SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
TLC The Laser Center Inc.
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(Exact name of registrant as specified in its
articles of incorporation)
Ontario, Canada 980151150
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(Jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
5600 Explorer Drive, Suite 301,
Mississauga, Ontario, Canada L4W 4Y2
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(Address of principal executive offices) (Zip Code)
If this form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), please check the following box.
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If this form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box.
|X|
Securities Act registration statement file number to which this form relates:
N/A
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None None
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Common Stock
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(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
On September 9, 1999, the Board of Directors of TLC The Laser Center
Inc., an Ontario corporation (the "Corporation"), authorized the
Corporation to adopt a shareholder Rights Plan. On September 21, 1999, the
Corporation adopted such a Rights Plan. On October 4, 1998, one Right was
issued under the Rights Plan and is attached to each outstanding common
share of the Corporation. The Plan will be submitted to shareholders for
ratification at the shareholders' meeting on November 4, 1999 (the
"Meeting"). A Right only becomes exercisable upon the occurrence of a
Flip-In Event, which is a transaction pursuant to which a person becomes
an Acquiring Person and which otherwise does not meet the requirements of
a Permitted Bid.
When exercised, a Right entitles each shareholder who is not then
attempting to acquire control of the Corporation to purchase additional
common shares at a substantial discount to market value. This purchase
would cause substantial dilution to the person or group of persons
attempting to acquire control of the Corporation, other than by way of a
Permitted Bid. The Rights will expire on the termination of the Rights
Plan, unless redeemed before such time.
Effect and Advantages of a Rights Plan
Under the provincial securities legislation in Canada, a take-over
bid generally means an offer to acquire voting or equity shares of a
corporation that, together with shares already owned by the bidder and
certain parties related thereto, amount to 20% or more of the outstanding
voting shares. The existing legislative framework for take-over bids
presents certain concerns for shareholders, which has led many Canadian
companies to adopt shareholder rights plans. In particular, this
legislation permits a take-over bid to expire 21 days after it is
initiated. The Board of Directors is of the view that this is an
insufficient time period for shareholders to consider a take-over bid and
make a reasoned and careful decision regarding such bid, or to consider
actual or possible competing take-over bids. Furthermore, a shareholder
may feel compelled to tender its common shares to a take-over bid which
such shareholder considers to be inadequate, out of a concern that in
failing to do so, it may be left with illiquid or minority-discounted
common shares. As a result, in the absence of a shareholders rights plan,
shareholders may fail to realize the maximum value for their common
shares.
The purpose of the Rights Plan is to ensure adequate time for
shareholders of the Corporation to assess the merits of a take-over bid
without undue pressure. The Rights Plan is designed to give the Board of
Directors time to consider alternatives, which may allow shareholders to
receive full and fair value for their common shares. Moreover, the Board
of Directors believes that the Rights Plan will encourage persons seeking
to acquire control of the Corporation to do so by means of a public
take-over bid available to all shareholders, which will give shareholders
the best opportunity of being assured that they will participate
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on an equal basis, regardless of the size of their holdings, in an
acquisition of control of the Corporation.
The Rights Plan does not affect the duty of the Board of Directors
to act honestly and in good faith with a view to the best interests of the
Corporation and its shareholders. Indeed, the Board of Directors believes
that the Rights Plan remains an appropriate mechanism to ensure that the
Board of Directors will be able to discharge its responsibility to assist
shareholders in responding to a take-over bid.
The Rights Plan was not adopted by the Board of Directors in
response to any acquisition or take-over bid. Furthermore, in adopting the
Rights Plan, the Board of Directors does not intend to prevent a change of
control of the Corporation or to secure the continuance of current
management or the directors currently in office. The Rights Plan is not
part of a plan by management to adopt a series of anti-takeover measures.
However, the Corporation already has in place certain provisions in its
articles and by-laws which may be deemed to render more difficult, or
discourage, takeovers or changes in control of the Corporation. See
"Existing Anti-Takeover Provisions". At present, management does not
intend to propose other anti-takeover measures in future proxy
solicitations.
Shareholder rights plans have been adopted by a large number of
publicly-held corporations in Canada. The terms of the Rights Plan are
substantially the same as those recently adopted by other major Canadian
companies.
Disadvantages of a Rights Plan
The Rights Plan could have the effect of deterring tender offers or
take-over attempts, even though such an offer or attempt might appear to
shareholders to be beneficial, and could make it more difficult for the
holder of a large block of the common shares to assume control of the
Corporation. In addition, it has been argued that rights plans, in
general, have the effect of entrenching management by discouraging certain
take-overs which are not favored by management.
Existing Anti-Takeover Provisions
Under the Corporation's Articles of Incorporation, the Board of
Directors may issue an unlimited number of additional common shares.
Although the Board of Directors has no present intention of doing so, such
shares could be issued in a manner that would make an acquisition of the
Corporation more difficult.
Terms of the Rights Plan
The material terms of the Rights Plan are summarized below.
Reference should be made to the actual provisions of the Shareholder
Rights Plan Agreement between the
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Corporation and CIBC Mellon Trust Company as Rights Agent, copies of which
are available to shareholders upon request. Capitalized terms which are
not defined below have the meanings attributed to such terms in such
agreement.
Acquiring Person
An Acquiring Person is generally a person who becomes the beneficial
owner of 20% or more of the outstanding common shares of the Corporation.
Under the Rights Plan, there are various exceptions, including:
(a) a person who acquires 20% or more of the outstanding
common shares due to (i) acquisitions of common shares by the
Corporation, (ii) pro rata distributions of common shares by the
Corporation, or (iii) the issuance of common shares on an exempt
private placement basis (subject to certain limits); and
(b) underwriters who obtain common shares for the purposes of
a public distribution.
Beneficial Ownership
The thresholds for triggering the Rights Plan are based on the
percentage of shares that are Beneficially Owned by a person. This is
defined in terms of legal or equitable ownership of common shares. In
addition, a person is deemed to be the Beneficial Owner of common shares
in circumstances where that person, and its affiliates or associates and
any other person acting jointly or in concert with such person, has a
right to acquire common shares within 60 days. There are various
exceptions to this rule, including:
(a) persons who tender common shares pursuant to a take-over
bid;
(b) persons such as portfolio managers who hold as nominees;
(c) persons who enter into lock-up agreements on certain terms
and conditions; and
(d) persons who have been given proxies to vote other persons'
common shares in connection with the public proxy solicitation, or
who have agreements as to how they will vote their common shares.
Permitted Bid
If a take-over bid is structured as a Permitted Bid, a Flip-In Event
will not occur and the Rights will not become exercisable. The
requirements of a Permitted Bid include the following:
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(a) the take-over bid must be made to all shareholders by
means of a take-over bid circular;
(b) the take-over bid must not permit the bidder to take up
any common shares that have been tendered pursuant to the take-over
bid prior to the expiry of a period not less than 60 days after the
take-over bid is made, and then only if at such time more than 50%
of the common shares held by the Independent Shareholders
(shareholders other than the bidder, its affiliates and persons
acting jointly or in concert with such bidder), have been tendered
pursuant to the take-over bid and not withdrawn;
(c) the take-over bid must contain an irrevocable and
unqualified provision that, unless it is withdrawn, common shares
may be tendered at any time during the 60 day period referred to in
(b) above and that any common shares deposited pursuant to the
take-over bid may be withdrawn until they have been taken up and
paid for; and
(d) if more than 50% of the common shares held by Independent
Shareholders are tendered to the take-over bid within the 60-day
period, then the bidder must make a public announcement of that fact
and the take-over bid must then remain open for an additional 10
business days from the date of such public announcement.
The Rights Plan also allows a Competing Permitted Bid to be made
while a Permitted Bid is in existence. A Competing Permitted Bid is a
take-over bid that is made after a Permitted Bid has been made but prior
to its expiry, and which satisfies all of the requirements of a Permitted
Bid except that it may expire on the same date as the Permitted Bid
(provided that the Competing Permitted Bid is open for a minimum of 21
days).
The requirements of a Permitted Bid and a Competing Permitted Bid
enable shareholders to decide whether the take-over bid or any competing
permitted bid is adequate on its own merits, without being influenced by
the likelihood that a take-over bid will succeed. Moreover, if there is
sufficient support for a take-over bid such that at least 50% of the
outstanding common shares have been tendered to it, a shareholder who has
not yet tendered to that bid will have a further 10 business days in which
to decide whether to withdraw its common shares from a competing take-over
bid, if any, and whether to tender to the take-over bid.
Waiver and Redemption
The Board of Directors may waive the application of the Rights Plan
to a particular take-over bid or redeem the Rights in the following
circumstances:
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(a) a waiver can only be given where a take-over bid is made
by way of a take-over bid circular;
(b) a waiver given in respect of one take-over bid constitutes
an automatic waiver in respect of all other competing take-over
bids;
(c) a waiver may be given in the event of an acquisition of
common shares by any person over the 20% threshold, provided that
such person agrees to dispose of the excess shares within 30 days,
if such acquisition was inadvertent and without any intention to
cause a Flip-In Event, and otherwise within 10 days; and
(d) the Rights are deemed to be redeemed upon the successful
completion of a Permitted Bid (or a Competing Permitted Bid) if a
waiver has been given in respect of any other take-over bid made by
way of circular.
The Board of Directors may, however, terminate the Rights Plan, with
prior shareholder approval, at any time prior to the occurrence of a
Flip-In Event by redeeming all of the Rights that are then outstanding at
a price of $0.0001 per Right.
