SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
ABITIBI-CONSOLIDATED INC.
(Exact name of Registrant as specified in charter)
AMENDMENT NO. 1
This Amendment No. 1 on Form 8 is being filed to reflect the amending and
restating of its Shareholders Rights Plan Agreement dated as of November 8, 1999
(originally filed with the Securities and Exchange Commission as an exhibit to
the registrant's Material Change Report on Form 6-K that was filed with the
Securities and Exchange Commission on November 12, 1999) on January 14, 2000 to
correct certain typographical and clerical errors discovered. Accordingly, the
undersigned registrant hereby amends the following portions of its Registration
Statement on Form 8-A (filed with the Securities and Exchange Commission on
January 7, 2000) as set forth in the pages attached hereto.
This Amendment No. 1 contains 50 pages. The exhibit index appears at page 3
hereof.
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Item 2. Exhibits
The securities to be registered hereunder are being registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Act").
Pursuant to paragraph I of the Instructions as to Exhibits, the following
exhibit is filed herewith:
1 Shareholder Rights Plan Agreement
dated as of November 8, 1999 (as
amended and restated as of January
14, 2000), between
Abitibi-Consolidated Inc. and
Montreal Trust Company, as Rights
Agent, including the Form of Rights
Certificate attached thereto as
Exhibit A.
Such exhibit supercedes Exhibit 1 to the registration statement on Form 8-A
filed by Abitibi-Consolidated Inc. with respect to the rights previously
registered thereunder.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, Registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized.
Date: January 21, 2000 ABITIBI-CONSOLIDATED INC.
By: /s/ Jacques Vachon
---------------------------------
Name: Jacques Vachon
Title: Senior Vice President and
Corporate Secretary
2
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EXHIBIT INDEX
Exhibit Description Page
- ------- ----------- ----
1 Shareholder Rights Plan Agreement dated as of 4
November 8, 1999 (as amended and restated as of
January 14, 2000), between Abitibi-Consolidated
Inc. and Montreal Trust Company, as Rights
Agent, including the Form of Rights Certificate
attached thereto as Exhibit A.
3
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EXHIBIT 1- SHAREHOLDER RIGHTS PLAN AGREEMENT
SHAREHOLDER RIGHTS PLAN AGREEMENT
MEMORANDUM OF AGREEMENT, dated as of the 8th day of November, 1999, (and
amended and restated as of January 14, 2000) between Abitibi-Consolidated Inc.,
a corporation amalgamated under the laws of Canada (the "Corporation") and
Montreal Trust Company, a trust company incorporated under the laws of Canada
(the "Rights Agent", which term shall include any successor Rights Agent
hereunder);
WHEREAS in order to maximize shareholder value, the board of directors of
the Corporation have determined that it is advisable for the Corporation to
adopt a shareholder rights plan respecting the Corporation (the "Rights Plan");
AND WHEREAS in order to implement the Rights Plan, the board of directors
of the Corporation have:
(a) authorized effective as at the Effective Time (as hereinafter defined)
on the Effective Date (as hereinafter defined) the issuance of one
Right (as hereinafter defined) in respect of each Common Share (as
hereinafter defined) outstanding at the Record Time (as hereinafter
defined), and
(b) authorized the issuance of one Right in respect of each Voting Share
(as hereinafter defined) issued after the Record Time and prior to the
earlier of the Separation Time (as hereinafter defined) and the
Expiration Time (as hereinafter defined);
AND WHEREAS each Right entitles the holder thereof, after the Separation
Time, to purchase securities of the Corporation pursuant to the terms and
subject to the conditions set forth herein;
AND WHEREAS the Corporation desires to appoint the Rights Agent to act on
behalf of the Corporation and the holders of Rights, and the Rights Agent is
willing to so act, in connection with the issuance, transfer, exchange and
replacement of Rights Certificates (as hereinafter defined), the exercise of
Rights and other matters referred to herein;
AND WHEREAS the board of directors of the Corporation proposes that this
Agreement be in place for a period of three years;
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements set forth herein, the parties hereby agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 Certain Definitions
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who is the Beneficial Owner
of 20% or more of the outstanding Voting Shares (for purposes of this
definition, Beneficial Ownership of instalment receipts representing
Voting Shares, if any, shall be deemed to be Beneficial Ownership of
the Voting Shares represented by such instalment receipts); provided,
however, that the term "Acquiring Person" shall not include:
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(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or more of the
outstanding Voting Shares as a result of one or any combination
of (A) a Voting Share Reduction; (B) a Permitted Bid Acquisition;
(C) an Exempt Acquisition; or (D) a Permissible Acquisition;
provided, however, that if a Person becomes the Beneficial Owner
of 20% or more of the outstanding Voting Shares by reason of one
or any combination of the operation of Clauses (A), (B), (C) or
(D) above and such Person's Beneficial Ownership of Voting Shares
thereafter increases by more than 1% of the number of Voting
Shares outstanding (other than pursuant to one or any combination
of a Voting Share Reduction, a Permitted Bid Acquisition, an
Exempt Acquisition or a Permissible Acquisition), then as of the
date such Person becomes the Beneficial Owner of such additional
Voting Shares, such Person shall become an "Acquiring Person"; or
(iii)an underwriter or member of a banking or selling group that
becomes the Beneficial Owner of 20% or more of the Voting Shares
in connection with a distribution of securities.
(b) "Affiliate" when used to indicate a relationship with a corporation,
means a corporation that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control with, such corporation;
(c) "Agreement" shall mean this shareholder rights plan agreement dated as
of November 8, 1999 between the Corporation and the Rights Agent, as
amended or supplemented from time to time; "hereof", "herein",
"hereto" and similar expressions mean and refer to this Agreement as a
whole and not to any particular part of this Agreement;
(d) "Associate" when used to indicate a relationship with a specified
Person, means any relative of such specified Person who has the same
home as such specified Person, or any person to whom such specified
Person is married, or any person with whom such specified Person is
living in a conjugal relationship outside marriage, or any relative of
such spouse or other person who has the same home as such specified
Person;
(e) 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 the owner at law or in equity;
(ii) any securities which such Person or any of such Person's
Affiliates or Associates has the right to acquire upon the
exercise, conversion or exchange of any Convertible Securities or
pursuant to any agreement, arrangement, pledge or understanding
whether or not in writing (other than (x) the customary
agreements with and between underwriters and banking or selling
group members with respect to a distribution of securities and
(y) pledges of securities in the ordinary course of the pledgee's
business); or
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(iii) any securities which are Beneficially Owned within the meaning
of Clauses 1.1(e)(i) and (ii) by any other Person with whom such
Person is acting jointly or in concert;
provided, however, that a Person shall not be deemed the "Beneficial
Owner" or to have "Beneficial Ownership" of, or to "Beneficially Own",
any security:
(iv) because (x) the holder of such security has agreed to deposit or
tender such security to a Take-over Bid made by such Person or
any of such Person's Affiliates or Associates or any other Person
referred to in Clause (iii) of this definition pursuant to a
Permitted Lock-up Agreement; or (y) 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) if (1) the ordinary business of such Person (the "Investment
Manager") includes the management of investment funds for others
and the Investment Manager holds such security in the ordinary
course of managing such funds for the account of any other
Person, or (2) 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 or in relation to other accounts and is acting in the
ordinary course of such duties for the estate of such deceased or
incompetent Person or for such other accounts or (3) such Person
(the "Plan Trustee") is the administrator or trustee of one or
more pension funds or plans (each, a "Plan") registered under
applicable laws or is a Plan and holds such security for the
purposes of its activity as such, or (4) such Person is
established by statute for purposes that include, and the
ordinary business or activity of such Person (the "Statutory
Body") includes, the management of investment funds for employee
benefit plans, pension plans, insurance plans (other than plans
administered by insurance companies) or various public bodies or
(5) such Person is a Crown agent or agency; provided, in any of
the above cases, that the Investment Manager, the Trust Company,
the Plan Trustee, the Plan, the Statutory Body or the Crown agent
or agency, as the case may be, is not making and has not
announced a current intention to make a Take-over Bid, other than
an Offer to Acquire Voting Shares or other securities pursuant to
a distribution by the Corporation or by means of ordinary market
transactions (including prearranged trades entered into in the
ordinary course of business of such Person) executed through the
facilities of a stock exchange or organized over-the-counter
market, alone or acting jointly or in concert with any other
Person;
(vi) because such Person is a client of the same Investment Manager as
another Person on whose account the Investment Manager holds such
security or where such Person is an account of the same Trust
Company as another Person on whose account the Trust Company
holds such security, or because such Person is a pension fund or
plan and has a Plan Trustee who is also a Plan Trustee for
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another pension fund or plan on whose account the Plan Trustee
holds such security;
(vii) because such Person is (i) a client of an Investment Manager and
such security is owned at law or in equity by the Investment
Manager, or (ii) an account of a Trust Company and such security
is owned at law or in equity by the Trust Company, or (iii) a
pension fund or plan and such security is owned at law or in
equity by the Plan Trustee; 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 agency.
