Exhibit 3
AMENDED AND RESTATED
SHAREHOLDER RIGHTS PLAN AGREEMENT
BETWEEN
NORTEL NETWORKS CORPORATION
- and -
COMPUTERSHARE TRUST COMPANY
OF CANADA,
AS RIGHTS AGENT
================================================================================
DATED AS OF FEBRUARY 14, 2003
(amending and restating a shareholder rights
plan agreement dated as of March 13, 2000)
================================================================================
ARTICLE 1 INTERPRETATION..........................................................................................2
1.1 CERTAIN DEFINITIONS...................................................................................2
1.2 CURRENCY.............................................................................................14
1.3 NUMBER AND GENDER....................................................................................15
1.4 SECTIONS AND HEADINGS................................................................................15
1.5 STATUTORY REFERENCES.................................................................................15
1.6 DETERMINATION OF PERCENTAGE OWNERSHIP................................................................15
1.7 ACTING JOINTLY OR IN CONCERT.........................................................................16
1.8 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.............................................................16
ARTICLE 2 THE RIGHTS.............................................................................................16
2.1 LEGEND ON COMMON SHARE CERTIFICATES..................................................................16
2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS.....................................17
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS......................................................20
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE..................................................................26
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES................................26
2.6 REGISTRATION, TRANSFER AND EXCHANGE..................................................................26
2.7 MUTILATED, LOST, STOLEN AND DESTROYED RIGHTS CERTIFICATES............................................27
2.8 PERSONS DEEMED OWNERS................................................................................28
2.9 DELIVERY AND CANCELLATION OF CERTIFICATES............................................................28
2.10 AGREEMENT OF RIGHTS HOLDERS..........................................................................28
ARTICLE 3 ADJUSTMENTS TO THE RIGHTS..............................................................................29
3.1 FLIP-IN EVENT........................................................................................29
3.2 FIDUCIARY DUTIES OF THE BOARD OF DIRECTORS OF THE CORPORATION........................................31
ARTICLE 4 THE RIGHTS AGENT.......................................................................................31
4.1 GENERAL..............................................................................................31
4.2 MERGER, AMALGAMATION, CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT................................32
4.3 DUTIES OF RIGHTS AGENT...............................................................................33
4.4 CHANGE OF RIGHTS AGENT...............................................................................34
ARTICLE 5 MISCELLANEOUS..........................................................................................35
5.1 REDEMPTION, WAIVER AND TERMINATION...................................................................35
5.2 EXPIRATION...........................................................................................37
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES..................................................................37
5.4 SUPPLEMENTS AND AMENDMENTS...........................................................................38
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES..............................................................39
5.6 RIGHTS OF ACTION.....................................................................................40
5.7 HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER............................................................40
5.8 NOTICE OF PROPOSED ACTIONS...........................................................................40
5.9 NOTICES..............................................................................................41
5.10 COSTS OF ENFORCEMENT.................................................................................41
5.11 REGULATORY APPROVALS.................................................................................41
5.12 DECLARATION AS TO NON-CANADIAN AND NON-U.S. HOLDERS..................................................42
5.13 SUCCESSORS...........................................................................................42
5.14 BENEFITS OF THIS AGREEMENT...........................................................................42
5.15 SHAREHOLDER REVIEW...................................................................................42
5.16 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS..................................................43
5.17 GOVERNING LAW........................................................................................43
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5.18 LANGUAGE.............................................................................................43
5.19 COUNTERPARTS.........................................................................................43
5.20 SEVERABILITY.........................................................................................43
5.21 EFFECTIVE DATE.......................................................................................43
5.22 TIME OF THE ESSENCE..................................................................................44
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AMENDED AND RESTATED
SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT dated as of February 14, 2003 (amending and
restating a shareholder rights plan agreement of the Corporation dated as of
March 13, 2000).
BETWEEN:
NORTEL NETWORKS CORPORATION
(the "CORPORATION")
- and -
COMPUTERSHARE TRUST COMPANY OF CANADA
(the "RIGHTS AGENT")
WHEREAS:
A. The Board of Directors determined that it was advisable to adopt a
shareholder rights plan (the "Rights Plan") to ensure, to the extent
possible, that all shareholders of the Corporation are treated fairly
in connection with any take-over offer for the equity securities of the
Corporation.
B. The Corporation (then called New Nortel Inc.) and Montreal Trust
Company of Canada entered into a shareholder rights plan agreement
(the "Original Agreement") dated as of March 13, 2000 in order to
adopt the Rights Plan.
C. Pursuant to an Assignment of Agencies Agreement dated January 15, 2001,
the rights and obligations of Montreal Trust Company of Canada under
the Original Agreement were assigned to the Rights Agent.
D. In order to implement the Rights Plan, the Board of Directors:
(a) authorized and declared a distribution 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
(c) authorized the issuance of Rights Certificates to holders of
Rights pursuant to the terms and subject to the conditions set
forth in the Original Agreement.
E. Section 5.15 of the Original Agreement requires that the Board of
Directors submit to the Independent Shareholders at or prior to the
annual meeting of the Corporation's shareholders to take place in 2003
a resolution ratifying the continued existence of the Original
Agreement.
F. The Board of Directors wishes to make certain amendments to the
Original Agreement in connection with the ratification of the continued
existence of the Rights Plan, which amendments will require the
approval of the Independent Shareholders in accordance with Section 5.4
of the Original Agreement.
G. The Corporation and the Rights Agent wish to amend and restate the
Original Agreement by entering into this Agreement, which amendment and
restatement shall become effective upon the Independent Shareholders
approving the continued existence of the Original Agreement as amended
hereby.
H. The Corporation desires to confirm its appointment of Computershare
Trust Company of Canada as the Rights Agent to act on behalf of the
Corporation, and the Rights Agent is willing to continue 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
Effective Date 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;
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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 or 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";
(iii) for a period of 10 days after the "DISQUALIFICATION DATE" (as
hereinafter defined), any Person who becomes the Beneficial
Owner of 20% or more of the outstanding Voting Shares as a
result of such Person becoming disqualified from relying on
clause 1.1(g)(vi) solely because such Person makes or
announces a current intention to make a Take-over Bid, alone
or by acting jointly or in concert with any other Person. For
the purposes of this definition, "DISQUALIFICATION DATE" means
the first date of public announcement indicating that any
Person has made or participated in, is making or participating
in, or proposes to make or participate in a Take-over Bid,
alone or by acting jointly or in concert with any other
Person; or
(iv) 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", when used to indicate a relationship with a specified body
corporate, means a Person that directly or indirectly controls, or is
controlled by, or is under common control with, such specified body
corporate.
(c) "AMENDMENT DATE" means the date upon which this Agreement amends,
restates and supercedes the Original Agreement in accordance with
Section 5.21.
(d) "ARRANGEMENT" means the arrangement under the provisions of Section 192
of the Canada Business Corporations Act set forth in the Plan of
Arrangement.