Termination
The Rights Plan will expire on the fifth anniversary of its
adoption, namely on November 4, 2004. However, in addition to the
shareholder approval that is being sought at the Meeting, shareholder
reconfirmation of the Rights Plan is also required at the first annual
shareholders meeting after the third anniversary of the Rights Plan,
namely at the shareholders meeting to be held after November 4, 2002.
If the Rights Plan is not approved at the Meeting, it will terminate
immediately.
Item 2. Exhibits.
1. Shareholder Rights Plan dated as of September 21, 1999, between TLC
The Laser Center Inc. and CIBC Mellon Trust Company, as Rights
Agent, including the Form of Rights Certificate attached thereto as
Exhibit A.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
TLC THE LASER CENTER INC.
(Registrant)
Date: October 4, 1999 By: /s/ Elizabeth A. Karmin
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Name: Elizabeth A. Karmin
Title: Deputy General Counsel and
Assistant Secretary
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EXHIBIT INDEX
1. Shareholder Rights Plan dated as of September 21, 1999, between TLC
The Laser Center Inc. and CIBC Mellon Trust Company, as Rights
Agent, including the Form of Rights Certificate attached thereto as
Exhibit A.
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SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT dated as of September 21, 1999,
B E T W E E N:
TLC THE LASER CENTER INC., a corporation incorporated
under the laws of Ontario (the "Corporation")
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CIBC MELLON TRUST COMPANY, a trust company incorporated
under the laws of Canada, as Rights Agent (the "Rights
Agent")
WHEREAS the Board of Directors has determined that it is advisable
and in the best interests of the Corporation to adopt a Shareholder Rights Plan
(the "Shareholder Rights Plan");
AND WHEREAS in connection with the implementation of the Shareholder
Rights Plan, the Board of Directors has:
(a) authorized and declared a distribution of one right (a "Right")
effective at the Record Time in respect of each Common Share
outstanding at that time; and
(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 WHEREAS each Right entitles the holder thereof, after the
Separation Time, to purchase securities of the Corporation pursuant to the terms
and subject to the conditions set forth herein;
AND WHEREAS the Corporation has appointed the Rights Agent to act on
behalf of the Corporation, and the Rights Agent is willing to so act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates, the exercise of Rights and other matters referred to herein,
NOW THEREFORE in consideration of the premises and their respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE 1. - INTERPRETATION
1.1. Certain Definitions
For purposes of this Agreement, the following terms have the
meanings indicated:
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(a) "Acquiring Person" means any Person who, after the date hereof,
becomes the Beneficial Owner of 20% or more of the outstanding
Voting Shares, but does not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or more of
the outstanding Voting Shares as a result of:
(A) a Voting Share Reduction;
(B) a Permitted Bid Acquisition;
(C) an Exempt Acquisition;
(D) a Pro Rata Acquisition; or
(E) a Convertible Security Acquisition;
provided, however, that if a Person becomes the Beneficial Owner of
20% or more of the outstanding Voting Shares by reason 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 1% of the Voting Shares
then outstanding (other than pursuant to a Voting Share
Reduction, a Permitted Bid Acquisition, an Exempt Acquisition,
or a Pro Rata Acquisition or a Convertible Security
Acquisition), then, as of the date that such Person becomes
the Beneficial Owner of such additional Voting Shares, such
Person shall be an "Acquiring Person";
(iii) for the period of 10 days after the Disqualification Date (as
defined below), 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(e)(v) solely because such Person makes or proposes to make
a Take-over Bid, either alone or by acting jointly or in
concert with any other Person. For the purposes of this
definition, "Disqualification Date" means the first date of
public announcement that any Person makes or is intending to
make a Take-over Bid including, without limitation, a report
filed pursuant to Section 101 of the Securities Act or Section
13(d) of the 1934 Exchange Act; or
(iv) an underwriter or member of a banking or selling group that
becomes the Beneficial Owner of 20% or more of the Voting
Shares in connection with a distribution of securities
pursuant to a prospectus or a private placement.
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(b) "Affiliate", when used to indicate a relationship with a specified
Person, means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under
common control with, such specified Person.
(c) "Agreement" means this shareholder rights plan agreement, as it may
be amended, modified or supplemented from time to time hereafter.
(d) "Associate", when used to indicate a relationship with a specified
Person, means any relative of such specified Person who has the same
home as such specified Person, or any person to whom such specified
Person is married, or any person with whom such specified Person is
living in a conjugal relationship outside marriage, or other person
who has the same home as such specified Person.
(e) A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own":
(i) any securities of which such Person or any Affiliate or
Associate of such Person is the owner in law or equity;
(ii) any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to acquire:
(A) upon the exercise of any Convertible Security provided
that they are exercisable immediately or within a period
of 60 days and whether or not on condition or the
happening of any contingency; or
(B) pursuant to any agreement, arrangement or understanding,
if such right is exercisable immediately or within a
period of 60 days and whether or not on condition or the
happening of any contingency (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 business); and
(iii) any securities that are Beneficially Owned within the meaning
of Clauses 1.1(e)(i) or (ii) hereof by any other Person with
whom such Person is acting jointly or in concert;
provided, however, that a Person shall not be deemed the "Beneficial
Owner" or to have "Beneficial Ownership" of, or to
"Beneficially Own", any security:
(iv) because such security has been deposited or tendered, without
any prior agreement (other than a Lock-up Agreement) or
arrangement in respect thereof, pursuant to any tender or
exchange offer or take-over bid made by
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such Person or made by any Affiliate or Associate of such
Person or made by any other Person acting jointly or in
concert with such Person, unless such deposited or tendered
security has been taken up or paid for, whichever shall first
occur;
(v) because:
(A) such Person, or any of the Affiliates or Associates of
such Person or any other Person acting jointly or in
concert with such Person, holds such security, provided
that the ordinary course of business of any such Person
(the "Fund Manager") includes the management of
investment funds for others and such security is held by
the Fund Manager in the ordinary course of such business
in the performance of such Fund Manager's duties for the
account of any other Person (a "Client");
(B) such Person (the "Trust Company") is licensed to carry
on business of a trust company under applicable laws
and, as such, acts as trustee or administrator or in a
similar capacity in relation to the estates of deceased
or incompetent Persons (each an "Estate Account") or in
relation to other accounts (each an "Other Account") and
holds such security in the ordinary course of such
duties for such Estate Accounts or for such Other
Accounts;
(C) such Person (the "Plan Administrator") is the
administrator or the trustee of one or more pension
funds or plans (a "Plan") registered under the laws of
Canada or any province thereof or the laws of the United
States of America or any state thereof;
(D) such Person (the "Crown Agent") is established by
statute for purposes that included, 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 and
has not then announced an intention to make a Take-over Bid,
alone or by acting jointly or in concert with any other
Person, other than an Offer to Acquire (X) pursuant to a
distribution by the Corporation, (Y) by means of a Permitted
Bid, or (Z) by means of market transactions made in the
ordinary course of the business of such
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Person (including pre-arranged trades entered into in the
ordinary course of business of such Person) executed through
the facilities of a stock exchange or organized
over-the-counter market;
(vi) because such Person is a Client of the same Fund Manager as
another Person on whose account the Fund Manager holds such
security, or because such Person is an Estate Account or an
Other Account of the same Trust Company as another Person on
whose account the Trust Company holds such security, or
because such Person is a Plan with the same Plan Administrator
as another Plan on whose account the Plan Administrator holds
such security;
(vii) because such Person is a Client of a Fund Manager and such
security is owned at law or in equity by the Fund Manager or
because such Person is an Estate Account or an Other Account
of a Trust Company and such security is owned at law or in
equity by the Trust Company or such Person is a Plan and such
security is owned at law or in equity by the Plan
Administrator; or
(viii) because such Person is the registered holder of securities as
a result of carrying on the business of, or acting as, a
nominee of a securities depositary.
(f) "Board of Directors" means the board of directors of the
Corporation.
(g) "Business Day" means any day other than a Saturday, Sunday or a day
on which chartered banks in the City of Toronto are authorized or
obliged by law to close.
(h) "Canadian Dollar Equivalent" of any amount which is expressed in
United States dollars means, on any date, the Canadian dollar
equivalent of such amount determined by multiplying such amount by
the U.S.-Canadian Exchange Rate in effect on such date.
(i) "Canadian-U.S. Exchange Rate" means, on any date, the inverse of the
U.S.-Canadian Exchange Rate in effect on such date.
(j) "Close of Business" on any given date means the time on such date
(or, if such date is not a Business Day, the time on the next
succeeding Business Day) at which the office of the transfer agent
for the Common Shares in the City of Toronto (or, after the
Separation Time, the office of the Rights Agent in the City of
Toronto), closes to the public.
(k) "Common Shares" means the common shares in the capital of the
Corporation 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
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the greatest per share voting power entitled to vote generally in
the election of all directors of such other Person or the equity
securities or other equity interest having power (whether or not
exercised) to control or direct the management of such other Person
or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned
other Person.
(l) "Company Act" means the Business Corporations Act (Ontario), R.S.O.
1990, c.B.16, as amended, and the regulations made thereunder, as
now in effect or as the same may from to time be amended, re-enacted
or replaced.
(m) "Competing Permitted Bid" means a Take-over Bid that:
(i) is made while another Permitted Bid is in existence; and
(ii) satisfies all the components of the definition of a Permitted
Bid, except that the reference to 60 days in Clause (ii) of
the definition of a Permitted Bid shall be satisfied for the
purposes of this Clause 1.1(m)(ii) if the Take-over Bid
contains, and the take up and payment for securities tendered
or deposited thereunder is subject to, an irrevocable and
unqualified condition that no Voting Shares shall be taken up
or paid for pursuant to the Competing Permitted Bid prior to
the later of:
(A) the date which is 21 days after the date the Competing
Permitted Bid is made; and
(B) the 60th day after the earliest of any other Permitted
Bid that is then outstanding, provided that the expiry
of the Competing Permitted Bid shall not occur at a time
of day that is prior to the time of expiry of any other
Permitted Bid on such day.