(f) "Board of Directors" means the board of directors of the Corporation
or any duly constituted and empowered committee thereof;
(g) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in Montreal, Quebec are authorized
or obligated by law to close or a day that is treated as a holiday at
the Corporation's principal executive office in Montreal, Quebec;
(h) "Canada Business Corporations Act" shall mean the Canada Business
Corporations Act, R.S.C. 1985, c. C-44, as amended, and the
regulations thereunder as now in effect or as the same may from time
to time be amended, re-enacted or replaced;
(i) "Canadian Dollar Equivalent" of any amount which is expressed in U.S.
dollars shall mean on any day the Canadian dollar equivalent of such
amount determined by reference to the Canadian-U.S. Exchange Rate on
such date;
(j) "Canadian-U.S. Exchange Rate" means, on any date, the inverse of the
U.S. Canadian exchange rate quoted by any Canadian chartered bank in
effect on such date;
(k) "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
succeeding Business Day) at which the office of the transfer agent for
the Voting Shares in the City of Montreal, Quebec (or, after the
Separation Time, the office in Montreal, Quebec of the Rights Agent)
is closed to the public;
(l) "Common Shares" means the common shares in the capital of the
Corporation;
(m) "Competing Permitted Bid" shall mean 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 requirements set out in the Clause (ii) of that
definition; and
(iii)contains an irrevocable and unqualified provision that no Voting
Shares, will be taken up or paid for pursuant to the Take-over
Bid prior to the close of business on a date that is no earlier
than the later of (1) the date on which Voting Shares
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may be taken up under the earliest Permitted Bid that preceded
the Competing Permitted Bid (determined at the date of making the
Take-over Bid and assuming no amendment or variation to the terms
and satisfaction of all conditions to the completion of the
Permitted Bid) and (2) 21 days following the date of the
Take-over Bid;
(n) "controlled" a corporation is "controlled" by another Person or two or
more Persons acting jointly or in concert if:
(i) securities entitled to vote in the election of directors carrying
more than 50% of the votes for the election of directors are
held, directly or indirectly, by or for the benefit of the other
Person or Persons; and
(ii) the votes carried by such securities are entitled, if exercised,
to elect a majority of the board of directors of such
corporation;
and "controls", "controlling" and "under common control with" shall be
interpreted accordingly;
(o) "Convertible Securities" shall mean at any time any right to acquire
Voting Shares or any securities from time to time (other than the
Rights) carrying any exercise, conversion or exchange right pursuant
to which the holder thereof may acquire Voting Shares or other
securities carrying any exercise, conversion or exchange right
pursuant to which the holder thereof may ultimately acquire Voting
Shares (in each case, provided such right is then exercisable or
exercisable within a period of 60 days from that time and whether or
not on condition or the happening of any contingency) including, at
the relevant time of determination, any outstanding options for the
purchase of Voting Shares issued under the Corporation's Voting Share
option programs which are then exercisable or exercisable within a
period of 60 days from that time.
(p) "Co-Rights Agents" shall have the meaning ascribed thereto in
Subsection 4.1(a) hereof;
(q) "Dividend Reinvestment Plan" means a dividend reinvestment or other
plan of the Corporation made available by the Corporation to holders
of its securities where such plan permits the holder to direct that
some or all of:
(i) dividends paid in respect of any Voting Shares of the
Corporation;
(ii) proceeds of redemption of Voting Shares of the Corporation;
(iii)interest paid on evidences of indebtedness of the Corporation;
or
(iv) optional cash payments;
be applied to the purchase from the Corporation of Voting Shares;
(r) "Effective Date" means November 8, 1999;
(s) "Effective Time" shall mean 5:00 p.m. on the Effective Date;
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(t) "Election to Exercise" shall have the meaning ascribed thereto in
Subsection 2.2(d) hereof;
(u) "Exchange Act of 1934" means the Securities Exchange Act of 1934, as
amended, of the United States of America and the rules and regulations
thereunder, unless otherwise specified, as the same exist on the date
hereof;
(v) "Exempt Acquisitions" shall mean Voting Share acquisitions in respect
of which the Board of Directors have waived the application of Section
3.1 hereof pursuant to the provisions of Subsections 5.1(b), 5.1(c) or
5.1(d) or which were made on or prior to the Effective Date;
(w) "Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole
Right which, until adjustment thereof in accordance with the terms
hereof, shall be $80.00;
(x) "Expansion Factor" shall have the meaning ascribed thereto in
Subsection 2.3(a) hereof;
(y) "Expiration Time" shall have the meaning ascribed thereto in Section
5.17 hereof;
(z) "Fiduciary" shall mean a trust company registered under the trust
company legislation of Canada or any province thereof or a portfolio
manager registered under the securities legislation of one or more
provinces of Canada;
(aa) "Flip-In Event" shall mean a transaction in or pursuant to which any
Person becomes an Acquiring Person;
(bb) "holder" shall have the meaning ascribed thereto in Section 2.8
hereof;
(cc) "Independent Shareholders" means 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(e)(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;
(dd) "Market Price" of any securities on any date of determination shall
mean the average daily closing prices per security of such securities
(determined as described below) on each of the 20 consecutive Trading
Days through and including the Trading Day immediately preceding such
date; provided, however, that if an event of a type analogous to any
of the events described in Section 2.3 hereof shall have caused the
closing prices used to determine the Market Price on any Trading Days
not to be fully comparable with the closing price on such date of
determination or, if the date of determination is not a Trading Day,
on the immediately preceding Trading Day, each such closing price so
used shall be appropriately adjusted in a manner analogous to the
applicable adjustment
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provided for in Section 2.3 hereof in order to make it fully
comparable with the closing price on such date of determination or, if
the date of determination is not a Trading Day, on the immediately
preceding Trading Day. The closing price of any securities on any date
shall be:
(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 security as reported by the principal Canadian stock
exchange on which such securities are listed or admitted to
trading; 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
Canadian stock exchange, the last sale price or, if such price is
not available, the average of the closing bid and asked prices,
for such security as reported by such other securities exchange
on which such securities are listed or admitted to trading, or
(iii)if for any reason none of such prices is available on such day
or the securities are not listed or admitted to trading on a
Canadian stock exchange or other securities exchange, the last
sale price, or if no sale takes place on such day, the average of
the high bid and low asked prices for each such security in the
over-the-counter market, as quoted by any reporting system then
in use, or
(iv) if on any such date none of such prices is available or the
securities are not listed or admitted to trading on a Canadian
stock exchange or any other securities exchange or not quoted by
any such reporting system, the average of the closing bid and
asked prices as furnished by a professional market maker making a
market in the securities;
provided, however, that if on any such date none of such prices is
available, the closing price of such securities on such date means the
fair value per security of such securities on such date as determined
in good faith by a nationally or internationally recognized investment
dealer or investment banker with respect to the fair value of such
securities. The Market Price shall be expressed in Canadian dollars
and if initially determined in respect of any day forming part of the
20 consecutive trading day in United States dollars, such amount shall
be translated into Canadian dollars at the Canadian Dollar Equivalent
thereof;
(ee) "Nominee" shall have the meaning ascribed thereto in Subsection 2.2(c)
hereof;
(ff) "Offer to Acquire" shall include:
(i) an offer to purchase, or a solicitation of an offer to sell,
Voting Shares or Convertible Securities, and
(ii) an acceptance of an offer to sell Voting Shares or Convertible
Securities, 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;
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(gg) "Offeror" shall mean a Person who has announced a current intention to
make or who is making a Take-over Bid;
(hh) "Offeror's Securities" shall mean Voting Shares Beneficially Owned by
an Offeror on the date of the Offer to Acquire;
(ii) "Permissible Acquisition" shall mean an acquisition by a Person of
Voting Shares and/or Convertible Securities pursuant to:
(i) a Dividend Reinvestment Plan;
(ii) a stock dividend distribution, stock split or other event in
respect of securities of the Corporation of one or more
particular class, classes or series pursuant to which such Person
becomes the Beneficial Owner of Voting Shares on the same pro
rata basis as all other holders of securities of the particular
class, classes or series;
(iii)the acquisition or the exercise by the Person of only those
rights to purchase Voting Shares or Convertible Securities issued
by the Corporation to all or substantially all the holders of
Voting Shares pursuant to a rights offering or pursuant to a
prospectus provided that such rights are acquired directly from
the Corporation, or a distribution by the Corporation of Voting
Shares or Convertible Securities made pursuant to a prospectus or
by way of a private placement; provided such Person does not
thereby acquire a greater percentage of Voting Shares or
Convertible Securities so offered than the Person's percentage of
Voting Shares Beneficially Owned immediately prior to such
acquisition; or
(iv) the exercise of any Convertible Securities which were acquired
pursuant to any of Clauses (i) through (iii) above.
