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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
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FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CHIEFTAIN INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
ALBERTA, CANADA NONE
(State of Incorporation (I.R.S. Employer
or Organization) Identification Number)
1201 TD Tower
10088-102 Avenue
Edmonton, Alberta T5J 2Z1
Canada
(Address, including zip code, of principal executive offices)
John L. Roach, Inc.
4150 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
(214) 922-9850
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service in the United States)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Common Share American Stock Exchange
Purchase Rights
If this Form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective upon filing
pursuant to General Instruction A.(c), please check the following box. /X/
If this Form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective pursuant to
General Instruction A.(d), please check the following box. / /
Securities Act registration statement file number to which this
form relates: [Not Applicable]
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
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2
Item 1. Description of Securities to be Registered.
On May 26, 1994, the shareholders of Chieftain International,
Inc., at their annual meeting, ratified the shareholder rights plan adopted by
the Board of Directors of Chieftain International, Inc. on February 23, 1994,
as amended. Pursuant to our rights plan, one right to purchase additional
common shares attaches to each of our common shares. In addition, one
convertible right attaches to each $1.8125 Convertible Redeemable Preferred
share of Chieftain International Funding Corp. Each convertible right entitles
its holder to receive one right to purchase additional common shares for each
whole common share issued upon conversion of such convertible preferred share
into our common shares. The rights and the convertible rights trade
automatically with their respective shares and become exercisable under the
circumstances described below. Until a right is exercised, the holder of the
right, as such, will have no rights as a shareholder, including the right to
vote or receive dividends. The description and terms of the rights and
convertible rights are set forth in a Shareholder Rights Plan Agreement dated
as of February 23, 1994, between the Company and R-M Trust Company,
as rights agent, as amended.
CERTAIN EFFECTS OF OUR RIGHTS PLAN
Our rights plan is designed to protect our shareholders in the
event of unsolicited offers to acquire and other coercive takeover tactics.
The primary purpose of our rights plan is to ensure that any bid for our
common shares, in the context of a takeover, will be made for all our common
shares, at the same price, and with sufficient time for our common
shareholders to fully consider the bid. The provisions of our rights plan may
render an unsolicited takeover of us more difficult or less likely to occur or
might prevent such a takeover, even though such a takeover may offer our
common shareholders the opportunity to sell their common shares at a price
above the prevailing market rate and may be favored by a majority of our
common shareholders.
SUMMARY OF PRINCIPAL ATTRIBUTES OF OUR RIGHTS PLAN
The following is a general summary of the terms of the our
rights plan, which is qualified in its entirety by reference to the text of
the rights plan agreement.
(a) One right to purchase common shares on the terms and conditions
set forth in the rights plan agreement is issued at no cost and
attaches to each outstanding common share.
(b) One convertible right entitling the holder to receive one right
for each whole common share issued on conversion of a $1.8125
Convertible Redeemable Preferred share of Chieftain
International Funding Corp., which is convertible into the our
common shares, is issued at no cost and attaches to each such
outstanding convertible preferred share.
(c) Until the "separation time" (the eighth trading day following
the earlier of (1) the date on which a person or group of
people acquire beneficial ownership (as defined in the rights
plan) of 25% or more of our common shares (an "acquiring
person") and (2) the commencement date of a takeover bid which
is not a Permitted Bid (as defined below)), rights trade with
the common shares to which they are attached, have no value and
may not be exercised.
(d) At the separation time, rights separate and trade separately
from the common shares and, promptly following the separation
time, separate certificates evidencing the rights are mailed to
holders of record of our common shares and, as applicable, to
the holders of record of the $1.8125 Convertible Redeemable
Preferred shares of Chieftain International Funding Corp. as of
the separation time. In addition, after the separation time,
each right (other than any rights held by the Acquiring Person)
may be exercised to acquire, on payment of the exercise price,
common shares having an aggregate market value equal to twice
the exercise price. The initial exercise price of a right is
Canadian $80 or the U.S. dollar equivalent thereof (the
"exercise price") and is subject to certain adjustments. Where
a takeover bid that is not a Permitted Bid or a Competing
Permitted Bid (as defined below) is withdrawn after the
separation time, our board of directors may elect to redeem all
the outstanding rights at a price of Canadian $0.001 each. Upon
such redemption, the rights plan will continue in effect as if
the separation time had never occurred.
(e) A Permitted Bid is an offer:
o that is open for a minimum of 75 days;
o that is made to acquire all of our outstanding common
shares;
o that is made by an offeror holding not more than 10% of
our common shares;
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o pursuant to which the offeror agrees not to acquire any
additional common shares unless 50% or more of the shares
not held by the offeror are tendered, failing which the
offer will cease to be a Permitted Bid; and
o which, if successful, allows shareholders who have not
already tendered their shares a further 15 business days
in which to do so.
(f) A Competing Permitted Bid has the same requirements as a
Permitted Bid except that a Competing Permitted Bid must remain
open for the greater of 21 days and the time then remaining
under the outstanding Permitted Bid. The reduction in the
acceptance time for a Competing Permitted Bid is intended to
allow, to the extent possible, all takeover bids to be
considered by our common shareholders within the same time
period.
(g) The rights plan has a term of 10 years from February 23, 1994.
GENERAL IMPACT OF OUR RIGHTS PLAN
The rights plan should not deter a person from acquiring
control of us if that person is prepared to make a takeover bid pursuant to
the Permitted Bid or Competing Permitted Bid requirements. However, if an
acquiring person makes a bid to acquire 25% or more of our common shares,
other than by a Permitted Bid or Competing Permitted Bid, holders of Rights,
other than the acquiring person, may acquire additional common shares at a 50%
discount to the then prevailing market price. As a result, it is unlikely that
any person will acquire 25% or more of our outstanding common shares other
than by way of a Permitted Bid or a Competing Permitted Bid.