(n) A corporation is "controlled" by another Person if:
(i) securities entitled to vote in the election of directors
carrying more than fifty percent (50%) of the votes for the
election of directors are held, directly or indirectly, by or
for the benefit of the other Person; and
(ii) the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of directors of
such corporation;
and "controls", "controlling" and "under common control with" shall be
interpreted accordingly.
(o) "Convertible Security" means any right (regardless of whether such
right constitutes a security) to acquire Voting Shares and any
securities issued by the Corporation from time to time (other than
the Rights) carrying any exercise,
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conversion or exchange right (whether such right is exercisable
immediately or within a period of 60 days thereafter and whether or
not on condition or the happening of any contingency).
(p) "Convertible Security Acquisition" means the acquisition of Voting
Shares upon the exercise of Convertible Securities received by a
Person pursuant to a Permitted Bid Acquisition, an Exempt
Acquisition or a Pro Rata Acquisition.
(q) "Effective Date" shall have the meaning attributed thereto in
Section 5.19.
(r) "Election to Exercise" has the meaning attributed thereto in Clause
2.2(d)(i).
(s) "Exempt Acquisition" means an acquisition:
(i) in respect of which the Board of Directors has waived the
application of Section 3.1 hereof pursuant to the provisions
of Subsections 5.1(b), 5.1(c) or 5.1(d) hereof;
(ii) which was made pursuant to a dividend reinvestment plan of the
Corporation;
(iii) which was made pursuant to a distribution by the Corporation
of Voting Shares or Convertible Securities made pursuant to a
prospectus; or
(iv) pursuant to a distribution by the Corporation of Voting Shares
or Convertible Securities by way of a private placement by the
Corporation, provided that:
(A) all necessary stock exchange approvals for such private
placement have been obtained and such private placement
complies with the terms and conditions of such
approvals; and
(B) the purchaser does not become the Beneficial Owner of
more than 25% of the Voting Shares outstanding
immediately prior to the private placement (and in
making this determination, the securities to be issued
to such purchaser pursuant to the private placement
shall be deemed to be held by such purchaser but shall
not be included in the aggregate number of outstanding
Voting Shares immediately prior to the private
placement).
(t) "Exercise Price" means, as of any date, the price at which a holder
of a Right may purchase the securities issuable upon exercise of one
whole Right. Until adjustment thereof in accordance with the terms
hereof, the Exercise Price shall be $200.
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(u) "Expiration Time" shall mean the earlier of:
(i) the Termination Time;
(ii) the Close of Business on the date of the first annual meeting
of shareholders of the Corporation held after the Effective
Date if the resolution referred to in Section 5.20 in respect
of the annual meeting referred to in clause (i) of Section
5.20 is submitted to the Independent Shareholders for their
consideration and approval and is not approved by the
Independent Shareholders in accordance with Section 5.20 at
such annual meeting;
(iii) the Close of Business on the date of the first annual meeting
of shareholders of the Corporation held in the year 2002 if
the resolution referred to in Section 5.20 in respect of the
annual meeting referred to in clause (ii) of Section 5.20 is
submitted to the Independent Shareholders for their
consideration and approval and is not approved by the
Independent Shareholders in accordance with Section 5.20 at
such annual meeting; and
(iv) the Close of Business on September 21, 2004.
(v) "Flip-in Event" means any transaction or event in or pursuant to
which any Person becomes an Acquiring Person.
(w) "Independent Shareholders" means holders of Voting Shares of the
Corporation, but shall not include:
(i) any Acquiring Person or any Offeror, other than a Person
referred to in Clause (v) of Subsection 1.1(e);
(ii) any Affiliate or Associate of such Acquiring Person or such
Offeror;
(iii) any Person acting jointly or in concert with such Acquiring
Person or such Offeror; or
(iv) any employee benefit plan, stock purchase plan, deferred
profit sharing plan or any similar plan or trust for the
benefit of employees of the Corporation or a Subsidiary of the
Corporation, unless the beneficiaries of any such plan or
trust direct the manner in which the Voting Shares are to be
voted or direct whether the Voting Shares are to be tendered
to a Take-over Bid.
(x) "Lock-up Agreement" means an agreement between an Offeror and
another Person (the "Locked-up Person") whereby the Locked-up Person
agrees to deposit or tender the Voting Shares held by the Locked-up
Person to the Offeror's Take-over Bid, where the agreement permits:
(i) the Locked-up Person to
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withdraw the Voting Shares from the agreement in order to tender or
deposit the Voting Shares to another Take-over Bid, or to support
another transaction, that provides for a purchase price for each
Voting Share that is higher than, or provides a value for each
Voting Share that is greater than, the purchase price contained in
or proposed to be contained in, and is made for at least the same
number of Voting Shares as, the Take-over Bid that the Locked-up
Person has agreed to deposit or tender Voting Shares to pursuant to
the Lock-up Agreement, and for greater certainty, the Lock-up
Agreement may contain a right of first refusal or require a period
of delay to give the Offeror an opportunity to at least match a
higher price in another Take-over Bid or transactions or other
similar limitation on a Locked-up Person's right to withdraw Voting
Shares from the Lock-up Agreement and not tender such voting shares
to the Take-over Bid to which the Locked-up Person has agreed to
deposit or tender, so long as the limitation does not preclude the
exercise by the Locked-up Person of the right to withdraw Voting
Shares in sufficient time to tender to the other Take-over Bid or
participate in the other transaction; and (ii) does not provide for
any "break-up fees", "top-up fees", penalties, expense reimbursement
or other amounts that exceed in the aggregate the greater of:
(i) the cash equivalent of 2.5% of the price or value payable
under the Take-over Bid to a Locked-up Person; and
(ii) 50% of the amount by which the price or value payable under
another Take-over Bid or transaction to a Locked-up Person
exceeds the price or value of the consideration that such
Locked-up Person would have received under the Take-over Bid;
to be paid by a Locked-up Person pursuant to the Lock-up Agreement in the
event the Locked-up Person fails to deposit or tender Voting Shares
to the Take-over Bid or withdraws Voting Shares in order to tender
to another Take-over Bid or participate in another transaction;
(y) "Market Price" per security of any securities on any date of
determination means the average of the daily closing prices per
security of such securities (determined as described below) on each
of the 20 consecutive Trading Days through and including the Trading
Day immediately preceding such date; provided, however, that if an
event of a type analogous to any of the events described in Section
2.3 hereof shall have caused the closing prices used to determine
the Market Price on any Trading 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 in order to make it fully
comparable with the closing price on the Trading Day immediately
preceding such date of determination. The closing price per security
of any securities on any date shall be:
<PAGE>
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(i) the closing board lot sale price or, in case no such sale
takes place on such date, the average of the closing bid and
asked prices for each of such securities as reported by the
principal Canadian stock exchange on which such securities are
listed or admitted to trading;
(ii) if for any reason none of such prices is available on such day
or the securities are not listed or posted for trading on a
Canadian stock exchange, the last sale price or, in case no
such sale takes place on such date, the average of the closing
bid and asked prices for each of such securities as reported
by the principal national United States securities exchange on
which such securities are listed or admitted to trading;
(iii) if for any reason none of such prices is available on such day
or the securities are not listed or admitted to trading on a
Canadian stock exchange or a national United States securities
exchange, 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, as
quoted by any reporting system then in use; or
(iv) if for any reason none of such prices is available on such day
or the securities are not listed or admitted to trading on a
Canadian stock exchange or a national United States securities
exchange or quoted by any such reporting system, the average
of the closing bid and asked prices as furnished by a
professional market maker selected by the Board of Directors
making a market in the securities;
provided, however, that if for any reason none of such prices is available
on such day, the closing price per security of such securities on
such date means the fair value per security of such securities on
such date as determined by a nationally recognized investment dealer
or investment banker with respect to the fair value per security of
such securities. The Market Price shall be expressed in Canadian
dollars and, if initially determined in respect of any day forming
part of the 20 consecutive Trading Day period in question in United
States dollars, such amount shall be translated into Canadian
dollars on such date at the Canadian Dollar Equivalent thereof.
(z) "1934 Exchange Act" means the Securities Exchange Act of 1934 of the
United States, as amended, and the rules and regulations thereunder
as now in effect or as the same may from time to time be amended,
re-enacted or replaced.
(aa) "1933 Securities Act" means the Securities Act of 1933 of the United
States, as amended and the rules and regulations thereunder as now
in effect or as the same may from time to time be amended,
re-enacted or replaced.
<PAGE>
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(bb) "Offer to Acquire" includes:
(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.
(cc) "Offeror" means a Person who has announced (and has not withdrawn)
an intention to make, or who has made (and has not withdrawn), a
Take-over Bid, and any Person who is an Affiliate, Associate or who
is acting jointly or in concert with such first mentioned Person,
but does not include a Person who has completed a Permitted Bid, a
Competing Permitted Bid or an Exempt Acquisition.
(dd) "Offeror's Securities" means the aggregate of the Voting Shares
Beneficially Owned on the date of a Take-over Bid by an Offeror.
