States of America that, except as
provided below, each Right shall thereafter constitute the right to purchase
from the Corporation upon exercise thereof in accordance with the terms hereof
that number of Common Shares of the Corporation having an aggregate Market Price
on the date of the 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 occurrencte 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) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of any Flip-in Event, any Rights that are Beneficially Owned by (i)
an Acquiring Person or any Affiliate or Associate of an Acquiring Person or any
Person acting jointly or in concert with an Acquiring Person or any Affiliate or
Associate of such Acquiring Person, or any Affiliate or Associate of such Person
so acting jointly or in concert, or (ii) a transferee or other successor in
title of Rights, directly or indirectly, of an Acquiring Person (or of any
Affiliate or Associate of an Acquiring Person) or of any Person acting jointly
or in concert with an Acquiring Person or any Associate or Affiliate of an
Acquiring Person who becomes a transferee or successor in title concurrently
with or subsequent to the Acquiring Person becoming such, shall become null and
void without any further action, and any holder of such Rights (including
transferees or successors in title) shall not have any rights whatsoever to
exercise such Rights under any provision of this Agreement and shall not have
thereafter any other rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise.
(c) In the event that there shall not be sufficient Common Shares
authorized but unissued to permit the exercise in full of the Rights in
accordance with this Section 3.1, the Corporation shall take all such action as
may be necessary and within its power to authorize additional Common Shares for
issuance upon exercise of Rights.
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ARTICLE 4 - THE RIGHTS AGENT
4.1 General
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Corporation may from time to
time appoint such co-Rights Agents as it may deem necessary or desirable. In the
event the Corporation appoints one or more co-Rights Agents, the respective
duties of the Rights Agents and co-Rights Agents shall be as the Corporation may
determine. The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and other disbursements
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 for, and to hold it harmless against, any loss,
liability, or expense incurred that is not the result of negligence, bad faith
or wilful misconduct on the part of any one or all of the Rights Agent, its
officers, employees or other representatives, for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability, which right to indemnification will survive the termination of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any certificate for Common
Shares or any Rights Certificate or certificate for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
4.2 Merger or Amalgamation or Change of Name of Rights Agent
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or amalgamated or with which it may be consolidated, or any
corporation resulting from any merger, amalgamation, statutory arrangement or
consolidation to which the Rights Agent or any successor Rights Agent is a
party, or any corporation succeeding to the shareholder or stockholder services
business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case at the time
such successor Rights Agent succeeds
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to the agency created by this Agreement any of the Rights Certificates have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, to all of which the
Corporation and the holders of Rights Certificates, by their acceptance thereof,
shall be bound.
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Corporation) and the opinion of such counsel will be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted to be taken by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter be proved
or established by the Corporation prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proven and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Vice-President, the Treasurer
or the Secretary of the Corporation and delivered to the Rights Agent; and such
certificate will be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
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(c) The Rights Agent will be liable hereunder only for events which are the
result of its own negligence, bad faith or wilful misconduct and that of its
officers, employees and other representatives.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Common Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and will be deemed to have been made by the
Corporation only.
(e) The Rights Agent will not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
authorization, execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any Common Share certificate or Rights
Certificate (except its countersignature thereof); nor will it be responsible
for any breach by the Corporation of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor will it be responsible for any
change in the exercisability of the Rights (including the Rights becoming void
pursuant to Subsection 3.1 (b) hereof) or any adjustment required under the
provisions of Section 2.3 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights after receipt of the certificate contemplated by Section 2.3 hereof
describing any such adjustment); nor will it by any act hereunder be deemed to
make any representation or warranty as to the authorization of any Common
Shares to be issued pursuant to this Agreement or any Rights or as to whether
any Common Shares will, when issued, be duly and validly authorized, executed,
issued and delivered or fully paid and non-assessable.
(f) The Corporation agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged, and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, President,
any Vice-President, Treasurer or any Assistant Treasurer or the Secretary or
any Assistant Secretary of the Corporation and to apply to such persons for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken qr suffered by it in good faith in accordance with
instructions of any such person.
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(h) The Rights Agent and any shareholder or stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in Common Shares,
Rights or other securities of the Corporation or become pecuniarily
interested in any transaction in which the Corporation may be interested or
contract with or lend money to the Corporation or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity for
the Corporation or for any other legal entity.