(jj) "Permitted Bid" shall mean a Take-over Bid made by way of a take-over
bid circular which also complies with the following additional
provisions;
(i) the Take-over Bid is made to all holders of Voting Shares;
(ii) the Take-over Bid contains, and the take up and payment for
securities tendered or deposited is subject to, an irrevocable
and unqualified provision (the "Take-Up Provision") that no
Voting Shares will be taken up or paid for pursuant to the
Take-over Bid prior to the close of business on a date which is
not less than 50 days following the date of the Take-over Bid;
(iii)the Take-over Bid contains an irrevocable and unqualified
provision that all Voting Shares may be deposited pursuant to the
Take-over Bid at any time prior to the close of business on the
date referred to in Clause (ii) hereof and that all Voting Shares
deposited pursuant to the Take-over Bid may be withdrawn at any
time prior to the close of business on such date;
(iv) unless the Take-over Bid is withdrawn, the Take-over Bid contains
an irrevocable and unqualified condition that no Voting Shares
will be taken up or
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paid for pursuant to the Take-over Bid unless not less than 50%
of the then outstanding Voting Shares held by Independent
Shareholders have been deposited or tendered to the Take-over Bid
and not withdrawn at the close of business on the date referred
to in Clause (iii) hereof; and
(v) the Take-over Bid contains an irrevocable and unqualified
provision that, should the condition referred to in Clause (iv)
hereof be met, the Offeror shall make a public announcement of
such fact and the Take-over Bid will remain open for a period of
not less than 10 Business Days from the date of such public
announcement;
(kk) "Permitted Bid Acquisition" shall mean an acquisition of Voting Shares
made pursuant to a Permitted Bid or a Competing Permitted Bid;
(ll) "Permitted Lock-up Agreement" means an agreement between a Person and
one or more holders (each, a "Locked-up Person") of Voting Shares (the
terms of which are publicly disclosed 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 or if
the Lock-up Agreement is entered into after the date of the Lock-up
Bid, not later than the date the Lock-up Agreement is made) pursuant
to which such Locked-up Persons agree to deposit or tender Voting
Shares to a Take-over Bid (the "Lock-up Bid")) made by such 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:
(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
Locked-up Person if:
(A) another Take-over Bid is made for the 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 (the "Specified
Amount") that is in excess of the price or value per Voting
Share offered under the Lock-up Bid, provided that the
Specified Amount is not greater than 7% of the price or
value per Voting Share offered under the Lock-up Bid; or
(B) another Take-over Bid is made for the Voting Shares prior to
Voting Shares being taken up and paid for under the Lock-up
Bid for a number of Voting Shares at least 7% greater than
the number of Voting Shares that the Offeror has offered to
purchase under the Lock-up Bid at a price or value per
Voting Share that is not less than the price or value per
Voting Share offered under the Lock-up Bid; and
for greater clarity, any such agreement may contain a right of
first refusal or require a period of delay to give an Offeror an
opportunity to match any greater consideration offered under
another Take-over Bid or similar limitation on a Locked-up Person
as long as the Locked-up Person can (or can agree to) deposit or
tender its Voting Shares to another Take-over Bid; and
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(ii) no "break-up" fees, "top-up" fees, penalties, expenses or other
amounts shall be payable pursuant to the agreement in the event
that the Locked-up Person fails to deposit or tender its Voting
Shares pursuant thereto or supports another transaction that
exceed in the aggregate the greater of
(A) the cash equivalent of 2 1/2% of the price or value payable
under the Lock-up Bid to the Locked-up Person; or
(B) one half of the cash equivalent of any amount in excess of
the price or value payable under the Lock-up Bid that the
Locked-up Person receives under another Take-over Bid or
transaction.
(mm) "Person" shall mean an individual, body corporate, corporation,
partnership, syndicate or other form of unincorporated association,
trust, government and its agencies or instrumentalities, entity or
group whether or not having legal personality and any of the foregoing
acting in any derivative, representative or fiduciary capacity;
(nn) "Record Date" shall mean the Effective Date;
(oo) "Record Time" shall mean the Effective Time;
(pp) "Redemption Price" shall have the meaning ascribed thereto in
Subsection 5.1(a) hereof;
(qq) "Right" shall mean a right to purchase one Common Share, subject to
adjustment as herein set forth, upon the terms and subject to the
conditions set forth in this Agreement;
(rr) "Rights Certificate" shall have the meaning ascribed thereto and be
substantially in the form provided in Subsection 2.3(c) hereof;
(ss) "Rights Register" shall have the meaning ascribed thereto in Clause
2.6(a) hereof;
(tt) "Rights Registrar" shall have the meaning ascribed thereto in Clause
2.6(a) hereof;
(uu) "Securities Act of 1933" shall mean the Securities Act of 1933 of the
United States, as amended, and the rules and regulations thereunder as
now in effect or as the same may from time to time be amended,
re-enacted or replaced;
(vv) "Securities Act (Ontario)" shall mean the Securities Act, R.S.O. 1990,
c. S.5, as amended, and the rules and regulations thereunder as now in
effect and as same may from time to time be amended, re-enacted or
replaced;
(ww) "Separation Time" shall mean the earlier of:
(i) the close of business on the tenth Trading Day after the earlier
of:
(A) the Voting Share Acquisition Date; and
(B) (1) the date of the commencement of, or first public
announcement of the intent of any Person (other than the
Corporation or any Subsidiary of
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the Corporation) to commence, a Take-over Bid (other than a
Permitted Bid or a Competing Permitted Bid), provided that,
if any Take-over Bid referred to in this Clause (2) of this
definition expires, is cancelled, terminated or otherwise
withdrawn prior to the Separation Time, such Take-over Bid
shall be deemed, for the purposes of this definition, never
to have been made; and (2) two days following the date upon
which a Permitted Bid ceases to be a Permitted Bid; and
(ii) such later Business Day as may be determined at any time or from
time to time by the Board of Directors;
(xx) "Subsidiary" of a Person means any corporation or other entity
controlled by such Person;
(yy) "Take-over Bid" means an Offer to Acquire Voting Shares or Convertible
Securities, where the Voting Shares subject to the Offer to Acquire,
together with the Common Shares underlying the Convertible Securities
subject to the Offer to Acquire, together with the Offeror's
Securities, constitute in the aggregate 20% or more of the outstanding
Voting Shares at the date of the Offer to Acquire;
(zz) "Termination Time" shall mean the time at which the right to exercise
Rights shall terminate pursuant to Section 5.1;
(aaa)"Trading Day", when used with respect to any securities, shall mean a
day on which the principal Canadian securities exchange 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 securities exchange, a Business
Day;
(bbb)"Voting Share Acquisition Date" shall mean the date of a public
announcement (which, for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to the Securities
Act (Ontario), the Exchange Act of 1934 or any other applicable
securities laws) by the Corporation or an Acquiring Person of facts
indicating that a Person has become an Acquiring Person;
(ccc)"Voting Share Acquisition Time" shall mean the close of business on
the Voting Share Acquisition Date;
(ddd)"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 proportionate number of Voting
Shares Beneficially Owned by any person to 20% or more of the Voting
Shares then outstanding; and
(eee)"Voting Shares" shall mean the Common Shares of the Corporation and
any other securities in the capital of the Corporation entitled to
vote generally in the election of directors (including, without
limitation, instalment receipts representing such securities).
1.2 Currency
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
<PAGE>
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1.3 Headings
The division of this Agreement into articles, sections, clauses and
subclauses and the insertion of headings, subheadings and a table of contents
are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.4 Acting Jointly and 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 to acquire or
offer to acquire Voting Shares or Convertible Securities (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).
ARTICLE 2 - THE RIGHTS
2.1 Issuance and Evidence of Rights
One Right in respect of each Common Share outstanding at the Record Time
and each Voting Share which may be issued after the Record Time and prior to the
earlier of the Separation Time and the Expiration Time shall be issued in
accordance with the terms hereof. Notwithstanding the foregoing, one Right in
respect of each Voting Share issued after the Record Time upon the exercise of
rights pursuant to Convertible Securities outstanding at the Voting Share
Acquisition Date may be issued after the Separation Time but prior to the
Expiration Time.
Certificates representing Voting Shares issued after the Record Time but
prior to the earlier of the Separation Time and the Expiration Time shall
evidence one Right for each Voting Share represented thereby and shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
Until the Separation Time (defined in the Rights Agreement
referred to below), this certificate also evidences rights of the
holder described in a Shareholder Rights Plan Agreement dated as
of November 8, 1999 (the "Rights Agreement"), between
Abitibi-Consolidated Inc. (the "Corporation") and Montreal Trust
Company, the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
executive offices of the Corporation. In certain circumstances
set out in the Rights Agreement, the rights may be redeemed, may
expire, may become void or may become exercisable and shall
thereafter be evidenced by separate certificates and no longer
evidenced by this certificate. The Corporation will mail or
arrange for the mailing of a copy of the Rights Agreement to the
holder of this certificate without charge as soon as practicable
after the receipt of a written request therefor.
Certificates representing Voting Shares that are issued and outstanding at the
Record Time shall evidence one Right for each Voting Share evidenced thereby,
notwithstanding the absence of the foregoing legend until the earlier of the
Separation Time and Expiration Time.
