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FORM 8-A
SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
GULF CANADA RESOURCES LIMITED
(Exact name of registrant as
specified in its charter)
CANADA
(State of incorporation or organization)
98-0086499
(I.R.S. Employer Identification No.)
ONE NORWEST CENTER
1700 LINCOLN, SUITE 5000
DENVER, COLORADO 80203-4524
(Address of principal executive
offices, including zip code)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
Ordinary Share Purchase Rights New York Stock Exchange
If this Form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [X]
If this Form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. [ ]
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
(Title of class)
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Item 1. Description of Registrant's Securities to be Registered
THE RIGHTS
On February 19, 1998, the Board of Directors of Gulf Canada Resources
Limited (the "Company"), authorized the issuance of one right (a "Right") with
respect to each outstanding ordinary share, no par value ("Ordinary Shares"),
of the Company as of the close of business on March 12, 1998. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") dated as of February 19, 1998, between the Company and Montreal
Trust Company of Canada (the "Rights Agent"). Capitalized terms not otherwise
defined herein are as defined in the Rights Agreement.
Each Right entitles the registered holder thereof to purchase from the
Company on the occurrence of certain events, one Ordinary Share at the price of
$75 per share, subject to adjustments (the "Exercise Price"). However, if a
Flip-in Event occurs, each Right would then entitle the registered holder to
receive, upon payment of the Exercise Price, that number of Ordinary Shares
that have a market value at the date of that occurrence equal to twice the
Exercise Price. The Rights are not exercisable until the Separation Time. The
Rights expire on the termination of the annual meeting of shareholders of the
Company in the year 2001 unless earlier terminated by the Board.
OVERVIEW OF THE RIGHTS PLAN
The Rights Plan utilizes the mechanism of the Permitted Bid to ensure
that a person seeking control of the Company allows shareholders and the Board
sufficient time to evaluate the bid. The purpose of the Permitted Bid is to
allow a potential bidder to avoid the dilutive features of the Rights Plan by
making a bid in conformity with the conditions specified in the Permitted Bid
provisions. If a person makes a Take-over Bid that is a Permitted Bid, the
Rights Plan will not affect the transaction in any respect.
The Rights Plan should not deter a person seeking to acquire control
of the Company if that person is prepared to make a Take-over Bid pursuant to
the Permitted Bid requirements or is prepared to negotiate with the Board of
Directors. Otherwise, a person will likely find it impractical to acquire 20%
or more of the outstanding Ordinary Shares because the Rights Plan will
substantially dilute the holdings of a person or group that seeks to acquire
such an interest other than by means of a Permitted Bid or on terms approved by
the Board of Directors. When a person or group or their transferees become an
Acquiring Person, the Rights Beneficially Owned by those persons become void
thereby permitting their holdings to be diluted. The possibility of such
dilution is intended to encourage such a person to make a Permitted Bid or to
seek to negotiate with the Board the terms of an offer which is fair to all
shareholders.
TRADING OF RIGHTS
Until the Separation Time, the Rights will be evidenced only by
outstanding Common Share certificates. The Rights Plan provides that, until
the Separation Time, the Rights will be transferred with and only with the
associated Ordinary Shares. Until the Separation Time, or earlier termination
or expiration of the Rights, each new share certificate issued after the Record
Time, upon transfer of existing Ordinary Shares or the issuance of additional
Ordinary Shares, will display a legend incorporating the terms of the Rights
Agreement by reference. As soon as practicable following the Separation Time,
separate certificates evidencing the Rights (the
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"Rights Certificates") will be mailed to the holders of record of Ordinary
Shares as of the close of business at the Separation Time, and thereafter the
Rights Certificates alone will evidence the Rights.
SEPARATION TIME
The Rights will separate and trade apart from the Ordinary Shares
after the Separation Time. Separation Time means the close of business on the
tenth business day after the earlier of (i) the first date (the "Stock
Acquisition Date") of public announcement of facts indicating that a person has
become an Acquiring Person, (ii) the commencement of, or first public
announcement of the intent of any person, other then the Company or any
corporation controlled by the Company, to commence a Take-over Bid (other than
a Permitted Bid or a Competing Permitted Bid or a Take-over Bid in respect of
which the Board of Directors has determined to waive the application of the
Rights Plan) or (iii) the date upon which a Permitted Bid ceases to be a
Permitted Bid or, in any circumstances, such earlier or later date as may be
determined by the Board, acting in good faith.
ACQUIRING PERSON AND FLIP-IN EVENT
An Acquiring Person is, generally, a person who beneficially owns 20%
or more of the outstanding Ordinary Shares of the Company. Holders of 20% or
more of the outstanding Ordinary Shares as at the date of the Rights Agreement
are grandfathered provided that such person shall not thereafter acquire an
additional 1.0% of the outstanding Ordinary Shares from time to time except
pursuant to certain permitted exceptions. The Rights Agreement provides
certain other exceptions to that rule, including a person who acquires 20% or
more of the outstanding Ordinary Shares through a Permitted Bid Acquisition, an
Exempt Acquisition or in its capacity as an Investment Manager, Trust Company
or Plan Trustee, provided in these latter instances that the person is not
making or proposing to make a Take-over Bid. The term Acquiring Person does
not include the Company or any corporation controlled by the Company. If a
person becomes an Acquiring Person (a "Flip-in Event"), each Right will
generally convert into the right to purchase from the Company, upon exercise, a
number of Ordinary Shares having an aggregate Market Price on the date of the
Flip-in Event equal to twice the Exercise Price for an amount in cash equal to
the Exercise Price. Holders of Rights who do not exercise their Rights upon
the occurrence of a Flip-in Event may therefore suffer substantial dilution.
PERMITTED BID
A Flip-in Event does not occur if a Take-over Bid is a Permitted Bid.
A Permitted Bid is a Take-over Bid, made by means of a take-over bid circular,
which also:
(i) is made to all registered holders of Ordinary Shares
(other than the Offeror);
(ii) contains, and the take-up and payment for Ordinary Shares
tendered or deposited is subject to, an irrevocable and
unqualified condition that no Ordinary 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 45 days
following the date of the Takeover Bid;
(iii) contains irrevocable and unqualified provisions that:
(a) unless the Take-over Bid is withdrawn, all Ordinary
Shares may be
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deposited pursuant to the Take-over Bid at any time prior
to the close of business on the date of first take-up or
payment for Ordinary Shares under the bid and that all
Ordinary Shares deposited pursuant to the Take-over Bid
may be withdrawn at any time prior to the close of
business on such date;
(b) more than 50% of the outstanding Ordinary Shares held by
persons, other than the Offeror, its Affiliates or
Associates and persons acting jointly or in concert with
the Offeror (the "Independent Shareholders"), determined
as at the date of first take-up or payment for Ordinary
Shares under the Take-over Bid, must be deposited to the
Take-over Bid and not withdrawn at the close of business
on the date of first take-up or payment for Ordinary
Shares; and
(c) in the event that more than 50% of the then outstanding
Ordinary Shares held by Independent Shareholders shall
have been deposited to the Take-over Bid, the Offeror will
make public announcement of that fact and the Take-over
Bid will be extended on the same terms for a period of
not less than 10 business days from the date of such
public announcement.
The Rights Plan also provides for a "Competing Permitted Bid", which
is a Take-over Bid made during the currency of another Permitted Bid that
satisfies all of the requirements of a Permitted Bid except that, provided it
is outstanding for a minimum period of 21 days, it may expire on the same date
as the initial Permitted Bid.
TAKE-OVER BID
A Take-over Bid is defined in the Rights Plan as an offer to acquire
Ordinary Shares or securities convertible into Ordinary Shares, where the
Ordinary Shares subject to the offer to acquire, together with the Ordinary
Shares into which the securities subject to the offer to acquire are
convertible, and the Offeror's Securities, constitute in the aggregate 20% or
more of the outstanding Ordinary Shares at the date of the offer.
WAIVER AND REDEMPTION
The Board of Directors of the Company may, prior to a Flip-in Event,
waive the dilutive effects of the Rights Plan in respect of a particular
Flip-in Event that would result from a Takeover Bid made by way of a take-over
bid circular to all holders of Ordinary Shares. In such case, such waiver
would be deemed also to be waiver, on the same terms and conditions, in respect
of any other Flip-in Event which occurs by reason of another Take-over Bid made
prior to the expiry of the Take-over Bid for which the initial waiver was
given. The Board of Directors of the Company may also waive the Rights Plan in
respect of a particular Flip-in Event that has occurred through inadvertence,
provided that the Acquiring Person that inadvertently triggered such Flip-in
Event reduces its beneficial holdings to less than 20% of the outstanding
Ordinary Shares. Subject to the prior consent of the holders of Ordinary
Shares or of Rights, at any time prior to the occurrence of a Flip-in Event,
the Board of Directors may at its option redeem all, but not less than all, of
the outstanding Rights at a nominal value.
REGISTRATION OF ORDINARY SHARES
The offer and sale of the Ordinary Shares issuable upon the exercise
of the Rights will be
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registered with the Securities and Exchange Commission, but such registration
will not become effective until the Rights become exercisable. The Rights will
not be transferable separately from the Ordinary Shares until the Separation
Date.
As of March 2, 1998, there were 348,795,944 Ordinary Shares issued and
outstanding and an aggregate of an additional 25,970,800 Ordinary Shares
reserved for issuance under the Company's stock option plans. One Right will
be distributed to holders of Ordinary Shares for each Ordinary Share owned of
recorded by them on March 12, 1998 or issued to holders thereafter. One Right
will be issued with respect to each Ordinary Share that shall become
outstanding prior to the Separation Time.
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company in a manner or on terms not in accordance with the Rights Agreement.
