Exhibit 1
SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT is dated as of April 12, 1999.
BETWEEN:
GSI LUMONICS INC.
(the "Corporation")
OF THE FIRST PART
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MONTREAL TRUST COMPANY OF CANADA
(the "Rights Agent")
OF THE SECOND PART
WHEREAS:
A. The Board of Directors has determined that it is advisable to adopt a
shareholder rights plan (the "Rights Plan") to ensure, to the extent
possible, that all shareholders of the Corporation are treated fairly
in connection with any takeover offer for the Corporation or other
acquisition of control of the Corporation.
B. In order to implement the Rights Plan, the Board of Directors has:
(a) authorized and declared a distribution of one right (a
"Right") effective at the Close of Business at the Record Time
in respect of each Common Share outstanding at the Close of
Business at the Record Time;
(b) authorized the issuance of one Right in respect of each Common
Share issued after the Record Time and prior to the earlier of
the Separation Time and the Expiration Time; and
(c) authorized the issuance of Rights Certificates to holders of
Rights pursuant to the terms and subject to the conditions set
forth herein.
3. Each Right entitles the holder thereof, after the Separation Time to
purchase securities of the Corporation pursuant to the terms and
subject to the conditions set forth herein.
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4. The Corporation desires to appoint the Rights Agent to act on behalf of
the Corporation, and the Rights Agent is willing to so act, in
connection with the issuance, transfer, exchange and replacement of
Rights Certificates, the exercise of Rights and other matters referred
to herein.
NOW THEREFORE in consideration of the premises and respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 CERTAIN DEFINITIONS
For the purposes of this agreement (the "Agreement"), including the
recitals hereto, the following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who is at any time
after the date hereof the Beneficial Owner of 20% or more of
the outstanding Voting Shares of the Corporation; provided,
however, that the term "Acquiring Person" shall not include
(i) the Corporation or any corporation controlled by the
Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares as a result of
one or any combination of:
(A) a Voting Share Reduction;
(B) a Permitted Bid Acquisition;
(C) an Exempt Acquisition; and
(D) a Pro Rata Acquisition;
provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the outstanding
Voting Shares by reason of one or any combination of
a Voting Share Reduction, a Permitted Bid
Acquisition, an Exempt Acquisition or a Pro Rata
Acquisition, and thereafter becomes the Beneficial
Owner of an additional one per cent of the Voting
Shares then outstanding (otherwise than pursuant to a
Voting Share Reduction, a
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Permitted Bid Acquisition, an Exempt Acquisition or a
Pro Rata Acquisition), then, as of the date that such
Person becomes a Beneficial Owner of such additional
Voting Shares, such Person shall become an "Acquiring
Person";
(iii) for the period of 10 days after the Disqualification
Date (as hereinafter defined), any Person who becomes
the Beneficial Owner of 20% or more of the
outstanding Voting Shares as a result of such Person
becoming disqualified from relying on subclause
l.l(d)(v) hereof where such disqualification results
solely because such Person is making or has announced
a current intention to make a Take-over Bid, either
alone or by acting jointly or in concert with any
other Person. For the purposes of this definition,
"DISQUALIFICATION DATE" means the first date of
public announcement that such Person is making or
has announced a current intention to make a
Take-over Bid, alone or by acting jointly or in
concert with another Person; or
(iv) an underwriter that becomes the Beneficial Owner of
20% or more of the Voting Shares in connection with a
distribution of securities pursuant to an
underwriting agreement with the Corporation.
(b) "AFFILIATE", when used to indicate a relationship with a
specified Person, means a Person that directly or indirectly
controls, or is controlled by, or is under common control
with, such specified Person.
(c) "ASSOCIATE", 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 any person 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.
(d) A Person shall be deemed the "BENEFICIAL OWNER" of, and to
have "BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY OWN":
(i) any securities of which such Person or any of such
Person's Affiliates or Associates is owner at law or
in equity;
(ii) any securities which the Person or any of such
Person's Affiliates or Associates has the right to
acquire, within 60 days (whether such right is
exercisable immediately or after the passage of not
more than 60 days thereafter or upon the occurrence
of a contingency or the making of a
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payment) pursuant to any Convertible Security,
agreement, arrangement, pledge or understanding,
whether or not in writing (other than (x) customary
agreements with and between underwriters and/or
banking group and/or selling group members with
respect to a distribution of securities and (y)
pledges of securities in the ordinary course of the
pledgee's business); and
(iii) any securities that are Beneficially Owned within the
meaning of clauses (i) or (ii) of this Subsection 1.1
(d) by any other Person with which such Person is
acting jointly or in concert;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to have "Beneficial Ownership" of,
or to "Beneficially Own", any security:
(iv) because (A) the holder of such security having agreed
to deposit or tender such security to a Take-over Bid
made by such Person or any of such Person's
Affiliates or Associates or any other Person referred
to in clause (iii) of this definition pursuant to a
Permitted Lock-up Agreement, or (B) such security has
been deposited or tendered pursuant to a Take-over
Bid made by such Person or any of such Person's
Affiliates or Associates or any other person acting
jointly or in concert with such Person until the
earlier of such tendered security being (x) accepted
unconditionally for payment or exchange and (y) taken
up and paid for;
(v) because (A) such Person or any of the Affiliates or
Associates of such Person or any other Person acting
jointly or in concert with such Person, holds such
security provided that the ordinary business of any
such Person (the "FUND MANAGER") includes the
management of investment funds for others and such
security is held by the Fund Manager in the ordinary
course of such business in the performance of such
Fund Manager's duties for the account of any other
Person (a "CLIENT"), (B) such Person (the "TRUST
COMPANY") is licensed to carry on the business of a
trust company under applicable laws and, as such,
acts as trustee or administrator or in a similar
capacity in relation to the estates of deceased or
incompetent Persons (each an "ESTATE ACCOUNT") or in
relation to other accounts (each an "OTHER Account")
and holds such security in the ordinary course of
such duties for such Estate Accounts or for such
Other Accounts, (C) such Person (the "PLAN
ADMINISTRATOR") is the administrator or the trustee
of one or more pension funds or plans (a "PLAN")
registered under the laws of Canada or any province
thereof or the laws of the United States of America
or any state thereof, (D) such Person (the "CROWN
AGENT") is established by statute for purposes that
include, and the ordinary business or activity of
such Person includes, the management of investment
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funds for employee benefit plans, pension plans,
insurance plans, or various public bodies, or (E)
such Person is a Plan; provided, however, that in any
of the foregoing cases the Fund Manager, the Trust
Company, the Plan Administrator, the Crown Agent or
the Plan, as the case may be, is not then making or
has not then announced an intention to make a
Take-over Bid, alone or by acting jointly or in
concert with any other Person, other than an Offer to
Acquire Voting Shares or other securities (X) by
means of ordinary market transactions (including
prearranged trades entered into in the ordinary
course of business of such Person) executed through
the facilities of a stock exchange or organized
over-the-counter market, alone or acting jointly or
in concert with any other Person, (Y) pursuant to a
distribution by the Corporation or (Z) by means of a
Permitted Bid;
(vi) because such Person is a Client of the same Fund
Manager as another Person on whose account the Fund
Manager holds such security, or because such Person
is an Estate Account or an Other Account of the same
Trust Company as another Person on whose account the
Trust Company holds such security, or because such
Person is a Plan with the same Plan Administrator as
another Plan on whose account the Plan Administrator
holds such securities;
(vii) because such Person is a Client of a Fund Manager and
such security is owned at law or in equity by the
Fund Manager or because such Person is an Estate
Account or an Other Account of a Trust Company and
such security is owned at law or in equity by the
Trust Company or such Person is a Plan and such
security is owned at law or in equity by the Plan
Administrator; or
(viii) because such Person is the registered holder of
securities as a result of carrying on the business of
or acting as a nominee of a securities depositary.
For purposes of this Agreement in determining the percentage
of the outstanding Voting Shares with respect to which a
Person is or is deemed to be the Beneficial Owner, any
unissued Voting Shares as to which such Person is deemed the
Beneficial Owner pursuant to this Subsection 1. I(d) shall be
deemed outstanding.
(e) "BOARD OF DIRECTORS" shall mean the board of directors of the
Corporation or any duly constituted and empowered committee
thereof.
(f) "BUSINESS CORPORATIONS ACT " shall mean the BUSINESS
CORPORATIONS ACT, New Brunswick, as amended and the
regulations thereunder, and any comparable or successor laws
or regulations thereto.
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(g) "BUSINESS DAY" shall mean any day, other than a Saturday or
Sunday or a day on which banking institutions in the City of
Ottawa are authorized or obligated by law to close.
(h) "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed
in United States dollars shall mean on any day the Canadian
dollar equivalent of such amount determined by reference to
the U.S. - Canadian Exchange Rate in effect on such date.
(i) "CLOSE OF BUSINESS" on any given date shall mean the time on
such date (or, if such date is not a Business Day, the time on
the next Business Day) at which the principal office of the
transfer agent for the Common Shares in Toronto, Ontario (or
after the Separation Time, the principal office of the Rights
Agent in Toronto, Ontario) is closed to the public.
(j) "CLOSING PRICE" per security of any securities on any date of
determination shall mean:
(i) the closing board lot sale price or, if such price is
not available, the average of the closing bid and
asked prices, for such securities as reported by the
stock exchange or national securities quotation
system on which such securities are listed or
admitted to trading (provided that, if at the date of
determination such securities are listed or admitted
to trading on more than one stock exchange or
national securities quotation system, such price or
prices shall be determined based on the stock
exchange or quotation system on which such securities
are then listed or admitted to trading on which the
largest number of such securities were traded during
the most recently completed calendar year); or
(ii) if for any reason none of such prices is available on
such day or the securities are not listed or admitted
to trading on a stock exchange or a national
securities quotation system, the last sale price, or
in case no sale takes place on such date, the average
of the high bid and low asked prices for each of such
securities in the over-the-counter market;
provided, however, that (A) if for any reason none of such
prices are available on such date, the "Closing Price" per
security of such securities on such date shall mean the fair
value per security of the securities on such date as
determined by a nationally or internationally recognized
investment dealer or investment banker with respect to the
fair value per security of such securities and (B) if the
Closing Price so determined is expressed in United States
dollars, such amount shall be converted to the Canadian Dollar
Equivalent.
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(k) "COMMON SHARES", when used with reference to the Corporation,
shall mean the Common Shares in the share capital of the
Corporation as presently constituted, as such shares may be
subdivided, consolidated, reclassified or otherwise changed
from time to time, and common shares" when used with reference
to any Person other than the Corporation means the class or
classes of shares (or similar equity interest) with the
greatest per share voting power entitled to vote generally in
the election of all directors of such other Person or the
equity securities or other equity interest having power
(whether or not exercised) to control or direct the management
of such other Person or, if such other Person is a corporation
controlled by another Person, the Person (other than an
individual) which ultimately controls such first mentioned
other Person.