The proxy mechanism of the Business Corporations Act (Alberta)
is not affected by our rights plan, and a shareholder may use his statutory
rights thereunder to promote a change in our management or direction. Under
the Business Corporations Act (Alberta), shareholders holding not less than 5%
of a company's outstanding shares that carry the right to vote may requisition
the board of directors of that company to call a meeting of shareholders.
The rights plan agreement describing the rights plan,
specifying the terms of the rights and including the Form of Rights
Certificate, Form of Assignment, Form of Election to Exercise and an
accompanying notice (Attachment 1 to the rights plan agreement) are filed
herewith as exhibits. The foregoing description of the rights does not purport
to be complete and is qualified in its entirety by reference to such exhibits,
which are incorporated herein by reference.
Item 2. Exhibits.
1. Shareholder Rights Plan Agreement, dated as of February 23,
1994, between Chieftain International, Inc. and the R-M Trust
Company, as rights agent, as amended.
2. Press Release dated May 26, 1994.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
CHIEFTAIN INTERNATIONAL,
INC.
by /s/ Edward L. Hahn
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Name: Edward L. Hahn
Date: October 20, 1999 Title: Senior Vice President,
Finance and Treasurer
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5
INDEX OF EXHIBITS
Exhibit No. Title
1 Shareholder Rights Plan Agreement, dated as of
February 23, 1994, between Chieftain
International, Inc. and The R-M Trust Company,
as rights agent, as amended.
2 Press Release dated May 26, 1994.
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SHAREHOLDER RIGHTS PLAN AGREEMENT
DATED AS OF
FEBRUARY 23, 1994
BETWEEN
CHIEFTAIN INTERNATIONAL, INC.
AND
THE R-M TRUST COMPANY
AS RIGHTS AGENT
AS AMENDED
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SHAREHOLDER RIGHTS PLAN AGREEMENT
TABLE OF CONTENTS
ARTICLE 1 - INTERPRETATION..................................................2
1.1 Certain Definitions...........................................2
1.2 Currency.....................................................14
1.3 Headings.....................................................14
1.4 Calculation of Number and Percentage of Beneficial Ownership
of Outstanding Voting Shares.................................15
1.5 Acting Jointly or in Concert.................................15
1.6 Generally Accepted Accounting Principles.....................16
1.7 Alberta Energy Company Ltd...................................16
1.8 Grandfathered Permitted Bidder...............................16
ARTICLE 2 - THE RIGHTS.....................................................17
2.1 Legend on Common Share Certificates..........................17
2.2 Initial Exercise Price; Exercise of Rights; Detachment
of Rights...................................................17
2.3 Adjustments to Exercise Price; Number of Rights..............20
2.4 Date on Which Exercise Is Effective..........................25
2.5 Execution, Authentication, Delivery and Dating of Rights
Certificates.................................................25
2.6 Registration, Transfer and Exchange..........................26
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates....26
2.8 Persons Deemed Owners of Rights..............................27
2.9 Delivery and Cancellation of Certificates....................27
2.10 Agreement of Rights Holders..................................28
2.11 Rights Certificate Holder Not Deemed a Shareholder...........28
ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS......................................29
3.1 Flip-in Event................................................29
ARTICLE 4 - THE RIGHTS AGENT...............................................30
4.1 General......................................................30
4.2 Merger, Amalgamation or Consolidation or Change of Name of
Rights Agent.................................................31
4.3 Duties of Rights Agent.......................................31
4.4 Change of Rights Agent.......................................33
ARTICLE 5 - CONVERTIBLE RIGHTS.............................................34
5.1 Convertible Preferred Share Certificates.....................34
5.2 Conversion of Convertible Rights.............................34
5.3 Persons Deemed Owners........................................34
5.4 Agreement of Convertible Rights Holders......................35
ARTICLE 6 - MISCELLANEOUS..................................................35
6.1 Redemption and Waiver........................................35
6.2 Expiration...................................................37
6.3 Issuance of New Rights Certificates..........................37
6.4 Supplements and Amendments...................................37
6.5 Fractional Rights and Fractional Shares......................39
6.6 Rights of Action.............................................39
(i)
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6.7 Regulatory Approvals.........................................39
6.8 Declaration as to Non-Canadian Holders.......................40
6.9 Notices......................................................40
6.10 Costs of Enforcement.........................................41
6.11 Successors...................................................41
6.12 Benefits of this Agreement...................................41
6.13 Governing Law................................................41
6.14 Severability.................................................41
6.15 Effective Date...............................................42
6.16 Reconfirmation...............................................42
6.17 Determinations and Actions by the Board of Directors.........42
6.18 Time of the Essence..........................................42
6.19 Execution in Counterparts....................................43
ATTACHMENT 1...............................................................44
(ii)
<PAGE>
SHAREHOLDER RIGHTS PLAN AGREEMENT
MEMORANDUM OF AGREEMENT, dated as of February 23, 1994 between
Chieftain International, Inc. (the "Corporation"), a corporation incorporated
under the Business Corporations Act (Alberta), and The R-M Trust Company, a
trust company incorporated under the laws of Canada (the "Rights Agent");
WHEREAS in order to implement the adoption of a shareholder rights
plan as established by this Agreement, the Board of Directors of the
Corporation has:
(a) authorized the issuance, effective at 12:01 a.m. (Edmonton time) on
the Effective Date (as hereinafter defined), of one Right (as
hereinafter defined) in respect of each Common Share (as hereinafter
defined) outstanding at 12:01 a.m. (Edmonton time) on the Effective
Date (the "Record Time");
(b) authorized the issuance, effective at 12:01 a.m. (Edmonton time) on
the Effective Date, of one Convertible Right (as hereinafter
defined), in respect of each Convertible Preferred Share (as
hereinafter defined) outstanding at the Record Time;
(c) authorized the issuance of one Right in respect of each Common Share
of the Corporation issued after the Record Time and prior to the
earlier of the Separation Time (as hereinafter defined) and the
Expiration Time (as hereinafter defined); and
(d) authorized the issuance of Rights to holders of Convertible Rights
upon the terms and subject to the conditions set forth herein;