The Rights, however, should not deter any prospective offeror willing to make a
Permitted Bid in accordance with the terms of the Rights Agreement or to
otherwise negotiate in good faith with the Board of Directors, nor should the
Rights interfere with any merger or business combination approved by the Board
of Directors of the Company prior to an Acquiring Person's acquisition of 20% or
more of the Ordinary Shares. In addition, Canadian securities regulatory
authorities have stated that they will not permit rights plans to be used to
frustrate take-over bids, although they have not determined the period of time
during which the plans may be used to delay a take-over bid.
The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement.
ITEM 2. EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
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<S> <C>
1 Rights Agreement dated as of February 19, 1998
between the Company and Montreal Trust Company if
Canada, as Rights Agent, which includes as Exhibit A
thereto, the form of Certificate of Designations,
Preferences and Rights, as Exhibit B thereto the
form of Rights Certificate and as Exhibit C thereto
the Summary of Rights.
</TABLE>
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Date: March 9, 1998 GULF CANADA RESOURCES LIMITED
By: /s/ Richard Auchinleck
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Name: Richard Auchinleck
Title: President and Chief
Executive Officer
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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1 Rights Agreement dated as of February 19,
1998 between the Company and Montreal Trust
Company of Canada, as Rights Agent, which
includes as Exhibit A thereto, the form of
Certificate of Designations, Preferences and
Rights, as Exhibit B thereto the form of
Rights Certificate and as Exhibit C thereto
the Summary of Rights.
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EXHIBIT 1
SHAREHOLDER RIGHTS PLAN AGREEMENT
DATED AS OF FEBRUARY 19, 1998
BETWEEN
GULF CANADA RESOURCES LIMITED
and
MONTREAL TRUST COMPANY OF CANADA
as Rights Agent
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE 1
CERTAIN DEFINITIONS 2
Certain Definitions 2
Currency 11
Acting Jointly or in Concert 11
Control 11
ARTICLE 2
THE RIGHTS 12
Legend on Ordinary Share Certificates 12
Initial Exercise Price; Exercise of Rights; Detachment of Rights 12
Adjustments to Exercise Price; Number of Rights 14
Date on Which Exercise is Effective 17
Execution, Authentication, Delivery and Dating of Rights Certificates 17
Registration, Registration of Transfer and Exchange 18
Mutilated, Destroyed, Lost and Stolen Rights Certificates 18
Persons Deemed Owners 19
Delivery and Cancellation of Certificates 19
Agreement of Rights Holders 19
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
Flip-in Event 20
ARTICLE 4
THE RIGHTS AGENT
General 22
Merger, Amalgamation or Consolidation or Change of Name of Rights Agent 22
Duties of Rights Agent 24
Change of Rights Agent 25
ARTICLE 5
MISCELLANEOUS
Redemption and Termination 26
Expiration 28
Issuance of New Rights Certificates 28
Supplements and Amendments 29
Fractional Rights and Fractional Shares 30
Rights of Action 30
Holder of Rights Not Deemed a Shareholder 30
Notice of Proposed Actions 31
Notices 31
Costs of Enforcement 32
Successors 33
Benefits of this Agreement 33
Descriptive Headings 33
Governing Law 33
Language 33
Counterparts 33
Severability 33
Effective Date 33
Regulatory Approvals 34
Determinations and Actions by the Board of Directors 34
</TABLE>
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SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT made effective as of and from the 19th day of February,
1998.
BETWEEN:
GULF CANADA RESOURCES LIMITED, a body corporate organized
under the laws of Canada (hereinafter referred to as the
"Corporation"),
OF THE FIRST PART,
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MONTREAL TRUST COMPANY OF CANADA, a trust company incorporated
under the laws of Canada (hereinafter referred to as the
"Rights Agent")
OF THE SECOND PART.
WHEREAS the Board of Directors of the Corporation has determined that
it is advisable to adopt a shareholder rights plan (the "Rights Plan") to
ensure, to the extent possible, that all shareholders of the Corporation are
treated fairly in connection with any takeover offer for the Corporation;
AND WHEREAS, in order to implement the Rights Plan, the Board of
Directors of the Corporation has:
(a) authorized a distribution of one right (a "Right") in respect
of each Ordinary Share as hereinafter defined) outstanding at
the close of business on March 12, 1998 (the "Record Time"),
such distribution to be made to shareholders of record at the
Record Time; and
(b) authorized the issuance of one Right in respect of each
Ordinary Share issued after the Record Time and prior to
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 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;
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NOW THEREFORE in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
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 Ordinary Shares of the
Corporation; provided, however, that the term "Acquiring
Person" shall not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or
more of the outstanding Ordinary Shares of the
Corporation as a result of any one or a combination
of:
(A) the acquisition and cancellation or the
redemption by the Corporation of Ordinary
Shares of the Corporation which, by reducing
the number of Ordinary Shares outstanding,
increases the proportionate number of
Ordinary Shares Beneficially Owned by such
Person to 20% or more of the Ordinary Shares
of the Corporation then outstanding ("Share
Acquisitions or Redemptions);
(B) share acquisitions made pursuant to a
Permitted Bid ("Permitted Bid
Acquisitions");
(C) share acquisitions (1) in respect of which
the Board of Directors of the Corporation
has waived the application of Section 3.1
pursuant to Sections 5.1(b), (c) or (d); or
(2) which were made on or prior to the date
of this Agreement; or (3) which were made
pursuant to dividend reinvestment plan of
the Corporation; or (4) pursuant to the
receipt or exercise of rights issued by the
Corporation to all the holders of the
Ordinary Shares to subscribe for or purchase
Ordinary Shares or Convertible Securities,
provided that such rights are acquired
directly from the Corporation and not from
any other person; or (5) pursuant to a
distribution by the Corporation of Ordinary
Shares or Convertible Securities made
pursuant to a prospectus or by way of a
private placement by the Corporation or upon
the exercise by an individual employee of
stock options granted under a stock option
plan of the Corporation or rights to
purchase securities granted under a share
purchase plan of the Corporation, provided
that such Person does not become the
Beneficial Owner of more than 25% of the
Ordinary Shares outstanding immediately
prior to the distribution, and in making
this determination the Ordinary Shares to be
issued to such Person in the distribution
shall be deemed to be held by such Person
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but shall not be included in the aggregate
number of outstanding Ordinary Shares
immediately prior to the distribution
("EXEMPT ACQUISITIONS");
(D) the acquisition of Ordinary Shares upon the
exercise of Convertible Securities received
by such Person pursuant to a Permitted Bid
Acquisition, Exempt Acquisition or a Pro
Rata Acquisition (as defined below)
("CONVERTIBLE SECURITY ACQUISITIONS"); or
(E) acquisitions as a result of a stock
dividend, a stock split or other event
pursuant to which such Person receives or
acquires Ordinary Shares or Convertible
Securities on the same pro rata basis as all
other holders of Ordinary Shares of the same
class ("PRO RATA ACQUISITIONS");
provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the Ordinary Shares of the
Corporation then outstanding by reason of any one or a
combination of (i) Share Acquisitions or Redemptions or (ii)
Permitted Bid Acquisitions or (iii) Exempt Acquisitions or
(iv) Convertible Security Acquisitions or (v) Pro Rata
Acquisitions and, after such Share Acquisitions or Redemptions
or Permitted Bid Acquisitions or Exempt Acquisitions or
Convertible Security Acquisitions or Pro Rata Acquisitions,
such Person becomes the Beneficial Owner of more than an
additional 1.00% of the number of Ordinary Shares of the
Corporation outstanding other than pursuant to any one or
combination of Share Acquisitions or Redemptions, Permitted
Bid Acquisitions, Exempt Acquisitions, Convertible Security
Acquisitions or Pro Rata Acquisitions, then as of such date
such Person shall become an "Acquiring Person";
(iii) a Grandfathered Person provided, however, that if
such Person shall after the Record Time become the
Beneficial Owner of more than an additional 1.00% of
the number of Ordinary Shares of the Corporation
outstanding other than pursuant to Share Acquisitions
or Redemptions, Permitted Bid Acquisitions, Exempt
Acquisitions, Convertible Security Acquisitions or
Pro Rata Acquisitions, then as of the date of any
such acquisition such Person shall become an
"Acquiring Person";
(iv) for a period of 10 days after the Disqualification
Date, any Person who becomes the Beneficial Owner of
20% or more of the outstanding Ordinary Shares as a
result of such Person becoming disqualified from
relying on clause 1.1(d)(B) solely because such
Person makes or announces an intention to make a
Takeover Bid, either alone or by acting jointly or in
concert with any other Person. For the purposes of
this definition, "DISQUALIFICATION DATE" means the
first date of public announcement that any Person is
making or intends to make a Takeover Bid; or
(v) an underwriter or member of a banking or selling
group acting in such capacity that becomes the
Beneficial Owner of 20% or more of the Ordinary
Shares in connection with a bona fide distribution to
the public of securities.
(b) "AFFILIATE", used to indicate a relationship with a specified
Person, shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, such specified Person.
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(c) "ASSOCIATE" of a specified Person shall mean any Person to
whom such specified Person is married or with whom such
specified Person is living in a conjugal relationship outside
marriage, or any relative of such specified Person, said
spouse or other Person who has the same home as such specified
Person.