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2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights
(a) Subject to adjustment as herein set forth, each Right will entitle the
holder thereof, after the Separation Time and prior to the Expiration
Time, to purchase one Common Share for the Exercise Price.
(b) Until the Separation Time,
(i) the Rights shall not be exercisable and no Right may be
exercised; and
(ii) each Right will be evidenced by the certificate for the
associated Voting Share registered in the name of the holder
thereof and will be transferable only together with, and will be
transferred by a transfer of, such associated Voting Share.
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(c) After the Separation Time and prior to the Expiration Time,
(i) the Rights shall be exercisable, and
(ii) the registration and transfer of the Rights shall be separate
from and independent of Voting Shares.
Promptly following the Separation Time, the Corporation will prepare and the
Rights Agent will mail to each holder of record of Voting Shares as of the
Separation Time or who subsequently becomes a holder of record of Voting Shares
upon the exercise of rights attaching to Convertible Securities outstanding at
the Voting Share Acquisition Date (other than an Acquiring Person and any holder
of record of Rights which are Beneficially Owned by such Acquiring Person (a
"Nominee")), at such holder's address as shown by the records of the Corporation
(the Corporation hereby agreeing to furnish copies of such records to the Rights
Agent for this purpose),
(x) 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, regulation or judicial or administrative order or with any
rule or regulation made pursuant thereto or with any rule or
regulation of any self-regulatory organization, stock exchange or
quotation system on which the Rights may from time to time be
listed or traded, or to conform to usage; and
(y) a statement describing the Rights.
For greater certainty, a Nominee shall be sent the materials provided for in (x)
and (y) in respect of all Voting Shares held of record by it which are not
Beneficially Owned by an Acquiring Person.
In order for the Corporation to determine whether any Person is holding
Voting Shares which are Beneficially Owned by another Person, the Corporation
may require such first mentioned Person to furnish such information and
documentation as the Corporation deems necessary.
(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:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise such Rights (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly
completed and executed by the holder or his executors or
administrators or other personal representatives or his or their
legal attorney duly appointed by an instrument in writing in form
and executed in a manner satisfactory to the Rights Agent; and
(iii)payment by certified cheque, banker's draft or money order
payable to the order of the Rights Agent, of a sum equal to the
Exercise Price multiplied by the number of Rights being exercised
and a sum sufficient to cover any transfer tax or charge which
may be payable in respect of any transfer or delivery of Rights
<PAGE>
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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 (1) a
completed Election to Exercise executed in accordance with Clause
2.2(d)(ii) that does not indicate that such Right is null and void as
provided by Subsection 3.1(b) and (2) payment as set forth in Clause
2.2(d)(iii), the Rights Agent (unless otherwise instructed by the
Corporation in the event that the Corporation is of the opinion that
the Rights cannot be exercised in accordance with this Agreement) will
thereupon promptly:
(i) requisition from the transfer agent for the Common Shares of the
Corporation certificates representing the number of Common Shares
to be purchased (the Corporation hereby irrevocably authorizing
its transfer agent to comply with all such requisitions);
(ii) when appropriate and as permitted under the constating documents
of the Corporation, requisition from the Corporation the amount
of cash to be paid in lieu of issuing fractional Common Shares;
(iii)after receipt of such Common Share certificates, deliver the
same to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be
designated by such holder;
(iv) when appropriate, after receipt, deliver such payment referred to
in Clause 2.2(e)(ii) to or to the order of the registered holder
of such Rights Certificate; and
(v) tender to the Corporation all payments received on exercise of
the Rights.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised (subject to
the provisions of Subsection 5.5(a)) will be issued by the Rights
Agent to such holder or to such holder's duly authorized assigns.
(g) The Corporation covenants and agrees that it will:
(i) take all such action as may be necessary and within its power to
ensure that all securities delivered upon the exercise of Rights
shall, at the time of delivery of the certificates for such
securities (subject to payment of the Exercise Price), be duly
and validly authorized and issued as fully paid and
non-assessable,
(ii) take all such action as may be necessary and within its power to
ensure compliance with the provisions of Section 3.1 including,
without limitation, all such action necessary to comply with the
requirements of the Canada Business Corporations Act, the
Securities Act (Ontario), the Securities Act of 1933 and the
Exchange Act of 1934 and any other applicable law, rule or
regulation, applicable to the issuance and delivery of the Rights
Certificates and the issuance of any securities upon exercise of
Rights,
<PAGE>
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(iii) use reasonable efforts to cause all securities issued upon the
exercise of Rights to be listed upon issuance on the stock
exchanges on which the Voting Shares were traded immediately
prior to the Voting Share Acquisition Date,
(iv) pay when due and payable, if applicable, any and all Canadian
and, if applicable, United States, federal, provincial, municipal
and state transfer taxes and charges (not including any income or
capital taxes of the holder or exercising holder or any liability
of the Corporation to withhold tax) which may be payable in
respect of the original issuance or delivery of the Rights
Certificates or certificates for Common Shares to be issued upon
exercise of any 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 involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of
certificates for securities in a name other than that of the
holder of the Rights being transferred or exercised,
(v) cause to be reserved and kept available out of its authorized
Common Shares the number of Common Shares that, as provided in
this Agreement, will from time to time be sufficient to permit
the exercise in full of all outstanding Rights, and
(vi) after the Separation Time, except as permitted by Section 5.1,
not take (or permit any Subsidiary 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
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.
(a) In the event the Corporation shall at any time after the date of this
Agreement and prior to the Expiration Time,
(i) declare or pay a dividend on its Common Shares payable in Common
Shares (or other securities exchangeable for or convertible into
or giving a right to acquire Common Shares or other securities of
the Corporation) other than pursuant to any Dividend Reinvestment
Plan;
(ii) subdivide or change the outstanding Common Shares into a greater
number of Common Shares;
(iii) combine or change the outstanding Common Shares into a smaller
number of Common Shares; or
(iv) issue any Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares or
other securities of the Corporation) in respect of, in lieu of or
in exchange for existing Common Shares except as otherwise
provided in this Section 2.3,
<PAGE>
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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 exercise of Rights shall be
adjusted as of the payment or effective date in respect of such event
in the manner set forth below.
If the Exercise Price and number of Rights outstanding are to be
adjusted:
(v) the Exercise Price in effect after such adjustment will be equal
to the Exercise Price in effect immediately prior to such
adjustment divided by the number of Common Shares (the "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
(vi) 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 distributed
among the Common Shares with respect to which the original Rights were
associated (if they remain outstanding) and the Common Shares issued
in respect of such dividend, subdivision, change, combination or
issuance, so that each such Common Share will have exactly one Right
associated with it in effect following the payment or effective date
of the event referred to in Clause 2.3(a)(i), (ii), (iii) or (iv), as
the case may be.
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, combination or issuance would hold
thereafter as a result thereof. If after the Record Time and prior to
the Expiration Time, the Corporation shall issue any securities of the
Corporation other than Common Shares in a transaction of a type
described in Clauses 2.3(a)(i) or (iv), such securities shall be
treated herein as nearly equivalent to Common Shares as may be
practicable and appropriate under the circumstances and the
Corporation and the Rights Agent agree to amend this Agreement in
order to give effect thereto, and the Corporation will not consolidate
with, amalgamate with or into or enter into an arrangement with, any
other Person unless such Person agrees to be bound by the terms of an
amendment effecting such treatment.
(b) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time fix a record date for the issuance of
rights, options or warrants to all or substantially all holders of
Common Shares entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Common
Shares (or securities convertible into or exchangeable for or carrying
a right to purchase Common Shares) at a price per Common Share (or, if
a security convertible into or exchangeable for or carrying a right to
purchase or subscribe for Common Shares having a conversion, exchange
or exercise price, including the price required to be paid to purchase
such convertible or exchangeable security or right per Common Share)
less than the Market Price per Common Share on such record date, the
Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of Common Shares outstanding on such record date, plus
the number of
<PAGE>
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Common Shares that the aggregate offering price of the total number of
Common Shares so to be offered (and/or the aggregate initial
conversion, exchange or exercise price of the convertible or
exchangeable securities or rights so to be offered, including the
price required to be paid to purchase such convertible or exchangeable
securities or rights) would purchase at such Market Price per Common
Share, and the denominator of which shall be the number of Common
Shares outstanding on such record date, plus the number of additional
Common Shares to be offered for subscription or purchase (or into
which the convertible or exchangeable securities or rights so to be
offered are initially convertible, exchangeable or exercisable).
In case such subscription price may be paid by delivery of
consideration, part or all of which may be in a form other than cash,
the value of such consideration shall be as determined in good faith
by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Such adjustment shall be
made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued or if issued, are
not exercised prior to the expiration thereof, the Exercise Price
shall be readjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed, or to the Exercise
Price which would be in effect based on the number of Common Shares
(or securities convertible into or exchangeable or exercisable for
Common Shares) actually issued upon the exercise of such rights,
options or warrants, as the case may be.