AND WHEREAS each Right entitles the holder thereof, after the
Separation Time, to purchase securities of the Corporation pursuant to the
terms and subject to the conditions set forth herein;
AND WHEREAS the Corporation desires to appoint the Rights Agent to
act on behalf of the Corporation and the holders of Rights, and the Rights
Agent is willing to so act, in connection with the issuance, transfer,
exchange and replacement of Rights Certificates (as hereinafter defined), the
exercise of Rights and other matters referred to herein;
AND WHEREAS the Board of Directors of the Corporation proposes that
this Agreement be in place for a period of ten years, subject to the Agreement
being reconfirmed by shareholders of the Corporation after a period of five
years;
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements set forth herein, and subject to such covenants and
agreements, the parties hereby agree as follows:
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ARTICLE 1 - INTERPRETATION
1.1. Certain Definition
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person who is the Beneficial
Owner of 25% or more of the outstanding Voting Shares of any
class; provided, however, that the term "Acquiring Person"
shall not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 25% per
cent or more of the outstanding Voting Shares of any class
as a result of one or any combination of (A) an
acquisition or redemption by the Corporation of Voting
Shares of any class which, by reducing the number of
Voting Shares of that particular class outstanding,
increases the proportionate number of Voting Shares of
that particular class Beneficially Owned by such Person to
25% or more of the Voting Shares of that particular class
then outstanding, (B) Permitted Bid Acquisitions, or (C)
Pro Rata Acquisitions; provided, however, that if a Person
becomes the Beneficial owner of 25% or more of the
outstanding Voting Shares of any class by reason of one or
any combination of the operation of Paragraphs (A) or (B)
or (C) above and such Person thereafter increases its
Beneficial Ownership of such Voting Shares by more than 1%
of the number of such Voting Shares outstanding as at the
time of acquisition, other than pursuant to Permitted Bid
Acquisitions or Pro Rata Acquisitions or as a result of an
acquisition or redemption with Paragraph (A) above, then
as of the date such Person becomes the Beneficial Owner of
such additional Voting Shares of that particular class,
such Person shall become an "Acquiring Person";
(iii) for a period of ten days after the Disqualification Date
(as defined below), any Person who becomes the Beneficial
Owner of 25% or more of the outstanding Voting Shares as a
result of such Person becoming disqualified from relying
on Clause 1.1(f)(E) solely because such Person or the
Beneficial Owner of such Voting Shares makes or proposes
to make a Take-over Bid, either alone or by acting jointly
or in concert with any other Person. For the purposes of
this definition, "Disqualification Date" means the first
date of public announcement of facts indicating that any
Person has made or proposed to make, either alone or by
acting jointly or in concert with any other Person, a
Take-over Bid.
(iv) an underwriter or member of a banking or selling group
that becomes the Beneficial Owner of 25% or more of the
Voting Shares in connection with a bona fide distribution
to the public of securities; or
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(v) a Person who is the Beneficial Owner of more than 25% of
the outstanding Voting Shares of the Corporation
determined as at the Record Time, (a "Grandfathered
Acquiring Person"); provided, however, that this exception
shall not be, and shall cease to be, applicable to a
Grandfathered Acquiring Person in the event that such
Grandfathered Acquiring Person shall, after the Record
Time, become the Beneficial Owner of any additional Voting
Shares of the Corporation that increases its Beneficial
Ownership of Voting Shares by more than 1% of the number
of Voting Shares outstanding as at the time of
acquisition, other than through a Permitted Bid
Acquisition or a Pro Rata Acquisition or as a result of an
acquisition or redemption within Paragraph 1.1(a)(ii)(A)
above;
(b) "Affiliate" a corporation shall be deemed to be an Affiliate of
another corporation if one of them is the Subsidiary of the
other or if both are Subsidiaries of the same corporation or if
each of them is directly or indirectly controlled by the same
Person;
(c) "Agreement" shall mean this shareholder rights plan agreement
dated as of February 23, 1994 between the Corporation and the
Rights Agent, as amended or supplemented from time to time;
"hereof", "herein", "hereto" and similar expressions mean and
refer to this Agreement as a whole and not to any particular
part of this Agreement;
(d) "annual cash dividend" shall mean cash dividends paid 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;
(ii) 300% of the arithmetic mean of the aggregate amounts of
the annual cash dividends declared payable by the
Corporation on its Common Shares in its three immediately
preceding fiscal years; and
(iii) 100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its
immediately preceding fiscal year;
(e) "Associate" means, when used to indicate a relationship with a
specified Person:
(i) a corporation (1) of which that person owns at law or in
equity shares or securities currently convertible into
shares carrying more than 10% of the voting rights
exercisable with respect to the election of directors
under all circumstances or by reason of the occurrence of
an event that has occurred and is continuing, or a
currently exercisable option or right to purchase such
shares or such convertible securities and (2) with whom
that Person is acting jointly or in concert (other than by
virtue of inclusion of the word "associate" in Section
131.1 of the Securities Act (Alberta) as it exists on the
date hereof);
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(ii) a partner of that Person;
(iii) a trust or estate in which that Person has a beneficial
interest and with whom that Person is acting jointly or in
concert (other than by virtue of inclusion of the word
"associate" in Section 131.1 of the Securities Act
(Alberta) as it exists on the date hereof) or in which
that Person has a 50% or greater beneficial interest or in
respect of which he serves as a trustee or in a similar
capacity; provided, however, that a Person shall not be an
Associate of a trust by reason only of the fact that such
Person serves as trustee or in a similar capacity in
relation to such trust if such Person is duly licensed to
carry on the business of a trust company under applicable
law or if the ordinary business of such Person includes
the management of investment funds for unaffiliated
investors and such Person acts as trustee or in a similar
capacity in relation to such trust in the ordinary course
of such business;
(iv) a spouse of that Person or any Person with whom that
Person is living in a conjugal relationship outside
marriage or a child of that Person; and
(v) a relative of a Person mentioned in Clause 1.1(e)(iv) if
that relative has the same residence as that Person;
(f) A Person shall be deemed the "Beneficial Owner" of, and to have
"Beneficial Ownership" of, and to "Beneficially Own",
(i) any securities as to which such Person or any of such