(e) "ARRANGEMENT AGREEMENT" means the amended and restated arrangement
agreement made as of January 26, 2000 between BCE Inc., 3056074 Canada
Inc., 3263207 Canada Inc., Pre-Arrangement Nortel and the Corporation,
as the same may be amended from time to time in accordance with its
terms.
(f) "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
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preceding clauses (i), (ii), (iii) or (iv) above, if that relative has
the same residence as the specified Person.
(g) 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); and
(iii) any securities that are Beneficially Owned within the meaning
of clauses (i) or (ii) of this Subsection 1.1(g) 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;
(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") including
non-discretionary accounts held on behalf of a Client by a
broker or dealer or broker-dealer registered under applicable
law; (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
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for such Estate Accounts or for such Other Accounts; (C) such
Person (the "PLAN ADMINISTRATOR") is the administrator or the
trustee of one or more pension funds or plans (a "PLAN")
registered under the laws of Canada or any province thereof or
the laws of the United States of America or any state thereof;
(D) such Person (the "CROWN AGENT") is established by statute
for purposes that include, and the ordinary business or
activity of such Person includes, the management of investment
funds for employee benefit plans, pension plans, insurance
plans, or various public bodies; or (E) such Person is a Plan;
provided, however, that in any of the foregoing cases the Fund
Manager, the Trust Company, the Plan Administrator, the Crown
Agent or the Plan, as the case may be, is not then making or
has not then announced 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 ordinary
market transactions (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 such Person is a Plan and such
security is owned at law or in equity by the Plan
Administrator; or
(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(g) shall be deemed outstanding.
(h) "BOARD OF DIRECTORS" shall mean the board of directors of the
Corporation or any duly constituted and empowered committee thereof.
(i) "BUSINESS DAY" shall mean any day, other than a Saturday or Sunday or a
day on which banking institutions in the City of Toronto or the City of
New York are authorized or obligated by law to close.
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(j) "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.
(k) "CANADA BUSINESS CORPORATIONS ACT" shall mean the Canada Business
Corporations Act, R.S.C. 1985, c.C-44, as amended and the regulations
thereunder, as from time to time in effect.
(l) "CLOSE OF BUSINESS" on any given date shall mean the time on such date
(or, if such date is not a Business Day, the time on the next Business
Day) at which the principal office of the transfer agent for the Common
Shares in Toronto, Ontario (or after the Separation Time, the principal
office of the Rights Agent in Toronto, Ontario) is closed to the
public.
(m) "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;
provided, however, that (A) if for any reason none of such prices are
available on such date, the "CLOSING PRICE" per security of such
securities on such date shall mean the fair value per security of the
securities on such date as determined 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.
(n) "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
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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.
(o) "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 paragraph (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 60th day after the earliest date on which any other
Permitted Bid that is then in existence was made.
(p) "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.
(q) "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.
(r) "CO-RIGHTS AGENTS" shall have the meaning ascribed thereto in
Subsection 4.1(a).
(s) "DISPOSITION DATE" has the meaning ascribed thereto in Subsection
5.1(b).
(t) "EFFECTIVE DATE" shall mean May 1, 2000, being the date upon which the
Arrangement became effective.
(u) "ELECTION TO EXERCISE" has the meaning ascribed thereto in Subsection
2.2(d).
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(v) "EXEMPT ACQUISITION" means a share acquisition in respect of which the
Board of Directors has waived the application of Section 3.1 pursuant
to Subsection 5.1(b), 5.1(d) or 5.1(e).
(w) "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 an amount
equal to three times the Market Price per Common Share determined as of
the Separation Time.
(x) "EXPIRATION TIME" shall mean the earlier of (i) the Termination Time;
and (ii) the Close of Business on the date the annual meeting of
shareholders of the Corporation is held in 2006; provided, however,
that if the resolution referred to in Section 5.15 is approved by the
Independent Shareholders in accordance with Section 5.15 at or prior to
such annual meeting, "EXPIRATION TIME" shall mean the earlier of (A)
the Termination Time; and (B) the Close of Business on the date the
annual meeting of shareholders of the Corporation is held in 2009.
(y) "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.
(z) "FLIP-IN EVENT" shall mean a transaction or event in or pursuant to
which any Person becomes an Acquiring Person.
(aa) "HOLDER" shall have the meaning ascribed thereto in Section 2.8.
(bb) "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(g)(vi)
hereof, (iii) any Person acting jointly or in concert with such
Acquiring Person or Offeror; (iv) any Associate or Affiliate of such
Acquiring Person or Offeror; and (v) 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.
(cc) "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
and a copy of which is made available to the public (including the
Corporation) not later than
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the date of the Lock-up Bid (as hereinafter defined) or, if the Lock-up
Bid has been made prior to the date of the Lock-up Agreement, forthwith
following the entering into of the Lock-up Agreement and, in any event,
not later than the day immediately following the date the Lock-up
Agreement was entered into, 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 Share offered under the
Lock-up Bid; or
(B) for a number of Voting Shares that exceeds by as much
as or more than a number (the "SPECIFIED NUMBER")
specified in the Lock-up Agreement the number of
Voting Shares that the Offeror has offered or
proposes to offer 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 or
proposed to be offered under the Lock-up Bid,
provided that the Specified Number is not greater
than 7% of the number of Voting Shares offered to be
purchased or proposed to be purchased 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 transaction 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
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(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 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.
(dd) "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.
(ee) "NOMINEE" has the meaning ascribed thereto in Subsection 2.2(c).
(ff) "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.
(gg) "OFFEROR" shall mean a Person who has announced a current intention to
make, or who is making, a Take-over Bid.
(hh) "OFFEROR'S SECURITIES" shall mean the Voting Shares Beneficially Owned
on the date of a Take-over Bid by an Offeror.
(ii) "ORIGINAL AGREEMENT" has the meaning ascribed thereto in recital B to
this Agreement.
(jj) "PERMITTED BID" means a Take-over Bid made by way of a take-over bid
circular which also complies with the following additional provisions:
(i) the Take-over Bid is made to all holders of record of Voting
Shares, other than the Offeror;
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(ii) the Take-over Bid contains, and the take-up and payment for
securities tendered or deposited thereunder is subject to,
irrevocable and unqualified conditions that:
(A) no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid (x) prior to the Close
of Business on a date which is not less than 60 days
following the date of the Take-over Bid and (y)
unless, at the Close of Business on that date, the
Voting Shares deposited or tendered pursuant to the
Take-over Bid and not withdrawn constitute more than
50% of the Voting Shares outstanding which are held
by Independent Shareholders;
(B) unless the Take-over Bid is withdrawn, Voting Shares
may be deposited pursuant to such Take-over Bid at
any time prior to the Close of Business on the date
of the first take-up of or payment for Voting Shares;
(C) any Voting Shares deposited pursuant to the Take-over
Bid may be withdrawn until taken up and paid for; and
(D) in the event that the requirement set forth in
subclause (A)(y) of this Clause 1.1(jj)(ii) is
satisfied, the Offeror will make a public
announcement of that fact and the Take-over Bid will
remain open for deposits and tenders of Voting Shares
for not less than 10 Business Days from the date of
such public announcement.