For purposes of this Agreement, the granting of the right to purchase
Common Shares (whether from treasury or otherwise) pursuant to any
Dividend Reinvestment Plan or Share Compensation Arrangement (so long
as such right to purchase is in no case evidenced by the delivery of
rights or warrants) shall be deemed not to constitute an issue of
rights, options or warrants by the Corporation; provided, however,
that, in all such cases, the right to purchase Common Shares is at a
price per Common Share of not less than 95% of the current Market
Price per Common Share (determined as provided in such plans) of the
Common Shares.
(c) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time fix a record date for a dividend to
all holders of Common Shares of evidences of indebtedness, assets
(other than cash and other than a regular periodic cash dividend or a
dividend paid in Common Shares on the liquidation of the Corporation),
rights, options or warrants (excluding those referred to in Subsection
2.3(b) hereof), the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the Market Price per Common Share on such record date,
less the fair market value (as determined in good faith by the Board
of Directors, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of Rights), on a per Common Share basis, of the
portion of the assets or evidences of indebtedness so to be
distributed and the denominator of which shall be such Market Price
per Common Share. Such adjustments shall be made successively whenever
such a record date is fixed, and in the event that such dividend is
not so made, the Exercise Price shall be adjusted to be the Exercise
Price which would have been in effect if such record date had not been
fixed.
<PAGE>
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(d) Notwithstanding anything herein to the contrary, no adjustment in the
Exercise Price shall be required unless such adjustment would require
an increase or decrease of at least one percent in the Exercise Price;
provided, however, that any adjustments which by reason of this
Subsection 2.3(d) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations
under this Section 2.3 shall be made to the nearest cent or to the
nearest ten-thousandth of a Common Share. Notwithstanding the first
sentence of this Subsection 2.3(d)), any adjustment required by this
Section 2.3 shall be made no later than the earlier of (i) three years
from the date of the transaction which mandates such adjustment or
(ii) the Expiration Date.
(e) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any securities of the
Corporation (other than the Common Shares), or rights, options or
warrants to subscribe for or purchase any such securities of the
Corporation, or securities convertible into or exchangeable for any
such securities of the Corporation, in a transaction referred to in
Clause 2.3(a)(i) or (iv) above, if the Board of Directors acting in
good faith determines that the adjustments contemplated by Subsections
2.3(a), (b) and (c) above in connection with such transaction will not
appropriately protect the interests of the holders of Rights, the
Board of Directors may determine what other adjustments to the
Exercise Price, number of Rights and/or securities purchaseable upon
exercise of Rights would be appropriate and, notwithstanding
Subsections 2.3(a), (b) and (c) above, such adjustment, rather than
the adjustments contemplated by Subsections 2.3(a), (b) and (c) above,
shall be made. Subject to Subsections 5.4(b) and (c) and subject to
the approval of each stock exchange on which the Common Shares are
listed for trading at the relevant time, the Corporation shall amend
this Agreement as appropriate to provide for such adjustments.
(f) Each Right originally issued by the Corporation subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of
Common Shares purchasable from time to time hereunder upon exercise of
a Right immediately prior to such issue, all subject to further
adjustment as provided herein.
(g) Irrespective of any adjustment or change in the Exercise Price or the
number of Common Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to
express the Exercise Price per Common Share and the number of Common
Shares which were expressed in the initial Rights Certificates issued
hereunder.
(h) In any case in which this Section 2.3 shall require that any
adjustment in the 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 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
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 securities upon the
occurrence of the event requiring such adjustment.
<PAGE>
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(i) Notwithstanding anything in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such reductions in the Exercise
Price, in addition to those adjustments expressly required by this
Section 2.3, as and to the extent that in their good faith judgment
the Board of Directors shall determine to be advisable in order that
any
<PAGE>
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(i) consolidation or subdivision of the Common Shares,
(ii) issuance (wholly or in part for cash) of Common Shares or
securities that by their terms are convertible into or
exchangeable for Common Shares,
(iii) Common Share distributions, or
(iv) 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.
(j) Notwithstanding anything in this Agreement to the contrary, the
Corporation shall be entitled to issue and deliver to each holder of
Rights upon exercise thereof in accordance with this Agreement and on
payment of the relevant exercise price, in lieu of the number of
Common Shares such holder would have otherwise been entitled, as and
to the extent that in their good faith judgment the Board of Directors
shall determine to be advisable, and subject to the receipt of all
necessary regulatory approvals (including without limitation the
approval of any stock exchange on which the Voting Shares are listed
for trading at the relevant time), debt, equity or other securities or
assets (or a combination thereof) of the Corporation having an
aggregate Market Price equal to the aggregate Market Price of the
number of Common Shares such holder would have otherwise been entitled
to receive.
2.4 Date on Which Exercise is Effective
Each Person in whose name any certificate for Common Shares or other
securities, if applicable, is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Common Shares or
other securities, if applicable, represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered in accordance with Subsection 2.2(d) (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 holder 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 holder of record of such Common Shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Common Share
transfer books of the Corporation are open.
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates
(a) The Rights Certificates shall be executed on behalf of the Corporation
by its Chairman of the Board, President or any of its Vice Presidents
and by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Rights Certificates may be
manual or facsimile. Rights Certificates bearing the manual or
facsimile signatures of individuals who were at any time to proper
officers of the Corporation shall bind the Corporation,
notwithstanding that such individuals or any of them have ceased to be
officers of the Corporation either before or after the
countersignature and delivery of such Rights Certificates.
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(b) Promptly after the Corporation learns of the Separation Time, the
Corporation will notify the Rights Agent of such Separation Time and
will deliver Rights Certificates executed by the Corporation to the
Rights Agent for countersignature, and the Rights Agent shall
countersign (manually or by facsimile signature in a manner
satisfactory to the Corporation) and send such Rights Certificates to
the holders of the Rights pursuant to Subsection 2.2(c). No Rights
Certificate shall be valid for any purpose until countersigned by the
Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 Registration, Transfer and Exchange
(a) The Corporation will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Corporation will provide for the registration and
transfer of Rights. The Rights Agent is hereby appointed registrar for
the Rights (the "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.
After the Separation Time and prior to the Expiration Time, upon surrender
for registration of transfer or exchange of any Rights Certificate, and subject
to the provisions of Subsection 2.6(c), the Corporation will execute, and the
Rights Agent will countersign, register and deliver, 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.
(b) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be the valid obligations of the Corporation,
and such Rights shall be entitled to the same benefits under this
Agreement as the Rights surrendered upon such registration of transfer
or exchange.
(c) 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 reasonable fees and
expenses of the Rights Agent) connected therewith.
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, the Corporation shall execute and the
Rights Agent shall countersign and deliver in exchange therefor a new
Rights Certificate evidencing the same number of Rights as did the
Rights Certificate so surrendered.
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(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 and/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
reasonable fees and expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7 in
lieu of any destroyed, lost or stolen Rights Certificate shall
evidence the contractual obligation of the Corporation, whether or not
the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other
Rights duly issued hereunder.
2.8 Persons Deemed Owners
Prior to due presentation of a Rights Certificate (or, prior to the
Separation Time, the associated Voting Share certificate) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Separation Time, the associated Voting 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 Voting Share.).
2.9 Delivery and Cancellation of Certificates
All Rights Certificates surrendered upon exercise or for redemption,
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 laws, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
<PAGE>
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2.10 Agreement of Rights Holders
Every holder of Rights, by accepting the same, 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 Voting Share certificate representing such Right;
(c) that after the Separation Time, the Rights Certificates 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 Voting Share certificate) for
registration of transfer, the Corporation, the Rights Agent and any
agent of the Corporation or the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Voting 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 Voting 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 his right to receive any
fractional Voting Shares or other securities upon exercise of a Right
(except as provided herein and as may be permitted by the constating
documents of the Corporation);
(f) that, subject to the provisions of Section 5.4, without the approval
of any holder of Rights or Voting Shares and upon the sole authority
of the Board of Directors, acting in good faith, this Agreement may be
supplemented or amended from time to time as provided herein; and
(g) that notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability
to any holder of a Right or any other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation.
2.11 Rights Certificate Holder not Deemed a Shareholder
No holder, as such, of any Rights or Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose whatsoever the holder of
any Common Share or any other security of the Corporation which may at any time
be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed or deemed or
confer upon the holder of any Rights or Rights Certificate, as such, any of the
rights, titles, benefits or
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privileges of a holder of Common Shares or any other securities of the
Corporation or any right to vote at any meeting of shareholders of the
Corporation whether for the election of directors or otherwise or upon any
matter submitted to holders of Voting Shares of the Corporation at any meeting
thereof, or to give or withhold consent to any action of the Corporation, or to
receive notice of any meeting or other action affecting any holder of Voting
Shares or any other securities of the Corporation except as expressly provided
herein, or to receive dividends, dividend or subscription rights, or otherwise,
until the Right or Rights evidenced by Rights Certificates shall have been duly
exercised in accordance with the terms and provisions hereof.