Person's Affiliates is the direct or indirect owner at law
or in equity and for the purpose of this Subclause (i) a
Person shall be deemed to be the Beneficial Owner of all
securities (1) owned by a partnership of which the Person
is a partner, (2) owned by a trust in which that Person
has a beneficial interest and which is acting jointly or
in concert with that Person (other than by virtue of the
definition of associate contained in the Securities Act
(Alberta)) or of which the Person has a 50% or greater
beneficial interest, (3) owned jointly or in common with
others and (4) any securities which are directly or
indirectly owned at law or in equity by an Associate of
such Person;
(ii) any securities as to which such Person or any of such
Person's Affiliates or Associates has, directly or
indirectly, (1) the right to acquire (whether such right
is exercisable immediately or after the lapse or passage
of time and whether or not on condition or the happening
of any contingency or otherwise) pursuant to any
agreement, arrangement, pledge or understanding, whether
or not in writing (other than customary agreements with
and between underwriters and/or banking group members
and/or selling group members with respect to a bona fide
public offering of securities and other than pledges of
securities in the ordinary course of business that meet
all the conditions specified in Rule 13d-3(d)(3) under the
U.S. Exchange Act other than the conditions relating to
the legislative
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<PAGE>
provisions specified in Rule 13d-1(b)(1)(ii) whether they
require registration or otherwise define legal obligations
or terms), or upon the exercise of any conversion right,
exchange right, share purchase right (other than the
Rights), warrant or option, or otherwise, or (2) the right
to vote such securities (whether such right is exercisable
immediately or after the lapse or passage of time and
whether or not on condition or the happening of any
contingency or otherwise), pursuant to any agreement,
arrangement, pledge (other then pledges of securities in
the ordinary course of business that meet all conditions
specified in Rule 13d-3(d)(3) under the U.S. Exchange Act
other than the conditions relating to the legislative
provisions specified in Rule 13d-1(b)(1)(ii) whether they
require registration or otherwise define legal obligations
or terms) or understanding (whether or not in writing) or
otherwise; and
(iii) any securities which are Beneficially owned within the
meaning of Clauses 1.1(f)(i) or (ii) by any other Person
with which such Person or any of such Person's Affiliates
has any agreement, arrangement or understanding, other
than a pledge, whether or not in writing (other than
customary agreements with and between underwriters and/or
banking group members and/or selling group members with
respect to a bona fide public offering of securities) with
respect to or for the purpose of acquiring, holding,
voting or disposing of any Voting Shares of any class of
the Corporation;
provided, however, that a Person shall not be deemed the
"Beneficial owner" of, or to have "Beneficial ownership" of, or
to "Beneficially own", any security:
(A) solely because such security has been deposited or
tendered pursuant to any Take-over Bid made by such
person, made by any of such Person's Affiliates or
Associates or made by any other Person referred to in
Clause 1.1(f)(iii), until such deposited or tendered
security has been taken up or paid for;
(B) solely because such Person, any of such Person's
Affiliates or Associates or any other Person referred
to in Clause 1.1(f)(iii), has or shares the power to
vote or direct the voting of such security pursuant
to a revocable proxy given in response to a public
proxy solicitation;
(C) solely because such Person, any of such Person's
Affiliates or Associates or any other Person referred
to in Clause 1.1(f)(iii), has or shares the power to
vote or direct the voting of such security in
connection with or in order to participate in a
public proxy solicitation made or to be made;
(D) solely because such Person, any of such Person's
Affiliates or Associates or any other Person referred
to in Clause 1.1(f)(iii), has an agreement,
arrangement or understanding with respect to a
shareholder proposal or a
5
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matter or matters to come before a meeting of
shareholders, including the election of directors;
(E) solely because such Person, any of such Person's
Affiliates or Associates or any other Person referred
to in Clause 1.1(f)(iii), holds or exercises voting
or dispositive power over such security provided
that, (1) the ordinary business of any such Person
(the "Investment Manager") includes the management of
investment funds for others and such voting or
dispositive power over such security is held by the
Investment Manager in the ordinary course of such
business in the performance of such Investment
Manager's duties for the account of any other Person
(a "Client"); (2) 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 for other accounts and holds such voting
or dispositive power over 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"); and (3) the Investment Manager or the
Trust Company, as the case may be, does not make or
propose to make a Take-over Bid alone or by acting
jointly or in concert with any other Person;
(F) solely because such Person is a Client of the same
Investment Manager as another Person on whose account
the Investment Manager holds or exercises voting or
dispositive power over such security, or solely
because such Person is an Estate Account or an Other
Account of the same Trust Company as another Person
on whose account the Trust Company holds or exercises
voting or dispositive power over such security; or
(G) solely because such Person, any of such Person's
Affiliates or Associates or any other Person referred
to in Clause 1.1(f)(iii) would be the Beneficial
Owner as defined in Clauses 1.1(f)(i) to (iii) of
such security provided that such Person is:
(i) a Crown agent or agency; or
(ii) the administrator or the trustee of one or more
pension funds or plans registered under the laws
of Canada or any Province thereof;
and such securities are held solely for the purposes
of its activity as a Person described in (i) or (ii)
above, provided that such Person (1)(A) is precluded
by its governing legislation from owning more than
30% of the shares of any company including the
Corporation or (B) where not so precluded, is
generally so precluded and in such event does
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not own more than 30% of the shares of the
Corporation; (2) holds its Common Shares or Voting
Shares for investment purposes; and (3) is not acting
jointly or in concert with any other Person. For
greater certainty, and without limitation to the
generality of Clause 6.14, if or any reason the
existence of this Clause 1.1(f)(G) is
judicially determined to affect the validity or
enforceability of this Agreement, it is the expressed
desire of the parties to this Agreement that this
Clause 1.1(f)(G) be severed from the balance of this
Agreement and that in such circumstances the
provisions of Subsection 6.1(a) shall apply
mutandis and the reference therein to 14 days shall
be read to be 60 days or such later date as the Board
of Directors may determine.
