UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
ALTAIR INTERNATIONAL INC.
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(Exact name of registrant as specified in its charter)
Province of
Ontario,
Canada 1-12497 None
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
1725 Sheridan Avenue, Suite 140
Cody, Wyoming 82414
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (307) 587-8245
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Item 5. Other Events.
Altair International Inc. (the "Company") is filing this Current
Report on Form 8-K to report the adoption of a Shareholder Rights Plan dated
November 27, 1998 (the "Rights Agreement"), between the Company and Equity
Transfer Services, Inc. (the "Rights Agent"), and the authorization and
distribution of certain rights related thereto.
In order to ensure that all shareholders of the Company are treated
fairly in connection with any takeover offer or other acquisition of the
Company, on November 27, 1998 (the "Record Date"), the board of the directors of
the Company (the "Board") authorized and declared a distribution of one right (a
"Right") with respect to each common share, no par value, of the Company
("Common Share") issued and outstanding as of the Record Date and each Common
Share issued thereafter prior to the Expiration Time (as defined below). The
Rights are subject to the terms and conditions of the Rights Agreement, a copy
of which is attached hereto as Exhibit 4.1 and incorporated herein by this
reference. A copy of the Rights Agreement is also available upon written request
to the Company. Because it is a summary, the following description of the Rights
and the Rights Agreement necessarily omits certain terms, exceptions, or
qualifications to the affirmative statements made therein. The reader is advised
to review the entire Rights Agreement prior to making any investment decision.
Certain Key Terms of the Rights Prior to Flip-In Date.
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Prior to the date a transaction or event occurs by which a person (an
"Acquiring Person") becomes the owner of 20% or more of the outstanding Common
Shares and other shares entitled to vote for the election of directors ("Voting
Shares") of the Company (a "Flip-in Event"), each Right shall entitle the holder
thereof to purchase one Common Share for the price of $40 (the "Exercise Price")
(which Exercise Price and number are subject to adjustment as set forth in the
Rights Agreement). Notwithstanding the foregoing, no Right shall be exercisable
prior to the "Commencement Date." The "Commencement Date" is the close of
business on the eighth business day after the earlier of (a) the date of a
public announcement or disclosure by the Company or an Acquiring Person of facts
indicating that a person has become an Acquiring Person, or (b) the date of
commencement of, or first public announcement of, the intent of any person to
commence a bid for a number of Voting Shares that would give the bidder
beneficial ownership of 20% of more of the issued and outstanding Voting Shares
(a "Take-over Bid").
Certain Key Terms of the Rights Following Flip-In Date.
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Section 3.1 of the Rights Agreement (the "Conversion Provision")
provides that, subject to certain exceptions, upon the occurrence of a Flip-in
Event, each Right shall be a adjusted so as to constitute a right to purchase
from the Company for the Exercise Price a number of Common Shares having an
aggregate "Market Price" of twice the Exercise Price. The "Market Price" is
determined by averaging the closing price of the Common Shares on the primary
exchange for the Common Shares for the 20 trading days preceding the date of
determination. In addition, upon the occurrence of any Flip-in Event (which is
not subsequently deemed not to have occurred under the Rights Agreement), any
Rights owned by the Acquiring Person, its affiliates, or certain assignees shall
become null and void. Any Rights certificate subsequently issued upon transfer,
exchange, replacement, adjustment, or otherwise with respect to Common Shares
owned by any of the foregoing persons shall bear a legend indicating the extent
to which such Rights are void. Rights held by the Company or its subsidiaries
shall also be void.
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Exceptions, Redemption and Waiver.
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The definitions of "Flip-in Event" and certain related terms are
subject to exceptions, certain of which are summarized below. Nevertheless, to
understand each such exception and how they may interrelate, the reader is
advised to review the Rights Agreement. Despite a person's acquisition of 20% or
more of the Voting Shares, a Flip-in Event shall be deemed not to have occurred
or shall have no effect if:
(i) the Acquiring Person is the Company or its affiliate;
(ii) the Acquiring Person is an underwriter who becomes the beneficial
owner of 20% or more Voting Shares in connection with a distribution of
securities pursuant to an underwriting agreement with the Company;
(iii) the transaction by which the person becomes an Acquiring Person
is a "Voting Share Reduction," which is an acquisition or redemption of
Voting Shares by the Company which, by reducing the number of
outstanding Common Shares, has the incidental effect of increasing the
acquiring person's ownership percentage;
(iv) the transaction by which the person becomes an Acquiring Person is
a "Permitted Bid," which is a Take-over Bid that is issued pursuant to
a circular, is made to all holders of record of Voting Shares other
than the bidder, and is subject to the irrevocable conditions that: (a)
no Voting Shares shall be taken up or paid for within 45 days of the
Take-over Bid; (b) no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid unless, at the closing of business on
such date, the Voting Shares tendered in acceptance of the Take-over
Bid constitute more than 50% of the Voting Shares held by persons not
affiliated with the bidder; (c) Voting Shares may be tendered in
acceptance at any time prior to the date of the first take-up of or
payment for Voting Shares; (d) any Voting Shares tendered pursuant to
the Take-over Bid may be withdrawn until taken up and paid for; and (e)
once the conditions set forth in (a) and (b) above are satisfied, the
bidder shall make a public announcement of that fact, and the Take-over
Bid will remain open for not less than 10 business days following such
announcement.
The definition of Permitted Bid also includes a "Competing
Permitted Bid, which is a Takeover Bid that (x) is made while a
Permitted Bid is open, (y) satisfies all of the requirements of a
Permitted Bid except for the requirement that the no Voting Shares
shall be taken up within 45 days the date Take-over Bid was made, and
(z) is subject to a restriction prohibiting any Voting Shares from
being taken up or paid for prior to the later of i. 21 days after such
Take-over Bid, and ii. the 45th day after the date on which the
earliest open Permitted Bid was made.
(iv) the transaction by which the person becomes an Acquiring Person is
an acquisition with respect to which the Board has waived the
Conversion Provision because:
(a) the Board has determined prior to the Commencement Date
that a person became an Acquiring Person by inadvertence and,
within 10 days of such determination, such person has refused
its beneficial ownership of Common Shares so as not to be an
Acquiring Person;
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(b) the Board acting in good faith has determined, prior to
the occurrence of a Flip-in Event that occurred by reason of a
Take-over Bid made by means of a bid circular to all holders
of Voting Shares, to waive the Conversion Provision, provided
that the if the Board waives the application of the Conversion
Provision to one such Take-over Bid, such waiver automatically
extends to all similar Take-over bids (a "Take-over Waiver");
(c) the Board determines within a specified time period to
waive application of the Conversion Provision to a Flip-in
Event, provided that the Acquiring Person has reduced, or
agreed to reduce, its beneficial ownership of Voting Shares to
less than 20% of the outstanding issue of Voting Shares (a
"Waiver Following Withdrawal").
(vi) the acquisition by which the person becomes an Acquiring Person is
an acquisition pursuant to (a) a dividend reinvestment plan or share purchase
plan made available to all holders of Voting Shares; (b) a stock dividend, stock
split or similar event pursuant to which the Acquiring Person receives Common
Shares on pro rata basis with all members of the same class or series; (c) the
acquisition or exercise of rights to purchase Voting Shares distributed to all
holders of Voting Shares; (d) a distribution of Voting Shares or securities
convertible into Voting Shares offered pursuant to a prospectus or by way of a
private placement, provided the Acquiring Person does not thereby acquire a
greater percentage of the Voting Shares or convertible securities offered than
the person's percentage of voting shares beneficially owned immediately prior to
such acquisition.
In addition, (i) when a Take-over Bid that is not a Permitted Bid is
withdrawn or otherwise terminated after the Commencement Date has occurred but
prior to the occurrence of a Flip-in Date, or (ii) if the Board grants a Waiver
Following Withdrawal, the Board may elect to redeem all outstanding Rights at
the price of Cdn. $.001 per Right (as adjusted) (the "Redemption Price"). Upon
the Rights being redeemed pursuant to the foregoing provision, all provisions of
the Rights Agreement shall continue to apply as if the Commencement Date had not
occurred, and the Company shall be deemed to have issued replacement rights to
the holders of its then outstanding Common Shares.
In addition, the Board may, at any time prior to the first date of
public announcement or disclosure by the Company or Acquiring Person of facts
indicating that a person has become an Acquiring Person (the "Announcement
Date") elect to redeem all, but not less than all, of the then outstanding
Rights at the Redemption Price ("Discretionary Redemption"). Moreover, in the
event a person acquires Voting Shares pursuant to a Permitted Bid or a Take-over
Waiver, the Board shall be deemed to have elected to redeem the Rights at the
Redemption Price ("Deemed Redemption"). Within 10 days after the Board elects,
or is deemed to have elected, to redeem the Rights, the Board shall give notice
of redemption to the holders of the then outstanding Rights and, in such notice,
described the method of payment by which the redemption price will be paid. The
rights of any person under the Rights Agreement or any Right, except rights to
receive cash or other property that have already accrued, shall terminate on the
date of a Discretionary Redemption or a Deemed Redemption (the "Expiration
Time").
Exercise of the Rights.
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The Rights shall not be exercisable prior to the Commencement Date.
Until the Commencement Date, each Right shall be evidenced by the certificate
for the associated Common Share and will be transferable only together with, and
will be transferred by the transfer of, its associated Common Share. New Common
Share certificates issued after the Record Date will contain a legend
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incorporating the Rights Agreement by reference. Certificates issued and
outstanding at the Record Date shall evidence one Right for each Common Share
evidenced thereby, notwithstanding the absence of a legend incorporating the
Rights Agreement, until the earlier of the Commencement Date or the Expiration
Time. Each Common Share issued for new value after the Record Date, but prior to
the Expiration Time, shall automatically have one new Right associated with it
and shall bear the appropriate legend.
From and after the Commencement Date, the Rights may be exercised, and
the registration and transfer of the Rights shall be separate from and
independent of the Common Shares. Following the Commencement Date, the Company
shall mail to each holder of Common Shares as of the Commencement Date, or such
holder's nominee, a Rights Certificate representing the number of Rights held by
such holder at the Commencement Date and a disclosure statement describing the
Rights.
Rights may be exercised in whole or in part on any business day after
the Commencement Date and prior to the Expiration Time by submitting to the
Rights Certificate, an election to exercise, and payment of the sum equal to the
Exercise Price multiplied by the number of Rights being exercised. Upon receipt
of such materials, the Rights Agent will promptly deliver certificates
representing the appropriate number of Common Shares to the registered holder of
the relevant Rights Certificate and, if not all Rights were exercised, issue a
new Rights Certificate evidencing the remaining unexercised Rights.
Miscellaneous Terms.
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Amendment. The Board may in its discretion from time to time amend,
vary or delete any of the provisions of the Rights Agreement or the Rights,
provided that no amendment to provisions affecting the Rights Agent shall be
made without the concurrence of the Rights Agent.
Consent by Rights Holders. Each holder of Rights, by accepting such
Rights, is deemed to have consented and agreed with the Company, the Rights
Agent, and other Rights holders (a) to be bound by the Rights Agreement; (b)
that, prior to the Commencement Date, each Right will be transferable only
together with, and will be transferred by the transfer of, the associated Common
Share; (c) that after the Commencement Date, the Rights will be transferred only
on the Rights register described in the Rights Agreement; (d) that, prior to due
presentment of a Rights Certificate for registration of transfer, the Company,
Rights Agent, and their agents may treat the person in whose name such
certificate is registered as the owner for all purposes; (e) to waive his right
to receive fractional Rights except as provided in the Rights Agreement; and (f)
that, without the approval of the holder of the Rights, the Rights Agreement may
be amended from time to time as provided therein.