ARTICLE - ADJUSTMENTS TO THE RIGHTS
3.1 Flip-In Event
(a) Subject to Subsection 3.1(b) and Section 5.1, in the event that prior
to the Expiration Time a Flip-In Event shall occur, each Right shall
constitute, effective on the close of business on the tenth Trading
Day after the Voting Share Acquisition Date (or such longer period as
may be required to satisfy the requirements of the Securities Act
(Ontario), the Securities Act of 1933 and the Exchange Act of 1934 and
any comparable legislation of any other applicable jurisdiction), the
right to purchase from the Corporation, upon payment of the Exercise
Price and otherwise exercising such Right in accordance with the terms
hereof, that number of Common Shares having an aggregate Market Price
on the date of such Flip-In Event equal to twice the relevant Exercise
Price for an amount in cash equal to the relevant 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 the occurrence of such Flip-In Event, an event of a type
analogous to any of the events described in Section 2.3 shall have
occurred).
(b) Notwithstanding the foregoing or any other provisions of this
Agreement, upon the occurrence of any Flip-In Event, any Rights that
are Beneficially Owned on or after the earlier of the Separation Time
and the Voting Share Acquisition Date by:
(i) an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert with
an Acquiring Person or any Affiliate or Associate of an Acquiring
Person); or
(ii) a transferee of Rights, directly or indirectly, from an Acquiring
Person (or of any Affiliate or Associate of an Acquiring Person
or of any Person acting jointly or in concert with an Acquiring
Person or any Associate or Affiliate of an Acquiring Person) in a
transfer made after the date hereof, whether or not for
consideration, that the Board of Directors acting in good faith
have determined is part of a plan, arrangement or scheme of an
Acquiring Person (or an Affiliate or Associate of an Acquiring
Person or of any Person acting jointly or in concert with an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person) that has the purpose or effect of avoiding Clause (i) of
this Subsection 3.1(b),
shall become void, and any holder of such Rights (including transferees) shall
thereafter have no right to exercise such Rights under any provision of this
Agreement and further shall thereafter not have any other rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise.
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(c) Any Rights Certificate that represents Rights Beneficially Owned by a
Person described in Clause 3.1(b)(i) or (ii) or transferred to any
nominee of any such Person, and any Rights Certificate issued upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain the following
legend:
The Rights represented by this Rights Certificate were Beneficially
Owned by a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in the
Shareholder Rights Plan Agreement) or who was acting jointly or in
concert with an Acquiring Person or an Affiliate or Associate of an
Acquiring Person. This Rights Certificate and the Rights represented
hereby are void or shall become void in the circumstances specified in
Subsection 3.1(b) of the Shareholder Rights Plan Agreement.
provided that the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but shall impose such legend only if instructed to do so by the
Corporation in writing or if a holder fails to certify upon transfer or exchange
in the space provided on the Rights Certificate that such holder is not a Person
described in such legend.
ARTICLE 4 - THE RIGHTS AGENT
4.1 General
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Corporation
may from time to time appoint such co-Rights Agents ("Co-Rights
Agents") as it may deem necessary or desirable, subject to the
approval of the Rights Agent. In the event the Corporation appoints
one or more Co-Rights Agents, the respective duties of the Rights
Agent and Co-Rights Agents shall be as the Corporation may determine
with the approval of the Rights Agent and the Co-Rights Agent. The
Corporation agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution
of this Agreement and the exercise and performance of its duties
hereunder (including the fees and disbursements of any expert or
advisor retained by the Rights Agent with the approval of the
Corporation). The Corporation also agrees to indemnify the Rights
Agent and its officers, employees and directors for and to hold it
harmless against any loss, liability or expense incurred without
negligence, bad faith or wilful misconduct on the part of the Rights
Agent for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement including 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 Voting Shares or any Rights Certificate or
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,
<PAGE>
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executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
(c) The Corporation shall inform the Rights Agent in a reasonably timely
manner of events which may materially affect the administration of
this Agreement or the Rights Agent and will, upon written request of
the Rights Agent, provide the Rights Agent with an incumbency
certificate with respect to the then current officers of the
Corporation.
4.2 Merger or Amalgamation 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, statutory arrangement or consolidation to which the
Rights Agent or any successor Rights Agent is a party, or any
corporation succeeding to the shareholder or stockholder services
business of the Rights Agent or any successor Rights Agent, will be
the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any
of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 4.4 hereof. In case at the time such successor
Rights Agent succeeds to the agency created by this Agreement any of
the Rights Certificates have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates will have the full
force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned;
and in case at that time any of the Right 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 Right 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, all of which the Corporation
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) the Rights Agent may retain and consult with legal counsel (who may be
legal counsel for the Corporation) and the opinion of such counsel
will be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion and the Rights Agent may also consult
with such other experts as the Rights Agent shall consider necessary
or appropriate to properly carry out the duties and obligations
imposed under this Agreement and the
<PAGE>
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Rights Agent shall be entitled to act and rely in good faith on the
advice of any such expert;
<PAGE>
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(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 Trustee and
delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate;
(c) the Rights Agent will be liable hereunder only for its own negligence,
bad faith or wilful misconduct;
(d) the Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Voting Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and will be deemed to have been made
by the Corporation only;
(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 Voting
Share certificate or Rights Certificate (except its countersignature
thereof); 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)) or any adjustment required under the
provisions of Section 2.3 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); 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 whether any Common Shares will, when
issued, be duly and validly authorized and issued as fully paid and
non-assessable;
(f) the Corporation agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement;
(g) the Rights Agent is hereby authorized and directed to accept
instructions in writing with respect to the performance of its duties
hereunder from any Person believed by the Rights Agent to be the
Chairman of the Board, President or Vice President, Treasurer,
Secretary or any Assistant Secretary of the Corporation and to apply
to such Persons for advice or instructions in connection with its
duties, and it shall not be liable for any action taken, omitted or
suffered by it in good faith in accordance with instructions of any
such Person;
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(h) the Rights Agent and any shareholder or stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in Common
Shares, Rights or other securities of the Corporation or become
pecuniarily interested in any transaction in which the Corporation may
be interested, or contract with or lend money to the Corporation or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Corporation or for any other
legal entity; and
(i) the Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Corporation
resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued
employment thereof.
4.4 Change of Rights Agent
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days notice (or such lesser notice as is acceptable to the
Corporation) in writing mailed to the Corporation and to each transfer agent of
Voting Shares by registered or certified mail, and to the holders of the Rights
in accordance with Section 5.9, all of which shall be at the Corporation's
expense. The Corporation may remove the Rights Agent upon 60 days notice in
writing, mailed to the Rights Agent and to each transfer agent of the Common
Shares by registered or certified mail, and to the holders of the Rights in
accordance with Section 5.9, all of which shall be at the Corporation's expense.
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 60 days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
any Rights (which holder shall, with such notice, submit such holder's Rights
Certificate for inspection by the Corporation), the holder may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent at the
Corporation's expense. Any successor Rights Agent, whether appointed by the
Corporation or by such a court, shall be a corporation incorporated under the
laws of Canada or a province thereof authorized to carry on the business of a
trust company. After appointment, the successor Rights Agent will be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall, upon payment in full of any outstanding amounts
owing by the Corporation to the Rights Agent under this Agreement, deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Corporation will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares, and mail
a notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this Section 4.4, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
<PAGE>
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ARTICLE 5 - MISCELLANEOUS
5.1 Redemption and Waiver
(a) The Board of Directors, acting in good faith, may at any time prior to
the occurrence of a Flip-In Event, with prior shareholder approval
given in the manner contemplated by Section 5.4(b), elect to redeem
all but not less than all of the then outstanding Rights at a
redemption price of $0.00001 per Right (appropriately adjusted in a
manner analogous to the applicable adjustment provided for in Section
2.3 in the event that an event of the type analogous to any of the
events described in Section 2.3 hereof shall have occurred (such
redemption price being herein referred to as the "Redemption Price")).
(b) The Board of Directors, acting in good faith, may determine, at any
time prior to the occurrence of a Flip-In Event, with prior
shareholder approval given in the manner contemplated by Section
5.4(b), to waive the application of Section 3.1 to such Flip-In Event
if such Flip-In Event would occur by reason of an acquisition of
Voting Shares otherwise than pursuant to a Take-over Bid made by means
of a take-over bid circular to all holders of record of Voting Shares.
(c) The Board of Directors, acting in good faith, may determine, at any
time prior to the occurrence of a Flip-In Event, to waive the
application of Section 3.1 to such Flip-In Event if such Flip-In Event
would occur by reason of a Take-over Bid made by means of a take-over
bid circular sent to all holders of record of Voting Shares; provided
that if the Board of Directors waive the application of Section 3.1 to
such a Flip-In Event, they shall be deemed to have waived the
application of Section 3.1 to any other Flip-In Event occurring by
reason of any Take-over Bid made by means of a take-over bid circular
to all holders of record of Voting Shares which is made prior to the
expiry of any Take-over Bid in respect of which the application of
Section 3.1 is, or is deemed to have been, waived under this
Subsection 5.1(c).