(g) "Board of Directors" shall mean the board of directors of the
Corporation or any duly constituted and empowered committee
thereof;
(h) "Business Corporations Act (Alberta)" shall mean the Business
Corporations Act, S.A. 1981, c. B-15, as amended, and the
regulations made thereunder, and any comparable or successor
laws or regulations thereto;
(i) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the City of Edmonton
are authorized or obligated by law to close;
(j) "Canadian Dollar Equivalent" of any amount which is expressed
in United States Dollars means, on any date, the Canadian
dollar equivalent of such amount determined by multiplying such
amount by the U.S.-Canadian Exchange Rate in effect on such
date;
(k) "Canadian - U.S. Exchange Rate" means, on any date, the inverse
of the U.S. - Canadian Exchange Rate in effect on such date;
(l) "close of business" on any given date shall mean the time on
such date (or, if such date is not a Business Day, the time on
the next succeeding Business Day) at which the principal
transfer office in Calgary of the transfer agent for the Common
Shares of the Corporation (or, after the Separation Time, the
principal transfer office in Calgary of the Rights Agent) is
closed to the public;
(m) "Common Shares" shall mean the Common Shares in the capital of
the Corporation;
(n) "Competing Permitted Bid" means a Take-over Bid that:
(i) is made after a Permitted Bid has been made and prior to
the expiry of the Permitted Bid;
(ii) satisfies all components of the definition of a Permitted
Bid other than the requirements set out in Clause (iii) of
the definition of a Permitted Bid; and
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(iii) contains, and the take-up and payment for securities
tendered or deposited is subject to, an irrevocable and
unqualified provision that no Voting Shares of the
particular class that is subject to the Take-over Bid will
be taken up or paid for pursuant to the Take-over Bid
prior to the close of business on a date that is no
earlier than the date on which Voting Shares may be taken
up under the Permitted Bid that preceded the Competing
Permitted Bid and only if at the date that the Voting
Shares are to be taken up more than 50% of the Voting
shares held by Independent Shareholders shall have been
deposited or tendered pursuant to the Competing Permitted
Bid and not withdrawn;
(o) "controlled" A corporation shall be deemed to be "controlled"
by another Person or two or more Persons 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 on
behalf of the other Person or Persons; and
(ii) the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of directors
of such corporation, and "control", "controls" and
"controlling" shall be interpreted accordingly;
(p) "Co-Rights Agents" shall have the meaning ascribed thereto in
Subsection 4.1(a);
(q) "Convertible Preferred Shares" means the $1.8125 Convertible
Redeemable Preferred Shares of Chieftain International Funding
Corp.;
(r) "Convertible Right", if applicable, means a right to receive a
Right, upon the terms and subject to the conditions set forth
in this Agreement;
(s) "Disposition Date" shall have the meaning ascribed thereto in
Subsection 6.1(a);
(t) "Dividend Reinvestment Acquisition" shall mean an acquisition
of Voting Shares of any class pursuant to a Dividend
Reinvestment Plan;
(u) "Dividend Reinvestment Plan" means a regular dividend
reinvestment or other plan of the Corporation made available by
the Corporation to holders of its securities where such plan
permits the holder to direct that some or all of:
(i) dividends paid in respect of shares of any class of the
Corporation;
(ii) proceeds of redemption of shares of the Corporation;
(iii) interest paid on evidences of indebtedness of the
Corporation; or
(iv) optional cash payments;
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be applied to the purchase from the Corporation of Common
Shares;
(v) "Election to Exercise" shall have the meaning ascribed
thereto in Clause 2.2(d)(ii);
(w) "Effective Date" means February 23, 1994;
(x) "Exercise Price" shall mean, as of any date, the price at which
a holder may purchase the securities issuable upon exercise of
one whole Right which, until adjustment thereof in accordance
with the terms hereof, shall be $80;
(y) "Expansion Factor" shall have the meaning ascribed thereto in
Clause 2.3(a)(x);
(z) "Expiration Time" shall mean the close of business on that date
which is the earlier of the date of termination of the meeting
called to consider the reconfirmation of this Agreement and the
date of termination of the 1999 annual meeting of holders of
Voting Shares or, if this Agreement is reconfirmed at such
meeting, the close of business on the tenth anniversary of the
Effective Date;
(aa) "Fiduciary" shall mean a trust company registered under the
trust company legislation of Canada or any province thereof or
a portfolio manager registered under the securities legislation
of one or more provinces of Canada;
(ab) "Flip-in Event" shall mean a transaction in or pursuant to
which any Person becomes an Acquiring Person;
(ac) "holder" shall have the meaning ascribed thereto in Section
2.8;
(ad) "Independent Shareholders" shall mean holders of Voting Shares,
other than:
(i) any Acquiring Person;
(ii) any Offeror;
(iii) any Affiliate or Associate of any Acquiring Person or
Offeror;
(iv) any Person acting jointly or in concert with any Acquiring
Person or Offeror, or with any Affiliate or Associate of
any Acquiring Person or Offeror; and
(v) any employee benefit plan, deferred profit sharing plan,
stock appreciation plan or trust for the benefit of
employees of the Corporation or any of its Affiliates but
excluding in any event a plan or trust in respect of which
the employees direct the manner in which the Voting Shares
are to be voted and direct whether the Voting Shares be
tendered to a Take-over Bid;
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(ae) "Market Price" per share of any securities on any date of
determination shall mean the average of the daily closing
prices per share of such securities (determined as described
below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date;