(1) "COMPETING PERMITTED BID" means a Take-over Bid that:
(i) is made after a Permitted Bid has been made and prior
to the expiry of the Permitted Bid;
(ii) satisfies all components of the definition of a
Permitted Bid other than the requirement in Clause
(ii)(A)(x) thereof; and
(iii) contains, and the take-up and payment for securities
tendered or deposited is subject to irrevocable and
unqualified provisions that no Voting Shares shall be
taken up or paid for pursuant to the Takeover Bid
prior to the Close of Business on a date that is no
earlier than the later of (i) 21 days after the date
of the Take-over Bid, and (ii) the 45th day after the
earliest date on which any other Permitted Bid that
is then in existence was made.
(m) "CONTROLLED": a body corporate is "controlled" by another
Person if and only if:
(i) securities entitled to vote in the election of
directors carrying more than 50% of the votes for the
election of directors are held, directly or
indirectly, by or for the benefit of the other
Person; and
(ii) the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of
directors of such body corporate;
and "CONTROLS", "CONTROLLING" "UNDER COMMON CONTROL WITH"
shall be interpreted accordingly.
(n) "CONVERTIBLE SECURITY" means, with respect to any security, a
security convertible into or exchangeable for the
first-mentioned security.
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(o) "CO-RIGHTS AGENTS" shall have the meaning ascribed thereto in
Subsection 4.1(a).
(p) "DISPOSITION DATE" has the meaning ascribed thereto in
Subsection 5.1(b).
(q) "DISQUALIFICATION DATE" has the meaning ascribed thereto in
Clause 1.1 (a)(iii) hereof.
(r) "EFFECTIVE DATE" shall mean the Close of Business on April 12,
1999.
(s) "ELECTION TO EXERCISE" has the meaning ascribed thereto in
Subsection 2.2(d).
(t) "EXEMPT ACQUISITION" means a share acquisition in respect of
which the Board of Directors has waived the application of
Section 3.1 pursuant to Subsection 5.1(b), 5.1(d) or 5.1(e) or
which was made on or prior to the date of this Agreement.
(u) "EXERCISE PRICE" shall mean, as of any date, the price at
which a holder of a Right may purchase the securities issuable
upon exercise of one whole Right and, until adjustment thereof
in accordance with the terms hereof, the Exercise Price shall
be $200.00.
(v) "EXPANSION FACTOR" has the meaning ascribed thereto in
subclause 2.3(b)(iv)(A)(I).
(w) "EXPIRATION TIME" shall, subject to section 5.21, mean the
earlier of (i) the Termination Time; and (ii) the Close of
Business on the date on which the first annual meeting of
shareholders of the Corporation following the third
anniversary of the date of this Agreement is held; provided,
however, that if the resolution referred to in Section 5.15 is
approved by the Independent Shareholders in accordance with
Section 5.15 at or prior to such annual meeting, "Expiration
Time" means the earlier of (i) the Termination Time; and (ii)
the Close of Business on the sixth anniversary of the date of
this Agreement.
(x) "FIDUCIARY" shall, when acting in a fiduciary capacity, mean a
trust company registered under the trust company legislation
of Canada or any province thereof, a trust company organized
under the laws of any state of the United States, a portfolio
manager registered under the securities legislation of one or
more provinces of Canada or an investment adviser registered
under the
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United States INVESTMENT ADVISERS ACT OF 1940 or any other
securities legislation of the United States or any state, of
the United States.
(y) "FLIP-IN EVENT" shall mean a transaction or event in or
pursuant to which any Person becomes an Acquiring Person.
(z) "HOLDER" shall have the meaning ascribed thereto in Section
2.8.
(aa) "INDEPENDENT SHAREHOLDERS" shall mean holders of outstanding
Voting Shares, other than Voting Shares Beneficially Owned by
(i) any Acquiring Person; (ii) any Offeror other than a Person
who at the relevant time is deemed not to Beneficially Own
such Voting Shares by reason of Clause l.l(d)(v) hereof; (iii)
any Person acting jointly or in concert with such Acquiring
Person or Offeror referred to in (ii); (iv) any Associate or
Affiliate of such Acquiring Person or Offeror referred to in
(ii); and (v) any employee benefit plan, deferred profit
sharing plan and any similar plan or trust for the benefit of
employees of the Corporation unless the beneficiaries of the
plan or trust direct the manner in which the Voting Shares are
to be voted or withheld from voting or direct whether the
Voting Shares are to be tendered to a Take-over Bid.
(ab) "MARKET PRICE" per security of any securities on any date of
determination shall mean the average of the daily Closing
Prices on The Toronto Stock Exchange (or if the securities are
not then listed in The Toronto Stock Exchange, on such other
exchange on which such securities are listed or quoted as
determined by the Board of directors) per security of such
securities on each of the 20 consecutive Trading Days through
and including the Trading Day immediately preceding such date
of determination; provided, however, that if an event of a
type analogous to any of the events described in Section 2.3
hereof shall have caused any Closing Price used to determine
the Market Price on any Trading Day not to be fully comparable
with the Closing Price on the Trading Day immediately
preceding such date of determination, each such Closing Price
so used shall be appropriately adjusted in a manner analogous
to the applicable adjustment provided for in Section 2.3
hereof in order to make it fully comparable with the Closing
Price on the Trading Day immediately preceding such date of
determination.
(ac) "NOMINEE" has the meaning ascribed thereto in Subsection
2.2(c).
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(ad) "OFFER TO ACQUIRE" shall include:
(i) an offer to purchase or a solicitation of an offer to
sell Voting Shares, or a public announcement of an
intention to make such an offer or solicitation; and
(ii) an acceptance of an offer to sell Voting Shares,
whether or not such offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer
to sell shall be deemed to be making an Offer to Acquire to
the Person that made the offer to sell.
(ae) "OFFEROR" shall mean a Person who has announced a current
intention to make, or who is making, a Take-over Bid.
(af) "OFFEROR'S SECURITIES" shall mean the Voting Shares
Beneficially Owned on the date of a Take-over Bid by an
Offeror.
(ag) "PERMITTED BID" means a Take-over Bid made by way of a
Take-over Bid circular which also complies with the following
additional provisions:
(i) the Take-over Bid is made to all holders of record of
Voting Shares wherever resident as registered on the
books of the Corporation, other than the Offeror;
(ii) the Take-over Bid contains, and the take-up and
payment for securities tendered or deposited
thereunder is subject to irrevocable and unqualified
conditions that:
(A) no Voting Shares shall be taken up or paid
for pursuant to the Take-over Bid (x) prior
to the Close of Business on a date which is
not less than 45 days following the date of
the Take-over Bid and (y) unless, at the
Close of Business on that date, the Voting
Shares deposited or tendered pursuant to the
Take-over Bid and not withdrawn constitute
more than 50% of the Voting Shares
outstanding which are held by Independent
Shareholders;
(B) unless the Take-over Bid is withdrawn,
Voting Shares may be deposited pursuant to
such Take-over Bid at any time prior to the
Close of Business on the date of the first
take-up of or payment for Voting Shares;
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(C) any Voting Shares deposited pursuant to the
Take-over Bid may be withdrawn until taken
up and paid for; and
(D) in the event that the requirement set forth
in subclause (A)(y) of this clause
l.l(ag)(ii) is satisfied, the Offeror will
make a public announcement of that fact and
the Take-over Bid will remain open for
deposits and tenders of Voting Shares for
not less than 10 Business Days from the date
of such public announcement.
For purposes of this Agreement, (A) should a
Take-over Bid which qualified as a Permitted Bid when
made cease to be a Permitted Bid because it ceases to
meet any or all of the requirements mentioned above
prior to the time it expires (after giving effect to
any extension) or is withdrawn, any acquisition of
Voting Shares made pursuant to such Take-over Bid
shall not be a Permitted Bid Acquisition and (B) the
term "Permitted Bid" shall include a Competing
Permitted Bid.
(ah) "PERMITTED BID ACQUISITION" means an acquisition of Voting
Shares made pursuant to a Permitted Bid or a Competing
Permitted Bid.
(ai) "PERMITTED LOCK-UP AGREEMENT" means an agreement (the "LOCK-UP
AGREEMENT") between a Person and one or more holders of Voting
Shares (each such holder herein referred to as a "LOCKED-UP
PERSON") (the terms of which are publicly disclosed and
reduced to writing and a copy of which is made available to
the public (including the Corporation) not later than the date
the Lock-up Bid (as defined below) or if the Lock-up Bid has
been made prior to the date of the Lock-up Agreement not later
than the date of the Lock-up Agreement) pursuant to which each
Lock-up Person agrees to deposit or tender the Voting Shares
held by such holder to a Take-over Bid (the "Lock-up Bid")
made by the Person or any of such Person's Affiliates or
Associates or any other Person referred to in clause
1.1(d)(iii) provided that:
(i) the Lock-up Agreement permits the Locked-up Person to
withdraw its Voting Shares from the Lock-up Agreement
in order to deposit or tender the Voting Shares to
another Take-over Bid or to support another
transaction for the Voting Shares prior to the Voting
Shares being taken up and paid for under the Lock-up
Bid:
(1) at a price or value per Voting Share that
exceeds the price or value per Voting Share
offered under the Lock-up Bid; or
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(2) for a number of Voting Shares at least 7%
greater than the number of Voting Shares
that the Offeror has offered to purchase
under the Lock-up Bid at a price or value
per Voting Share that is not less than the
price or value per Voting Share offered
under the Lock-up Bid; or
(3) that contains an offering price for each
Voting Share that exceeds by as much as or
more than a specified amount (the "SPECIFIED
AMOUNT") the offering price for each Voting
Share contained in or proposed to be
contained in the Lock-up Bid and (b) does
not by itself provide for a Specified Amount
that is greater than 7% of the offering
price contained in or proposed to be
contained in the Lock-up Bid; and
for greater clarity, the agreement may contain a
right of first refusal or require a period of delay
to give the Person who made the Lock-up Bid an
opportunity to match a higher price in another
Take-over Bid or other similar limitation on a
Locked-up Person's right to withdraw Voting Shares
from the agreement, so long as the limitation does
not preclude the exercise by the Locked-up Person of
the right to withdraw Voting Shares during the period
of the other Take-over Bid or transaction;
(ii) no "break-up" fees, "top-up" fees, penalties,
expenses or other amounts that exceed in aggregate
the greater of:
(1) 2 1/2% of the price or value of the
consideration payable under the Lock-up Bid
to a Locked-up Person; and
(2) 50% of the amount by which the price or
value of the consideration received by a
Locked-up Person under another Take-over Bid
or transaction exceeds the price or value of
the consideration that the Locked-up Person
would have received under the Lock-up Bid;
shall be payable by such Locked-up Person if the
Locked-up Person fails to deposit or tender Voting
shares to the Lock-up Bid, or withdraws Voting Shares
previously rendered thereto in order to deposit or
tender such Voting Shares to another Take-over Bid or
support another transaction.