4.4 Change of Rights Agent
The Rights Agent may resign and be discharged from its duties under this
Agreement upon ninety (90) days' notice (or such lesser notice as is acceptable
to the Corporation) in writing mailed to the Corporation and to each transfer
agent of Voting Shares of the Corporation by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.8 hereof. The
Corporation may remove the Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent and to each transfer agent of the Voting
Shares of the Corporation by registered or certified mail and to the holders of
the Rights in accordance with Section 5.8 hereof. If the Rights Agent should
resign or be removed or otherwise become incapable of acting, the Corporation
will appoint a successor to the Rights Agent. If the Corporation fails to
make such appointment within a period of ninety (90) 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 may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Corporation or by such a
court, shall be a corporation incorporated under the laws of Canada or a
province thereof authorized to carry on the business of a trust company in
Canada. After appointment, the successor Rights Agent will be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent, upon receiving from the Corporation payment in full of all amounts
outstanding under this Agreement, shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Corporation will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Voting Shares of the Corporation, and mail
a notice thereof in writing to the holders of the Rights. The cost of giving
any notice required under this Section 4.4 shall be borne solely by the
Corporation. Failure to give any notice provided for in this Section 4.4
however, or any defect therein, shall not affect the legality or validity of
the resignation or
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removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
ARTICLE 3 - MISCELLANEOUS
5.1 Redemption and Waiver
(a) Subject to the prior consent of the holders of Voting Shares or Rights
obtained as set forth in Subsections 5.4(b) or 5.4(c) hereof, as applicable,
the Board of Directors acting in good faith may, at any time prior to the
occurrence of a Flip-in Event, elect to redeem all but not less than all of the
then outstanding Rights at a redemption price of $0.0001 per Right
appropriately adjusted in a manner analogous to the applicable adjustment
provided for in Section 2.3 hereof in the event that an event of the type
described in Section 2.3 hereof shall have occurred (such redemption price
being herein referred to as the "Redemption Price").
(b) The Board of Directors acting in good faith, may, prior to the
occurrence of a Flip-in Event, and upon prior written notice delivered to the
Rights Agent, determine to waive the application of Section 3.1 hereof to a
Flip-in Event that may occur by reason of Take-over Bid made by means of a
take-over bid circular to all holders of Voting Shares (which for greater
certainty shall not include the circumstances described in Subsection 5.1(h)
below); provided that if the Board of Directors waives the application of
Section 3.1 hereof to a particular Flip-in Event pursuant to this Subsection
5.1 (b), the Board of Directors shall be deemed to have waived the application
of Section 3.1 hereof to any other Flip-in Event occurring by reason of any
Take-over Bid made by means of a take-over bid circular to all holders of
record of Voting Shares prior to the expiry of any Take-over Bid in respect of
which a waiver is, or is deemed to have been granted, pursuant to this
Subsection 5.1(b).
(c) The Board of Directors may prior to the close of business on the tenth
(10th) day following the Stock Acquisition Date determine, upon prior written
notice delivered to the Rights Agent, to waive or to agree to waive the
application of Section 3.1 hereof to a Flip-in Event, provided that both of the
following conditions are satisfied:
(i) the Board of Directors has determined that a Person became an
Acquiring Person by inadvertence and without any intention to become, or
knowledge that Person would become, an Acquiring Person; and
(ii) such Acquiring Person has reduced its Beneficial Ownership of Voting
Shares (or has entered into a contractual arrangement with the Corporation,
acceptable to the Board of Directors, to do so within thirty (30) days of the
date on which such contractual arrangement is entered into) such that at the
time the waiver
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becomes effective pursuant to this Subsection 5.1 (c) it is no longer an
Acquiring Person;
and in the event of such a waiver, for the purposes of this Agreement, the
Flip-in Event shall be deemed never to have occurred.
(d) Where a Person acquires pursuant to a Permitted Bid, a Competing Bid
or an Exempt Acquisition under Subsection 5.1 (b) above, outstanding Voting
Shares, other than Voting Shares Beneficially Owned by such Person at the date
of the Permitted Rid, the Competing Bid or the Exempt Acquisition under
Subsection 5.1 (b) above, then the Corporation shall immediately upon the
consummation of such acquisition redeem the Rights at the Redemption Price.
