<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
GLAMIS GOLD LTD
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
G. Barry Finlayson
LANG MICHENER LAWRENCE & SHAW
Barristers and Solicitors
1500 Royal Centre
1055 West Georgia Street
P.O. Box 11117
Vancouver BC V6E 4N7
Direct Telephone No.: (604) 691-7465
Facsimile: (604) 685-7084
E-mail: [email protected]
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
GLAMIS GOLD LTD.
5190 NEIL ROAD, SUITE 31
RENO, NEVADA 89502
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TAKE NOTICE that the annual general meeting (the "Meeting") of Shareholders
of GLAMIS GOLD LTD. (the "Company") will be held at The Royal York Canadian
Pacific Hotel, 100 Front Street West, Toronto, Ontario, on Wednesday, May 3,
2000 at 1:30 p.m., local time, for the following purposes:
1. To receive the report of the directors of the Company.
2. To receive and consider the consolidated financial statements of the
Company for its fiscal period ended December 31, 1999 and the report of the
auditor thereon.
3. To elect directors of the Company for the ensuing year.
4. To appoint an auditor of the Company for the ensuing year and to authorize
the directors to fix the auditor's remuneration.
5. To consider and, if thought fit, approve an ordinary resolution authorizing
the amendment of the Company's Incentive Share Purchase Option Plan to make
an additional 2,016,800 shares available for issuance under it.
6. To consider and, if thought fit, approve an ordinary resolution ratifying
the establishment of a Shareholders' Rights Plan.
7. To consider any permitted amendment to or variation of any matter
identified in this Notice.
8. To transact such other business as may properly come before the Meeting or
any adjournment thereof.
An Information Circular and a copy of the Annual Report of the Company for
the year ended December 31, 1999 accompany this Notice. The Information Circular
contains details of matters to be considered at the Meeting. The Annual Report
includes the consolidated financial statements and the auditor's report thereon.
A SHAREHOLDER WHO IS UNABLE TO ATTEND THE MEETING IN PERSON AND WHO WISHES
TO ENSURE THAT SUCH SHAREHOLDER'S SHARES WILL BE VOTED AT THE MEETING IS
REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND DELIVER IT
BY HAND OR BY MAIL IN ACCORDANCE WITH THE INSTRUCTIONS SET OUT IN THE FORM OF
PROXY AND IN THE INFORMATION CIRCULAR.
DATED at Vancouver, British Columbia, March 20, 2000.
BY ORDER OF THE BOARD
C. KEVIN MCARTHUR
PRESIDENT & CHIEF EXECUTIVE OFFICER
<PAGE> 3
GLAMIS GOLD LTD.
5190 NEIL ROAD, SUITE 310
RENO, NEVADA, 89502 U.S.A.
INFORMATION CIRCULAR (PROXY STATEMENT)
AS AT MARCH 1, 2000
SUMMARY
THIS INFORMATION CIRCULAR (PROXY STATEMENT) IS FURNISHED IN CONNECTION WITH
THE SOLICITATION OF PROXIES BY THE MANAGEMENT OF GLAMIS GOLD LTD. (THE
"COMPANY") FOR USE AT THE ANNUAL GENERAL MEETING (THE "MEETING") TO BE HELD ON
MAY 3, 2000 AT 1:30 P.M., LOCAL TIME, AT THE ROYAL YORK CANADIAN PACIFIC HOTEL,
100 FRONT STREET WEST, TORONTO, ONTARIO, FOR THE FOLLOWING PURPOSES:
1. To receive the report of the directors of the Company.
2. To receive and consider the consolidated financial statements of the
Company for its fiscal period ended December 31, 1999 and the report of the
auditor thereon.
3. To elect directors of the Company for the ensuing year.
4. To appoint an auditor of the Company for the ensuing year and to authorize
the directors to fix the auditor's remuneration.
5. To consider and, if thought fit, approve an ordinary resolution authorizing
the amendment of the Company's Incentive Share Purchase Option Plan to make
more shares available for issuance under it.
6. To consider and, if thought fit, approve an ordinary resolution ratifying
the establishment of a Shareholders' Rights Plan.
7. To transact such other business as may properly come before the Meeting or
any adjournment thereof.
It is anticipated that the accompanying Notice of Annual general Meeting
and this information Circular (Proxy Statement) will be sent to shareholders no
later than March 24, 2000.
Dollar amounts stated herein are in U.S. dollars unless otherwise stated.
Pursuant to section 111 of the Company Act (British Columbia), advance
notice of the Meeting was published in the Vancouver Sun newspaper on March 6,
2000 and filed with The Toronto Stock Exchange, the British Columbia Securities
Commission and the Ontario Securities Commission.
<PAGE> 4
GENERAL PROXY INFORMATION
SOLICITATION OF PROXIES
The solicitation of proxies will be primarily by the mail, but proxies may
be solicited personally or by telephone by directors, officers and regular
employees. All solicitation costs will be borne by the Company.
APPOINTMENT AND REVOCATION OF PROXIES
The individuals named in the accompanying form of proxy are the Chairman of
the Board of Directors of the Company and the President and Chief Executive
Officer of the Company. A SHAREHOLDER WISHING TO APPOINT SOME OTHER PERSON (WHO
NEED NOT BE A SHAREHOLDER) TO REPRESENT HIM AT THE MEETING HAS THE RIGHT TO DO
SO, EITHER BY INSERTING SUCH PERSON'S NAME IN THE BLANK SPACE PROVIDED IN THE
FORM OF PROXY OR BY COMPLETING ANOTHER FORM OF PROXY. A FORM OF PROXY WILL NOT
BE VALID UNLESS IT IS COMPLETED AND DELIVERED TO THE OFFICE OF MONTREAL TRUST
COMPANY BY FAX TO (604) 683-3694 OR BY MAIL OR BY HAND TO 510 BURRARD STREET,
VANCOUVER, BRITISH COLUMBIA, CANADA, V6C 3B9, NOT LESS THAN 48 HOURS (EXCLUDING
SATURDAYS, SUNDAYS AND HOLIDAYS) BEFORE THE MEETING AT WHICH THE PERSON NAMED
THEREIN PURPORTS TO VOTE IN RESPECT THEREOF.
A shareholder who has given a proxy may revoke it by an instrument in
writing delivered either to Montreal Trust Company as specified above or to the
registered office of the Company by fax to (604) 685-7084 or by mail or by hand
to 1500, 1055 West Georgia Street, P.O. Box 11117, Vancouver, British Columbia,
Canada, V6E 4N7, at any time up to and including the last business day that
precedes the day of the Meeting or, if adjourned, any reconvening thereof, or in
any other manner provided by law. In addition, a revocation of a proxy does not
affect any matter on which a vote has been taken before the revocation.
REGISTERED AND UNREGISTERED SHAREHOLDERS
Registered shareholders may vote the shares they hold in the Company either
by attending the Meeting in person or, if they do not plan to attend the
Meeting, by completing the proxy and following the delivery instructions
contained in the form of proxy and this Information Circular.
Unregistered shareholders, being persons whose holdings of shares of the
Company are registered in the name of a stockbroker or financial intermediary
(each an "Intermediary"), must follow special procedures if they wish to vote at
the Meeting. To vote in person at the Meeting, an unregistered shareholder must
insert his or her name in the space provided for in the form of proxy for the
appointment of a person, other than the persons named in the proxy, as
proxyholder and have the proxy signed by the Intermediary. In such case, the
unregistered shareholder attends as a proxyholder for their own shareholdings
and will be subject to the same limitations as any other proxyholder in voting
shares (see "Exercise of Discretion"). If the unregistered shareholder does not
plan to attend the Meeting, the unregistered shareholder can vote by proxy, by
following the instructions included on the proxy and provided to the
unregistered shareholder by the relevant Intermediary. In either case, the proxy
must be delivered in the manner provided for in this Information Circular or as
instructed by the shareholder's Intermediary. AN UNREGISTERED SHAREHOLDER WHO
DOES NOT FOLLOW THE INSTRUCTIONS FOR DELIVERY OF THE RELEVANT FORM OF PROXY AND
WHO ATTENDS THE MEETING WILL NOT BE ENTITLED TO VOTE AT THE MEETING.
EXERCISE OF DISCRETION
The nominees named in the accompanying form of proxy will vote or withhold
from voting the shares represented thereby in accordance with the instructions
of the shareholders on any ballot that may be called for. The proxy confers
discretionary authority upon the nominees named therein with respect to:
(a) each matter or group of matters identified therein for which a choice
is not specified, other than the appointment of auditors and the
election of directors,
(b) any amendment to or variation of any matter identified therein, and
(c) any other matter that may properly come before the Meeting.
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<PAGE> 5
IN RESPECT OF MATTERS FOR WHICH A CHOICE IS NOT SPECIFIED IN THE FORM OF
PROXY, THE NOMINEES NAMED IN THE ACCOMPANYING FORM OF PROXY WILL VOTE SHARES
REPRESENTED BY THE PROXY FOR THE APPROVAL OF SUCH MATTER OR GROUP OF MATTERS
DESCRIBED IN THE PROXY.
As of the date of this Information Circular management of the Company knows
of no amendment, variation or other matter that may come before the Meeting, but
if any amendment, variation or other matter is properly brought before the
Meeting each nominee intends to vote thereon in accordance with his best
judgment.
VOTING SHARES AND PRINCIPAL SHAREHOLDERS
As of March 1, 2000, the Company had outstanding 69,907,832 fully paid and
non-assessable Common shares ("Shares") without par value, each Share carrying
the right to one vote.
Only shareholders of record at the close of business on March 17, 2000, who
either personally attend the Meeting or who have completed and delivered a form
of proxy in the manner and subject to the provisions described above will be
entitled to vote or to have their Shares voted at the Meeting. A quorum for
general meetings of shareholders is 2 persons being present in person or being
represented by proxy, holding not less than one-twentieth of the issued Shares.
To the knowledge of the directors and senior officers of the Company, no
person or corporation beneficially owns directly or indirectly, or exercises
control or direction over Shares carrying more than 5% of the voting rights
attached to all outstanding Shares as at March 1, 2000, except as follows:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES % OUTSTANDING
- ---- ---------------- -------------
<S> <C> <C>
Royal Bank Investment Management Inc........................ 4,715,055 6.7%
RT Investment Management Holdings Ltd....................... 4,715,055 6.7%
The Royal Trust Company..................................... 4,573,740 6.5%
Royal Mutual Funds Inc...................................... 4,573,740 6.5%
</TABLE>
SECURITY OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets out as of March 1, 2000, ownership of Shares by
each Director and nominee for Director of the Company, each current Named
Executive Officer of the Company described in the Summary Compensation Table and
by all Directors and Named Executive Officers of the Company, who are such as at
the date hereof, as a group, without naming them. All such Shares are directly
owned by the person shown unless otherwise indicated by footnote.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------ -------------------- --------
<S> <C> <C>
A. Dan Rovig................................................ 215,000(1) 0.31
C. Kevin McArthur........................................... 220,000(2) 0.31
James R. Billingsley........................................ 100,000(3) 0.14
Ian S. Davidson............................................. 111,966(4) 0.16
Jean Depatie................................................ 100,000(5) 0.14
Kenneth F. Williamson....................................... 108,500(6) 0.16
Leonard Harris.............................................. 100,000(7) 0.14
Charles A. Jeannes.......................................... 130,000(8) 0.19
David L. Hyatt.............................................. 100,000(9) 0.14
Steve L. Baumann............................................ 100,000(10) 0.14
James S. Voorhees........................................... Nil --
Directors and Executive Officers as a Group (11 persons).... 1,285,466 1.84
</TABLE>
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Notes:
(1) Includes options exercisable within 60 days for the purchase of 200,000
shares at a price of Cdn.$2.70 on or before March 9, 2004.
(2) Includes options exercisable within 60 days for the purchase of 200,000
shares at a price of Cdn.$2.70 per share on or before March 9, 2004.
3
<PAGE> 6
(3) Includes options exercisable within 60 days for the purchase of 100,000
shares at a price Cdn.$2.70 per share on or before March 9, 2004.
(4) Includes options exercisable within 60 days for the purchase of 100,000
shares at a price of Cdn.$2.70 per share on or before March 9, 2004 and
2,200 shares owned by spouse in trust.
(5) Includes options exercisable within 60 days for the purchase of 100,000
shares at a price of Cdn.$2.70 per share on or before March 9, 2004.
(6) Includes options exercisable within 60 days for the purchase of 100,000
shares at a price of Cdn.$2.70 per share on or before March 9, 2004.
(7) Includes options exercisable within 60 days for the purchase of 100,000
shares at a price of Cdn.$2.70 per share on or before March 9, 2004.
(8) Includes options exercisable within 60 days for the purchase of 125,000
shares at a price of Cdn.$2.60 per share on or before April 23, 2004
(9) Includes options exercisable within 60 days for the purchase of 60,000
shares at a price of Cdn.$2.70 per share on or before March 9, 2004 and
40,000 shares at a price of Cdn.$2.60 per share on or before April 23,
2004.
(10) Includes options exercisable within 60 days for the purchase of 100,000
shares at a price of Cdn.$2.70 per share on or before March 9, 2004.
(11) Includes options which are exercisable within 60 days.
ELECTION OF DIRECTORS
SIZE OF BOARD
The size of the Board of Directors is currently established at 7. It is
proposed that the size of the Board of Directors remain at 7 persons for the
ensuing year.
TERM OF OFFICE
The term of office of each of the current directors expires at the
conclusion of the Meeting. The persons named below will be nominated for
election at the Meeting as management's nominees. Each director elected at the
Meeting or appointed by the Board of Directors to fill a vacancy on the Board of
Directors thereafter will hold office until the next annual general meeting of
the Company or until his successor is elected or appointed, unless his office is
earlier vacated in accordance with the Articles of the Company or the provisions
of the Company Act (British Columbia).
NOMINEES
The following table sets out the names and ages of management's nominees
for election as director, all offices in the Company now held by each of them,
the principal occupation, business or employment of each of them and the period
of time during which each has been a director of the Company. The Board of
Directors unanimously recommends the election of the nominees as directors to
hold office until the next annual meeting of shareholders or until their
successors are elected and qualified. The Board of Directors does not
contemplate that any of the nominees will be unable to stand for election, or
will decline to serve.
<TABLE>
<CAPTION>
NAME, AGE, POSITION OCCUPATION, BUSINESS PERIOD A DIRECTOR OF
AND COUNTRY OF RESIDENCE OR EMPLOYMENT(1) THE COMPANY
- ------------------------ -------------------- --------------------
<S> <C> <C>
A. Dan Rovig, 61............ Independent Consultant; Director and November 17, 1989 to August 15, 1997
Chairman and Director Chairman of the Board of the Company and November 19, 1998 to present.
U.S.A.
C. Kevin McArthur, 45....... President and Chief Executive Officer January 1, 1998 to present.
President, Chief Executive of the Company
Officer and Director
U.S.A.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME, AGE, POSITION OCCUPATION, BUSINESS PERIOD A DIRECTOR OF
AND COUNTRY OF RESIDENCE OR EMPLOYMENT(1) THE COMPANY
- ------------------------ -------------------- --------------------
<S> <C> <C>
James R. Billingsley, 77.... Retired; former Vice-President, August 18, 1986 to present.
Director Administration of Company
Canada
Ian S. Davidson, 58......... Vice-President of RBC Dominion June 28, 1994 to present.
Director Securities Inc.
Canada
Jean Depatie, 63............ President and Chief Executive Officer December 12, 1997 to present.
Director of Gold Hawk Resources Inc.
Canada
Leonard Harris, 73.......... Mining Consultant; President of B&H April 28, 1999 to present.
Director Mine services (Peru)
U.S.A.
Kenneth F. Williamson, 52... Independent Consultant April 28, 1999 to present.
Director
Canada
</TABLE>
- ---------------
Note:
(1) The information as to principal occupation and business or employment is not
within the knowledge of the management of the Company and has been furnished
by the respective nominees.
A. DAN ROVIG is currently a director and Chairman of the Board of Directors
of the Company and has been such from November 19, 1998. He was a director and
the President and Chief Executive Officer of the Company and its subsidiaries
from November 17, 1989 to August 15, 1997 when he retired from these positions.
He acted as a consultant to the Company until August 1998. Before joining the
Company in September 1988, Mr. Rovig was an executive officer of British
Petroleum Minerals Ltd, including its subsidiaries Amselco Minerals Inc. and BP
Minerals America for five years.
C. KEVIN MCARTHUR has been a director, President and Chief Executive
Officer of the Company since January 1, 1998. He served the Company and its
subsidiaries in various capacities from February 1988 to the present, including
Chief Operating Officer of the Company from July 30, 1997 to December 31, 1997,
President & General Manager of Glamis Rand Mining Company from December 1, 1995
to July 29, 1997 and prior to that as Vice President and General Manager of
Chemgold, Inc. Both Glamis Rand Mining Company and Chemgold, Inc. are
subsidiaries of the Company.
JAMES R. BILLINGSLEY is a director of the Company and was Vice-President in
charge of corporate administration, a position he held from August 1986 to
December 31, 1997, when he retired.
IAN S. DAVIDSON has been associated with the brokerage business for the
last 12 years having held vice-president positions with Capital Group Securities
Ltd. and Majendie Securities Ltd. and currently is a Vice-President of RBC
Dominion Securities Inc.
JEAN DEPATIE has been President and Chief Executive Officer of Gold Hawk
Resources Inc. since May 1997. Prior thereto he was President and Chief
Executive Officer of Cambiex Exploration from August 1995 to April 1997 and
President & Chief Executive Officer of Louvem Mines Inc. from February 1993 to
August 1995.
LEONARD HARRIS was Chairman of the Company's International Advisory Board
from December 12, 1997 to April 28, 1999 when the Committee was abandoned. He is
President of B&H Mine Services (Peru), and serves as a director of Sociedad
Minera Berenguela (Peru), Corriente Resources Inc. (Canada), Alamos Minerals Ltd
(Canada) and Resource Development Inc. (U.S.A.). He held various positions with
Newmont Mining Company and its subsidiaries including Vice President-Newmont
Gold Company, President
5
<PAGE> 8
& General Manager -- Newmont Peru, Vice President & General Manager -- Newmont
Latin America and General Manager -- Minera Yanacocha until May 1995.
KENNETH F. WILLIAMSON has been associated with the brokerage business as an
investment banker for the last 19 years having held positions as Vice Chairman,
Investment and Banking at Midland Walwyn/Merrill Lynch from 1993 until 1998. His
main areas of concentration for the past 20 years have been mergers and
acquisitions and the capital markets. He has focused his work in the financial
services and natural resources industries in the U.S. and Europe.
The Board of Directors met eight times during the fiscal year ended
December 31, 1999, and passed two resolutions by unanimous consent in writing
during the period.
VOTING FOR DIRECTORS
Under the Company Act (British Columbia) and the Articles of the Company,
the seven nominees for election to the Board of Directors who receive the
greatest number of votes cast for the election of directors by Shares present,
in person or represented by proxy at the Meeting and entitled to vote, will be
elected directors, if a quorum is present. In the election of directors, a
withholding of a vote will have no effect on the election since only affirmative
votes will be counted with respect to the election of directors. Voting at the
meeting will, except where a poll is demanded by a member or proxyholder
entitled to attend the Meeting, be by a show of hands.