(d) A Person shall be deemed the "BENEFICIAL OWNER", and to have
"BENEFICIAL OWNERSHIP", of, and to "BENEFICIALLY OWN":
(i) any securities as to which such Person or any of
such Person's Affiliates or Associates is the owner
at law or in equity;
(ii) any securities as to which such Person or any of
such Person's Affiliates or Associates has the right
to acquire (A) upon the exercise of any Convertible
Securities, or (B) pursuant to any agreement,
arrangement or understanding whether such right is
exercisable immediately or within a period of 60 days
thereafter and whether or not on condition or the
happening of any contingency or otherwise (other than
customary agreements with and between underwriters
and banking group or selling group members with
respect to a public offering of securities or
pursuant to a bona fide pledge of securities); and
(iii) any securities which are Beneficially Owned within
the meaning of clauses 1.1(d)(i) or (ii) above 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 solely because:
(A) such security has been deposited or tendered
pursuant to a tender or exchange offer or
Takeover 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 earliest
time at which any such tendered security is
accepted unconditionally for payment or
exchange or is taken up and paid for; or
(B) such Person, any of such Person's
Affiliates or Associates or any other Person
acting jointly or in concert with such
Person, holds such security provided that
(1) the ordinary business of any such Person
(the "INVESTMENT MANAGER") includes the
management of investment funds for others
and such security is held by the Investment
Manager in the ordinary course of such
business in the performance of such
Investment Manager's duties 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 holds such security in the
ordinary course of such duties for the
estates of deceased or incompetent Persons
or for such other accounts, or (3) such
Person (the "PLAN TRUSTEE") is the
administrator
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or trustee of one or more pension funds or
plans (each a "PLAN") registered under
applicable laws and holds such security for
the purposes of its activity as such, or (4)
such Person is a Plan or is a Person
established by statute (the "STATUTORY
BODY") for purposes that include, and the
ordinary business or activity of such Person
includes the management of investment funds
for employee benefit plans, pension plans,
insurance plans (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 then making a Takeover Bid or has not
announced a current intention to make a
Takeover Bid, other than an Offer to Acquire
Ordinary Shares or other securities pursuant
to a distribution by the Corporation or by
means of ordinary market transactions
(including pre-arranged trades entered into
in the ordinary course of business of such
Person) executed through the facilities of a
stock exchange or organized over-the-counter
market, alone or by acting jointly or in
concert with any other Person; or
(C) such Person is a client of or has an
account with the same Investment Manager as
another Person on whose account the
Investment Manager holds such security, or
such Person is a client of or has an account
with the same Trust Company as another
Person on whose account the Trust Company
holds such security, or such Person is a
Plan and has a Plan Trustee who is also a
Plan Trustee for another Plan on whose
account the Plan Trustee holds such
security; or
(D) such Person (i) is a client of an Investment
Manager and such security is owned at law or
in equity by the Investment Manager, or (ii)
has an account with a Trust Company and such
security is owned at law or in equity by the
Trust Company, or (iii) is a Plan and such
security is owned at law or in equity by the
Plan Trustee; or
(E) such person is the registered holder of
securities as a result of carrying on the
business of, or acting as a nominee of, a
securities depositary.
For purposes of this Agreement, the percentage of Ordinary
Shares Beneficially Owned by any Person shall be and be deemed
to be the product determined by the formula:
100 x A/B
Where:
A = the number of votes for the election of all directors
generally attaching to the Ordinary Shares
Beneficially Owned by such Person; and
B = the number of votes for the election of all directors
generally attaching to all outstanding Ordinary
Shares.
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For the purposes of the foregoing formula, where any person is
deemed to Beneficially Own unissued Ordinary Shares which may
be acquired pursuant to Convertible Securities, such Ordinary
Shares shall be deemed to be outstanding for the purpose of
calculating the percentage of Ordinary Shares Beneficially
Owned by such Person in both the numerator and the
denominator, but no other unissued Ordinary Shares which may
be acquired pursuant to any other outstanding Convertible
Securities held by other Persons shall, for the purposes of
that calculation, be deemed to be outstanding.
(e) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day that is treated as a holiday at the
Corporation's principal executive offices in Calgary, Canada.
(f) "CANADA BUSINESS CORPORATIONS ACT" shall mean the Canada
Business Corporations Act, R.S.C. 1985, c. C-44, as amended,
and the regulations thereunder, and any comparable or
successor laws or regulations thereto.
(g) "CANADIAN-U.S. EXCHANGE RATE" shall mean on any date the
inverse of the U.S.-Canadian Exchange Rate.
(h) "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed
in United States dollars shall mean on any day the Canadian
dollar equivalent of such amount determined by reference to
the Canadian-U.S. Exchange Rate on such date.
(i) "CLOSE OF BUSINESS" on any given date shall mean the time on
such date (or, if such date is not a Business Day, the time on
the next succeeding Business Day) at which the office of the
transfer agent for the Ordinary Shares in the City of Calgary
(or, after the Separation Time, the offices of the Rights
Agent in the City of Calgary) becomes closed to the public.
(j) "COMPETING PERMITTED BID" means a Takeover 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, and the take-up and payment for securities
tendered or deposited is subject to, an irrevocable
and unqualified condition that no Ordinary Shares
will be taken up or paid for pursuant to the Takeover
Bid prior to the close of business on a date that is
no earlier than the later of (A) the 60th day after
the date of the initial Permitted Bid with which it
competes and (B) 21 days after the date of the
Take-over Bid constituting the Competing Permitted
Bid.
(k) "CONVERTIBLE SECURITIES" means at any time:
(i) any right (contractual or otherwise and regardless of
whether such right constitutes a security) to acquire
Ordinary Shares from the Corporation; and
(ii) any securities issued by the Corporation from time to
time (other than the Rights) carrying any exercise,
conversion or exchange right;
<PAGE> 9
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which is then exercisable or exercisable within a period of 60
days from that time pursuant to which the holder thereof may
acquire Ordinary Shares or other securities which are
convertible into or exercisable or exchangeable for Ordinary
Shares (in each case, whether 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).
(l) "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 and until adjustment thereof in
accordance with the terms hereof, the Exercise Price shall
equal $75.
(m) "EXPIRATION TIME" shall mean the earlier of:
(i) the Termination Time, and
(ii) the termination of the annual meeting of the
shareholders of the Corporation in the year 2001.
(n) A "FLIP-IN EVENT" shall mean a transaction occurring
subsequent to the date of this Agreement as a result of which
any Person shall become an Acquiring Person.
(o) "GRANDFATHERED PERSON" means any Person who is the Beneficial
Owner of 20% or more of the outstanding Ordinary Shares of the
Corporation at the Record Time.
(p) "INDEPENDENT SHAREHOLDERS" shall mean holders of Ordinary
Shares of the Corporation excluding (i) any Acquiring Person;
or (ii) any Person that is making or has announced a current
intention to make a Takeover Bid for Ordinary Shares of the
Corporation (including a Permitted Bid and a Competing
Permitted Bid); or (iii) any Affiliate or Associate of such
Acquiring Person or Persons referred to in clause (ii); or
(iv) any Person acting jointly or in concert with such
Acquiring Person or a Person referred to in clause (ii); or
(v) a Person who is a trustee of any employee benefit plan,
share purchase plan, deferred profit sharing plan or any
similar plan or trust for the benefit of employees of the
Corporation or a Subsidiary of the Corporation, unless the
beneficiaries of the plan or trust direct the manner in which
the Ordinary Shares are to be voted or direct whether the
Ordinary Shares are to be tendered to a Takeover Bid.
(q) "MARKET PRICE" per security of any securities on any date of
determination shall mean the average of the daily Closing
Prices Per Security of such securities (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 price used to determine the Closing
Price Per Security on any Trading Day not to be fully
comparable with the price used to determine the Closing Price
Per Security on such date of determination or, if the date of
determination is not a Trading Day, on the immediately
preceding Trading Day, each such price so used shall be
appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 hereof in order to make
it fully comparable with the price per security used to
determine the Closing Price Per Security on such date of
determination or, if the date of determination is not a
Trading Day, on the
<PAGE> 10
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immediately preceding Trading Day. The "CLOSING PRICE PER
SECURITY" 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 securities as reported by the
principal Canadian stock exchange (as determined by
the Board of Directors) on which such securities are
listed or admitted to trading, or if for any reason
neither such prices is available on such day or the
securities are not listed or admitted to trading on a
Canadian stock exchange, the closing board lot sale
price or, if such price is not available, the average
of the closing bid and asked prices, for such
securities as reported by such other securities
exchange on which such securities are listed or
admitted for trading;
(ii) if, for any reason, none of such prices is
available on such date or the securities are not
listed or admitted to trading on a Canadian stock
exchange or other securities exchange, the last sale
price, or in case no sale takes place on such date,
the average of the high bid and low asked prices for
such securities in the over-the-counter market, as
quoted by any reporting system then in use (as
selected by the Board of Directors); or
(iii) if the securities are not listed or admitted to
trading as contemplated in clause 1.1(q)(i) or (ii),
the average of the closing bid and asked prices as
furnished by a professional market maker making a
market in the securities selected by the Board of
Directors of the Corporation;
provided, however, that if on any such date the Closing Price
Per Security cannot be determined in accordance with the
foregoing, the Closing Price Per Security of such securities
on such date shall mean the fair value per share of such
securities on such date as determined in good faith by an
internationally recognized investment dealer or investment
banker with respect to the fair value per share of such
securities. The Market Price shall be expressed in Canadian
dollars and, if initially determined in respect of any day
forming part of the 20 consecutive Trading Day period in
question in United States dollars, such amount shall be
translated into Canadian dollars at the Canadian Dollar
Equivalent thereof.
(r) "1933 SECURITIES ACT" shall mean the Securities Act of 1933 of
the United States, as amended, and the rules and regulations
thereunder, and any comparable or successor laws or
regulations thereto.
(s) "1934 EXCHANGE ACT" shall mean the Securities Exchange Act of
1934 of the United States, as amended, and the rules and
regulations thereunder, and any comparable or successor laws
or regulations thereto.
(t) "OFFER TO ACQUIRE" shall include:
(i) an offer to purchase, or a solicitation of an offer
to sell; and
(ii) an acceptance of an offer to sell, 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.