(e) If the Corporation is obligated under Subsection 5.1 (d) above to
redeem the Rights, or if the Board of Directors elects under Subsection 5.1 (a)
above or 5.1 (g) below to redeem the Rights, the right to exercise the Rights
will thereupon, without further action and without notice, terminate and each
Right will after redemption be null and void and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price.
(f) Within ten (10) days after the Corporation is obligated to under
Subsection 5.1 (d) above to redeem the Rights, or the Board of Directors elects
under Subsection 5.1 (a) above or 5.1 (g) below to redeem the Rights, the
Corporation shall give notice of redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
address as they appear upon the Rights Register or, prior to the Separation
Time, on the registry books of the Transfer Agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be
made. The Corporation may not redeem, acquire or purchase for value any Rights
at any time in any manner other than that specifically set forth in this
Section 5.1 and other than in connection with the purchase of Common Shares
prior to the Separation Time.
(g) Where a Take-over Bid that is not a Permitted Bid Acquisition is
withdrawn or otherwise terminated after the Separation Time has occurred and
prior to the occurrence of a Flip-in Event, the Board of Directors may elect to
redeem all the outstanding Rights at the Redemption Price.
(h) Upon the Rights being redeemed pursuant to Subsection 5.1 (g) above,
all the provisions of this Agreement shall continue to apply as if the
Separation Time had not occurred and Rights Certificates representing the
number of Rights held by each holder of record of Common Shares as of the
Separation Time had not been mailed to each such holder and for all purposes of
this Agreement the Separation Time shall be deemed not to have occurred.
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5.2 Expiration
No person shall have any rights whatsoever pursuant to or arising out of
this Agreement or in respect of any Right after the Expiration Time, except the
Rights Agent as specified in Subsection 4.1 (a) hereof.
5.3 Issuance of New Right Certificates
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the number or kind or class of
shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.
5.4 Supplements and Amendments
(a) The Corporation may prior to the 1995 Annual Meeting of Shareholders of
the Corporation, supplement or amend this Agreement without the approval of any
holder of Rights or Voting Shares or Debentures in order to make any changes
which the Board of Directors may deem necessary or desirable. Thereafter, the
Corporation may from time to time supplement or amend this Agreement without
the approval of any holders of Rights or Voting Shares or Debentures to correct
any clerical or typographical error or to maintain the validity of the
Agreement as a result of a change in any applicable legislation or regulations
thereunder.
Notwithstanding anything in this Section 5.4 to the contrary, no
supplement or amendment shall be made to the provisions of Article 4 hereof
except with the written concurrence of the Rights Agent to such supplement or
amendment.
(b) Subject to Subsection 5.4(a) above, the Corporation may, with the
prior consent of the holders of the Voting Shares obtained as set forth below,
at any time prior to the Separation Time amend, vary or rescind any of the
provisions of this Agreement and the Rights (whether or not such action would
materially adversely affect the interests of the holders of Rights generally).
Such consent shall be deemed to have been given if provided by the holders of
Voting Shares at a meeting of the holders of Voting Shares, which meeting shall
be called and held in compliance with applicable laws and regulatory
requirements and the requirements in the articles and by-laws of the
Corporation. Subject to compliance with any requirements imposed by the
foregoing, consent shall be given if the proposed amendment, variation or
revision is approved by the affirmative vote of a majority of the votes cast by
all holders of Voting Shares (other than any holder of Voting Shares who is an
offeror pursuant to a Take-over Bid that is not a Permitted Bid or, Competing
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Bid with respect to all Voting Shares Beneficially Owned by such Person),
represented in person or by proxy at the meeting.
(c) The Corporation may, with the prior consent of the holders of Rights,
at any time after the Separation Time and before the Expiration Time, amend,
vary or rescind any of the provisions of this Agreement and the Rights (whether
or not such action would materially adversely affect the interests of the
holders of Rights generally).
(d) Any approval of the holders of Rights shall be deemed to have been
given if the action requiring such approval is authorized by the affirmative
votes of the holders of Rights present or represented at and entitled to be
voted at a meeting of the holders Rights and representing a majority of the
votes cast in respect thereof. For the purposes hereof, each outstanding Right
(other than Rights which are void pursuant to the provisions hereof) shall be
entitled to one vote, and the procedures for the calling, holding and conduct
of the meeting shall be those, as nearly as may be, which are provided in the
Corporation's by-laws and the Business Corporations Act (Ontario) with respect
to a meeting of shareholders of the Corporation.