provided, however, that if an event of a type analogous to any
of the events described in Section 2.3 hereof shall have caused
the closing prices used to determine the Market Price on any
Trading Days not to be fully comparable with the closing price
on such date of determination or, if the date of determination
is not a Trading Day, on the immediately preceding Trading Day,
each such closing price so used shall be appropriately adjusted
in a manner analogous to the applicable adjustment provided for
in Section 2.3 hereof in order to make it fully comparable with
the closing price on such date of determination or, if the date
of determination is not a Trading Day, on the immediately
preceding Trading Day. The closing price per share of any
securities on any date shall be:
(i) the closing board lot sale price or, in case no such sale
takes place on such date, the average of the closing bid
and asked prices for each of such securities as reported
by the principal Canadian stock exchange (as determined by
the Board of Directors) on which such securities are
listed or admitted to trading;
(ii) if for any reason none of such prices is available on such
day or the securities are not listed or posted for trading
on a Canadian stock exchange, the last sale price or, in
case no such sale takes place on such date, the average of
the closing bid and asked prices for each of such
securities as reported by the principal national United
States securities exchange (as determined by the Board of
Directors) on which such securities are listed or admitted
to trading;
(iii) if for any reason none of such prices is available on
such day or the securities are not listed or admitted to
trading on a Canadian stock exchange or a national United
States securities exchange, the last sale price or, in
case no sale takes place on such date, the average of the
high bid and low asked prices for each of such securities
in the over-the-counter market, as quoted by any reporting
system then in use (as determined by the Board of
Directors); or
(iv) if for any reason none of such prices is available on such
day or the securities are not listed or admitted to
trading on a Canadian stock exchange or a national United
States securities exchange or quoted by any such reporting
system, the average of the closing bid and asked prices as
furnished by a professional market maker making a market
in the securities selected by the Board of Directors;
provided, however, that if for any reason none of such
prices is available on such day, the closing price per
share of such securities on such date means the fair value
per share of such securities on such date as determined by
the Board of Directors, after consultation with a
nationally recognized investment dealer or investment
banker with respect to the fair value per share of such
securities. The Market Price shall be expressed in
Canadian dollars and, if
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initially determined in respect of any day forming part of
the 20 consecutive Trading Day period in question in
United States dollars, such amount shall be translated
into Canadian dollars on such date at the Canadian Dollar
Equivalent thereof.
(af) "1934 Exchange Act" means the Securities Exchange Act of
1934 of the United States, as amended, and the rules and
regulations thereunder as now in effect or as the same may
from time to time be amended, re-enacted or replaced;
(ag) "Nominee" shall have the meaning ascribed thereto in
Subsection 2.2(c);
(ah) "Offer to Acquire" shall include:
(i) an offer to purchase or a solicitation of an offer to
sell Voting Shares of any class or classes; and
(ii) an acceptance of an offer to sell Voting Shares of
any class or classes, whether or not such offer to
sell has been solicited; or any combination thereof,
and the Person accepting an offer to sell shall be
deemed to be making an Offer to Acquire to the Person
that made the offer to sell;
(ai) "Offeror" shall mean a Person who has announced an
intention to make or who has made a Take-over Bid;
(aj) "Offeror's Securities" means Voting Shares Beneficially
Owned by an Offeror on the date of the Offer to Acquire;
(ak) "Permitted Bid" means a Take-over Bid made by an Offeror
by way of Take-over bid circular which also complies with
the following additional provisions:
(i) the Take-over Bid is made for all outstanding Voting
Shares of a particular class and to all holders of
Voting Shares of that particular class wherever
resident as registered on the books of the
Corporation, other than the Offeror;
(ii) the Person making the Take-over Bid does not
Beneficially Own more than 10% of the outstanding
Voting Shares and said Person does not become the
Beneficial Owner of any Additional Voting Shares
prior to the close of business on the expiry of the
Permitted Bid;
(iii) the Take-over Bid contains, and the take-up and
payment for securities tendered or deposited is
subject to, an irrevocable and unqualified provision
that Voting Shares may be deposited pursuant to the
Take-over Bid, unless the Take-over Bid is withdrawn,
and that any Voting Shares deposited pursuant to the
Take-over Bid may be withdrawn and that no shares
shall be taken up and paid for by the
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Offeror at any time prior to the close of business
on a date which is not less than 75 days following
the date of the Take-over Bid and only if at such
date more than 50% of the Voting Shares held by
Independent Shareholders shall have been deposited
or tendered pursuant to the Take-over Bid and not
withdrawn; and
(iv) the Take-over Bid contains an irrevocable and
unqualified provision that in the event that on the
date on which Voting Shares of the particular class
that is the subject of the Take-over Bid may be taken
up and paid for more than 50% of the Voting Shares
held by Independent Shareholders shall have been
deposited or tendered pursuant to the Take-over Bid
and not withdrawn the Offeror will make a public
announcement of that fact and the Take-over Bid will
remain open for deposits and tenders of Voting Shares
for not less than 15 days from the date of such
public announcement.