<PAGE> 11
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(u) "OFFEROR'S SECURITIES" means Ordinary Shares Beneficially
Owned on the date of an Offer to Acquire by any Person who is
making a Takeover Bid and "OFFEROR" means a Person who has
announced a current intention to make or is making a Takeover
Bid.
(v) "ORDINARY SHARES OF THE CORPORATION" and "ORDINARY SHARES"
shall mean the Ordinary Shares in the capital stock of the
Corporation.
(w) "PERMITTED BID" means a Takeover Bid made by a Person by means
of a Takeover Bid circular and which also complies with the
following additional provisions:
(i) the Takeover Bid is made for all of the Ordinary
Shares to all holders of record of Ordinary Shares
wherever resident as registered on the books of the
Corporation, other than the Offeror;
(ii) the Takeover Bid shall contain, and the provisions
for the take-up and payment for Ordinary Shares
tendered or deposited thereunder shall be subject to,
an irrevocable and unqualified condition that no
Ordinary Shares shall be taken up or paid for
pursuant to the Takeover Bid prior to the close of
business on a date which is not less than 60 days
following the date of the Takeover Bid;
(iii) the Takeover Bid shall contain irrevocable and
unqualified provisions that, unless the Takeover Bid
is withdrawn, Ordinary Shares may be deposited
pursuant to the Takeover Bid at any time prior to the
close of business on the date of first take-up or
payment for Ordinary Shares and that all Ordinary
Shares deposited pursuant to the Takeover Bid may be
withdrawn at any time prior to the close of business
on such date;
(iv) the Takeover Bid shall contain an irrevocable and
unqualified condition that more than 50% of the
outstanding Ordinary Shares held by Independent
Shareholders, determined as at the date of first
take-up or payment for Ordinary Shares under the
Takeover Bid, must be deposited to the Takeover Bid
and not withdrawn at the close of business on the
date of first take-up or payment for Ordinary Shares;
and
(v) the Takeover Bid shall contain an irrevocable and
unqualified provision that in the event that more
than 50% of the then outstanding Ordinary Shares held
by Independent Shareholders shall have been deposited
to the Takeover Bid as at the date of first take-up
or payment for Ordinary Shares under the Take-over
Bid, the Offeror will make a public announcement of
that fact and the Takeover Bid will remain open for
deposits and tenders of Ordinary Shares for not less
than 10 Business Days from the date of such public
announcement;
provided that if a Takeover Bid constitutes a Competing
Permitted Bid, the term "Permitted Bid" shall also mean the
Competing Permitted Bid.
(x) "PERSON" shall mean any individual, firm, partnership,
association, trust, trustee, personal representative, body
corporate, corporation, unincorporated organization, syndicate
or other entity.
<PAGE> 12
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(y) "RECORD TIME" shall mean the close of business on March 12,
1998.
(z) "SECURITIES ACT" shall mean the Securities Act, S.A. 1981, c.
S-6.1, as amended, and the rules and regulations thereunder,
and any comparable or successor laws, rules or regulations
thereto.
(aa) "SEPARATION TIME" shall mean, subject to Section 5.1(d), the
close of business on the tenth Business Day after the earlier
of:
(i) the Stock Acquisition Date;
(ii) the date of the commencement of, or first public
announcement of the intent of any Person (other than
the Corporation or any Subsidiary of the Corporation)
to commence a Takeover Bid (other than a Takeover
Bid which is a Permitted Bid), provided that, if any
Takeover Bid referred to in this clause (ii) expires,
is cancelled, terminated or otherwise withdrawn prior
to the Separation Time, such Takeover Bid shall be
deemed, for purposes of this Section 1.1(aa), never
to have been made; and
(iii) the date upon which a Permitted Bid ceases to be a
Permitted Bid;
or such later date as may be determined by the Board of
Directors of the Corporation acting in good faith provided
that, if the foregoing results in the Separation Time being
prior to the Record Time, the Separation Time shall be the
Record Time.
(ab) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to
Section 141 of the Securities Act or Section 13(d) under the
1934 Exchange Act) by the Corporation or an Acquiring Person
of facts indicating that a Person has become an Acquiring
Person.
(ac) "SUBSIDIARY" of any specified Person shall mean any
corporation or other entity controlled by such specified
Person.
(ad) "TAKEOVER BID" means an Offer to Acquire Ordinary Shares or
securities convertible into Ordinary Shares, where the
Ordinary Shares subject to the Offer to Acquire, together with
the Ordinary Shares into which the securities subject to the
Offer to Acquire are convertible, and the Offeror's
Securities, constitute in the aggregate 20% or more of the
outstanding Ordinary Shares at the date of the Offer to
Acquire.
(ae) "TERMINATION TIME" shall mean the time at which the right to
exercise Rights shall terminate pursuant to Section 5.1 or
5.18 hereof.
(af) "TRADING DAY", when used with respect to any securities, shall
mean a day on which the principal 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 securities exchange, a
Business Day.
<PAGE> 13
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(ag) "U.S.-CANADIAN EXCHANGE RATE" shall mean on any date:
(iv) if on such date the Bank of Canada sets an average
noon spot rate of exchange with a conversion of one
United States dollar into Canadian dollars, such
rate;
(v) in any other case, the rate for such date for the
conversion of one United States dollar into Canadian
dollars which is calculated in the manner which shall
be determined by the Board of Directors from time to
time acting in good faith.
(ah) "U.S. DOLLAR EQUIVALENT" of any amount which is expressed in
Canadian dollars shall mean on any day the United States
dollar equivalent of such amount determined by reference to
the U.S.-Canadian Exchange Rate on such date.
1.2 CURRENCY
All sums of money which are referred to in this Agreement are expressed
in lawful money of Canada.
1.3 ACTING JOINTLY OR IN CONCERT
For purposes of this Agreement, it is a question of fact whether a
person is acting jointly or in concert with another Person and, without limiting
the generality of the foregoing, a Person shall be deemed to be acting jointly
or in concert with another Person if such Person has any agreement, arrangement
or understanding (whether formal or informal and whether or not in writing) with
such other Person for the purpose of acquiring, or Offering to Acquire any
Ordinary Shares of the Corporation (other than customary agreements with and
between underwriters and banking group or selling group members with respect to
a public offering of securities or pursuant to a pledge of securities in the
ordinary course of business).
1.4 CONTROL
A Person is "CONTROLLED" by another Person if:
(a) in the case of a body corporate, securities entitled to
vote in the election of directors carrying more than 50%
of the votes for the election of directors are held,
directly or indirectly, by or for the benefit of the other
Person and the votes carried by such securities are
entitled, if exercised, to elect a majority of the board
of directors of such corporation; or
(b) in the case of a Person which is not a body corporate,
more than 50% of the voting or equity interests of such
entity are held directly or indirectly, by or for the
benefit of the other Person;
and "CONTROLS", "CONTROLLING" and "UNDER COMMON CONTROL WITH" shall be
interpreted accordingly.
<PAGE> 14
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ARTICLE 2
THE RIGHTS
2.1 LEGEND ON ORDINARY SHARE CERTIFICATES
Certificates for the Ordinary Shares issued after the Record Time but
prior to the earlier of the Separation Time and the Expiration Time shall
evidence, in addition to the Ordinary Shares, one Right for each Ordinary Share
represented thereby and, commencing as soon as reasonably practicable after the
Record Time, shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in a
Shareholder Rights Plan Agreement, dated as of February 19,
1998, (the "Rights Agreement"), between Gulf Canada Resources
Limited (the "Corporation") and Montreal Trust Company of
Canada as Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the registered office of the Corporation. In certain
circumstances, as set forth in the Rights Agreement, such
Rights may be amended, redeemed, may expire, may become void
(if, in certain cases, they are "Beneficially Owned" by an
"Acquiring Person", as such terms are defined in the Rights
Agreement, or a transferee thereof) or may be evidenced by
separate certificates and may no longer be evidenced by this
certificate. The Corporation will mail or arrange for the
mailing of a copy of the Rights Agreement to the holder of
this certificate without charge within five days after the
receipt of a written request therefor.
Certificates representing Ordinary Shares that are issued and
outstanding at the Record Time shall evidence one Right for each Ordinary Share
evidenced thereby notwithstanding the absence of the foregoing legend until the
earlier of the Separation Time and the Expiration Time.
2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS
(a) Subject to adjustment as herein set forth, each Right will
entitle the holder thereof, after the Separation Time and
prior to the Expiration Time, to purchase, for the Exercise
Price, or its U.S. Dollar Equivalent as at the Business Day
immediately preceding the day of exercise of the Right, one
Ordinary Share.
(b) Until the Separation Time,
(i) no Right may be exercised; and
(ii) each Right will be evidenced by the certificate for
the associated Ordinary Share and will be
transferable only together with, and will be
transferred by a transfer of, such associated share.
(c) After the Separation Time and prior to the Expiration Time,
the Rights (i) may be exercised; and (ii) will be transferable
independent of Ordinary Shares. Promptly following the
Separation Time the Rights Agent will mail to each holder of
record of Ordinary Shares as of the Separation Time (other
than an Acquiring Person and, in respect of any Rights
Beneficially Owned by such Acquiring Person which are not held
of record by such Acquiring Person, the holder of record of
such Rights) at such
<PAGE> 15
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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
certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto with registration particulars
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 or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange
or quotation system on which the Rights may from time to time
be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights.