(ee) "Permitted Bid" means a Take-over Bid made by an Offeror that is
made by means of a Take-over Bid circular and which also complies
with the following additional provisions:
(i) the Take-over Bid is made to all holders of record of Voting
Shares of the Corporation;
(ii) the Take-over Bid contains, and the take up and payment for
securities tendered or deposited thereunder shall be subject
to, an irrevocable, non-waivable, and unqualified condition
that no Voting Shares of the Corporation shall be taken up or
paid for pursuant to the Take-over Bid prior to the Close of
Business on the date which is not less than 60 days following
the date of the Take-over Bid and unless, at such date, more
than 50% of the Voting Shares held by Independent Shareholders
have been deposited pursuant to the Take-over Bid and not
withdrawn;
(iii) the Take-over Bid contains an irrevocable and unqualified
provision that, unless the Take-over Bid is withdrawn, Voting
Shares of the Corporation may be deposited pursuant to the
Take-over Bid at any time during the period of time described
in Clause (ii) of this Subsection 1.1(ee) and that any Voting
Shares deposited pursuant to the Take-over Bid may be
withdrawn until taken up and paid for; and
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(iv) the Take-over Bid contains an irrevocable and unqualified
provision that in the event that the condition set forth in
Clause (ii) of this Subsection 1.1(ee) is satisfied, the
Person making the Take-over Bid 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 days from the date of the public announcement that
such condition has been satisfied.
(ff) "Permitted Bid Acquisition" means an acquisition of Voting Shares
made pursuant to a Permitted Bid or a Competing Permitted Bid.
(gg) "Person" includes any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal personal
representative, government, governmental body or authority, group
(as such term is used in Rule 13d-5 under the 1934 Exchange Act, as
in effect on the date of this Agreement), corporation or other
incorporated or unincorporated organization.
(hh) "Pro Rata Acquisition" means an acquisition as a result of:
(i) a stock dividend or a stock split or other event pursuant to
which a Person receives or acquires Voting Shares or
Convertible Securities on the same pro rata basis as all other
holders of Voting Shares of the same class; or
(ii) any other event pursuant to which all holders of Voting Shares
of the Corporation are entitled to receive Voting Shares or
Convertible Securities on a pro rata basis, including, without
limiting the generality of the foregoing, pursuant to the
receipt or exercise of rights issued by the Corporation and
distributed to all the holders of a series or class of Voting
Shares to subscribe for or purchase Voting Shares or
Convertible Securities of the Corporation, provided that such
rights are acquired directly from the Corporation and not from
any other Person.
(ii) "Record Time" means the Close of Business on October 4, 1999.
(jj) "Redemption Price" has the meaning attributed thereto in Subsection
5.1(a).
(kk) "Regular Periodic Cash Dividend" means cash dividends paid on the
Common Shares at regular intervals in any fiscal year of the
Corporation to the extent that such cash dividends do not exceed in
the aggregate in any fiscal year, the greatest of:
(i) 200% of the aggregate amount of cash dividends declared
payable by the Corporation on the Common Shares in its
immediately preceding fiscal year;
<PAGE>
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(ii) 300% of the arithmetic mean of the aggregate amounts of cash
dividends declared payable by the Corporation on the 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.
(ll) "Rights Certificate" means the certificates representing the Rights
after the Separation Time which shall be substantially in the form
attached hereto as Exhibit A.
(mm) "Securities Act" means the Securities Act, R.S.O. 1990, c. S.5, as
amended, and the regulations made thereunder, as now in effect or as
the same may from time to time be amended, re-enacted or replaced.
(nn) "Separation Time" means the Close of Business on the tenth Trading
Day after the earlier of:
(i) the Stock Acquisition Date; and
(ii) the date of the commencement of, or first public announcement
of the intent of any Person (other than the Corporation or any
Subsidiary of the Corporation) to commence, a Take-over Bid
other than a Take-over Bid which is a Permitted Bid;
or such later date as may from time to time be determined by the Board of
Directors, provided that if any such Take-over Bid expires, is
cancelled, is terminated or is otherwise withdrawn prior to the
Separation Time, such offer shall be deemed, for the purposes of
this Subsection 1.1(nn), never to have been made, and provided
further that if the Board of Directors determines pursuant to
Subsections 5.1(b), 5.1(c) or 5.1(d) hereof to waive the application
of Section 3.1 hereof to a Flip-in Event, the Separation Time in
respect of such Flip-in Event shall be deemed never to have
occurred.
(oo) "Stock Acquisition Date" means the first date of public announcement
(which for purposes of this definition includes, without limitation,
a report filed pursuant to Section 101 of the Securities Act or
Section 13(d) of the 1934 Exchange Act) of facts indicating that a
Person has become an Acquiring Person.
(pp) "Subsidiary". A corporation is deemed to be a Subsidiary of another
corporation if:
(i) it is controlled by:
(A) that other corporation; or
<PAGE>
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(B) that other corporation and one or more corporations each
of which is controlled by that other corporation; or
(C) two or more corporations each of which is controlled by
that other; or
(ii) it is a Subsidiary of a corporation that is that other's
Subsidiary.
(qq) "Take-over Bid" means an Offer to Acquire Voting Shares or
securities convertible into Voting Shares, where the Voting Shares
subject to the Offer to Acquire, together with the Voting Shares
into which the securities subject to the Offer to Acquire are
convertible or exchangeable, and the Offeror's Securities,
constitute in the aggregate 20% or more of the outstanding Voting
Shares at the date of the Offer to Acquire.
(rr) "Termination Time" means the time at which the right to exercise
Rights shall terminate pursuant to Section 5.1.
(ss) "Trading Day", when used with respect to any securities, means any
day on which the principal Canadian or United States securities
exchange (as determined by the Board of Directors) on which such
securities are listed or admitted to trading is open for the
transaction of business or, if the securities are not listed or
admitted to trading on any Canadian or United States securities
exchange, a Business Day.
(tt) "U.S.-Canadian Exchange Rate" means, on any date:
(i) if on such date the Bank of Canada sets an average noon spot
rate of exchange for the conversion of one United States
dollar into Canadian dollars, such rate; and
(ii) in any other case, the rate for such date for the conversion
of one United States dollar into Canadian dollars calculated
in such manner as may be determined by the Board of Directors
from time to time acting in good faith.
(uu) "U.S. Dollar Equivalent" of any amount which is expressed in
Canadian dollars means, on any date, the United States dollar
equivalent of such amount determined by multiplying such amount by
the Canadian-U.S. Exchange Rate in effect on such date.
(vv) "Voting Shares" means the Common Shares of the Corporation and any
other shares of capital stock or voting interests of the Corporation
entitled to vote generally in the election of directors and "voting
shares", when used with reference to any Person other than the
Corporation, means common shares of such other Person and any other
shares of capital stock or voting interests of such other Person
<PAGE>
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entitled to vote generally in the election of the directors of such
other person.
(ww) "Voting Share Reduction" means an acquisition by the Corporation or
a Subsidiary of the Corporation or the redemption by the Corporation
of Voting Shares of the Corporation which by reducing the number of
Voting Shares of the Corporation outstanding increases the
proportionate number of Voting Shares Beneficially Owned by any
Person.
1.2. Currency
All sums of money which are referred to in this Agreement are
expressed in lawful money of Canada, unless otherwise specified.
1.3. Number and Gender
Wherever the context so requires, 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", "hereof", "hereunder" and similar
expressions refer to this Agreement 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 herein to a
specific Section, Subsection, Clause or Rule of any act or regulation shall be
deemed to refer to the same as it may be amended, re-enacted or replaced or, if
repealed and there shall be no replacement therefor, to the same as it is in
effect on the date of this Agreement.
1.6. Acting Jointly or in Concert
For the purposes of this Agreement, a Person is acting jointly or in
concert with every Person who is a party to an agreement, commitment or
understanding, whether formal or informal, with the first Person or any
Associate or Affiliate of such Person to acquire or make an Offer to Acquire
Voting Shares of the Corporation (other than a Lock-up Agreement or customary
agreements with and between underwriters or banking group members or selling
group
<PAGE>
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members with respect to a distribution of securities or to a pledge of
securities in the ordinary course of business).
1.7. Determination of Percentage Ownership
For purposes of this Agreement, the percentage of Voting Shares
Beneficially Owned by any Person shall 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.
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, all unissued Voting Shares as to which such Person is
deemed the Beneficial Owner shall be deemed outstanding.
ARTICLE 2. - THE RIGHTS
2.1. Legend on Common Share Certificates
(a) Certificates for Common Shares issued after the Record Time but
prior to the earlier of (i) the Separation Time and (ii) the
Expiration Time, shall, subject to Subsection 2.3(j), also evidence
one Right for each Common Share represented thereby and shall have
impressed on, printed on, written on or otherwise affixed to them
the following legend:
"Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in
the Shareholder Rights Plan Agreement dated as of September
21, 1999 (the "Rights Agreement"), between the Corporation and
CIBC Mellon Trust Company, as Rights Agent, the terms of which
are incorporated herein by reference and a copy of which is on
file at the principal office of the Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights may be amended or redeemed, may expire, may become void
(if, in certain cases, they are "Beneficially Owned" by an
"Acquiring Person", as such terms
<PAGE>
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are defined in the Rights Agreement, or a transferee thereof),
or may be evidenced by separate certificates and may no longer
be evidenced by this certificate. The Corporation will mail,
or arrange for the mailing of, a copy of the Rights Agreement
to the holder of this certificate without charge promptly
after the receipt of a written request therefor."
(b) Certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for each
Common Share evidenced thereby, notwithstanding the absence of the
foregoing legend, until the earlier of (i) the Separation Time and
(ii) the Expiration Time.