(al) "Permitted Bid Acquisition" shall mean an acquisition of
Voting Shares of any class made pursuant to a Permitted
Bid or a Competing Permitted Bid;
(am) "Person" shall include an individual, body corporate,
partnership, syndicate or other form of unincorporated
association, a government and its agencies or
instrumentalities, any entity whether or not having legal
personality and any of the foregoing acting in any
derivative, representative or fiduciary capacity;
(an) "Pro Rata Acquisition" means an acquisition by a Person of
Beneficial Ownership of Voting Shares pursuant to:
(i) a Dividend Reinvestment Acquisition;
(ii) a stock dividend, stock split or other event in
respect of securities of the Corporation of one or
more particular classes or series pursuant to which
such Person becomes the Beneficial Owner of Voting
Shares on the same pro rata basis as all other
holders of securities of the particular class,
classes or series;
(iii) the acquisition or exercise by the Person of only
those rights to purchase Voting Shares distributed to
that Person in the course of a distribution to all
holders of securities of the Corporation of one or
more particular classes or series pursuant to a bona
fide rights offering or pursuant to a prospectus; or
(iv) a distribution to the public of Voting Shares, or
securities convertible into or exchangeable for
Voting Shares (and the conversion or exchange of such
convertible or exchangeable securities), made
pursuant to a prospectus or a distribution by way of
a private placement, provided that the Person does
not thereby acquire a greater percentage of such
Voting Shares, or securities convertible into or
exchangeable for Voting Shares so offered than the
Person's percentage of Voting Shares Beneficially
Owned immediately prior to such acquisition;
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(ao) "Record Time" has the meaning set forth in the first
whereas clause;
(ap) "Right" means a right to purchase a Common Share of the
Corporation, upon the terms and subject to the conditions
set forth in this Agreement;
(aq) "Rights Certificate" means the certificates representing
the Rights after the Separation Time, which shall be
substantially in the form attached hereto as Attachment 1;
(ar) "Rights Register" shall have the meaning ascribed thereto
in Subsection 2.6(a);
(as) "Securities Act (Alberta)" shall mean the Securities Act,
S.A. 1991, c.S-6. 1, as amended, and the regulations
thereunder, and any comparable or successor laws or
regulations thereto;
(at) "Separation Time" shall mean the close of business on the
eighth Trading Day after the earlier of:
(i) the Stock Acquisition Date; and
(ii) the date of the commencement of, a Take-over Bid
(other than a Permitted Bid or a Competing Permitted
Bid), or such earlier or later time as may be
determined by the Board of Directors, provided that,
if any Take-over Bid referred to in this Clause (ii)
expires, is cancelled, terminated or otherwise
withdrawn prior to the Separation Time, such
Take-over Bid shall be deemed, for the purposes of
this definition, never to have been made;
(au) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this
definition, shall include, without limitation, a
report filed pursuant to Section 141 of the
Securities Act (Alberta) or Section 13(d) of the 1934
Exchange Act) by the Corporation or an Acquiring
Person that an Acquiring Person has become such;
(av) "Subsidiary" means a corporation shall 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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(aw) "Take-over Bid" shall mean an Offer to Acquire Voting
Shares of any class, or securities convertible into Voting
Shares of any class by means of a take-over bid circular
or by any other means, other than an Offer to Acquire such
Voting Shares or convertible securities by means of
ordinary market transactions through the facilities of a
stock exchange or an organized over-the-counter market,
if, assuming that the Voting Shares or convertible
securities subject to the Offer to Acquire are acquired at
the date of such Offer to Acquire by the Person making
such Offer to Acquire, such Voting Shares (including
Voting Shares that may be acquired upon conversion of
securities convertible into Voting Shares) together with
the Offeror's Securities, constitute in the aggregate 20%
or more of the outstanding Voting Shares of that
particular class at the date of the Offer to Acquire;
(ax) "Trading Day", when used with respect to any securities,
shall mean a day on which the principal Canadian stock
exchange on which such securities are listed or admitted
to trading is open for the transaction of business or, if
the securities are not listed or admitted to trading on
any Canadian stock exchange, a Business Day;
(ay) "U.S.-Canadian Exchange Rate" means, on any date:
(i) if on such date the Bank of Canada sets an average
noon spot rate of exchange for the conversion of one
United States dollar into Canadian dollars, such
rate; and
(ii) in any other case, the rate for such date for the
conversion of one United States dollar into Canadian
dollars calculated in such manner as may be
determined by the Board of Directors from time to
time acting in good faith.
(az) "U.S. Dollar Equivalent" of any amount which is expressed
in Canadian dollars means, on any date, the United States
dollar equivalent of such amount determined by multiplying
such amount by the Canadian-U.S. Exchange Rate in effect
on such date; and
(ba) "Voting Shares" shall mean the Common Shares of the
Corporation and any other shares in the capital of the
Corporation entitled to vote generally in the election of
all directors.
1.2 Currency
All sums of money which are referred to in this Agreement
are expressed in lawful money of Canada, unless otherwise specified.