COMPENSATION OF DIRECTORS
For the fiscal year ended December 31, 1999, each director of the Company
was entitled to an annual remuneration of $8,000 payable quarterly for acting as
a director and $500 for each meeting of the Board of Directors attended. In
addition, the chairman of a committee received $500 and each member of a
committee received $400 for each committee meeting attended. Effective February
24, 2000, the Directors receive $1,000 for each Board meeting attended and $500
for each committee meeting attended. Directors also receive share purchase
options (see "Security Ownership by Directors and Executive Officers"). These
share purchase options are granted at the discretion of the Corporate
Compensation Committee whose current policy is to provide the Chairman 200,000
share purchase options and all outside directors 100,000 share purchase options.
All share purchase options granted to directors are immediately exercisable.
Subject to then existing circumstances, the policy of the Corporate Compensation
Committee is to grant additional share purchase options in the same amounts to
the directors upon their exercise of the options presently held.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT AND ENVIRONMENT COMMITTEE
The Company's Audit and Environment Committee is comprised of Ian S.
Davidson, Kenneth F. Williamson, James R. Billingsley and Jean Depatie, all of
whom are independent of management. In carrying out its audit function, the
Committee reviews audits, considers the adequacy of the audit procedures,
recommends the appointment of independent auditors, reviews and approves
professional services to be rendered by them and reviews fees for audit
services. The Committee met three during the past fiscal year in carrying out
its audit function.
The Committee meets quarterly in carrying out its environmental review
function which includes arranging for and reviewing the annual independent
environmental audit of the Company's operations. The responsibility of the
Committee is to ensure that the Company's Environmental Compliance Program (the
"Program") is being adhered to, to review the effectiveness of the Program and
to ensure that environmental incidents are dealt with expeditiously. The
Committee met four times during the past fiscal year in carrying out its
environmental function.
6
<PAGE> 9
CORPORATE COMPENSATION COMMITTEE
The Company has a Corporate Compensation Committee whose current members
are A. Dan Rovig, Ian S. Davidson, Leonard Harris and C. Kevin McArthur (as a
non-voting member). The function of this Committee is to review compensation of
the Company's Directors and Executive Officers on an annual basis and to review
annually the compensation plans for the Company's non-executive staff.
During the 12 months ended December 31, 1999 the Corporate Compensation
Committee met four times and passed one resolution by consent in writing.
CORPORATE GOVERNANCE COMMITTEE
The Company's Corporate Governance Committee is comprised of James R.
Billingsley, Leonard Harris and Kenneth F. Williamson. The objective of the
Corporate Governance Committee is to report to the Board of Directors on the
general corporate governance of the Company and to recommend appropriate
procedures and actions in light of the guidelines for improved corporate
governance in Canada contained in the policies of The Toronto Stock Exchange.
The Committee met three times during the past fiscal year.
NOMINATING COMMITTEE
The Company's Nominating Committee is comprised of Jean Depatie, A. Dan
Rovig and C. Kevin McArthur. This Committee proposes nominees for the Board of
Directors. The Committee met one time during the past fiscal year.
CORPORATE GOVERNANCE
The Toronto Stock Exchange (the "TSE") requires that every listed company
incorporated in Canada or a province of Canada must disclose on an annual basis
its approach to corporate governance. The Company has elected to incorporate the
required disclosure in this Information Circular. The following disclosure was
approved by the Board of Directors (the "Board") at a meeting held on February
25, 2000.
STEWARDSHIP OF THE COMPANY
The Company's Board is empowered by the Company's Articles to manage, or
supervise the management of the affairs and business of the Company. The Board
performs this function through quarterly and special meetings and has delegated
certain of its responsibilities to those committees described above under
"Committees of the Board of Directors". In addition, the Board has established
policies and procedures that limit the ability of management to carry out
certain specific activities without the prior approval of the Board.
The planning process, related not only to current mining operations, but
also to the acquisition and development of new properties or the acquisition of
companies which control properties which are of interest to the Company, is of
key importance to a corporation the size of the Company. The Board is
intricately involved in this planning process thereby carrying out its duty to
take steps to increase shareholder value. The planning process in respect of
current mining operations is accomplished through a yearly review and approval
process wherein the Board reviews a rolling, five-year budget which is presented
by management through the Company's President and Chief Executive Officer. The
planning process with respect to the acquisition of properties or other
companies is carried out by the full Board reviewing proposals brought to it by
management. Outside consultants and professionals are engaged when required by
the Board. All material acquisitions and material asset dispositions require
approval of the Board.
The Board of Directors, as part of the planning process, has identified the
principal risks associated with the Company's business and has taken steps to
deal with them. The Board has adopted an Environmental Program that is
administered by the Audit and Environment Committee. The Committee reports to
the Board on a quarterly basis, which enables the Board to monitor the
effectiveness of the Environmental Program.
The Board of directors has delegated responsibility for communication with
the public and the Company's shareholders to its Senior Vice-President and
General Counsel and its President and Chief
7
<PAGE> 10
Executive Officer. Procedures are in place to ensure proper dissemination of
news releases and that shareholders who request information about the Company
get it in a timely manner. In addition, the Board has adopted a Corporate
Disclosure, Confidentiality and Insider Reporting Policy which sets out rules
for the disclosure of corporate information, the obligation of directors,
officers and employees of the Company to hold non-disclosed material information
confidential and the trading and reporting of sales of shares of the Company.
The responsibility for monitoring the effectiveness of the Company's
internal financial information systems has been delegated to the Company's Chief
Financial Officer who reports to the Board on a quarterly basis. The duty of
monitoring the technical affairs of the Company falls on the President and Chief
Executive Officer.
The Board of Directors does not have in place formal programs for
succession of management and training of management. Due to the size of the
Company, management personnel who are already trained are engaged as required to
fill vacancies.
CONSTITUTION OF THE BOARD
The Company's Board is currently comprised of 7 persons of which the 5
directors who are not officers or employees of the Company are "unrelated
directors" and as such are independent from management. The remaining 2 members
on the Board are the Chairman of the Board, who is not an employee of Company
and who is independent from management, and the President & Chief Executive
Officer of the Company, who is an employee of Company. Accordingly, a majority
of the members of the Board are unrelated to management and as such the Board is
in a position to act independently from management.
NOMINATION AND ASSESSMENT OF DIRECTORS
The Board has established a Nominating Committee that has been assigned the
responsibility for recommending and attracting Board members. This Committee is
comprised of 3 persons, one of which, being the President and Chief Executive
Officer, is a member of management. The Board has determined that the input of
the President and Chief Executive Officer on the Nominating Committee is helpful
to the Committee in evaluating nominees for the position of Director. Though the
Board has not yet put into place a formal procedure for assessing and evaluating
the effectiveness of the members of the Board and its committees, this function
is carried out in part by the Nominating Committee when evaluating and
recommending persons as nominees for the position of Director of the Company.
CORPORATE GOVERNANCE
The Corporate Governance Committee has been given the responsibility of
developing and recommending to the Board the Company's approach to corporate
governance. This Committee has prepared and approved a Directors' Manual that
has been distributed to all directors to assist members of the Board in carrying
out their duties. This manual includes a Policy on Corporate Disclosure,
Confidentiality and Insider Reporting as well as a Directors' Code of Conduct.
STRUCTURE OF COMMITTEES
The TSE guidelines on corporate governance recommend that generally
committees of the Board be comprised of persons who are not officers or
employees of the Company. The Board has determined, however, that due to the
technical nature of the Company's business, most of its committees can be more
effective by having one officer of the Company on the committee who is involved
in the committee's area of responsibility.
EVALUATION OF MANAGEMENT
The Company has a small management team, the performance of which is
reviewed annually by the Company's Corporate Compensation Committee. This
Committee is comprised of the Chairman, two outside independent directors and
the President and Chief Executive Officer who is a non-voting member of the
8
<PAGE> 11
Committee. The philosophy of the Corporate Compensation Committee is stated
below under "Executive Compensation". In addition, the Corporate Compensation
Committee periodically reviews the compensation paid to members of the Board and
makes recommendations to the Board.
EXECUTIVE COMPENSATION
REMUNERATION OF MANAGEMENT AND OTHERS
During the Company's fiscal year ended December 31, 1999 the aggregate
remuneration paid or payable to the directors and senior officers of the Company
and its subsidiaries (all of whose financial statements are consolidated with
those of the Company) was $1,583,315.
Under an existing policy of insurance, the Company is entitled to be
reimbursed for indemnity payments it is required or permitted to make to
directors and officers. The directors and officers of the Company as individuals
are insured for losses arising from claims against them for certain acts, errors
or omissions. The policy provides a maximum coverage in any one policy year of
$10 million for each claim. The annual premium which is payable during the
current fiscal year is $53,138. The premiums for the policy are not allocated
between directors and officer as separate groups.
NAMED EXECUTIVE OFFICERS
Under applicable laws Messrs. McArthur, Jeannes, Forbush, Voorhees, Hyatt,
and Baumann are "Named Executive Officers" of the Company for the period ended
December 31, 1999. The following disclosure is in respect of these individuals.
9
<PAGE> 12
COMPENSATION OF NAMED EXECUTIVE OFFICERS
The table below shows the compensation paid to the Named Executive Officers
for the past three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
AWARDS PAYOUTS
RESTRICTED
SECURITIES SHARES OR
UNDER RESTRICTED
OTHER ANNUAL OPTIONS/SARS SHARE LTIP ALL OTHER
SALARY BONUS COMPENSATION GRANTED UNITS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#)(3) ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. KEVIN MCARTHUR(1) 1999 240,000 Nil Nil 200,000 Nil Nil 12,800(2)
President, Chief 1998 182,500 Nil Nil 100,000 Nil Nil 13,500(2)
Executive Officer and
Director
CHARLES A. JEANNES(4) 1999 137,949 Nil Nil 125,000 Nil Nil 29,645(9)
Senior Vice-President,
Administration, Chief
Financial Officer, General
Counsel and Director
DANIEL J. FORBUSH(5) 1999 102,019 Nil Nil 125,000(6) Nil Nil 381,871.21(7)
Former Chief Financial 1998 125,000 Nil Nil 50,000 Nil Nil Nil
Officer
JAMES S. VOORHEES(4) 1999 105,000 Nil Nil 100,000(8) Nil Nil 90,208(9)
Vice-President and Chief
Operating Officer
DAVID L. HYATT(4) 1999 115,680 Nil Nil 100,000 Nil Nil 24,972(9)
Vice-President Nevada
Operations
STEVE L. BAUMANN(4) 1999 120,000 Nil Nil 100,000 Nil Nil 31,332(9)
Vice-President Latin
American Operations -- only
for 1999
</TABLE>
Notes:
(1) Mr. McArthur was not an executive Officer in 1997.
(2) Includes a fee of $8,000 paid annually to the Named Executive Officer in his
capacity as a director of the Company and fees of $500 for each meeting of
the Board attended and of $400 for each committee meeting attended.
(3) The Table lists share purchase options ("Options") granted during the noted
fiscal year. The Named Executive Officers of the Company are not entitled to
receive share appreciation rights ("SAR") under the Company's Share
Appreciation Rights Plan. Grants of Options under the Company's Incentive
Share Purchase Option Plan are generally made for a 5-year period at the
closing price as published by The Toronto Stock Exchange on the date prior
to the date of grant. The Corporate Compensation Committee of the Board
determines which Executive Officers and directors of the Company are to
receive Options, the exercise price of the Options, and restrictions, if
any, which are to attach to the right to exercise Options. The employment
contracts of the Named Executive Officers provides that they are entitled to
be granted Options of a stated number of Shares. If a Named Executive
Officer has his employment with the Company terminated without cause, any
outstanding Options will remain in effect for a period which is the shorter
of the time to the expiration of the share purchase option and 12 months
from the time of termination of employment. On March 9, 1999, all options
held by Messrs. McArthur, Forbush, Hyatt and Baumann were cancelled and
regranted at a lower exercise price of $2.70 per share. See particulars of
repricing under heading "Table of Option and SAR Repricings" below.
(4) The Named Executive Officers were not Executive Officers in 1997 and 1998.
(5) Mr. Forbush's employment as Chief Financial Officer, Secretary and Treasure
of the Company terminated on August 31, 1999. He was not a Named Executive
Officer in 1997.
(6) These options expire on August 31, 2000.
(7) Includes termination payments made to Mr. Forbush under his employment
contract.
(8) The grant of these options is conditional upon shareholders approving the
resolution to make more shares available under the Company's Incentive Share
Purchase Option Plan (See "Amendment of the Incentive Share Purchase Option
Plan" below).
(9) The amounts represent reimbursement of relocation expenses.
10
<PAGE> 13
LONG-TERM INCENTIVE PLAN AWARDS
No long-term incentive plan awards were made to the Named Executive
Officers during the Company's most recently completed financial year.
OPTIONS GRANTED TO AND EXERCISED BY THE NAMED EXECUTIVE OFFICERS
Share purchase options granted during the financial year ended December 31,
1999 to the Named Executive Officers, pursuant to the Incentive Share Purchase
Option Plan, are as follows:
OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
<TABLE>
SECURITIES % OF TOTAL MARKET VALUE OF
UNDER OPTIONS/SARS SECURITIES UNDERLYING
OPTIONS/SARS GRANTED TO OPTIONS ON THE
GRANTED(1) EMPLOYEES IN EXERCISE PRICE DATE OF GRANT
NAME (#) FISCAL YEAR (CDN$/SECURITY) (CDN$/SECURITY) EXPIRATION DATE
<S> <C> <C> <C> <C> <C>
C. KEVIN MCARTHUR 200,000 17.21% 2.70 2.70 March 9, 2004
CHARLES A. JEANNES 125,000 10.75% 2.60 2.60 April 23, 2004
JAMES S. VOORHEES 100,000(2) 8.6% 2.80 2.80 June 1, 2004
DAVID L. HYATT 60,000 8.6% 2.70 2.70 March 9, 2004
40,000 2.60 2.60
STEVE L. BAUMANN 100,000 8.6% 2.70 2.70 March 9, 2004
DANIEL J. FORBUSH 125,000(3) 10.75% 2.70 2.70 August 31, 2000
</TABLE>
Notes:
(1) The grants are in respect of Common shares of the Company. No SARs were
granted to the Named Executive Officers.
(2) The grant of these options is conditional upon shareholders approving the
resolution to make more shares available under the Company's Incentive Share
Purchase Option Plan (See "Amendment of the Incentive Share Purchase Option
Plan" below)
(3) Mr. Forbush's employment with the Company ceased on August 31, 1999.
No share purchase options were exercised by the Named Executive Officers
during the financial year ended December 31, 1999. The values of such
outstanding options at the end of such year were as follows:
AGGREGATED OPTIONS EXERCISED DURING THE MOST RECENTLY
COMPLETED FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION VALUES
<TABLE>
VALUE OF
UNEXERCISED
IN-THE-MONEY
AGGREGATE UNEXERCISED OPTIONS/ OPTIONS/SARS AT
SECURITIES ACQUIRED VALUE SARS AT FY-END FY-END
ON EXERCISE REALIZED (#) (CDN$)
NAME (#) (CDN$) EXERCISABLE/UNEXERCISABLE EXERCISABLE(1)
<S> <C> <C> <C> <C> <C>
C. KEVIN MCARTHUR Nil Nil 200,000 -- Nil
CHARLES A. JEANNES Nil Nil 125,000 -- Nil
JAMES S. VOORHEES Nil Nil -- -- Nil
DAVID L. HYATT Nil Nil 100,000 -- Nil
STEVEN L. BAUMANN Nil Nil 100,000 -- Nil
DANIEL J. FORBUSH Nil Nil 125,000 -- Nil
</TABLE>
Note:
(1) Potential realizable values in this table have been calculated in the manner
prescribed by applicable securities regulatory requirements and are neither
intended to reflect actual values nor are they a forecast of future prices
for the shares of the Company during the five-year option term.
11
<PAGE> 14
REGRANT OF OPTIONS
The following table discloses the cancellation and regrant of share
purchase options to the Named Executive Officers during 1999.
TABLE OF OPTION AND SAR REPRICINGS(1)
<TABLE>
<CAPTION>
SECURITIES
UNDER EXERCISE
OPTIONS PRICE OF
REPRICED OR CANCELLED TERM OF SHARES EXERCISE PRICE
DATE OF AMENDED(2) OPTIONS CANCELLED SUBJECT TO OF NEW OPTIONS
NAME REPRICING (#) (CDN$/SECURITY) OPTIONS NEW OPTIONS(3) (CDN$/SECURITY)
<S> <C> <C> <C> <C> <C> <C>
C. KEVIN MCARTHUR March 9, 1999 40,000 9.25 07/16/01 200,000 2.70
60,000 9.75 07/31/02
100,000 4.60 12/22/02
100,000 5.15 03/17/03
DANIEL J. FORBUSH March 9, 1999 50,000 9.25 07/16/01 125,000 2.70
75,000 4.60 12/22/02
50,000 5.15 03/17/03
DAVID L. HYATT March 9, 1999 40,000 8.75 05/05/02 60,000 2.70
40,000 4.60 12/22/01
STEVEN L. BAUMANN March 9, 1999 50,000 9.25 07/16/01 100,000 2.70
40,000 4.60 12/22/02
</TABLE>
Notes:
(1) The reason for all downward repricings of options held by the Named
Executive Officers during the most recently completed financial year was
that the prior option structure was not equitable to such persons in light
of the options held by other persons who received options to acquire Shares
by virtue of the Company acquiring Mar-West Resources Ltd. and Rayrock
Resources Ltd.
(2) All of these options were cancelled.
(3) Shareholders approved the issuance of the new options at the Company's
Annual General Meeting held on April 28, 1999.
EMPLOYMENT AGREEMENTS BETWEEN THE COMPANY AND THE NAMED EXECUTIVE OFFICERS
By an agreement dated January 1, 2000, Mr. C. Kevin McArthur was engaged by
the Company to act as its President and Chief Executive Officer. The agreement
has a month-to-month term subject to certain termination provisions. If Mr.
McArthur is terminated for other than cause, or in the event of a change of
control of the Company, as defined in the agreement, he will be paid any
remuneration due through the date of termination together with two times the
annual salary in force at the date of termination and the cash value of 24
months of full benefit coverage. The current salary under the Agreement is
$240,000 per annum plus benefits and participation in the Company's Incentive
Share Purchase Option Plan (see Note 2 to the "Summary Compensation Table").
By an Agreement dated January 1, 2000, Mr. Charles A. Jeannes was engaged
by the Company to act as its Senior Vice-President, Administration, General
Counsel and Secretary. The Agreement has a month-to-month term subject to
certain termination provisions. If Mr. Jeannes' employment with the Company is
terminated for other than cause, or in the event of a change of control of the
Company, as defined in the agreement, he will be paid any remuneration due
through the date of termination together with two times the annual salary and at
the date of termination and the cash value of 24 months of full benefit
coverage. The current salary under the Agreement is $200,000 per annum plus
benefits and participation in the Company's Incentive Share Purchase Option
Plan.
By an Agreement dated January 1, 2000, Mr. James S. Voorhees was engaged by
the Company to act as its Vice-President, Operations and Chief Operating
Officer. The Agreement has a month-to-month term subject to certain termination
provisions. If Mr. Voorhees' employment with the Company is terminated for other
than cause, or in the event of a change of control of the Company, as defined in
the agreement, he will be paid any remuneration due through the date of
termination together with two times the annual salary in force
12
<PAGE> 15
at the date of termination and the cash value of 24 months of full benefit
coverage. The current salary under the Agreement is $200,000 per annum plus
benefits and participation in the Company's Incentive Share Purchase Option
Plan.