2.2. Initial Exercise Price; Exercise of Rights; Detachment of Rights
(a) Subject to adjustment as herein set forth, each Right will entitle
the holder thereof, after the Separation Time and prior to the
Expiration Time, to purchase one Common Share for the Exercise
Price, or the U.S. Dollar Equivalent of the Exercise Price, as at
the Business Day immediately preceding the Separation Time (which
Exercise Price and number of Common Shares are subject to adjustment
as set forth below). Notwithstanding any other provision of this
Agreement, any Rights held by the Corporation or any of its
Subsidiaries shall be void.
(b) Until the Separation Time (i) the Rights shall not be exercisable
and no Right may be exercised and (ii) for administrative purposes,
each Right will be evidenced by the certificate for the associated
Common Share registered in the name of the holder thereof 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 issue
and the Rights Agent will mail to each holder of record of Common
Shares as of the Separation Time (other than an Acquiring Person
and, in respect of any Rights Beneficially Owned by such Acquiring
Person which are not held of record by such Acquiring Person, the
holder of record of such Rights), at such holder's address as shown
on the records of the Corporation (the Corporation hereby agreeing
to furnish copies of such records to the Rights Agent for this
purpose):
(i) a Rights Certificate, in substantially the form set out in
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
<PAGE>
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the provisions of this Agreement, or as may be required to
comply with any law or with any rule, regulation or judicial
or administrative order made pursuant thereto or with any rule
or regulation of any stock exchange or quotation system or
self-regulatory organization 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 such materials shall not be sent to (A) an Acquiring Person;
or (B) to a holder of record (a "Nominee") of Common Shares or
securities convertible into Common Shares in respect of any Rights
Beneficially Owned by the 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 the City
of Toronto:
(i) the Rights Certificate evidencing such Rights, with an
election to exercise (an "Election to Exercise") substantially
in the form attached to the Rights Certificate appropriately
completed and duly executed by the holder or his executors or
administrators or other legal personal representatives or his
or their attorney duly appointed by an instrument in writing
in form and executed in a manner satisfactory to the Rights
Agent; and
(ii) payment by certified cheque or money order payable to the
order of the Corporation, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum
sufficient to cover any transfer tax or charge which may be
payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of
certificates for Common Shares in a name other than that of
the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
appropriately completed and duly executed, which does not indicate
that such Right is null and void as provided by Subsection 3.1(b),
accompanied by payment as set forth in Clause 2.2(d)(ii), the Rights
Agent (unless otherwise instructed in writing by the Corporation)
will thereupon promptly:
(i) requisition from the transfer agent of the Common Shares
certificates for the number of Common Shares to be purchased
(the Corporation hereby irrevocably agreeing to authorize such
transfer agent to comply with all such requisitions);
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(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) 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 exercises less than all 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 covenants and agrees that it will:
(i) take all such action as may be necessary and within its power
to ensure that all Common Shares delivered upon 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 Company Act, the Securities Act and the
securities legislation of each of the other provinces and
territories of Canada in connection with the issuance and
delivery of the Rights Certificates and the issuance of any
Common Shares upon exercise of Rights;
(iii) use reasonable efforts to cause all Common Shares of the
Corporation issued upon exercise of Rights to be listed upon
issuance on the stock exchange(s) where the Common Shares may
be 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, any and all Canadian and United
States federal, provincial and state taxes (not in the nature
of income 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
<PAGE>
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issued upon 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 exercise of Rights in a name other than that of the
holder of the rights being exercised; and
(vi) after the Separation Time, except as permitted by Section 5.1
or Section 5.4 hereof, not take (or permit any Subsidiary of
the Corporation 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. Fractional interests in securities resulting
from such adjustments are subject to Section 5.5.
(b) In the event that the Corporation at any time after the Record Time
and prior to the Expiration Time:
(i) declares or pays a dividend on the Common Shares payable in
Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares)
other than pursuant to any dividend reinvestment plan;
(ii) subdivides or changes the then outstanding Common Shares into
a greater number of Common Shares;
(iii) consolidates or changes the then outstanding Common Shares
into a smaller number of Common Shares; or
(iv) issues any Common Shares (or other securities exchangeable for
or convertible into or giving a right to acquire Common
Shares) in respect of, in lieu of, or in exchange for existing
Common Shares,
the Exercise Price and the number of Rights outstanding shall be adjusted
as follows:
(A) the Exercise Price in effect after such adjustment will
be equal to the Exercise Price in effect immediately
prior to such adjustment divided by the number of Common
Shares (the "Adjustment Factor") that a holder of one
Common Share immediately prior to such dividend,
subdivision, change, consolidation or issuance would
<PAGE>
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hold thereafter as a result thereof (assuming the
exercise of all such exchange or conversion rights, if
any); and
(B) each Right held prior to such adjustment will become
that number of Rights equal to the Adjustment Factor,
and the adjusted number of Rights will be deemed to be
distributed among the Common Shares with respect to
which the Original Rights were associated (if they
remain outstanding) and the shares issued in respect of
such dividend, subdivision, change, consolidation or
issuance, so that each such Common Share will have
exactly one Right associated with it.
(c) Adjustments pursuant to Subsection 2.3(b) shall be made
successively, whenever an event referred to in Subsection 2.3(b)
occurs.
(d) If an event occurs which would require an adjustment under both this
Section 2.3 and Section 3.1 hereof, the adjustment provided for in
this Section 2.3 shall be in addition to, and shall be made prior
to, any adjustment 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 that the Corporation at any time after the Record Time
and prior to the Expiration Time fixes a record date for the making
of a distribution to substantially 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 securities convertible into or exchangeable for or
carrying a right to purchase or subscribe for Common Shares) at a
price per Common Share (or, in the case of a security convertible
into or exchangeable for or carrying a right to purchase or
subscribe for Common Shares, having a conversion, exchange or
exercise price per share (including the price required to be paid to
purchase such convertible or exchangeable security or right)) less
than 90 per cent of the Market Price per Common Share on such record
date, the Exercise Price shall be adjusted. The Exercise Price in
effect after such record date will equal the Exercise Price in
effect immediately prior to such record date multiplied by a
fraction, 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 or
exchangeable securities or rights so to be offered (including the
<PAGE>
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price required to be paid to purchase such convertible or
exchangeable securities or rights)) would purchase at such Market
Price per Common Share and 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 or exchangeable securities
or rights to be so offered are initially convertible, exchangeable
or exercisable). In case such subscription price may be paid in a
consideration part or all of which will be in a form other than
cash, the value of such consideration shall be as determined in good
faith by the Board of Directors. To the extent that such rights or
warrants are not exercised prior to the expiration thereof, the
Exercise Price shall be readjusted to the Exercise Price which would
then be in effect based on the number of Common Shares (or
securities convertible into or exchangeable for Common Shares)
actually issued upon the exercise of such rights. For purposes of
this Agreement, the granting of the right to purchase Common Shares
(whether from treasury shares or otherwise) pursuant to any dividend
reinvestment plan and/or any share purchase plan (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 reinvestment plan or share
purchase plan, the right to purchase Common Shares is at a price per
share of not less than 90 per cent of the current market price per
Common Share (determined in accordance with such plans) of the
Common Shares.
(g) In the event that the Corporation at any time after the Record Time
and prior to the Expiration Time fixes a record date for the making
of a distribution to substantially all holders of Common Shares of
evidences of indebtedness or assets (other than a Regular Periodic
Cash Dividend or a dividend paid in Common Shares but including any
dividend payable in securities other than Common Shares) or rights
or warrants entitling them to subscribe for or purchase Common
Shares (or securities convertible into or exchangeable for or
carrying a right to purchase or subscribe for Common Shares) at a
price per Common Share (or, in the case of a security convertible
into or exchangeable for or carrying a right to purchase or
subscribe for Common shares, having a conversion, exchange or
exercise price per share (including the price required to be paid to
purchase such convertible or exchangeable security or right) less
than 90 per cent of the Market Price per Common Share on such record
date (excluding rights or warrants referred to in Subsection
2.3(f)), the Exercise Price in effect after such record date shall
be equal to the Exercise Price in effect immediately prior to such
record date less the fair market value (as determined by the Board
of Directors) of the portion of the assets, evidences of
indebtedness, rights or warrants so to be distributed applicable to
a Common Share.
(h) Each adjustment made pursuant to this Section 2.3 shall be made as
of:
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(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); 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 (g).
(i) In the event that the Corporation shall at any time after the Record
Time and prior to the Expiration Time issue any shares of capital
stock (other than Common Shares), or rights or warrants to subscribe
for or purchase any such capital stock, or securities convertible
into or exchangeable for any such capital stock, in a transaction
referred to in Clauses 2.3(b)(i) or (iv), if the Board of Directors
acting in good faith determines that the adjustments contemplated by
Subsections 2.3(b), (f) or (g) in connection with such transaction
will not appropriately protect the interests of the holders of
Rights, the Corporation may, subject to Section 5.4, determine what
other adjustments to the Exercise Price, number of Rights and/or
securities purchasable upon exercise of Rights would be appropriate
and, notwithstanding Subsections 2.3(b), (f) and (g), such
adjustments, rather than the adjustments contemplated by Subsections
2.3(b), (f) and (g), shall be made. The Corporation and the Rights
Agent shall amend this Agreement as appropriate to provide for such
adjustments.
(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 one per cent 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 made pursuant to this Section 2.3 shall
be made to the nearest cent or to the nearest one hundredth of a
Common Share or a Right, as the case may be.