For purposes of this Agreement, the term "PERMITTED BID" shall include
a Competing Permitted Bid.
(kk) "PERMITTED BID ACQUISITION" means an acquisition of Voting Shares made
pursuant to a Permitted Bid.
(ll) "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.
(mm) "PLAN OF ARRANGEMENT" means the plan of arrangement set out in the
Arrangement Agreement as the same may be amended from time to time in
accordance with terms of the Arrangement Agreement.
(nn) "PRE-ARRANGEMENT COMMON SHARES" means the common shares of
Pre-Arrangement Nortel.
(oo) "PRE-ARRANGEMENT NORTEL" means Nortel Networks Limited as such
corporation existed prior to the Arrangement.
(pp) "PRIOR YEARS" means any fiscal year of Pre-Arrangement Nortel prior to
the 2000 fiscal year.
11
(qq) "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),
provided that such Person does not thereby acquire a greater percentage
of the Voting Shares represented by the rights so distributed than the
Person's percentage of Voting Shares Beneficially Owned immediately
prior to such acquisition or exercise; or (iv) a distribution of Voting
Shares or Convertible Securities in respect thereof offered pursuant to
a prospectus or by way of a private placement 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.
(rr) "RECORD TIME" means on the Close of Business on the fourth TSE Trading
Day immediately following (but not including) the Effective Date, after
giving effect to the subdivision of the common shares of the
Corporation on a two-for-one basis pursuant to the Arrangement.
(ss) "REDEMPTION PRICE" shall have the meaning attributed thereto in
Subsection 5.1(a).
(tt) "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;
provided however that if the provisions of this Subsection 1.1(tt)
require the calculation of cash dividends or net income in respect of
the fiscal year of the Corporation ending on December 31, 2000, or in
respect of any period prior thereto then, for the purpose of
determining the applicable limits set out in clauses (i), (ii) and
(iii) of this Subsection 1.1(tt), (A) any cash dividend declared
payable by Pre-Arrangement Nortel on the Pre-Arrangement Common Shares
to shareholders of record at any time prior to the
12
Record Time shall be deemed to have been paid at such time by the
Corporation on its Common Shares; and (B) the consolidated net income
of Pre-Arrangement Nortel, before extraordinary items, for each Prior
Year shall be deemed to be the consolidated net income of the
Corporation, before extraordinary items, for such year, in each case as
if the Corporation had existed at such time.
(uu) "RIGHT" shall mean the herein described rights to purchase securities
pursuant to the terms and subject to the conditions set forth herein.
(vv) "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.
(ww) "RIGHTS REGISTER" and "RIGHTS REGISTRAR" shall have the respective
meanings ascribed thereto in Subsection 2.6(a).
(xx) "SECURITIES ACT" shall mean the Securities Act (Ontario), R.S.O. 1990,
c.S.5, as amended and the regulations and rules made thereunder, as
from time to time in effect.
(yy) "SEPARATION TIME" means the Close of Business on the eighth Trading Day
after the earlier of:
(i) the Stock Acquisition Date; and
(ii) the date of the commencement of, or first public announcement
or disclosure of the intent of any Person (other than the
Corporation or any corporation controlled by the Corporation)
to commence, a Take-over Bid (other than a Permitted Bid, so
long as such Take-over Bid continues to satisfy the
requirements of a Permitted Bid);
or such later Business Day as may be determined at any time or from
time to time by the Board of Directors provided, however, that if any
such Take-over Bid expires, is canceled, 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(yy), 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.
(zz) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement or disclosure by the Corporation or an Acquiring Person of
facts indicating that a Person has become an Acquiring Person (which,
for the purposes of this definition, shall include, without limitation,
a report filed pursuant to Section 101 of the Securities Act or Section
13(d) of the U.S. Exchange Act disclosing such information).
(aaa) "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
13
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.
(bbb) "TERMINATION TIME" means the time at which the right to exercise Rights
shall terminate pursuant to Section 5.1 hereof.
(ccc) "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.
(ddd) "TSE TRADING DAY" means a day on which The Toronto Stock Exchange is
open for the transaction of business.
(eee) "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;
(fff) "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.
(ggg) "VOTING SHARE REDUCTION" means an acquisition, redemption or
cancellation 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.
(hhh) "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.
14
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, reenacted or replaced or, if repealed
and there shall be no replacement therefor, to the same as it is in effect on
the date of this Agreement.
1.6 DETERMINATION OF PERCENTAGE OWNERSHIP
The percentage of Voting Shares Beneficially Owned by any Person,
shall, for the purposes of this Agreement, be and be deemed to be the product
determined by the formula:
100 x A
-
B
where:
A = the aggregate number of votes for the election of all
directors generally attaching to the Voting Shares
Beneficially Owned by such Person; and
B = the aggregate number of votes for the election of all
directors generally attaching to all outstanding Voting
Shares.
Where any person is deemed to Beneficially Own unissued Voting Shares pursuant
to Subsection 1.1(g), such Voting Shares shall be deemed to be outstanding for
the purpose of both A and B in the formula above.
15
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 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.
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 legend set forth in the Original Agreement (which
legend shall be deemed for all purposes to be amended to read the same
as set forth below), but Common Share certificates issued after the
Amendment Date but prior to the Close of Business on the earlier of the
Separation Time and the Expiration Time 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 an Amended and Restated
Shareholder Rights Plan Agreement, dated as of February 14, 2003,
between the Corporation and Computershare Trust Company of Canada, as
rights agent, (the "Rights Agent") as the same may from time to time be
amended, varied, restated or replaced (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the registered office of
16
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 modifiee et
mise a jour intervenue en date du 14 fevrier 2003 entre la Societe et
la Societe de fiducie Computershare du Canada, a titre d'agent des
Droits (<< agent des Droits >>), en sa version pouvant etre modifiee,
mise a jour ou remplacee de temps a autre (<< convention visant les
Droits >>), 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 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 or the Amendment Date, as the
case may be, shall evidence one Right for each Common Share evidenced
thereby until the earlier of the Separation Time and the Expiration
Time notwithstanding the absence of the legend required by Subsection
2.1(a).
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
17
(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
(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 Toronto, or any other
office of the Rights Agent designated for that purpose from time to
time by the Corporation:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise (an "ELECTION TO EXERCISE")
substantially in the form attached to the Rights Certificate
duly completed and executed in a manner acceptable to the
Rights Agent; and
18
(iii) payment by certified cheque, banker's draft or money order
payable to the order of the Rights Agent, or by wire transfer
to an account designated by 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.
(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
19
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.
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. For greater
certainty, no adjustment shall be made pursuant to this Section 2.3 or
Article 3 in respect of the Arrangement or securities issued in
connection therewith.
