Exhibit 4.1
SHAREHOLDER RIGHTS PLAN AGREEMENT
BETWEEN
COGNICASE INC.
- and -
NATIONAL BANK TRUST INC.
AS RIGHTS AGENT
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DATED AS OF DECEMBER 19, 2002
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TABLE OF CONTENTS
PAGE
ARTICLE 1 INTERPRETATION.....................................................................2
1.1 CERTAIN DEFINITIONS................................................................2
1.2 CURRENCY..........................................................................13
1.3 NUMBER AND GENDER.................................................................13
1.4 SECTIONS AND HEADINGS.............................................................13
1.5 STATUTORY REFERENCES..............................................................13
1.6 DETERMINATION OF PERCENTAGE OWNERSHIP.............................................14
1.7 ACTING JOINTLY OR IN CONCERT......................................................14
1.8 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES..........................................14
ARTICLE 2 THE RIGHTS........................................................................15
2.1 LEGEND ON COMMON SHARE CERTIFICATES...............................................15
2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS..................16
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS...................................19
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE...............................................24
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES.............24
2.6 REGISTRATION, TRANSFER AND EXCHANGE...............................................25
2.7 MUTILATED, LOST, STOLEN AND DESTROYED RIGHTS CERTIFICATES.........................25
2.8 PERSONS DEEMED OWNERS.............................................................26
2.9 DELIVERY AND CANCELLATION OF CERTIFICATES.........................................26
2.10 AGREEMENT OF RIGHTS HOLDERS.......................................................26
ARTICLE 3 ADJUSTMENTS TO THE RIGHTS.........................................................27
3.1 FLIP-IN EVENT.....................................................................27
3.2 FIDUCIARY DUTIES OF THE BOARD OF DIRECTORS OF THE CORPORATION.....................29
ARTICLE 4 THE RIGHTS AGENT..................................................................29
4.1 GENERAL...........................................................................29
4.2 MERGER, AMALGAMATION, CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.............30
4.3 DUTIES OF RIGHTS AGENT............................................................31
4.4 CHANGE OF RIGHTS AGENT............................................................33
ARTICLE 5 MISCELLANEOUS.....................................................................33
5.1 REDEMPTION, WAIVER AND TERMINATION................................................33
5.2 EXPIRATION........................................................................35
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES...............................................35
5.4 SUPPLEMENTS AND AMENDMENTS........................................................35
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES...........................................35
5.6 RIGHTS OF ACTION..................................................................36
5.7 HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER.........................................36
5.8 NOTICE OF PROPOSED ACTIONS........................................................36
5.9 NOTICES...........................................................................37
5.10 COSTS OF ENFORCEMENT..............................................................37
PAGE
5.11 DECLARATION AS TO NON-CANADIAN AND NON-U.S. HOLDERS...............................38
5.12 SUCCESSORS........................................................................38
5.13 BENEFITS OF THIS AGREEMENT........................................................38
5.14 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS...............................38
5.15 GOVERNING LAW.....................................................................38
5.16 LANGUAGE..........................................................................39
5.17 COUNTERPARTS......................................................................39
5.18 SEVERABILITY......................................................................39
5.19 EFFECTIVE DATE....................................................................39
5.20 TERMINATION OF AGREEMENT..........................................................39
5.21 TIME OF THE ESSENCE...............................................................39
SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT dated as of December 19, 2002.
BETWEEN: COGNICASE INC., 0xx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxxxx XX
X0X 0X0
(the "CORPORATION")
AND: NATIONAL BANK TRUST INC., 16th Floor, 0000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx XX X0X 0X0
(the "RIGHTS AGENT")
WHEREAS:
A. CGI Group Inc. has announced its intention to make an unsolicited take-over
bid for the securities of the Corporation.
B. The Board of Directors of the Corporation, upon the unanimous
recommendation of a special committee of independent directors, has
determined that it is advisable and in the best interests of the
Corporation to adopt a shareholder rights plan (the "RIGHTS PLAN") to (a)
ensure, to the extent possible, that the Board of Directors has adequate
time to consider and evaluate any unsolicited bid for the Corporation's
securities, including that proposed by CGI Group Inc., (b) provide the
Board of Directors with adequate time to identify, develop and negotiate
value-enhancing alternatives, if considered appropriate, to any such
unsolicited bid, (c) encourage the fair treatment of shareholders in
connection with any take-over offer for the Corporation's securities, and
(d) generally to prevent any person from acquiring ownership (or the right
to acquire ownership) of or the right to vote more than 20% of the
outstanding common shares of the Corporation (or, where such person already
owns or has the right to vote more than 20% of such outstanding common
shares at the date hereof, any additional common shares) while the process
undertaken by the Board of Directors is ongoing, or entering into
arrangements or relationships that have a similar effect.
C. In order to implement the Rights Plan, the Board of Directors has:
(a) authorized and declared a distribution on the Effective Date of one
right (a "RIGHT") in respect of each Common Share outstanding 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
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(c) authorized the issuance of Rights Certificates to holders of Rights
pursuant to the terms and subject to the conditions set forth herein.
D. 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.
E. 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 the 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; or
(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 percent
of the Voting Shares then outstanding (otherwise than pursuant to a
Voting Share Reduction, a Permitted Bid Acquisition, an Exempt
Acquisition or a Pro Rata Acquisition of any combination thereof),
then, as of the date that such Person becomes a Beneficial Owner of
such additional Voting Shares, such Person shall become an "ACQUIRING
PERSON"; or
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(iii) an underwriter or member of a banking or selling group acting in such
capacity 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" shall mean, when used to indicate a relationship with a
specified Person, a Person that directly or indirectly controls, or is
controlled by, or is under common control with, such specified Person.