(d) The Board of Directors may, prior to the close of business on the
tenth day following the Voting Share Acquisition Time, waive the
application of Section 3.1 to any particular Flip-In Event, provided
that the Board of Directors have determined that the Acquiring Person
became an Acquiring Person by inadvertence and without any intent or
knowledge that he would become an Acquiring Person, provided that in
the event of such waiver for the purposes of this Agreement, such
particular Flip-In Event shall be deemed never to have occurred and
the Separation Time shall be deemed not to have occurred as a result
of such Person having inadvertently become an Acquiring Person. Any
such waiver pursuant to this Subsection 5.1(d) must be on the
condition that such Person, within 14 days after the foregoing
determination by the Board of Directors or such earlier or later date
as the Board of Directors may determine (the "Disposition Date"), will
reduce its Beneficial Ownership of Voting Shares such that the Person
is no longer an Acquiring Person. If the Person remains an Acquiring
Person at the close of business on the Disposition Date the
Disposition Date shall be deemed to be the date of occurrence of a
further Voting Share Acquisition Date and Section 3.1 shall apply
thereto.
(e) The Corporation shall give prompt written notice to the Rights Agent
of any waiver of the application of Section 3.1 made by the Board of
Directors under this Section 5.1.
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(f) The Board of Directors shall, without further formality, be deemed to
have elected to redeem the Rights at the Redemption Price on the date
that a Person who has made a Permitted Bid, a Competing Permitted Bid
or a Take-over Bid in respect of which the Board of Directors has
waived or is deemed to have waived, pursuant to Subsection 5.1(b) or
5.1(c), the application of Section 3.1, takes up and pays for Voting
Shares pursuant to the terms and conditions of the Permitted Bid,
Competing Permitted Bid or the Take-over Bid, as the case may be.
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(g) Where a Take-over Bid that is not a Permitted Bid is withdrawn or
otherwise terminated after the Separation Time has occurred and prior
to the occurrence of a Flip-In Event, the Board of Directors may elect
to redeem all the outstanding Rights at the Redemption Price. In such
event, all the provisions of this Agreement shall continue to apply as
if the Separation Time had not occurred and as if Rights Certificates
representing the number of Rights held by each holder of record of
Voting Shares as of the Separation Time had not been mailed to each
such holder and for all purposes of this Agreement the Separation Time
shall be deemed not to have occurred.
(h) If the Board of Directors elects or is deemed to have elected 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 will be to receive the
Redemption Price.
(i) Within 10 days after the Board of Directors elects or is deemed to
elect to redeem the Rights in accordance with the terms hereof, the
Corporation shall give notice of redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their
last address as they appear 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.
The Corporation may not redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set
forth in this Section 5.1, or other than in connection with the
purchase of Voting Shares prior to the Separation Time. If the
Redemption Price payable to any holder of Rights includes a fraction
of a cent, such Redemption Price shall be rounded to the nearest cent.
5.2 Expiration
No Person shall have any rights whatsoever pursuant to this Agreement or in
respect of any Right after the Expiration Time, except the Rights Agent as
specified in Subsection 4.1(a).
5.3 Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board of Directors to
reflect any adjustment or change in the number or kind or class of securities
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
5.4 Supplements and Amendments
(a) The Corporation may make, without the approval of the holders of
Rights or Voting Shares, any amendments to this Agreement (i) to
correct any clerical or typographical error or (ii) which are required
to maintain the validity and effectiveness of the Agreement as a
result of any change in applicable laws, rules or regulatory
requirements. Notwithstanding anything in this Section 5.4 to the
contrary, no amendment shall be
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made to the provisions of Article 4 except with the written
concurrence of the Rights Agent to such supplement or amendment.
(b) Subject to Subsection 5.4(a), the Corporation may, with the prior
consent of the holders of Voting Shares obtained as set forth below,
at any time before the Separation Time, amend, vary or rescind any of
the provisions of this Agreement and the Rights (whether or not such
action would materially adversely affect the interests of the holders
of Rights generally). Such consent shall be deemed to have been given
if provided by the holders of Voting Shares at a special meeting
called and held in compliance with applicable laws, rules and
regulatory requirements and the requirements in the articles and
by-laws of the Corporation. Subject to compliance with any
requirements imposed by the foregoing, consent shall be given if the
proposed amendment, variation or rescission is approved by the
affirmative vote of a majority of the votes cast by Independent
Shareholders represented in person or by proxy at the special meeting.
(c) The Corporation may, with the prior consent of the holders of Rights
obtained as set forth below, at any time after the Separation Time and
before the Expiration Time, amend, vary or rescind any of the
provisions of this Agreement and the Rights (whether or not such
action would materially adversely affect the interests of the holders
of Rights generally). Such consent shall be deemed to have been given
if provided by the holders of Rights at a special meeting of holders
of Rights called and held in compliance with applicable laws and
regulatory requirements and, to the extent possible, with the
requirements in the articles and by-laws of the Corporation applicable
to meetings of holders of Voting Shares, applied mutatis mutandis.
Subject to compliance with any requirements imposed by the foregoing,
consent shall be given if the proposed amendment, variation or
rescission is approved by the affirmative vote of a majority of the
votes cast by holders of Rights (other than holders of Rights whose
Rights have become null and void pursuant to Subsection 3.1(b)),
represented in person or by proxy at the special meeting.
(d) Any amendments made by the Corporation to this Agreement pursuant to
Subsection 5.4(a) which are required to maintain the validity and
effectiveness of this Agreement as a result of any change in any
applicable laws, rules or regulatory requirements shall:
(i) if made before the Separation Time, be submitted to the holders
of Common Shares of the Corporation at the next meeting of
shareholders and the shareholders may, by the majority referred
to in Subsection 5.4(b), confirm or reject such amendment; and
(ii) if made after the Separation Time, be submitted to the holders of
Rights at a meeting to be called for on a date not later than
immediately following the next meeting of shareholders of the
Corporation and the holders of Rights may, by resolution passed
by the majority referred to in Subsection 5.4(c), confirm or
reject such amendment.
Any such amendment shall be effective from the date of the resolution of the
Board of Directors adopting such amendment, until it is confirmed or rejected or
until it ceases to be effective (as described in the next sentence) and, where
such amendment is confirmed, it continues in effect in the form so confirmed. If
such amendment is rejected by the shareholders of the Corporation or the holders
of
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Rights, as required, then such amendment shall cease to be effective from and
after the termination of the meeting at which it was rejected or to which it
should have been but was not submitted or from and after the date of the meeting
of holders of Rights that should have been but was not held, and no subsequent
resolution of the Board of Directors to amend this Agreement to substantially
the same effect shall be effective until confirmed by the shareholders of the
Corporation or holders of Rights as the case may be.
5.5 Fractional Rights and Fractional Common Shares
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights and
no amount shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable.
(b) The Corporation shall not be required to issue fractions of Common
Shares or other securities upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares or
other securities. In lieu of issuing fractional Common Shares or other
securities, the Corporation shall, subject to the provisions of the
constating documents of the Corporation, pay to the registered holders
of Rights Certificates, at the time such Rights are exercised as
herein provided, an amount in cash equal to the fraction of the Market
Price of one Common Share or other security that the fraction of a
Common Share or other security that would otherwise be issuable upon
the exercise of such Right is of one whole Common Share or other
security at the date of such exercise.
5.6 Rights of Action
Subject to the terms of this Agreement, all rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective registered holders of the Rights. Any registered
holder of any Rights, without the consent of the Rights Agent or of the
registered 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 such holder's right to exercise such holder's Rights or
Rights to which such holder is entitled, in the manner provided in such holder's
Rights and in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
5.7 Regulatory Approvals
Any obligation of the Corporation or action or event contemplated by this
Agreement shall be subject to the receipt of any requisite approval or consent
from any governmental or regulatory authority having jurisdiction over the
Corporation, including without limitation any requisite approval of stock
exchanges on which the Voting Shares are listed for trading.
<PAGE>
-36-
5.8 Notice of Proposed Actions
In case the Corporation shall propose after the Separation Time and prior
to the Expiration Time:
(a) to waive the application of Section 3.1 to a particular Flip-In Event;
or
(b) 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, a notice of such proposed action, which shall
specify the date on which such Flip-In Event, liquidation, dissolution, or
winding up is to take place, and such notice shall be so given at least 10
Business Days prior to the date of taking of such proposed action by the
Corporation.