(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;
20
(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 (if any) will be equal to the
Exercise Price in effect immediately prior
to such adjustment (if any) 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 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.
21
(d) If an event occurs which would require an adjustment under both this
Section 2.3 and Section 3.1 hereof, the adjustment provided for in this
Section 2.3 shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 3.1 hereof.
(e) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any Common Shares otherwise than
in a transaction referred to in Subsection 2.3(b), each such Common
Share so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such
Common Share.
(f) In the event the Corporation shall, at any time after the Record Time
and prior to the Expiration Time, fix a record date for the making of a
distribution to all holders of Common Shares of rights or warrants
entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Shares (or
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 (if any) will equal the
Exercise Price in effect immediately prior to such record date (if any)
multiplied by a fraction;
(i) of which the numerator shall be the number of Common Shares
outstanding on such record date plus the number of Common
Shares which the aggregate offering price of the total number
of Common Shares so to be offered (and/or the aggregate
initial conversion, exchange or exercise price of the
Convertible Securities so to be offered (including the price
required to be paid to purchase such Convertible Securities))
would purchase at such Market Price per Common Share; and
(ii) of which the denominator shall be the number of Common Shares
outstanding on such record date plus the number of additional
Common Shares to be offered for subscription or purchase (or
into which the Convertible Securities so to be offered are
initially convertible, exchangeable or exercisable).
In case such subscription price is satisfied, in whole or in part, by
consideration other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors. Such adjustment
shall be made successively whenever such a record date is fixed. To the
extent that such rights or warrants are not exercised prior to the
expiration thereof, the Exercise Price shall be readjusted in the
manner contemplated above based on the number of Common Shares (or
securities convertible into or exchangeable for Common Shares) actually
issued on the exercise of such rights or warrants.
For purposes of this Agreement, the granting of the right to purchase
Common Shares (whether from treasury or otherwise) pursuant to any
dividend or interest reinvestment plan or 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
22
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 (if any) shall be equal to the Exercise Price in
effect immediately prior to such record date (if any) 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.
(i) In the event the Corporation shall at any time after the Record Time
and prior to the Expiration Time issue any shares (other than Common
Shares), or rights or warrants to subscribe for or purchase any such
shares, or Convertible Securities in respect of any such shares, in a
transaction referred to in any of subclauses 2.3(b)(i) to (iv),
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
23
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 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
24
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.
(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
25
(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 one of the Chief Executive Officer or President, together with one
of the Chief Financial Officer, Chief Legal Officer or Corporate
Secretary. The signature of any of these officers on the Rights
Certificates may be manual or facsimile. Rights Certificates bearing
the manual or facsimile signatures of individuals who were at any time
the proper officers of the Corporation shall bind the Corporation,
notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such
Rights Certificates.
(b) Promptly 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 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
26
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 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
27
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;
(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
28
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) notwithstanding anything in this Agreement to the contrary, neither the
Corporation nor the Rights Agent shall have any liability to any holder
of a Right or any other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS
3.1 FLIP-IN EVENT
(a) Subject to Sections 3.1(b) and 5.1, in the event that prior to the
Expiration Time a Flip-in Event occurs, each Right shall thereafter
constitute the right to purchase from the Corporation, upon exercise
thereof in accordance with the terms hereof, that number of Common
Shares of the Corporation as have an aggregate Market Price on the date
of consummation or occurrence of such Flip-in Event equal to twice the
Exercise Price for an amount in cash equal to the Exercise Price (such
right to be appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.3 in the event that,
after such date of consummation or occurrence, an event of a type
analogous to any of the events described in Section 2.3 shall have
occurred with respect to such Common Shares).
(b) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of any Flip-in Event, any Rights that are or were
Beneficially Owned on or after the earlier of the Separation Time and
the Stock Acquisition Date, or which may thereafter be Beneficially
Owned, by:
29
(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 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 Clauses 3.1(b)(i) or 3.1(b)(ii) or
transferred to any Nominee of any such Person, and any Rights
Certificate issued upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence, shall
contain or will be deemed to contain the following legend:
"The Rights represented by this Rights Certificate were issued
to a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement) or 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 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."
30
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.
(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, 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,
31
liability, cost, claim, action, damage, suit or expense, incurred
without negligence, bad faith or willful 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.
(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
32
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 willful 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 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
33
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.
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
34
Rights Agent, to each transfer agent of the Common Shares and to the holders of
the Rights in accordance with Section 5.9. If the Rights Agent should resign or
be removed or otherwise become incapable of acting, the Corporation will appoint
a successor to the Rights Agent. If the Corporation fails to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of any Rights (which holder shall,
with such notice, submit such holder's Rights Certificate for inspection of the
Corporation), then the holder of any Rights or the Rights Agent may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent at the
Corporation's expense. Any successor Rights Agent, whether appointed by the
Corporation or by such a court, must be a corporation incorporated under the
laws of Canada or a province thereof and authorized to carry on the business of
a trust company in the Province of Ontario. After appointment, the successor
Rights Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent, upon receipt of any
outstanding fees and expenses then owing, shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Corporation will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the 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) Subject to the prior consent of the holders of the Voting Shares or the
Rights obtained as set forth herein, 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 shall waive the application of Section 3.1 in
respect of the occurrence of any Flip-in Event if the Board of
Directors has determined, following the Stock Acquisition Date and
prior to the Separation Time, that a Person became an Acquiring Person
by inadvertence and without any intention to become, or knowledge that
it would become, an Acquiring Person under this Agreement and, in the
event that such a waiver is granted by the Board of Directors, such
Stock Acquisition Date shall be deemed not to have occurred. Any such
waiver pursuant to this Subsection 5.1(b) may only be given on the
condition that such Person, within 10 days after the foregoing
determination by the Board of Directors or such later date as the Board
of Directors may
35
determine (the "DISPOSITION DATE"), has reduced its Beneficial
Ownership of Voting Shares such that the Person is no longer an
Acquiring Person. If the Person remains an Acquiring Person at the
Close of Business on the Disposition Date, the Disposition Date shall
be deemed to be the date of occurrence of a further Stock Acquisition
Date and Section 3.1 shall apply thereto.
(c) In the event that a Person acquires Voting Shares pursuant to a
Permitted Bid or an Exempt Acquisition referred to in Subsection
5.l(d), then the Board of Directors of the Corporation shall,
immediately upon the consummation of such acquisition and without
further formality, be deemed to have elected to redeem the Rights at
the Redemption Price.
(d) The Board of Directors acting in good faith may prior to the occurrence
of the relevant Flip-in Event, upon prior written notice delivered to
the Rights Agent, 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 with the prior consent
of the holders of Voting Shares obtained as set forth herein prior to
the occurrence of the relevant Flip-In Event, upon prior written notice
delivered to the Rights Agents, determine 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). In the event that the Board of Directors proposes such a
waiver, the Board of Directors shall extend the Separation Time to a
time and date subsequent to and not more than 10 Business Days
following the meeting of shareholders held to approve such waiver.