(e) Any supplements or amendments made by the Corporation to this
Agreement pursuant to Subsection 5.4(a) above which are required to maintain
the validity of this Agreement as a result of any change in any applicable
legislation or regulations thereunder shall:
(i) if made before the Separation Time, be submitted to the shareholders
of the Corporation at the next meeting of shareholders and the shareholders
may, by the majority referred to in Subsection 5.4(b) above confirm or reject
such amendment;
(ii) if made after the Separation Time, be submitted to the holders of
Rights at a meeting to be called for on a date not later than immediately
following the next meeting of shareholders of the Corporation and the holders
of Rights may, by resolution passed by the majority referred to in Subsection
5.4(d) above confirm or reject such amendment.
A supplement or amendment shall be effective from the date of the
resolution of the Board of Directors adopting such supplement or amendment
until it is confirmed or rejected or until it ceases to be effective (as
described in the next sentence) and, where such supplement or amendment is
confirmed, it continues in effect in the form so confirmed. If such supplement
or amendment is rejected by the shareholders or the holders of Rights or is not
submitted to the shareholders or holders of rights as required, then such
supplement or amendment shall cease to be effective from and after the
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termination of the meeting at which it was rejected or to which it should have
been but was not submitted or from and after the date of the meeting of holders
of Rights that should have been but was not held, and no subsequent resolution
of the Board of Directors to amend, vary or delete any provision of this
Agreement to substantially the same effect shall be effective until confirmed by
the shareholders or holders of Rights, as the case may be.
5.5 Fractional Rights and Fractional Shares
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights. Any such
fractional Right shall be null and void and the Corporation will not have any
obligation or liability in respect thereof.
(b) The Corporation shall not be required to issue fractions of Common
Shares or other securities upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares or other securities. In
lieu of issuing fractional Common Shares or other securities, the Corporation
shall pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided, an amount in cash equal to the same
fraction of the Market Price of one Common Share.
5.6 Rights of Action
Subject to the terms of this Agreement, all rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective registered holders of the Rights; and any
registered holder of any Rights, without the consent of the Rights Agent or of
the registered holder of any other Rights, may, on such holder's own behalf and
for such holder's own benefit and the benefit of other holders of Rights
enforce, and may institute and maintain any suit, action or proceeding against
the Corporation to enforce such holder's right to exercise such holder's Rights
in the manner provided in such holder's Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to this Agreement.
5.7 Notice of Proposed Actions
In case the Corporation shall propose after the Separation Time and prior
to the Expiration Time to effect the liquidation, dissolution or winding up of
the Corporation or the sale of all or substantially all of the Corporation's
assets, then, in each such case, the Corporation shall give to each holder of a
Right, in accordance with Section 5.8 hereof, a notice of such proposed action,
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which shall specify the date on which such liquidation, dissolution, winding
up, or sale is to take place, and such notice shall be so given at least twenty
(20) Business Days prior to the date of taking of such proposed action.
5.8 Notices
Notices or demands authorized or required by this Agreement to be given
or made by the Rights Agent or by the holder of any Rights to or on the
Corporation shall be sufficiently given or made if delivered or sent by first-
class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Xxxxxx Environmental Inc.
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
X.X. Xxx 000
Xxxxxxx, Xxxxxxx
X0X lE2
Attention: President
Any notice or demand authorized or required by this Agreement to be given
or made by the Corporation or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Corporation) as follows:
Montreal Trust Company of Canada
000 Xxxxx Xxxxxx Xxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0Xx
Attention: Manager, Client Services Department
Notices or demands authorized or required by this Agreement to be given
or made by the Corporation or the Rights Agent to or on the holder of any
Rights shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder
as it appears upon the Rights Register or, prior to the Separation Time, on the
registry books of the transfer agent for the Common Shares. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice.
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5.9 SUCCESSORS
All the covenants and provisions of this Agreement by or for the benefit
of the Corporation or the Rights Agent shall bind and enure to the benefit of
their respective successors and assigns hereunder.