(c) "ASSOCIATE" shall mean, when used to indicate a relationship with a
specified Person, (i) a spouse of that Person, (ii) any Person of the same
or opposite sex with whom that Person is living in a conjugal relationship
outside marriage, (iii) a child of that Person, (iv) another relative of
that Person if that relative has the same residence as that Person or (v)
any relative of such spouse, child or other Person referred to in the
immediately preceding Clauses (i), (ii), (iii) or (iv) above, if that
relative has the same residence as the 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 payment) pursuant to any Convertible Security, agreement,
arrangement, pledge or understanding, whether or not in writing (other
than (A) customary agreements with and between underwriters and/or
banking group and/or selling group members with respect to a
distribution of securities or (B) pledges of securities in the
ordinary course of the pledgee's business); or
(iii) any securities that are Beneficially Owned within the meaning of
Clause (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 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 such deposited or tendered security is taken up or
paid for, whichever shall first occur;
(v) because such security has been agreed to be deposited or tendered
pursuant to a Lock-up Agreement until such deposited or tendered
security is taken up or paid for, whichever shall first occur;
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(vi) because (A) such Person or any of the Affiliates or Associates of 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 and such security is held by the Plan Administrator
or the Plan in the ordinary course of such Plan Administrator's or
Plan's activities; (D) such Person (the "CROWN AGENT") is established
by statute for purposes that include, and the ordinary business or
activity of such Person includes, the management of investment funds
for employee benefit plans, pension plans or insurance plans of
various public bodies and such security is held by the Crown Agent in
the ordinary course of the management of such investment funds; or (E)
such Person is a Plan and such security is held by the Plan in the
ordinary course of such Plan's activities; 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 a current intention to
make a Take-over Bid, alone or by acting jointly or in concert with
any other Person, other than an Offer to Acquire Voting Shares or
other securities (x) pursuant to a distribution by the Corporation or
(y) by means of a Permitted Bid, or (z) by means of market
transactions made in the ordinary course of business of such Person
(including pre-arranged 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;
(vii) 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 security;
(viii) 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
because such Person is a Plan and such security is owned at law or in
equity by the Plan Administrator; or
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(ix) because such Person is the registered holder of securities as a result
of carrying on the business of, or acting as, a nominee of a
securities depositary.
For purposes of this Agreement, in determining the percentage of the
outstanding Voting Shares with respect to which a Person is, or is deemed
to be, the Beneficial Owner, any unissued Voting Shares as to which such
Person is deemed the Beneficial Owner pursuant to this Subsection 1.1(d)
shall be deemed outstanding.
(e) "BOARD OF DIRECTORS" shall mean the board of directors of the Corporation
or any duly constituted and empowered committee thereof.
(f) "BUSINESS DAY" shall mean any day, other than a Saturday or Sunday or a day
on which banking institutions in Montreal, Quebec are authorized or
obligated by law to close.
(g) "CANADA BUSINESS CORPORATIONS ACT" shall mean the CANADA BUSINESS
CORPORATIONS ACT (Canada), R.S.C. 1985, c. C-44, as amended and the
regulations thereunder, as from time to time in effect.
(h) "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed in United
States dollars shall mean on any date 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
Montreal, Quebec (or after the Separation Time, the principal office of the
Rights Agent in Montreal, Quebec) 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
on such date 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, if a calendar year has not been
completed prior to the date of determination, during such shorter
period as the Board of Directors acting in good faith determines to be
appropriate); or
(ii) if for any reason none of such prices is available on such date or the
securities are not listed or admitted to trading on a stock exchange
or a national securities quotation system on such date, 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;
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provided, however, that (A) if for any reason none of such prices is
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 at the request of the Board of Directors by a
nationally or internationally recognized investment dealer or investment
banker; and (B) if the Closing Price so determined is expressed in United
States dollars, such amount shall be converted to the Canadian Dollar
Equivalent.
(k) "COMMON SHARES" means the common shares in the share capital of the
Corporation as constituted at the Record Time, 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
interests) 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 interests 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) that ultimately controls such first mentioned
other Person.
(l) "COMPETING PERMITTED BID" means a Take-over Bid that:
(i) is made after a Permitted Bid has been made and prior to the expiry of
the Permitted Bid;
(ii) satisfies all components of the definition of a Permitted Bid other
than the requirement in Subclause (ii)(A)(x) thereof; and
(iii) contains, and the take-up and payment for securities tendered or
deposited thereunder is subject to, irrevocable and unqualified
conditions that no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid prior to the Close of Business on a date
that is no earlier than the later of (A) 35 days (or such longer
minimum period of days that a Take-over Bid must remain open for
acceptance under the Securities Act) after the date of the Take-over
Bid; and (B) the 53rd 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 or two or
more Persons acting jointly or in concert 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 or two or
more Persons acting jointly or in concert; and
(ii) the votes carried by such securities are entitled, if exercised, to
elect a majority of the board of directors of such body corporate;
and "CONTROLS", "CONTROLLING" "UNDER COMMON CONTROL WITH" shall be
interpreted accordingly.
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(n) "CONVERTIBLE SECURITY" means, with respect to any security, a security
convertible into or exercisable or exchangeable for the first-mentioned
security including, without limitation, options and warrants.
(o) "CO-RIGHTS AGENTS" shall have the meaning ascribed thereto in Subsection
4.1(a).
(p) "DISPOSITION DATE" shall have the meaning ascribed thereto in Subsection
5.1(b).
(q) "EFFECTIVE DATE" shall mean December 19, 2002.
(r) "ELECTION TO EXERCISE" shall have the meaning ascribed thereto in
Subsection 2.2(d).