(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 without
the consent of the holders of the Voting Shares or the Rights and
reissue Rights under this Agreement to holders of record of Voting
Shares immediately following such redemption. Upon the Rights being
redeemed and reissued pursuant to this Subsection 5.1(f), all the
provisions of this Agreement shall continue to apply as if the
Separation Time had not occurred and Rights Certificates representing
the number of Rights held by each holder of record of Common Shares at
the Separation Time had not been mailed to each such holder, and for
all purposes of this Agreement the Separation Time shall be deemed not
to have occurred and the Corporation shall be deemed to have issued
replacement Rights to the holders of its then outstanding Common
Shares.
36
(g) If the Board of Directors is deemed under Subsection 5.1(c) to have
elected or elects under Subsection 5.1(a) to redeem the Rights, the
right to exercise the Rights will thereupon, without further action and
without notice, terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price.
(h) Within 10 days after the Board of Directors is deemed under Subsection
5.1(c) to have elected or elects under Subsection 5.1(a) or (f) to
redeem the Rights, the Corporation shall give notice of redemption to
the holders of the then outstanding Rights by mailing such notice to
each such holder at his last address as it appears upon the registry
books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Voting Shares. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made.
(i) If a redemption of Rights pursuant to subsection 5.1(a) or a waiver of
a Flip-in Event pursuant to Subsection 5.1(e) is proposed at any time
prior to the Separation Time, such redemption or waiver shall be
submitted for approval to the holders of Voting Shares. Such approval
shall be deemed to have been given if the redemption or waiver is
approved by the affirmative vote of a majority of the votes cast by
Independent Shareholders represented in person or by proxy at a meeting
of such holders duly held in accordance with applicable laws and the
Corporation's by-laws.
(j) If a redemption of Rights pursuant to subsection 5.1(a) or a waiver of
a Flip-in Event pursuant to Subsection 5.1(e) is proposed at any time
after the Separation Time, such redemption or waiver shall be submitted
for approval to the holders of Rights. Such approval shall be deemed to
have been given if the redemption or waiver is approved by holders of
Rights as set forth in Subsection 5.4(d).
5.2 EXPIRATION
No person will have any rights pursuant to this Agreement or in respect
of any Right after the Expiration Time, except in respect of any right to
receive cash, securities or other property which has accrued at the Expiration
Time and except as specified in Subsections 4.1(a) and 4.1(b) hereof.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the number or kind or class of
shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.
37
5.4 SUPPLEMENTS AND AMENDMENTS
(a) Subject to Subsections 5.4(b) and (c) and this Subsection 5.4(a), the
Corporation may from time to time amend, vary or delete any of the
provisions of this Agreement and the Rights provided that no amendment,
variation or deletion made on or after the date of the meeting of
shareholders at which the resolution referred to in Section 5.21 is to
be considered shall be made without the prior consent of the holders of
the Rights, given as provided in Subsection 5.4(b) below, except that
amendments, variations or deletions made for any of the following
purposes shall not require such prior approval but shall be subject to
subsequent ratification in accordance with Subsection 5.4(b):
(i) in order to make such changes as are necessary in order to
maintain the validity of this Agreement and the Rights as a
result of any change in any applicable legislation,
regulations or rules; or
(ii) in order to make such changes as are necessary in order to
cure any clerical or typographical error.
(b) Any amendment, variation or deletion to or from this Agreement made by
the Board of Directors pursuant to Subsection 5.4(a) shall:
(i) if made prior to the Separation Time, be submitted to the
shareholders of the Corporation at the next meeting of
shareholders and the shareholders may, by resolution passed by
a majority of the votes cast by Independent Shareholders who
vote in respect of such amendment, variation or deletion,
confirm or reject such amendment or supplement; or
(ii) if made after the Separation Time, be submitted to the holders
of Rights at a meeting to be held on a date not later than the
date of the next meeting of shareholders of the Corporation
and the holders of Rights may, by resolution passed by a
majority of the votes cast by the holders of Rights which have
not become void pursuant to Subsection 3.1(b) who vote in
respect of such amendment, variation or deletion, confirm or
reject such amendment or supplement.
Any amendment, variation or deletion pursuant to Subsection 5.4(a)
shall be effective only when so consented to by the holders of Voting
Shares or Rights, as applicable (except in the case of an amendment,
variation or deletion referred to in any of Clauses 5.4(a)(i) or (ii),
which shall be effective from the date of the resolution of the Board
of Directors adopting such amendment, variation or deletion and shall
continue in effect until it ceases to be effective (as in this
paragraph described) and, where such amendment, variation or deletion
is confirmed, it shall continue in effect in the form so confirmed). If
an amendment, variation or deletion pursuant to Clause 5.4(a)(i) or
(ii) is rejected by the shareholders or the holders of Rights or is not
submitted to the shareholders or holders of Rights as required, then
such amendment, variation or deletion shall cease to be effective from
and after the termination of the meeting at which it was rejected or to
which it should have been but was not submitted or from and after the
date
38
of the meeting of holders of Rights that should have been but was not
held, and no subsequent resolution of the Board of Directors to amend,
vary or delete any provision of this Agreement to substantially the
same effect shall be effective until confirmed by the shareholders or
holders of Rights, as the case may be.
(c) For greater certainty and notwithstanding anything herein contained,
(i) the Corporation, at or prior to the meeting of shareholders
referred to in Section 5.21 or any adjournment or postponement thereof,
may supplement or amend this Agreement without the approval of any
holders of Rights or Voting Shares in order to make any changes that
the Board of Directors acting in good faith may deem necessary or
desirable, (ii) no amendment, variation or deletion to the provisions
of Article 4 shall be made except with the concurrence of the Rights
Agent thereto, and (iii) neither the exercise by the Board of Directors
of any power or discretion conferred on it hereunder nor the making by
the Board of Directors of any determination or the granting of any
waiver it is permitted to make or give hereunder shall constitute an
amendment, variation or deletion of the provisions of this Agreement or
the Rights, for purposes of this Section 5.4 or otherwise.
(d) The approval, confirmation or consent of the holders of Rights with
respect to any matter arising hereunder shall be deemed to have been
given if the action requiring such approval, confirmation or consent is
authorized by the affirmative votes of the holders of Rights present or
represented at and entitled to be voted at a meeting of the holders of
Rights and representing a majority of the votes cast in respect
thereof. For the purposes hereof, each outstanding Right (other than
Rights which are void pursuant to the provisions hereof or which, prior
to the Separation Time, are held otherwise than by Independent
Shareholders) shall be entitled to one vote, and the procedures for the
calling, holding and conduct of the meeting shall be those, as nearly
as may be, which are provided in the Corporation's By-laws and the
Canada Business Corporations Act with respect to meetings of
shareholders of the Corporation.