Adjustment of Exercise Price and Number of Rights. In the event the
Company shall (i) declare a dividend in Voting Shares or convertible securities,
(ii) subdivide the Common Shares; (iii) consolidate the Common Shares, or (iv)
issue any Voting Shares or convertible securities in exchange for existing
Common Shares, whether in a reclassification, amalgamation, statutory
arrangement, consolidation or otherwise, the Exercise Price and number of Rights
shall be adjusted to prevent dilution. The Rights Agreement also requires
adjustments in the Exercise Price and/or the number of Rights to avoid dilution
in the event the Company issues warrants or other convertible securities with
respect to Common Shares at less than market value, distributes evidences of
indebtedness or assets, or issues certain other dilutive securities or rights.
The Company is not required, however, to make any adjustment if such adjustment
would require an increase or decrease in the Exercise Price of less than 1%
(although such minor adjustments are carried forward and aggregated). The
Company may elect on or
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after the date of any 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. The Company is also entitled to make any additional adjustments to the
Exercise Price as it may in good faith deem advisable to ensure that the stock
splits, consolidations, issuance of securities at a discount from Market Price,
stock dividends, and certain other transactions are not taxable to shareholders.
Whenever the Company makes an adjustment in the Exercise Price, the Company is
required to prepare a statement setting forth such adjustment, along with
supporting facts, and deliver such statement to the Rights Agent, each transfer
agent, and any Rights holder who requests a copy.
Fractional Rights and Shares. The Company shall not be required to
issue fractions of Rights. After the Commencement Date, there shall be paid, in
lieu of such fractions of Rights, an amount of cash equal to the same fraction
of the Market Price of a whole Right. Similarly, the Company shall not be
required to issue fractional Common Shares upon exercise of the Rights, but
shall pay, in lieu of such Common Shares, an amount of cash equal to the same
fraction of the Market Price of one common Share at the date of exercise.
Government Approvals. Any obligation of the Company under the Rights
Agreement shall be subject to applicable law and to the receipt of approval or
consent from any governmental or regulatory approval. Without limiting the
generality of the foregoing, the issuance of debt or equity securities of the
Company upon the exercise of the Rights and any Amendment to the Rights
Agreement shall, if required, be subject to the prior consent of the stock
exchanges on which the Company is from time to time listed.
The foregoing descriptions do not purport to be complete and are
qualified by reference to the definitive Rights Agreement and related documents
filed as Exhibits herewith.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
4.1 Shareholders Rights Plan Agreement dated November 27,
1998, between Altair International Inc.
99.1 Press Release dated November 30, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned thereunto duly authorized.
Altair International Inc.
December 24, 1998 By:/s/ William P. Long
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Date Dr. William P. Long, President
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Exhibit 4.1
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SHAREHOLDER RIGHTS PLAN AGREEMENT
BETWEEN
ALTAIR INTERNATIONAL INC.
AND
EQUITY TRANSFER SERVICES INC.
DATED AS OF NOVEMBER 27, 1998
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<PAGE>
Exhibit 4.1
<TABLE>
<CAPTION>
TABLE OF CONTENTS
ARTICLE 1
<S> <C>
INTERPRETATION...........................................................................................2
1.1 Certain Definitions.............................................................................2
1.2 Currency.......................................................................................13
1.3 Number and Gender..............................................................................13
1.4 Sections and Headings..........................................................................13
1.5 Statutory References...........................................................................13
1.6 Determination of Percentage Ownership..........................................................14
1.7 Acting Jointly or in Concert...................................................................14
1.8 Generally Accepted Accounting Principles.......................................................14
ARTICLE 2
THE RIGHTS..............................................................................................15
2.1 Legend on Common Share Certificates............................................................15
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights...............................15
2.3 Adjustments to Exercise Price; Number of Rights................................................18
2.4 Date on Which Exercise is Effective............................................................24
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates..........................24
2.6 Registration, Transfer and Exchange............................................................25
2.7 Mutilated, Lost, Stolen and Destroyed Rights Certificates......................................26
2.8 Persons Deemed Owners..........................................................................26
2.9 Delivery and Cancellation of Certificates......................................................26
2.10 Agreement of Rights Holders....................................................................27
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS...............................................................................27
3.1 Flip-in Event..................................................................................27
3.2 Fiduciary Duties of the Board of Directors of the Corporation..................................29
ARTICLE 4
THE RIGHTS AGENT........................................................................................29
4.1 General........................................................................................29
4.2 Merger, Amalgamation, Consolidation or Change of Name of Rights Agent..........................30
4.3 Duties of Rights Agent.........................................................................31
4.4 Change of Rights Agent.........................................................................33
ARTICLE 5
MISCELLANEOUS...........................................................................................33
</TABLE>
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<TABLE>
<CAPTION>
Exhibit 4.1
<S> <C>
5.1 Redemption, Waiver and Termination.............................................................33
5.2 Expiration.....................................................................................35
5.3 Issuance of New Rights Certificates............................................................35
5.4 Supplements and Amendments.....................................................................35
5.5 Fractional Rights and Fractional Shares........................................................36
5.6 Rights of Action...............................................................................37
5.7 Holder of Rights Not Deemed a Shareholder......................................................37
5.8 Notice of Proposed Actions.....................................................................37
5.9 Notices........................................................................................37
5.10 Costs of Enforcement...........................................................................38
5.11 Regulatory Approvals...........................................................................38
5.12 Declaration as to Non-Canadian and Non-U.S. Holders............................................38
5.13 Successors.....................................................................................39
5.14 Benefits of this Agreement.....................................................................39
5.15 Determination and Actions by the Board of Directors............................................39
5.16 Governing Law..................................................................................39
5.17 Language.......................................................................................39
5.18 Counterparts...................................................................................40
5.19 Severability...................................................................................40
5.20 Effective Date.................................................................................40
5.21 Time of the Essence............................................................................40
EXHIBIT A
Rights Certificate .............................................................................................A-1
FORM OF ELECTION TO EXERCISE ...................................................................................A-3
FORM OF ASSIGNMENT .............................................................................................A-5
</TABLE>
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<PAGE>
SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT dated as of November 27, 1998.
BETWEEN:
ALTAIR INTERNATIONAL INC.
(the "Corporation")
OF THE FIRST PART
- and -
EQUITY TRANSFER SERVICES INC.
(the "Rights Agent")
OF THE SECOND PART
WHEREAS:
A. The Board of Directors has determined that it is advisable to adopt a
shareholder rights plan (the "Rights Plan") to ensure, to the extent
possible, that all shareholders of the Corporation are treated fairly in
connection with any takeover offer for the Corporation or other
acquisition of control of the Corporation.
B. In order to implement the Rights Plan, the Board of Directors has:
(a) authorized and declared a distribution of one right (a "Right")
effective at the Close of Business at the Record Time in respect
of each Common Share outstanding at the Close of Business at the
Record Time;
(b) authorized the issuance of one Right in respect of each Common
Share issued after the Record Time and prior to the earlier of
the Separation Time and the Expiration Time; and
(c) authorized the issuance of Rights Certificates to holders of
Rights pursuant to the terms and subject to the conditions set
forth herein.
C. 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.
D. The Corporation desires to appoint the Rights Agent to act on behalf of
the Corporation, and the Rights Agent is willing to so act, in connection
with the issuance, transfer, exchange and replacement of Rights
Certificates, the exercise of Rights and other matters referred to herein.
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NOW THEREFORE in consideration of the premises and respective agreements
set forth herein, the parties hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Certain Definitions
For the purposes of this Agreement, including the recitals hereto, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who is at any time after
the date hereof the Beneficial Owner of 20% or more of the
outstanding Voting Shares of the Corporation; provided, however,
that the term "Acquiring Person" shall not include:
(i) the Corporation or any corporation controlled by the
Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares as a result of one
or any combination of:
(A) a Voting Share Reduction;
(B) a Permitted Bid Acquisition;
(C) an Exempt Acquisition; and
(D) a Pro Rata Acquisition;
provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the outstanding Voting
Shares by reason of one or any combination of a Voting
Share Reduction, a Permitted Bid Acquisition, an Exempt
Acquisition or a Pro Rata Acquisition, and thereafter
becomes the Beneficial Owner of an additional one per
cent of the Voting Shares then outstanding (otherwise
than pursuant to a Voting Share Reduction, a Permitted
Bid Acquisition, an Exempt Acquisition or a Pro Rata
Acquisition), then, as of the date that such Person
becomes a Beneficial Owner of such additional Voting
Shares, such Person shall become an "Acquiring Person";
(iii) for the period of 10 days after the Disqualification Date
(as hereinafter defined), any Person who becomes the
Beneficial Owner of 20% or more of the outstanding Voting
Shares as a result of such Person becoming disqualified
from relying on subclause 1.1(d)(v) hereof where such
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disqualification results solely because such Person is
making or has announced a current intention to make a
Take-over Bid, either alone or by acting jointly or in
concert with any other Person. For the purposes of this
definition, "Disqualification Date" means the first date
of public announcement that such Person is making or has
announced a current intention to make a Take-over Bid,
alone or by acting jointly or in concert with another
Person;
(iv) an underwriter that becomes the Beneficial Owner of 20%
or more of the Voting Shares in connection with a
distribution of securities pursuant to an underwriting
agreement with the Corporation; or
(v) a Person (a "Grandfathered Person") who is the Beneficial
Owner of 20% or more of the outstanding Voting Shares of
the Corporation determined as at the Record Time
provided, however, that this exception shall not be, and
shall cease to be, applicable to a Grandfathered Person
in the event that such Grandfathered Person shall, after
the Record Time, become the Beneficial Owner of an
additional Voting Shares of the Corporation that
increases its Beneficial Ownership of Voting Shares by
more than 1% of the number of Voting Shares outstanding
as at the Record Time, other than through a Voting Share
Reduction, a Permitted Bid Acquisition, an Exempt
Acquisition or a Pro Rata Acquisition;
(b) "Affiliate", when used to indicate a relationship with a
specified Person, means a Person that directly or indirectly
controls, or is controlled by, or is under common control with,
such specified Person.
(c) "Associate", when used to indicate a relationship with a
specified Person, means any relative of such specified Person who
has the same home as such specified Person, or any person to whom
such specified Person is married, or any person with whom such
specified Person is living in a conjugal relationship outside
marriage, or any relative of such spouse or other person who has
the same home as such specified Person.
(d) A Person shall be deemed the "Beneficial Owner" of, and to have
"Beneficial Ownership" of, and to "Beneficially Own":
(i) any securities of which such Person or any of such
Person's Affiliates or Associates is owner at law or in
equity;
(ii) any securities which the Person or any of such Person's
Affiliates or Associates has the right to acquire, within
60 days (whether such right is exercisable immediately or
after the passage of not more than 60 days thereafter or
upon the occurrence of a contingency or the making of a
payment) pursuant to any Convertible Security, agreement,
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arrangement, pledge or understanding, whether or not in
writing (other than (A) customary agreements with and
between underwriters and/or banking group and/or selling
group members with respect to a distribution of
securities and (B) pledges of securities in the ordinary
course of the pledgee's business); and
(iii) any securities that are Beneficially Owned within the
meaning of clauses (i) or (ii) of this Subsection 1.1(d)
by any other Person with which such Person is acting
jointly or in concert;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to have "Beneficial Ownership" of, or
to "Beneficially Own", any security:
(iv) because (A) the holder of such security has agreed to
deposit or tender such security pursuant to a Take-over
Bid made by such Person or any of such Person's
Affiliates or Associates or any other Person referred to
in clause (iii) of this definition pursuant to a
Permitted Lock-up Agreement, or (B) such security has
been deposited or tendered pursuant to a Take-over Bid
made by such Person or any of such Person's Affiliates or
Associates or any other person acting jointly or in
concert with such Person until the earlier of such
tendered security being 1) accepted unconditionally for
payment or exchange and 2) taken up and paid for;
(v) because (A) such Person or any of the Affiliates or
Associates of such Person or any other Person acting
jointly or in concert with such Person, holds such
security provided that the ordinary business of any such
Person (the "Fund Manager") includes the management of
investment funds for others and such security is held by
the Fund Manager in the ordinary course of such business
in the performance of such Fund Manager's duties for the
account of any other Person (a "Client"), (B) such Person
(the "Trust Company") is licensed to carry on the
business of a trust company under applicable laws and, as
such, acts as trustee or administrator or in a similar
capacity in relation to the estates of deceased or
incompetent Persons (each an "Estate Account") or in
relation to other accounts (each an "Other Account") and
holds such security in the ordinary course of such duties
for such Estate Accounts or for such Other Accounts, (C)
such Person (the "Plan Administrator") is the
administrator or the trustee of one or more pension funds
or plans (a "Plan") registered under the laws of Canada
or any province thereof or the laws of the United States
of America or any state thereof, (D) such Person (the
"Crown Agent") is established by statute for purposes
that include, and the ordinary business or activity of
such Person includes, the management of investment 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
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cases the Fund Manager, the Trust Company, the Plan
Administrator, the Crown Agent or the Plan, as the case
may be, is not then making or has not then announced an
intention to make a Take-over Bid, alone or by acting
jointly or in concert with any other Person, other than
an Offer to Acquire Voting Shares or other securities (X)
pursuant to a distribution by the Corporation or (Y) by
means of a Permitted Bid, or (Z) by means of market
transactions made in the ordinary course of the business
of such Person (including pre-arranged trades entered
into 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 securities;
(vii) because such Person is a Client of a Fund Manager and
such security is owned at law or in equity by the Fund
Manager or because such Person is an Estate Account or an
Other Account of a Trust Company and such security is
owned at law or in equity by the Trust Company or such
Person is a Plan and such security is owned at law or in
equity by the Plan Administrator; or
(viii) because such Person is the registered holder of
securities as a result of carrying on the business of or
acting as a nominee of a securities depositary.