(s) "EXEMPT ACQUISITION" means a share acquisition in respect of which the
Board of Directors has waived the application of Section 3.1 pursuant to
Subsections 5.1(b), 5.1(d) or 5.1(e).
(t) "EXERCISE PRICE" shall mean, as of any date from and after the Separation
Time, the price at which a holder of a Right may purchase the securities
issuable upon exercise of one whole Right which, subject to adjustment in
accordance with the terms hereof, shall be $20.00.
(u) "EXPIRATION TIME" shall mean the earlier of (i) the Termination Time; (ii)
5:00 p.m. (Montreal time) on March 26, 2003; or (iii) 5:00 p.m. on the date
of the next annual meeting of the shareholders of the Corporation.
(v) "FIDUCIARY" shall mean, when acting in that capacity, a trust company
registered under the trust company legislation of Canada or any province
thereof, a trust company organized under the laws of any state of the
United States, a portfolio manager registered under the securities
legislation of one or more provinces of Canada or an investment adviser
registered under the United States Investment Advisers Act of 1940 or any
other securities legislation of the United States or any state of the
United States.
(w) "FLIP-IN EVENT" shall mean a transaction or event in or pursuant to which
any Person becomes an Acquiring Person.
(x) "HOLDER" shall have the meaning ascribed thereto in Section 2.8.
(y) "INDEPENDENT SHAREHOLDERS" shall mean holders of outstanding Voting Shares,
other than Voting Shares Beneficially Owned by (i) any Acquiring Person or
Offeror other than a Person who is deemed not to Beneficially Own such
Voting Shares by reason of Clause 1.1(d)(vi) hereof; (ii) any Person acting
jointly or in concert with such Acquiring Person or Offeror; (iii) any
Associate or Affiliate of such Acquiring Person or Offeror; and (iv) any
employee benefit plan, stock purchase plan, deferred profit sharing plan
and any similar plan or trust for the benefit of employees of the
Corporation or a corporation controlled by 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.
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(z) "LOCK-UP AGREEMENT" means an agreement between an Offeror or any Affiliate
or Associate of an Offeror and one or more holders of Voting Shares (each
such holder herein referred to as a "LOCKED-UP PERSON") who are not
Affiliates or Associates of the Offeror and who are not, other than by
virtue of entering into such agreement, acting jointly or in concert with
the Offeror, the terms of which are publicly disclosed 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 Locked-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 Offeror or any Affiliates
or Associates of the Offeror or any other Person acting jointly or in
concert with the Offeror provided that:
(i) the Lock-up Agreement permits the Locked-up Person to withdraw its
Voting Shares from the Lock-up Agreement and the Lock-up Bid in order
to deposit or tender the Voting Shares to another Take-over Bid or to
support another transaction prior to the Voting Shares being taken up
and paid for under the Lock-up Bid:
(A) at a price or value per Voting Share that exceeds the price or
value per Voting Shares offered under the Lock-up Bid; or
(B) 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
(C) at such price or value that exceeds by as much as or more than an
amount (the "SPECIFIED AMOUNT") specified in the Lock-up
Agreement the offering price for each Voting Share contained in
or proposed to be contained in the Lock-up Bid, provided that the
Specified Amount is not greater than 7% of the offering price
contained in or proposed to be contained in the Lock-up Bid;
for greater certainty, the Lock-up 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; and
(ii) no "break-up" fees, "topping" fees, penalties, expenses or other
amounts that exceed in aggregate the greater of:
(A) 2 1/2% of the price or value of the aggregate consideration
payable under the Lock-up Bid to a Locked-up Person; and
(B) 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
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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 tendered thereto, in order to
deposit or tender such Voting Shares to another Take-over Bid or
support another transaction.
(aa) "MARKET PRICE" per security of any securities on any date of determination
shall mean the average of the daily Closing Prices per security of such
securities on each of the 20 consecutive Trading Days through and including
the Trading Day immediately preceding such date of determination; provided,
however, that if an event of a type analogous to any of the events
described in Section 2.3 hereof shall have caused any Closing Price used to
determine the Market Price on any Trading Day not to be fully comparable
with the Closing Price on the Trading Day immediately preceding such date
of determination, each such Closing Price so used shall be appropriately
adjusted in a manner analogous to the applicable adjustment provided for in
Section 2.3 hereof (as determined by the Board of Directors acting in good
faith) in order to make it fully comparable with the Closing Price on the
Trading Day immediately preceding such date of determination.
(bb) "NOMINEE" shall have the meaning ascribed thereto in Subsection 2.2(c).
(cc) "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.
(dd) "OFFEROR" shall mean a Person who has announced a current intention to
make, or who is making, a Take-over Bid.
(ee) "OFFEROR'S SECURITIES" shall mean the Voting Shares Beneficially Owned on
the date of a Take-over Bid by an Offeror.
(ff) "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 for all Voting Shares and to all holders of
record of Voting Shares, 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:
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(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 53 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 then
outstanding which are held by Independent Shareholders;
(B) unless the Take-over Bid is withdrawn, Voting Shares may be
deposited pursuant to such Take-over Bid at any time prior to the
Close of Business on the date of the first take-up of or payment
for Voting Shares;
(C) any Voting Shares deposited pursuant to the Take-over Bid may be
withdrawn until taken up and paid for; and
(D) in the event that the requirement set forth in Subclause (A)(y)
of this Clause 1.1(ff)(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;
provided that, should a Permitted Bid cease to be a Permitted Bid
because it ceases to meet any of the requirements referred to above or
is withdrawn, any acquisition of Voting Shares made pursuant to such
Permitted Bid, including any acquisition of Voting Shares made prior
to such time, should cease to be a Permitted Bid Acquisition.