(k) All Rights originally issued by the Corporation subsequent to any
adjustment made to an Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of
Common Shares purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(l) Unless the Corporation shall have exercised its election, as
provided in Subsection 2.3(m), upon each adjustment of an Exercise
Price as a result of the calculations made in Subsections 2.3(f) and
(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:
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(i) multiplying (A) the number of Common Shares covered by a Right
immediately prior to this adjustment, by (B) the relevant
Exercise Price in effect immediately prior to such adjustment
of the relevant Exercise Price; and
(ii) dividing the product so obtained by the relevant Exercise
Price in effect immediately after such adjustment of the
relevant Exercise Price.
(m) The Corporation may elect on or after the date of any adjustment of
an Exercise Price to adjust the number of Rights, in lieu of any
adjustment in the number of Common Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the
number of Common Shares for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become the
number of Rights obtained by dividing the relevant Exercise Price in
effect immediately prior to adjustment of the relevant Exercise
Price by the relevant Exercise Price in effect immediately after
adjustment of the relevant Exercise Price. The Corporation shall
make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This record
date may be the date on which the relevant Exercise Price is
adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least 10 calendar days later than the date
of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this
Subsection 2.3(m) the Corporation shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates
on such record date, Rights Certificates evidencing, subject to
Section 5.5, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Corporation, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Corporation, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled
after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided
for herein and may bear, at the option of the Corporation, the
relevant adjusted Exercise Price and shall be registered in the
names of holders of record of Rights Certificates on the record date
specified in the public announcement.
(n) 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 express the
securities so purchasable which were expressed in the initial Rights
Certificates issued hereunder.
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(o) 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 a due bill or other 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.
(p) Notwithstanding anything in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required
by this Section 2.3, as and to the extent that in 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, subject to applicable taxation
laws, shall not be taxable to such shareholders.
(q) The Corporation covenants and agrees that, after the Separation
Time, it will not, except as permitted by Section 5.1 or 5.4, take
(or permit any Subsidiary of the Corporation 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.
(r) Whenever an adjustment to the Exercise Price or a change in the
securities purchasable upon exercise of the Rights is made pursuant
to this Section 2.3, the Corporation shall promptly:
(i) file with the Rights Agent and with the transfer agent for the
Common Shares a certificate specifying the particulars of such
adjustment or change; and
(ii) cause notice of the particulars of such adjustment or change
to be given to the holders of the Rights.
Failure to file such certificate or to cause such notice to be given as
aforesaid, or any defect therein, shall not affect the validity of
any such adjustment or change.
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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 an appropriately
completed and duly executed Election to Exercise) and payment of the Exercise
Price for such Rights (and any applicable transfer taxes or charges payable by
such Person hereunder) was made in accordance with Subsection 2.2(d); 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 holder of record of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the Common
Share transfer books of the Corporation are open.
2.5. Execution, Authentication, Delivery and Dating of Rights Certificates
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its Chief Executive Officer, its Chief Financial
Officer or its 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 the Rights Agent will countersign (manually or
by facsimile signature in a manner satisfactory to the Corporation)
and deliver such Rights Certificates to the holders of the Rights
pursuant to Subsection 2.2(c). No Rights Certificate shall be valid
for any purpose until countersigned by the Rights Agent as
aforesaid.
(c) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6. Registration, Registration of Transfer and Exchange
(a) After the Separation Time, the Corporation will cause to be kept a
register (the "Rights Register") in which, subject to such
reasonable regulations as it may prescribe, the Corporation will
provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Corporation and registering
Rights and transfers and exchanges of Rights as herein provided. In
the event that the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent will have the right to examine the
Rights Register at all reasonable times.
<PAGE>
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(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 Subsection 2.6(d) and
3.1(b), 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 the valid obligations of the
Corporation, and such Rights shall be entitled to the same benefits
under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(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) connected therewith.
2.7. Mutilated, Destroyed, Lost and Stolen Rights Certificates
(a) If any mutilated Rights Certificate is surrendered to the Rights
Agent prior to the Expiration Time, the Corporation shall execute
and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of
the destruction, loss or theft of any Rights Certificate and (ii)
such security or indemnity as may be required by them to save each
of them and any of their agents harmless, then, in the absence of
notice to the Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the
Corporation shall execute and upon its request the Rights Agent
shall countersign and deliver, in lieu of any such destroyed, lost
or stolen Rights Certificate, a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.7, the Corporation 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
<PAGE>
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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
Prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent may deem and treat the person in whose name such Rights
Certificate (or, prior to the Separation Time, such 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 means 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,
or for registration of transfer or exchange shall, if surrendered to any person
other than the Rights Agent, be delivered to the Rights Agent and, in any case,
shall be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9, except as expressly permitted by this Agreement.
The Rights Agent shall destroy all cancelled Rights Certificates and deliver a
certificate of destruction to the Corporation.
2.10. Agreement of Rights Holders
Every holder of Rights, by accepting such Rights, consents and
agrees with the Corporation and the Rights Agent and with every other holder of
Rights that:
(a) such holder shall 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;
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(b) 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 certificate representing such Right;
(c) after the Separation Time, the Rights will be transferable only on
the Rights Register as provided herein;
(d) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for
registration of transfer, the Corporation, the Rights Agent and any
agent of the Corporation or the Rights Agent may deem and treat the
person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on
such Rights Certificate or the associated Common Share certificate
made by anyone other than the Corporation or the Rights Agent) for
all purposes whatsoever, and neither the Corporation nor the Rights
Agent shall be affected by any notice to the contrary;
(e) such holder is not entitled to receive any fractional Rights or
fractional Common Shares upon the exercise of Rights;
(f) subject to the provisions of Section 5.4, without the approval of
any holder of Rights and upon the sole authority of the Board of
Directors 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 court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation.
ARTICLE 3. - ADJUSTMENTS TO THE RIGHTS
3.1. Flip-In Event
(a) Subject to Subsection 3.1(b) and Section 5.1, in the event that
prior to the Expiration Time a Flip-in Event shall occur, each Right
shall constitute, effective from and after the Close of Business on
the tenth Trading Day following the Stock Acquisition Date, the
right to purchase from the Corporation, upon exercise thereof in
accordance with the terms hereof, that number of Common Shares of
the Corporation having an aggregate Market Price on the date of
consummation or occurrence of such Flip-in Event equal to twice the
Exercise Price for an amount
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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 by:
(i) an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert
with an Acquiring Person or any Affiliate or Associate of an
Acquiring Person); or
(ii) a transferee of Rights, direct or indirect, from an Acquiring
Person 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 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 transferees) shall thereafter have no right
to exercise such Rights under any provision of this Agreement and
shall have no other 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 clause 3.1(b)(i) or (ii) or transferred to any
nominee of any such Person, and any Rights Certificate issued upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain the
following legend:
"The Rights represented by this Rights Certificate were Beneficially
Owned by a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in the
Shareholders Rights Plan Agreement) or who was acting jointly or in
concert with an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person. This Rights Certificate and the Rights
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represented hereby are void or shall become void in the
circumstances specified in subsection 3.1(b) of the Shareholders
Rights Plan Agreement"
provided that the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition
of such legend but shall impose such legend only if instructed so to
do by the Corporation or in writing or if a holder fails to certify
upon transfer or exchange in the space provided on the Rights
Certificate that such holder is not a Person described in such
legend. The issuance of a Rights Certificate without the legend
referred to in this Subsection 3.1(c) shall be of no effect on the
provisions of Subsection 3.1(b).
(d) After the Separation Time, the Corporation shall do all such acts
and things as are 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 Company 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 where the Common Shares are listed at such time, in
respect of the issue of Common Shares upon the exercise of Rights in
accordance with this Agreement.
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 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 approval of the Rights Agent. In the event
the Corporation appoints one or more Co-Rights Agents, the
respective duties of the Rights Agents and Co-Rights Agents shall be
as the Corporation may determine with the approval of the Rights
Agent and the Co-Rights Agent. The Corporation agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder (including the
fees and disbursements of any expert or advisor retained by the
Rights Agent). The Corporation also agrees to indemnify the Rights
Agent, its directors, officers, employees and agents for, and to
hold it harmless against, any loss, liability, or expense incurred
without negligence, bad faith or wilful misconduct on the part of
the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this
Agreement, including but not limited to the costs and
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expenses of defending against any claim of liability, which right to
indemnification will survive the termination of this Agreement and
the resignation or removal 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 or 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 or stockholder services business of the Rights Agent
or any successor Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 4.4 hereof.
In case at the time such successor Rights Agent succeeds 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
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such Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this
Agreement.
4.3. Duties of Rights Agent
The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Corporation and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may retain and consult with legal counsel (who may
be legal counsel for the Corporation), and the opinion of such
counsel will be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion; the Rights Agent may
also, with the approval of the Corporation (such approval not to be
unreasonably withheld), consult with such other experts as the
Rights Agent shall consider necessary or appropriate to properly
carry out the duties and obligations imposed under this Agreement
and the Rights Agent shall be entitled to act and rely in good faith
on the advice of any such expert. Any remuneration so paid by the
Rights Agent shall be repaid to the Rights Agent in accordance with
Section 4.1(a).
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter
be proved or established by the Corporation prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate
signed by a person believed by the Rights Agent to be the President
and Chief Executive Officer or the Chief Financial Officer of the
Corporation and delivered to the Rights Agent. Such certificate will
be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or wilful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Common Shares or the Rights Certificates (except
its countersignature thereof) or be required to verify the same, but
all such statements and recitals are and will be deemed to have been
made by the Corporation only.