For purposes of this Agreement in determining the percentage of
the outstanding Voting Shares with respect to which a Person is
or is deemed to be the Beneficial Owner, any unissued Voting
Shares as to which such Person is deemed the Beneficial Owner
pursuant to this Subsection 1.1(d) shall be deemed outstanding.
(e) "Board of Directors" shall mean the board of directors of the
Corporation or any duly constituted and empowered committee
thereof.
(f) "Business Corporations Act" shall mean the Business Corporations
Act (Ontario), R.S.O. 1990, Chapter B.16, as amended and the
regulations thereunder, and any comparable or successor laws or
regulations thereto.
(g) "Business Day" shall mean any day, other than a Saturday or
Sunday or a day on which banking institutions in the City of
Toronto are authorized or obligated by law to close.
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(h) "Canadian Dollar Equivalent" of any amount which is expressed in
United States dollars shall mean on any day the Canadian dollar
equivalent of such amount determined by reference to the Canadian
- U.S. Exchange Rate in effect on such date.
(i) "Close of Business" on any given date shall mean the time on such
date (or, if such date is not a Business Day, the time on the
next Business Day) at which the principal office of the transfer
agent for the Common Shares in Toronto, Ontario (or after the
Separation Time, the principal office of the Rights Agent in
Toronto, Ontario) is closed to the public.
(j) "Closing Price" per security of any securities on any
date of determination shall mean:
(i) the closing board lot sale price or, if such price is not
available, the average of the closing bid and asked
prices, for such securities as reported by the stock
exchange or national securities quotation system on which
such securities are listed or admitted to trading
(provided that, if at the date of determination such
securities are listed or admitted to trading on more than
one stock exchange or national securities quotation
system, such price or prices shall be determined based on
the stock exchange or quotation system on which such
securities are then listed or admitted to trading on
which the largest number of such securities were traded
during the most recently completed calendar year); or
(ii) if for any reason none of such prices is available on
such day or the securities are not listed or admitted to
trading on a stock exchange or a national securities
quotation system, the last sale price, or in case no sale
takes place on such date, the average of the high bid and
low asked prices for each of such securities in the
over-the-counter market;
provided, however, that (A) if for any reason none of such prices
are available on such date, the "Closing Price" per security of
such securities on such date shall mean the fair value per
security of the securities on such date as determined by a
nationally or internationally recognized investment dealer or
investment banker with respect to the fair value per security of
such securities and (B) if the Closing Price so determined is
expressed in United States dollars, such amount shall be
converted to the Canadian Dollar Equivalent.
(k) "Common Shares" shall mean the Common Shares in the share capital
of the Corporation as presently constituted, as such shares may
be subdivided, consolidated, reclassified or otherwise changed
from time to time, and "common shares" when used with reference
to any Person other than the Corporation means the class or
classes of shares (or similar equity interest) with the greatest
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per share voting power entitled to vote generally in the
election of all directors of such other Person or the
equity securities or other equity interest having power
(whether or not exercised) to control or direct the
management of such other Person or, if such other Person
is a corporation controlled by another Person, the Person
(other than an individual) which ultimately controls such
first mentioned other Person.
(l) "Competing Permitted Bid" means a Take-over Bid that:
(i) is made after a Permitted Bid has been made and prior to
the expiry of the Permitted Bid;
(ii) satisfies all components of the definition of a Permitted
Bid other than the requirement in Clause (ii)(A)(x)
thereof; and
(iii) contains, and the take-up and payment for securities
tendered or deposited is subject to, irrevocable and
unqualified provisions that no Voting Shares shall be
taken up or paid for pursuant to the Takeover Bid prior
to the Close of Business on a date that is no earlier
than the later of (i) 21 days after the date of the
Take-over Bid, and (ii) the 45th day after the earliest
date on which any other Permitted Bid that is then in
existence was made.
(m) "controlled": a body corporate is "controlled" by another Person if
and only if:
(i) securities entitled to vote in the election of directors
carrying more than 50% of the votes for the election of
directors are held, directly or indirectly, by or for the
benefit of the other Person; and
(ii) the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of directors
of such body corporate;
and "controls", "controlling" and "under common control with"
shall be interpreted accordingly.
(n) "Convertible Security" means, with respect to any security, a
security convertible into or exchangeable for the first-mentioned
security.
(o) "Co-Rights Agents" shall have the meaning ascribed thereto in
Subsection 4.1(a).
(p) "Disposition Date" has the meaning ascribed thereto in Subsection
5.1(b).
(q) "Disqualification Date" has the meaning ascribed thereto in Clause
1.1(a)(iii) hereof.
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(r) "Effective Date" shall mean the Close of Business on November 27,
1998.
(s) "Election to Exercise" has the meaning ascribed thereto in Subsection
2.2(d).
(t) "Exempt Acquisition" means a share acquisition in respect of
which the Board of Directors has waived the application of
Section 3.1 pursuant to Subsection 5.1(b), 5.l(d) or 5.l(e) or
which was made on or prior to the date of this Agreement.
(u) "Exercise Price" shall mean, as of any date, the price at which a
holder of a Right may purchase the securities issuable upon
exercise of one whole Right and, until adjustment thereof in
accordance with the terms hereof, the Exercise Price shall be
US$40.
(v) "Expansion Factor" has the meaning ascribed thereto in subclause
2.3(b)(iv)(A)(1).
(w) "Expiration Time" shall mean the Termination Time.
(x) "Fiduciary" shall, for the purpose of Section 5.12, mean a trust
company registered under the trust company legislation of Canada
or any province thereof, a trust company organized under the laws
of any state of the United States, a portfolio manager registered
under the securities legislation of one or more provinces of
Canada or an investment adviser registered under the United
States Investment Advisers Act of 1940 or any other securities
legislation of the United States or any state, of the United
States.
(y) "Flip-in Event" shall mean a transaction or event in or pursuant
to which any Person becomes an Acquiring Person.
(z) "holder" shall have the meaning ascribed thereto in Section 2.8.
(aa) "Independent Shareholders" shall mean holders of outstanding
Voting Shares, other than Voting Shares Beneficially Owned by (i)
any Acquiring Person; (ii) any Offeror other than a Person who at
the relevant time is deemed not to Beneficially Own such Voting
Shares by reason of Clause 1.1(d)(v) hereof; (iii) any Person
acting jointly or in concert with such Acquiring Person or
Offeror referred to in (ii); (iv) any Associate or Affiliate of
such Acquiring Person or Offeror referred to in (ii); and (v) any
employee benefit plan, deferred profit sharing plan and any
similar plan or trust for the benefit of employees of the
Corporation unless the beneficiaries of the plan or trust direct
the manner in which the Voting Shares are to be voted or withheld
from voting or direct whether the Voting Shares are to be
tendered to a Take-over Bid.
(ab) "Market Price" per security of any securities on any date of
determination shall mean the average of the daily Closing Prices
per security of such securities on each of the 20 consecutive
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Trading Days through and including the Trading Day immediately
preceding such date of determination; provided, however, that if
an event of a type analogous to any of the events described in
Section 2.3 hereof shall have caused any Closing Price used to
determine the Market Price on any Trading Day not to be fully
comparable with the Closing Price on the Trading Day immediately
preceding such date of determination, each such Closing Price so
used shall be appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.3 hereof in order
to make it fully comparable with the Closing Price on the Trading
Day immediately preceding such date of determination.
(ac) "Nominee" has the meaning ascribed thereto in Subsection 2.2(c).
(ad) "Offer to Acquire" shall include:
(i) an offer to purchase or a solicitation of an offer to
sell Voting Shares, or a public announcement of an
intention to make such an offer or solicitation; and
(ii) an acceptance of an offer to sell Voting Shares, whether
or not such offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer to
sell shall be deemed to be making an Offer to Acquire to the
Person that made the offer to sell.
(ae) "Offerer" shall mean a Person who has announced a current
intention to make, or who is making, a Take-over Bid.
(af) "Offerer's Securities" shall mean the Voting Shares Beneficially
Owned on the date of a Take-over Bid by an Offerer.
(ag) "Permitted Bid" means a Take-over Bid made by way of a Take-over
Bid circular which also complies with the following additional
provisions and conditions:
(i) the Take-over Bid is made to all holders of record of
Voting Shares wherever resident as registered on the
books of the Corporation, other than the Offerer;
(ii) the Take-over Bid contains, and the take-up and payment
for securities tendered or deposited thereunder is
subject to irrevocable and unqualified conditions that:
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(A) no Voting Shares shall be taken up or paid for
pursuant to the Take-over Bid 1) prior to the
Close of Business on a date which is not less
than 45 days following the date of the Take-over
Bid and 2) unless, at the Close of Business on
that date, the Voting Shares deposited or
tendered pursuant to the Take-over Bid and not
withdrawn constitute more than 50% of the Voting
Shares outstanding which are held by Independent
Shareholders;
(B) unless the Take-over Bid is withdrawn, Voting
Shares may be deposited pursuant to such
Take-over Bid at any time prior to the Close of
Business on the date of the first take-up of or
payment for Voting Shares;
(C) any Voting Shares deposited pursuant to the
Take-over Bid may be withdrawn until taken up
and paid for; and
(D) in the event that the requirement set forth in
subclause (A) of this clause 1.1(ag)(ii) is
satisfied, the Offerer will make a public
announcement of that fact and the Take-over Bid
will remain open for deposits and tenders of
Voting Shares for not less than 10 Business Days
from the date of such public announcement.
For purposes of this Agreement, (A) should a Take-over Bid which
qualified as a Permitted Bid when made cease to be a Permitted
Bid because it ceases to meet any or all of the requirements
mentioned above prior to the time it expires (after giving effect
to any extension) or is withdrawn, any acquisition of Voting
Shares made pursuant to such Take-over Bid shall not be a
Permitted Bid Acquisition and (B) the term "Permitted Bid" shall
include a Competing Permitted Bid.
(ah) "Permitted Bid Acquisition" means an acquisition of Voting Shares
made pursuant to a Permitted Bid or a Competing Permitted Bid.