(d) Rights may be exercised in whole or in part on any Business
Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent (at its office in the city
of Calgary, Canada or at any other office of the Rights Agent
in the cities designated from time to time for that purpose by
the Corporation), the Rights Certificate evidencing such
Rights together with an election to exercise such Rights (an
"Election to Exercise") substantially in the form attached to
the Rights Certificate duly completed, accompanied by payment
in cash, or by certified cheque, banker's draft or money order
payable to the order of the Corporation, of a sum equal to the
Exercise Price multiplied by the number of Rights being
exercised and a sum sufficient to cover any transfer tax or
charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or
the issuance or delivery of certificates for Ordinary Shares
in a name other than that of the holder of the Rights being
exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise which does not indicate that such Right is null or
void as provided by Section 3.1(c) and accompanied by payment
as set forth in Section 2.2(d) above, the Rights Agent will
thereupon promptly:
(i) requisition from the transfer agent or any
co-transfer agent of the Ordinary Shares certificates
for the number of Ordinary Shares to be purchased
(the Corporation hereby irrevocably authorizing its
transfer agent to comply with all such requisitions);
(ii) when appropriate, requisition from the Corporation
the amount of cash to be paid in lieu of issuing
fractional Ordinary Shares;
(iii) after receipt of the Ordinary Share certificates,
deliver the same to or to the order of the registered
holder of such Rights Certificate, registered in such
name or names as may be designated by such holder;
(iv) when appropriate, after receipt, deliver such cash to
or to the order of the registered holder of the
Rights Certificate; and
(v) tender to the Corporation all amounts 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 will be issued by the Rights Agent to such holder
or to such holder's duly authorized assigns.
<PAGE> 16
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(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 shares delivered upon
exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment
of the Exercise Price), be duly and validly
authorized, executed, issued and delivered as fully
paid and non-assessable;
(ii) take all such action as may be necessary and within
its power to comply with any applicable requirements
of the Canada Business Corporations Act, the
Securities Act, the securities acts or comparable
legislation of each of the other provinces of Canada,
the 1933 Securities Act and the 1934 Exchange Act,
and the rules and regulations thereunder or any other
applicable law, rule or regulation, in connection
with the issuance and delivery of the Rights
Certificates and the issuance of any shares upon
exercise of Rights;
(iii) use reasonable efforts to cause all shares issued
upon exercise of Rights to be listed on the principal
exchanges or traded in the over-the-counter markets
on which the shares were traded immediately prior to
the Stock Acquisition Date; and
(iv) pay when due and payable any and all Canadian and
United States federal, provincial, and state transfer
taxes (for greater certainty not including any income
taxes of the holder or exercising holder or any
liability of the Corporation to withhold tax) and
charges which may be payable in respect of the
original issuance or delivery of the Rights
Certificates or certificates for shares, 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 shares in a name other
than that of the holder of the Rights being
transferred or exercised. (i)
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
The Exercise Price, the number and kind of shares 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
Record Time and prior to the Expiration Time:
(i) declare or pay a dividend on the Ordinary Shares
payable in Ordinary Shares (or other capital stock or
securities exchangeable for or convertible into or
giving a right to acquire Ordinary Shares or other
capital stock) other than pursuant to any optional
stock dividend program,
(ii) subdivide or change the then outstanding Ordinary
Shares into a greater number of Ordinary Shares,
(iii) combine or change the then outstanding Ordinary
Shares into a smaller number of Ordinary Shares, or
<PAGE> 17
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(iv) issue any Ordinary Shares (or other capital stock or
securities exchangeable for or convertible into or
giving a right to acquire Ordinary Shares or other
capital stock) in respect of, in lieu of or in
exchange for existing Ordinary Shares in a
reclassification, amalgamation, merger, statutory
arrangement or consolidation,
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 in the manner set forth below. If the Exercise Price and
number of Rights outstanding are to be adjusted (x) the Exercise Price
in effect after such adjustment shall be equal to the Exercise Price in
effect immediately prior to such adjustment divided by the number of
Ordinary Shares (or other capital stock) (the "Expansion Factor") that
a holder of one Ordinary Share immediately prior to such dividend,
subdivision, change, combination or issuance would hold thereafter as a
result thereof and (y) each Right held prior to such adjustment shall
become that number of Rights equal to the Expansion Factor, and the
adjusted number of Rights will be deemed to be allocated among the
Ordinary Shares with respect to which the original Rights were
associated (if they remain outstanding) and the shares issued in
respect of such dividend, subdivision, change, combination or issuance,
so that each such Ordinary Share (or other capital stock) will have
exactly one Right associated with it. 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 number of
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 shares of capital stock other than Ordinary Shares in a
transaction of a type described in Section 2.3(a)(i) or (iv), shares of
such capital stock shall be treated herein as nearly equivalent to
Ordinary 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 effect, and will not consolidate with,
amalgamate with or into or enter into a statutory arrangement with, any
other Person unless such Person agrees to be bound by the terms of an
amendment effecting such treatment. If an event occurs which would
require an adjustment under both this Section 2.3 and Section 3.1
hereof, the adjustment provided for in this Section 2.3 shall be in
addition to, and shall be made prior to, any adjustment required
pursuant to Section 3.1 hereof.
In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any Ordinary Shares otherwise than in a
transaction referred to in the preceding paragraph, each such Ordinary Share so
issued shall automatically have one new Right associated with it, which Right
shall be evidenced by the certificate representing such share.
(b) In the event the Corporation shall at any time after the
Record Time and prior to the Expiration Time fix a record date
for the making of a distribution to all holders of Ordinary
Shares of rights or warrants entitling them (for a period
expiring within 45 calendar days after such record date) to
subscribe for or purchase Ordinary Shares (or securities
convertible into or exchangeable for or carrying a right to
purchase or subscribe for Ordinary Shares) at a price per
Ordinary Share (or, if a security convertible into or
exchangeable for or carrying a right to purchase or subscribe
for Ordinary 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 share))
less than the Market Price per Ordinary Share on such record
date, the Exercise Price shall be adjusted in the manner set
forth below. The Exercise Price
<PAGE> 18
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in effect after such record date shall equal the Exercise
Price in effect immediately prior to such record date
multiplied by a fraction, of which the numerator shall be the
number of Ordinary Shares outstanding on such record date plus
the number of Ordinary Shares which the aggregate offering
price of the total number of Ordinary 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 and of which the
denominator shall be the number of Ordinary Shares outstanding
on such record date plus the number of additional Ordinary
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 in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Corporation 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. Such adjustment
shall be made successively whenever such a record date is
fixed. For purposes of this paragraph (b), the granting of the
right to purchase Ordinary Shares (whether from treasury
shares or otherwise) pursuant to any dividend or interest
reinvestment plan and/or any Ordinary Share purchase plan
providing for the reinvestment of dividends or interest
payable on securities of the Corporation and/or the investment
of periodic optional payments and/or employee benefit or
similar plans (so long as such right to purchase is in no case
evidenced by the delivery of rights or warrants) shall not be
deemed to constitute an issue of rights or warrants by the
Corporation; provided, however, that in the case of any
dividend or interest reinvestment plan, the right to purchase
Ordinary Shares is at a price per share of not less than 90%
of the current market price per share (determined as provided
in such plans) of the Ordinary Shares.
(c) In the event the Corporation shall at any time after the
Record Time and prior to the Expiration Time fix a record date
for the making of a distribution to all holders of Ordinary
Shares of evidences of indebtedness or assets (other than a
regular periodic cash dividend or a dividend paid in Ordinary
Shares) or rights or warrants (excluding those referred to in
Section 2.3(b)), the Exercise Price shall be adjusted in the
manner set forth below. The Exercise Price in effect after
such record date shall equal the Exercise Price in effect
immediately prior to such record date less the fair market
value (as determined in good faith by the Board of Directors
of the Corporation) of the portion of the assets, evidences of
indebtedness, rights or warrants so to be distributed
applicable to each of the securities purchasable upon exercise
of one Right (such determination to be described in a
statement filed with the Rights Agent and the holders of the
Rights). Such adjustment shall be made successively whenever
such a record date is fixed.
(d) Each adjustment made pursuant to this Section 2.3 shall be
made as of:
(i) the payment or effective date for the applicable
dividend, subdivision, change, combination or
issuance, in the case of an adjustment made pursuant
to paragraph (a) above; and
(ii) the record date for the applicable dividend or
distribution, in the case of an adjustment made
pursuant to paragraph (b) or (c) above subject to
readjustment to reverse the same if such distribution
shall not be made.
<PAGE> 19
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(e) In the event the Corporation shall at any time after the
Record Time and prior to the Expiration Time issue any shares
of capital stock (other than Ordinary Shares), or rights or
warrants to subscribe for or purchase any such capital stock,
or securities convertible into or exchangeable for any such
capital stock, in a transaction referred to in clause (a)(i)
or (a)(iv) above, or if the Corporation shall take any other
action (other than the issue of Ordinary Shares) which might
have a negative effect on the holders of Rights, if the Board
of Directors acting in good faith determines that the
adjustments contemplated by paragraphs (a), (b) and (c) above
are not applicable or will not appropriately protect the
interests of the holders of Rights, the Corporation may
determine what other adjustments to the Exercise Price, number
of Rights and/or securities purchasable upon exercise of
Rights would be appropriate and, if the adjustments
contemplated by paragraphs (a), (b) and (c) above are
applicable, notwithstanding such paragraphs, the adjustments
so determined by the Corporation, rather than the adjustments
contemplated by paragraphs (a), (b) and (c) above, shall be
made. The Corporation and the Rights Agent shall amend this
Agreement in accordance with Section 5.4(b) and (c), as the
case may be, to provide for such adjustments.
(f) Each adjustment to the Exercise Price made pursuant to this
Section 2.3 shall be calculated to the nearest cent. Whenever
an adjustment to the Exercise Price is made pursuant to this
Section 2.3, the Corporation shall:
(i) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts
accounting for such adjustment;
(ii) promptly file with the Rights Agent and with each
transfer agent for the Ordinary Shares a copy of such
certificate and mail a brief summary thereof to each
holder of Rights.
(g) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to
express the securities so purchasable which were expressed in
the initial Rights Certificates issued hereunder.