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(e) The Rights Agent will not be under any responsibility in respect of:
(i) the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery
hereof by the Rights Agent) or in respect of the validity or
execution of any Common Share certificate or Rights
Certificate (except its countersignature thereof);
(ii) any breach by the Corporation of any covenant or condition
contained in this Agreement or in any Rights Certificate;
(iii) any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Subsection 3.1(b));
(iv) any adjustment required under the provisions of Section 2.3;
(v) the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights
after receipt of the certificate contemplated by Subsection
2.3(o) hereof describing any such adjustment); or
(vi) will not by any act hereunder be deemed to make any
representation or warranty as to the authorization of any
Common Shares to be issued pursuant to this Agreement or any
Rights or as to whether any Common Shares will, when issued,
be duly and validly authorized, executed, issued and delivered
and 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 written
instructions with respect to the performance of its duties hereunder
from any Person believed by the Rights Agent to be the Chief
Executive Officer, the Chief Financial Officer, the Secretary or a
Vice-President of the Corporation, and to apply to such persons for
advice or instructions in connection with its duties and it shall
not be liable for any action taken or suffered by it in good faith
in accordance with instructions of any such person.
(h) The Rights Agent and any shareholder or stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
Common Shares, Rights or other securities of the Corporation or
become pecuniarily interested in any transaction in which the
Corporation may be interested, or contract with or lend
<PAGE>
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money to the Corporation or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity
for the Corporation or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any
loss to the Corporation resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
4.4. Change of Rights Agent
The Rights Agent may resign and be discharged from its duties under
this Agreement upon 60 days notice (or such lesser notice as is acceptable to
the Corporation) in writing mailed to the Corporation and to the transfer agent
of Common Shares by registered or certified mail, and to the holders of the
Rights in accordance with Section 5.9. The Corporation may remove the Rights
Agent upon 30 days notice in writing, mailed to the Rights Agent and to the
transfer agent of the Common Shares by registered or certified mail, 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 by the
Corporation), then the holder of any Rights may (at the Corporation's expense)
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Corporation or by
such a court, shall be a corporation incorporated under the laws of Canada or a
province thereof. 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 shall, upon payment in full of any outstanding amounts
owing by the Corporation to the Rights Agent under this Agreement, 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. 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.
<PAGE>
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ARTICLE 5.- MISCELLANEOUS
5.1. Redemption and Waiver
(a) The Board of Directors acting in good faith, with prior shareholder
approval, may, at its option and at any time prior to the occurrence
of a Flip-in Event, elect to redeem all but not less than all of the
then outstanding Rights at a redemption price of $0.0001 per Right
appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 in the event that an event of
the type analogous to any of the events descried 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 30 days
after the foregoing determination by the Board of Directors or such
later date as the Board of Directors may determine (the "Disposition
Date"), has reduced its Beneficial Ownership of Voting Shares such
that the Person is no longer an Acquiring Person. If the Person
remains an Acquiring Person at the Close of Business on the
Disposition Date, the Disposition Date shall be deemed to be the
date of occurrence of a further Stock Acquisition Date and Section
3.1 shall apply thereto.
(c) 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(c), the Board of
Directors shall also be deemed to have waived the application of
Section 3.1 in respect of any other Take-over Bid made by means of a
circular to all holders of record of Voting Shares prior to the
expiry of any Take-over Bid in respect of which a waiver is, or is
deemed to have been, granted under this Subsection 5.1(c).
(d) The Board of Directors may, prior to the Close of Business on the
tenth Trading Day following a Stock Acquisition Date or such later
Business Day as they may from time to time determine, upon prior
written notice delivered to the Rights Agent, waive the application
of Section 3.1 to the related Flip-in Event, provided
<PAGE>
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that the Acquiring Person has reduced its Beneficial Ownership of
Voting Shares (or has entered into a contractual arrangement with
the Corporation, acceptable to the Board of Directors, to do so
within 10 days of the date on which such contractual arrangement is
entered into or such later date as the Board of Directors may
determine) such that at the time the waiver becomes effective
pursuant to this Subsection 5.1(d) such Person is no longer an
Acquiring Person. In the event of such a waiver becoming effective
prior to the Separation Time, for the purposes of this Agreement,
such Flip-in Event shall be deemed not to have occurred.
(e) Where a Person acquires, pursuant to a Permitted Bid, a Competing
Permitted Bid or an Exempt Acquisition as a result of a waiver
granted under Subsection 5.1(c), outstanding Voting Shares, other
than Voting Shares Beneficially Owned by such Person at the date of
the Permitted Bid, the Competing Permitted Bid or the Exempt
Acquisition as a result of a waiver granted under Subsection 5.1(c),
then the Corporation shall immediately upon the consummation of such
acquisition redeem the Rights at the Redemption Price.
(f) If the Board of Directors elects or the Corporation is obliged 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 holder of a Right shall be to receive the
Redemption Price. Within 10 days of the Board of Directors electing
or being deemed to have elected to redeem the Rights, the
Corporation shall give notice of such redemption to the holders of
the then outstanding Rights. Each such notice of redemption shall
state the method by which the payment of the Redemption Price shall
be made.
5.2. Expiration
No Person shall have any rights pursuant to this Agreement or in
respect of any Right after the Expiration Time, except the Rights Agent as
specified in Subsection 4.1(a) hereof.
5.3. Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board of
Directors to reflect any adjustment or change in the number or kind or class of
shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.
5.4. Supplements and Amendments
(a) The Corporation may from time to time supplement or amend this
Agreement without the approval of any holders of Rights or Voting
Shares (i) to correct any clerical or typographical error or to
maintain the validity of the Agreement as a
<PAGE>
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result of a change in any applicable legislation, regulations or
rules thereunder or (ii) prior to the first shareholder meeting
referred to in Section 5.20.
(b) Any amendment, variation or deletion made by the Board of Directors
pursuant to Subsection 5.4(a) shall:
(i) if made prior to the Separation Time, be submitted to the
holders of Voting Shares at the next meeting of shareholders
of the Corporation and the holders of Voting Shares 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.
(c) Any amendment, variation or deletion pursuant to Subsection 5.4(a)
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). If an amendment, variation or deletion
pursuant to Subsection 5.4(a) is rejected by the holders of Voting
Shares or the holders of Rights or is not submitted to the holders
of Voting Shares or the holders of Rights as required pursuant to
Clause 5.4(b)(i) or (ii), then such amendment, variation or deletion
shall cease to be effective from and after the termination of the
meeting at which it was rejected or to which it should have been but
was not submitted or from and after the date of the meeting of
holders of Rights that should have been but was not held, and no
subsequent resolution of the Board of Directors to amend, vary or
delete any provision of this Agreement to substantially the same
effect shall be effective until confirmed by the holders of Voting
Shares or the holders of Rights, as the case may be.
(d) The Corporation may, with the prior consent of the holders of Voting
Shares obtained as set forth below, at any time prior to the
Separation Time, amend, vary or rescind any of the provisions of
this Agreement and the Rights (whether or not such action would
materially adversely affect the interest of the holders of Rights
generally). Such consent shall be deemed to have been given if the
action requiring such approval is authorized by the affirmative vote
of a majority of the votes cast by Independent Shareholders present
or represented at and entitled to be voted at a
<PAGE>
-39-
meeting of the holders of Voting Shares duly called and held in
compliance with applicable laws and the articles and by-laws of the
Corporation.
(e) The Corporation may, with the prior consent of the holders of Rights
obtained as set forth below, at any time after the Separation Time,
amend, vary or rescind any of the provisions of this Agreement and
the Rights (whether or not such action would materially adversely
affect the interest of the holders of Rights generally). Such
consent shall be deemed to have been given if the action requiring
such approval is authorized by the affirmative vote of a majority of
the votes cast by the holders of Rights (other than any holder of
Rights whose Rights have become null and void pursuant to the
provisions hereof) present or represented at and entitled to be
voted at a meeting of the holders of Rights. For the purposes,
hereof, the procedures for the calling, holding and conduct of a
meeting of the holders of Rights shall be those, as nearly as may
be, which are provided in the Corporation's by-laws with respect to
meetings of its shareholders.
(f) For greater certainty, 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.
(g) Notwithstanding anything in this Section 5.4 to the contrary, no
such supplement or amendment shall be made to the provisions of
Article 4 except with the written concurrence of the Rights Agent to
such supplement or amendment. 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.
5.5. Fractional Rights and Fractional Shares
(a) The Corporation shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional
Rights. After the Separation Time, there shall be paid to the
registered holders of the Rights Certificate with regard to which
fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Market Value of a whole Right in
lieu of such fractional Rights.
(b) The Corporation shall not be required to issue fractional Common
Shares upon exercise of the Rights or to distribute certificates
which evidence fractional Common Shares. In lieu of issuing
fractional Common Shares, the Corporation shall pay to the
registered 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 Value of one Common Share.
<PAGE>
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5.6. Rights of Action
Subject to the terms of this Agreement, rights of action in respect
of this Agreement, other than rights of action vested solely in the Rights
Agent, are vested in the respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any other
Rights, may, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Corporation to enforce, or otherwise
act in respect of, such holder's right to exercise such holder's Rights in the
manner provided in such holder's Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
5.7. Holder of Rights Not Deemed a Shareholder
No holder, as such, of any Rights shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Shares or any other
securities which may at any time be issuable on the exercise of such Rights, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in Section
5.8 hereof), or to receive dividends or subscription rights or otherwise, until
such Rights shall have been exercised in accordance with the provisions hereof.