By an Agreement dated January 1, 2000, Mr. David L. Hyatt was engaged by
the Company to act as its Vice-President, Investor Relations. The Agreement has
a month-to-month term subject to certain termination provisions. If Mr. Hyatt's
employment with the Company is terminated for other than cause, or in the event
of a change of control of the Company, as defined in the agreement, he will be
paid any remuneration due through the date of termination together with the
annual salary in force at the date of termination and the cash value of 12
months of full benefit coverage. The current salary under the Agreement is
$120,000 per annum plus benefits and participation in the Company's Incentive
Share Purchase Option Plan.
By an Agreement dated January 1, 2000, Mr. Steven L. Baumann was engaged by
the Company to act as its Vice-President, Investor Relations. The Agreement has
a month-to-month term subject to certain termination provisions. If Mr.
Baumann's employment with the Company is terminated for other than cause, or in
the event of a change of control of the Company, as defined in the agreement, he
will be paid any remuneration due through the date of termination together with
the annual salary in force at the date of termination and the cash value of 12
months of full benefit coverage. The current salary under the Agreement is
$120,000 per annum plus benefits and participation in the Company's Incentive
Share Purchase Option Plan.
By an agreement dated March 1, 1998, Daniel J. Forbush was engaged by the
Company to act as its Chief Financial Officer and Treasurer. The agreement had a
month-to-month term subject to certain termination provisions which provided
that in the case of Mr. Forbush being terminated for other than cause, as
defined in the agreement, he would be paid any remuneration due through the date
of termination together with 2 times the annual salary in force at the date of
termination and the cash value of 24 months of full benefit coverage. Mr.
Forbush was paid $381,871.21 upon his termination of employment on August 31,
1999.
No funds were set aside or accrued by the Company during the year ended
December 31, 1999 to provide pension, retirement or similar benefits for
directors or executive officers of the Company pursuant to any existing plan.
CORPORATE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Corporate Compensation Committee, comprised of Messrs. Ian S.
Davidson, Leonard Harris and A. Dan Rovig as voting members and C. Kevin
McArthur as non-voting member reviews the compensation of the Company's
executive officers annually.
It is the policy of the Committee to compensate the Company's executive
officers by both direct remuneration and entitlement to share purchase options.
To date, the Committee has not established any compensation criteria related to
individual or corporate performance reports.
The Committee also reviews the compensation paid to directors of the
Company. The compensation paid to the directors is based on the Committee's
analysis of the time and efforts devoted by the Directors to the meetings and
affairs of the Company, as well as various surveys of compensation paid to
directors of other public companies of a similar size to the Company in the
metals and mining industry.
Corporate Compensation Committee
<TABLE>
<S> <C>
(Signed) -- (Signed) --
</TABLE>
13
<PAGE> 16
PERFORMANCE GRAPHS
THE TORONTO STOCK EXCHANGE
The following chart compares the market performance of the Company's shares
in Canadian dollars on The Toronto Stock Exchange ("TSE") as compared to the TSE
gold and silver index and the TSE 300 index. The TSE is the principal trading
market for Shares of the Company outside of the United States.
[Performance Graph (TSE)]
<TABLE>
<CAPTION>
GLAMIS TSE/GOLD TSE/300
------ -------- -------
<S> <C> <C> <C>
1994/12 100.00 100.00 100.00
1995/12 71.71 115.71 111.86
1996/12 78.42 123.59 140.66
1997/12 44.06 70.88 158.99
1998/12 23.44 65.79 153.93
1999/12 21.02 54.17 199.68
</TABLE>
NEW YORK STOCK EXCHANGE
The following chart compares the market performance of the Company's shares
in U.S. dollars on the New York Stock Exchange ("NYSE") as compared to the MG
Group Index and the NYSE Market index.
[Performance Graph (NYSE)]
<TABLE>
<CAPTION>
NYSE MARKET II MC GROUP INC. GLAMIS GOLD I
-------------- ------------- -------------
<S> <C> <C> <C>
1994/12 100.00 100.00 100.00
1995/12 119.22 105.09 119.37
1996/12 104.95 108.95 162.18
1997/12 56.48 68.51 213.37
1998/12 28.24 55.56 253.89
1999/12 27.30 62.76 278.01
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Davidson, Harris, McArthur and Rovig comprise the Company's
Corporate Compensation Committee. Mr. Rovig currently serves as Chairman of the
Board of Directors of the Company and Mr. McArthur is the Company's President
and Chief Financial Officer.
APPOINTMENT OF AUDITORS
KPMG LLP, Chartered Accountants, of 777 Dunsmuir Street, Vancouver, British
Columbia, will be nominated at the Meeting at a remuneration to be fixed by the
directors. KPMG LLP have been the auditors of the Company since March 11, 1986.
14
<PAGE> 17
It is anticipated that a representative of KPMG will be in attendance at
the Meeting and will be given an opportunity to make a statement if he desires
and will be available to respond to appropriate questions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
To the knowledge of management of the Company, no director or Executive
Officer of the Company or nominee for election as a director of the Company or
any security holder known to the Company to own of record or beneficially more
than 5% of the Company's outstanding shares or any member of the immediate
family of any of the foregoing persons had any interest in any material
transaction during the year ended December 31, 1999, or has any interest in any
material transaction in the current year.
PARTICULARS OF OTHER MATTERS TO BE ACTED ON
AMENDMENT OF THE INCENTIVE SHARE PURCHASE OPTION PLAN
The Company currently has an Amended Incentive Share Purchase Option Plan
dated for reference September 30, 1995 (the "Share Option Plan"). The Board may,
from time to time, grant options under the Share Option Plan to purchase Common
shares in the capital of the Company to directors, officers, employees and
consultants of the Company or any subsidiary of the Company.
Each option is generally granted for a term of 5 years and the term may not
exceed 10 years. Options will have such vesting provisions as are determined by
the Board at the time of grant of the option.
As permitted by the Share Option Plan, the Board has delegated the
authority to grant options to the Corporate Compensation Committee.
The exercise price under each option will be either:
(a) the closing price per share for the Common Shares on The Toronto Stock
Exchange ("TSE") on the last trading day on such exchange before the
Effective Date of the Option,
(b) if at the time of granting the Option the Board is of the opinion that
the price determined under sec.(a) would not be a representative
price, the simple average of the high and low trading prices per share
for the Common shares on The TSE on the last five trading days on such
exchange before the Effective Date of the Option on which a trade of
Common Shares occurred, or
(c) such other price as determined by the Board and as approved by The TSE
in respect of share purchase options issued under the Plan which are
the result of options to acquire shares of acquired companies being
converted into options to acquire common shares.
Presently, the number of shares subject to option under the Share Option
Plan is limited to 1,759,500, of which options to acquire 1,556,500 Common
shares have been granted as at March 1, 2000. In addition to the Share Option
Plan, the Company has outstanding share purchase options to former employees of
Rayrock Resources Inc. in respect of 3,214,460 Shares as at March 1, 2000.
On February 23, 2000, the Board approved an increase in the number of
Common shares which may be issued under the Share Option Plan by 2,016,800
Common shares making the total number of Shares issuable thereunder 3,776,300,
subject to the approval of the TSE and the shareholders of the Company. The
purpose of the increase is to allow the Board to continue to grant options under
the Share Option Plan as a component of remuneration to directors, officers,
employees and consultants.
The current policy of the Board with respect to the grant of options to
Directors is to provide the Chairman 200,000 share purchase options and all
outside directors 100,000 share purchase options. All share purchase options
granted to directors are immediately exercisable. Subject to then existing
circumstances, the policy of the Corporate Compensation Committee is to grant
additional share purchase options in the same amounts to the directors upon
their exercise of the options presently held.
15
<PAGE> 18
Shareholder approval for the allocation of an additional 2,016,800 Common
shares for issuance pursuant to the Share Option Plan is being sought in
accordance with the policies of the TSE. In order for the resolution to be
effective, the Plan must be approved by a simple majority of the votes cast by
or on behalf of shareholders entitled to vote at the Meeting.
Management recommends that shareholders vote in favour of the resolution.
ADOPTION OF SHAREHOLDERS' RIGHTS PLAN
At the Meeting, shareholders will be asked to consider and vote to approve
a Shareholders' Rights Plan (the "Plan") for the Company. The Plan was adopted
by the Board on February 25, 2000 pursuant to an agreement dated February 25,
2000 (the "Rights Agreement'). The full text of the Rights Agreement is set
forth in Schedule "A" to this Circular. Capitalized terms used below without
express definition have the meanings ascribed to them in the Rights Agreement.
The shareholder approval is being sought in accordance with the policies of the
TSE.
THE BOARD HAS UNANIMOUSLY ADOPTED AND APPROVED THE PLAN AND THE BOARD AND
MANAGEMENT RECOMMEND THAT SHAREHOLDERS VOTE FOR ITS ADOPTION.
The Plan will terminate if it is not approved by the shareholders at the
Meeting. To be effective, the resolution to approve the Plan must be passed by a
majority of the votes cast by the Independent Shareholders (see below) who vote
in respect of the resolution, failing which the Rights Agreement will be void.
UNLESS OTHERWISE INSTRUCTED, SHARES REPRESENTED BY PROPERLY EXECUTED
PROXIES IN THE ENCLOSED FORM (IF EXECUTED IN FAVOUR OF THE MANAGEMENT NOMINEES
AND DEPOSITED AS PROVIDED IN THE NOTICE OF MEETING) WILL BE VOTED FOR APPROVAL
OF THE PLAN.
BACKGROUND
The Board proposes the adoption of the Plan to protect the shareholders of
the Company from unfair take-over strategies to which the Company and its
shareholders may be particularly vulnerable because of the different securities
laws applicable in Canada and the United States of America, the principal
trading markets for the Company's Shares.
The Plan is not being proposed by the Board in response to, or in
anticipation of, any acquisition proposal, and is not intended to prevent a
Take-over Bid being made for the Company or to secure continuance of management
or the directors in office. The Plan has been designed to ensure that, in the
event of a Take-over Bid being made for Voting Shares (which at the moment are
comprised solely of Shares) of the Company, all shareholders will receive full
and fair value for their Shares and will not be subject to abusive or coercive
takeover strategies and that the Board, on behalf of the Company and all of its
shareholders, will have the time and opportunity to evaluate the bid and its
effects, to seek out alternative bidders and to explore, develop and evaluate
other ways of maximizing shareholder value.
Accordingly, the objectives of the Plan are, (i) to provide each
shareholder, no matter where they are resident, the opportunity to receive the
same offer, (ii) to provide each shareholder, together with his or her advisor,
with sufficient time to assess and evaluate a Take-over Bid and (iii) to permit
the Board, where appropriate, to explore, develop and evaluate alternatives to
maximize the value to shareholders. Under the Plan, a bidder is encouraged
either to make a Permitted Bid, which does not need approval of the Board,
having terms and conditions that are designed to meet these objectives, or, to
negotiate the terms of a bid with the Board.
In considering whether to adopt the Plan, the Board considered the current
legislative framework in Canada governing Take-over Bids, developments in the
terms of shareholders' rights plans over the last number of years and the actual
experiences in hostile Take-over Bids in Canada which have taken place over the
last few years for target companies having shareholder rights plans.
16
<PAGE> 19
The objectives of the Plan and the terms of the Plan have been developed to
deal with the following specific concerns with the existing securities laws in
Canada pertaining to Take-over Bids:
Time
Current Canadian securities legislation generally provides that Take-over
Bids may expire after only 21 days (certain of the Canadian securities
administrators have indicated that the period will be increased to 35 days,
though no timetable has been established for the change to be put into effect).
The Board is concerned that such a short period does not provide an opportunity
(i) for the shareholders and the Board to properly assess the initiating bid,
(ii) for the shareholders to assess the merits of competing bids, and (iii) for
the Board to seek out or otherwise allow competing bidders to emerge or to
develop other methods of maximizing shareholder value.
The Plan, through the Permitted Bid concept, provides a mechanism whereby
the minimum expiry period for a Take-over Bid will be 45 days and provides that
if the Permitted Bid is successful in having at least 50% of the outstanding
Voting Shares held by Independent Shareholders (such being generally the
shareholders of the Company other than (i) the bidder and its Associates and
Affiliates and other persons acting in concert with the bidder, and (ii) any
employee benefit plan for the employees of the Company or a wholly-owned
subsidiary of the Company), tendered by such time, the Take-over Bid will be
extended for an additional 10 Business Days. These provisions will allow the
shareholders and the Board additional time to consider the Take-over Bid and the
various alternatives that may potentially be available.
Pressure to Tender
There is concern that a shareholder may feel compelled to tender to a bid
which the shareholder considers to be inadequate and not represent full and fair
value because, in failing to do so, the shareholder may be left with illiquid or
minority discounted Voting Shares in the Company. The requirements for a
Permitted Bid in the Plan include a mechanism which is intended to ensure that a
shareholder who has not tendered to a Permitted Bid, may do so once it is known
that the Permitted Bid has been successful. A Permitted Bid is required to
contain a provision that Voting Shares will not be taken-up and paid for under
the Take-over Bid unless a majority of the outstanding Voting Shares held by
Independent Shareholders have tendered by the end of the Permitted Bid's minimum
45 day period, following which the Take-over Bid must be extended for a further
10 Business Days so as to allow those who did not tender at the first expiry
time to nevertheless tender into the bid.
Unfair Treatment
The Board has adopted the Plan in part because a bidder could attempt to
obtain control of the Company without paying full value, without obtaining
shareholder approval and without treating all shareholders equally. Canadian
securities laws contain various exemptions which may allow for unequal treatment
of shareholders in transactions involving an acquisition of effective control of
a company. Under these laws it is possible, through the acquisition of shares in
the open market or through private agreements involving a small number of
shareholders, to acquire a large share position or even a control block in a
Canadian public company without making an offer to all shareholders. Under these
types of acquisitions, control of a company may be obtained without the acquirer
being required to pay a "control premium" to all shareholders of the company.
SUMMARY OF OPERATION OF THE PLAN
As described in more detail below, if a person (an "Acquiring Person")
acquires 20% or more of the Voting Shares of the Company, other than by way of
(i) a Permitted Bid, (ii) a Competing Bid, (iii) a transaction otherwise
approved by the Board, or (iv) through distributions by the Company, holders of
Rights other than the Acquiring Person may acquire for Cdn$100, Common Shares of
the Company having a market value of $200. In such a case, the Rights will cause
substantial dilution to an Acquiring Person. This dilutive
17
<PAGE> 20
aspect of the Plan is intended to discourage a potential acquirer from
undertaking "creeping acquisitions" or buying a large block of shares from a
select group of shareholders through "private agreement transactions".
The adoption of the Plan will not affect the duties imposed upon the Board
at law to act honestly and in good faith and in the best interests of the
Company and to consider any Take-over Bid in respect of the Company on that
basis. In addition, the Plan will not prevent a person from utilizing the proxy
solicitation mechanism of the Company Act (British Columbia) to effect a change
of the Board nor will it affect the right of holders of not less than 5% of the
Voting Shares of the Company to requisition the Board to call a meeting of
shareholders for the purposes stated in the requisition.
Issuance of the Rights will not alter in any way the financial condition of
the Company and will not interfere with the day-to-day operations of the Company
or its business plans nor will it change the way in which shareholders currently
trade Common Shares.
DESCRIPTION OF THE PLAN
THE FOLLOWING DESCRIPTION OF THE PLAN IS A SUMMARY ONLY. REFERENCE IS MADE
TO THE RIGHTS AGREEMENT CONSTITUTING THE PLAN, THE FULL TEXT OF WHICH IS
REPRODUCED IN SCHEDULE A TO THIS CIRCULAR.
Issuance of Rights
Effective at 5:00 p.m. on February 25, 2000, one Right was issued in
respect of each outstanding Common share (each a "Voting Share") of the Company
(the "Effective Time") and one Right will be issued in respect of each Voting
Share of the Company issued thereafter, prior to the earlier of the Separation
Time and the Expiration Time. If the Plan is approved by shareholders at the
Meeting, the Rights will expire at the termination of the Company's annual
meeting in the year 2003 (the "Expiration Time"), unless earlier redeemed by the
Company. If the Plan is not approved by the shareholders of the Company at the
Meeting, the Plan will expire.
Trading of Rights
Certificates for Voting Shares issued after the Effective Time will contain
a notation incorporating the Rights Agreement by reference. Until the Separation
Time, or earlier termination or expiration of the Rights, the Rights will be
evidenced by and transferred with the associated Voting Shares and the surrender
for transfer of any certificate representing Voting Shares will also constitute
the surrender for transfer of the Rights associated with those Voting Shares.
After the Separation Time, the Rights will become exercisable and begin to trade
separately from the associated Voting Shares. As soon as practicable following
the Separation Time, separate certificates evidencing rights ("Rights
Certificates") will be mailed to the holders of record of Voting Shares as of
the Separation Time and the Rights Certificates alone will evidence the Rights.
The Rights will be listed in Canada on The Toronto Stock Exchange.
Separation Time
Under the Plan the Separation Time means the close of business on the 10th
Trading Day after the earliest to occur of:
(a) a public announcement that a person or a group of affiliated or
associated persons (an "Acquiring Person") has acquired Beneficial
Ownership of 20% or more of the outstanding voting shares of the
Company ("Voting Shares"), other than as a result of (i) a reduction
in the number of Voting Shares outstanding, (ii) a Permitted Bid,
(iii) acquisitions of Voting Shares approved by the Board, or (iv)
other specified exempt acquisitions where shareholders participate on
a pro rata basis;
(b) the date of commencement of, or the first public announcement of an
intention of any person to commence, a Take-over Bid where the Voting
Shares subject to the bid, together with the Voting Shares
beneficially owned by that person (including affiliates, associates
and joint actors) would constitute 20% or more of the outstanding
Voting Shares;
18
<PAGE> 21
(c) the date upon which a Permitted Bid or Competing Permitted Bid ceases
to be such; and
(d) or such later date as the Board may determine.
Under the Plan, a Take-over Bid means an offer to acquire Voting Shares
where the Voting Shares subject to the offer together with the number of Voting
Shares held by the person making the bid constitute in the aggregate 20% or more
of the outstanding Voting Shares of the Company.
Exercise of Rights
Rights will not be exercisable until the Separation Time. After the
Separation Time and prior to the occurrence of a transaction which results in a
person becoming an Acquiring Person (a "Flip-In Event"), each Right will entitle
the registered holder thereof to purchase from the Company one Common share at a
price of $100, subject to adjustment and certain anti-dilution provisions (the
"Exercise Price"). If a Flip-In Event occurs, each Right will, unless the
Flip-In Event is waived in accordance with the terms of the Plan, entitle the
registered holder to receive, upon payment of the Exercise Price, Common Shares
of the Company having an aggregate market price equal to twice the Exercise
Price. In such event, however, any Rights beneficially owned by an Acquiring
Person, (including affiliates, associates and joint actors), or the transferee
of any such person, will be void. A Flip-In Event does not include acquisitions
approved by the Board or acquisitions pursuant to a Permitted Bid or Competing
Permitted Bid.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including the right to vote or receive
dividends.
Permitted Bids
The Plan employs a "Permitted Bid" concept whereby a Take-over Bid will not
trigger the Separation Time if it meets certain conditions. A "Permitted Bid" is
defined as an offer to acquire Voting Shares for cash or securities made by
means of a Take-over Bid circular, where the Voting Shares subject to the offer,
together with shares beneficially owned by the offeror at the date of the offer
(including its affiliates, associates and joint actors), constitute 20% or more
of the outstanding Voting Shares and that also complies with the following
additional provisions:
(a) the bid must be made to all the holders of Voting Shares wherever
resident; and
(b) the bid must contain the following irrevocable and unqualified
conditions:
(i) no Voting Shares will be taken up or paid for prior to the close
of business on the 45th day following the date the circular is
sent to shareholders and then only if more than 50% of the then
outstanding Voting Shares held by Independent Shareholders have
been tendered to the bid and not withdrawn;
(ii) Voting Shares may be deposited pursuant to the bid, unless it is
withdrawn, at any time during the 45 day period described in
sec.(b)(i);
(iii) Voting Shares deposited pursuant to the bid may be withdrawn until
taken up or paid for; and
(iv) if the deposit condition referred to in sec.(b)(i) is satisfied,
the offeror will extend the expiration date for the bid for at
least 10 Business Days from the date on which the offer would
otherwise expire.