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(aj) "PERSON" includes any individual, firm, partnership,
association, trust, trustee, executor, administrator, legal
personal representative, government, governmental body or
authority, corporation, or other incorporated or
unincorporated organization, syndicate or other entity.
(ak) "PRO RATA ACQUISITION" means an acquisition by a Person of
Voting Shares pursuant to (i) any dividend reinvestment plan
or share purchase plan of the Corporation made available to
all holders of Voting Shares (other than holders resident in
any jurisdiction where participation in any such plan is
restricted or impractical as a result of applicable law), (ii)
a stock dividend, a stock split or other event pursuant to
which such Person becomes the Beneficial Owner of Voting
Shares on the same pro rata basis as all other holders of
Voting Shares of the same class or series, (iii) the
acquisition or exercise of rights to purchase Voting Shares
distributed to all holders of Voting Shares (other than
holders resident in any jurisdiction where such distribution
is restricted or impractical as a result of applicable law) by
the Corporation pursuant to a rights offering (but only if
such rights are acquired directly from the Corporation) or
(iv) a distribution of Voting Shares or Convertible Securities
in respect thereof offered pursuant to a prospectus or by way
of a private placement or a conversion or exchange of any such
Convertible Security, provided such Person does not thereby
acquire a greater percentage of Voting Shares or Convertible
Securities so offered than the Person's percentage of Voting
Shares Beneficially Owned immediately prior to such
acquisition.
(al) "RECORD TIME" means the Close of Business on the Effective
Date.
(am) "REDEMPTION PRICE" shall have the meaning attributed thereto
in Subsection 5. l(a).
(an) "REGULAR PERIODIC CASH DIVIDEND" means cash dividends paid on
the Common Shares at regular intervals in any fiscal year of
the Corporation to the extent that such cash dividends do not
exceed in the aggregate in any fiscal year, on a per share
basis, the greatest of:
(i) 200% of the aggregate amount of cash dividends
declared payable by the Corporation on its Common
Shares in its immediately preceding fiscal year
divided by the number of Common Shares outstanding as
at the end of such fiscal year;
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(ii) 300% of the arithmetic mean of the aggregate amounts
of cash dividends declared payable by the Corporation
on its Common Shares in its three immediately
preceding fiscal years divided by the arithmetic mean
of the number of Common Shares outstanding as at the
end of each of such fiscal years; and
(iii) 100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its
immediately preceding fiscal year divided by the
number of Common Shares outstanding as at the end of
such fiscal year.
(ao) "RIGHT" shall mean the herein described rights to purchase
securities pursuant to the terms and subject to the conditions
set forth herein.
(ap) "RIGHTS CERTIFICATE" shall mean the certificates representing
the Rights after the Separation Time which shall be
substantially in the form attached hereto as Exhibit A.
(aq) "RIGHTS REGISTER" and "RIGHTS REGISTRAR" shall have the
respective meanings ascribed thereto in Subsection 2.6(a)
(ar) "SECURITIES ACT" shall mean the SECURITIES ACT (Ontario),
R.S.O. 1990, c.S.5, as amended and the regulations and rules
made thereunder, as now in effect or as the same may from time
to time be amended, re-enacted or replaced.
(as) "SEPARATION TIME" means the Close of Business on the eighth
Business Day after the earlier of:
(i) the Stock Acquisition Date; and
(ii) the date of the commencement of, or first public
announcement or disclosure of the intent of any
Person (other than the Corporation or any corporation
controlled by the Corporation) to commence, a
Take-over Bid (other than a Permitted Bid, so long as
such Take-over Bid continues to satisfy the
requirements of a Permitted Bid) or such later
Business Day as may be determined at any time or from
time to time by the Board of Directors;
provided, however, that if any such Take-over Bid expires, is
cancelled, is terminated or is otherwise withdrawn prior to
the Separation Time, such Take-over Bid shall be deemed, for
purposes of this Subsection l.l(ar) never
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to have been made, and, provided further, that if the Board of
Directors determines, pursuant to Section 5.1, to waive the
application of Section 3.1 to a Flip-In Event, the Separation
Time in respect of such Flip-In Event shall be deemed never to
have occurred.
(at) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement or disclosure by the Corporation or an Acquiring
Person of facts indicating that a Person has become an
Acquiring Person (which, for the purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 101 of the Securities Act or Section 13(d) of the U.S.
Exchange Act disclosing such information).
(au) "TAKE-OVER BID" means an Offer to Acquire Voting Shares of any
class, or Convertible Securities with respect thereto, where
the Voting Shares subject to the Offer to Acquire, together
with the Voting Shares into or for which the securities
subject to the Offer to Acquire are convertible or
exchangeable and the Offeror's Securities constitute in the
aggregate 20% or more of the outstanding Voting Shares at the
date of the Offer to Acquire.
(av) "TERMINATION TIME" means the time at which the right to
exercise Rights shall terminate pursuant to Section 5.1
hereof.
(aw) "TRADING DAY", when used with respect to any securities, means
the day on which the principal Canadian or United States
securities exchange (as determined by the Board of Directors)
on which such securities are listed or admitted to trading is
open for the transaction of business or, if the securities are
not listed or admitted to trading on any Canadian or United
States securities exchange, a Business Day.
(ax) "U.S. - CANADIAN EXCHANGE RATE" on any date shall mean:
(i) if on such date the Bank of Canada sets an average
noon spot rate of exchange for the conversion of one
United States dollar into Canadian dollars, such
rate; and
(ii) in any other case, the rate for such date for the
conversion of one United States dollar into Canadian
dollars which is calculated in the manner which shall
be determined by the Board of Directors from time to
time acting in good faith;
(ay) "U.S. EXCHANGE ACT" means the United States Securities
Exchange Act of 1934, as amended, and the rules and
regulations thereunder as from time to time in effect.
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(az) "VOTING SHARE REDUCTION" means an acquisition or redemption by
the Corporation of Voting Shares which, by reducing the number
of Voting Shares outstanding, increases the percentage of
Voting Shares Beneficially Owned by any Person to 20% or more
of the Voting Shares then outstanding.
(ba) "VOTING SHARES", when used in reference to the Corporation,
shall mean the Common Shares and any other securities the
holders of which are entitled to vote generally on the
election of directors of the Corporation, and "VOTING SHARES",
when used with reference to any Person other than the
Corporation, means common shares of such other Person and any
other securities the holders of which are entitled to vote
generally in the election of the directors of such other
Person.
1.2 CURRENCY
All sums of money which are referred to in this Agreement are expressed
in lawful money of Canada, unless otherwise specified.
1.3 NUMBER AND GENDER
Wherever the context will require, terms (including defined terms) used
herein importing the singular number only include the plural and vice versa and
words importing any one gender shall include all others.
1.4 SECTIONS AND HEADINGS
The division of this Agreement into Articles, Sections, Subsections,
Clauses and Subclauses and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. The terms this "AGREEMENT", "HEREUNDER", "HEREOF", and similar
expressions refer to this Agreement as amended or supplemented from time to time
and not to any particular Article, Section or other portion hereof and include
any Agreement or instrument supplemental or ancillary hereto. Unless something
in the subject matter or context is inconsistent therewith, references herein to
Articles, Sections, Subsections, Clauses and Subclauses are to Articles,
Sections, Subsections, Clauses and Subclauses of this Agreement.
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1.5 STATUTORY REFERENCES
Unless the context otherwise requires, any reference to a specific
Section, Subsection, Clause or Rule of any statute or regulation shall be deemed
to refer to the same as it may be amended, 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.
1.6 DETERMINATION OF PERCENTAGE OWNERSHIP
The percentage of Voting Shares Beneficially Owned by any Person,
shall, for the purposes of this Agreement, be and be deemed to be the product
determined by the formula:
100 x A
---
B
where:
A = the aggregate number of votes for the election of all
directors generally attaching to the Voting Shares
Beneficially Owned by such Person; and
B = the aggregate number of votes for the election of all
directors generally attaching to all outstanding Voting
Shares.
Where any person is deemed to Beneficially Own unissued Voting Shares
pursuant to Subsection l.l(d), such Voting Shares shall be deemed to be
outstanding for the purpose of both A and B in the formula above.
1.7 ACTING JOINTLY OR IN CONCERT
For the purposes of this Agreement, a Person is acting jointly or in
concert with every Person who is a party to an agreement, commitment or
understanding, whether formal or informal, with the first Person for the purpose
of acquiring or offering to acquire Voting Shares or Convertible Securities in
respect thereof (other than customary agreements with and between underwriters
and banking group or selling group members with respect to a distribution of
securities or pursuant to a pledge of securities in the ordinary course of the
pledgee's business).
1.8 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to generally accepted
accounting principles, such reference shall be deemed to be the recommendations
at the relevant time of the Canadian Institute of Chartered Accountants, or any
successor institute, applicable on a consolidated basis (unless otherwise
specifically provided herein to be applicable on an unconsolidated basis) as at
the date on which a calculation is made or required to be made in accordance
with generally accepted accounting principles. Where the character or amount of
any asset or liability or item of revenue or
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expense is required to be determined, or any consolidation or other accounting
computation is required to be made for the purpose of this Agreement or any
document, such determination or calculation shall, to the extent applicable and
except as otherwise specified herein or as otherwise agreed in writing by the
parties, be made in accordance with generally accepted accounting principles
applied on a consistent basis.
ARTICLE 2
THE RIGHTS
2.1 LEGEND ON COMMON SHARE CERTIFICATES
(a) Certificates representing the Common Shares, including without
limitation Common Shares issued upon the conversion of
Convertible Securities, issued after the Record Time but prior
to the Close of Business on the earlier of the Separation Time
and the Expiration Time, shall also evidence one Right for
each Common Share represented thereby and shall have impressed
on, printed on, written on or otherwise affixed to them the
following legend:
"Until the Separation Time (as defined in the Rights
Agreement referred to below), this certificate also
evidences and entitles the holder hereof to certain
Rights as set forth in a Shareholder Rights Plan
Agreement, dated as of April 12, 1999 (the "Rights
Agreement"), between the Corporation and Montreal
Trust Company of Canada, as Rights Agent, the terms
of which are hereby incorporated herein by reference
and a copy of which is on file at the registered
office of the Corporation. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights may be amended or redeemed, may expire,
may become void (if, in certain cases, they are
"Beneficially Owned" by an "Acquiring Person", as
such terms are defined in the Rights Agreement, or a
transferee thereof) or may be evidenced by separate
certificates and may no longer be evidenced by this
certificate. The Corporation will mail or arrange for
the mailing of a copy of the Rights Agreement to the
holder of this certificate without charge as soon as
practicable after the receipt of a written request
therefor."
(b) Certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for
each Common Share evidenced thereby, notwithstanding the
absence of the foregoing legend, until the earlier of the
Separation Time and the Expiration Time.
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2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS
(a) Subject to adjustment as herein set forth, including without
limitation as set forth in Article 3, each Right will entitle
the holder thereof, from and after the Separation Time and
prior to the Expiration Time, to purchase one Common Share for
the Exercise Price as at the Business Day immediately
preceding Separation Time (which Exercise Price and number of
Common Shares are subject to adjustment as set forth below).