5.10 BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person other
than the Corporation, the Rights Agent and the holders of the Rights any legal
or equitable right, remedy 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,
5.11 GOVERNING LAW
This Agreement and each Right issued hereunder shall be deemed to be a
contract made under the laws of the Province of Ontario and for all purposes
shall be governed by and construed in accordance with the laws of such
province.
5.12 SEVERABILITY
If any Section, Subsection, Clause, Subclause, term or provision hereof
or the application thereof to any circumstances or any right hereunder shall,
in any jurisdiction and to any extent, be invalid or unenforceable, such
Section, Subsection, Clause, Subclause, term or provision or such right shall
be ineffective only in such jurisdiction and to the extent of such invalidity
or unenforceability in such jurisdiction without invalidating or rendering
unenforceable or ineffective the remaining Sections, Subsections, Clauses,
Subclauses, terms and provisions hereof or rights hereunder in such
jurisdiction or the application of such Section, Subsection, Clause, Subclause,
term or provision or rights hereunder in any other jurisdiction or to
circumstances other than those as to which it is specifically held invalid or
unenforceable.
5.13 EFFECTIVE DATE
This Agreement is effective and in full force and effect in accordance
with its terms as of and from l2:OO p.m. (Toronto time) on April 11, 1995 (the
"Effective Date"). If this Agreement is not confirmed by a majority of the
votes cast by the holders of Common Shares of the Corporation represented in
person or by proxy at the 1995 Annual Meeting of Shareholders of the
Corporation who vote in respect of confirmation of this Agreement at such
meeting, then this Agreement and any then outstanding Rights shall be of no
further force and effect from the date of the 1995 Annual Meeting of
Shareholders of the Corporation.
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5.14 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
The Board of Directors shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or to the Corporation as may be necessary or
advisable in the administration of this Agreement.
All such actions, calculations and determinations (including all
omissions with respect to the foregoing) which are done or made by the Board of
Directors, in good faith, shall not subject the Board of Directors or any
director of the Corporation to any liability to the holders of the Rights.
5.15 RIGHTS OF BOARD, CORPORATION AND OFFEROR
Without limiting the generality of the foregoing, nothing contained herein
shall be construed to suggest or imply that the Board of Directors shall not be
entitled to recommend that holders of Voting Shares reject or accept any
Take-over Bid or take any other action (including, without limitation, the
commencement, prosecution, defence or settlement of any litigation and the
submission of additional or alternative Take-over Bids or other proposals to
the Shareholders of the Corporation) with respect to any Take-over Bid or
otherwise that the Board of Directors believes is necessary or appropriate in
the exercise of its fiduciary duties.
5.16 REGULATORY APPROVALS
Any obligation of the Corporation or action or event contemplated by this
Agreement shall be subject to the prior receipt of any requisite approval or
consent from any governmental or regulatory authority including, without
limiting the generality of the foregoing, any necessary approval of any
securities regulatory authority or stock exchange.
5.17 DECLARATION AS TO NON-CANADIAN HOLDERS
If in the opinion of the Board of Directors (who may rely upon the advice
of counsel) any action or event contemplated by this Agreement would require
compliance with the securities laws or comparable legislation of a jurisdiction
outside Canada, the Board of Directors acting in good faith may take such
actions as it may deem appropriate to ensure such compliance. In no event shall
the Corporation or the Rights Agent be required to issue or deliver Rights or
securities issuable on exercise of Rights to Persons who are citizens,
residents or nationals of any jurisdiction other than Canada or the United
States in which such issue or delivery would be unlawful without registration
of the relevant Persons or securities for such purposes.
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5.18 TIME OF THE ESSENCE
Time shall be of the essence in this Agreement.
5.19 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
XXXXXX ENVIRONMENTAL INC
By:________________________
MONTREAL TRUST COMPANY CANADA
By:________________________
By:________________________
45
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 CLAUSE 3.1 (b) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON, ANY PERSON ACTING JOINTLY OR IN CONCERT WITH AN ACQUIRING
PERSON OR THEIR RESPECTIVE ASSOCIATES AND AFFILIATES (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND THEIR RESPECTIVE TRANSFEREES SHALL BECOME VOID
WITHOUT ANY FURTHER ACTION.