"Independent Shareholders" are holders of Voting Shares other than (i) an
Acquiring Person, (ii) any offeror making a Take-over Bid, (iii) any affiliate
or associate of an Acquiring Person or offeror, (iv) joint actors with such
persons, and (v) employee benefit plans or trusts for employees of the Company
or its wholly-owned subsidiaries unless the beneficiaries of such plans or
trusts direct the voting or tendering to a Take-over Bid for the Voting Shares.
19
<PAGE> 22
Competing Permitted Bids
A "Competing Permitted Bid" is a Take-over Bid made after a Permitted Bid
has been made and prior to its expiry that satisfies all of the provisions of a
Permitted Bid, except that it must remain open for acceptance until at least the
later of 21 days and the expiry of the outstanding Permitted Bid. The reduction
in the time for acceptance of a Competing Permitted Bid is to allow, as nearly
as practicable, all bids to be dealt with by the shareholders of the Company
within substantially the same time frame.
Beneficial Ownership
Under the definition of "Beneficial Ownership" in the Plan, a person is
deemed to own securities owned by the person's affiliates and associates and by
any person acting jointly or in concert with such person. A person is also
deemed to own securities which such person has a right to acquire within 60 days
of the exercise of conversion rights or purchase rights. The Plan contains
certain exceptions which would permit investment managers and trust companies
holding securities on behalf of clients, Crown agents, certain statutory bodies
and pension plan administrators to hold more than 20% of the outstanding Voting
Shares of the Company in the ordinary course of their business without becoming
an Acquiring Person, provided they do not actually make a Take-over Bid for such
shares. In addition, the Plan has an exemption from the deemed ownership of
securities for those which are lodged under a Permitted Lock-up Agreement or in
respect of securities which have been deposited or tendered pursuant to a tender
or exchange offer or Take-over Bid unless such deposited or tendered shares have
been accepted unconditionally for payment or exchange or have been taken up or
paid for.
A Permitted Lock-up Agreement is an agreement whereby a person agrees to
deposit or tender Voting Shares held by the person to a Take-over Bid, but which
permits the person to withdraw the Voting Shares from the agreement in order to
tender or deposit them to another Take-over Bid that contains an offering price
or value per Voting Share that is at least 5% in excess of the value per Voting
Share offered under the bid which is subject to the Lock-up Agreement.
Redemption of Rights and Waiver of a Flip-In Event
At any time prior to the occurrence of a Flip-In Event, the Board may, with
the prior consent of the holders of Voting Shares, authorize the redemption of
all, but not less than all, of the then outstanding Rights at a redemption price
of $0.00001 per Right, subject to adjustment. In addition, if an offeror
acquires more than 50% of the Outstanding Voting Shares not already beneficially
owned by the offeror, pursuant to a Permitted Bid, a Competing Permitted Bid or
another exempt acquisition, the Board will be deemed to have elected to have the
Company redeem the Rights at the redemption price.
Prior to the occurrence of a Flip-In Event, the Board may, with the prior
consent of the holders of Voting Shares, waive a Flip-In Event that occurs as a
result of a circular Take-over Bid sent to all holders of Voting Shares. In that
event, the Board will be deemed to have waived any other Flip-In Event occurring
by reason of any other circular Take-over Bid.
The Board may also waive the application of the Plan to a Flip-In Event
resulting from inadvertence where the Acquiring Person has reduced its
beneficial ownership of Voting Shares to below 20%. Except as described above,
the waiver of the application of the Plan to a particular Flip-In Event requires
shareholder approval.
Protection against Dilution
The Exercise Price, the number and nature of securities which may be
purchased upon the exercise of Rights and the number of Rights outstanding, are
subject to adjustment from time to time to prevent dilution in the event of
stock dividends, subdivisions, consolidations, reclassifications or other
changes in the outstanding Common Shares, pro rata distributions to holders of
Common Shares and other circumstances where adjustments are required to
appropriately protect the interests of the holders of Rights.
20
<PAGE> 23
Supplements and Amendments
Assuming that the shareholders approve the Plan at the Meeting, the Company
may thereafter, without the approval of the holders of Voting Shares or Rights,
make any amendments to the Rights Agreement (i) specifically contemplated
therein, (ii) to correct clerical or typographical errors, or (iii) which may be
required to maintain the validity and effectiveness of the Rights Agreement as a
result of any change in any applicable laws or regulatory requirements. If these
amendments occur before the Separation Time, they must be put before the
shareholders for ratification at the next occurring meeting of shareholders and
if the amendments occur after the Separation Time they must be put before the
holders of Rights for ratification at a meeting to be called in accordance with
the Articles of the Company and the Company Act (B.C.).
At any time before the Separation Time, the Company may, with the prior
consent of the holders of Voting Shares, amend, vary or rescind any of the
provisions of the Rights Agreement or the Rights whether or not such action
would materially adversely affect the interests of the holders of Rights
generally.
At any time after the Separation Time and before the Expiration Time, the
Company may, with the prior consent of the holders of Rights, amend, vary or
rescind any of the provisions of the Rights Agreement or the Rights whether or
not such action would materially adversely affect the interests of the holders
of Rights generally.
INCOME TAX CONSEQUENCES
Canadian Income Tax Consequences
The Company will not receive any income as a result of the issuance of the
Rights for Canadian federal income tax purposes. Generally, the value of a
right, if any, to acquire additional shares of a company is not a taxable
benefit includable in income under the Income Tax Act (Canada) (the "Act") and
is not subject to non-resident withholding tax under the Act if the right is
conferred on all shareholders. While the Rights are conferred on all
shareholders, the Rights may become void in the hands of certain shareholders
upon the occurrence of certain triggering events. Whether the issuance of the
Rights is a taxable event is not therefore free of doubt, but no tax arises if
the Rights do not have a monetary value at the date of issue. The Company is of
the view that the Rights will have a negligible monetary value at their date of
issue and will continue to have a negligible monetary value. If the value of the
Rights is negligible, the issue of the Rights will not give rise to a taxable
benefit or capital gain and will not be subject to non-resident withholding tax.
If the Rights come to have a monetary value, their disposition, other than by
way of exercise, will give rise to a capital gain equal to the full amount of
the proceeds received by shareholders who held the Rights as capital property.
The foregoing does not address the Canadian income tax consequences of other
events such as the separation of the voting Rights from the Common Shares, the
occurrence of a Flip-In Event or the redemption of Rights.
As long as the Common Shares continue to be qualified investments for
trusts governed by registered retirement savings plans, registered retirement
investment funds and deferred profit sharing plans, the Rights will continue to
be qualified investments for such plans.
United States Tax Consequences
For United States federal income tax purposes, the Internal Revenue Service
has stated in Revenue Ruling 90-11 that the adoption of a shareholders' rights
plan similar to the Plan is not a taxable transaction to a company's
shareholders. That ruling expressly refrains from addressing the tax
consequences of any other event in connection with a rights plan. The United
States federal income tax consequences of such other events as the separation of
the Rights from the Common Shares, a Flip-In Event or the exercise or redemption
of Rights, are uncertain. The tax consequences, including the likelihood that an
event will be a taxable transaction (which, in certain cases is probable) or, if
taxable, whether it is a distribution or a sale or exchange of a Right can vary
depending on the facts and circumstances at the time of the event.
SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE
CONSEQUENCES OF RECEIVING, HOLDING, EXERCISING OR EXCHANGING RIGHTS.
21
<PAGE> 24
ANNUAL REPORT
The Annual Report to Shareholders of the Company for the fiscal year ended
December 31, 1999, which includes audited consolidated financial statements,
will be mailed to Shareholders contemporaneously herewith, but such Annual
Report is not incorporated in the Information Circular (Proxy Statement) and is
not deemed to be a part of the proxy-soliciting material.
SHAREHOLDER PROPOSALS
If any Shareholder desires to present a proposal for action at the
Company's annual general meeting to be held in the year 2001, such proposal must
be received by the Company prior to November 1, 2000.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the United States Securities Exchange Act of 1934 (the
"Exchange Act") requires the Company's officers and directors and persons who
own more than 10% of a class of the Company's securities registered under the
Exchange Act to file reports of ownership and changes of ownership with the
United States Securities and Exchange Commission ("SEC"). Officers, directors
and greater than 10% shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of copies of such forms received by it, the
Company believes that during the last fiscal year, all filing requirements
applicable to its officers, directors and greater than 10% shareholders were
complied with.
FORM 10-K
The Company's Annual Report for the year ended December 31, 1999, on Form
10-K, filed with the SEC and the securities administrators of Canada in lieu of
filing an Annual Information Form, including the financial statements and
schedules thereto, can be obtained, without charge, by sending a written request
to Charles A. Jeannes, Senior Vice-President, Administration of the Company, at
5190 Neil Road, Suite 310, Reno, Nevada U.S.A., 89502.
OTHER MATTERS
Management knows of no other matters that are to be presented for action at
the Meeting. Should any other matters properly come before the Meeting, the
persons named in the accompanying proxy will have discretionary authority to
vote all proxies in accordance with their judgment.
BY ORDER OF THE BOARD
(SIGNED) C. KEVIN MCARTHUR
PRESIDENT AND CHIEF EXECUTIVE OFFICER
22
<PAGE> 25
SCHEDULE A
GLAMIS GOLD LTD.
AND
MONTREAL TRUST COMPANY OF CANADA
AS RIGHTS AGENT
------------------------------------------------------------------------
SHAREHOLDER RIGHTS PLAN AGREEMENT
DATED
FEBRUARY 25, 2000
------------------------------------------------------------------------
<PAGE> 26
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1 -- INTERPRETATION.................................
Certain Definitions.......................................
Currency..................................................
Headings..................................................
Number and Gender.........................................
Acting Jointly or in Concert..............................
Statutory References......................................
Holder....................................................
Calculation of Voting Share Percentage....................
Interpretation............................................
ARTICLE 2 -- THE RIGHTS.....................................
Legend on Voting Share Certificates.......................
Initial Exercise Price....................................
Rights Not Exercisable Until Separation Time..............
Mailing of Rights Certificates and Disclosure Statement...
Exercise of Rights........................................
Duties of Rights Agent Upon Receipt of Election to
Exercise...............................................
Partial Exercise of Rights................................
Duties of the Corporation.................................
Adjustments to Exercise Price; Number of Rights...........
Date on Which Exercise is Effective.......................
Execution of Rights Certificates..........................
Authentication of Rights Certificates.....................
Dating of Rights Certificates.............................
Register of Rights........................................
Transfers and Exchanges...................................
Mutilated Rights Certificates.............................
Destroyed, Lost and Stolen Rights Certificates............
Replacement Fee...........................................
Validity of Replacement Rights Certificates...............
Persons Deemed Owners.....................................
Delivery and Cancellation of Rights Certificates..........
Agreement of Rights Holders...............................
Rights Certificate Holder Not Deemed a Shareholder........
ARTICLE 3 -- ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS......................................
Flip-in Event.............................................
Cancellation of Rights Held by an Acquiring Party.........
Legend on Rights Certificates Transferred by an Acquiring
Party..................................................
ARTICLE 4 -- THE RIGHTS AGENT...............................
Appointment of Rights Agent...............................
Protection of Rights Agent................................
Rights Agent to be Kept Informed..........................
Merger or Amalgamation or Change of Name of Rights
Agent..................................................
Countersigning of Rights Certificates.....................
Duties of Rights Agent....................................
Change of Rights Agent....................................
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 5 -- MISCELLANEOUS..................................
Redemption and Waiver.....................................
Expiration................................................
Issuance of New Right Certificates........................
Supplements and Amendments................................
Timing of Certain Approvals of the Shareholders...........
Effective Time of Supplements and Amendments..............
Approvals of Amendments by Rights Agent...................
Fractional Rights and Fractional Shares...................
Rights of Action..........................................
Notice of Proposed Actions................................
Notices...................................................
Successors................................................
Benefits of This Agreement................................
Governing Law.............................................
Severability..............................................
Effective Date............................................
Determinations and Actions by the Board of Directors......
Rights of Board, Corporation and Offeror..................
Regulatory Approvals......................................
Declaration as to Non-Canadian Holders....................
Time of the Essence.......................................
Execution in Counterparts.................................
EXHIBITS
Exhibit A -- Form of Rights Certificate (and attached Form
of Election to Exercise and Form of Assignment)...........
</TABLE>
<PAGE> 28
SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT dated as of the 25th day of February, 2000 between Glamis
Gold Ltd. (the "Corporation"), a corporation incorporated under the Company Act
(British Columbia), and Montreal Trust Company of Canada, a trust company
incorporated under the laws of Canada, as Rights Agent (the "RIGHTS AGENT",
which term will include any successor Rights Agent hereunder).
WHEREAS:
(A) The Board of Directors of the Corporation has determined that it is
advisable and in the best interests of the Corporation and its shareholders
to adopt a shareholder rights plan (the "Rights Plan") to ensure, to the
extent possible, that all shareholders of the Corporation are treated fairly
in connection with any take-over bid for the Corporation;
(B) In order to implement the adoption of the Rights Plan the Board of
Directors has, subject to receipt of shareholder and regulatory approval:
(a) authorized the issuance of one Right (as hereinafter defined)
effective the Record Time (as hereinafter defined) in respect of each
Common Share outstanding at the Record Time; and
(b) authorized the issuance of one Right in respect of each Common Share
issued after the Record Time and prior to the earlier of the
Separation Time (as hereinafter defined) and the Expiration Time (as
hereinafter defined);
(C) Each Right entitles the holder thereof, after the Separation Time, to
purchase securities of the Corporation pursuant to the terms and subject to
the conditions set forth herein; and
(D) The Corporation desires to appoint the Rights Agent to act on behalf of the
Corporation, and the Rights Agent is willing to so act, in connection with
the issuance, transfer, exchange and replacement of Rights Certificates, the
exercise of Rights, and other matters referred to herein.
NOW THEREFORE in consideration of the premises and the respective covenants and
agreements set forth herein the parties agree as follows:
ARTICLE 1 -- INTERPRETATION
CERTAIN DEFINITIONS
1.1 For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "1933 SECURITIES ACT" means 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.
(b) "1934 EXCHANGE ACT" means 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.
(c) "ACQUIRING PERSON" means, any Person who is the Beneficial Owner of 20% or
more of the outstanding Voting Shares; save and except that the term
"Acquiring Person" will not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or more of the
outstanding Voting Shares of the Corporation as a result of
(A) Corporate Acquisitions,
(B) Permitted Bid Acquisitions,
(C) Corporate Distributions,
A-1
<PAGE> 29
(D) Exempt Acquisitions, or
(E) Convertible Security Acquisitions;
(each an "Exempt Transaction")
provided, however, that if a Person becomes the Beneficial Owner of 20%
or more of the outstanding Voting Shares by reason of one or more or any
combination of Exempt Transactions and, after such becomes the
Beneficial Owner of an additional 1% or more of the outstanding Voting
Shares, other than pursuant to an Exempt Transaction, such Person will,
as at such time, become an Acquiring Person;
(iii) a Grandfathered Person provided, however, that if such person
becomes, after the Record Time, the Beneficial Owner of more than an
additional 1% of the number of Voting Shares outstanding, other than
pursuant to Corporate Acquisitions, Permitted Bid Acquisitions,
Corporate Distributions, Exempt Acquisitions or Convertible Security
Acquisitions, such Person will as of the date of such acquisition
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
Voting Shares as a result of such Person becoming disqualified from
relying on sec.1.1(g)(vi) or sec.1.1(g)(viii) solely because such
Person makes or proposes to make a Take-over Bid in respect of
securities of the Corporation alone or by acting jointly or in
concert with any other Person; and
(v) an underwriter or member of a banking or selling group which acquires
Voting Shares from the Corporation in connection with a distribution
of securities of the Corporation.
(d) "AFFILIATE", when used to indicate a relationship with a specified Person,
means a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, such specified Person and a body corporate will be deemed to be an
Affiliate of another body corporate if one of them is the Subsidiary of the
other or if both are Subsidiaries of the same body corporate or if each of
them is controlled by the same Person.
(e) "AGREEMENT" means this agreement as amended, modified or supplemented from
time to time.
(f) "ASSOCIATE", when used to indicate a relationship with a specified Person,
means
(i) a spouse of such specified Person,
(ii) any Person of either sex with whom such specified Person is living in
a conjugal relationship outside marriage, or
(iii) any relative of such specified Person or of a Person mentioned in
sec.(i) or sec.(ii) of this definition if that relative has the same
residence as the specified Person.
(g) a Person will be deemed the "BENEFICIAL OWNER", and to have "BENEFICIAL
OWNERSHIP" of, and to "BENEFICIALLY OWN":
(i) any securities of which such Person or any Affiliate or Associate of
such Person is the owner in law or equity;
(ii) any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to become the owner at law or
in equity (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 the making of any payment) pursuant
to any agreement, arrangement, pledge or understanding, whether or
not in writing (other than customary agreements with and between
underwriters and banking group or selling group members with respect
to a distribution of securities or pursuant to a pledge of securities
in the ordinary course of business), or upon the exercise of any
conversion right, exchange right, share purchase right (other than a
Right), warrant or option; and
A-2
<PAGE> 30
(iii) any securities that are Beneficially Owned within the meaning of
sec.1.1(g)(i) or (ii) by any other Person with whom such Person is
acting jointly or in concert;
provided, however, that a Person will not be deemed to be the "BENEFICIAL
OWNER", or to have "BENEFICIAL OWNERSHIP" of, or to "BENEFICIALLY OWN", any
security by reason of:
(iv) such security having been deposited or tendered pursuant to a
Take-over Bid made by such Person or any of such Person's Affiliates
or Associates or made by any other Person acting jointly or in concert
with such Person, unless such deposited or tendered security has been
accepted unconditionally for payment or exchange or has been taken up
or paid for, whichever occurs first; or
(v) the holder of such security having agreed to deposit or tender such
security to a Take-over Bid made by such Person or any of such
Person's Affiliates or Associates or any other Person referred to in
sec.(iii) of this definition pursuant to a Permitted Lock-up
Agreement; or
(vi) such Person or any Affiliate or Associate of such Person or any other
Person acting jointly or in concert with such Person, holding such
security, in circumstances where
(A) the ordinary business of the Person (the "FUND MANAGER") includes
the management of investment funds for others and such security is
held by the Fund Manager in the ordinary course of such business
in the performance of such Fund Manager's duties for the account
of any other Person (a "CLIENT"), or
(B) such Person (the "TRUST COMPANY") is licensed to carry on the
business of a trust company under applicable law 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 estate of any such deceased or
incompetent Person (each an "ESTATE ACCOUNT") or for such other
accounts (each an "OTHER ACCOUNT"),
(C) the ordinary business or activity of such Person includes acting
as an agent of the Crown in the management of public assets (the
"CROWN AGENT"), or
(D) the Person is the administrator or the trustee of one or more
pension funds, plans or related trusts (each a "PENSION FUND")
registered or qualified under the laws of Canada or any province
thereof or the laws of the United States or any state thereof (the
"INDEPENDENT PERSON"), or is a Pension Fund, and holds such
securities solely for the purposes of its activities as an
Independent Person or as a Pension Fund, or
(E) the Person is an independent Person established by statute for
purposes that include, and the ordinary business or activity of
such Person (in this definition, the "STATUTORY BODY") includes,
the management of investment funds for employee benefit plans,
pension plans, insurance plans of various public bodies and the
Statutory Body holds such security for the purposes of its
activities as such;
and provided that the Fund Manager, the Trust Company, the Crown
Agent, the Independent Person, the Pension Fund or the Statutory Body,
as the case may be, does not make or propose to make a Take-over Bid
in respect of securities of the Corporation alone or by acting jointly
or in concert with any other Person (other than by means of ordinary
market transactions (including prearranged trades) entered into in the
ordinary course of business of such Person executed through the
facilities of a stock exchange or organized over-the-counter market);
or
(vii) such Person being a Client of the same Fund Manager as another Person
on whose account the Fund Manager holds such security, or such Person
being an Estate Account or an Other Account of the same Trust Company
as another Person on whose account the Trust Company holds such
security, or such Person being a Pension Fund with the same
Independent Person as another Pension Fund;
A-3
<PAGE> 31
(viii) such Person being a Client of a Fund Manager and such security is
owned at law or in equity by the Fund Manager, or such Person being
an Estate Account or an Other Account of a Trust Company and such
security is owned at law or in equity by the Trust Company, or such
Person being a Pension Fund and such security is owned at law or in
equity by the Independent Person; or
(ix) such Person being a registered holder of securities as a result of
carrying on the business of, or acting as the nominee of, a
securities depository.