Notwithstanding any other provision of this Agreement, any
Rights held by the Corporation or any of its subsidiaries
shall be void.
(b) Until the Separation Time, (i) the Rights shall not be
exercisable and no Right may be exercised; and (ii) for
administrative purposes, each Right will be evidenced by the
certificate for the associated Common Share registered in the
name of the holder thereof (which certificate shall be deemed
to represent a Rights Certificate) and will be transferable
only together with, and will be transferred by a transfer of,
such associated Common Share.
(c) From and after the Separation Time and prior to the Expiration
Time, the Rights may be exercised, and the registration and
transfer of the Rights shall be separate from and independent
of Common Shares. Promptly following the Separation Time, the
Corporation will prepare or cause to be prepared and the
Rights Agent will mail to each holder of record of Common
Shares as of the Separation Time and, in respect of each
Convertible Security converted into Common Shares after the
Separation Time and prior to the Expiration Time, promptly
after such conversion, the Corporation will prepare or cause
to be prepared and the Rights Agent will mail to the holder so
converting (other than an Acquiring Person and in respect of
any Rights Beneficially Owned by such Acquiring Person which
are not held of record by such Acquiring Person, the holder of
record of such rights (a "NOMINEE")) at such holder's address
as shown by the records of the Corporation (the Corporation
hereby agreeing to furnish copies of such record to the Rights
Agent for this purpose):
(i) a Rights Certificate in substantially the form of
Exhibit A hereto appropriately completed,
representing the number of Rights held by such holder
at the Separation Time and having such marks of
identification or designation and such legends,
summaries or endorsements printed thereon as the
Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement,
or as may be required to comply with any law, rule or
regulation or judicial or administrative order, or
with any article or regulation of any stock exchange
or quotation system on which the Rights may from time
to time be listed or traded, or to conform to usage;
and
(ii) a disclosure statement prepared by the Corporation
describing the Rights, provided that a Nominee shall
be sent the materials provided for in (i) and (ii)
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only in respect of all Common Shares held of record
by it which are not Beneficially Owned by an
Acquiring Person and the Corporation may require any
Nominee or suspected Nominee to provide such
information and documentation as the Corporation may
reasonably require for such purpose.
(d) Rights may be exercised in whole or in part on any Business
Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent, at its principal office in
Toronto or any other office of the Rights Agent designated for
that purpose from time to time by the Corporation:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise (an "ELECTION TO EXERCISE")
substantially in the form attached to the Rights
Certificate duly completed, and executed in a manner
acceptable to the Rights Agent; and
(iii) payment by certified cheque, banker's draft or money
order payable to the order of the Montreal Trust
Company of Canada, of a sum equal to the Exercise
Price multiplied by the number of Rights being
exercised and a sum sufficient to cover any transfer
tax or charge which may be payable in respect of any
transfer involved in the transfer or delivery of
Rights Certificates or the issuance or delivery of
certificates for Common Shares in a name other than
that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, which is accompanied by
an appropriately completed and duly executed Election to
Exercise (which does not indicate that such Right is null and
void as provided by Subsection 3.1(b)) and payment as set
forth in Subsection 2.2(d), the Rights Agent (unless otherwise
instructed by the Corporation) will thereupon promptly:
(i) requisition from the transfer agent of the Common
Shares certificates representing the number of Common
Shares to be purchased (the Corporation hereby
irrevocably authorizing its transfer agent to comply
with all such requisitions);
(ii) after receipt of such Common Share certificates,
deliver such certificates to, or to the order of, the
registered holder of such Rights Certificate,
registered in such name or names as may be designated
by such holder;
(iii) when appropriate, requisition from the Corporation
the amount of cash, if any, to be paid in lieu of
issuing fractional Common Shares;
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(iv) when appropriate, after receipt of such cash, deliver
such cash to, or to the order of, the registered
holder of the Rights Certificate; and
(v) tender to the Corporation all payments received on
exercise of the Rights.
(f) If the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new
Rights Certificate evidencing the Rights remaining unexercised
subject to subsection 5.5(a) will be issued by the Rights
Agent to such holder or to such holder's duly authorized
assigns.
(g) The Corporation shall:
(i) take all such action as may be necessary and within
its power to ensure, that all Common Shares delivered
upon the exercise of Rights shall, at the time of
delivery of the certificates for such Common Shares
(subject to payment of the Exercise Price), be duly
and validly authorized, executed, issued and
delivered as fully paid and non-assessable;
(ii) take all such action as may reasonably be considered
to be necessary and within its power to comply with
any applicable requirements of the Business
Corporations Act or the Securities Act, the U.S.
Exchange Act, the United States Securities Act of
1933, as amended, and comparable legislation of each
of the provinces and territories of Canada and states
of the United States of America, or the rules and
regulations thereunder or any other applicable law,
rule or regulation, in connection with the issuance
and delivery of the Rights, the Rights Certificates
and the issuance of any Common Shares upon exercise
of the Rights;
(iii) use reasonable efforts to cause all Common Shares
issued upon exercise of the Rights to be listed on
the stock exchanges on which the Common Shares are
listed at that time;
(iv) cause to be reserved and kept available out of its
authorized and unissued Common Shares, the number of
Common Shares that, as provided in this Agreement,
will from time to time be sufficient to permit the
exercise in full of all outstanding Rights;
(v) pay when due and payable, if applicable, any and all
federal, provincial, state and municipal taxes (not
in the nature of income, capital gains or withholding
taxes) and charges which may be payable in respect of
the original issuance or delivery of the Rights
Certificates or certificates for Common Shares
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issued upon the exercise of Rights, provided that the
Corporation shall not be required to pay any transfer
tax or charge which may be payable in respect of any
transfer of Rights or the issuance or delivery of
certificates for Common Shares issued upon the
exercise of Rights, in a name other than that of the
holder of the Rights being transferred or exercised;
and
(vi) after the Separation Time, except as permitted by
Section 5.1 or Section 5.4 hereof, not take (or
permit any corporation it controls to take) any
action if at the time such action is taken it is
reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
(a) The Exercise Price, the number and kind of securities subject
to purchase upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time
as provided in this Section 2.3 and in Article 3.
(b) In the event that the Corporation shall at any time after the
Record Time and prior to the Expiration Time:
(i) declare or pay a dividend on the Common Shares
payable in Voting Shares or Convertible Securities in
respect thereof other than pursuant to any dividend
reinvestment plan;
(ii) subdivide or change the then outstanding Common
Shares into a greater number of Common Shares;
(iii) consolidate or change the then outstanding Common
Shares into a smaller number of Common Shares; or
(iv) issue any Voting Shares (or Convertible Securities in
respect thereof) in respect of, in lieu of or in
exchange for existing Common Shares, whether in a
reclassification, amalgamation, statutory
arrangement, consolidation or otherwise;
the Exercise Price and the number of Rights outstanding (or,
if the payment or effective date therefor shall occur after
the Separation Time, the securities purchasable upon the
exercise of Rights) shall be adjusted as follows:
(A) If the Exercise Price and number of Rights
outstanding are to be adjusted:
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1) the Exercise Price in effect after such
adjustment will be equal to the Exercise
Price in effect immediately prior to such
adjustment divided by the number of Common
Shares (or other securities of the
Corporation) (the "EXPANSION FACTOR") that a
holder of one Common Share immediately prior
to such dividend, subdivision, change,
combination or issuance would hold
thereafter as a result thereof; and
2) each Right held prior to such adjustment
will become that number of Rights equal to
the Expansion Factor, and the adjusted
number of Rights will be deemed to be
allocated among the Common Shares with
respect to which the original Rights were
associated (if they remain outstanding) and
the securities of the Corporation issued in
respect of such dividend, subdivision,
change, consolidation or issuance, so that
each such Common Share (or other security of
the Corporation) will have exactly one Right
associated with it.
(B) If the securities purchasable upon exercise of Rights
are to be adjusted, the securities purchasable upon
exercise of each Right after such adjustment will be
the securities that a holder of the securities
purchasable upon exercise of one Right immediately
prior to such dividend, subdivision, change,
consolidation or issuance would hold thereafter as a
result thereof.
(c) Adjustments pursuant to Subsection 2.3(b) shall be made
successively, whenever an event referred to in Subsection
2.3(b) occurs.
(d) If an event occurs which would require an adjustment under
both this Section 2.3 and Section 3.1 hereof, the adjustment
provided for in this Section 2.3 shall be in addition to, and
shall be made prior to, any adjustment required pursuant to
Section 3.1 hereof.
(e) In the event the Corporation shall at any time after the
Record Time and prior to the Separation Time issue any Common
Shares otherwise than in a transaction referred to in
Subsection 2.3(b), each such Common Share so issued shall
automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such
Common Share.
(f) In the event the Corporation shall, at any time after the
Record Time and prior to the Expiration Time, fix a record
date for the making of a distribution to all holders of Common
Shares of rights or warrants entitling them (for a period
expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Shares (or
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Convertible Securities in respect of Common Shares) at a price
per Common Share (or, in the case of such a Convertible
Security, having a conversion, exchange or exercise price per
share (including the price required to be paid to purchase
such Convertible Security)) less than 90% of the Market Price
per Common Share on such record date, the Exercise Price in
effect after such record date will equal the Exercise Price in
effect immediately prior to such record date multiplied by a
fraction;
(i) of which the numerator shall be the number of Common
Shares outstanding on such record date plus the
number of Common Shares which the aggregate offering
price of the total number of Common Shares so to be
offered (and/or the aggregate initial conversion,
exchange or exercise price of the Convertible
Securities so to be offered (including the price
required to be paid to purchase such Convertible
Securities)) would purchase at such Market Price per
Common Share; and
(ii) of which the denominator shall be the number of
Common Shares outstanding on such record date plus
the number of additional Common Shares to be offered
for subscription or purchase (or into which the
Convertible Securities so to be offered are initially
convertible, exchangeable or exercisable).
In case such subscription price is satisfied, in whole or in
part, by consideration other than cash, the value of such
consideration shall be as determined in good faith by the
Board of Directors. Such adjustment shall be made successively
whenever such a record date is fixed. To the extent that such
rights or warrants are not exercised prior to the expiration
thereof, the Exercise Price shall be readjusted in the manner
contemplated above based on the number of Common Shares (or
securities convertible into or exchangeable for Common Shares)
actually issued on the exercise of such rights or warrants.
For purposes of this Agreement, the granting of the right to
purchase Common Shares (whether from treasury or otherwise)
pursuant to any dividend or interest reinvestment plan or any
share purchase plan providing for the reinvestment of
dividends or interest payable on securities of the Corporation
or the investment of periodic optional payments or employee
benefit or similar plans (so long as such right to purchase is
in no case evidenced by the delivery of rights or warrants by
the Corporation) shall not be deemed to constitute an issue of
rights or warrants by the Corporation; provided, however, that
in the case of any dividend or interest reinvestment or share
purchase plan, the right to purchase Common Shares is at a
price per share of not less than 90% of the current Market
Price per share (determined as provided in such plans) of the
Common Shares.