(ai) "Permitted Lock-up Agreement" means an agreement between a Person
and one or more holders of Voting Shares, the terms of which are
publicly disclosed and reduced to writing and a copy of which is
made available to the public (including the Corporation) not
later than the date the Lock-up Bid (as defined below) is
publicly announced) pursuant to which such holders agree to
deposit or tender Voting Shares to a Take-over Bid (the "Lock-up
Bid") made by the Person or any of such Person's Affiliates or
Associates or any other Person referred to in clause (iii) of the
definition of Beneficial Owner and which provides:
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(i) that any agreement to deposit or tender or to not
withdraw Voting Shares from the Lock-up Bid is terminable
at the option of any holder if:
(A) another Take-over Bid is made for the same class
of Voting Shares prior to Voting Shares being
taken up and paid for under the Lock-up Bid at a
price or value per Voting Share that is at least
5% in excess of the price or value per Voting
Share offered under the Lock-up Bid; or
(B) another Take-over Bid is made prior to Voting
Shares being taken up and paid for under the
Lock-up Bid for a number of Voting Shares at
least 5% greater than the number of Voting
Shares that the Offeror has offered to purchase
under the Lock-up Bid at a price or value per
Voting Share that is not less than the price or
value per Voting Share offered under the Lock-up
Bid; and
(ii) no "break-up" fees, "top-up" fees, penalties, expenses or
other amounts that exceed in the aggregate the cash
equivalent of 2 1/2% of the price or value payable under
the Lock-up Bid to the holders of Voting Shares who are
party to the agreement shall be payable pursuant to the
agreement in the event that the Lockup Bid is not
successfully concluded or if any holder fails to tender
Voting Shares pursuant thereto.
(aj) "Person" includes any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal personal
representative, government, governmental body or authority,
corporation, or other incorporated or unincorporated
organization, syndicate or other entity.
(ak) "Pro Rata Acquisition" means an acquisition by a Person of Voting
Shares pursuant to (i) any dividend reinvestment plan or share
purchase plan of the Corporation made available to all holders of
Voting Shares (other than holders resident in any jurisdiction
where participation in any such plan is restricted or impractical
as a result of applicable law), (ii) a stock dividend, a stock
split or other event pursuant to which such Person becomes the
Beneficial Owner of Voting Shares on the same pro rata basis as
all other holders of Voting Shares of the same class or series,
(iii) the acquisition or exercise of rights to purchase Voting
Shares distributed to all holders of Voting Shares (other than
holders resident in any jurisdiction where such distribution is
restricted or impractical as a result of applicable law) by the
Corporation pursuant to a rights offering (but only if such
rights are acquired directly from the Corporation) or (iv) a
distribution of Voting Shares or Convertible Securities in
respect thereof offered pursuant to a prospectus or by way of a
private placement or a conversion or exchange of any such
Convertible Security, provided such Person does not thereby
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acquire a greater percentage of Voting Shares or Convertible
Securities so offered than the Person's percentage of Voting
Shares Beneficially Owned immediately prior to such acquisition.
(al) "Record Time" means the Close of Business on the Effective Date.
(am) "Redemption Price" shall have the meaning attributed thereto in
Subsection 5.1(a).
(an) "Regular Periodic Cash Dividend" means cash dividends paid on the
Common Shares at regular intervals in any fiscal year of the
Corporation to the extent that such cash dividends do not exceed
in the aggregate in any fiscal year, on a per share basis, the
greatest of:
(i) 200% of the aggregate amount of cash dividends declared
payable by the Corporation on its Common Shares in its
immediately preceding fiscal year divided by the number
of Common Shares outstanding as at the end of such fiscal
year;
(ii) 300% of the arithmetic mean of the aggregate amounts of
cash dividends declared payable by the Corporation on its
Common Shares in its three immediately preceding fiscal
years divided by the arithmetic mean of the number of
Common Shares outstanding as at the end of each of such
fiscal years; and
(iii) 100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its
immediately preceding fiscal year divided by the number
of Common Shares outstanding as at the end of such fiscal
year.
(ao) "Right" shall mean the herein described rights to purchase
securities pursuant to the terms and subject to the conditions
set forth herein.
(ap) "Rights Certificate" shall mean the certificates representing the
Rights after the Separation Time which shall be substantially in
the form attached hereto as Exhibit A.
(aq) "Rights Register" and "Rights Registrar" shall have the
respective meanings ascribed thereto in Subsection 2.6(a).
(ar) "Securities Act (Ontario)" shall mean the Securities Act
(Ontario), R.S.O. 1990, c.S-5, as amended and the regulations and
rules made thereunder, as now in effect or as the same may from
time to time be amended, re-enacted or replaced.
(as) "Separation Time" means the Close of Business on the eighth
Business Day after the earlier of:
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(i) the Stock Acquisition Date; and
(ii) the date of the commencement of, or first public
announcement or disclosure of the intent of any Person
(other than the Corporation or any corporation controlled
by the Corporation) to commence, a Take-over Bid (other
than a Permitted Bid, so long as such Take-over Bid
continues to satisfy the requirements of a Permitted Bid)
or such later Business Day as may be determined at any
time or from time to time by the Board of Directors;
provided, however, that if any such Take-over Bid expires, is
cancelled, is terminated or is otherwise withdrawn prior to the
Separation Time, such Take-over Bid shall be deemed, for purposes
of this Subsection 1.1(ar) never to have been made, and, provided
further, that if the Board of Directors determines, pursuant to
Section 5.1, to waive the application of Section 3.1 to a Flip-In
Event, the Separation Time in respect of such Flip-In Event shall
be deemed never to have occurred.
(at) "Stock Acquisition Date" shall mean the first date of public
announcement or disclosure by the Corporation or an Acquiring
Person of facts indicating that a Person has become an Acquiring
Person (which, for the purposes of this definition, shall
include, without limitation, a report filed pursuant to Section
141 of the Securities Act (Alberta), Section 101 of the
Securities Act (Ontario) or Section 13(d) of the U.S. Exchange
Act disclosing such information).
(au) "Take-over Bid" means an Offer to Acquire Voting Shares of any
class, or Convertible Securities with respect thereto, where the
Voting Shares subject to the Offer to Acquire, together with the
Voting Shares into or for which the securities subject to the
Offer to Acquire are convertible or exchangeable and the
Offeror's Securities constitute in the aggregate 20% or more of
the outstanding Voting Shares at the date of the Offer to
Acquire.
(av) "Termination Time" means the time at which the right to exercise
Rights shall terminate pursuant to Section 5.1 hereof.
(aw) "Trading Day", when used with respect to any securities, means
the day on which the principal Canadian or United States
securities exchange (as determined by the Board of Directors) on
which such securities are listed or admitted to trading is open
for the transaction of business or, if the securities are not
listed or admitted to trading on any Canadian or United States
securities exchange, a Business Day.
(ax) "U.S. - Canadian Exchange Rate" on any date shall mean:
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(i) if on such date the Bank of Canada sets an average noon
spot rate of exchange for the conversion of one United
States dollar into Canadian dollars, such rate; and
(ii) in any other case, the rate for such date for the
conversion of one United States dollar into Canadian
dollars which is calculated in the manner which shall be
determined by the Board of Directors from time to time
acting in good faith;
(ay) "U.S. Exchange Act" means the United States Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder
as from time to time in effect.
(az) "Voting Share Reduction" means an acquisition or redemption by
the Corporation of Voting Shares which, by reducing the number of
Voting Shares outstanding, increases the percentage of Voting
Shares Beneficially Owned by any Person to 20% or more of the
Voting Shares then outstanding.
(aaa) "Voting Shares" shall mean the Common Shares and any other
securities the holders of which are entitled to vote generally on
the election of directors of the Corporation, and "voting
shares", when used with reference to any Person other than the
Corporation, means common shares of such other Person and any
other securities the holders of which are entitled to vote
generally in the election of the directors of such other Person.
1.2 Currency
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
1.3 Number and Gender
Wherever the context will require, terms (including defined terms) used
herein importing the singular number only include the plural and vice versa and
words importing any one gender shall include all others.
1.4 Sections and Headings
The division of this Agreement into Articles, Sections, Subsections,
Clauses and Subclauses and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. The terms this "Agreement", "hereunder", "hereof", and similar
expressions refer to this Agreement as amended or supplemented from time to time
and not to any particular Article, Section or other portion hereof and include
any Agreement or instrument supplemental or ancillary hereto. Unless something
in the subject matter or context is inconsistent therewith, references herein to
Articles, Sections, Subsections, Clauses and Subclauses are to Articles,
Sections, Subsections, Clauses and Subclauses of this Agreement.
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1.5 Statutory References
Unless the context otherwise requires, any reference to a specific
Section, Subsection, Clause or Rule of any statute or regulation shall be deemed
to refer to the same as it may be amended, reenacted or replaced or, if repealed
and there shall be no replacement therefor, to the same as it is in effect on
the date of this Agreement.
1.6 Determination of Percentage Ownership
The percentage of Voting Shares Beneficially Owned by any Person, shall,
for the purposes of this Agreement, be and be deemed to be the product
determined by the formula:
A
---
100 x
B
where:
A = the aggregate number of votes for the election of all
directors generally attaching to the Voting Shares
Beneficially Owned by such Person; and
B = the aggregate number of votes for the election of all
directors generally attaching to all outstanding Voting
Shares.
Where any person is deemed to Beneficially Own unissued Voting
Shares pursuant to Subsection 1.1(d), such Voting Shares shall be
deemed to be outstanding for the purpose of both A and B in the
formula above.
1.7 Acting Jointly or in Concert
For the purposes of this Agreement, a Person is acting jointly or in
concert with every Person who is a party to an agreement, commitment or
understanding, whether formal or informal, with the first Person for the purpose
of acquiring or offering to acquire Voting Shares or Convertible Securities in
respect thereof (other than customary agreements with and between underwriters
and banking group or selling group members with respect to a distribution of
securities or pursuant to a pledge of securities in the ordinary course of the
pledgee's business).
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1.8 Generally Accepted Accounting Principles
Wherever in this Agreement reference is made to generally accepted
accounting principles, such reference shall be deemed to be the recommendations
at the relevant time of the Canadian Institute of Chartered Accountants, or any
successor institute, applicable on a consolidated basis (unless otherwise
specifically provided herein to be applicable on an unconsolidated basis) as at
the date on which a calculation is made or required to be made in accordance
with generally accepted accounting principles. Where the character or amount of
any asset or liability or item of revenue or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purpose of this Agreement or any document, such determination or
calculation shall, to the extent applicable and except as otherwise specified
herein or as otherwise agreed in writing by the parties, be made in accordance
with generally accepted accounting principles applied on a consistent basis.
ARTICLE 2
THE RIGHTS
2.1 Legend on Common Share Certificates
(a) Certificates representing the Common Shares, including without
limitation Common Shares issued upon the conversion of
Convertible Securities, issued after the Record Time but prior to
the Close of Business on the earlier of the Separation Time and
the Expiration Time, shall also evidence one Right for each
Common Share represented thereby and shall have impressed on,
printed on, written on or otherwise affixed to them the following
legend:
"Until the Separation Time (as defined in the Rights
Agreement referred to below), this certificate also
evidences and entitles the holder hereof to certain
Rights as set forth in a Shareholder Rights Plan
Agreement, dated as of November 27, 1998 (the "Rights
Agreement"), between the Corporation and Equity Transfer
Services Inc., as Rights Agent, the terms of which are
hereby incorporated herein by reference and a copy of
which is on file at the registered office of the
Corporation. Under certain circumstances, as set forth in
the Rights Agreement, such Rights may be amended or
redeemed, may expire, may become void (if, in certain
cases, they are "Beneficially Owned" by an "Acquiring
Person", as such terms are defined in the Rights
Agreement, or a transferee thereof) or may be evidenced
by separate certificates and may no longer be evidenced
by this certificate. The Corporation will mail or arrange
for the mailing of a copy of the Rights Agreement to the
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holder of this certificate without charge as soon as
practicable after the receipt of a written request
therefor."
(b) Certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for each
Common Share evidenced thereby, notwithstanding the absence of
the foregoing legend, until the earlier of the Separation Time
and the Expiration Time.