For purposes of this Agreement, the term "PERMITTED BID" shall include
a Competing Permitted Bid.
(gg) "PERMITTED BID ACQUISITION" means an acquisition of Voting Shares made
pursuant to a Permitted Bid.
(hh) "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.
(ii) "PRO RATA ACQUISITION" means an acquisition by a Person of Voting Shares
pursuant to (i) any dividend reinvestment plan, such purchase plan or other
plan of the Corporation made available to all holders of Voting Shares
(other than holders resident in any jurisdiction where participation in
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 or exercise 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
- 11 -
of Voting Shares or Convertible Securities in respect thereof offered
pursuant to a prospectus or by way of a private placement by the
Corporation or a conversion or exchange of any such Convertible Security,
provided that 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.
(jj) "RECORD TIME" means on the Close of Business on the Effective Date.
(kk) "REDEMPTION PRICE" shall have the meaning attributed thereto in Subsection
5.1(a).
(ll) "REGULAR CASH DIVIDEND" means cash dividends paid on the Common Shares in
any fiscal year of the Corporation to the extent that such cash dividends
do not exceed in the aggregate in any fiscal year 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;
(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; and
(iii) 100% of the aggregate consolidated net income of the Corporation,
before extraordinary items, for its immediately preceding fiscal year.
(mm) "RIGHT" shall mean a right to purchase a Common Share pursuant to the terms
and subject to the conditions set forth herein.
(nn) "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.
(oo) "RIGHTS REGISTER" and "RIGHTS REGISTRAR" shall have the respective meanings
ascribed thereto in Subsection 2.6(a).
(pp) "SECURITIES ACT" shall mean the SECURITIES ACT, R.S.Q., c. V.-1.1, as
amended and the regulations, rules and policy statements made thereunder,
as from time to time in effect.
(qq) "SEPARATION TIME" means
(i) the Close of Business on the 10th Trading Day after the earlier of:
(A) the Stock Acquisition Date; and
(B) the date of the commencement, 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) provided, in respect of a Take-over Bid
- 12 -
(other than a Permitted Bid), commenced prior to the Effective
Date, the Separation Time shall be the Close of Business on the
3rd Trading Day after the Effective Date;
provided, however, that if any such Take-over Bid expires, is
cancelled, is terminated or is otherwise withdrawn prior to the
Separation Time, without securities deposited thereunder being taken
up and paid for, such Take-over Bid shall be deemed, for purposes of
this Subsection 1.1(qq), never to have been made, and, provided
further, that if the Board of Directors determines, pursuant to
Section 5.1, to waive the application of Section 3.1 to a Flip-in
Event, the Separation Time in respect of such Flip-in Event shall be
deemed never to have occurred; or
(ii) such later Business Day as may be determined at any time or from time
to time by the Board of Directors (or any committee of the Board of
Directors so designated by the Board of Directors).
(rr) "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 147.11 of the Securities Act or Section 13(d) of the U.S.
Exchange Act disclosing such information).
(ss) "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.
(tt) "TERMINATION TIME" means the time at which the right to exercise Rights
shall terminate pursuant to Section 5.1 hereof.
(uu) "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 acting in good faith) 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.
(vv) "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;
- 13 -
(ww) "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.
(xx) "VOTING SHARE REDUCTION" means an acquisition or redemption by the
Corporation or any corporation controlled 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.
(yy) "VOTING SHARES" means 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 on 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 shall 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.
1.5 STATUTORY REFERENCES
Unless the context otherwise requires, any reference to a specific Section,
Subsection, Clause or Rule of any statute or regulation shall be deemed to refer
to the same as it may be amended, re-enacted or replaced or, if repealed and
there shall be no replacement therefor, to the same as it is in effect on the
date of this Agreement.
- 14 -
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 1.1(d), such Voting Shares shall be deemed to be outstanding for
the purpose of both A and B in the formula above.
1.7 ACTING JOINTLY OR IN CONCERT
For the purposes of this Agreement, a Person is acting jointly or in
concert with every Person who is a party to an agreement, commitment or
understanding, whether formal or informal and whether or not in writing, with
the first Person, or with any other Person acting jointly or in concert with the
first Person, to acquire or to Offer 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 to the
recommendations at the relevant time of the Canadian Institute of Chartered
Accountants, or any successor institute, applicable on a consolidated basis
(unless otherwise specifically provided herein to be applicable on an
unconsolidated basis) as at the date on which a calculation is made or required
to be made in accordance with generally accepted accounting principles. Where
the character or amount of any asset or liability or item of revenue or expense
is required to be determined, or any consolidation or other accounting
computation is required to be made for the purpose of this Agreement or any
document contemplated hereby, 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.
- 15 -
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 December 19, 2002 (the "RIGHTS
AGREEMENT"), between the Corporation and National Bank Trust
Inc., as rights agent, as the same may be amended or supplemented
from time to time in accordance with the terms thereof, 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, whether currently held by or on behalf of such
Person or any subsequent holder) or may be evidenced by separate
certificates and may no longer be evidenced by this certificate.
The Corporation will mail or arrange for the mailing of a copy of
the Rights Agreement to the holder of this certificate without
charge as soon as practicable after the receipt of a written
request therefor.
Jusqu'a l'heure de separation (definie dans la convention visant
les Droits mentionnee ci-dessous), le present certificat atteste
egalement que son porteur jouit de certains Droits stipules dans
une convention visant un regime de droits de souscription des
actionnaires intervenue en date du 19 decembre 2002
(`convention visant les Droits') entre la Societe et Trust
Banque Nationale, a titre d'agent des Droits, en sa version
pouvant etre modifiee ou completee de temps a autre conformement
aux modalites des presentes, convention dont les conditions sont
integrees dans les presentes par renvoi et dont une copie se
trouve dans les dossiers tenus au siege social de la Societe.