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(g) In the event the Corporation shall at any time after the
Record Time and prior to the Expiration Time fix a record date
for the making of a distribution to all holders of Common
Shares of (i) evidences of indebtedness or assets (other than
a Regular Periodic Cash Dividend or a dividend paid in Common
Shares, but including any dividend payable in securities other
than Common Shares), (ii) rights or warrants entitling them to
subscribe for or purchase Voting Shares (or Convertible
Securities in respect of Voting Shares), at a price per Voting
Share (or, in the case of a Convertible Security in respect of
Voting Shares, having a conversion, exchange or exercise price
per share (including the price required to be paid to purchase
such Convertible Security)) less than 90% of the Market Price
per Common Share on such record date (excluding rights or
warrants referred to in Subsection 2.3(f)) or (iii) other
securities of the Corporation, the Exercise Price in effect
after such record date shall be equal to the Exercise Price in
effect immediately prior to such record date less the fair
market value (as determined in good faith by the Board of
Directors) of the portion of the assets, evidences of
indebtedness, rights or warrants or other securities so to be
distributed applicable to each of the securities purchasable
upon exercise of one Right. Such adjustment shall be made
successively whenever such a record date is fixed.
(h) Each adjustment made pursuant to Section 2.3 shall be made as
of
(i) the payment or effective date for the applicable
dividend, subdivision, change, combination or
issuance, in the case of an adjustment made pursuant
to Subsection 2.3(b) above; and
(ii) the record date for the applicable dividend or
distribution, in the case of an adjustment made
pursuant to Subsections 2.3(f) or 2.3(g) above,
subject to readjustment to reverse the same if such
distribution shall not be made.
(i) In the event the Corporation shall at any time after the
Record Time and prior to the Expiration Time issue any shares
(other than Common Shares), or rights or warrants to subscribe
for or purchase any such shares, or Convertible Securities in
respect of any such shares, in a transaction referred to in
any of subclauses 2.3(b)(i) to (iv) above, if the Board of
Directors acting in good faith determines that the adjustments
contemplated by Subsections 2.3(b), 2.3(f) and 2.3(g) above in
connection with such transaction will not appropriately
protect the interests of the holders of Rights, the Board of
Directors may from time to time, but subject to obtaining the
prior approval of the holders of the Rights obtained as set
forth in Subsection 5.4(b), determine what other adjustments
to the Exercise Price, number of Rights or securities
purchasable upon exercise of Rights would be appropriate and,
notwithstanding Subsections 2.3(b), 2.3(f) and 2.3(g) above,
such adjustments, rather than the adjustments
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contemplated by Subsections 2.3(b), 2.3(f) and 2.3(g) above,
shall be made upon the Board of Directors providing written
certification thereof to the Rights Agent pursuant to
Subsection 2.3(q).
(j) Notwithstanding anything herein to the contrary, no adjustment
of the Exercise Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in such
Exercise Price; provided, however, that any adjustments which
by reason of this Subsection 2.3(j)) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment. All adjustments to the Exercise Price
made pursuant to this Section 2.3 shall be calculated to the
nearest cent.
(k) All Rights originally issued by the Corporation subsequent to
any adjustment made to an Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Exercise
Price, the number of Common Shares purchasable from time to
time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(1) Unless the Corporation shall have exercised its election, as
provided in Subsection 2.3(m), upon each adjustment of an
Exercise Price as a result of the calculations made in
Subsections 2.3(f) and 2.3(g), each Right outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of Common Shares obtained by:
(i) multiplying (A) the number of Common Shares covered
by a Right immediately prior to such adjustment, by
(B) the Exercise Price in effect immediately prior to
such adjustment; and
(ii) dividing the product so obtained by the Exercise
Price in effect immediately after such adjustment.
(m) The Corporation may elect on or after the date of any
adjustment of an Exercise Price to adjust the number of
Rights, in lieu of any adjustment in the number of Common
Shares purchasable upon the exercise of a Right. Each of the
Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Common Shares
for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become the number of Rights
obtained by dividing the relevant Exercise Price in effect
immediately prior to adjustment of the relevant Exercise Price
by the relevant Exercise Price in effect immediately after
adjustment of the relevant Exercise Price. The Corporation
shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the
adjustment, and, if
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known at the time, the amount of the adjustment to be made.
This record date may be the date on which the relevant
Exercise Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least 10
calendar days later than the date of the public announcement.
If Rights Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Subsection 2.3(m),
the Corporation shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on
such record date, Rights Certificates evidencing, subject to
Section 5.5, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option
of the Corporation, shall cause to be distributed to such
holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Corporation, new Rights Certificates evidencing all the Rights
to which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein
and may bear, at the option of the Corporation, the relevant
adjusted Exercise Price and shall be registered in the names
of holders of record of Rights Certificates on the record date
specified in the public announcement.
(n) In any case in which this Section 2.3 shall require that an
adjustment in an Exercise Price be made effective as of a
record date for a specified event, the Corporation may elect
to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date of
the number of Common Shares and other securities of the
Corporation, if any, issuable upon such exercise over and
above the number of Common Shares and other securities of the
Corporation, if any, issuable upon such exercise on the basis
of the relevant Exercise Price in effect prior to such
adjustment; provided, however, that the Corporation shall
deliver to such holder an appropriate instrument evidencing
such holder's right to receive such additional Common Shares
(fractional or otherwise) or other securities upon the
occurrence of the event requiring such adjustment.
(o) Notwithstanding anything in this Section 2.3 to the contrary,
the Corporation shall be entitled to make such adjustments in
the Exercise Price, in addition to those adjustments expressly
required by this Section 2.3, as and to the extent that in its
good faith judgment the Board of Directors shall determine to
be advisable in order that any (i) subdivision or
consolidation of the Common Shares, (ii) issuance wholly for
cash of any Common Shares at less than the applicable Market
Price, (iii) issuance wholly for cash of any Common Shares or
securities that by their terms are exchangeable for or
convertible into or give a right to acquire Common Shares,
(iv) stock dividends, or (v) issuance of rights, options or
warrants referred to in this Section 2.3, hereafter made by
the Corporation to holders of its Common Shares, shall not be
taxable to such shareholders.
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(p) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to
represent the securities so purchasable which were represented
in the initial Rights Certificates issued hereunder.
(q) Whenever an adjustment to the Exercise Price is made pursuant
to this Section 2.3, the Corporation shall
(i) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts
accounting for such adjustment; and
(ii) promptly file with the Rights Agent and with each
transfer agent for the Common Shares a copy of such
certificate and mail a brief summary thereof to each
holder of Rights who requests a copy.
Failure to file such certificate or to cause such notice to be
given as aforesaid, or any defect therein, shall not affect
the validity of any such adjustment or change.
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE
Each Person in whose name any certificate for Common Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered (together with a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and any
applicable transfer taxes and other governmental charges payable by the
exercising Person hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Share transfer books
of the Corporation are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
Business Day on which the Common Share transfer books of the Corporation are
open.
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its President, a Chief Executive Officer, its
Chief Financial Officer, its Secretary or any Vice President.
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.
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(b) Promptly following the Separation Time, the Corporation will
notify the Rights Agent of such Separation Time and will
deliver Rights Certificates executed by the Corporation to the
Rights Agent for countersignature and a statement describing
the Rights, and the Rights Agent shall countersign (manually
or by facsimile signature) and deliver such Rights
Certificates and statement to the holders of the Rights
pursuant to Section 2.2 hereof. No Rights Certificate shall be
valid for any purpose until countersigned by the Rights Agent
as aforesaid.
(c) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.6 REGISTRATION, TRANSFER AND EXCHANGE
(a) After the Separation Time, the Corporation shall cause to be
kept a register (the "Rights Register") in which, subject to
such reasonable regulations as it may prescribe, the
Corporation will provide for the registration and transfer of
Rights. The Rights Agent is hereby appointed "Rights
Registrar" for the purpose of maintaining the Rights Register
for the Corporation and registering Rights and transfers of
Rights as herein provided and the Rights Agent hereby accepts
such appointment. In the event that the Rights Agent shall
cease to be the Rights Registrar, the Rights Agent will have
the right to examine the Rights Register at all reasonable
times.
(b) After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any
Rights Certificate, and subject to the provisions of
Subsections 2.6(d) and 3.1(b) below, the Corporation will
execute, and the Rights Agent will countersign, deliver and
register, in the name of the holder or the designated
transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the
Rights Certificates so surrendered.
(c) All Rights issued upon any registration of transfer or
exchange of Rights Certificates shall be valid obligations of
the Corporation, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon
such registration of transfer or exchange.
(d) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to
the Corporation or the Rights Agent, as the case may be, duly
executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any
new Rights Certificate under this Section 2.6, the Corporation
may require the payment of a sum sufficient to cover any tax
or other
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governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the
Rights Agent) in connection therewith.
2.7 MUTILATED, LOST, STOLEN AND DESTROYED RIGHTS CERTIFICATES
(a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, the Corporation
shall execute and the Rights Agent shall countersign and
deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights
Agent prior to the Expiration Time: (i) evidence to their
reasonable satisfaction of the destruction, loss or theft of
any Rights Certificate; and (ii) such security or indemnity as
may be reasonably required by them to save each of them and
any of their agents harmless, then, in the absence of notice
to the Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the
Corporation shall execute and, upon the Corporation's request
the Rights Agent shall countersign and deliver, in lieu of any
such destroyed, lost or stolen Rights Certificate, a new
Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.7, the Corporation may require the
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section
2.7 in lieu of any destroyed, lost or stolen Rights
Certificate shall evidence a contractual obligation of the
Corporation, whether or not the destroyed, lost or stolen
Rights Certificate shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Agreement
equally and proportionately with any and all other Rights duly
issued hereunder.
2.8 PERSONS DEEMED OWNERS
The Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Separation Time, the associated Common Share
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement, unless
the context otherwise requires, the term "holder" of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated Common Shares).
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2.9 DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption,
for registration of transfer or exchange shall, if surrendered to any person
other than the Rights Agent, be delivered to the Rights Agent and, in any case,
shall be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9 except as expressly permitted by this Agreement.