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights
(a) Subject to adjustment as herein set forth, including without
limitation as set forth in Article 3, each Right will entitle the
holder thereof, from and after the Separation Time and prior to
the Expiration Time, to purchase one Common Share for the
Exercise Price as at the Business Day immediately preceding
Separation Time (which Exercise Price and number of Common Shares
are subject to adjustment as set forth below). Notwithstanding
any other provision of this Agreement, any Rights held by the
Corporation or any of its Subsidiaries shall be void.
(b) Until the Separation Time, (i) the Rights shall not be
exercisable and no Right may be exercised; and (ii) for
administrative purposes, each Right will be evidenced by the
certificate for the associated Common Share registered in the
name of the holder thereof (which certificate shall be deemed to
represent a Rights Certificate) and will be transferable only
together with, and will be transferred by a transfer of, such
associated Common Share.
(c) From and after the Separation Time and prior to the Expiration
Time, the Rights may be exercised, and the registration and
transfer of the Rights shall be separate from and independent of
Common Shares. Promptly following the Separation Time, the
Corporation will prepare or cause to be prepared and the Rights
Agent will mail to each holder of record of Common Shares as of
the Separation Time and, in respect of each Convertible Security
converted into Common Shares after the Separation Time and prior
to the Expiration Time, promptly after such conversion, the
Corporation will prepare or cause to be prepared and the Rights
Agent will mail to the holder so converting (other than an
Acquiring Person and in respect of any Rights Beneficially Owned
by such Acquiring Person which are not held of record by such
Acquiring Person, the holder of record of such rights (a
"Nominee")) at such holder's address as shown by the records of
the Corporation (the Corporation hereby agreeing to furnish
copies of such record to the Rights Agent for this purpose):
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(i) a Rights Certificate in substantially the form of Exhibit
A hereto appropriately completed, representing the number
of Rights held by such holder at the Separation Time and
having such marks of identification or designation and
such legends, summaries or endorsements printed thereon
as the Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as
may be required to comply with any law, rule or
regulation or judicial or administrative order, or with
any article or regulation of any stock exchange or
quotation system on which the Rights may from time to
time be listed or traded, or to conform to usage; and
(ii) a disclosure statement prepared by the Corporation
describing the Rights, provided that a Nominee shall be
sent the materials provided for in (i) and (ii) only in
respect of all Common Shares held of record by it which
are not Beneficially Owned by an Acquiring Person and the
Corporation may require any Nominee or suspected Nominee
to provide such information and documentation as the
Corporation may reasonably require for such purpose.
(d) Rights may be exercised in whole or in part on any Business Day
after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent, at its principal office in
Toronto:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise (an "Election to Exercise")
substantially in the form attached to the Rights
Certificate duly completed, and executed in a manner
acceptable to the Rights Agent; and
(iii) payment by certified cheque, banker's draft or money
order payable to the order of the 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, which is accompanied by an
appropriately completed and duly executed Election to Exercise
(which does not indicate that such Right is null and void as
provided by Subsection 3.1(b)) and payment as set forth in
Subsection 2.2(d), the Rights Agent (unless otherwise instructed
by the Corporation) will thereupon promptly:
(i) requisition from the transfer agent of the Common Shares
certificates representing the number of Common Shares to
be purchased (the Corporation hereby irrevocably
authorizing its transfer agent to comply with all such
requisitions);
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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
appropriate payment by certified cheque, banker's draft
or money order, if any, to be paid in lieu of issuing
fractional Common Shares;
(iv) when appropriate, after receipt of such certified cheque,
banker's draft or money order, deliver such funds to, or
to the order of, the registered holder of the Rights
Certificate; and
(v) tender to the Corporation all payments received on
exercise of the Rights.
(f) If the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new
Rights Certificate evidencing the Rights remaining unexercised
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
the exercise of Rights shall, at the time of delivery of
the certificates for such Common Shares (subject to
payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered as fully paid
and non-assessable;
(ii) take all such action as may reasonably be considered to
be necessary and within its power to comply with any
applicable requirements of the Business Corporations Act,
the Securities Act (Ontario), the U.S. Exchange Act, the
United States Securities Act of 1933, as amended, and
comparable legislation of each of the provinces and
territories of Canada and states of the United States of
America, or the rules and regulations thereunder or any
other applicable law, rule or regulation, in connection
with the issuance and delivery of the Rights, the Rights
Certificates and the issuance of any Common Shares upon
exercise of the Rights;
(iii) use reasonable efforts to cause all Common Shares issued
upon exercise of the Rights to be listed on the stock
exchanges on which the Common Shares are listed at that
time;
(iv) cause to be reserved and kept available out of its
authorized and unissued Common Shares, the number of
Common Shares that, as provided in this
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Agreement, will from time to time be sufficient to permit
the exercise in full of all outstanding Rights;
(v) pay when due and payable, if applicable, any and all
federal, provincial, state and municipal taxes (not in
the nature of income, capital gains or withholding taxes)
and charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates
or certificates for Common Shares issued upon the
exercise of Rights, provided that the Corporation shall
not be required to pay any transfer tax or charge which
may be payable in respect of any transfer of Rights or
the issuance or delivery of certificates for Common
Shares issued upon the exercise of Rights, in a name
other than that of the holder of the Rights being
transferred or exercised; and
(vi) after the Separation Time, except as permitted by Section
5.1 or Section 5.4 hereof, not take (or permit any
corporation it controls to take) any action if at the
time such action is taken it is reasonably foreseeable
that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the
Rights.
2.3 Adjustments to Exercise Price; Number of Rights
(a) The Exercise Price, the number and kind of securities subject to
purchase upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 2.3 and in Article 3.
(b) In the event that the Corporation shall at any time after the
Record Time and prior to the Expiration Time:
(i) declare or pay a dividend on the Common Shares payable in
Voting Shares or Convertible Securities in respect
thereof other than pursuant to any dividend reinvestment
plan;
(ii) subdivide or change the then outstanding Common Shares
into a greater number of Common Shares;
(iii) consolidate or change the then outstanding Common Shares
into a smaller number of Common Shares; or
(iv) issue any Voting Shares (or Convertible Securities in
respect thereof) in respect of, in lieu of or in exchange
for existing Common Shares, whether in a
reclassification, amalgamation, statutory arrangement,
consolidation or otherwise;
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the Exercise Price and the number of Rights outstanding (or, if
the payment or effective date therefor shall occur after the
Separation Time, the securities purchasable upon the exercise of
Rights) shall be adjusted as follows:
(A) If the Exercise Price and number of Rights
outstanding are to be adjusted:
1) the Exercise Price in effect after such
adjustment will be equal to the
Exercise Price in effect immediately
prior to such adjustment divided by the
number of Common Shares (or other
securities of the Corporation) (the
"Expansion Factor") that a holder of
one Common Share immediately prior to
such dividend, subdivision, change,
combination or issuance would hold
thereafter as a result thereof; and
2) each Right held prior to such
adjustment will become that number of
Rights equal to the Expansion Factor,
and the adjusted number of Rights will
be deemed to be allocated among the
Common Shares with respect to which the
original Rights were associated (if
they remain outstanding) and the
securities of the Corporation issued in
respect of such dividend, subdivision,
change, consolidation or issuance, so
that each such Common Share (or other
security of the Corporation) will have
exactly one Right associated with it.
(B) If the securities purchasable upon exercise of
Rights are to be adjusted, the securities
purchasable upon exercise of each Right after
such adjustment will be the securities that a
holder of the securities purchasable upon
exercise of one Right immediately prior to such
dividend, subdivision, change, consolidation or
issuance would hold thereafter as a result
thereof.
(c) Adjustments pursuant to Subsection 2.3(b) shall be made
successively, whenever an event referred to in Subsection 2.3(b)
occurs.
(d) If an event occurs which would require an adjustment under both
this Section 2.3 and Section 3.1 hereof, the adjustment provided
for in this Section 2.3 shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 3.1
hereof.
(e) In the event the Corporation shall at any time after the Record
Time and prior to the Separation Time issue any Common Shares
otherwise than in a transaction referred to in Subsection 2.3(b),
each such Common Share so issued shall automatically have one new
Right associated with it, which Right shall be evidenced by the
certificate representing such Common Share.
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(f) In the event the Corporation shall, at any time after the Record
Time and prior to the Expiration Time, fix a record date for the
making of a distribution to all holders of Common Shares of
rights or warrants entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Common Shares (or Convertible Securities in respect of
Common Shares) at a price per Common Share (or, in the case of
such a Convertible Security, having a conversion, exchange or
exercise price per share (including the price required to be paid
to purchase such Convertible Security)) less than 90% of the
Market Price per Common Share on such record date, the Exercise
Price in effect after such record date will equal the Exercise
Price in effect immediately prior to such record date multiplied
by a fraction;
(i) of which the numerator shall be the number of Common
Shares outstanding on such record date plus the number of
Common Shares which the aggregate offering price of the
total number of Common Shares so to be offered (and/or
the aggregate initial conversion, exchange or exercise
price of the Convertible Securities so to be offered
(including the price required to be paid to purchase such
Convertible Securities)) would purchase at such Market
Price per Common Share; and
(ii) of which the denominator shall be the number of Common
Shares outstanding on such record date plus the number of
additional Common Shares to be offered for subscription
or purchase (or into which the Convertible Securities so
to be offered are initially convertible, exchangeable or
exercisable).
In case such subscription price is satisfied, in whole or in
part, by consideration other than cash, the value of such
consideration shall be as determined in good faith by the Board
of Directors. Such adjustment shall be made successively whenever
such a record date is fixed. To the extent that such rights or
warrants are not exercised prior to the expiration thereof, the
Exercise Price shall be readjusted in the manner contemplated
above based on the number of Common Shares (or securities
convertible into or exchangeable for Common Shares) actually
issued on the exercise of such rights or warrants.
For purposes of this Agreement, the granting of the right to
purchase Common Shares (whether from treasury or otherwise)
pursuant to any dividend or interest reinvestment plan or any
share purchase plan providing for the reinvestment of dividends
or interest payable on securities of the Corporation or the
investment of periodic optional payments or employee benefit or
similar plans (so long as such right to purchase is in no case
evidenced by the delivery of rights or warrants by the
Corporation) shall not be deemed to constitute an issue of rights
or warrants by the Corporation; provided, however, that in the
case of any dividend or interest reinvestment or share purchase
plan, the right to purchase Common Shares is at a price per share
of not less than 90% of the current market price per share
(determined as provided in such plans) of the Common Shares.
(g) In the event the Corporation shall at any time after the Record
Time and prior to the Expiration Time fix a record date for the
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making of a distribution to all holders of Common Shares of (i)
evidences of indebtedness or assets (other than a Regular
Periodic Cash Dividend or a dividend paid in Common Shares, but
including any dividend payable in securities other than Common
Shares), (ii) rights or warrants entitling them to subscribe for
or purchase Voting Shares (or Convertible Securities in respect
of Voting Shares), at a price per Voting Share (or, in the case
of a Convertible Security in respect of Voting Shares, having a
conversion, exchange or exercise price per share (including the
price required to be paid to purchase such Convertible Security))
less than 90% of the Market Price per Common Share on such record
date (excluding rights or warrants referred to in Subsection
2.3(f)) or (iii) other securities of the Corporation, the
Exercise Price in effect after such record date shall be equal to
the Exercise Price in effect immediately prior to such record
date less the fair market value (as determined in good faith by
the Board of Directors) of the portion of the assets, evidences
of indebtedness, rights or warrants or other securities so to be
distributed applicable to each of the securities purchasable upon
exercise of one Right. Such adjustment shall be made successively
whenever such a record date is fixed.
(h) Each adjustment made pursuant to Section 2.3 shall be made as of:
(i) the payment or effective date for the applicable
dividend, subdivision, change, combination or issuance,
in the case of an adjustment made pursuant to Subsection
2.3(b) above; and
(ii) the record date for the applicable dividend or
distribution, in the case of an adjustment made pursuant
to Subsections 2.3(f) or 2.3(g) above, subject to
readjustment to reverse the same if such distribution
shall not be made.