Dans certaines circonstances stipulees dans la convention visant
les Droits, ces Droits peuvent etre modifies ou rachetes ou
peuvent expirer ou devenir nuls (si, dans certains cas, ils sont
`detenus a titre de veritable proprietaire' par une
`personne faisant une acquisition', selon la definition de
ces termes dans la convention visant les Droits, qu'ils soient
detenus actuellement par cette personne ou un porteur ulterieur
ou pour le compte de ceux-ci). Les Droits peuvent aussi etre
attestes par des certificats distincts et peuvent ne plus etre
attestes par le present certificat. La Societe postera ou fera
poster sans frais une copie de la convention visant les
- 16 -
Droits au porteur du present certificat des que possible apres la
reception d'une demande ecrite a cet effet."
(b) Certificates representing Common Shares that have been issued prior to and
remain 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.
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 (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 in each case 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, requirement 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
- 17 -
(ii) a disclosure statement prepared by the Corporation describing the
Rights;
provided that a Nominee shall be sent the materials provided for in (i) and
(ii) only in respect of all Common Shares held of record by it which are
not Beneficially Owned by an Acquiring Person and the Corporation may
require any Nominee or suspected Nominee to provide such information and
documentation as the Corporation may reasonably require for such purpose.
(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 Montreal, Quebec, 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 Rights Agent, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum
sufficient to cover any transfer tax or charge which may be payable in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for Common
Shares in a name other than that of the holder of the Rights being
exercised.
(e) Upon receipt of a Rights Certificate, which is accompanied by an
appropriately completed and duly executed Election to Exercise (which does
not indicate that such Right is null and void as provided by Subsection
3.1(b)) and payment as set forth in Subsection 2.2(d), the Rights Agent
(unless otherwise instructed by the Corporation) will thereupon promptly:
(i) requisition from the transfer agent of the Common Shares certificates
representing the number of Common Shares to be purchased (the
Corporation hereby irrevocably authorizing its transfer agent to
comply with all such requisitions);
(ii) after receipt of such Common Share certificates, deliver such
certificates to, or to the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder;
(iii) when appropriate, requisition from the Corporation the amount of
cash, if any, to be paid in lieu of issuing fractional Common Shares;
(iv) when appropriate, after receipt of such cash, deliver such cash to, or
to the order of, the registered holder of the Rights Certificate; and
(v) tender to the Corporation all payments received on exercise of the
Rights.
- 18 -
(f) If the holder of any Rights shall exercise less than all of the Rights
evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights
Agent to such holder or to such holder's duly authorized assigns.
(g) 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
Canada Business Corporations Act, the Securities Act, the U.S.
Exchange Act, the United States Securities Act of 1933, as amended,
and applicable comparable legislation of each of the provinces and
territories of Canada and states of the United States of America, or
the rules and regulations thereunder or any other applicable law, rule
or regulation, in connection with the issuance and delivery of the
Rights, the Rights Certificates and the issuance of any Common Shares
upon exercise of the Rights;
(iii) use reasonable efforts to cause all Common Shares issued upon
exercise of the Rights to be listed on the stock exchanges on which
the Common Shares are listed at that time;
(iv) cause to be reserved and kept available out of its authorized and
unissued Common Shares, the number of Common Shares that, as provided
in this Agreement, will from time to time be sufficient to permit the
exercise in full of all outstanding Rights;
(v) pay when due and payable, if applicable, any and all federal,
provincial, state and municipal taxes (not in the nature of income,
capital gains or withholding taxes) and charges which may be payable
in respect of the original issuance or delivery of the Rights
Certificates or certificates for Common Shares issued upon the
exercise of Rights, provided that the Corporation shall not be
required to pay any transfer tax or charge which may be payable in
respect of any transfer of Rights or the issuance or delivery of
certificates for Common Shares issued upon the exercise of Rights, in
a name other than that of the holder of the Rights being transferred
or exercised; and
(vi) after the Separation Time, except as permitted by Section 5.1 or
Section 5.4, 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.
- 19 -
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. Fractional interests in securities resulting from such
adjustments are subject to Section 5.5.
(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 or program;
(ii) subdivide or change the then outstanding Common Shares into a greater
number of Common Shares;
(iii) consolidate, combine 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:
(x) 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) that a holder of one
Common Share immediately prior to such dividend,
subdivision, change, consolidation or issuance would hold
thereafter as a result thereof; and
(y) each Right held prior to such adjustment will become that
number of Rights equal to that number that is equal to the
number of Common Shares (or other securities of the
Corporation) that a holder of one Common Share immediately
prior to such dividend, subdivision, change, consolidation
or issuance would hold immediately thereafter as a result
thereof, 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
- 20 -
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 Expiration Time issue any Common Shares otherwise than in a
transaction referred to in Subsection 2.3(b), each such Common Share so
issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such Common Share.
(f) In the event the Corporation shall, at any time after the Record Time and
prior to the Expiration Time, fix a record date for the making of a
distribution to all holders of Common Shares of rights or warrants
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common Shares (or Convertible
Securities in respect of Common Shares) at a price per Common Share (or, in
the case of such a Convertible Security, having a conversion, exchange or
exercise price per share (including the price required to be paid to
purchase such Convertible Security)) 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
- 21 -
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 program or any share purchase plan or
program 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 or program, 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.
(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 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, consolidation 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.