The Rights Agent shall, subject to applicable law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
2.10 AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights, by accepting such Rights, consents and agrees
with the Corporation and the Rights Agent and with every other holder of Rights:
(a) to be bound by and subject to the provisions of this
Agreement, as amended from time to time in accordance with the
terms hereof, in respect of all Rights held;
(b) that, prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a
transfer of, the associated Common Share;
(c) that, after the Separation Time, the Rights will be
transferable only on the Rights Register as provided herein;
(d) that, prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Share
certificate) for registration of transfer, the Corporation,
the Rights Agent and any agent of the Corporation or the
Rights Agent may deem and treat the Person in whose name the
Rights Certificate (or, prior to the Separation Time, the
associated Common Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on such
Rights Certificate or the associated Common Share certificate
made by anyone other than the Corporation or the Rights Agent)
for all purposes whatsoever, and neither the Corporation nor
the Rights Agent shall be affected by any notice to the
contrary;
(e) that such holder of Rights has waived its right to receive any
fractional Rights or any fractional Common Shares or other
securities upon exercise of a Right (except as provided
herein);
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(f) that, subject to the provisions of Section 5.4 without the
approval of any holder of Rights or Voting Shares and upon the
sole authority of the Board of Directors acting in good faith,
this Agreement may be supplemented or amended from time to
time as provided herein; and
(g) notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any
liability to any holder of a Right or any other Person as a
result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS
3.1 FLIP-IN EVENT
(a) Subject to Sections 3.1(b) and 5.1, in the event that prior
to the Expiration Time a Flip-in Event occurs, each Right
shall thereafter constitute the right to purchase from the
Corporation, upon exercise thereof in accordance with the
terms hereof, that number of Common Shares of the Corporation
as have an aggregate Market Price on the date of consummation
or occurrence of such Flip-in Event equal to twice the
Exercise Price for an amount in cash equal to the Exercise
Price (such right to be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section
2.3 in the event that, after such date of consummation or
occurrence, an event of a type analogous to any of the events
described in Section 2.3 shall have occurred with respect to
such Common Shares).
(b) Notwithstanding anything in this Agreement to the contrary,
upon the occurrence of any Flip-in Event, any Rights that are
or were Beneficially Owned on or after the earlier of the
Separation Time and the Stock Acquisition Date, or which may
thereafter be Beneficially Owned, by:
(i) an Acquiring Person (or any Affiliate or Associate of
an Acquiring Person or any other Person acting
jointly or in concert with an Acquiring Person or any
Associate or Affiliate of such other Person); or
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(ii) a transferee of Rights, direct or indirect, from an
Acquiring Person (or from any Affiliate or Associate
of an Acquiring Person or any Person acting jointly
or in concert with an Acquiring Person or any
associate or Affiliate thereof) where such a
transferee becomes a transferee concurrently with or
subsequent to the Acquiring Person becoming such in a
transfer that the Board of Directors has determined
is part of a plan, arrangement or scheme 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), that has the
purpose or effect of avoiding clause 3.1(b)(i);
shall become null and void without any further action and any
holder of such Rights (including any transferee of, or other
successor entitled to, such Rights, whether directly or
indirectly) shall thereafter have no right to exercise such
Rights under any provisions of this Agreement and further
shall thereafter not have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement
or otherwise. The holder of any Rights represented by a Rights
Certificate which is submitted to the Rights Agent upon
exercise or for registration of transfer or exchange which
does not contain the necessary certifications set forth in the
Rights Certificate establishing that such Rights are not void
under this Subsection 3.1(b) shall be deemed to be an
Acquiring Person for the purposes of this Subsection 3.1 (b)
and such Rights shall become null and void.
(c) Any Rights Certificate that represents Rights Beneficially
Owned by a Person described in either of subclauses 3.1(b)(i)
or 3.1(b)(ii) or transferred to any Nominee of any such
Person, and any Rights Certificate issued upon transfer,
exchange, replacement or adjustment of any other Rights
Certificate, referred to in this sentence, shall contain or
will be deemed to contain the following legend:
"The Rights represented by this Rights Certificate
were issued to a Person who was an Acquiring Person
or an Affiliate or an Associate of an Acquiring
Person (as such terms are defined in the Rights
Agreement) or acting jointly or in concert with any
of them. This Rights Certificate and the Rights
represented hereby shall be void in the circumstances
specified in Subsection 3.1(b) of the Shareholder
Rights Plan Agreement."
The Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the
imposition of such legend but shall be required to impose such
legend only if instructed to do so in writing by the
Corporation or if a holder fails to certify upon transfer or
exchange in the space provided to do so.
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(d) After the Separation Time, the Corporation shall do all such
acts and things necessary and within its power to ensure
compliance with the provisions of this Section 3.1 including,
without limitation, all such acts and things as may be
required to satisfy the requirements of the Business
Corporations Act, the Securities Act and the securities laws
or comparable legislation in each of the provinces of Canada
and in any other jurisdiction where the Corporation is subject
to such laws and the rules of the stock exchanges or quotation
systems where the Common Shares are listed or quoted at such
time in respect of the issue of Common Shares upon the
exercise of Rights in accordance with this Agreement.
3.2 FIDUCIARY DUTIES OF THE BOARD OF DIRECTORS OF THE CORPORATION
For clarification, it is understood that nothing contained in this
Article 3 shall be considered to affect the obligations of the Board of
Directors to exercise its fiduciary duties. Without limiting the generality of
the foregoing, nothing contained herein shall be construed to suggest or imply
that the Board of Directors shall not be entitled to recommend that holders of
the Voting Shares reject or accept any Take-over Bid or take any other action
including, without limitation, the commencement, prosecution, defence or
settlement of any litigation and the submission of additional or alterative
Take-over Bids or other proposals to the shareholders of the Corporation with
respect to any Takeover Bid or otherwise that the Board of Directors believes is
necessary or appropriate in the exercise of its fiduciary duties.
ARTICLE 4
THE RIGHTS AGENT
4.1 GENERAL
(a) The Corporation hereby appoints the Rights Agent to act as
agent for the Corporation and the holders of the Rights in
accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Corporation
may from time to time appoint such co-rights agents
("Co-Rights Agents") as it may deem necessary or desirable
subject to the prior written approval of the Rights Agent. In
the event the Corporation appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and
Co-Rights Agents shall be as the Corporation may determine
with the written approval of the Rights Agent. The Corporation
agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and
other disbursements reasonably incurred in the administration
and execution of this Agreement and the exercise and
performance of its duties hereunder, including the reasonable
fees and disbursements of counsel and other experts consulted
by the Rights Agent pursuant to Subsection 4.3(a). The
Corporation also agrees to indemnify the Rights Agent, its
officers, directors, employees and agents for, and to
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hold it harmless against, any loss, liability, cost, claim,
action, damage or expense, incurred without negligence, bad
faith or wilful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement,
including the legal costs and expenses, which right to
indemnification will survive the termination of this Agreement
or the removal or resignation of the Rights Agent.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any certificate for Common Shares,
Rights Certificate, certificate for other securities of the
Corporation, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper
Person or Persons.
(c) The Corporation shall inform the Rights Agent in a reasonably
timely manner of events which may materially affect the
administration of this Agreement by the Rights Agent and, at
any time upon request, shall provide to the Rights Agent an
incumbency certificate certifying the then current officers of
the Corporation.
4.2 MERGER, AMALGAMATION, CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or amalgamated or with which it may
be consolidated, or any corporation resulting from any merger,
amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation
succeeding to the shareholder services business of the Rights
Agent or any successor Rights Agent, will be the successor to
the Rights Agent under this Agreement without the execution or
filling of any document or any further act on the part of any
of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 4.4 hereof. In case at the time such
successor Rights Agent succeeds to the agency created by this
Agreement any of the Rights Certificates have been
countersigned but not delivered any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have
not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Rights Certificates
will have the full force provided in the Rights Certificates
and in this Agreement.
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(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name;
and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this
Agreement.
4.3 DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the
Corporation and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may retain and consult with legal counsel
(who may be legal counsel for the Corporation) or such other
experts that the Rights Agent considers necessary to carry out
its duties under this Agreement and the opinion of such
counsel or other expert will be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance
with such opinion; the Rights Agent may also, with the
approval of the Corporation (such approval not to be
unreasonably withheld), consult with such other experts as the
Rights Agent shall consider necessary or appropriate to
properly carry out the duties and obligations imposed under
this Agreement and the Rights Agent shall be entitled to act
and rely in good faith on the advice of any such expert.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems it necessary or desirable that any fact
or matter be proved or established by the Corporation prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a person
believed by the Rights Agent to be the President, Chief
Executive Officer, Chief Financial Officer, a Vice President
or the Secretary or Assistant Secretary of the Corporation and
delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or wilful misconduct.
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(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, and all such statements and
recitals are and will be deemed to have been made by the
Corporation only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Common Share certificate, or
Rights Certificate (except its countersignature thereon) nor
will it be responsible for any breach by the Corporation of
any covenant or condition contained in this Agreement or in
any Rights Certificate; nor will it be responsible for any
change in the exercisability of the Rights (including the
Rights becoming void pursuant to Subsection 3.1(b) hereof or
any adjustment required under the provisions of Section 2.3)
hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to
the exercise of Rights after receipt of the certificate
contemplated by Section 2.3 describing any such adjustment or
any written notice from the Corporation or any holder that a
Person has become an Acquiring Person); nor will it by any act
hereunder be deemed to make any representation or warranty as
to the authorization of any Common Shares to be issued
pursuant to this Agreement or any Rights or as to any Common
Shares, when issued, being duly and validly authorized, issued
and delivered as fully paid and non-assessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any individual believed by the Rights Agent to
be the President, Chief Executive Officer, Chief Financial
Officer, a Vice President or the Secretary or Assistant
Secretary of the Corporation, and to apply to such individuals
for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it
in good faith in accordance with instructions of any such
individual. It is understood that instructions to the Rights
Agent shall, except where circumstances make it impractical or
the Rights Agent otherwise agrees, be given in writing and,
where not in writing, such instructions shall be confirmed in
writing as soon as reasonably practicable after the giving of
such instructions.
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(h) Subject to applicable law, the Rights Agent and any
shareholder or director, officer or employee of the Rights
Agent may buy, sell or deal in Common Shares, Rights or other
securities of the Corporation or become pecuniarily interested
in any transaction in which the Corporation may be interested,
or contract with or lend money to the Corporation or otherwise
act as fully and freely as though it were not the Rights Agent
under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Corporation or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and
the Rights Agent will not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any
such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment
thereof.
4.4 CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties under
this Agreement by giving 60 days' prior written notice (or such lesser notice as
is acceptable to the Corporation) to the Corporation, to each transfer agent of
Common Shares and to the holders of the Rights, all in accordance with Section
5.9 and at the expense of the Corporation. The Corporation may remove the Rights
Agent by giving 30 days' prior written notice to the Rights Agent, to each
transfer agent of the Common Shares and to the holders of the Rights in
accordance with Section 5.9. If the Rights Agent should resign or be removed or
otherwise become incapable of acting, the Corporation will appoint a successor
to the Rights Agent. If the Corporation fails to make such appointment within a
period of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of any Rights (which holder shall, with such notice, submit such
holder's Rights Certificate for inspection of the Corporation), then the holder
of any Rights or the Rights Agent may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent at the Corporation's
expense. Any successor Rights Agent, whether appointed by the Corporation or by
such a court, must be a corporation incorporated under the laws of Canada or a
province thereof and authorized to carry on the business of a trust company in
the Province of Ontario. 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 receipt of any outstanding fees and expenses then
owing, 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
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Common Shares and mail a notice thereof in writing to the holders of the Rights
in accordance with Section 5.9. Failure to give any notice provided for in this
Section 4.4, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
ARTICLE 5
MISCELLANEOUS
5.1 REDEMPTION, WAIVER AND TERMINATION
(a) The Board of Directors acting in good faith may, at any time
prior to the later of the Stock Acquisition Date and the
Separation Time, with prior shareholder approval 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
adjustments provided for in Section 2.3 in the event that an
event of the type analogous to any of the events described in
Section 2.3 shall have occurred (such redemption price being
herein referred to as the "Redemption Price").