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE
Each person in whose name any certificate for Ordinary Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Ordinary Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered (together with a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and any
applicable transfer taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Ordinary Share transfer
books of the Corporation are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which the Ordinary 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
Vice President and by the Treasurer, any
<PAGE> 20
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Assistant Treasurer, the Secretary or any Assistant Secretary
of the Corporation. The signature of any of these officers on
the Rights Certificates may be manual or facsimile. Rights
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Corporation shall bind the Corporation, notwithstanding that
such individuals or any of them have ceased to hold such
offices prior to the countersignature and delivery of such
Rights Certificates. 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 mail such Rights Certificates to the
holders of the Rights pursuant to Section 2.2(c) hereof. No
Rights Certificate shall be valid for any purpose until
countersigned by the Rights Agent as aforesaid.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.6 REGISTRATION, REGISTRATION OF 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 "Rights Registrar" for the purpose of
maintaining the Rights Register for the Corporation and
registering Rights and transfers of Rights as herein provided.
In the event that the Rights Agent shall cease to be the
Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times.
(b) After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any
Rights Certificate, and subject to the provisions of Section
2.6(d) below, the Corporation will execute, and the Rights
Agent will countersign 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.
(c) All Rights issued upon any registration of transfer or
exchange of Rights Certificates shall be the valid obligations
of the Corporation, and such Rights shall be entitled to the
same benefits under this Agreement as the Rights surrendered
upon such registration of transfer or exchange.
(d) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to
the Corporation or the Rights Agent, as the case may be, duly
executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any
new Rights Certificate under this Section 2.6, the Corporation
may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation
thereto.
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
<PAGE> 21
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countersign and deliver in exchange therefor a new Rights
Certificate evidencing the same number of Rights as did the
Rights Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights
Agent prior to the Expiration Time (i) evidence to their
satisfaction of the destruction, loss or theft of any Rights
Certificate and (ii) such security or indemnity as may be
required by them in their sole discretion to save each of them
and any of their agents harmless, then, in the absence of
notice to the Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the
Corporation shall execute and upon its request the Rights
Agent shall countersign and deliver, in lieu of any such
destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the
Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.7, the Corporation may require the
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section
2.7 in lieu of any destroyed, lost or stolen Rights
Certificate shall evidence an original additional contractual
obligation of the Corporation, whether or not the destroyed,
lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the
benefits of this Agreement equally and proportionately with
any and all other Rights duly issued hereunder.
2.8 PERSONS DEEMED OWNERS
The Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Separation Time, the associated Ordinary 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 Ordinary Shares).
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 law, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
2.10 AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights by accepting the same consents and agrees with
the Corporation and the Rights Agent and with every other holder of Rights that:
<PAGE> 22
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(a) he will 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) prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of,
the associated Ordinary Share;
(c) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(d) prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Ordinary 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 Ordinary 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 Ordinary Share
certificate made by anyone other than the Corporation or the
Rights Agent) for all purposes whatsoever, and neither the
Corporation nor the Rights Agent shall be affected by any
notice to the contrary;
(e) such holder of Rights has waived his right to receive any
fractional Rights or any fractional shares upon exercise of a
Right (except as provided herein);
(f) without the approval of any holder of Rights and upon the sole
authority of the Board of Directors of the Corporation acting
in good faith this Agreement may be supplemented or amended
from time to time as provided herein; and
(g) that notwithstanding anything in this Agreement to the
contrary, neither the Corporation nor the Rights Agent shall
have any liability to any holder of a Right or any other
Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such
obligation.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
3.1 FLIP-IN EVENT
(a) Subject to Sections 3.1(b), 5.1(b), 5.1(c) and 5.1(d) hereof,
in the event that prior to the Expiration Time a Flip-in Event
shall occur, the Corporation shall take such action as shall
be necessary to ensure and provide, within 10 Business Days
thereafter or such longer period as may be required to satisfy
the requirements of the applicable securities acts or
comparable legislation so that, except as provided below, each
Right shall thereafter constitute the right to purchase from
the Corporation, upon exercise thereof in accordance with the
terms hereof, that number of Ordinary Shares of the
Corporation having an aggregate Market Price on the date of
consummation
<PAGE> 23
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or occurrence of such Flip-in Event equal to twice the
Exercise Price for an amount in cash equal to the Exercise
Price (such right to be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section
2.3 in the event that after such date of consummation or
occurrence an event of a type analogous to any of the events
described in Section 2.3 shall have occurred with respect to
such Ordinary Shares).
(b) Notwithstanding the foregoing or any other provisions of this
Agreement, upon the occurrence of any Flip-in Event, any
Rights that are or were Beneficially Owned on or after the
earlier of the Separation Time or the Stock Acquisition Date
by:
(i) an Acquiring Person (or any Affiliate or Associate of
an Acquiring Person or any Person acting jointly or
in concert with an Acquiring Person or any Affiliate
or Associate of an Acquiring Person); or
(ii) a transferee, direct or indirect, of an Acquiring
Person (or any Affiliate or Associate of an Acquiring
Person or any Person acting jointly or in concert
with an Acquiring Person or any Affiliate or
Associate of an Acquiring Person) in a transfer made
after the date hereof, whether or not for
consideration, that the Board of Directors of the
Corporation acting in good faith has determined is
part of a plan, arrangement or scheme of an Acquiring
Person (or any Affiliate or Associate of an Acquiring
Person) that has the purpose or effect of avoiding
clause (i) of this Section 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 shall not
have any other rights whatsoever in respect to or of such
Rights, whether under this Agreement or otherwise.
(c) Any Rights Certificate that represents Rights Beneficially
Owned by a Person described in either clauses (i) or (ii) of
Section 3.1(b) 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
who was an Affiliate or an Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement) or was
acting jointly or in concert with any of them. This Rights
Certificate and the Rights represented hereby shall become
void in the circumstances specified in Section 3.1(b) of the
Rights 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 be required to
impose such legend only if instructed to do so by the
Corporation or if a holder fails to certify upon transfer or
exchange in the space provided on the Rights Certificate that
such holder is not an Acquiring Person or an Affiliate or
Associate thereof.
<PAGE> 24
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ARTICLE 4
THE RIGHTS AGENT
4.1 GENERAL
(a) The Corporation hereby appoints the Rights Agent to act as
agent for the Corporation and the holders of Rights in
accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Corporation
may from time to time appoint such Co-Rights Agents as it may
deem necessary or desirable. In the event the Corporation
appoints one or more Co-Rights Agents, the respective duties
of the Rights Agent and Co-Rights Agents shall be as the
Corporation may determine. The Corporation agrees to pay to
the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the execution and
administration of this Agreement and the exercise and
performance of its duties hereunder (including the reasonable
fees and other disbursements of any expert retained by the
Rights Agent with the approval of the Corporation, such
approval not to be unreasonably withheld). The Corporation
also agrees to indemnify the Rights Agent 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, suffered or omitted by
the Rights Agent in connection with the acceptance, execution
and administration of this Agreement and the exercise and
performance of its duties hereunder, including the costs and
expenses of defending against any claim of liability, which
right to indemnification will survive the termination of this
Agreement.
(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 Ordinary
Shares, Rights Certificate, certificate for other securities
of the Corporation, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by
the proper person or persons.
4.2 MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or amalgamated or with which it may
be consolidated, or any corporation resulting from any merger,
amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation
succeeding to the shareholder or stockholder services business
of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In
case, at the time such successor Rights Agent succeeds to the
agency created by this Agreement, any of the Rights
Certificates have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of
the Rights Certificates have not been countersigned, any
successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights
Agent or in the name of the successor
<PAGE> 25
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Rights Agent; and in all such cases such Rights Certificates
will have the full force provided in the Rights Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name;
and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this
Agreement.
<PAGE> 26
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4.3 DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the
Corporation and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Corporation), and the opinion of such
counsel will be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion; the Rights
Agent may also, with the approval of the Corporation (such
approval not to be unreasonably withheld) and at the expense
of the Corporation, consult with such other experts as the
Rights Agent shall consider necessary or appropriate to
properly carry out the duties and obligations imposed under
this Agreement and the Rights Agent shall be entitled to rely
in good faith on the advice of any such expert.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems it necessary or desirable that any fact
or matter be proved or established by the Corporation prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a person
believed by the Rights Agent to be the Chairman of the Board,
the Vice Chairman of the Board, the President or any Vice
President and by the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Corporation and
delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or wilful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement
or in the certificates for Ordinary 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 Ordinary 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 Section 3.1(b) hereof) or any
adjustment required under the provisions of Section 2.3 hereof
or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the
exercise of Rights after receipt of the certificate
contemplated by Section 2.3 describing any such adjustment);
nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization of any
Ordinary Shares to be
<PAGE> 27
-25-
issued pursuant to this Agreement or any Rights or as to
whether any Ordinary Shares will, when issued, be duly and
validly authorized, executed, issued and delivered and fully
paid and non-assessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any person believed by the Rights Agent to be
the Chairman of the Board, the Vice Chairman of the Board, the
President, any Vice President or the Secretary or any
Assistant Secretary or the Treasurer or any Assistant
Treasurer of the Corporation, and to apply to such persons for
advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered by it in
good faith in reliance upon instructions of any such person;
it is understood that instructions to the Rights Agent shall,
except where circumstances make it impracticable or the Rights
Agent otherwise agrees, be given in writing and, where not in
writing, such instructions shall be confirmed in writing as
soon as reasonably possible after the giving of such
instructions.
(h) The Rights Agent and any shareholder or stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal
in Ordinary 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.