(i) In the event the Corporation shall at any time after the Record
Time and prior to the Expiration Time issue any shares (other
than Common Shares), or rights or warrants to subscribe for or
purchase any such shares, or Convertible Securities in respect of
any such shares, in a transaction referred to in any of
subclauses 2.3(b)(i) to (iv) above, if the Board of Directors
acting in good faith determines that the adjustments contemplated
by Subsections 2.3(b), 2.3(f) and 2.3(g) above in connection with
such transaction will not appropriately protect the interests of
the holders of Rights, the Board of Directors may from time to
time determine what other adjustments to the Exercise Price,
number of Rights or securities purchasable upon exercise of
Rights would be appropriate and, notwithstanding Subsections
2.3(b), 2.3(f) and 2.3(g) above, such adjustments, rather than
the adjustments contemplated by Subsections 2.3(b), 2.3(f) and
2.3(g) above, shall be made upon the Board of Directors providing
written certification thereof to the Rights Agent pursuant to
Subsection 2.3(q).
(j) Notwithstanding anything herein to the contrary, no adjustment of
the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such Exercise
Price; provided, however, that any adjustments which by reason of
this Subsection 2.3(j)) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All adjustments to the Exercise Price made pursuant
to this Section 2.3 shall be calculated to the nearest cent.
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(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 2.3(g), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Exercise Price, that
number of Common Shares obtained by:
(i) multiplying (A) the number of Common Shares covered by a
Right immediately prior to such adjustment, by (B) the
Exercise Price in effect immediately prior to such
adjustment; and
(ii) dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment.
(m) The Corporation may elect on or after the date of any adjustment
of an Exercise Price to adjust the number of Rights, in lieu of
any adjustment in the number of Common Shares purchasable upon
the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the
number of Common Shares for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become the
number of Rights obtained by dividing the relevant Exercise Price
in effect immediately prior to adjustment of the relevant
Exercise Price by the relevant Exercise Price in effect
immediately after adjustment of the relevant Exercise Price. The
Corporation shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if 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
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Exercise Price and shall be registered in the names of holders of
record of Rights Certificates on the record date specified in the
public announcement.
(n) In any case in which this Section 2.3 shall require that an
adjustment in an Exercise Price be made effective as of a record
date for a specified event, the Corporation may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date of the number of
Common Shares and other securities of the Corporation, if any,
issuable upon such exercise over and above the number of Common
Shares and other securities of the Corporation, if any, issuable
upon such exercise on the basis of the relevant Exercise Price in
effect prior to such adjustment; provided, however, that the
Corporation shall deliver to such holder an appropriate
instrument evidencing such holder's right to receive such
additional Common Shares (fractional or otherwise) or other
securities upon the occurrence of the event requiring such
adjustment.
(o) Notwithstanding anything in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such adjustments in the
Exercise Price, in addition to those adjustments expressly
required by this Section 2.3, as and to the extent that in its
good faith judgment the Board of Directors shall determine to be
advisable in order that any (i) subdivision or consolidation of
the Common Shares, (ii) issuance wholly for cash of any Common
Shares at less than the applicable Market Price, (iii) issuance
wholly for cash of any Common Shares or securities that by their
terms are exchangeable for or convertible into or give a right to
acquire Common Shares, (iv) stock dividends, or (v) issuance of
rights, options or warrants referred to in this Section 2.3,
hereafter made by the Corporation to holders of its Common
Shares, shall not be taxable to such shareholders.
(p) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to represent the
securities so purchasable which were represented in the initial
Rights Certificates issued hereunder.
(q) Whenever an adjustment to the Exercise Price is made pursuant to
this Section 2.3, the Corporation shall
(i) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting
for such adjustment; and
(ii) promptly file with the Rights Agent and with each
transfer agent for the Common Shares a copy of such
certificate and mail a brief summary thereof to each
holder of Rights who requests a copy.
Failure to file such certificate or to cause such notice to be
given as aforesaid, or any defect therein, shall not affect the
validity of any such adjustment or change.
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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 a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and any
applicable transfer taxes and other governmental charges payable by the
exercising Person hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Share transfer books
of the Corporation are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
Business Day on which the Common Share transfer books of the Corporation are
open.
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates
(a) The Rights Certificates shall be executed on behalf of the
Corporation by a senior officer. The signature of any such
officer on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Corporation shall bind the Corporation, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the countersignature and delivery of such Rights Certificates.
(b) Promptly following the Separation Time, the Corporation will
notify the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Corporation to the Rights
Agent for countersignature and a statement describing any
adjustment to the Exercise Price, and the Rights Agent shall
countersign (manually or by facsimile signature in a manner
satisfactory to the Corporation) and deliver such Rights
Certificates and any statement describing an adjustment to the
Exercise Price to the holders of the Rights pursuant to Section
2.2 hereof. No Rights Certificate shall be valid for any purpose
until countersigned by the Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.6 Registration, Transfer and Exchange
(a) After the Separation Time, the Corporation shall cause to be kept
a register (the "Rights Register") in which, subject to such
reasonable regulations as it may prescribe, the Corporation will
provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Corporation and
registering Rights and transfers of Rights as herein provided and
the Rights Agent hereby accepts such appointment. In the event
that the Rights Agent shall cease to be the Rights Registrar, the
Rights Agent will have the right to examine the Rights Register
at all reasonable times.
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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 Subsections 2.6(d)
and 3.1(b) below, the Corporation will execute, and the Rights
Agent will countersign, deliver and register, in the name of the
holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights
Certificates evidencing the same aggregate number of Rights as
did the Rights Certificates so surrendered.
(c) All Rights issued upon any registration of transfer or exchange
of Rights Certificates shall be valid obligations of the
Corporation, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(d) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the
Corporation or the Rights Agent, as the case may be, duly
executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.6, the Corporation may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Rights
Agent) in connection therewith.
2.7 Mutilated, Lost, Stolen and Destroyed Rights Certificates
(a) If any mutilated Rights Certificate is surrendered to the Rights
Agent prior to the Expiration Time, the Corporation shall execute
and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights
Agent prior to the Expiration Time: (i) evidence to their
reasonable satisfaction of the destruction, loss or theft of any
Rights Certificate; and (ii) such security or indemnity as may be
reasonably required by them to save each of them and any of their
agents harmless, then, in the absence of notice to the
Corporation or the Rights Agent that such Rights Certificate has
been acquired by a bona fide purchaser, the Corporation shall
execute and, upon the Corporation's request the Rights Agent
shall countersign and deliver, in lieu of any such destroyed,
lost or stolen Rights Certificate, a new Rights Certificate
evidencing the same number of Rights as did the Rights
Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.7, the Corporation may require the payment
of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Rights Agent) connected
therewith.
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(d) Every new Rights Certificate issued pursuant to this Section 2.7
in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence a contractual obligation of the Corporation, whether or
not the destroyed, lost or stolen Rights Certificate shall be at
any time enforceable by anyone, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any
and all other Rights duly issued hereunder.
2.8 Persons Deemed Owners
The Corporation, the Rights Agent and any agent of the Corporation or the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever. As used in this Agreement, unless the context otherwise
requires, the term "holder" of any Rights shall mean the registered holder of
such Rights (or, prior to the Separation Time, the associated Common Shares).
2.9 Delivery and Cancellation of Certificates
All Rights Certificates surrendered upon exercise or for redemption, for
registration of transfer or exchange shall, if surrendered to any person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9 except as expressly permitted by this Agreement.
The Rights Agent shall, subject to applicable law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
2.10 Agreement of Rights Holders
Every holder of Rights, by accepting such Rights, consents and agrees with
the Corporation and the Rights Agent and with every other holder of Rights:
(a) to be bound by and subject to the provisions of this Agreement,
as amended from time to time in accordance with the terms hereof,
in respect of all Rights held;
(b) that, prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a
transfer of, the associated Common Share;
(c) that, after the Separation Time, the Rights will be transferable
only on the Rights Register as provided herein;
(d) that, prior to due presentment of a Rights Certificate (or, prior
to the Separation Time, the associated Common Share certificate)
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for registration of transfer, the Corporation, the Rights Agent
and any agent of the Corporation or the Rights Agent may deem and
treat the Person in whose name the Rights Certificate (or, prior
to the Separation Time, the associated Common Share certificate)
is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on such Rights Certificate or the associated Common Share
certificate made by anyone other than the Corporation or the
Rights Agent) for all purposes whatsoever, and neither the
Corporation nor the Rights Agent shall be affected by any notice
to the contrary;
(e) that such holder of Rights has waived its right to receive any
fractional Rights or any fractional Common Shares or other
securities upon exercise of a Right (except as provided herein);
and
(f) that, without the approval of any holder of Rights or Voting
Shares and upon the sole authority of the Board of Directors
acting in good faith, this Agreement may be supplemented or
amended from time to time as provided herein.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS
3.1 Flip-in Event
(a) Subject to Sections 3.1(b) and 5.1, in the event that prior to
the Expiration Time a Flip-in Event occurs, each Right shall
thereafter constitute the right to purchase from the Corporation,
upon exercise thereof in accordance with the terms hereof, that
number of Common Shares of the Corporation as have an aggregate
Market Price on the date of consummation or occurrence of such
Flip-in Event equal to twice the Exercise Price for an amount in
cash equal to the Exercise Price (such right to be appropriately
adjusted in a manner analogous to the applicable adjustment
provided for in Section 2.3 in the event that, after such date of
consummation or occurrence, an event of a type analogous to any
of the events described in Section 2.3 shall have occurred with
respect to such Common Shares).
(b) Notwithstanding anything in this Agreement to the contrary, upon
the occurrence of any Flip-in Event, any Rights that are or were
Beneficially Owned on or after the earlier of the Separation Time
and the Stock Acquisition Date, or which may thereafter be
Beneficially Owned, by:
(i) an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any other Person acting jointly or in
concert with an Acquiring Person or any Associate or
Affiliate of such other Person); or
(ii) a transferee, direct or indirect, of 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 Associate or Affiliate thereon in a
transfer of Rights occurring subsequent to the Acquiring
Person becoming such;
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shall become null and void without any further action and any
holder of such Rights (including any transferee of, or other
successor entitled to, such Rights, whether directly or
indirectly) shall thereafter have no right to exercise such
Rights under any provisions of this Agreement and further shall
thereafter not have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or
otherwise. The holder of any Rights represented by a Rights
Certificate which is submitted to the Rights Agent upon exercise
or for registration of transfer or exchange which does not
contain the necessary certifications set forth in the Rights
Certificate establishing that such Rights are not void under this
Subsection 3.1(b) shall be deemed to be an Acquiring Person for
the purposes of this Subsection 3.1(b) and such Rights shall
become null and void.
(c) Any Rights Certificate that represents Rights Beneficially Owned
by a Person described in either of subclauses 3.1(b)(i) or
3.1(b)(ii) or transferred to any Nominee of any such Person, and
any Rights Certificate issued upon transfer, exchange,
replacement or adjustment of any other Rights Certificate,
referred to in this sentence, shall contain or will be deemed to
contain the following legend:
"The Rights represented by this Rights Certificate were
issued to a Person who was an Acquiring Person or an Affiliate or
an Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement) or acting jointly or in concert with any of
them. This Rights Certificate and the Rights represented hereby
shall be void in the circumstances specified in Subsection 3.1(b)
of the Rights Agreement."
The Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the
imposition of such legend but shall be required to impose such
legend only if instructed to do so by the Corporation or if a
holder fails to certify upon transfer or exchange in the space
provided to do so.
(d) After the Separation Time, the Corporation shall do all such acts
and things necessary and within its power to ensure compliance
with the provisions of this Section 3.1 including, without
limitation, all such acts and things as may be required to
satisfy the requirements of the Business Corporations Act, the
Securities Act (Ontario) 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.