(b) The Board of Directors shall waive the application of Section
3.1 in respect of the occurrence of any Flip-in Event if the
Board of Directors has determined, following the Stock
Acquisition Date and prior to the Separation Time, that a
Person became an Acquiring Person by inadvertence and without
any intention to become, or knowledge that it would become, an
Acquiring Person under this Agreement and, in the event that
such a waiver is granted by the Board of Directors, such Stock
Acquisition Date shall be deemed not to have occurred. Any
such waiver pursuant to this Subsection 5.1(b) may only be
given on the condition that such Person, within 10 days after
the foregoing determination by the Board of Directors or such
later date as the Board of Directors may determine (the
"Disposition Date"), has reduced its Beneficial Ownership of
Voting Shares such that the Person is no longer an Acquiring
Person. If the Person remains an Acquiring Person at the Close
of Business on the Disposition Date, the Disposition Date
shall be deemed to be the date of occurrence of a further
Stock Acquisition Date and Section 3.1 shall apply thereto.
(c) In the event that a Person acquires Voting Shares pursuant to
a Permitted Bid or an Exempt Acquisition referred to in
Subsection 5. l(d), then the Board of Directors of the
Corporation shall, immediately upon the consummation of such
acquisition and without further formality, be deemed to have
elected to redeem the Rights at the Redemption Price.
(d) The Board of Directors acting in good faith may, prior to the
occurrence of the relevant Flip-in Event, upon prior written
notice delivered to the Rights Agent,
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determine to waive the application of Section 3.1 to a Flip-in
Event that may occur by reason of a Take-over Bid made by
means of a Take-over Bid circular to all holders of record of
Voting Shares provided that if the Board of Directors waives
the application of Section 3.1 in respect of a Take-over Bid
pursuant to this Subsection 5.1(d), the Board of Directors
shall also be deemed to have waived the application of Section
3.1 in respect of any other Take-over Bid made by means of a
circular to all holders of record of Voting Shares prior to
the expiry of any Take-over Bid in respect of which a waiver
is, or is deemed to have been, granted under this Subsection
5.1(d).
(e) The Board of Directors may, prior to the Close of Business on
the eighth Business Day following a Stock Acquisition Date or
such later Business Day as they may from time to time
determine, upon prior written notice delivered to the Rights
Agent, waive the application of Section 3.1 to the related
Flip-in Event, provided that the Acquiring Person has reduced
its Beneficial Ownership of Voting Shares (or has entered into
a contractual arrangement with the Corporation, acceptable to
the Board of Directors, to do so within 10 days of the date on
which such contractual arrangement is entered into or such
later date as the Board of Directors may determine) such that
at the time the waiver becomes effective pursuant to this
Subsection 5.1(e) such Person is no longer an Acquiring
Person. In the event of such a waiver becoming effective prior
to the Separation Time, for the purposes of this Agreement,
such Flip-in Event shall be deemed not to have occurred.
(f) Where a Take-over Bid that is not a Permitted Bid Acquisition
is withdrawn or otherwise terminated after the Separation Time
has occurred and prior to the occurrence of a Flip-in Event,
or if the Board of Directors grants a waiver under Subsection
5.1 (e) after the Separation Time, the Board of Directors may
elect to redeem all the outstanding Rights at the Redemption
Price. Upon the Rights being redeemed pursuant to this
Subsection 5.1(f), all the provisions of this Agreement shall
continue to apply as if the Separation Time had not occurred
and Rights Certificates representing the number of Rights held
by each holder of record of Common Shares at the Separation
Time had not been mailed to each such holder, for all purposes
of this Agreement the Separation Time shall be deemed not to
have occurred and the Corporation shall be deemed to have
issued replacement Rights to the holders of its then
outstanding Common Shares.
(g) If the Board of Directors is deemed under Subsection 5.1(c) to
have elected or elects under Subsection 5.1(a) to redeem the
Rights, the right to exercise the Rights will thereupon,
without further action and without notice, terminate and the
only right thereafter of the holders of Rights shall be to
receive the Redemption Price.
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(h) Within 10 days after the Board of Directors is deemed under
Subsection 5.1(c) to have elected or elects under Subsection
5.1(a) or (f) to redeem the Rights, the Corporation shall give
notice of redemption to the holders of the then outstanding
Rights by mailing such notice to each such holder at his last
address as it appears upon the registry books of the Rights
Agent or, prior to the Separation Time, on the registry books
of the transfer agent for the Voting Shares. Any notice which
is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the
payment of the Redemption Price will be made.
5.2 EXPIRATION
No person will have any rights pursuant to this Agreement or in respect
of any Right after the Expiration Time, except in respect of any right to
receive cash, securities or other property which has accrued at the Expiration
Time and except as specified in Subsections 4.1(a) and 4.1(b) hereof.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the number or kind or class of
shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.
5.4 SUPPLEMENTS AND AMENDMENTS
(a) Subject to Subsections 5.4(b) and (c) and this Subsection
5.4(a), the Corporation may from time to time amend, vary or
delete any of the provisions of this Agreement and the Rights
provided that no amendment, variation or deletion made on or
after the date of the meeting of Shareholders at which the
resolution referred to in Section 5.21 is to be considered
shall be made without the prior consent of the holders of the
Rights, given as provided in Subsection 5.4(b) below, except
that amendments, variations or deletions made for any of the
following purposes shall not require such prior approval but
shall be subject to subsequent ratification in accordance with
Subsection 5.4(b):
(i) in order to make such changes as are necessary in
order to maintain the validity of this Agreement and
the Rights as a result of any change in any
applicable legislation, regulations or rules; or
(ii) in order to make such changes as are necessary in
order to cure any clerical or typographical error.
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(b) Any amendment, variation or deletion made by the Board of
Directors pursuant to Subsection 5.4(a) shall:
(i) if made prior to the Separation Time, be submitted to
the shareholders of the Corporation at the next
meeting of shareholders and the shareholders may, by
resolution passed by a majority of the votes cast by
Independent Shareholders who vote in respect of such
amendment, variation or deletion, confirm or reject
such amendment or supplement; or
(ii) if made after the Separation Time, be submitted to
the holders of Rights at a meeting to be held on a
date not later than the date of the next meeting of
shareholders of the Corporation and the holders of
Rights may, by resolution passed by a majority of the
votes cast by the holders of Rights which have not
become void pursuant to Subsection 3. l(b) who vote
in respect of such amendment, variation or deletion,
confirm or reject such amendment or supplement.
Any amendment, variation or deletion pursuant to Subsection
5.4(a) shall be effective only when so consented to by the
holders of Voting Shares or Rights, as applicable (except in
the case of an amendment, variation or deletion referred to in
any of Clauses 5.4(a)(i) or (ii), which shall be effective
from the date of the resolution of the Board of Directors
adopting such amendment, variation or deletion and shall
continue in effect until it ceases to be effective (as in this
paragraph described) and, where such amendment, variation or
deletion is confirmed, it shall continue in effect in the form
so confirmed). If an amendment, variation or deletion pursuant
to Clause 5.4(a)(i) or (ii) is rejected by the shareholders or
the holders of Rights or is not submitted to the shareholders
or holders of Rights as required, then such amendment,
variation or deletion shall cease to be effective from and
after the termination of the meeting at which it was rejected
or to which it should have been but was not submitted or from
and after the date of the meeting of holders of Rights that
should have been but was not held, and no subsequent
resolution of the Board of Directors to amend, vary or delete
any provision of this Agreement to substantially the same
effect shall be effective until confirmed by the shareholders
or holders of Rights, as the case may be.
(c) For greater certainty, (i) no amendment, variation or deletion
to the provisions of Article 4 shall be made except with the
concurrence of the Rights Agent thereto, and (ii) neither the
exercise by the Board of Directors of any power or discretion
conferred on it hereunder nor the making by the Board of
Directors of any
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determination or the granting of any waiver it is permitted to
make or give hereunder shall constitute an amendment,
variation or deletion of the provisions of this Agreement or
the Rights, for purposes of this Section 5.4 or otherwise.
(d) The approval, confirmation or consent of the holders of Rights
with respect to any matter arising hereunder shall be deemed
to have been given if the action requiring such approval,
confirmation or consent is authorized by the affirmative votes
of the holders of Rights present or represented at and
entitled to be voted at a meeting of the holders of Rights and
representing a majority of the votes cast in respect thereof.
For the purposes hereof, each outstanding Right (other than
Rights which are void pursuant to the provisions hereof or
which, prior to the Separation Time, are held otherwise than
by Independent Shareholders) shall be entitled to one vote,
and the procedures for the calling, holding and conduct of the
meeting shall be those, as nearly as may be, which are
provided in the Corporation's Bylaws and the Business
Corporations Act with respect to meetings of shareholders of
the Corporation.
(e) The Corporation shall be required to provide the Rights Agent
with notice in writing of any such amendment, recission or
variation to this Agreement as referred to in this Section 5.4
within 5 days of effecting such amendment, variation or
deletion.
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Corporation will not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence
fractional Rights. After the Separation Time there shall be
paid, in lieu of such fractional Rights, to the registered
holders of the Rights Certificates with regard to which
fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the Market Price of a whole
Right. The Rights Agent shall have no obligation to make
payments in lieu of fractional Rights unless the Corporation
shall have provided the Rights Agent with the necessary funds
to pay in full all amounts payable in accordance with section
2.2(c),
(b) The Corporation shall not be required to issue fractional
Common Shares upon exercise of the Rights or to distribute
certificates that evidence fractional Common Shares. In lieu
of issuing fractional Common Shares, the Corporation shall pay
to the registered holder of Rights Certificates at the time
such Rights are exercised as herein provided, an amount in
cash equal to the same fraction of the Market Price of one
Common Share at the date of such exercise. The Rights Agent
shall have no obligation to make payments in lieu of
fractional Common Shares unless the Corporation shall have
provided the Rights Agent with the necessary funds to pay in
full all amounts payable in accordance with section 2.2(c).
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5.6 RIGHTS OF ACTION
Subject to the terms of this Agreement, rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any other
Rights may, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Corporation to enforce, or otherwise
act in respect of, such holder's right to exercise such holder's Rights in the
manner provided in this Agreement and in such holder's Rights Certificate.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER
No holder, as such, of any Rights or Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
Common Shares or any other securities which may at any time be issuable on the
exercise of Rights, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights, as such, any
of the rights of a shareholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 5.8 hereof) or to receive dividends or subscription rights
or otherwise, until such Rights shall have been exercised in accordance with the
provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS
In case the Corporation proposes after the Separation Time and prior to
the Expiration Time to effect the liquidation, dissolution or winding up of the
Corporation or the sale of all or substantially all of the Corporation's assets,
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 5.9 hereof, a notice of such proposed action, which
shall specify the date on which such liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action by the Corporation.