(e) The Corporation shall be required to provide the Rights Agent with
notice in writing of any such amendment, variation or deletion to this
Agreement as referred to in this Section 5.4 within 5 days of effecting
such amendment, variation or deletion.
(f) Any supplement or amendment to this Agreement pursuant to Subsections
5.4 (b) through (e) shall be subject to the receipt of any requisite
approval or consent from any governmental or regulatory authority
having jurisdiction over the Corporation, including without limitation
any requisite approval of stock exchanges on which the Common Shares
are listed.
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Corporation will not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. After
the Separation Time there shall be paid, in lieu of such fractional
Rights, to the registered holders of the Rights Certificates with
regard to which fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the Market Price of a
whole Right. The Rights Agent shall have no obligation to make any
payments in lieu of fractional Rights unless the
39
Corporation shall have provided the Rights Agent with the necessary
funds to pay in full all amounts payable in accordance with Section 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
Section 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; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any other
Rights may, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Corporation to enforce, or otherwise
act in respect of, such holder's right to exercise such holder's Rights in the
manner provided in this Agreement and in such holder's Rights Certificate.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER
No holder, as such, of any Rights or Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
Common Shares or any other securities which may at any time be issuable on the
exercise of Rights, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights, as such, any
of the rights of a shareholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 5.8 hereof) or to receive dividends or subscription rights
or otherwise, until such Rights shall have been exercised in accordance with the
provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS
In case the Corporation proposes after the Separation Time and prior to
the Expiration Time to effect the liquidation, dissolution or winding up of the
Corporation or the sale of all or substantially all of the Corporation's assets,
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 5.9 hereof, a notice of such proposed action, which
shall specify the date on which such liquidation, dissolution, or winding up is
to take
40
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:
Nortel Networks Corporation
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Corporate Secretary
Facsimile No. (000) 000-0000
(b) if to the Rights Agent:
Computershare Trust Company of Canada
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Senior Manager, Client Services
Facsimile No. (000) 000-0000
(c) if to the holder of any Rights, to the address of such
holder as it appears on the registry books of the Rights
Agent or, prior to the Separation Time, on the registry
books of the Corporation for the Common Shares.
5.10 COSTS OF ENFORCEMENT
The Corporation agrees that if the Corporation or any other Person the
securities of which are purchasable upon exercise of Rights fails to fulfil any
of its obligations pursuant to this Agreement, then the Corporation or such
Person will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce his rights
pursuant to any Rights or this Agreement.
5.11 REGULATORY APPROVALS
Any obligation of the Corporation or action or event contemplated by
this Agreement shall be subject to applicable law and to the receipt of any
requisite approval or consent from any governmental or regulatory authority.
Without limiting the generality of the foregoing, any issuance or delivery of
debt or equity securities (other than non-convertible debt securities) of the
Corporation upon the exercise of Rights and any amendment to this Agreement
shall be subject
41
to any required prior consent of the stock exchange(s) on which the Corporation
is from time to time listed or has been listed during the six months prior to
such amendment.
5.12 DECLARATION AS TO NON-CANADIAN AND NON-U.S. HOLDERS
If in the opinion of the Board of Directors (who may rely upon the
advice of counsel), any action or event contemplated by this Agreement would
require compliance with the securities laws or comparable legislation of a
jurisdiction outside Canada and the United States of America, its territories
and possessions, the Board of Directors acting in good faith may take such
actions as it may deem appropriate to ensure that such compliance is not
required, including without limitation establishing procedures for the issuance
to a Canadian resident Fiduciary of Rights or securities issuable on exercise of
Rights, the holding thereof in trust for the Persons entitled thereto (but
reserving to the Fiduciary or to the Fiduciary and the Corporation, as the
Corporation may determine, absolute discretion with respect thereto) and the
sale thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. In no event shall the Corporation or the Rights Agent be
required to issue or deliver Rights or securities issuable on exercise of Rights
to Persons who are citizens, residents or nationals of any jurisdiction other
than Canada and a province or territory thereof and the United States of America
and any state thereof in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes.
5.13 SUCCESSORS
All the covenants and provisions of this Agreement by or for the
benefit of the Corporation or the Rights Agent shall bind and enure to the
benefit of their respective successors and assigns hereunder.
5.14 BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person
other than the Corporation, the Rights Agent and the holders of the Rights any
legal or equitable right, remedy or claim under this Agreement; this Agreement
shall be for the sole and exclusive benefit of the Corporation, the Rights Agent
and the holders of the Rights.
5.15 SHAREHOLDER REVIEW
At or prior to the annual meeting of shareholders of the Corporation to
be held in 2006, provided that a Flip-in Event has not occurred prior to such
time, the Board of Directors shall submit a resolution ratifying the continued
existence of this Agreement to the Independent Shareholders for their
consideration and, if thought advisable, approval. Unless a majority of the
votes cast by Independent Shareholders who vote in respect of such resolution
are voted in favour of the continued existence of this Agreement, the Board of
Directors shall, immediately upon the confirmation by the chairman of such
shareholders' meeting of the result of the vote on such resolution and without
further formality, be deemed to have elected to redeem the Rights at the
Redemption Price.
42
5.16 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS
All actions, calculations, interpretations and determinations
(including all omissions with respect to the foregoing) which are done or made
by the Board of Directors 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.
5.17 GOVERNING LAW
This Agreement and the Rights issued hereunder shall be deemed to be a
contract made under the laws of the Province of Ontario and 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.
5.18 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.
5.19 COUNTERPARTS
This Agreement may be executed in any number of counterparts and each
of such counterparts will for all purposes be deemed to be an original, and all
such counterparts shall together constitute one and the same instrument.
5.20 SEVERABILITY
If any term or provision hereof or the application thereof to any
circumstance is, in any jurisdiction and to any extent, invalid or
unenforceable, such term or provision will be ineffective only to the extent of
such invalidity or unenforceability 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.
5.21 EFFECTIVE DATE
The Original Agreement is effective and in full force and effect from
and after the Effective Date. If a majority of the votes cast by the Independent
Shareholders who vote in respect of a resolution to ratify and approve the
continued existence of the Original Agreement and the amendment and restatement
thereof as provided herein at the annual meeting of shareholders of the
Corporation to be held in 2003 are voted in favour of such resolution, this
Agreement shall upon such approval of such resolution amend, restate and
supersede the Original Agreement and shall be deemed to be effective from and
after the Effective Date. If such resolution is not then so approved by the
aforesaid Independent Shareholders, this Agreement shall have no force or
effect. For greater certainty, unless a majority of the votes cast by
Independent Shareholders who vote in respect of such resolution are voted in
favour of such
43
resolution, the Board of Directors shall, immediately upon the confirmation by
the chairman of such shareholders' meeting of the result of the vote on such
resolution and without further formality, be deemed to have elected to redeem
the Rights at the Redemption Price in accordance with the terms of the Original
Agreement.
5.22 TIME OF THE ESSENCE
Time shall be of the essence hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of February 14, 2003.