(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, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Corporation
resulting from any such act, omission, 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 30 days' notice (or such lesser notice as is acceptable to
the Corporation) in writing mailed to the Corporation and to each transfer agent
of Ordinary Shares by registered or certified mail, and to the holders of the
Rights in accordance with Section 5.9. The Corporation may remove the Rights
Agent upon 30 days' notice in writing given to the Rights Agent and to each
transfer agent of the Ordinary Shares (by personal delivery, or registered or
certified mail). If the Rights Agent should resign or be removed or otherwise
become incapable of acting, the Corporation will appoint a successor to the
Rights Agent. If the Corporation fails to make such appointment within a period
of 30 days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent, then
the resigning Rights Agent or any holder of any Rights may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Corporation or by such a court, shall be
a
<PAGE> 28
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corporation incorporated under the laws of Canada or a province thereof
authorized to carry on the business of a trust company in the Province of
Alberta. After appointment, the successor Rights Agent will be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent 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
Ordinary 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.
ARTICLE 5
MISCELLANEOUS
5.1 REDEMPTION AND TERMINATION
(a) The Board of Directors of the Corporation may, with the prior
consent of holders of Ordinary Shares or of the holders of
Rights given in accordance with Section 5.1(f) or (g), as the
case may be, at any time prior to the occurrence of a Flip-in
Event as to which the application of Section 3.1 has not been
waived pursuant to the provisions of this Section 5.1, elect
to redeem all but not less than all of the then outstanding
Rights at a redemption price of $.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 shall have occurred (such redemption price being
herein referred to as the "Redemption Price").
(b) The Board of Directors of the Corporation may, with the prior
consent of the holders of Ordinary Shares given in accordance
with Section 5.1(f), determine, at any time prior to the
occurrence of a Flip-in Event as to which the application of
Section 3.1 has not been waived pursuant to this Section 5.1,
if such Flip-in Event would occur by reason of an acquisition
of Ordinary Shares otherwise than pursuant to a Takeover Bid
made by means of a Takeover Bid circular to all holders of
record of Ordinary Shares and otherwise than in the
circumstances set forth in Section 5.1(d), to waive the
application of Section 3.1 to such Flip-in Event. In the event
that the Board of Directors proposes such a waiver, the Board
of Directors shall extend the Separation Time to a date
subsequent to and not more than ten Business Days following
the meeting of shareholders called to approve such waiver.
(c) The Board of Directors of the Corporation may, prior to the
occurrence of a Flip-in Event as to which the application of
Section 3.1 has not been waived under this clause, determine,
upon prior written notice to the Rights Agent, to waive the
application of Section 3.1 to that Flip-in Event provided that
the Flip-in Event would occur by reason of a Takeover Bid made
by means of a Takeover Bid circular sent to all holders of
record of Ordinary Shares; further provided that if the Board
waives the application of Section 3.1 to such a Flip-in Event,
the Board of Directors shall be deemed to have waived the
application of Section 3.1 to any other Flip-in Event
occurring by reason of any Takeover Bid made by means of a
Takeover Bid circular to all holders of record of Ordinary
Shares which is made prior to the expiry of any
<PAGE> 29
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Takeover Bid in respect of which a waiver is, or is deemed to
have been, granted under this Section 5.1(c).
(d) The Board of Directors of the Corporation may, in respect of
any Flip-in Event waive the application of Section 3.1 to that
Flip-in Event, provided that both of the following conditions
are satisfied:
(i) the Board of Directors has determined that the
Acquiring Person became an Acquiring Person by
inadvertence and without any intent or knowledge that
it would become an Acquiring Person; and
(ii) such Acquiring Person has reduced its Beneficial
Ownership of Ordinary Shares such that at the time of
waiver pursuant to this Section 5.1(d) it is no
longer an Acquiring Person
and in the event of any such waiver, such Flip-in Event shall
be deemed not to have occurred and the Separation Time shall
be deemed not to have occurred as a result of such Person
having become an Acquiring Person.
(e) The Board of Directors of the Corporation 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 or a Takeover Bid in respect of which
the Board of Directors of the Corporation has waived, or is
deemed to have waived, pursuant to Section 5.1(c), the
application of Section 3.1, takes up and pays for the Ordinary
Shares pursuant to the terms and conditions of the Permitted
Bid or Takeover Bid, as the case may be.
(f) If a redemption of Rights pursuant to Section 5.1(a) or a
waiver of a Flip-in Event pursuant to Section 5.1(b) is
proposed at any time prior to the Separation Time, such
redemption or waiver shall be submitted for approval to the
holders of Ordinary Shares. Such approval shall be deemed to
have been given if the redemption or waiver is approved by the
affirmative vote of a majority of the votes cast by
Independent Shareholders represented in person or by proxy at
a meeting of such holders duly held in accordance with
applicable laws and the Corporation's by-laws.
(g) If a redemption of Rights pursuant to Section 5.1(a) is
proposed at any time after the Separation Time, such
redemption shall be submitted for approval to the holders of
Rights. Such approval shall be deemed to have been given if
the redemption is approved by holders of Rights by a majority
of the votes cast by the holders of Rights represented in
person or by proxy at and entitled to vote at a meeting of
such holders. For the purposes hereof, each outstanding Right
(other than Rights which are Beneficially Owned by any Person
referred to in clauses (i) to (v) inclusive of the definition
of Independent Shareholders) shall be entitled to one vote,
and the procedures for the calling, holding and conduct of the
meeting shall be those, as nearly as may be, which are
provided in the Corporation's by-laws and the Canada Business
Corporations Act with respect to meetings of shareholders of
the Corporation.
(h) Where a Takeover 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 may
elect to redeem all the outstanding Rights at the
<PAGE> 30
-28-
Redemption Price. In such event, all of 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 Ordinary
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.
(i) If the Board of Directors of the Corporation elects or is
deemed to have elected to redeem the Rights, and, in
circumstances where Section 5.1(a) is applicable, such
redemption is approved by the holders of Ordinary Shares or
the holders of Rights in accordance with Section 5.1(f) or
(g), as the case may be, 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.
(j) Within 10 Business Days after the Board of Directors electing
or having been deemed to have elected to redeem the Rights or,
if Section 5.1(a) is applicable within 10 Business Days after
the holders of Ordinary Shares or the holders of Rights have
approved a redemption of Rights in accordance with Section
5.1(f) or (g), as the case may be, the Corporation shall give
notice of redemption to the holders of the then outstanding
Rights by mailing such notice to each such holder at its last
address as it appears upon the register of the Rights Agent
or, prior to the Separation Time, on the register of the
Transfer Agent for the Ordinary Shares. Any notice which is
mailed in the manner herein provided will 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 in connection with the purchase of
Ordinary Shares prior to the Separation Time.
5.2 EXPIRATION
No Person shall have any rights pursuant to this Agreement or in
respect of any Right after the Expiration Time, except the Rights Agent as
specified in Section 4.1(a) of this Agreement.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the number of or kind or class
of shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.
<PAGE> 31
-28-
5.4 SUPPLEMENTS AND AMENDMENTS
(a) The Corporation may make amendments to this Agreement to
correct any clerical or typographical error or which are
required to maintain the validity of this Agreement as a
result of any change in any applicable legislation or
regulations thereunder. The Corporation may, prior to the date
of the shareholders' meeting referred to in Section 5.18,
supplement, amend, vary, rescind or delete any of the
provisions of this Agreement without the approval of any
holders of Rights or Ordinary Shares (whether or not such
action would materially adversely affect the interests of the
holders of Rights generally) where the Board of Directors
acting in good faith deems such action necessary or desirable.
Notwithstanding anything in this Section 5.4 to the contrary,
no such supplement or amendment shall be made to the
provisions of Article 4 except with the written concurrence of
the Rights Agents to such supplement or amendment.
(b) Subject to the Section 5.4(a), the Corporation may, with the
prior consent of the holders of Ordinary Shares obtained as
set forth below, at any time prior to the Separation Time,
supplement, amend, vary, rescind or delete 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 the action requiring such approval is
authorized by the affirmative vote of a majority of the votes
cast by Independent Shareholders present or represented at and
entitled to be voted at a meeting of the holders of Ordinary
Shares duly called and held in compliance with applicable laws
and the articles and by-laws of the Corporation.
(c) The Corporation may, with the prior consent of the holders of
Rights, at any time on or after the Separation Time,
supplement, amend, vary, rescind or delete 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), provided that no such
amendment, variation or deletion shall be made to the
provisions of Article 4 except with the written concurrence of
the Rights Agent thereto.
(d) Any approval of the holders of Rights shall be deemed to have
been given if the action requiring such approval is authorized
by the affirmative votes of the holders of Rights present or
represented at and entitled to be voted at a meeting of the
holders of Rights and representing a majority of the votes
cast in respect thereof. For the purposes hereof, each
outstanding Right (other than Rights which are void pursuant
to the provisions hereof) shall be entitled to one vote, and
the procedures for the calling, holding and conduct of the
meeting shall be those, as nearly as may be, which are
provided in the Corporation's by-laws and the Canada Business
Corporations Act with respect to meetings of shareholders of
the Corporation.
(e) Any amendments made by the Corporation to this Agreement
pursuant to Section 5.4(a) which are required to maintain the
validity of this Agreement as a result of any change in any
applicable legislation or regulation thereunder shall:
(i) if made before the Separation Time, be submitted to
the shareholders of the Corporation at the next
meeting of shareholders and the shareholders may, by
the majority referred to in Section 5.4(b), confirm
or reject such amendment;
<PAGE> 32
-30-
(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 Section 5.4(d), 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 or the holder of Rights or is not
submitted to the shareholders or holders of 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 or holders of Rights as the case
may be.
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Corporation shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence
fractional Rights. After the Separation Time there shall be
paid to the registered holders of the Rights Certificates with
regard to which fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the Market
Price of a whole Right in lieu of such fractional Rights as of
the date such fractional Rights would otherwise be issuable.