3.2 Fiduciary Duties of the Board of Directors of the Corporation
For clarification it is understood that nothing contained in this Article
3 shall be considered to affect the obligations of the Board of Directors to
exercise its fiduciary duties. Without limiting the generality of the foregoing,
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nothing contained herein shall be construed to suggest or imply that the Board
of Directors shall not be entitled to recommend that holders of the Voting
Shares reject or accept any Take-over Bid or take any other action including,
without limitation, the commencement, prosecution, defence or settlement of any
litigation and the submission of additional or alterative Take-over Bids or
other proposals to the shareholders of the Corporation with respect to any
Takeover Bid or otherwise that the Board of Directors believes is necessary or
appropriate in the exercise of its fiduciary duties.
ARTICLE 4
THE RIGHTS AGENT
4.1 General
(a) The Corporation hereby appoints the Rights Agent to act as agent
for the Corporation and the holders of the Rights in accordance
with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Corporation may from time to time
appoint such co-rights agents ("Co-Rights Agents") as it may deem
necessary or desirable. In the event the Corporation appoints one
or more Co-Rights Agents, the respective duties of the Rights
Agent and Co-Rights Agents shall be as the Corporation may
determine. The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and other disbursements reasonably incurred
in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder, including the
reasonable fees and disbursements of counsel and other experts
consulted by the Rights Agent pursuant to Subsection 4.3(a). The
Corporation also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense,
incurred without gross negligence, bad faith or wilful misconduct
on the part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability, which right
to indemnification will survive the termination of this Agreement
or 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
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administration of this Agreement by the Rights Agent and, at any
time upon request, shall provide to the Rights Agent an
incumbency certificate certifying the then current officers of
the Corporation.
4.2 Merger, Amalgamation, Consolidation or Change of Name of Rights Agent
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or amalgamated or with which it may be
consolidated, or any corporation resulting from any merger,
amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation succeeding
to the shareholder services business of the Rights Agent or any
successor Rights Agent, will be the successor to the Rights Agent
under this Agreement without the execution or filling of any
document or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 4.4 hereof. In case at the time such successor Rights
Agent succeeds to the agency created by this Agreement any of the
Rights Certificates have been countersigned but not delivered any
such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name
of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Rights Certificates will
have the full force provided in the Rights Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent is changed and
at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of
the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in
its prior name or in its changed name; and in all such cases such
Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the
Corporation and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may 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
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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
(at the expense of the Corporation) and the Rights Agent shall be
entitled to rely in good faith on the advice of any such expert.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Corporation prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the
Rights Agent to be a senior officer of the Corporation and
delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own gross
negligence, bad faith or wilful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or
in the certificates for Common Shares, or the Rights Certificates
(except its countersignature thereof) or be required to verify
the same, and all such statements and recitals are and will be
deemed to have been made by the Corporation only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery
hereof by the Rights Agent) or in respect of the validity or
execution of any Common Share certificate, or Rights Certificate
(except its countersignature thereon) nor will it be responsible
for any breach by the Corporation of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor
will it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to
Subsection 3.1(b) hereof or any adjustment required under the
provisions of Section 2.3) hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights after receipt of
the certificate contemplated by Section 2.3 describing any such
adjustment or any written notice from the Corporation or any
holder that a Person has become an Acquiring Person); nor will it
by any act hereunder be deemed to make any representation or
warranty as to the authorization of any Common Shares to be
issued pursuant to this Agreement or any Rights or as to any
Common Shares, when issued, being duly and validly authorized,
issued and delivered as fully paid and non-assessable.
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(f) The Corporation agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any individual believed by the Rights Agent to be
a senior officer of the Corporation, and to apply to such
individuals for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of
any such individual. It is understood that instructions to the
Rights Agent shall, except where circumstances make it
impractical or the Rights Agent otherwise agrees, be given in
writing and, where not in writing, such instructions shall be
confirmed in writing as soon as reasonably practicable after the
giving of such instructions.
(h) Subject to applicable law, the Rights Agent and any shareholder
or director, officer or employee of the Rights Agent may buy,
sell or deal in Common Shares, Rights or other securities of the
Corporation or become pecuniarily interested in any transaction
in which the Corporation may be interested, or contract with or
lend money to the Corporation or otherwise act as fully and
freely as though it were not the Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Corporation or for any other
legal entity.
(i) the Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act, default,
neglect or misconduct of any such act, default, neglect or
misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
4.4 Change of Rights Agent
The Rights Agent may resign and be discharged from its duties under this
Agreement by giving 60 days' prior written notice (or such lesser notice as is
acceptable to the Corporation) to the Corporation, to each transfer agent of
Common Shares and to the holders of the Rights, all in accordance with Section
5.9 and at the expense of the Corporation. The Corporation may remove the Rights
Agent by giving 30 days' prior written notice to the Rights Agent, to each
transfer agent of the Common Shares and to the holders of the Rights in
accordance with Section 5.9. If the Rights Agent should resign or be removed or
otherwise become incapable of acting, the Corporation will appoint a successor
to the Rights Agent. If the Corporation fails to make such appointment within a
period of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of any Rights (which holder shall, with such notice, submit such
holder's Rights Certificate for inspection of the Corporation), then the holder
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of any Rights may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, must be a corporation incorporated under
the laws of Canada or a province thereof and authorized to carry out the duties
of the Rights Agent specified in this Agreement in the Province of Ontario.
After appointment, the successor Rights Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent, upon payment of any
outstanding fee, any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Corporation will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares and mail a notice thereof in
writing to the holders of the Rights in accordance with Section 5.9. Failure to
give any notice provided for in this Section 4.4, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
ARTICLE 5
MISCELLANEOUS
5.1 Redemption, Waiver and Termination
(a) The Board of Directors acting in good faith may, at any time
prior to the later of the Stock Acquisition Date and the
Separation Time, elect to redeem all but not less than all of the
then outstanding Rights at a redemption price of $0.001 per Right
appropriately adjusted in a manner analogous to the applicable
adjustments provided for in Section 2.3 in the event that an
event of the type analogous to any of the events described in
Section 2.3 shall have occurred (such redemption price being
herein referred to as the "Redemption Price").
(b) The Board of Directors shall waive the application of Section 3.1
in respect of the occurrence of any Flip-in Event if the Board of
Directors has determined, following the Stock Acquisition Date
and prior to the Separation Time, that a Person became an
Acquiring Person by inadvertence and without any intention to
become, or knowledge that it would become, an Acquiring Person
under this Agreement and, in the event that such a waiver is
granted by the Board of Directors, such Stock Acquisition Date
shall be deemed not to have occurred. Any such waiver pursuant to
this Subsection 5.1(b) may only be given on the condition that
such Person, within 10 days after the foregoing determination by
the Board of Directors or such later date as the Board of
Directors may determine (the "Disposition Date"), has reduced its
Beneficial Ownership of Voting Shares such that the Person is no
longer an Acquiring Person. If the Person remains an Acquiring
Person at the Close of Business on the Disposition Date, the
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Disposition Date shall be deemed to be the date of occurrence of
a further Stock Acquisition Date and Section 3.1 shall apply
thereto.
(c) In the event that a Person acquires Voting Shares pursuant to a
Permitted Bid or an Exempt Acquisition referred to in Subsection
5.1(d), then the Board of Directors of the Corporation shall,
immediately upon the consummation of such acquisition and without
further formality, be deemed to have elected to redeem the Rights
at the Redemption Price.
(d) The Board of Directors acting in good faith may, prior to the
occurrence of the relevant Flip-in Event, upon prior written
notice delivered to the Rights Agent, determine to waive the
application of Section 3.1 to a Flip-in Event that may occur by
reason of a Take-over Bid made by means of a Take-over Bid
circular to all holders of record of Voting Shares provided that
if the Board of Directors waives the application of Section 3.1
in respect of a Take-over Bid pursuant to this Subsection 5.1(d),
the Board of Directors shall also be deemed to have waived the
application of Section 3.1 in respect of any other Take-over Bid
made by means of a circular to all holders of record of Voting
Shares prior to the expiry of any Take-over Bid in respect of
which a waiver is, or is deemed to have been, granted under this
Subsection 5.1(d).
(e) The Board of Directors may, prior to the Close of Business on the
eighth Business Day following a Stock Acquisition Date or such
later Business Day as they may from time to time determine, upon
prior written notice delivered to the Rights Agent, waive the
application of Section 3.1 to the related Flip-in Event, provided
that the Acquiring Person has reduced its Beneficial Ownership of
Voting Shares (or has entered into a contractual arrangement with
the Corporation, acceptable to the Board of Directors, to do so
within 10 days of the date on which such contractual arrangement
is entered into or such later date as the Board of Directors may
determine) such that at the time the waiver becomes effective
pursuant to this Subsection 5.1(e) such Person is no longer an
Acquiring Person. In the event of such a waiver becoming
effective prior to the Separation Time, for the purposes of this
Agreement, such Flip-in Event shall be deemed not to have
occurred.
(f) Where a Take-over Bid that is not a Permitted Bid Acquisition is
withdrawn or otherwise terminated after the Separation Time has
occurred and prior to the occurrence of a Flip-in Event, or if
the Board of Directors grants a waiver under Subsection 5.1(e)
after the Separation Time, the Board of Directors may elect to
redeem all the outstanding Rights at the Redemption Price. Upon
the Rights being redeemed pursuant to this Subsection 5.1(f), all
the provisions of this Agreement shall continue to apply as if
the Separation Time had not occurred and Rights Certificates
representing the number of Rights held by each holder of record
of Common Shares at the Separation Time had not been mailed to
each such holder, for all purposes of this Agreement the
Separation Time shall be deemed not to have occurred and the
Corporation shall be deemed to have issued replacement Rights to
the holders of its then outstanding Common Shares.
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(g) If the Board of Directors is deemed under Subsection 5.1(c) to
have elected or elects under Subsection 5.1(a) to redeem the
Rights, the right to exercise the Rights will thereupon, without
further action and without notice, terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price.
(h) Within 10 days after the Board of Directors is deemed under
Subsection 5.1(c) to have elected or elects under Subsection
5.1(a) or (f) to redeem the Rights, the Corporation shall give
notice of redemption to the holders of the then outstanding
Rights by mailing such notice to the Rights Agent and to each
such holder at his last address as it appears upon the registry
books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Voting Shares.
Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
5.2 Expiration
No person will have any rights pursuant to this Agreement or in respect of
any Right after the Expiration Time, except in respect of any right to receive
cash, securities or other property which has accrued at the Expiration Time and
except as specified in Subsections 4.1(a) and 4.1(b) hereof.
5.3 Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the number or kind or class of
shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.
5.4 Supplements and Amendments
(a) Subject to Subsection 5.4(b) and this Subsection 5.4(a), the
Corporation may from time to time amend, vary or delete any of
the provisions of this Agreement and the Rights.
(b) For greater certainty, (i) no amendment, variation or deletion to
the provisions of Article 4 or the rights, duties, obligations or
indemnities of the Rights Agent shall be made except with the
concurrence of the Rights Agent thereto, and (ii) neither the
exercise by the Board of Directors of any power or discretion
conferred on it hereunder nor the making by the Board of
Directors of any 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.
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(c) The approval, confirmation or consent of the holders of Rights
with respect to any matter arising hereunder shall be deemed to
have been given if the action requiring such approval,
confirmation or consent is authorized by the affirmative votes of
the holders of Rights present or represented at and entitled to
be voted at a meeting of the holders of Rights and representing a
majority of the votes cast in respect thereof. For the purposes
hereof, each outstanding Right (other than Rights which are void
pursuant to the provisions hereof or which, prior to the
Separation Time, are held otherwise than by Independent
Shareholders) shall be entitled to one vote, and the procedures
for the calling, holding and conduct of the meeting shall be
those, as nearly as may be, which are provided in the
Corporation's by-laws and the Business Corporations Act with
respect to meetings of shareholders of the Corporation.
5.5 Fractional Rights and Fractional Shares
(a) The Corporation will not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional
Rights. After the Separation Time there shall be paid, in lieu of
such fractional Rights, to the registered holders of the Rights
Certificates with regard to which fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the Market Price of a whole Right.