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(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 Clauses 2.3(b)(i) to (iv), Subsection 2.3(f) or
Subsection 2.3(g) 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 would not
appropriately protect the interests of the holders of Rights, the Board of
Directors may from time to time acting in good faith determine what other
adjustments, if any, to the Exercise Price, number of Rights or securities
purchasable upon exercise of Rights would be appropriate in the
circumstances, if any, and such other adjustments (if any) shall be made
upon the Board of Directors providing written certification thereof to the
Rights Agent pursuant to Subsection 2.3(q) and no adjustments contemplated
by Subsections 2.3(b), 2.3(f) or 2.3(g) shall be made notwithstanding the
terms thereof. The Corporation and the Rights Agent shall amend this
Agreement in accordance with Section 5.4 to provide for any such other
adjustments contemplated by this Subsection 2.3(i).
(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 the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(l) Unless the Corporation shall have exercised its election as provided in
Subsection 2.3(m) to adjust the number of Rights in lieu of any adjustment
in the number of Common Shares purchasable upon the exercise of a Right,
upon each adjustment of the 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 the
Exercise Price to adjust the number of Rights, in lieu of any adjustment in
the number of Common Shares purchasable upon the exercise of a Right. Each
of the Rights outstanding after the
- 23 -
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 pursuant to this Subsection 2.3(m), indicating the record
date for the adjustment; and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the
relevant Exercise Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least 10 calendar days
later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Subsection 2.3(m), the Corporation shall, as promptly as practicable, cause
to be distributed to holders of record of Rights Certificates on such
record date, Rights Certificates evidencing, subject to Section 5.5, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Corporation, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Corporation, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for
herein and may bear, at the option of the Corporation, the relevant
adjusted Exercise Price and shall be registered in the names of holders of
record of Rights Certificates on the record date specified in the public
announcement.
(n) In any case in which this Section 2.3 shall require that an adjustment in
an Exercise Price be made effective as of a record date for a specified
event, the Corporation may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record
date of the number of Common Shares and other securities of the
Corporation, if any, issuable upon such exercise over and above the number
of Common Shares and other securities of the Corporation, if any, issuable
upon such exercise on the basis of the relevant Exercise Price in effect
prior to such adjustment; provided, however, that the Corporation shall
deliver to such holder an appropriate instrument evidencing such holder's
right to 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
any two officers of the Corporation. The signature of any of these officers
on the Rights Certificates may be manual or facsimile. Rights Certificates
bearing the manual or facsimile signatures of individuals who were at any
time the proper officers of the Corporation shall bind the Corporation,
notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the countersignature and delivery of such Rights
Certificates.
(b) Promptly 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 in a manner satisfactory to the
Corporation) and deliver such Rights Certificates and statement to the
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holders of the Rights pursuant to Section 2.2 hereof. No Rights Certificate
shall be valid for any purpose until countersigned by the Rights Agent as
aforesaid.
(c) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 REGISTRATION, TRANSFER AND EXCHANGE
(a) After the Separation Time, the Corporation shall cause to be kept a
register (the "RIGHTS REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Corporation will provide for the
registration and transfer of Rights. The Rights Agent is hereby appointed
"RIGHTS REGISTRAR" for the purpose of maintaining the Rights Register for
the Corporation and registering Rights and transfers of Rights as herein
provided and the Rights Agent hereby accepts such appointment. In the event
that the Rights Agent shall cease to be the Rights Registrar, the Rights
Agent will have the right to examine the Rights Register at all reasonable
times.
(b) After the Separation Time and prior to the Expiration Time, upon surrender
for registration of transfer or exchange of any Rights Certificate, and
subject to the provisions of Subsections 2.6(d) and 3.1(b) below, the
Corporation will execute, and the Rights Agent will countersign, deliver
and register, in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's instructions, one or more
new Rights Certificates evidencing the same aggregate number of Rights as
did the Rights Certificates so surrendered.
(c) All Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be valid obligations of the Corporation, and such Rights
shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
(d) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Corporation or the Rights Agent, as
the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any
new Rights Certificate under this Section 2.6, the Corporation may require
the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Rights Agent) in connection
therewith.
2.7 MUTILATED, LOST, STOLEN AND DESTROYED RIGHTS CERTIFICATES
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, the Corporation shall execute and the Rights
Agent shall countersign and deliver in exchange therefor a new Rights
Certificate evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(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
- 26 -
them to save each of them and any of their agents harmless, then, in the
absence of notice to the Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Corporation
shall execute and, upon the Corporation's request the Rights Agent shall
countersign and deliver, in lieu of any such destroyed, lost or stolen
Rights Certificate, a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under this
Section 2.7, the Corporation may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of
any destroyed, lost or stolen Rights Certificate shall evidence a
contractual obligation of the Corporation, whether or not the destroyed,
lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally
and proportionately with any and all other Rights duly issued hereunder.
2.8 PERSONS DEEMED OWNERS
The Corporation, the Rights Agent and any agent of the Corporation or the
Rights Agent may deem and treat the Person in whose name a Rights Certificate
(or, prior to the Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever. As used in this Agreement, unless the context otherwise
requires, the term "HOLDER" of any Rights shall mean the registered holder of
such Rights (or, prior to the Separation Time, the associated Common Shares).
2.9 DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption, for
registration of transfer or for 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;
- 27 -
(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);
(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) that notwithstanding anything in this Agreement to the contrary, neither
the Corporation nor the Rights Agent shall have any liability to any holder
of a Right or any other Person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS
3.1 FLIP-IN EVENT
(a) Subject to Subsection 3.1(b) and Section 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
- 28 -
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
(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, acting in
good faith, 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 Clause 3.1(b)(i) or (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 to a Person acting jointly or in concert with any of
them. This Rights Certificate and the Rights represented hereby shall
be void in the circumstances specified in Subsection 3.1(b) of the
Rights Agreement.