5.9 Notices
Notices or demands authorized or required by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights to or on the Corporation
shall be sufficiently given or made if delivered or sent by registered or
certified mail, postage prepaid, or sent by facsimile or by other similar means
of recorded electronic communication, charges prepaid and confirmed in writing,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Montreal Trust Company
Stock Transfer Services
7th Floor
1800 McGill College Avenue
Montreal, Quebec
H3A 3K9
Telephone: (514) 982-7000
Telecopier: (514) 982-7974
Attention: Manager of Stock Transfer
Any notices or demands authorized or required by this Agreement to be given
or made by the Corporation or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by registered or
certified mail, postage prepaid, or sent by facsimile or by other similar means
of recorded electronic communication, charges prepaid and confirmed in writing,
addressed (until another address is filed in writing with the Corporation) as
follows:
Abitibi-Consolidated Inc
1155, rue Metcalfe Street
Suite 800
Montreal, Quebec
H3B 5H2
Telephone: (514) 394-4656
Telecopier: (514) 394-3644
Attention: Managing Counsel
<PAGE>
-37-
Notices or demands authorized or required by this Agreement to be given or
made by the Corporation or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the Separation
Time, on the registry books of the Corporation for its Voting Shares. Any notice
which is mailed or sent in the manner herein provided shall be deemed given,
whether or not the holder receives the notice.
<PAGE>
-38-
Any notice given or made in accordance with this Section 5.9 shall be
deemed to have been given and to have been received on the day of delivery, if
so delivered, on the third Business Day (excluding each day during which there
exists any general interruption of postal service due to strike, lockout or
other cause) following the mailing thereof, if so mailed, and on the day of
telegraphing, telecopying or sending of the same by other means of recorded
electronic communication (provided such sending is during the normal business
hours of the addressee on a Business Day and if not, on the first Business Day
thereafter). Each of the Corporation and the Rights Agent may from time to time
change its address for notice to the other given in the manner aforesaid.
5.10 Declaration as to Non-Canadian 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 by the Corporation with the securities laws or comparable legislation
of a jurisdiction outside of Canada or the United States, the Board of
Directors, acting in good faith, shall take such actions as they may deem
appropriate to ensure that such compliance is not required, including, without
limitation, establishing procedures for the issuance to an appropriate Canadian
resident acting as a resident agent (a "Resident Agent") of Rights or securities
issuable on exercise of Rights, the holding thereof in trust for the Person
entitled thereto (but reserving such rights unto the Resident Agent or to the
Resident Agent and the Corporation, as the Corporation may determine in its
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 or the United
States, in which such issue or delivery would be unlawful without registration
of the relevant Persons or securities for such purposes.
5.11 Costs of Enforcement
The Corporation agrees that if the Corporation fails to fulfil any of its
obligations pursuant to this Agreement, then the Corporation will reimburse the
holder of any Rights for the costs and expenses (including legal fees) incurred
by such holder to enforce his rights pursuant thereto in any action, suit or
proceeding in which a court of competent jurisdiction in a final non-appealable
judgment has rendered judgment in favour of the holder.
5.12 Successors
All the covenants and provisions of this Agreement by or for the benefit of
the Corporation or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.
5.13 Benefits of this Agreement
Nothing in this Agreement shall be construed to give to any Person other
than the Corporation, the Rights Agent and the holders of the Rights any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Corporation, the Rights Agent
and the holders of the Rights.
<PAGE>
-39-
5.14 Governing Law
This Agreement and each Right issued hereunder shall be deemed to be a
contract made under the laws of the Province of Ontario and for all purposes
shall be governed by and construed in accordance with the laws of such province
applicable to contracts to be made and performed entirely within such Province.
5.15 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 decouleront soient
rediges en langue anglaise. The parties hereto have required that this Agreement
and all documents and notices related thereto and/or resulting therefrom be
drawn up in the English language.
5.16 Severability
If any section, clause, term or provision hereof or the application thereof
to any circumstance or any right hereunder shall, in any jurisdiction and to any
extent, be invalid or unenforceable such section, clause, term or provision or
such right shall be ineffective only as to such jurisdiction and to the extent
of such invalidity or unenforceability in such jurisdiction without invalidating
or rendering unenforceable or ineffective the remaining sections, clauses, terms
and provisions hereof or rights hereunder in such jurisdiction or the
application of such section, clause, term or provision or rights hereunder in
any other jurisdiction or to circumstances other than those as to which it is
specifically held invalid or unenforceable.
5.17 Expiry Date
This Agreement is effective and in full force and effect in accordance with
its terms from and after the Effective Date; provided this Agreement shall
expire and be of no further force or effect from and after the close of business
(the "Expiration Time") on the date which is the earlier of (i) six months from
the Effective Date provided that this Agreement has not then been approved by at
least a majority of the votes cast by the holders of all outstanding Voting
Shares at a meeting of the holders of Voting Shares called for the purposes of
considering this Agreement; and (ii) the date upon which the annual meeting of
the holders of Voting Shares is held in 2003. At the Expiration Time, all Rights
shall, without further formality, be cancelled, expire and be of no further
force or effect whatsoever.
5.18 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, acting 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.
5.19 Time of the Essence
Time shall be of the essence in this Agreement.
<PAGE>
-40-
5.20 Execution In Counterparts
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ABITIBI-CONSOLIDATED INC.
By: /s/ John W. Weaver
--------------------------------------
c/s
By: /s/ Jacques Vachon
--------------------------------------
MONTREAL TRUST COMPANY
By: /s/ Joe Chirico
--------------------------------------
c/s
By: /s/ Anna Pagliuca
--------------------------------------
<PAGE>
-41-
Exhibit A
ABITIBI-CONSOLIDATED INC.
SHAREHOLDER RIGHTS PLAN AGREEMENT
(Form of Rights Certificate)
Certificate No. _________ __________ Rights
THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER
RIGHTS PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION
3.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES OR TRANSFEREES OF AN ACQUIRING
PERSON OR CERTAIN RELATED PARTIES MAY BECOME VOID.
Rights Certificate
This certifies that_____________________________ or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement dated as of the 8th day of
November, 1999, as the same may be amended or supplemented from time to time
(the "Rights Agreement") between Abitibi-Consolidated Inc. (the "Corporation"),
a corporation amalgamated under the laws of Canada and Montreal Trust Company, a
trust company incorporated under the laws of Canada (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 (as such
term is defined in the Rights Agreement) and prior to the Expiration Time (as
such term is 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 with the Form of Election
to Exercise (in the form provided hereinafter) duly executed and submitted to
the Rights Agent at its principal office in the City of Toronto. The Exercise
Price shall be $80.00 per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date 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.
<PAGE>
-2-
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Rights Certificate may be redeemed by the Corporation at a redemption price of
$0.00001 per Right, subject to adjustment in certain events, under certain
circumstances at its option.
No fractional Common Share will be issued upon the exercise of any Rights
evidenced hereby but in lieu thereof a cash payment may 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 of
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 proper officers or upon
any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement) or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of two of the proper officers of
Abitibi-Consolidated Inc.
Date:_________________________
ABITIBI-CONSOLIDATED INC.
By:
---------------------------
By:
---------------------------
Countersigned:
MONTREAL TRUST COMPANY
By:
---------------------------
Authorized Signature
<PAGE>
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificates.)
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitutes and appoints
____________________________________ as attorney, to transfer the within Rights
on the books of the within-named Corporation, with full power of substitution.
Dated: ________________________
--------------------------------------
Signature Guaranteed: Signature
(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 recognized Canadian stock exchange in Canada,
a registered national securities exchange in the United States, a member of the
Transfer Association Medallion (STAMP) Program or a commercial bank or trust
company having an office or correspondent in Canada or the United States.
(To be completed if true)
The undersigned hereby represents, for the benefit of 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 an Affiliate or Associate thereof or by any Person acting
jointly or in concert with any of the foregoing (as defined in the Rights
Agreement).
Dated: ________________________
--------------------------------------
Signature
<PAGE>
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
TO: ABITIBI-CONSOLIDATED INC.
AND TO: MONTREAL TRUST COMPANY
The undersigned hereby irrevocably elects to exercise _______________________
whole Rights represented by the attached Rights Certificate to purchase the
Common Shares or other securities, if applicable, issuable upon the exercise of
such Rights and requests that certificates for such securities be issued in the
name of:
----------------------------------------------------------
(Name)
----------------------------------------------------------
(Address)
----------------------------------------------------------
(Social Insurance, Social Security 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)
----------------------------------------------------------
(Social Insurance, Social Security or Other Taxpayer
Identification Number)
Dated: ________________________
--------------------------------------
Signature Guaranteed: Signature
(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 recognized Canadian stock exchange in Canada,
a registered national securities exchange in the United States, a member of the
Transfer Association Medallion (STAMP) Program or a commercial bank or trust
company having an office or correspondent in Canada or the United States.
(To be completed if true)
<PAGE>
-2-
The undersigned hereby represents, for the benefit of 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 an Affiliate or Associate thereof or by any Person acting
jointly or in concert with any of the foregoing (as defined in the Rights
Agreement).
Dated: ________________________
--------------------------------------
Signature
<PAGE>
NOTICE
In the event the certification set forth above in the Forms of Assignment and
Election to Exercise is not completed, the Corporation may deem the Beneficial
Owner of the Rights evidenced by this Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof or a Person acting jointly or in
concert with any of the foregoing (as defined in the Rights Agreement). No
Rights Certificates shall be issued in exchange for a Rights Certificate owned
or deemed to have been owned by an Acquiring Person or an Affiliate or Associate
thereof.