5.8. Notice of Proposed Actions
In case the Corporation shall propose after the Separation Time and
prior to the Expiration Time to effect the liquidation, dissolution or winding
up of the Corporation or the sale of all or substantially all of the
Corporation's assets, then, in each such case, the Corporation shall give to
each holder of a Right, a notice of such proposed action, which shall specify
the date on which such liquidation, dissolution, or winding up is to take place,
and such notice shall be so given at least 20 Business Days prior to the date of
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 by the Rights Agent or by the holder of any Rights to or on the
Corporation shall be sufficiently given or made if delivered or sent by
facsimile transmission addressed (until another address is filed in writing with
the Rights Agent) as follows:
<PAGE>
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TLC Laser Center Inc.
5600 Explorer Drive, Suite 301
Mississauga, Ontario
L4W 4Y2
Facsimile No.: (905) 602-7956
Attention: General Counsel
with a copy to:
Tory Tory DesLauriers & Binnington
Suite 3000, Aetna Tower
P.O. Box 270
Toronto-Dominion Centre
Toronto, Ontario
M5K 1N2
Facsimile No.: (416) 865-7380
Attention: David A. Chaikof
Any notice or demand authorized or required by this Agreement to be
given or made by the Corporation or by the holder of any Rights to or on the
Rights Agent shall be sufficiently given or made if delivered or sent by
facsimile transmission addressed (until another address is filed in writing with
the Corporation) as follows:
CIBC Mellon Trust Company
320 Bay Street
Ground Floor
Toronto, Ontario
M5H 4A6
Facsimile No.: (416) 643-5570
Attention: Vice President, Client Services
Notices or demands authorized or required by this Agreement to be given or made
by the Corporation or the Rights Agent to or on the holder of any Rights shall
be sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears on
the Rights Register or, prior to the Separation Time, on the registry books of
the Corporation for the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice.
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
<PAGE>
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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 any successful action 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, or any amendment to this Agreement, shall be subject to the
receipt of any requisite approval or consent from any governmental or regulatory
authority. Without limiting the generality of the foregoing, any issuance or
delivery of debt or equity securities (other than non-convertible debt
securities) of the Corporation upon the exercise of Rights and any amendment to
this Agreement shall be subject to the prior consent of The Toronto Stock
Exchange and any other exchange requiring prior approval.
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, 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 any province or
territory thereof and the United States of America 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 inure 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; but this
Agreement shall be for the sole and exclusive benefit of the Corporation, the
Rights Agent and the holders of the Rights.
<PAGE>
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5.15. Governing Law
This Agreement and each Right issued hereunder shall be deemed to be
a contract made under the laws of the Province of Ontario and for all purposes
shall be governed by and construed in accordance with the laws of such province
applicable to contracts to be made and performed entirely within the such
province.
5.16. Language
Les parties aux presentes ont exige que la presente convention ainsi
que tous les documents et avis qui s'y rattachent et/ou qui en coulent soient
rediges en langue anglaise. The parties hereto have required that this Agreement
and all documents and notices related thereto and/or resulting therefrom be
drawn up in English.
5.17. Counterparts
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
5.18. Severability
If any term or provision hereof or the application thereof to any
circumstance shall, in any jurisdiction and any extent, be invalid or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
5.19. Effective Date
This Agreement shall be effective on and from the date hereof (the
"Effective Date").
5.20. Shareholder Review
At each of (i) an annual or special meeting of shareholders of the
Corporation held after the Effective Date which must be no later than six months
from the date hereof, and (ii) an annual or special meeting of shareholders of
the Corporation to be held in the year 2002, provided that a Flip-in Event has
not occurred prior to such time, the Board of Directors shall submit a
resolution to the Independent Shareholders for their consideration and approval,
ratifying the continued existence of this Agreement after each such meeting. If
a majority of the votes cast by Independent Shareholders who vote in respect of
such resolution at such meeting are not voted in favour of ratifying the
continued existence of this Agreement, then the Board of Directors shall
immediately upon the confirmation by the Chairman of such shareholders' meeting
of the result of
<PAGE>
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the vote on such resolution without further formality be deemed to have elected
to redeem the Rights at the Redemption Price.
5.21. Time of the Essence
Time shall be of the essence hereof.
5.22. Determinations and Actions by the Board of Directors
All actions, calculations and determinations (including all
omissions with respect to the foregoing) which are done or made by the Board of
Directors in good faith, shall not subject to the Board of Directors to any
liability to the holders of the Rights or any other parties.
5.23. Fiduciary Duties of the Board of Directors
For greater certainty, nothing contained herein shall be construed
to suggest or imply that the Board of Directors shall not be entitled to
recommend that holders of Voting Shares reject or accept any Take-over Bid or
take any other action (including, without limitation, the commencement,
prosecution, defence or settlement of any litigation and the submission of
additional or alternative Take-over Bids or other proposals to the Shareholders
of the Corporation) with respect to any Take-over Bid or otherwise that the
Board of Directors believes is necessary or appropriate in the exercise of its
fiduciary duties.
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have cause this Agreement to
be duly executed as of the date first above written.
TLC THE LASER CENTER INC.
Per: __________________________________
Name:
Title:
Per: __________________________________
Name:
Title:
CIBC MELLON TRUST COMPANY
Per: __________________________________
Name:
Title:
Per: __________________________________
Name:
Title:
<PAGE>
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 PROTECTION RIGHTS PLAN AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b) OF SUCH AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON, CERTAIN RELATED PARTIES OF AN
ACQUIRING PERSON OR A TRANSFEREE OF AN ACQUIRING PERSON OR ANY SUCH RELATED
PARTIES WILL BECOME VOID WITHOUT FURTHER ACTION.
Rights Certificate
This certifies that _____________________________ is the registered holder of
the number of Rights set forth above, each of which entitles the registered
holder thereof, subject to the terms, provisions and conditions of the
Shareholder Rights Plan Agreement dated as of September 21, 1999 (the "Rights
Agreement") between TLC The Laser Center Inc., a corporation incorporated under
the laws of Ontario (the "Corporation") and CIBC Mellon Trust Company, a trust
company incorporated under the laws of Canada, as Rights Agent (the "Rights
Agent", which term shall include any successor Rights Agent under the Rights
Agreement), to purchase from the Corporation, at any time after the Separation
Time and prior to the Expiration Time (as such terms are defined in the Rights
Agreement), one fully paid common share of the Corporation (a "Common Share") at
the Exercise Price referred to below, upon presentation and surrender of this
Rights Certificate, together with the Form of Election to Exercise appropriately
completed and duly executed, to the Rights Agent at its principal office in the
City of Toronto. Until adjustment thereof in certain events as provided in the
Rights Agreement, the Exercise Price shall be $200 per Right (payable in cash,
certified cheque or money order payable to the order of the Corporation).
In certain circumstances described in the Rights Agreement, each
Right evidenced hereby may entitle the registered holder thereof to receive more
or less than one Common Share (or a combination thereof), as provided 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 herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of 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 head 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 the City of
Toronto, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Corporation at a redemption
price of $0.0001 per Right, subject to adjustment in certain events.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Common
Shares or any other securities which may at any time be issuable upon the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer
<PAGE>
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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 or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation.
DATED:
TLC THE LASER CENTER INC.
Per:_____________________________________
Chief Executive Officer
Per:_____________________________________
Chief Financial Officer
Countersigned:
CIBC MELLON TRUST COMPANY
Per:_____________________________________
Authorized Signature
<PAGE>
FORM OF ELECTION TO EXERCISE
TO: TLC LASER CENTER INC.
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/State
________________________________________
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/State
________________________________________
Social Insurance No. or other taxpayer
identification number
Date:_______________________________ Signature ____________________________
____________________________________ (Signature must correspond to name
as Signature Guaranteed written
upon the face of this Rights
Certificate in every particular,
without alteration or enlargement
or any change whatsoever)
Signature must be guaranteed by a member firm of a recognized stock
exchange in Canada, a registered national securities exchange in the United
States, a member of the Investment Dealers Association of Canada or National
Association of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in Canada or the United States.
(To be completed if true)
The undersigned hereby represents, for the benefit of the
Corporation and all holders of Rights and Common Shares, that the Rights
evidenced by this Rights Certificate are not and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person or by
any Affiliate or Associate of an Acquiring Person, any other Person acting
jointly or in concert with an Acquiring Person or any Affiliate or Associate of
any such other Person (as such terms are defined in the Rights Agreement).
__________________________________
Signature
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________________________________________________________
(Please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein.
Date:_______________________________ Signature ____________________________
____________________________________ (Signature must correspond to name
as Signature Guaranteed written
upon the face of this Rights
Certificate in every particular,
without alteration or enlargement
or any change whatsoever)
Signature must be guaranteed by a member firm of a recognized stock
exchange in Canada, a registered national securities exchange in the United
States, a member of the Investment Dealers Association of Canada or National
Association of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in Canada or the United States.
(To be completed if true)
The undersigned hereby represents, for the benefit of the
Corporation and all holders of Rights and Common Shares, that the Rights
evidenced by this Rights Certificate are not and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person or by
any Affiliate or Associate of an Acquiring Person, any other Person acting
jointly or in concert with an Acquiring Person or any Affiliate or Associate of
any such other Person (as such terms are defined in the Rights Agreement).
__________________________________
Signature
<PAGE>
NOTICE
In the event that the certifications set forth above in the Forms of
Election to Exercise and Assignment are not completed, the Corporation shall
deem the Beneficial Owner of the Rights represented by this Rights Certificate
to be an Acquiring Person (as defined in the Rights Agreement) and, accordingly,
such Rights shall be null and void.