Les Droits representes par le present certificat de Droits ont ete
emis a une personne qui etait une personne faisant une acquisition ou
un membre du meme
- 29 -
groupe qu'elle ou une personne avec qui elle avait des liens (selon la
definition de ces termes dans la convention visant les Droits) ou a
une personne agissant conjointement ou de concert avec l'un de
ceux-ci. Le present certificat de Droits et les Droits representes par
celui-ci seront nuls dans les circonstances precisees a l'alinea
3.1(b) de la convention visant les Droits."
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 that such holder is not a Person
described in such legend.
(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 Canada
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 alternative Take-over Bids or
other proposals to the shareholders of the Corporation with respect to any
Take-over Bid or otherwise that the Board of Directors believes is necessary or
appropriate in the exercise of its fiduciary duties.
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,
- 30 -
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 hold it harmless against any
loss, liability, cost, claim, action, damage, suit 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 its
reasonable 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 filing 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.
- 31 -
(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 (at the expense
of the Corporation) 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 a senior officer of the Corporation and delivered to the Rights
Agent; and such certificate will be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights agent will be liable hereunder only for its own negligence, bad
faith or wilful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Common Shares, or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, 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
- 32 -
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 person
designated in writing by the Corporation, and to apply to such individuals
for advice or instructions in connection with its duties, and it shall not
be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such individual. It is understood that
instructions to the Rights Agent shall, except where circumstances make it
impractical or the Rights Agent otherwise agrees, be given in writing and,
where not in writing, such instructions shall be confirmed in writing as
soon as reasonably practicable after the giving of such instructions.
(h) Subject to applicable law, the Rights Agent and any shareholder or
director, officer or employee of the Rights Agent may buy, sell or deal in
Common Shares, Rights or other securities of the Corporation or become
pecuniarily interested in any transaction in which the Corporation may be
interested, or contract with or lend money to the Corporation or otherwise
act as fully and freely as though it were not the Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Corporation or for any other legal entity.
(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 of such attorneys
and agents.
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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) thereof 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 thereof 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 Quebec. 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 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 a
Flip-in Event as to which the application of Section 3.1 has not been
waived pursuant to this Section 5.1, 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 may 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
- 34 -
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 Subsections 5.1(d) or 5.1(e),
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 written notice delivered to the Rights
Agent, determine to waive the application of Section 3.1 to a Flip-in Event
that may occur by reason of a Take-over Bid made by means of a take-over
bid circular to all holders of record of Voting Shares, provided that if
the Board of Directors waives the application of Section 3.1 in respect of
a Take-over Bid pursuant to this Subsection 5.1(d), the Board of Directors
shall also be deemed to have waived the application of Section 3.1 in
respect of any other Take-over Bid made by means of a take-over bid
circular to all holders of record of Voting Shares prior to the expiry of
any Take-over Bid (as the same may be extended from time to time) 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 acting in good faith may determine, at any time
prior to the occurrence of the relevant Flip-in Event, to waive the
application of Section 3.1 to a Flip-in Event that may occur by reason of
an acquisition of Voting Shares other than pursuant to a Take-over Bid made
by means of a take-over bid circular to all holders of record of Voting
Shares and other than in the circumstances set out in Subsection 5.1(b).
(f) Where a Take-over Bid that is not a Permitted Bid is withdrawn or otherwise
terminated after the Separation Time has occurred and prior to the
occurrence of a Flip-in Event, the Board of Directors may elect to redeem
all the outstanding Rights at the Redemption Price. In such event, all the
provisions of this Agreement shall continue to apply as if the Separation
Time had not occurred and as if Rights Certificates representing the number
of Rights held by each holder of record of Common Shares as of the
Separation Time had not been mailed to each such holder, and for all
purposes of this Agreement the Separation Time shall be deemed not to have
occurred.
(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
- 35 -
thereupon, without further action and without notice, terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price.
(h) Within 10 days after the Board of Directors is deemed under Subsection
5.1(c) to have elected or elects under Subsection 5.1(a) or 5.1(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.
(i) If the Redemption Price payable to any holder of Rights includes a fraction
of a cent, such Redemption Price shall be rounded up to the nearest cent.
(j) The Corporation shall give prompt written notice to the Rights Agent of any
waiver of the application of Section 3.1 made by the Board of Directors
under this Section 5.1.
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 (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
Notwithstanding any other provisions of this Agreement or of the Rights to
the contrary, the Corporation may, at any time, amend, vary or rescind any of
the provisions of this Agreement and the Rights (whether or not such action
would materially adversely affect the interests of the holders of Rights
generally). Notwithstanding anything in this Section 5.4 to the contrary, no
such supplement or amendment shall be made to the provisions of ARTICLE 4 except
with the written consent of the Rights Agent.
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
- 36 -
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 any 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 Subsection 2.2(e).
(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
any payments in lieu of fractional Common Shares unless the Corporation
shall have provided the Rights Agent with the necessary funds to pay in
full all amounts payable in accordance with Subsection 2.2(e).
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. Any registered 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
- 37 -
substantially all of the Corporation's assets, then, in each such case, the
Corporation shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the date on which
such liquidation, dissolution, or winding up is to take place, and such notice
shall be so given at least 20 Business Days prior to the date of the taking of
such proposed action by the Corporation.