(h) "BOARD OF DIRECTORS" means, at any time, the duly constituted board of
directors of the Corporation.
(i) "BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which banking institutions in the Cities of Vancouver, British Columbia and
Toronto, Ontario are authorized or obligated by law to close.
(j) "COMPANY ACT" means the Company Act, R.S.B.C. 1996, c.62, as amended, and
the regulations made thereunder, and any comparable or successor laws or
regulations thereto.
(k) "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed in United
States dollars means on any date the Canadian dollar equivalent of such
amount determined by reference to the Canadian-U.S. Exchange Rate on such
date.
(l) "CANADIAN-U.S. EXCHANGE RATE" means, on any date, the inverse of the
U.S.-Canadian Exchange Rate.
(m) "CLOSE OF BUSINESS" on any given day means the time on such day (or, if
such day is not a Business Day, the time on the next succeeding Business
Day) at which the office of the transfer agent for the Common Shares in
Vancouver, British Columbia (or, after the Separation Time, the office of
the Rights Agent in Vancouver, British Columbia) is closed to the public.
(n) "COMMON SHARES" means the common shares in the capital of the Corporation.
(o) "COMPETING PERMITTED BID" means a Take-over Bid that is made while another
Permitted Bid or Competing Permitted Bid is in existence and that satisfies
all of the components of the definition of a Permitted Bid, except that the
requirements set out in sec.(ii) of the definition of a Permitted Bid will
be satisfied if the Competing Permitted Bid contains, and the take up and
payment for securities tendered or deposited thereunder will be subject to,
an irrevocable and unqualified condition that no Voting Shares will be
taken up or paid for pursuant to the Competing Permitted Bid prior to the
close of business on the day that is no earlier than the later of 21 days
after the date the Competing Permitted Bid is made and the earliest date on
which Voting Shares may be taken up or paid for under any other Permitted
Bid then in existence at the date of such Competing Permitted Bid and only
if at the time when Voting Shares are first taken up and paid for under the
Competing Permitted Bid, more than 50% of the then outstanding Voting
Shares held by Independent Shareholders have been deposited to the
Competing Permitted Bid and not withdrawn.
(p) "CONTROLLED": a corporation is "controlled" by another Person if:
(i) securities entitled to vote in the election of directors carrying
more than 50% of the votes for the election of directors are held,
directly or indirectly, by or for the benefit of the other Person or
Persons acting jointly or in concert with it; and
(ii) the votes carried by such securities are entitled, if exercised, to
elect a majority of the board of directors of such corporation;
and "CONTROLS", "CONTROLLING" and "UNDER COMMON CONTROL WITH" will be
interpreted accordingly.
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(q) "CONVERTIBLE SECURITY" means at any time:
(i) any right (regardless of whether such right constitutes a security);
or
(ii) any security issued by the Corporation (other than the Rights);
which is exercisable or exercisable within a period of 60 days from that
time, by the holder thereof to acquire Voting Shares or other securities
which are convertible into or exercisable or exchangeable for Voting 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).
(r) "CONVERTIBLE SECURITY ACQUISITION" means the acquisition of Voting Shares
upon the exercise of Convertible Securities received by a Person pursuant
to a Permitted Bid Acquisition, an Exempt Acquisition or a Corporate
Distribution.
(s) "CORPORATE ACQUISITION" means an acquisition by the Corporation or a
Subsidiary of the Corporation of Voting Shares which by reducing the number
of outstanding Voting Shares, increases the proportionate number of Voting
Shares Beneficially Owned by any Person.
(t) "CORPORATE DISTRIBUTION" means:
(i) a stock dividend or a stock split or other event pursuant to which a
Person receives or acquires Voting Shares or Convertible Securities
on the same pro rata basis as all other holders of Voting Shares of
the same class; or
(ii) any other event pursuant to which all holders of Voting Shares are
entitled to receive Voting Shares or Convertible Securities on a pro
rata basis, including, without limiting the generality of the
foregoing, pursuant to the receipt or exercise of rights issued by
the Corporation and distributed to all the holders of a series or
class of Voting Shares to subscribe for or purchase Voting Shares or
Convertible Securities, provided that such rights are acquired
directly from the Corporation and not from any other Person.
(u) "DISQUALIFICATION DATE" in respect of a Person means the first date that a
public announcement is made indicating that the Person has or is making or
has announced on intention to make, a Take-over Bid alone or by acting
jointly or in concert with any other Person.
(v) "ELECTION TO EXERCISE" has the meaning ascribed thereto in sec.2.5(a).
(w) "EXEMPT ACQUISITION" means an acquisition of Voting Shares
(i) in respect of which the Board of Directors has waived the application
of sec.3.1 pursuant to the provisions of sec.5.1(b), sec.5.1(c) or
sec.5.1(d), or
(ii) pursuant to a dividend reinvestment plan of the Corporation, or
(iii) pursuant to a distribution by the Corporation of Voting Shares or
Convertible Securities made pursuant to a prospectus, or pursuant to
a distribution by the Corporation of Voting Shares or Convertible
Securities by way of a private placement by the Corporation or upon
the exercise by an individual employee or director 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 all necessary stock exchange approvals for
such private placement, stock option plan or share purchase plan have
been obtained and such private placement, stock option plan or share
purchase plan complies with the terms and conditions of such
approvals and such Person does not become the Beneficial owner of
more than 25% of the Voting Shares outstanding immediately prior to
the distribution and in making this determination the Voting Shares
to be issued to such Person in the distribution will be deemed to be
held by such Person but will not be included in the aggregate number
of outstanding Voting Shares immediately prior to the distribution.
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(x) "EXERCISE PRICE" means, as of any date, the price at which a holder may
purchase the securities issuable upon exercise of one whole Right. Until
adjustment or revision thereof in accordance with the terms hereof, the
Exercise Price will be $100.00.
(y) "EXPIRATION TIME" means the earlier of:
(i) the Termination Time, and
(ii) the close of business on the date of the Corporation's 2003 Annual
Meeting of Shareholders.
(z) "FLIP-IN EVENT" means a transaction or event that results in a Person
becoming an Acquiring Person.
(aa) "GRANDFATHERED PERSON" means any person who is the Beneficial Owner of 20%
or more of the outstanding Voting Shares at the Record Time.
(ab) "INDEPENDENT SHAREHOLDERS" means all holders of Voting Shares except for
(i) an Acquiring Person,
(ii) an Offeror, other than a person referred to in sec.1.1(g)(vi),
(iii) an Affiliate or Associate of such Acquiring Person or such Offeror,
(iv) a Person acting jointly or in concert with such Acquiring Person or
such Offeror, and
(v) an employee benefit plan, stock purchase plan, deferred profit
sharing plan or any similar plan or trust for the benefit of
employees of the Corporation or a Subsidiary of the Corporation,
unless the beneficiaries of any such plan or trust direct the manner
in which the Voting Shares are to be voted or withheld from voting
or direct whether the Voting Shares are to be tendered to a
Take-over Bid.
(ac) "MARKET PRICE" per security of any securities on any date of determination
means the average of the daily closing prices per security of such
securities (determined as described below) on each of the 20 consecutive
Trading Days through and including the Trading Day immediately preceding
such date; provided, however, that if an event of a type analogous to any
of the events described in sec.2.9 has caused the closing prices used to
determine the Market Price on any Trading Days not to be fully comparable
with the closing price on such date of determination or, if the date of
determination is not a Trading Day, on the immediately preceding Trading
Day, each such closing price so used will be appropriately adjusted in a
manner analogous to the applicable adjustment provided for in sec.2.9 in
order to make it fully comparable with the closing price on such date of
determination or, if the date of determination is not a Trading Day, on the
immediately preceding Trading Day. The closing price per security of a
security on a specified date will be
(i) the closing board lot sale price on the date or, if such price is
not available, the average of the closing bid and asked prices on
the date, for the security as reported by The Toronto Stock
Exchange, or
(ii) if for any reason none of such prices is available on such day or
the securities are not listed or admitted to trading on The Toronto
Stock Exchange, the closing board lot sale price on the date, or if
such price is not available, the average of the closing bid and
asked prices on the date, for the security as reported by the NYSE,
or
(iii) if for any reason none of such prices is available on such day or
the securities are not listed or admitted to trading on The Toronto
Stock Exchange or the NYSE, the closing board lot sale price on the
date, or if such price is not available, the average of the closing
bid and asked prices on the date, for the security as reported by
the principal stock exchange in Canada or the United States on which
the security is primarily traded, or
(iv) if not so listed, the last quoted price on the date, or if not so
quoted, the average of the high bid and low asked prices on the
date, for the security in the over-the-counter market, as reported
by
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Nasdaq or, if the securities are not quoted on Nasdaq, as reported
by such other system then in use, or
(v) if on any such date the securities are not quoted by any such
organization, the average of the closing bid and asked prices on the
date as furnished by a professional market maker making a market in
the security as selected by the Board of Directors; provided,
however, that if on any such date the security is not traded in the
over-the-counter market, the closing price per security on such date
will mean the fair value per security on such date as determined by
a nationally or internationally recognized investment dealer or
investment banker.
The Market Price will be expressed in Canadian dollars. If the price for
the security on any day forming part of the 20 consecutive Trading Day
period is in United States dollars, such amount will be translated into
Canadian dollars at the Canadian Dollar Equivalent thereof.
(ad) "NASDAQ" means The NASDAQ SmallCap Market.
(ae) "NYSE" means the New York Stock Exchange.
(af) "OFFER TO ACQUIRE" means:
(i) an offer to purchase, a public announcement of an intention to make
an offer to purchase, or a solicitation of an offer to sell, Voting
Shares; and
(ii) an acceptance of an offer to sell Voting Shares, whether or not such
offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer to sell will
be deemed to be making an Offer to Acquire to the Person that made the
offer to sell.
(ag) "OFFEROR" means a Person who has announced a current intention to make, or
who makes and has outstanding, a Take-over Bid.
(ah) "OFFEROR'S SECURITIES" means the aggregate of Voting Shares and Convertible
Securities Beneficially Owned by a Person on the date upon which it becomes
an Offeror.
(ai) "OUTSTANDING VOTING SHARES" means that number of Common Shares, or other
Voting Shares, which are issued and outstanding at the time of a Flip-in
Event on a fully-diluted basis and, for more certainty, includes without
limitation all outstanding options, warrants, rights or other securities
(excluding the Rights) convertible into Common Shares or other Voting
Shares to be issued from treasury at the time of a Flip-in Event.
(aj) "PERMITTED BID" means a Take-over Bid made by an Offeror which is made by
means of a Take-over Bid circular and which:
(i) is made to all holders of Voting Shares;
(ii) contains, and the take up and payment for securities tendered or
deposited thereunder will be subject to, an irrevocable and
unqualified condition that no Voting Shares will be taken up or paid
for pursuant to the Take-over Bid prior to the close of business on
the date which is not less than 45 days following the date the
Take-over Bid circular is sent to shareholders of the Corporation
and that no Voting Shares will be taken up or paid for pursuant to
the Take-over Bid unless, at such date, more than 50% of the then
outstanding Voting Shares held by Independent Shareholders have been
deposited to the Take-over Bid and not withdrawn;
(iii) contains an irrevocable and unqualified provision that, unless the
Take-over Bid is withdrawn, Voting Shares of the Corporation may be
deposited pursuant to the Take-over Bid at any time during the
period of time described in sec.1.1(ai)(ii) and that any Voting
Shares deposited pursuant to the Take-over Bid may be withdrawn at
any time until taken up and paid for; and
(iv) contains an irrevocable and unqualified provision that provides upon
the condition referred to in sec.1.1(ai)(ii) being satisfied, the
Offeror will make a public announcement of that fact on the date
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the Take-over Bid would otherwise expire and the Take-over Bid will be
extended for a period of not less than 10 Business Days from the date
it would otherwise expire.
(ak) "PERMITTED BID ACQUISITION" means the acquisition of Voting Shares made
pursuant to a Permitted Bid or a Competing Permitted Bid.
(al) "PERMITTED LOCK-UP AGREEMENT" means an agreement between an Offeror, any of
its Affiliates or Associates or any other Person acting jointly or in
concert with the Offeror and a Person (the "LOCKED-UP PERSON") who is not
an Affiliate or Associate of the Offeror or a Person acting jointly or in
concert with the Offeror, whereby the Locked-up Person agrees to deposit or
tender the Voting Shares or Convertible Securities held by the Locked-up
Person to the Offeror's Take-over Bid or to any Take-over Bid made by any
of the Offeror's Affiliates or Associates or made by any other Person
acting jointly or in concert with the Offeror (the "Lock-up Bid"), where,
(i) the agreement,
(A) permits the Locked-up Person to withdraw the Voting Shares or
Convertible Securities from the agreement in order to tender or
deposit them to another Take-over Bid or to support another
transaction, that provides for a consideration for each Voting
Share or Convertible Security that is higher than the
consideration contained in or proposed to be contained in and is
made for at least the same number of Voting Shares or
Convertible Securities as, the Lock-up Bid; or
(B) permits the Locked-up Person to withdraw its Voting Shares or
Convertible Securities from the agreement in order to tender or
deposit them to another Take-over Bid or to support another
transaction, that provides for a consideration for each Voting
Shares or Convertible Security that exceeds by as much as or
more than a specified amount (the "Specified Amount") the
consideration for each Voting Share or Convertible Security
contained in and is made for at least the same number of Voting
Shares and Convertible Securities as, the Lock-up Bid and does
not by its terms provide for a Specified Amount that is greater
than 7% over the consideration for each Voting Share or
Convertible Security contained in the Lockup Bid;
and, for greater certainty, the agreement may contain a right of
first refusal or require a period of delay to give the Offeror an
opportunity to at least match a higher consideration payable under
another Take-over Bid or transaction or other similar limitation on
a Locked-up Person's right to withdraw Voting Shares or Convertible
Securities from the agreement and not tender such to the Lock-up
Bid, so long as the limitation does preclude the exercise by the
Locked-up Person of the right to withdraw Voting Shares or
Convertible Securities in sufficient time to tender to the other
Take-over Bid or participate in the other transaction;
(ii) the agreement does not provide for any "break-up fees", "top-up
fees", penalties, expense reimbursement or other amounts that exceed
in the aggregate the greater of:
(A) the cash equivalent of 2.5% of the consideration payable under
the Lock-up Bid to the Locked-up Person; and
(B) 50% of the amount by which the consideration payable under
another Take-over Bid or transaction to a Locked-up Person
exceeds the consideration that such Locked-up Person would have
received under the Lock-up Bid;
to be paid by a Locked-up Person pursuant to the Lock-up Agreement in the
event that the Locked-up Persons fails to deposit or tender Voting Shares
or Convertible Securities to the Take-over Bid or withdraws such in order
to tender to another Take-over Bid or participate in another transaction.
(am) "PERSON" means any individual, firm, partnership, association, trust,
trustee, executor, administrator, legal or personal representative,
government, governmental body, entity or authority, group, body corporate,
corporation, unincorporated organization or association, syndicate, joint
venture or any other
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entity, whether or not having legal personality, and any of the foregoing
in any derivative, representative or fiduciary capacity, and pronouns have
a similar extended meaning.
(an) "RECORD TIME" means 5:00 p.m. (Toronto time) on February 25, 2000.
(ao) "REDEMPTION PRICE" has the meaning ascribed thereto in sec.5.1(a).
(ap) "REGULAR PERIODIC CASH DIVIDENDS" means cash dividends paid at regular
intervals in any fiscal year of the Corporation to the extent that such
cash dividends do not exceed, in the aggregate, the greatest of
(i) 200% of the aggregate amount of cash dividends declared payable by
the Corporation on its Common Shares in its immediately preceding
fiscal year, and
(ii) 100% of the aggregate consolidated net income of the Corporation,
before extraordinary items, for its immediately preceding fiscal
year.
(aq) "RIGHT" means a right issued pursuant to this Agreement.
(ar) "RIGHTS CERTIFICATE" has the meaning ascribed thereto in sec.2.4(a).
(as) "RIGHTS REGISTER" has the meaning ascribed thereto in sec.2.14.
(at) "SECURITIES ACT (BRITISH COLUMBIA)" means the Securities Act, R.S.B.C.
1996, c.418, as amended, and the regulations, rules, policies and notices
thereunder, and any comparable or successor laws, regulations, rules,
policies or notices thereto.
(au) "SECURITIES ACT (ONTARIO)" means the Securities Act, R.S.O. 1990, c. S.5,
as amended, and the regulations, rules, policies, and notices thereunder,
and any comparable or successor laws, regulations, rules, policies or
notices thereto.
(av) "SEPARATION TIME" means the close of business (Vancouver Time) on the 10th
Trading 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 Take-over Bid (other than a Permitted
Bid or Competing Permitted Bid), and
(iii) the date upon which a Permitted Bid or Competing Permitted Bid ceases
to be such,
or such later date as may be determined by the Board of Directors provided
that, if any such Take-over Bid expires, is cancelled, terminated or
otherwise withdrawn prior to the Separation Time, such Take-over Bid will be
deemed, for the purposes of this definition, never to have been made and
provided further that if the Board of Directors determines pursuant to
sec.5.1(b), sec.5.1(c) or sec.5.1(d) to waive the application of sec.3.1 to
a Flip-in Event, the Separation Time in respect of such Flip-in Event will
be deemed never to have occurred.
(aw) "STOCK ACQUISITION DATE" means the first date of public announcement
(which, for purposes of this definition, will include, without limitation,
a report filed pursuant to sec.101 of the Securities Act (Ontario) or
sec.111 of the Securities Act (British Columbia) or sec.13(d) under the
1934 Exchange Act) by the Corporation or an Offeror or Acquiring Person,
that a Person has become an Acquiring Person.
(ax) "SUBSIDIARY": a corporation will be deemed to be a Subsidiary of another
corporation if:
(i) it is controlled by:
(A) that other; or
(B) that other and one or more corporations each of which is
controlled by that other; or
(C) two or more corporations each of which is controlled by that other;
or
(ii) it is a Subsidiary of a corporation that is that other's Subsidiary.