NORTEL NETWORKS CORPORATION
By: /s/ XXXXXXXX X. XXXXXX
---------------------------
Xxxxxxxx X. XxXxxx
Chief Legal Officer
By: /s/ XXXXX X. XXXXXXXX
---------------------------
Xxxxx X. Xxxxxxxx
Assistant Secretary
COMPUTERSHARE TRUST COMPANY OF CANADA
By: /s/ XXXX XXXXXXXXX
---------------------------
Xxxx Xxxxxxxxx
Professional, Client Services
By: /s/ XXXXX XxXXXXXXXX
---------------------------
Xxxxx XxXxxxxxxx
Manager, Client Services
44
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 o 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 Amended and Restated Shareholder Rights
Plan Agreement made as of February 14, 2003 between Nortel Networks Corporation,
a corporation existing under the laws of Canada, (the "CORPORATION") and
Computershare Trust Company of Canada, a trust company incorporated under the
laws of Canada, as Rights Agent (the "RIGHTS AGENT"), which term shall include
any successor Rights Agent under the Rights Agreement, as such agreement may
from time to time be amended, varied, restated or replaced (the "RIGHTS
AGREEMENT") to purchase from the Corporation, at any time after the Separation
Time and prior to the Expiration Time (as such terms are defined in the Rights
Agreement), one fully paid common share of the Corporation (a "COMMON SHARE") at
the Exercise Price referred to below, upon presentation and surrender of this
Rights Certificate, together with the Form of Election to Exercise appropriately
completed and duly executed, to the Rights Agent at its principal office in
Toronto. Until adjustment thereof in certain events as provided in the Rights
Agreement, the Exercise Price shall be an amount equal to three times the Market
Price (as defined in the Rights Agreement) per Common Share (determined as of
the Separation Time) per Right (payable by certified cheque, banker's draft or
money order payable to the order of the Rights Agent or by wire transfer to an
account designated by 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 Toronto, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
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:
NORTEL NETWORKS CORPORATION
Per: ___________________________________________
Per: ___________________________________________
Countersigned:
2
COMPUTERSHARE TRUST COMPANY OF
CANADA, in the City of Toronto
Per: ___________________________________________
3
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
Date: _______________________________ ___________________________________
Signature
_______________________________________
Signature Guaranteed
(Signature must correspond to name
as written upon theface 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
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.
2
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________________________________________________________
(Please print name and address of transferee) the Rights represented by this
Rights Certificate, together with all right, title and interest therein.
Date: _______________________________ ___________________________________
Signature
_______________________________________
(Signature Guaranteed) (Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signature must be guaranteed by a Canadian chartered bank, 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 deemed 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 TO BE NULL AND VOID.
3
Certificat n DEGREES Droits
LES DROITS PEUVENT ETRE RACHETES, AU GRE DE LA SOCIETE, SELON LES MODALITES
INDIQUEES DANS LA CONVENTION VISANT UN REGIME DE DROITS DE SOUSCRIPTION DES
ACTIONNAIRES. DANS CERTAINES CIRCONSTANCES (PRECISEES A L'ALINEA 3.1(b) DE CETTE
CONVENTION), LES DROITS DETENUS EN PROPRIETE EFFECTIVE PAR UNE PERSONNE FAISANT
UNE ACQUISITION, CERTAINES PARTIES APPARENTEES A UNE PERSONNE FAISANT UNE
ACQUISITION OU LE CESSIONNAIRE D'UNE PERSONNE FAISANT UNE ACQUISITION OU D'UNE
DE CES PARTIES APPARENTEES DEVIENDRONT NULS SANS AUTRE FORMALITE.
CERTIFICAT DE DROITS
Les presentes attestent que o est le porteur inscrit du nombre de Droits indique
ci-dessus, dont chacun permet au porteur inscrit des Droits, sous reserve des
modalites, dispositions et conditions de la convention visant un regime de
droits de souscription des actionnaires modifiee et mise a jour intervenue en
date du 14 fevrier 2003 entre Corporation Nortel Networks, societe existant en
vertu des xxxx du Canada (<< SOCIETE >>) et la Societe de fiducie Computershare
du Canada, societe de fiducie constituee en vertu des xxxx du Canada, en qualite
d'agent des Droits (<< AGENT DES DROITS >>), terme qui comprend tout successeur
de l'agent des Droits conformement a la convention visant les Droits, en sa
version pouvant etre modifiee, mise a jour ou remplacee de temps a autre (<<
CONVENTION VISANT LES DROITS >>), d'acheter aupres de la Societe, en tout temps
apres l'heure de separation et avant l'heure d'expiration (selon la definition
de ces termes dans la convention visant les Droits) une action ordinaire
entierement liberee de la Societe (<< ACTION ORDINAIRE >>) au prix d'exercice
indique ci-dessous, sur presentation et remise du present certificat de Droits,
accompagne du formulaire de choix d'exercice adequatement rempli et dument
signe, a l'agent des Droits a son bureau principal de Toronto. Tant qu'il ne
sera pas ajuste dans certaines circonstances prevues dans la convention visant
les Droits, le prix d'exercice sera un montant egal a trois fois le prix du
marche (selon la definition donnee dans la convention visant les Droits) par
action ordinaire (determine a l'heure de separation) pour chaque Droit (payable
par cheque certifie, traite bancaire ou mandat-poste etabli a l'ordre de l'agent
des Droits ou par virement telegraphique a un compte designe par celui-ci). Le
nombre d'actions ordinaires pouvant etre achete pour le prix d'exercice peut
faire l'objet d'ajustements comme le stipule la convention visant les Droits.
Le present certificat de Droits est assujetti a toutes les modalites,
dispositions et conditions de la convention visant les Droits, lesquelles sont
integrees dans les presentes par renvoi et en font partie integrante, convention
a laquelle il est fait renvoi par les presentes pour la description complete des
droits, restrictions des droits, obligations, fonctions et immunites qu'elle
confere a l'agent des Droits, a la Societe et aux porteurs des certificats de
Droits. Des copies de la convention visant les Droits sont conservees au siege
social de la Societe et peuvent etre obtenues sur demande ecrite.
Le present certificat de Droits, avec ou sans autres certificats de Droits,
peut, sur remise au bureau principal de l'agent des Droits a Toronto, etre
echange contre un ou plusieurs autres certificats de Droits de la meme teneur
attestant un nombre global de Droits egal au nombre global des Droits attestes
par le ou les certificats de Droits remis. Si le present certificat de Droits
est exerce en partie, le porteur inscrit aura le droit de recevoir, sur remise
de celui-ci, un ou plusieurs autres certificats de Droits representant le nombre
de Droits entiers qui n'auront pas ete exerces.
Sous reserve des dispositions de la convention visant les Droits, les Droits
attestes par le present certificat de Droits peuvent etre rachetes par la
Societe au prix de rachat de 0,0001 $ par Droit, sous reserve d'ajustements dans
certaines circonstances.