(b) The Corporation shall not be required to issue fractional Common
Shares upon exercise of the Rights or to distribute certificates
that evidence fractional Common Shares. In lieu of issuing
fractional Common Shares, the Corporation shall pay to the
registered holder of Rights Certificates at the time such Rights
are exercised as herein provided, an amount in cash equal to the
same fraction of the Market Price of one Common Share at the date
of such exercise.
5.6 Rights of Action
Subject to the terms of this Agreement, rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any other
Rights may, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Corporation to enforce, or otherwise
act in respect of, such holder's right to exercise such holder's Rights in the
manner provided in this Agreement and in such holder's Rights Certificate.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
5.7 Holder of Rights Not Deemed a Shareholder
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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 Rights, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in Section
5.8 hereof) or to receive dividends or subscription rights or otherwise, until
such Rights shall have been exercised in accordance with the provisions hereof.
5.8 Notice of Proposed Actions
In case the Corporation proposes after the Separation Time and prior to
the Expiration Time to effect the liquidation, dissolution or winding up of the
Corporation or the sale of all or substantially all of the Corporation's assets,
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 5.9 hereof, a notice of such proposed action, which
shall specify the date on which such liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action by the Corporation.
5.9 Notices
Notices or demands authorized or required by this Agreement to be given or
made to or by the Rights Agent, the holder of any Rights or the Corporation will
be sufficiently given or made and shall be deemed to be received if delivered or
sent by first-class mail, postage prepaid, or by fax machine or other means of
printed telecommunication, charges prepaid and confirmed in writing by mail or
delivery, addressed (until another address is filed in writing with the Rights
Agent or the Corporation, as applicable), as follows:
(a) if to the Corporation:
1725 Sheridan Avenue
Cody, Wyoming
82414 U.S.A.
Attention: William P. Long
Facsimile No. 702-857-1920
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(b) if to the Rights Agent:
120 Adelaide Street West, Suite 420
Toronto, Ontario M5H 4C3
Attention: Manager, Client Services
Facsimile No. (416) 361-0470
(c) if to the holder of any Rights, to the address of such holder as
it appears on the registry books of the Rights Agent or, prior to
the Separation Time, on the registry books of the Corporation for
the Common Shares.
5.10 Costs of Enforcement
The Corporation agrees that if the Corporation or any other Person the
securities of which are purchasable upon exercise of Rights fails to fulfil any
of its obligations pursuant to this Agreement, then the Corporation or such
Person will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce his rights
pursuant to any Rights or this Agreement.
5.11 Regulatory Approvals
Any obligation of the Corporation or action or event contemplated by this
Agreement, shall be subject to applicable law and to the receipt of any
requisite approval or consent from any governmental or regulatory authority.
Without limiting the generality of the foregoing, any issuance or delivery of
debt or equity securities (other than non-convertible debt securities) of the
Corporation upon the exercise of Rights and any amendment to this Agreement
shall, if required, be subject to the prior consent of the stock exchanges on
which the Corporation is from time to time listed.
5.12 Declaration as to Non-Canadian and Non-U.S. Holders
If in the opinion of the Board of Directors (who may rely upon the advice
of counsel), any action or event contemplated by this Agreement would require
compliance with the securities laws or comparable legislation of a jurisdiction
outside Canada and the United States of America, its territories and
possessions, the Board of Directors acting in good faith may take such actions
as it may deem appropriate to ensure that such compliance is not required,
including without limitation establishing procedures for the issuance to a
Canadian resident Fiduciary of Rights or securities issuable on exercise of
Rights, the holding thereof in trust for the Persons entitled thereto (but
reserving to the Fiduciary or to the Fiduciary and the Corporation, as the
Corporation may determine, absolute discretion with respect thereto) and the
sale thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. In no event shall the Corporation or the Rights Agent be
required to issue or deliver Rights or securities issuable on exercise of Rights
to Persons who are citizens, residents or nationals of any jurisdiction other
than Canada and a province or territory thereof and the United States of America
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and any state thereof in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes.
5.13 Successors
All the covenants and provisions of this Agreement by or for the benefit
of the Corporation or the Rights Agent shall bind and enure to the benefit of
their respective successors and assigns hereunder.
5.14 Benefits of this Agreement
Nothing in this Agreement shall be construed to give to any Person other
than the Corporation, the Rights Agent and the holders of the Rights any legal
or equitable right, remedy or claim under this Agreement; this Agreement shall
be for the sole and exclusive benefit of the Corporation, the Rights Agent and
the holders of the Rights.
5.15 Determination and Actions by the Board of Directors
All actions, calculations, interpretations and determinations (including
all omissions with respect to the foregoing) which are done or made by the Board
of Directors, in good faith, (x) may be relied on by the Rights Agent, and (y)
shall not subject the Board of Directors to any liability to the holders of the
Rights or to any other parties.
5.16 Governing Law
This Agreement and the Rights issued hereunder shall be deemed to be a
contract made under the laws of the Province of Ontario and for all purposes
will be governed by and construed in accordance with the laws of such province
applicable to contracts to be made and performed entirely within such province.
5.17 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
redieds en langue anglaise. The parties hereto have required that this Agreement
and all documents and notices related thereto and/or resulting therefrom be
drawn up in English.
5.18 Counterparts
This Agreement may be executed in any number of counterparts and each of
such counterparts will for all purposes be deemed to be an original, and all
such counterparts shall together constitute one and the same instrument.
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5.19 Severability
If any term or provision hereof or the application thereof to any
circumstance is, in any jurisdiction and to any extent, invalid or
unenforceable, such term or provision will be ineffective only to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining terms and provisions hereof or the application of
such term or provision to circumstances other than those as to which it is held
invalid or unenforceable.
5.20 Effective Date
This Agreement is effective as of the Effective Date.
5.21 Time of the Essence
Time shall be of the essence hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective November 27, 1998.
ALTAIR INTERNATIONAL INC.
By:/s/ "William P. Long"
--------------------
William P. Long
EQUITY TRANSFER SERVICES INC.
By:/s/ "Richard M. Barnowski"
------------------------
Richard M. Barnowski
Vice President
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EXHIBIT A
[Form of Rights Certificate]
Certificate No.
Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
CORPORATION, ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS
PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN
SUBSECTION 3.1(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
made as of November 27, 1998 (the "Rights Agreement") between Altair
International Inc., a corporation subsisting under the laws of the Province of
Ontario (the "Corporation") and Equity Transfer Services Inc., a company
incorporated under the laws of Ontario, as Rights Agent (the "Rights Agent"),
which term shall include any successor Rights Agent under the Rights Agreement,
to purchase from the Corporation, at any time after the Separation Time and
prior to the Expiration Time (as such terms are defined in the Rights
Agreement), one fully paid common share of the Corporation (a "Common Share") at
the Exercise Price referred to below, upon presentation and surrender of this
Rights Certificate, together with the Form of Election to Exercise appropriately
completed and duly executed, to the Rights Agent at its principal office in
Toronto. Until adjustment thereof in certain events as provided in the Rights
Agreement, the Exercise Price shall be US$40 per Right (payable by certified
cheque or money order payable to the order of the Corporation). The number of
Common Shares which may be purchased for the Exercise Price is subject to
adjustment as set forth in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holder of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent in Toronto, may be
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<PAGE>
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
$0.001 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 payment by certified
cheque, banker's draft or money order will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Common
Shares or any other securities which may at any time be issuable upon the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
any meeting or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation.
Date:
ALTAIR INTERNATIONAL INC.
By:
------------------
Countersigned:
EQUITY TRANSFER SERVICES INC.
Per:
----------------------------------------
----------------------------------------
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<PAGE>
FORM OF ELECTION TO EXERCISE
ALTAIR INTERNATIONAL 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:
Rights Certificate No.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City and Province
- --------------------------------------------------------------------------------
Social Insurance No. or other taxpayer
identification number
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City and Province
- --------------------------------------------------------------------------------
Social Insurance No. or other taxpayer
identification number
Date:
-----------------------
------------------------------------
Signature
Signature Guaranteed
(Signature must correspond to name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever)
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<PAGE>
Signature must be guaranteed by a Canadian chartered bank or major
Canadian trust company, or a member of the Securities Transfer Association
Medallion Program (STAMP).
(To be completed by the holder if true)
The undersigned hereby represents, for the benefit of the Corporation
and all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or by an Affiliate or Associate
of an Acquiring Person, any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of any such other Person (as such
terms are defined in the Rights Agreement).
---------------------------------------
Signature
NOTICE
In the event that the certifications set forth above in the Form of
Election to Exercise and Assignment are not completed, the Corporation shall
deem the Beneficial Owner of the Rights represented by this Rights Certificate
to be an Acquiring Person (as defined in the Rights Agreement) and, accordingly,
such Rights shall be null and void.
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<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 Guaranteed (Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signature must be guaranteed by a Canadian chartered bank or major
Canadian trust company, or a member of the Securities Transfer Association
Medallion Program (STAMP).
(To be completed by the assignor if true)
The undersigned hereby represents, for the benefit of the Corporation
and all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not and, to the knowledge of the undersigned have never
been, Beneficially Owned by an Acquiring Person or by an Affiliate or Associate
of an Acquiring Person, any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of any such other Person (as such
terms are deemed in the Rights Agreement).
------------------------------------
Signature
------------------------------------
(Please print name below signature)
NOTICE
In the event that the certifications set forth above in the Form of
Election to Exercised 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 RightsAgreement) and, accordingly, such
Rights shall to be null and void.
O:\USERS\SHARE\BTA-DT\A\ALTAIR\8K\sr-right-8k
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Exhibit 99.1
FOR IMMEDIATE RELEASE: Monday, November 30, 1998
CONTACT: Carl Thompson, CEO William P. Long, President
Sheila Whitman, Sr. Acct. Executive Altair International Inc.
Carl Thompson Associates (307) 587-8245
(800) 959-9677
ALTAIR ANNOUNCES SHAREHOLDER RIGHTS PLAN
CODY, WY --Altair International Inc. (NASDAQ:ALTIF) announced today the adoption
by its Board of Directors of a Shareholder Rights Plan, similar to those
recently adopted by many other Canadian corporations. Management is concerned
that current legislation does not provide sufficient time for the Board and
shareholders to properly evaluate a bid or pursue alternatives with a view to
maximizing shareholder value. The Plan seeks to ensure that all shareholders
have an equal opportunity to participate in the benefits of a takeover bid.
If any person acquires 20% or more of Altair's common stock, the Plan is
triggered. However, unlike most U.S. shareholder rights plans, Altair's Plan
encourages responsible bids by allowing a potential bidder to make a "permitted
bid" directly to the shareholders without prior approval of the Board. Such
permitted bid must be made to all shareholders and must remain open for a
minimum period of 45 days after the date of the bid and for a further period of
10 business days after the offeror publicly announces that the shares deposited
constitute more than 50% of the outstanding common shares held by independent
shareholders. The Plan also allows for a "competing permitted bid" to be made
while the permitted bid is in existence.
The Plan is effective immediately. To implement the Plan, the Board of Directors
has authorized the issue of one Right in respect of each outstanding common
share of Altair to holders of record at 5:00 p.m. (Toronto time) on November 27,
1998. For administrative convenience, the Rights will trade with the common
shares and be represented by the certificates representing common shares.
Neither the Board nor management of Altair is aware of any pending or threatened
take over bid for the company.
Altair International is in the final development stages of commercializing its
state-of-the-art technology, the Altair Centrifugal Jig, which recovers
extremely fine, heavy particulate matter using a combination of a mechanical jig
and centrifugal force. Potential applications include gold/mineral recovery,
coal cleaning and environmental remediation.
Altair is the 100% owner of a large titanium/zircon mineral deposit in
Tennessee.
This press release may be deemed to contain certain forward-looking statements
with respect to the Company that are subject to risks and uncertainties that
include, but are not limited to, those identified in the Company's press
releases or discussed from time to time in the Company's Securities and Exchange
Commission filings. Actual results may vary materially.
News releases and other information on Altair can be accessed at no charge at
Web Site www.altairint.com.
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