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5.9 NOTICES
Notices or demands authorized or required by this Agreement to be given
or made to or by the Rights Agent, the holder of any Rights or the Corporation
will be sufficiently given or made and shall be deemed to be received if
delivered or sent by first-class mail, postage prepaid, or by fax machine or
other means of printed telecommunication, charges prepaid and confirmed in
writing by mail or delivery, addressed (until another address is filed in
writing with the Rights Agent or the Corporation, as applicable), as follows:
(a) if to the Corporation:
GSI Lumonics Inc.
000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: Chief financial Officer
Facsimile No. (000) 000-0000
(b) if to the Rights Agent:
Montreal Trust company of Canada
000 Xxxxx Xxxxxx West
8th Floor
Stock Xxxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Senior Manager, Client Services
Facsimile No. (000) 000-0000
(c) if to the holder of any Rights, to the address of such holder
as it appears on the registry books of the Rights Agent or,
prior to the Separation Time, on the registry books of the
Corporation for the Common Shares.
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5.10 COSTS OF ENFORCEMENT
The Corporation agrees that if the Corporation or any other Person the
securities of which are purchasable upon exercise of Rights fails to fulfil any
of its obligations pursuant to this Agreement, then the Corporation or such
Person will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce his rights
pursuant to any Rights or this Agreement.
5.11 REGULATORY APPROVALS
Any obligation of the Corporation or action or event contemplated by
this Agreement, shall be subject to applicable law and to the receipt of any
requisite approval or consent from any governmental or regulatory authority.
Without limiting the generality of the foregoing, any issuance or delivery of
debt or equity securities (other than non-convertible debt securities) of the
Corporation upon the exercise of Rights and any amendment to this Agreement
shall be subject to any required prior consent of the stock exchange(s) on which
the Corporation is from time to time listed or has been listed during the six
months prior to such amendment.
5.12 DECLARATION AS TO NON-CANADIAN AND NON-U.S. HOLDERS
If in the opinion of the Board of Directors (who may rely upon the
advice of counsel), any action or event contemplated by this Agreement would
require compliance with the securities laws or comparable legislation of a
jurisdiction outside Canada and the United States of America, its territories
and possessions, the Board of Directors acting in good faith may take such
actions as it may deem appropriate to ensure that such compliance is not
required, including without limitation establishing procedures for the issuance
to a Canadian resident Fiduciary of Rights or securities issuable on exercise of
Rights, the holding thereof in trust for the Persons entitled thereto (but
reserving to the Fiduciary or to the Fiduciary and the Corporation, as the
Corporation may determine, absolute discretion with respect thereto) and the
sale thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. In no event shall the Corporation or the Rights Agent be
required to issue or deliver Rights or securities issuable on exercise of Rights
to Persons who are citizens, residents or nationals of any jurisdiction other
than Canada and a province or territory thereof and the United States of America
and any state thereof in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes.
5.13 SUCCESSORS
All the covenants and provisions of this Agreement by or for the
benefit of the Corporation or the Rights Agent shall bind and enure to the
benefit of their respective successors and assigns hereunder.
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5.14 BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person
other than the Corporation, the Rights Agent and the holders of the Rights any
legal or equitable right, remedy or claim under this Agreement; this Agreement
shall be for the sole and exclusive benefit of the Corporation, the Rights Agent
and the holders of the Rights.
5.15 SHAREHOLDER REVIEW
At or prior to the first annual meeting of shareholders of the
Corporation following the third anniversary of the date of this Agreement,
provided that a Flip-in Event has not occurred prior to such time, the Board of
Directors shall submit a resolution ratifying the continued existence of this
Agreement to the Independent Shareholders for their consideration and, if
thought advisable, approval. Unless a majority of the votes cast by Independent
Shareholders who vote in respect of such resolution are voted in favour of the
continued existence of this Agreement, the Board of Directors shall, immediately
upon the confirmation by the chairman of such shareholders' meeting of the
result of the vote on such resolution and without further formality, be deemed
to have elected to redeem the Rights at the Redemption Price.
5.16 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS
All actions, calculations, interpretations and determinations
(including all omissions with respect to the foregoing) which are done or made
by the Board of Directors, in good faith, (x) may be relied on by the Rights
Agent, and (y) shall not subject the Board of Directors to any liability to the
holders of the Rights or to any other parties.
5.17 GOVERNING LAW
This Agreement and the Rights issued hereunder shall be deemed to be a
contract made under the laws of the Province of Ontario and for all purposes
will be governed by and construed in accordance with the laws of such province
applicable to contracts to be made and performed entirely within such province.
5.18 LANGUAGE
Les parties aux presentes ont exige que la presente convention ainsi
que tons les documents et avis qui s'y rattachent et ou qui en coulent soient
redieds en langue anglaise. The parties hereto have required that this Agreement
and all documents and notices related thereto and or resulting therefrom be
drawn up in English.
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5.19 COUNTERPARTS
This Agreement may be executed in any number of counterparts and each
of such counterparts will for all purposes be deemed to be an original, and all
such counterparts shall together constitute one and the same instrument.
5.20 SEVERABILITY
If any term or provision hereof or the application thereof to any
circumstance is, in any jurisdiction and to any extent, invalid or
unenforceable, such term or provision will be ineffective only to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining terms and provisions hereof or the application of
such term or provision to circumstances other than those as to which it is held
invalid or unenforceable.
5.21 EFFECTIVE DATE
This Agreement is effective as of the Effective Date. If the Rights
Plan is not confirmed by resolution passed by a majority of the votes cast by
Independent Shareholders who vote in respect of such Rights Plan at a meeting to
be held not later than October 8, 1999 then this Agreement and any outstanding
Rights shall be of no further force and effect from the earlier of (a) the date
of the meeting, and (b) October 8, 1999.
5.22 TIME OF THE ESSENCE
Time shall be of the essence hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective April 12, 1999.
GSI LUMONICS INC.
By: ___________________________________
By: ___________________________________
MONTREAL TRUST COMPANY OF CANADA
By: ___________________________________
By: ___________________________________
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EXHIBIT A
Form of Rights Certificate
Certificate No. Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
CORPORATION, ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS
PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN
SUBSECTION 3. I (b) OF SUCH AGREEMENT), RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON, CERTAIN RELATED PARTIES OF AN
ACQUIRING PERSON OR A TRANSFEREE OF AN ACQUIRING PERSON OR ANY
SUCH RELATED PARTIES WILL BECOME VOID WITHOUT FURTHER ACTION.
RIGHTS CERTIFICATE
This certifies that ______________ is the registered holder of the
number of Rights set forth above, each of which entitles the registered holder
thereof, subject to the terms, provisions and conditions of the Shareholder
Rights Plan Agreement made as of April 12, 1999 (the "Rights Agreement")
between GSI Lumonics Inc., a corporation existing under the laws of New
Brunswick (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 and prior to the Expiration Time (as such terms are defined in the Rights
Agreement), one fully paid common share of the Corporation (a "Common Share") at
the Exercise Price referred to below, upon presentation and surrender of this
Rights Certificate, together with the Form of Election to Exercise appropriately
completed and duly executed, to the Rights Agent at its principal office in
Toronto. Until adjustment thereof in certain events as provided in the Rights
Agreement, the Exercise Price shall be $200.00 per Right (payable by certified
cheque, bankers draft or money order payable to the order of the Corporation).
The number of Common Shares which may be purchased for the Exercise Price is
subject to adjustment as set forth in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holder of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.
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This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent in Toronto, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement the Rights evidenced
by this Certificate may be redeemed by the Corporation at a redemption price of
$0.0001 per Right subject to adjustment in certain events.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Common
Shares or any other securities which may at any time be issuable upon the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
any meeting or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation.
Date: ___________________________
o
Per: ______________________________
Per: ______________________________
Countersigned:
o TRUST COMPANY, in the City of Toronto
Per: ______________________________
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FORM OF ELECTION TO EXERCISE
The undersigned hereby irrevocably elects to exercise _________________
whole Rights represented by this Rights Certificate to purchase the Common
Shares issuable upon the exercise of such Rights and requests that certificates
for such Common Shares be issued in the name of and delivered to:
Rights Certificate No.
------------------------------------
Name
------------------------------------
Address
------------------------------------
City and Province
------------------------------------
Social Insurance No. or other taxpayer
identification number
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
------------------------------------
Name
------------------------------------
Address
------------------------------------
City and Province
------------------------------------
Social Insurance No. or other taxpayer
identification number
-52-
Date: ________________________ _________________________________________
Signature
Signature Guaranteed
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signature must be guaranteed by a Canadian chartered bank or trust
company, a member of a recognized stock exchange in Canada or a member of the
Securities Transfer Association Medallion (Stamp) Program.
(TO BE COMPLETED BY THE HOLDER IF TRUE)
The undersigned hereby represents, for the benefit of the Corporation
and all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or by an Affiliate or Associate
of an Acquiring Person, any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of any such other Person (as such
terms are defined in the Rights Agreement).
----------------------------------
Signature
NOTICE
IN THE EVENT THAT THE CERTIFICATIONS SET FORTH ABOVE IN THE FORM OF
ELECTION TO EXERCISE AND ASSIGNMENT ARE NOT COMPLETED, THE CORPORATION SHALL
DEEM THE BENEFICIAL OWNER OF THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
TO BE AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND, ACCORDINGLY,
SUCH RIGHTS SHALL BE NULL AND VOID.
-53-
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
--------------------------------------------------------------------------------
(Please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein.
Date: ______________________________ ___________________________________
Signature
____________________________________
(Signature Guaranteed
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signature must be guaranteed by a Canadian chartered bank or trust
company, a member of a recognized stock exchange in Canada or a member of the
Securities Transfer Association Medallion (Stamp) Program.
(TO BE COMPLETED BY THE ASSIGNOR IF TRUE)
The undersigned hereby represents, for the benefit of the Corporation
and all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not and, to the knowledge of the undersigned have never
been, Beneficially Owned by an Acquiring Person or by an Affiliate or Associate
of an Acquiring Person, any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of any such other Person (as such
terms are deemed in the Rights Agreement).
----------------------------------------
Signature
----------------------------------------
(Please print name below signature)
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NOTICE
IN THE EVENT THAT THE CERTIFICATIONS SET FORTH ABOVE IN THE FORM OF
ELECTION TO EXERCISE AND ASSIGNMENT ARE NOT COMPLETED, THE CORPORATION SHALL
DEEM THE BENEFICIAL OWNER OF THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
TO BE AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND, ACCORDINGLY,
SUCH RIGHTS SHALL TO BE NULL AND VOID.
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