Aucune fraction d'action ordinaire ne sera emise au moment de l'exercice d'un ou
de plusieurs Droits attestes par les presentes mais, en remplacement de
celle-ci, un paiement comptant sera effectue comme le prevoit la convention
visant les Droits.
Aucun porteur du present certificat de Droits, en tant que tel, ne sera habile a
voter ou a recevoir des dividendes ni ne sera repute a quelque fin que ce soit
etre le porteur d'actions ordinaires ou d'autres titres pouvant etre emissibles
a un moment quelconque au moment de l'exercice du present certificat, et aucune
disposition de la convention visant les Droits ou du present certificat ne xxxxx
etre interpretee comme conferant au porteur du present certificat, en tant que
tel, l'un quelconque des droits d'un actionnaire de la Societe ni le droit de
voter en vue de l'election d'administrateurs ou a l'egard de toute question
soumise aux actionnaires a une assemblee de ceux-ci, ni le droit d'approuver ou
de s'abstenir d'approuver toute mesure prise par la Societe, ni le droit de
recevoir l'avis de convocation a quelque assemblee des actionnaires que ce soit
ou un avis des autres mesures visant les actionnaires de la Societe (sauf comme
le prevoit la convention visant les Droits), ni le droit de recevoir des
dividendes ou des droits de souscription ni quelque autre droit, et ce, tant que
les Droits attestes par le present certificat de Droits n'auront pas ete exerces
comme le prevoit la convention visant les Droits.
Le present certificat de Droits n'est pas valide a quelque fin que ce soit tant
qu'il n'a pas ete contresigne par l'agent des Droits.
2
EN FOI DE QUOI le fac-simile de la signature des dirigeants appropries de la
Societe a ete appose sur le present certificat de Droits.
Date :
CORPORATION NORTEL NETWORKS
Par :________________________________________
Par :________________________________________
Contresignature :
SOCIETE DE FIDUCIE COMPUTERSHARE DU CANADA
dans la ville de Toronto
Par :________________________________________
3
FORMULAIRE DE CHOIX D'EXERCICE
Par les presentes, le soussigne choisit irrevocablement d'exercer
_____________________ Droits entiers attestes par le present certificat de
Droits en vue de l'achat des actions ordinaires emissibles au moment de
l'exercice de ces Droits et demande que les certificats attestant ces actions
ordinaires soient emis au nom de la personne suivante et lui soient livres :
_______________________________________________________
Nom
_______________________________________________________
Adresse
_______________________________________________________
Ville et province
_______________________________________________________
Numero d'assurance sociale ou autre numero d'identification du contribuable
Si ce nombre de Droits ne constitue pas la totalite des Droits attestes par le
present certificat de Droits, un nouveau certificat de Droits attestant le reste
de ces Droits sera immatricule au nom de la personne suivante et lui sera livre:
_______________________________________________________
Nom
_______________________________________________________
Adresse
_______________________________________________________
Ville et province
_______________________________________________________
Numero d'assurance sociale ou autre numero d'identification du contribuable
Date : ______________________________ ___________________________________
Signature
_____________________________________
(Signature avalisee) (La signature doit correspondre en
tous points au nom apparaissant au
recto du present certificat de
Droits, sans modification, ajout
ni changement d'aucune sorte.)
La signature doit etre avalisee par une banque a charte canadienne, une societe
de fiducie canadienne, une firme membre d'une bourse reconnue au Canada ou d'une
bourse nationale inscrite aux Etats-Unis ou un membre du Securities Transfer
Association Medallion Program (programme STAMP).
(Attestation devant etre signee par le porteur si elle est exacte)
Le soussigne atteste et declare par les presentes, au profit de la Societe et de
tous les porteurs de Droits et d'actions ordinaires, que les Droits attestes par
le present certificat de Droits ne sont pas et, a la connaissance du soussigne,
n'ont jamais ete detenus en propriete effective par une personne faisant une
acquisition ou un membre du meme groupe qu'elle ou une personne avec qui elle a
des liens ou une autre personne agissant conjointement ou de concert avec l'un
de ceux-ci (selon la definition de ces termes dans la convention visant les
Droits).
_____________________________________________
Signature
AVIS
SI L'ATTESTATION FIGURANT CI-DESSUS DANS LE FORMULAIRE DE CHOIX D'EXERCICE N'EST
PAS SIGNEE, LA SOCIETE CONSIDERERA LE VERITABLE PROPRIETAIRE DES DROITS
REPRESENTES PAR LE PRESENT CERTIFICAT DE DROITS COMME UNE PERSONNE FAISANT UNE
ACQUISITION (SELON LA DEFINITION DONNEE DANS LA CONVENTION VISANT LES DROITS)
ET, PAR CONSEQUENT, CES DROITS SERONT NULS ET NON AVENUS.
2
FORMULAIRE DE CESSION
CONTRE VALEUR RECUE, le soussigne vend, cede et transfere par les presentes a
________________________________________________________________________________
(veuillez ecrire le nom et l'adresse du cessionnaire en lettres moulees) les
Droits representes par le present certificat de Droits, de meme que tous les
droits, titres et interets s'y attachant.
Date : ______________________________ ___________________________________
Signature
_____________________________________
(Signature avalisee) (La signature doit correspondre en
tous points au nom apparaissant au
recto du present certificat de
Droits, sans modification, ajout
ni changement d'aucune sorte.)
La signature doit etre avalisee par une banque a charte canadienne, une societe
de fiducie canadienne, une firme membre d'une bourse reconnue au Canada ou d'une
bourse nationale inscrite aux Etats-Unis ou un membre du Securities Transfer
Association Medallion Program (programme STAMP).
(Attestation devant etre signee par le cedant si elle est exacte)
Le soussigne atteste et declare par les presentes, au profit de la Societe et de
tous les porteurs de Droits et d'actions ordinaires, que les Droits attestes par
le present certificat de Droits ne sont pas et, a la connaissance du soussigne,
n'ont jamais ete detenus en propriete effective par une personne faisant une
acquisition ou un membre du meme groupe qu'elle ou une personne avec qui elle a
des liens ou une autre personne agissant conjointement ou de concert avec l'un
de ceux-ci (selon la definition de ces termes dans la convention visant les
Droits).
_______________________________________________
Signature
_______________________________________________
(Veuillez ecrire le nom en lettres moulees sous
la signature)
AVIS
SI L'ATTESTATION FIGURANT CI-DESSUS DANS LE FORMULAIRE DE CESSION N'EST PAS
SIGNEE, LA SOCIETE CONSIDERERA LE VERITABLE PROPRIETAIRE DES DROITS REPRESENTES
PAR LE PRESENT CERTIFICAT DE DROITS COMME UNE PERSONNE FAISANT UNE ACQUISITION
(SELON LA DEFINITION DONNEE DANS LA CONVENTION VISANT LES DROITS) ET, PAR
CONSEQUENT, CES DROITS SERONT NULS ET NON AVENUS.