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(ay) "TAKE-OVER BID" means an Offer to Acquire Voting Shares or Convertible
Securities where the Voting Shares subject to the Offer to Acquire,
together with the Voting Shares into which the Convertible Securities are
convertible, exchangeable or exercisable, and the Offeror's Securities,
constitute in the aggregate 20% or more of the outstanding Voting Shares at
the date of the Offer to Acquire.
(az) "TERMINATION TIME" means the time at which the right to exercise Rights
will terminate pursuant to sec.5.1(a) and sec.5.1(e).
(ba) "TRADING DAY", when used with respect to any securities, means a day on
which the principal Canadian stock exchange or American stock exchange or
market on which such securities are listed or admitted to trading is open
for the transaction of business or, if the securities are not listed or
admitted to trading on any Canadian stock exchange or American stock
exchange or market, a Business Day.
(bb) "U.S.-CANADIAN EXCHANGE RATE" means on any date:
(i) if on such date the Bank of Canada sets an average noon spot rate of
exchange for the conversion of one United States dollar into Canadian
dollars, such rate; and
(ii) in any other case, the rate for such date for the conversion of one
United States dollar into Canadian dollars which is calculated in the
manner which will be determined by the Board of Directors from time
to time acting in good faith.
(bc) "VOTING SHARES" means the Common Shares and any other shares in the capital
of the Corporation entitled to vote generally in the election of all
directors of the Corporation.
CURRENCY
1.2 All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
HEADINGS
1.3 The division of this Agreement into Articles, Sections, Subsections,
Clauses and Subclauses and the insertion of headings, subheadings and a table of
contents are for convenience of reference only and will not affect the
construction or interpretation of this Agreement.
NUMBER AND GENDER
1.4 Wherever the context so requires, terms used herein importing the singular
number only will include the plural and vice-versa and words importing only one
gender will include all others.
ACTING JOINTLY OR IN CONCERT
1.5 For the purposes of this Agreement, a Person is acting jointly or in
concert with every Person who is a party to an agreement, commitment or
understanding, whether formal or informal, with the first Person or any
Associate or Affiliate of such Person to acquire or make directly or indirectly
an Offer to Acquire Voting Shares of the Corporation (other than customary
agreements with and between underwriters or banking group members or selling
group members with respect to a distribution of securities or to a pledge of
securities in the ordinary course of business).
STATUTORY REFERENCES
1.6 Unless the context otherwise requires or except as expressly provided
herein, any reference herein to a specific part, section, subsection, clause or
rule of any statute or regulation will be deemed to refer to the same as it may
be amended, re-enacted or replaced or, if repealed and there will be no
replacement therefor, to the same as it is in effect on the date of this
Agreement.
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HOLDER
1.7 As used in this Agreement, unless the context otherwise requires, the term
"holder" when used with reference to Rights, means the registered holder of such
Rights or, prior to the Separation Time, the associated Voting Shares.
CALCULATION OF VOTING SHARE PERCENTAGE
1.8 For purposes of this Agreement, the percentage of Voting Shares
Beneficially Owned by any Person, will be and be deemed to be the product of 100
and the number of which the numerator is the number of votes for the election of
all directors generally attaching to the Voting Shares and Convertible
Securities Beneficially Owned by such Person and the denominator of which is the
number of votes for the election of all directors generally attaching to all
outstanding Voting Shares and Convertible Securities. Where any Person is deemed
to Beneficially Own unissued Voting Shares, such Voting Shares will be deemed to
be issued and outstanding for the purpose of calculating the percentage of
Voting Shares Beneficially Owned by such Person.
INTERPRETATION
1.9 For the purposes of this Agreement, except as otherwise expressly provided
herein:
(a) the symbol sec. followed by a number or some combination of numbers
and letters refers to the section, paragraph, subparagraph, clause or
subclause of this Agreement so designated,
(b) the word "or" is not exclusive and the word "including" is not
limiting (whether or not non-limiting language such as "without
limitation" or "but not limited to" or other words of similar import
is used with reference thereto); and
(c) a reference to a corporate entity includes and is also a reference to
any corporate entity that is a successor to such entity.
ARTICLE 2 -- THE RIGHTS
LEGEND ON VOTING SHARE CERTIFICATES
2.1 Certificates:
(a) issued for Voting Shares after the Record Time but prior to the close
of business on the earlier of the Separation Time and the Expiration
Time will evidence one Right for each Common Share represented thereby
and will have impressed on, printed on, written on or otherwise
affixed to them, a legend in substantially the following form:
"Until the Separation Time (as defined in the Rights Plan 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 25, 2000 (the "RIGHTS PLAN"),
between Glamis Gold Ltd. (the "CORPORATION") and The Montreal Trust
Company of Canada, as rights agent (the "RIGHTS AGENT"), the terms
of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive office of the
Corporation. Under certain circumstances, as set forth in the
Rights Plan, such Rights may be amended or redeemed, may expire,
may become null and void (if, in certain cases, they are issued to
or "BENEFICIALLY OWNED" by any Person who is, was or becomes an
"ACQUIRING PERSON", as such terms are defined in the Rights Plan,
whether currently held by or on behalf of such Person or any
subsequent holder) or may be evidenced by separate certificates and
may no longer be evidenced by this certificate. The Corporation
will mail or arrange for the mailing of a copy of the Rights Plan
to the holder of this certificate without charge upon receipt of a
written request therefor."
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and
(b) representing Common Shares that are issued and outstanding at the
Record Time will evidence one Right for each Common Share evidenced
thereby notwithstanding the absence of the foregoing legend until the
earlier of the Separation Time and the Expiration Time.
INITIAL EXERCISE PRICE
2.2 Subject to adjustment as herein set forth and subject to sec.3.1, each
Right, save and except those held by the Corporation and any of its Subsidiaries
which will be void, will entitle the holder thereof, from and after the
Separation Time and prior to the Expiration Time, to purchase, for the Exercise
Price as at the Business Day immediately preceding the date of exercise of the
Right, one Common Share.
RIGHTS NOT EXERCISABLE UNTIL SEPARATION TIME
2.3 Until the Separation Time:
(a) the Rights will not be exercisable, and
(b) for administrative purposes each Right will be evidenced by the
certificates for the associated Voting Shares registered in the names
of the holders thereof (which certificates will also be deemed to be
Rights Certificates) and will be transferable only together with, and
will be transferred by a transfer of, such associated Voting Shares.
MAILING OF RIGHTS CERTIFICATES AND DISCLOSURE STATEMENT
2.4 From and after the Separation Time and prior to the Expiration Time, the
Rights may be exercised, and will be registered and transferable independently
of Voting Shares. Promptly following the Separation Time, the Corporation will
prepare and the Rights Agent will mail to each holder of record of Rights as of
the Separation Time (other than an Acquiring Person, any other Person whose
Rights are or become void pursuant to the provisions of sec.3.2 and, in respect
of any Rights Beneficially Owned by such Acquiring Person which are not held of
record by such Acquiring Person, the holder of record of such Rights) at such
holder's address as shown by the records of the Corporation (the Corporation
hereby agreeing to furnish copies of such records to the Rights Agent for this
purpose),
(a) a certificate (a "RIGHTS CERTIFICATE") in substantially the form of
Exhibit A hereto appropriately completed, representing the number of
Rights held by such holder at the Separation Time and having such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or
as may be required to comply with any law, rule, regulation or
judicial or administrative order or with any rule or regulation made
pursuant thereto or with any rule or regulation of any self-regulatory
organization, stock exchange or quotation system on which the Rights
may from time to time be listed or traded, or to conform to usage, and
(b) a disclosure statement describing the Rights,
provided that a nominee will be sent the materials provided for in this
sec.2.4 in respect of all Voting Shares held of record by it which are not
Beneficially Owned by an Acquiring Person. In order for the Corporation to
determine whether any Person is holding Voting Shares which are
Beneficially Owned by another Person, the Corporation may require such
first mentioned Person to furnish it with such information and
documentation as the Corporation considers advisable.
EXERCISE OF RIGHTS
2.5 Rights may be exercised in whole at any time or in part from time to time
on any Business Day (or other day that is not a bank holiday at the place of
exercise) after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent, at its office in the City of Vancouver, British
Columbia, Canada or at
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any other office of the Rights Agent or any Co-Rights Agent in the cities
specified in the Rights Certificate or designated from time to time for that
purpose by the Corporation after consultation with the Rights Agent:
(a) the Rights Certificate evidencing such Rights with an Election to
Exercise (an "ELECTION TO EXERCISE") substantially in the form
attached to the Rights Certificate, appropriately completed and duly
executed by the holder or his executors or administrators or other
personal representatives or his legal attorney duly appointed by
instrument in writing in form and executed in a manner satisfactory to
the Rights Agent; and
(b) payment by certified cheque or money order payable to the order of the
Corporation, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any
transfer tax or charge which may be payable in respect of any transfer
involved in the issuance, transfer or delivery of Rights Certificates
or the issuance, transfer or delivery of certificates for Common
Shares in a name other than that of the holder of the Rights being
exercised.
DUTIES OF RIGHTS AGENT UPON RECEIPT OF ELECTION TO EXERCISE
2.6 Upon receipt of a Rights Certificate, which is accompanied by a completed
Election to Exercise that does not indicate that such Right is null and void as
provided by sec.3.2, and payment as set forth in sec.2.5(b), the Rights Agent
(unless otherwise instructed by the Corporation) will thereupon promptly:
(a) requisition from the transfer agent for the Common Shares certificates
representing the number of Common Shares to be purchased (the
Corporation hereby irrevocably authorizing its transfer agent to
comply with all such requisitions);
(b) when appropriate, requisition from the Corporation the amount of cash
to be paid in lieu of issuing fractional Common Shares;
(c) after receipt of such certificates, deliver the same to or upon the
order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such registered holder;
(d) when appropriate, after receipt, deliver such cash (less any amounts
required to be withheld) to or to the order of the registered holder
of the Rights Certificate; and
(e) tender to the Corporation all payments received on exercise of the
Rights.
PARTIAL EXERCISE OF RIGHTS
2.7 In case the holder of any Rights exercises less than all of the Rights
evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns.
DUTIES OF THE CORPORATION
2.8 The Corporation covenants and agrees that it will:
(a) take all reasonable action as may be necessary on its part and within
its power to ensure that all Common Shares or other securities
delivered upon exercise of Rights will, 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
and fully paid and non-assessable;
(b) take all reasonable action as may be necessary on its part and within
its power to comply with any applicable requirements of the Company
Act, the Securities Act (British Columbia), the Securities Act
(Ontario), and any applicable comparable securities legislation of
each of the other provinces of Canada, the 1933 Securities Act, the
1934 Exchange Act and any other applicable law, rule or regulation, in
connection with the issuance and delivery of the Rights Certificates
and the issuance of any Common Shares or other securities upon
exercise of Rights. The Corporation may
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temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file any
securities disclosure documents required by securities legislation in
respect of the issuance and delivery of the Rights Certificates and
the issuance of any Common Shares or other securities upon exercise of
Rights. Upon such suspension, the Corporation will issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time
as the suspension is no longer in effect, in each case with prompt
written notice to the Rights Agent. Notwithstanding any such provision
of this Agreement to the contrary, the Rights will not be exercisable
in any jurisdiction unless the requisite qualification in such
jurisdiction has been obtained;
(c) use its reasonable efforts to cause, from and after such time as the
Rights become exercisable, all Common Shares which may be issued upon
the exercise thereof, to be listed on the principal stock exchanges on
which the Common Shares are traded;
(d) cause to be reserved and kept available out of its authorized and
unissued Common Shares, the number of Common Shares that, as provided
in this Agreement, will from time to time be sufficient to permit the
exercise in full of all outstanding Rights; and
(e) pay when due and payable any and all Canadian and, if applicable,
United States, federal, provincial and state transfer taxes and
charges (not including any income or capital taxes of the holder or
exercising holder or any liability of the Corporation to withhold tax)
which may be payable in respect of the original issuance or delivery
of the Rights Certificates, provided that the Corporation will 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 or
other securities in a name other than that of the registered holder of
the Rights being transferred or exercised.
ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
2.9 The Exercise Price, the number and kind of Common Shares or other
securities subject to purchase upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this sec.2.9:
(a) if the Corporation at any time after the Record Time,
(i) declares or pays a dividend on the Common Shares payable in
Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares or
other securities) other than the issue of Common Shares or such
exchangeable or convertible securities to holders of Common
Shares in lieu of but not in an amount which exceeds the value
of regular periodic cash dividends;
(ii) subdivides or changes the Common Shares into a greater number of
Common Shares;
(iii) combines or changes the Common Shares into a smaller number of
Common Shares or;
(iv) issues any Common Shares (or other securities exchangeable for
or convertible into or giving a right to acquire Common Shares
or other securities) in respect of, in lieu of or in exchange
for existing Common Shares in a reclassification or
redesignation of Common Shares, an amalgamation or statutory
arrangement,
the Exercise Price and the number of Rights outstanding, or, if the
payment or effective date therefor will occur after the Separation
Time, the securities purchasable upon exercise of Rights will be
adjusted in the manner set forth below. If an event occurs which would
require an adjustment under both this sec.2.9 and sec.3.1, the
adjustment provided for in this sec.2.9 will be in addition to, and
will be made prior to, any adjustment required under sec.3.1.
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If the Exercise Price and number of Rights are to be adjusted,
(A) the Exercise Price in effect after such adjustment will be
equal to the Exercise Price in effect immediately prior to such
adjustment divided by the number of Common Shares (or other
capital stock of the Corporation) (the "Expansion Factor") that
a holder of one Common Share immediately prior to such
dividend, subdivision, change, consolidation or issuance would
hold immediately thereafter as a result thereof (assuming the
exercise of all such exchange or conversion rights, if any),
and
(B) each Right held prior to such adjustment will become that
number of Rights equal to the Expansion Factor, and the
adjusted number of Rights will be deemed to be distributed
among the Common Shares with respect to which the original
Rights were associated (if they remain outstanding) and the
shares issued in respect of such dividend, subdivision, change,
consolidation or issuance, so that each such Common 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 securities that a holder of the securities
purchasable upon exercise of one Right immediately prior to such
dividend, subdivision, change, consolidation or issuance would hold
immediately thereafter as a result thereof. To the extent that any such
rights of exchange, conversion or acquisition are not exercised prior to
the expiration thereof, the Exercise Price will be readjusted to the
Exercise Price which would then be in effect based upon the number of
Common Shares (or securities convertible into or exchangeable for Common
Shares) actually issued upon the exercise of such rights. If after the
Record Time and prior to the Expiration Time the Corporation issues any
shares of its authorized capital other than Common Shares in a
transaction of a type described in sec.2.9(a)(i) and sec.2.9(a)(iv), such
shares will be treated herein as nearly equivalent to Common Shares as
may be practicable and appropriate under the circumstances and the
Corporation and the Rights Agent agree to amend this Agreement in order
to effect such treatment.
If the Corporation, at any time after the Record Time and prior to the
Separation Time, issues any Common Shares otherwise than in a transaction
referred to in this sec.2.9(a), each Common Share so issued will
automatically have one new Right associated with it, which Right will be
evidenced by the certificate representing such share;
(b) if at any time after the Record Time and prior to the Separation
Time the Corporation fixes a record date for the issuance of rights,
options or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or shares having
the same rights, privileges and preferences as Common Shares
("EQUIVALENT COMMON SHARES")) or securities convertible into or
exchangeable for or carrying a right to purchase Common Shares or
equivalent common shares, at a price per Common Share or per
equivalent common share (or having a conversion price or exchange
price or exercise price per share, if a security convertible into or
exchangeable for or carrying a right to purchase Common Shares or
equivalent common shares) less than 90% of the Market Price per
Common Share on such record date, the Exercise Price will be
adjusted as follows:
(i) the Exercise Price to be in effect after such record date will
equal the Exercise Price in effect immediately prior to such
record date multiplied by a fraction, the numerator of which
will be the number of Common Shares outstanding on such record
date, plus the number of Common Shares that the aggregate
offering price of the total number of Common Shares and/or
equivalent common shares so to be offered (and/or the
aggregate initial conversion, exchange or exercise price of
the convertible or exchangeable securities or rights so to be
offered, including the price required to be paid to purchase
such convertible or exchangeable securities or rights so to be
offered) would purchase at such Market Price per Common Share,
and the denominator of which will be the number of Common
Shares outstanding on such record date, plus the number of
additional Common Shares and/or equivalent common
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shares to be offered for subscription or purchase (or into which
the convertible or exchangeable securities are initially
convertible, exchangeable or exercisable);
(ii) if the Exercise Price may be paid by delivery of consideration,
part or all of which is in a form other than cash, the value of
such non-cash consideration will be as determined by the Board of
Directors, whose determination will be described in a certificate
filed with the Rights Agent and will be binding on the Rights Agent
and the holders of the Rights; and
(iii) such adjustment will be made successively whenever such a record
date is fixed, and in the event that such rights or warrants are
not so issued, the Exercise Price will be adjusted to be the
Exercise Price which would then be in effect if such record date
had not been fixed.