RIGHTS CERTIFICATE
This certifies that ____________________ or registered assigns, is the
registered holder of the number of Rights set forth above each of which entitles
the registered holder thereof, subject to the terms, provisions and conditions
of the Shareholder Rights Plan Agreement dated as of the 11th day of April, 1995
as amended and restated as of the 19th day of May, 1995 (the "Rights Agreement")
between Xxxxxx Environmental Inc., a corporation amalgamated under the Business
Corporations Act (Ontario) (the "Corporation"), and Montreal Trust Company of
Canada, a trust company incorporated under the laws of Canada, as rights agent
(the "Rights Agent", which term shall include any successor Rights Agent under
the Rights Agreement) to purchase from the Corporation at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the close of business on the 30th day of June, 1998 (or such earlier expiration
time as is provided in the Rights Agreement) one fully paid and non-assessable
Common Share of the Corporation (a "Common Share") at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate
together with the Form of Election to Exercise duly executed and submitted to
the Rights Agent at its principal office in any of the cities of Vancouver,
Calgary, Toronto and Montreal. The Exercise Price shall initially be $75.00
(Canadian) per Right and shall be subject to adjustment in certain events as
provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, each Right
evidenced hereby may entitle the registered holder thereof to purchase or
receive assets, debt securities or other equity securities of the Corporation
(or a combination thereof) all as provided in the Rights Agreement.
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This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of right, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights. Copies of the
Rights Agreement are on file at the registered head office of the Corporation
and are available upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights entitling the holder to
purchase a like aggregate number of Common Shares as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered. If this Rights
Certificate shall be exercised in part, the registered holder shall be entitled
to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Rights Certificate may be, and under certain circumstances are required to
be, redeemed by the Corporation at a redemption price of $0.0001 per Right.
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby.
No holder of this Rights Certificate, as such, shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities of the Corporation which may at any time be issuable upon
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders of the Corporation at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders of the
Corporation (except as expressly provided in the Rights Agreement), or to
receive dividends, distributions or subscription rights, or otherwise until the
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been manually countersigned by the Rights Agent.
47
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WITNESS the facsimile signature of the proper officers of the Corporation.
Date ________________________
Xxxxxx Environmental Inc.
BY _____________________________ BY _______________________________ c/s
Countersigned
Montreal Trust Company of Canada
Transfer Agent and Registrar
BY _____________________________
Authorized Signature
48
(To be attached to each Rights Certificate)
FORM OF ELECTION TO EXERCISE
TO: XXXXXX ENVIRONMENTAL INC.
The undersigned hereby irrevocably elects to exercise whole Rights
represented by the attached Rights Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that certificates for
such Shares be issued to:
__________________________________
(NAME)
__________________________________
(ADDRESS)
__________________________________
(CITY AND STATE OR PROVINCE)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
__________________________________
(NAME)
__________________________________
(ADDRESS)
__________________________________
(CITY AND STATE OR PROVINCE)
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)
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Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company or a member of a recognized stock exchange or a member of the Transfer
Association Medallion (Stamp) Program.
[To be completed if true]
The undersigned hereby represents, for the benefit of all holders of Rights
and Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned by
an Acquiring Person or an Affiliate or Associate thereof or any Person acting
jointly or in consent with any of the foregoing or any Affiliate or Associate of
such Person (as defined in the Rights Agreement).
_______________________________
Signature
NOTICE
In the event the certification set forth in the Form of Election to
Exercise is not completed, the Corporation will deem the Beneficial Owner of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and
accordingly such Rights shall be null and void.
50
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED _____________________________________________
hereby sells, assigns and transfers unto
_________________________________________________
(Please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein and does hereby irrevocably constitute and appoint
_____________________ as attorney to transfer the within Rights on the books of
the Corporation, with full power of substitution.
Dated _________________
Signature Guaranteed
_________________________________
Signature
(Signature must correspond to name as written upon
the face of this Rights Certificate in every
particular, without alteration or enlargement or
any change whatsoever)
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company or a member of a recognized stock exchange or a member of the Transfer
Association Medallion (Stamp) Program.
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[To be completed if true]
The undersigned hereby represents, for the benefit of all holders of
Rights and Common Shares, that the Rights evidenced by this Rights Certificate
are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
or any Person acting jointly or in consent with any of the foregoing (as
defined in the Rights Agreement).
___________________________________
Signature
NOTICE
In the event the certification set forth in the Form of Assignment is not
completed, the Corporation will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and accordingly such
Rights shall be null and void.