(b) The Corporation shall not be required to issue fractional
Ordinary Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Ordinary Shares. In
lieu of issuing fractional Ordinary Shares, the Corporation
shall pay to the registered holder of Rights Certificates at
the time such Rights are exercised as herein provided, an
amount in cash equal to the same fraction of the Market Price
of one Ordinary Share at the date of such exercise.
5.6 RIGHTS OF ACTION
Subject to the terms of this Agreement, rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any other
Rights, may, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Corporation to enforce, or otherwise
act in respect of, such holder's right to exercise such holder's Rights, or
Rights to which he is entitled, in the manner provided in this Agreement and in
such holder's Rights Certificate. Without limiting the foregoing or any remedies
available to the holders of Rights it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
<PAGE> 33
-31-
5.7 HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER
No holder, as such, of any Rights shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Ordinary Shares or any
other securities which may at any time be issuable on the exercise of Rights,
nor shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting Shareholders (except as provided in Section
5.8 hereof), or to receive dividends or subscription rights or otherwise, until
such Rights, or Rights to which such holder is entitled, shall have been
exercised in accordance with the provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS
In case the Corporation shall propose after the Separation Time and
prior to the Expiration Time:
(a) to effect or permit (in cases where the Corporation's
permission is required) any 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 hereof, 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 to be given or made in connection with this
Agreement 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 mail,
postage prepaid or by fax (with, in the case of fax, an original copy of the
notice or demand sent by first class mail, postage prepaid, to the Corporation
following the giving of the notice or demand by fax), addressed (until another
address is filed in writing with the Rights Agent) as follows:
Gulf Canada Resources Limited
1600, 401-9th Avenue S.W.
Calgary, Alberta
T2P 2H7
Attention: Corporate Secretary
Fax: (403) 233-5520
Notices or demands to be given or made in connection with this Agreement 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 mail, postage prepaid, or by
fax (with, in the case of fax, an original copy of the notice or demand sent by
first class mail, postage prepaid, to the Rights Agent following the giving of
the notice or demand by fax), addressed (until another address is filed in
writing with the Corporation) as follows:
<PAGE> 34
-32-
Montreal Trust Company of Canada
600, 530 - 8th Avenue S.W.
Calgary, Alberta
T2P 3S8
Attention: Manager of Client Services
Fax: (403) 267-6529
Notices or demands to be given or made in connection with this Agreement 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, or by fax (with, in the case of fax, an original copy of the notice or
demand sent by first class mail, postage prepaid, to such holder following the
giving of the notice or demand by fax), addressed to such holder at the address
of such holder as it appears upon the register of the Rights Agent or, prior to
the Separation Time, on the register of the Corporation for the Ordinary Shares.
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
faxing (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 by notice to the other given in the manner aforesaid.
If mail service is or is threatened to be interrupted at a time when
the Corporation or the Rights Agent wishes to give a notice or demand hereunder
to or on the holders of the Rights, the Corporation or the Rights Agent may,
notwithstanding the foregoing provisions of this Section 5.9, give such notice
by means of publication once in each of two successive weeks in the business
section of the Financial Post and, so long as the Corporation has a transfer
agent in the United States, in a daily publication in the United States
designated by the Corporation, or in such other publication or publications as
may be designated by the Corporation and notice so published shall be deemed to
have been given on the date on which the first publication of such notice in any
such publication has taken place.
5.10 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 in actions to enforce his rights pursuant to any Rights
or this Agreement.
<PAGE> 35
-33-
5.11 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.
5.12 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.
5.13 DESCRIPTIVE HEADINGS
Descriptive headings appear herein for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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 Alberta 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 COUNTERPARTS
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
5.17 SEVERABILITY
If any term or provision hereof or the application thereof to any
circumstance is, in any jurisdiction and to any extent, invalid or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
5.18 EFFECTIVE DATE
This Agreement is effective from the date hereof. If this Agreement is
not confirmed by resolution passed by a majority of the votes cast by
Independent Shareholders who vote in respect of confirmation of this Agreement
at a meeting of shareholders to be held not later than the date on
<PAGE> 36
-34-
which the 1998 annual meeting of shareholders of the Corporation terminates,
then this Agreement and all outstanding Rights shall terminate and be void and
of no further force and effect on and from that date which is the earlier of (a)
the date of termination of the meeting called to consider the confirmation of
this Agreement under this Section 5.18 and (b) the date of termination of the
1998 annual meeting of shareholders of the Corporation.
5.19 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. Without limiting the
generality of the foregoing, any issuance or delivery of debt or equity
securities (other than non-convertible debt securities) of the Corporation upon
the exercise of Rights and any amendment or supplement to this Agreement shall
be subject to the prior consent of The Toronto Stock Exchange, The Montreal
Exchange and The New York Stock Exchange.
5.20 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
All actions and determinations (including all omissions with respect to
the foregoing) which are done or made by the Board of Directors of the
Corporation, in good faith, shall not subject any member of the Board of
Directors to any liability whatsoever to the holders of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
GULF CANADA RESOURCES LIMITED
Per:
-----------------------------------
Name: R.H. Auchinleck
Title: President and Chief Executive Officer
Per:
-----------------------------------
Name: C.S. Glick
Title: Senior Vice President, Corporate
and Chief Financial Officer and
Corporate Secretary
MONTREAL TRUST COMPANY OF CANADA
Per:
-----------------------------------
Name: o
Title: o
Per:
-----------------------------------
Name: o
Title: o
<PAGE> 37
EXHIBIT A
FORM OF RIGHTS CERTIFICATE
Certificate No._______ _____Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN CERTAIN CIRCUMSTANCES (SPECIFIED IN
SECTION 3.1(b) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR TRANSFEREES OF AN ACQUIRING PERSON OR ITS AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY PERSON
ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM, 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 February 19, 1998 (the "Rights
Agreement") between Gulf Canada Resources Limited, a corporation incorporated
under the laws of Canada (the "Corporation") and Montreal Trust Company of
Canada, a trust company incorporated under the laws of Canada, as Rights Agent
(the "Rights Agent"), which term shall include any successor Rights Agent under
the Rights Agreement, 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 earlier of (i) the Termination Time (as such term is defined in the Rights
Agreement) and (ii) the termination of the annual meeting of the Corporation in
the year 2001, one fully paid Ordinary Share of the Corporation (a "Ordinary
Share") at the Exercise Price referred to below, upon presentation and surrender
of this Rights Certificate together with the Form of Election to Exercise duly
executed to the Rights Agent at its principal office in the City of Calgary or
in such other cities as may be designated by the Corporation from time to time.
The Exercise Price shall initially be CDN $75 per Right and shall be subject to
adjustment in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the number
of Ordinary Shares which each Right entitles the registered holder thereof to
purchase shall be adjusted 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
and are available upon written request.
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.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Corporation at a redemption price of
$.00001 per Right, subject to adjustment in certain events, under certain
circumstances at its option.
<PAGE> 38
No fractional Ordinary Shares will be issued upon the exercise of any
Rights evidenced hereby, but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Ordinary
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
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
GULF CANADA RESOURCES LIMITED
By: /s/ R.H. Auchinleck By: /s/ C.S. Glick
Authorized Officer Authorized Officer
Countersigned:
MONTREAL TRUST COMPANY OF CANADA
By: /s/ Frances van. der Basch
Authorised Signature
<PAGE> 39
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights represented by this Rights Certificate.)
FOR VALUE RECEIVED ______________________hereby sells, assigns and
transfers to
- --------------------------------------------------------------------------------
(Please print name and address of transferee) the Rights represented by this
Rights Certificate, together with all right, title and interest therein, and
hereby irrevocably constitutes and appoints _____________________ as attorney,
to transfer the within Rights on the books of the 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 Canadian chartered bank, a Canadian trust
company, a member of a recognized stock exchange or a member of the Securities
Transfer Association Medallion (STAMP) Program.
- --------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
Ordinary 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 (all capitalized terms are used
as defined in the Rights Agreement).
Dated: Signature:
------------------------------
NOTICE
In the event the certification set forth above in the Form of Election
to Exercise is not completed upon exercise of the Right(s) evidenced hereby or
in the event that the certification set forth above in the Form of Assignment is
not completed upon the assignment of the Right(s) evidenced hereby, the
Corporation will deem the Beneficial Owner of the Right(s) evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an assignment,
will affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.
<PAGE> 40
(To be attached to each Rights Certificate)
FORM OF ELECTION TO EXERCISE
TO: GULF CANADA RESOURCES LIMITED
The undersigned hereby irrevocably elects to exercise ____________________ whole
Rights represented by the attached Rights Certificate to purchase the Ordinary
Shares (or other securities or property) issuable upon the exercise of such
Rights and requests that certificates for such shares (or other securities or
title to such property) be issued in the name of:
------------------------------------
(Name)
------------------------------------
(Street)
------------------------------------
(City and State or Province)
------------------------------------
(Country, Postal Code or Zip Code)
------------------------------------
SOCIAL INSURANCE, SOCIAL SECURITY OR
OTHER TAXPAYER IDENTIFICATION NUMBER
<PAGE> 41
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)
------------------------------------
(Street)
------------------------------------
(City and State or Province)
------------------------------------
(Country, Postal Code or Zip Code)
------------------------------------
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 Canadian chartered bank, a Canadian trust
company, a member of a recognized stock exchange or a member of the Securities
Transfer Association Medallion (STAMP) Program.
- --------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
Ordinary 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 (all capitalized terms are used
as defined in the Rights Agreement).
Dated: Signature:
------------------------------
<PAGE> 42
NOTICE
In the event the certification set forth above in the Form of Election
to Exercise is not completed upon exercise of the Right(s) evidenced hereby or
in the event that the certification set forth above in the Form of Assignment is
not completed upon the assignment of the Right(s) evidenced hereby, the
Corporation will deem the Beneficial Owner of the Right(s) evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an assignment,
will affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.