For purposes of this Agreement, the granting of the right to purchase
Common Shares (or equivalent common shares) (whether from treasury shares
or otherwise) pursuant to any dividend or interest reinvestment plan
and/or any Common 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, stock
option or similar plans (so long as such right to purchase is in no case
evidenced by the delivery of rights or warrants) will not be deemed to
constitute an issue of rights, options or warrants by the Corporation;
provided, however, that, in the case of any dividend or interest
reinvestment plan, the right to purchase Common Shares (or equivalent
common shares) must be at a price per share of not less than 90% of the
current market price per share (determined as provided in such plans) of
the Common Shares;
(c) if after the Record Time and prior to the Separation Time the
Corporation fixes a record date for a distribution to all holders of
Common Shares (including any such distribution made in connection
with a merger, amalgamation, arrangement, plan, compromise or
reorganization in which the Corporation is the continuing or
successor corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend or a regular periodic cash
dividend paid in Common Shares, but including any dividend payable
in securities other than Common Shares), assets or subscription
rights, options or warrants (excluding those referred to in
sec.2.9(b)), the Exercise Price will be adjusted as follows:
(i) the Exercise Price to be in effect after such record date will
be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the
numerator of which will be the Market Price per Common Share on
such record date, less the fair market value (as determined by
the Board of Directors, whose determination will be described
in a statement filed with the Rights Agent) of the portion of
the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights, options or warrants
applicable to a Common Share and the denominator of which will
be such Market Price per Common Share; and
(ii) such adjustments will be made successively whenever such a
record date is fixed, and in the event that such distribution
is not so made, the Exercise Price will be adjusted to be the
Exercise Price which would have been in effect if such record
date had not been fixed;
(d) notwithstanding anything herein to the contrary, no adjustment in
the Exercise Price will be required unless such adjustment would
require an increase or decrease of at least 1% in the Exercise
Price; provided, however, that any adjustments which by reason of
this sec.2.9(d) are not required to be made will be carried forward
and taken into account in any subsequent adjustment. All
calculations under this sec.2.9 will be made to the nearest cent or
to the nearest one-hundredth of a Common Share or other share, as
the case may be. Notwithstanding the first sentence of this
sec.2.9(d), any adjustment required by this sec.2.9 will be made no
later than the earlier of (A) 3 years from the date of the
transaction which mandates such adjustment or (B) the Expiration
Time;
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(e) each adjustment made pursuant to this sec.2.9 will be made as of:
(i) the payment or effective date for the applicable dividend,
subdivision, change, consolidation or issuance in the case of an
adjustment made pursuant to sec.2.9(a), and
(ii) the record date for the applicable dividend or distribution, in
the case of an adjustment made pursuant to sec.2.9(b) or
sec.2.9(c);
(f) if the Corporation, at any time after the Record Time and prior to the
Expiration Time, issues any shares of capital stock (other than Common
Shares), or rights or warrants to subscribe for or purchase any such
capital stock, or securities convertible into or exchangeable for any
such capital stock, in a transaction referred to in sec.2.9(a)(i) or
sec.2.9(a)(iv) and, if the Board of Directors determines that the
adjustments contemplated by sec.2.9(a), sec.2.9(b) and sec.2.9(c) in
connection with such transaction will not appropriately protect the
interests of the holders of Rights, the Board of Directors may
determine what other adjustments to the Exercise Price, number of
Rights and/or securities purchasable upon exercise of Rights would be
appropriate and, notwithstanding sec.2.9(a), sec.2.9(b) and
sec.2.9(c), such adjustments, rather than the adjustments contemplated
by sec.2.9(a), sec.2.9(b) and sec.2.9(c), will be made. The
Corporation and the Rights Agent will amend this Agreement, subject to
prior shareholder approval, as appropriate to provide for such
adjustments;
(g) each Right originally issued by the Corporation subsequent to any
adjustment made to the Exercise Price hereunder will evidence the
right to purchase, at the adjusted Exercise Price, the number of
Common Shares purchasable from time to time hereunder upon exercise of
such Right, all subject to further adjustment as provided herein;
(h) unless the Corporation has exercised its election as provided in
sec.2.9(i), upon each adjustment of the Exercise Price as a result of
the calculations made in sec.2.9(b) and sec.2.9(c), each Right
outstanding immediately prior to the making of such adjustment will
thereafter evidence the right to purchase, at the adjusted Exercise
Price, that number of Common Shares (calculated to the nearest one
ten-thousandth) obtained by (A) multiplying (x) the number of shares
purchasable upon exercise of a Right immediately prior to this
adjustment by (y) the Exercise Price in effect immediately prior to
such adjustment of the Exercise Price, and (B) dividing the product so
obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price;
(i) the Corporation may elect on or after the date of any adjustment of
the Exercise Price to adjust the number of Rights, in lieu of any
adjustment in the number of Common Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights will be exercisable for the number
of Common Shares for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment
of the number of Rights will become that number of Rights (calculated
to the nearest one ten-thousandth) obtained by multiplying it by a
fraction, the numerator of which is the Exercise Price in effect
immediately prior to adjustment of the Exercise Price and the
denominator of which is the Exercise Price in effect immediately after
adjustment of the Exercise Price. The Corporation will make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be
the date on which the Exercise Price is adjusted or any day
thereafter, but, if Rights Certificates have been issued, will be at
least 10 days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this sec.2.9(i), the Corporation will, as
promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates
evidencing, subject to sec.5.8, the additional Rights to which such
holders will be entitled as a result of such adjustment, or, at the
option of the Corporation, will cause to be distributed to such
holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, new Rights Certificates evidencing all the
Rights to which such holders will be entitled after such adjustment.
Rights Certificates so to be distributed will be issued, executed and
countersigned in the manner provided for herein and may
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bear, at the option of the Corporation, the adjusted Exercise Price
and will be registered in the names of the holders of record of Rights
Certificates on the record date for the adjustment specified in the
public announcement;
(j) irrespective of any adjustment or change in the Exercise Price or the
securities purchasable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express
the Exercise Price per share and the number of Common Shares or other
securities which were expressed in the initial Rights Certificates
issued hereunder;
(k) in any case in which this sec.2.9 requires that an adjustment in the
Exercise Price be made effective as of a record date for a specified
event, the Corporation may elect to defer until the occurrence of such
event the issuance, to the holder of any Right exercised after such
record date, of the number of Common Shares and other securities of
the Corporation, if any, issuable upon such exercise over and above
the number of Common Shares and other securities of the Corporation,
if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the
Corporation will deliver to such holder an appropriate instrument
evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the
event requiring such adjustment.
(l) notwithstanding anything in this sec.2.9 to the contrary, the
Corporation will be entitled to make such reductions in the Exercise
Price, in addition to those adjustments expressly required by this
sec.2.9, as and to the extent that the Board of Directors determines
to be advisable in order that any
(i) consolidation or subdivision of the Common Shares,
(ii) issuance of any Common Shares at less than the Market Price,
(iii) issuance of securities convertible into or exchangeable for
Common Shares,
(iv) stock dividends or
(v) issuance of rights, options or warrants,
referred to in this sec.2.9 hereafter made by the Corporation to
holders of its Common Shares, will not be taxable to such
shareholders;
(m) whenever an adjustment to the Exercise Price or a change in the
securities purchasable upon the exercise of Rights is made pursuant to
this sec.2.9, the Corporation will promptly:
(i) prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment;
(ii) file with the Rights Agent and with each transfer agent for the
Common Shares, a copy of such certificate; and
(iii) cause notice of the particulars of such adjustment or change to
be given to the holders of the Rights.
Failure to file such certificate or to cause such notice to be given
as aforesaid, or any defect therein, will not affect the validity of
any such adjustment or change.
DATE ON WHICH EXERCISE IS EFFECTIVE
2.10 Each Person in whose name any certificate for Common Shares is issued upon
the exercise of Rights, will for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate will 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 Common Share transfer books of the Corporation
are closed, such Person will be
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deemed to have become the record holder of such shares on, and such certificate
will be dated, the next succeeding Business Day on which the Common Share
transfer books of the Corporation are open or on which such suspension is no
longer effective.
EXECUTION OF RIGHTS CERTIFICATES
2.11 The Rights Certificates will be executed on behalf of the Corporation by
its President or any of its senior officers, together with its Secretary or
Assistant Secretary. The signature of any of these officers on the Rights
Certificates may be manual or facsimile. Rights Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Corporation will 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.
AUTHENTICATION OF RIGHTS CERTIFICATES
2.12 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 will countersign (manually or by
facsimile signature in a manner satisfactory to the Corporation) and send such
Rights Certificates to the holders of the Rights pursuant to sec.2.4. No Rights
Certificate will be valid for any purpose until countersigned by the Rights
Agent as aforesaid.
DATING OF RIGHTS CERTIFICATES
2.13 Each Rights Certificate will be dated the date of countersignature
thereof.
REGISTER OF RIGHTS
2.14 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 will cease to be
the Rights Registrar, the Rights Agent will have the right to examine the Rights
Register at all reasonable times.
TRANSFERS AND EXCHANGES
2.15 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 sec.2.15(c) and the other provisions of this Agreement:
(a) 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;
(b) all Rights issued upon any registration of transfer or exchange of
Rights Certificates will be the valid obligations of the Corporation,
and such Rights will be entitled to the same benefits under this
Agreement as the Rights surrendered upon such registration of transfer
or exchange; and
(c) every Rights Certificate surrendered for registration of transfer or
exchange will 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 sec.2.15, the
Corporation or the Rights Agent may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and the Corporation
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may require payment of a sum sufficient to cover any other expenses
(including the fees and expenses of the Rights Agent) in connection
therewith.
MUTILATED RIGHTS CERTIFICATES
2.16 If any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, the Corporation will execute and the Rights Agent
will manually countersign and deliver in exchange therefor a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so surrendered.
DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES
2.17 If the Corporation and the Rights Agent receive, prior to the Expiration
Time:
(a) evidence to their reasonable satisfaction of the destruction, loss or
theft of any Rights Certificate; and
(b) such indemnity or other security as may be required by them to save
each of them and any of their agents harmless, then, in the absence of
notice to the Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the
Corporation will execute and upon its request the Rights Agent will
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.
REPLACEMENT FEE
2.18 As a condition to the issuance of any new Rights Certificate under
sec.2.17, the Corporation or the Rights Agent may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and the Corporation may require payment of a sum sufficient to
cover any other expenses (including the fees and expenses of the Rights Agent)
in connection therewith.
VALIDITY OF REPLACEMENT RIGHTS CERTIFICATES
2.19 Every new Rights Certificate issued pursuant to sec.2.17 in lieu of any
destroyed, lost or stolen Rights Certificate will evidence an original
additional contractual obligation of the Corporation, whether or not the
destroyed lost or stolen Rights Certificate will be at any time enforceable by
anyone, and the holder thereof will be entitled to all the benefits of this
Agreement equally and proportionately with any and all other holders of Rights
duly issued by the Corporation.
PERSONS DEEMED OWNERS
2.20 Prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent will be entitled to deem and treat the person in whose name a
Rights Certificate (or, prior to the Separation Time, the associated Common
Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement, unless
the context otherwise requires, the term "holder" of any Rights will mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated Voting Shares).
DELIVERY AND CANCELLATION OF RIGHTS CERTIFICATES
2.21 All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange will, if surrendered to any person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, will
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 will be promptly
cancelled by the Rights Agent. No Rights Certificate will be countersigned in
lieu of or in exchange for any Rights Certificates cancelled as provided in this
sec.2.21 except as expressly permitted by this
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Agreement. The Rights Agent will destroy all cancelled Rights Certificates and
deliver a certificate of destruction to the Corporation.
AGREEMENT OF RIGHTS HOLDERS
2.22 Every holder of Rights, by accepting the same, consents and agrees with
the Corporation and the Rights Agent and with every other holder of Rights:
(a) to be bound by and subject to the provisions of this Agreement, as
amended or supplemented from time to time in accordance with the terms
hereof, in respect of all Rights held;
(b) that prior to the Separation Time each Right will be transferable only
together with, and will be transferred by a transfer of, the Common
Share certificate representing such Right;
(c) that after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(d) that prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Share certificate) for
registration of transfer, the Corporation, the Rights Agent and any
agent of the Corporation or the Rights Agent will be entitled to deem
and treat the person in whose name the Rights Certificate (or prior to
the Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on such
Rights Certificate or the associated Common Share certificate made by
anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights Agent
will be affected by any notice to the contrary;
(e) that such holder of Rights has waived his or her right to receive any
fractional Rights or any fractional shares upon exercise of Right; and
(f) that this Agreement may be supplemented or amended from time to time
pursuant to and as provided herein upon the sole authority of the
Board of Directors without the approval of any holder of Rights.
RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER
2.23 No holder, as such, of any Rights or Rights Certificate will be entitled
to vote, receive dividends or be deemed for any purpose whatsoever the holder of
any Common Share or any other share or security of the Corporation which may at
any time be issuable on the exercise of the Rights represented thereby, nor will
anything contained herein or in any Rights Certificate be construed or deemed to
confer upon the holder of any Right or Rights Certificate, as such, any of the
rights, titles, benefits or privileges of a holder of Common Shares or any other
shares or securities of the Corporation or any right to vote at any meeting of
shareholders of the Corporation whether for the election of directors or
otherwise or upon any matter submitted to holders of shares of the Corporation
at any meeting thereof, or to give or withhold consent to any action of the
Corporation, or to receive notice of any meeting or other action affecting any
holder of Common Shares or any other shares or securities of the Corporation
except as expressly provided herein, or to receive dividends, distributions or
subscription rights, or otherwise, until the Right or Rights evidenced by Rights
Certificates will have been duly exercised in accordance with the terms and
provisions hereof.
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ARTICLE 2 -- ADJUSTMENTS TO THE RIGHTS
IN THE EVENT OF CERTAIN TRANSACTIONS
FLIP-IN EVENT
3.1 Subject to adjustment pursuant to Article 2 and the redemption and waiver
provisions of sec.5.1 and except as provided below, if prior to the Expiration
Time a Flip-in Event occurs, each Right will thereafter constitute, effective at
the Close of Business on the 10th Business Day after the relevant Stock
Acquisition Date, the right to purchase from the Corporation, upon exercise
thereof in accordance with the terms hereof, that number of Common Shares of the
Corporation having an aggregate Market Price on the date of consummation or
occurrence of such Flip-in Event equal to twice the Exercise Price for an amount
in cash equal to the Exercise Price (such right to be appropriately adjusted in
a manner analogous to the applicable adjustment provided for in sec.2.9 in the
event that, after such date of consummation or occurrence, an event of a type
analogous to any of the events described in sec.2.9 occurs with respect to such
Common Shares).
CANCELLATION OF RIGHTS HELD BY AN ACQUIRING PARTY
3.2 Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of a Flip-In Event, any Rights that are or were Beneficially Owned on
or after the earlier of the Separation Time and the Stock Acquisition Date by:
(a) an Acquiring Person (or any Person acting jointly or in concert with
an Acquiring Person or with an Affiliate or Associate of an Acquiring
Person); or
(b) a direct or indirect transferee of, or other successor in title to,
such Rights (a "Transferee"), who becomes a Transferee concurrently
with or subsequent to the Acquiring Person becoming an Acquiring
Person, in a transfer, whether or not for consideration, that the
Board of Directors has determined is part of a plan, understanding or
scheme of an Acquiring Person (or an Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert with an
Acquiring Person or an Affiliate or Associate of an Acquiring Person)
that has the purpose or effect of avoiding the provisions of this
sec.3.2;
will thereupon become and be void and any holder of such Rights (including any
Transferee) will thereafter have no rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The holder
of any Rights represented by a Rights Certificate which is submitted to the
Rights Agent, or any Co-Rights Agent, upon exercise or for registration of
transfer or exchange which does not contain the necessary certifications set
forth in the Rights Certificate establishing that such Rights are not void under
this sec.3.2 will be deemed to be an Acquiring Person for the purposes of this
sec.3.2 and such rights will be null and void.
LEGEND ON RIGHTS CERTIFICATES TRANSFERRED BY AN ACQUIRING PARTY
3.3 Any Rights Certificate that represents Rights Beneficially Owned by a
Person described in either clauses sec.(a) or (b) of sec.3.2 or transferred to
any nominee of any such Person, and any Rights Certificate issued upon the
transfer, exchange or replacement of any other Rights Certificate referred to in
this sentence will contain the following legend:
"The Rights represented by this Rights Certificate were issued to a Person
who was an Acquiring Person or an Affiliate or an Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement) or was acting
jointly or in concert with any of them. This Rights Certificate and the
Rights represented hereby will become void in the circumstances specified
in sec.3.2 of the Rights Agreement."
provided, however, that the Rights Agent will not be under any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but will 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 or acting jointly or in concert with
any of them.
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ARTICLE 3 -- THE RIGHTS AGENT
APPOINTMENT OF RIGHTS AGENT
4.1 The Corporation hereby appoints the Rights Agent to act as agent for the
Corporation in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Corporation may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable. If the
Corporation appoints one or more co-Rights Agents, the respective duties of the
Rights Agents and co-Rights Agents will be as the Corporation may determine. The
Corporation agrees to pay the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Corporation also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability, or expense
incurred that is not the result of negligence, bad faith or wilful misconduct on
the part of any one or all of the Rights Agent, its officers, employees or other
representatives, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability, which right to
indemnification will survive the termination of this Agreement or the
resignation or removal of the Rights Agent.
PROTECTION OF RIGHTS AGENT
4.2 The Rights Agent will be protected from and will incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any certificate for Voting
Shares or any Rights Certificate or certificate for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
RIGHTS AGENT TO BE KEPT INFORMED
4.3 The Corporation will inform the Rights Agent in a reasonably timely manner
of events which may materially affect the administration of this Agreement by
the Rights Agent and, at any time upon written request, will provide to the
Rights Agent an incumbency certificate certifying the then current officers of
the Corporation.
MERGER OR AMALGAMATION OR CHANGE OF NAME OF RIGHTS AGENT
4.4 Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or amalgamated or with which it may be consolidated, or any
corporation resulting from any merger, amalgamation, statutory arrangement or
consolidation to which the Rights Agent or any successor Rights Agent is a
party, or any corporation succeeding to the shareholder or stockholder services
business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of sec.4.7. In case at the time such successor
Rights Agent succeeds to the agency created by this Agreement any of the Rights
Certificates have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates have not been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
COUNTERSIGNING OF RIGHTS CERTIFICATES
4.5 In case at any time the name of the Rights Agent is changed and at such
time any of the Rights Certificates have been countersigned but not delivered,
the Rights Agent may adopt the countersignature
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under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates have not 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 will
have the full force provided in the Rights Certificates and in this Agreement.
DUTIES OF RIGHTS AGENT
4.6 The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, to all of which the
Corporation and the holders of Rights Certificates, by their acceptance thereof,
will 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 to be taken by it in good faith and in
accordance with such opinion;
(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 proven and established by a certificate
signed by a person believed by the Rights Agent to be the Chairman of
the Board, the President or any Vice-President, the Treasurer or the
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 events which are
the result of its own negligence, bad faith or wilful misconduct and
that of its officers, employees and other representatives;
(d) the Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Voting Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and will be deemed to have been made
by the Corporation only;
(e) the Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Common
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 sec.3.2) or any adjustment required under the provisions
of sec.2.9 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 sec.2.9
describing any such adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization
of any Common Shares to be issued pursuant to this Agreement or any
Rights or as to whether any Common Shares will, when issued, be duly
and validly authorized, executed, issued and delivered or 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, President, any Vice-President, Treasurer or any Assistant
Treasurer or the
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Secretary or any Assistant Secretary of the Corporation and to apply
to such persons for advice or instructions in connection with its
duties, and it will not be liable for any action taken or suffered by
it in good faith in accordance with instructions of any such person;
(h) the Rights Agent and any shareholder or stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in Common
Shares, Rights or other securities of the Corporation or become
pecuniarily interested in any transaction in which the Corporation may
be interested or contract with or lend money to the Corporation or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein will preclude the Rights Agent
from acting in any other capacity for the Corporation or for any other
legal entity; and
(i) the Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Corporation
resulting from any such act, omission, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
CHANGE OF RIGHTS AGENT
4.7 The Rights Agent may resign and be discharged from its duties under this
Agreement upon 90 days' notice (or such lesser notice as is acceptable to the
Corporation) in writing mailed to the Corporation and to each transfer agent of
Voting Shares of the Corporation by registered or certified mail, and to the
holders of the Rights in accordance with sec.5.11. The Corporation may remove
the Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent and
to each transfer agent of the Voting Shares of the Corporation by registered or
certified mail and to the holders of the Rights in accordance with sec.5.11. If
the Rights Agent resigns or is removed or otherwise becomes 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 90 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder will, with such notice, submit such holder's Rights Certificate for
inspection by the Corporation), the 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,
will be a corporation incorporated under the laws of Canada or a province
thereof authorized to carry on the business of a trust company in Canada. After
appointment, the successor Rights Agent will be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent, upon
receiving from the Corporation payment in full of all amounts outstanding under
this Agreement, will 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
Voting Shares of the Corporation, and mail a notice thereof in writing to the
holders of the Rights. The cost of giving any notice required under this sec.4.7
will be borne solely by the Corporation. Failure to give any notice provided for
in this sec.4.7 however, or any defect therein, will 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.
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ARTICLE 4 -- MISCELLANEOUS
REDEMPTION AND WAIVER
5.1 The:
(a) Board of Directors may, with the prior consent of holders of Voting
Shares or of the holders of Rights given in accordance with sec.5.1(i)
or (j), as the case may be, any time prior to the occurrence of a
Flip-in Event, elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.00001 per Right
appropriately adjusted in a manner analogous to the applicable
adjustment provided for in sec.2.9 if an event of the type described
in sec.2.9 has occurred (such redemption price being herein referred
to as the "Redemption Price");
(b) Board of Directors may, with the prior consent of the holders of
Voting Shares given in accordance with sec.5.1(i), determine, at any
time prior to the occurrence of a Flip-in Event as to which the
application of sec.3.1 has not been waived pursuant to this sec.5.1,
if such Flip-in Event would occur by reason of an acquisition of
Voting Shares otherwise than pursuant to a Take-over Bid made by means
of a Take-over Bid circular and otherwise than in the circumstances
set forth in sec.5.1(d), waive the application of sec.3.1 to such
Flip-in Event. In such event, the Board of Directors will extend the
Separation Time to a date at least 10 Business Days subsequent to the
meeting of shareholders called to approve such waiver.