5.9 NOTICES
Notices or demands authorized or required by this Agreement to be given or
made to or by the Rights Agent, the holder of any Rights or the Corporation will
be sufficiently given or made and shall be deemed to be received if delivered or
sent by first-class mail, postage prepaid, or by fax machine or other means of
printed telecommunication, charges prepaid and confirmed in writing by mail or
delivery, addressed (until another address is filed in writing with the Rights
Agent or the Corporation, as applicable), as follows:
(a) if to the Corporation:
COGNICASE Inc.
0xx Xxxxx 000 Xxxx Xxxxxx
Xxxxxxxx XX X0X 0X0
Attention: Xxxxxx Xxxx
Facsimile No. (000) 000-0000
(b) if to the Rights Agent:
National Bank Trust Inc.
9th Floor 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX X0X 0X0
Attention: Manager, Share Ownership Management
Facsimile No. (000) 000-0000
(c) if to the holder of any Rights, to the address of such
holder as it appears on the registry books of the Rights
Agent or, prior to the Separation Time, on the registry
books of the Corporation for the Common Shares.
5.10 COSTS OF ENFORCEMENT
The Corporation agrees that if the Corporation or any other Person the
securities of which are purchasable upon exercise of Rights fails to fulfil any
of its obligations pursuant to this Agreement, then the Corporation or such
Person will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce his rights
pursuant to any Rights or this Agreement.
- 38 -
5.11 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.
5.12 SUCCESSORS
All the covenants and provisions of this Agreement by or for the benefit of
the Corporation or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.
5.13 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.
5.14 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 pursuant to this Agreement, in good faith, (i) may be relied on by
the Rights Agent, and (ii) shall not subject the Board of Directors to any
liability to the holders of the Rights or to any other parties.
5.15 GOVERNING LAW
This Agreement and the Rights issued hereunder shall be deemed to be a
contract made under the laws of the Province of Quebec and the laws of Canada
applicable therein 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.
- 39 -
5.16 LANGUAGE
Les parties aux presentes ont exige que la presente convention ainsi que
tous les documents et avis qui s'y rattachent ou qui en decoulent soient rediges
en langue anglaise. The parties hereto have required that this Agreement and all
documents and notices related thereto or resulting therefrom be drawn up in
English.
5.17 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.
5.18 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 in such jurisdiction without invalidating or
rendering unenforceable the remaining terms and provisions hereof or the
enforceability thereof in any other jurisdiction or the application of such term
or provision to circumstances other than those as to which it is held invalid or
unenforceable.
5.19 EFFECTIVE DATE
This Agreement is effective and in force and effect in accordance with its
terms from and after the date hereof.
5.20 TERMINATION OF AGREEMENT
This Agreement shall terminate at, and be of no further force or effect
from and after, the Expiration Time.
5.21 TIME OF THE ESSENCE
Time shall be of the essence hereof.
- 40 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of December 19, 2002.
COGNICASE INC.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Executive Vice-President
and CFO
NATIONAL BANK TRUST INC.
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Account Manager
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Manager
EXHIBIT A
Form of Rights Certificate
Certificate No. Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE
TERMS SET FORTH IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b) OF SUCH AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON, CERTAIN RELATED PARTIES OF AN
ACQUIRING PERSON OR A TRANSFEREE OF AN ACQUIRING PERSON OR ANY SUCH RELATED
PARTIES WILL BECOME VOID WITHOUT FURTHER ACTION.
RIGHTS CERTIFICATE
This certifies that __________________________________________________________
is the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement (the "RIGHTS AGREEMENT")
made as of December 19, 2002 between COGNICASE Inc., a corporation existing
under the laws of Canada (the "CORPORATION") and National Bank Trust Inc., a
trust company incorporated under the laws of Quebec, 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 Montreal. Until adjustment thereof in certain events as provided in
the Rights Agreement, the Exercise Price shall be $20.00 per Right (payable by
certified cheque, banker's draft or money order payable to the order of the
Rights Agent). 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 holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office of the Rights Agent in Montreal, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive,
- 2 -
upon surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Rights Certificate may be redeemed by the Corporation at a redemption price of
$0.0001 per Right subject to adjustment in certain events.
No fractional Common Share 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:
COGNICASE INC.
Per: _________________________________________
Authorized signature
Per: _________________________________________
Authorized signature
Countersigned:
NATIONAL BANK TRUST INC.,
in the City of Montreal
Per: _________________________________________
Authorized signature
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:
---------------------------------
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
- 2 -
Date: ______________________________ _____________________________________
Signature
____________________________________ (Signature must correspond to name as
Signature Guaranteed written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company, a member firm of a recognized stock exchange in Canada, a member of a
registered national securities exchange in the United States, or a member of the
Securities Transfer Association Medallion (STAMP) Program.
(TO BE COMPLETED BY THE HOLDER IF TRUE)
The undersigned hereby certifies and 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 or any other Person acting jointly
or in concert with any of the foregoing (as such terms are defined in the Rights
Agreement).
_____________________________________
Signature
_____________________________________
(Please print name below signature)
NOTICE
IN THE EVENT THAT THE CERTIFICATION SET FORTH ABOVE IN THE FORM OF ELECTION TO
EXERCISE IS 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.
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 must correspond to name as
Signature Guaranteed written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company, a member firm of a recognized stock exchange in Canada, a member of a
registered national securities exchange in the United States, or a member of the
Securities Transfer Association Medallion (STAMP) Program.
(TO BE COMPLETED BY THE ASSIGNOR IF TRUE)
The undersigned hereby certifies and 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 or any other Person acting jointly
or in concert with any of the foregoing (as such terms are defined in the Rights
Agreement).
_____________________________________
Signature
_____________________________________
(Please print name below signature)
NOTICE
IN THE EVENT THAT THE CERTIFICATION SET FORTH ABOVE IN THE FORM OF ASSIGNMENT IS
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.