(c) Board of Directors may, prior to the occurrence of a Flip-in Event,
and upon prior written notice delivered to the Rights Agent, determine
to waive the application of sec.3.1 to a Flip-in Event which may occur
by reason of a Take-over Bid made by means of a Take-over Bid
circular; provided that if the Board of Directors waives the
application of sec.3.1 to a particular Flip-in Event pursuant to this
sec.5.1(c), the Board of Directors will be deemed to have waived the
application of sec.3.1 to any other Flip-in Event occurring by reason
of any Take-over Bid made by means of a Take-over Bid circular prior
to the expiry of any Take-over Bid (as the same may be extended from
time to time) in respect of which a waiver is, or is deemed to have
been, granted pursuant to this sec.5.1(c).
(d) Board of Directors may, prior to the close of business on the 10th day
following the Stock Acquisition Date, determine, upon prior written
notice delivered to the Rights Agent, to waive or to agree to waive
the application of sec.3.1 to a Flip-in Event, provided that both of
the following conditions are satisfied:
(i) the Board of Directors has determined that a Person became an
Acquiring Person by inadvertence and without any intention to
become, or knowledge that Person would become, an Acquiring
Person; and
(ii) such Acquiring Person has reduced its Beneficial Ownership of
Voting Shares (or has entered into a contractual arrangement
with the Corporation, acceptable to the Board of Directors, to
do so within 30 days of the date on which such contractual
arrangement is entered into) such that at the time the waiver
becomes effective pursuant to this sec.5.1(d) it is no longer an
Acquiring Person;
and in the event of such a waiver, for the purposes of this Agreement,
the Flip-in Event will be deemed never to have occurred;
(e) Board of Directors, notwithstanding the provisions of sec.5.1(a), will
and will be deemed to have elected without further formality to redeem
the Rights at the Redemption Price, if a Person acquires, pursuant to
a Permitted Bid or a Competing Permitted Bid or pursuant to a
Take-over Bid in respect of which the Board of Directors has waived,
or is deemed to have waived, the application of sec.3.1 pursuant to
sec.5.1(c), any Outstanding Voting Shares;
(f) right to exercise the Rights will, if the Corporation is obligated
under sec.5.1(e) to redeem the Rights, or if the Board of Directors
elects under sec.5.1(a) or sec.5.1(h) to redeem the Rights, without
further action and without notice, terminate and each Right will after
redemption be null and void and the
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only right thereafter of the holders of Rights will be to receive the
Redemption Price and no further Rights will be issued thereafter;
(g) Corporation will, within 10 days after the Corporation is obligated
under sec.5.1(e) to redeem the Rights, or if sec.5.1(a) is applicable
within 10 Business Days after the Board of Directors determines to
redeem the Rights, as applicable, give notice of redemption to the
holders of the then outstanding Rights by mailing such notice to all
such holders at their last address as they appear upon the Rights
Register or, prior to the Separation Time, on the registry books of
the Transfer Agent for the Voting Shares. Any notice which is mailed
in the manner herein provided 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 sec.5.1 and other than in connection with the purchase
of Voting Shares prior to the Separation Time;
(h) Board of Directors may, where a Take-over Bid that is not a Permitted
Bid Acquisition is withdrawn or is otherwise terminated after the
Separation Time has occurred and prior to the occurrence of a Flip-in
Event, elect to redeem all the outstanding Rights at the Redemption
Price and upon such redemption, all the provisions of this Agreement
will continue to apply as if the Separation Time had not occurred and
Rights Certificates representing the number of Rights held by each
holder of record of Voting Shares as of the Separation Time had not
been mailed to each such holder and for all purposes of this Agreement
the Separation Time will be deemed not to have occurred;
(i) Shareholder consent required under sec.5.1(a) or (b) will 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 articles; and
(j) Consent of holders of Rights which is required pursuant to sec.5.1(a)
will 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 called in accordance with procedures for the
calling, holding and conduct of meetings of shareholders of the
Corporation held in accordance with applicable laws and the
Corporation's articles. For the purposes of this subsection, each
outstanding Right (other than Rights which are void pursuant to the
provisions of this Agreement) will be entitled to one vote.
EXPIRATION
5.2 No person will have any rights whatsoever pursuant to or arising out of
this Agreement or in respect of any Right after the Expiration Time, except the
Rights Agent as specified in sec.4.2.
ISSUANCE OF NEW RIGHT CERTIFICATES
5.3 Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the number or kind or class of shares
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
SUPPLEMENTS AND AMENDMENTS
5.4 The Corporation may:
(a) prior to the Annual Meeting of Shareholders of the Corporation to be
held in the year 2000, supplement or amend this Agreement without the
approval of any holder of Rights or Voting Shares in order to make any
changes which the Board of Directors may deem necessary or desirable.
Thereafter, the Corporation may, subject to sec.5.1, from time to time
supplement or
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amend this Agreement without the approval of any holders of Rights or
Voting Shares to correct any clerical or typographical error or to
maintain the validity of the Agreement as a result of a change in any
applicable legislation, rules or regulations thereunder;
(b) subject to sec.5.4(a), with the prior consent of the holders of the
Voting Shares obtained as set forth below, at any time prior to the
Separation Time amend, vary or rescind any of the provisions of this
Agreement and the Rights (whether or not such action would materially
adversely affect the interests of the holders of Rights generally).
Such consent will be deemed to have been given if provided by the
holders of Voting Shares at a meeting of the holders of Voting Shares,
which meeting will be called and held in compliance with applicable
laws and regulatory requirements and the requirements in the articles
of the Corporation. Subject to compliance with any requirements
imposed by the foregoing, consent will be deemed to have been given if
the proposed amendment, variation or revision is approved by the
affirmative vote of a majority of the votes cast by Independent
Shareholders represented in person or by proxy at the meeting; and
(c) with the prior consent of the holders of Rights, at any time after the
Separation Time and before the Expiration Time, amend, vary or rescind
any of the provisions of this Agreement and the Rights (whether or not
such action would materially adversely affect the interests of the
holders of Rights generally). Any approval of the holders of Rights
will 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)
will be entitled to one vote, and the procedures for the calling,
holding and conduct of the meeting will be those, as nearly as may be,
which are provided in the Corporation's Articles and the Company Act
with respect to a meeting of shareholders of the Corporation.
TIMING OF CERTAIN APPROVALS OF THE SHAREHOLDERS
5.5 Any supplements or amendments made by the Corporation to this Agreement
pursuant to sec.5.4(a) which are required to maintain the validity of this
Agreement as a result of any change in any applicable legislation, rules or
regulations thereunder:
(a) if made before the Separation Time, will be submitted to the
shareholders of the Corporation at the next meeting of shareholders
and the shareholders may, by the majority referred to in sec.5.4(b)
confirm or reject such amendment; and
(b) if made after the Separation Time, will be submitted to the holders of
Rights at a meeting to be called and held as soon as reasonably
possible in accordance with the provisions of sec.5.4(c).
EFFECTIVE TIME OF SUPPLEMENTS AND AMENDMENTS
5.6 A supplement or amendment of the type referred to in sec.5.5 will be
effective from the date of the resolution of the Board of Directors adopting
such supplement or amendment and will continue in force until it is either
rejected by the shareholders or holders of Rights, as the case may be, or, if
approved, until it ceases to be effective in accordance with the terms hereof.
Any other supplement or amendment will be effective upon approval of the
shareholders or holders of Rights, as the case may be. If a supplement or
amendment is rejected by the shareholders or the holders of Rights or is not
submitted to the shareholders or holders of Rights as required, such supplement
or amendment will cease to be effective from and after the termination of the
meeting at which it was rejected or to which it should have been but was not
submitted or from and after the date of the meeting of holders of Rights that
should have been but was not held, and no subsequent resolution of the Board of
Directors to amend, vary or delete any provision of this Agreement to
substantially the same effect will be effective until confirmed by the
shareholders or holders of Rights, as the case may be.
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APPROVALS OF AMENDMENTS BY RIGHTS AGENT
5.7 Notwithstanding anything in sec.5.4 to the contrary, no supplement or
amendment will be made to the provisions of Article 4 except with the written
concurrence of the Rights Agent to such supplement or amendment.
FRACTIONAL RIGHTS AND FRACTIONAL SHARES
5.8 The Corporation will not be required to issue fractions of:
(a) Rights or to distribute Rights Certificates which evidence fractional
Rights. Any such fractional Right will be null and void and the
Corporation will not have any obligation or liability in respect
thereof; and
(b) Common Shares or other securities upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares or
other securities. In lieu of issuing fractional Common Shares or other
securities, the Corporation will pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided, an amount in cash equal to the same fraction of the Market
Price of one Common Share.
RIGHTS OF ACTION
5.9 Subject to the terms of this Agreement, all rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective registered holders of the Rights; and any
registered holder of any Rights, without the consent of the Rights Agent or of
the registered holder of any other Rights, may, on such holder's own behalf and
for such holder's own benefit and the benefit of other holders of Rights
enforce, and may institute and maintain any suit, action or proceeding against
the Corporation to enforce such holder's right to exercise such holder's Rights
in the manner provided in such holder's Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to this Agreement.
NOTICE OF PROPOSED ACTIONS
5.10 If the Corporation proposes after the Separation Time and prior to the
Expiration Time to effect the liquidation, dissolution or winding-up of the
Corporation or the sale of all or substantially all of the Corporation's assets,
the Corporation, in each such case, will give to each holder of a Right, in
accordance with sec.5.11, a notice of such proposed action, which will specify
the date on which such liquidation, dissolution, winding-up, or sale is to take
place, and such notice will be so given at least 20 Business Days prior to the
date of such proposed action.
NOTICES
5.11 Notices or demands authorized or required by this Agreement to be given or
made:
(a) by the Rights Agent or by the holder of any Rights to or on the
Corporation will be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Glamis Gold Ltd.
5190 Neil Road, Suite 310
Reno, Nevada
U.S.A. 89502
Attention: Senior Vice-President Administration;
A-29
<PAGE> 57
(b) by the Corporation or by the holder of any Rights to or on the Rights
Agent will be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Corporation) as follows:
The Montreal Trust Company of Canada
510 Burrard Street
Vancouver, British Columbia
V6C 3B9
Attention: Assistant Vice-President, Client Services; and
(c) by the Corporation or the Rights Agent to or on the holder of any
Rights will be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed to such holder at the
address of such holder as it appears upon the Rights Register or,
prior to the Separation Time, on the registry books of the transfer
agent for the Voting Shares. Any notice which is mailed in the manner
herein provided will be deemed given, whether or not the holder
receives the notice.
SUCCESSORS
5.12 All the covenants and provisions of this Agreement by or for the benefit
of the Corporation or the Rights Agent will bind and enure to the benefit of
their respective successors and assigns hereunder.
BENEFITS OF THIS AGREEMENT
5.13 Nothing in this Agreement will 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
will be for the sole and exclusive benefit of the Corporation, the Rights Agent
and the holders of the Rights.
GOVERNING LAW
5.14 This Agreement and each Right issued hereunder will be deemed to be a
contract made under the laws of the Province of British Columbia and for all
purposes will be governed by and construed in accordance with the laws of such
province.
SEVERABILITY
5.15 If any Section, Subsection, Clause, Subclause, term or provision hereof or
the application thereof to any circumstances or any right hereunder will, in any
jurisdiction and to any extent, be invalid or unenforceable, such Section,
Subsection, Clause, Subclause, term or provision or such right will be
ineffective only in such jurisdiction and to the extent of such invalidity or
unenforceability in such jurisdiction without invalidating or rendering
unenforceable or ineffective the remaining Sections, Subsections, Clauses,
Subclauses, terms and provisions hereof or rights hereunder in such jurisdiction
or the application of such Section, Subsection, Clause, Subclause, term or
provision or rights hereunder in any other jurisdiction or to circumstances
other than those as to which it is specifically held invalid or unenforceable.
EFFECTIVE DATE
5.16 This Agreement is effective and in full force and effect in accordance
with its terms as of and from the Record Time. If this Agreement is not
confirmed by a majority of the votes cast by the holders of Common Shares of the
Corporation represented in person or by proxy at the Annual Meeting of
Shareholders of the Corporation to be held in the year 2000 who vote in respect
of confirmation of this Agreement at such meeting, then this Agreement and any
then outstanding Rights will be of no further force and effect from the date of
such Annual Meeting of Shareholders of the Corporation.
A-30
<PAGE> 58
DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
5.17 All actions, calculations and determinations (including all omissions with
respect to the foregoing) which are done or made by the Board of Directors for
the purposes hereof, will not subject the Board of Directors or any director of
the Corporation to any liability to the holders of the Rights.
RIGHTS OF BOARD, CORPORATION AND OFFEROR
5.18 Without limiting the generality of the foregoing, nothing contained herein
will be construed to suggest or imply that the Board of Directors will not be
entitled to recommend that holders of Voting Shares reject or accept any
Take-over Bid or take any other action (including, without limitation, the
commencement, prosecution, defence or settlement of any litigation and the
submission of additional or alternative Take-over Bids or other proposals to the
Shareholders of the Corporation) with respect to any Take-over Bid or otherwise
that the Board of Directors believes is necessary or appropriate in the exercise
of its fiduciary duties.
REGULATORY APPROVALS
5.19 Any obligation of the Corporation or action or event contemplated by this
Agreement will be subject to the prior receipt of any requisite approval or
consent from any governmental or regulatory authority including, without
limiting the generality of the foregoing, any necessary approval of any
securities regulatory authority or stock exchange.
DECLARATION AS TO NON-CANADIAN HOLDERS
5.20 If in the opinion of the Board of Directors (who may rely upon the advice
of counsel) any action or event contemplated by this Agreement would require
compliance with the securities laws or comparable legislation of a jurisdiction
outside Canada, the Board of Directors may take such actions as it may deem
appropriate to ensure such compliance. In no event will the Corporation or the
Rights Agent be required to issue or deliver Rights or securities issuable on
exercise of Rights to Persons who are citizens, residents or nationals of any
jurisdiction other than Canada or the United States in which such issue or
delivery would be unlawful without registration of the relevant Persons or
securities for such purposes.
TIME OF THE ESSENCE
5.21 Time will be of the essence in this Agreement.
A-31
<PAGE> 59
EXECUTION IN COUNTERPARTS
5.22 This Agreement may be executed in any number of counterparts and each of
such counterparts will for all purposes be deemed to be an original, and all
such counterparts will together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
GLAMIS GOLD LTD.
Per:
--------------------------------
Authorized Signatory
THE MONTREAL TRUST COMPANY OF CANADA
Per:
--------------------------------
Authorized Signatory
Per:
--------------------------------
Authorized Signatory
A-32
<PAGE> 60
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.
UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN sec.3.2 OF THE
RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON, ANY PERSON ACTING JOINTLY OR IN CONCERT WITH AN
ACQUIRING PERSON OR THEIR RESPECTIVE ASSOCIATES AND AFFILIATES
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND THEIR
RESPECTIVE TRANSFEREES WILL BECOME VOID WITHOUT ANY FURTHER
ACTION.
RIGHTS CERTIFICATE
This certifies that ____________________________ or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement dated as of the 25th day of
February, 2000 (the "RIGHTS AGREEMENT") between Glamis Gold Ltd., a corporation
formed under the Company Act (British Columbia) (the "CORPORATION"), and The
Montreal Trust Company of Canada, a trust company incorporated under the laws of
Canada, as rights agent (the "RIGHTS AGENT", which term will 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 close of business on the date of the
Corporation's Annual Meeting of Shareholders to be held in the year 2003 (or
such earlier expiration time as is provided in the Rights Agreement) one fully
paid and non-assessable Common Share of the Corporation (a "COMMON SHARE")
(subject to adjustment as provided in the Rights Agreement) at the Exercise
Price, upon presentation and surrender of this Rights Certificate together with
the Form of Election to Exercise duly executed and submitted to the Rights Agent
at its principal office in Vancouver. The Exercise Price will initially be
$100.00 (Canadian) per Right and will be subject to adjustment or revision in
certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, each Right evidenced
hereby may entitle the registered holder thereof to purchase or receive assets,
debt securities or other equity securities of the Corporation (or a combination
thereof) all 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. Copies of the
Rights Agreement are on file at the registered head 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 entitling the holder to
purchase a like aggregate number of Common Shares as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered. If this Rights
Certificate will be exercised in part, the registered holder will be entitled to
receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
<PAGE> 61
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Rights Certificate may be, and under certain circumstances are required to be,
redeemed by the Corporation at a redemption price of $0.00001 per Right.
No fractional Common Shares will be issued upon the exercise of any Right or
Rights evidenced hereby.
No holder of this Rights Certificate, as such, will be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Shares or of any
other securities of the Corporation which may at any time be issuable upon the
exercise hereof, nor will anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, 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 of the Corporation 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 of the
Corporation (except as expressly provided in the Rights Agreement), or to
receive dividends, distributions or subscription rights, or otherwise until the
Rights evidenced by this Rights Certificate will have been exercised as provided
in the Rights Agreement.
This Rights Certificate will not be valid or obligatory for any purpose until it
will have been manually countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation.
<TABLE>
<S> <C>
Date:
--------------------------------------------------
GLAMIS GOLD LTD.
By: By:
------------------------------ ------------------------------
Countersigned
THE MONTREAL TRUST COMPANY OF CANADA
By:
------------------------------
Authorized Signature
By:
------------------------------
Authorized Signature
</TABLE>
2
<PAGE> 62
(To be attached to each Rights Certificate)
FORM OF ELECTION TO EXERCISE
TO: GLAMIS GOLD LTD.
The undersigned hereby irrevocably elects to exercise
____________________________ whole Rights represented by the attached Rights
Certificate to purchase the Common Shares issuable upon the exercise of such
Rights and requests that certificates for such Shares be issued to:
----------------------------------------
(NAME)
----------------------------------------
(ADDRESS)
----------------------------------------
(CITY AND STATE OR PROVINCE)
If such number of Rights will not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights will be
registered in the name of and delivered to:
----------------------------------------
(NAME)
----------------------------------------
(ADDRESS)
----------------------------------------
(CITY AND STATE OR PROVINCE)
----------------------------------------
SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER 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 or a member of a recognized stock exchange or a member of the Transfer
Association Medallion (Stamp) Program.
2
<PAGE> 63
[THE FOLLOWING IS TO BE COMPLETED, IF TRUE:]
The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned by
an Acquiring Person or an Affiliate or Associate thereof or any Person acting
jointly or in consent with any of the foregoing or any Affiliate or Associate of
such Person (as defined in the Rights Agreement).
----------------------------------------
Signature
NOTICE
In the event the certification set forth in the Form of Election to Exercise is
not completed, the Corporation will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and accordingly such
Rights will be null and void.
2
<PAGE> 64
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED _____________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________
(Please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein and does hereby irrevocably constitute and appoint
____________________________________ 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 or a member of a recognized stock exchange or a member of the Transfer
Association Medallion (Stamp) Program.
[THE FOLLOWING TO BE COMPLETED, IF TRUE:]
The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned by
an Acquiring Person or an Affiliate or Associate thereof or any Person acting
jointly or in consent with any of the foregoing (as defined in the Rights
Agreement).
----------------------------------------
Signature
NOTICE
In the event the certification set forth in the Form of Assignment is not
completed, the Corporation will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and accordingly such
Rights will be null and void.