1.3 Headings
The division of this Agreement into Articles, Sections,
Subsections, Clauses, Paragraphs, Subparagraphs or other portions hereof and
the insertion of headings, subheadings and a table of contents are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
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1.4 Calculation of Number and Percentage of Beneficial Ownership of
Outstanding Voting Shares
For purposes of this Agreement, the percentage of Voting Shares of
any class Beneficially Owned by any Person shall be and be deemed to be the
product (expressed as a percentage) determined by the formula:
100 x A/B
where:
A = the number of votes for the election of all directors generally
attaching to the Voting Shares of the particular class Beneficially
Owned by such Person; and
B = the number of votes for the election of all directors generally
attaching to all outstanding Voting Shares of the particular class.
Where any Person is deemed to Beneficially Own unissued Voting Shares of a
particular class, such Voting Shares shall be deemed to be outstanding for the
purpose of calculating the percentage of Voting Shares of the particular class
Beneficially Owned by such Person.
1.5 Acting Jointly or in Concert
For purposes of this Agreement, whether Persons are acting jointly
or in concert is a question of fact in each circumstance; however, a Person
(other than an associate as defined in the Securities Act (Alberta) or in this
Agreement) shall be deemed to be acting jointly or in concert with another
Person if such Person would be deemed to be acting jointly or in concert with
such other Person for purposes of Section 131.1 of the Securities Act
(Alberta) as it exists on the date hereof. Notwithstanding the foregoing and
for greater certainty, the phrase, "acting jointly or in concert", wherever
used in this Agreement, shall not include conduct:
(i) unrelated to Voting Shares of the Corporation; or
(ii) consisting solely of:
(A) voting or directing the vote of securities of the
Corporation pursuant to a revocable proxy given in
response to a public proxy solicitation;
(B) voting or directing the vote of securities of the
Corporation in connection with or in order to participate
in a public proxy solicitation made or to be made; or
(C) having an agreement, arrangement or understanding with
respect to a shareholder proposal or a matter or matters
to come before a meeting of shareholders, including the
election of directors.
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1.6 Generally Accepted Accounting Principles
Wherever in this Agreement reference is made to generally accepted
accounting principles, such reference shall be deemed to be the
recommendations at the relevant time of the Canadian Institute of Chartered
Accountants, or any successor institute, applicable on a consolidated basis
(unless otherwise specifically provided herein to be applicable on an
unconsolidated basis) as at the date on which a calculation is made or
required to be made in accordance with generally accepted accounting
principles. Where the charter or amount of any asset or liability or item of
revenue or expense is required to be determined, or any consolidation or other
accounting computation is required to be made for the purpose of this
Agreement or any document, such determination or calculation shall, to the
extent applicable and except as otherwise specified herein or as otherwise
agreed in writing by the parties, be made in accordance with generally
accepted accounting principles applied on a consistent basis.
1.7 Alberta Energy Company Ltd.
For the purposes of determining whether a Person is entitled to make
a Permitted Bid, a Person shall not be restricted from making a Permitted Bid
hereunder if that Person is Alberta Energy Company Ltd. ("AEC"),
notwithstanding its Beneficial Ownership, directly and indirectly, of
approximately 22% of the outstanding Voting Shares of the Corporation as at
the Record Time; provided, however, that this exception shall not be, and
shall cease to be, applicable to AEC in the event that (i) it shall, after the
Record Time, become the Beneficial Owner of Voting Shares in excess of 24.99%
other than through Permitted Bid Acquisitions, Pro-Rata Acquisitions or
otherwise in accordance with Clause 1.1(a)(ii); or (ii) there shall be a
change in control of AEC; or (iii) AEC shall reduce its approximately 22%
Beneficial Ownership of the outstanding Voting Shares in a single transaction
or a series of transactions over a period of time to less than 10% (which
transaction or transactions shall not, for the purposes of this Agreement,
constitute a Flip-in Event). For purposes hereof, a "change of control" of AEC
shall mean any change in the holding, direct or indirect, of voting shares of
AEC that occurs pursuant to a single transaction or a series of transactions
over a period of time, as a result of which a Person or a group of Persons, or
Persons acting in concert, or Persons associated or affiliated with such
Person or group are in a position to exercise effective control of AEC; and
for such purpose a Person or group of Persons who have Beneficial Ownership
(as defined in Clause 1.1(f) herein, mutatis mutandis, in relation to
securities of AEC) of voting shares and/or other securities in excess of the
number which, directly or following conversion thereof, would entitle the
holders thereof to cast more than 20% of the votes outstanding on all shares
of AEC which may be cast to elect directors of AEC, shall be deemed to be in a
position to exercise effective control of AEC.
1.8 Grandfathered Permitted Bidder
For the purposes of determining whether a Person (other than AEC) is
entitled to make a Permitted Bid, a Person shall not be restricted from making
a permitted bid hereunder if such Person (a "Grandfathered Permitted Bidder")
is the Beneficial Owner of more than 10% of the outstanding Voting Shares of
the Corporation determined as at the Record Time; provided, however, that this
exception shall not be, and shall cease to be, applicable to a Grandfathered
Permitted Bidder in the event that such a Grandfathered Permitted Bidder
shall, after the Record Time, become the Beneficial Owner of any
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additional Voting Shares other than through Permitted Bid Acquisitions,
Pro-Rata Acquisitions or otherwise in accordance with Clause 1.1(a)(ii).
ARTICLE 2 - THE RIGHTS
2.1 Legend on Common Share Certificates
Certificates representing Common Shares which are issued after the
Record Time but prior to the earlier of the Separation Time and the Expiration
Time, shall also evidence one Right for each Common Share represented thereby
and shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
Until the Separation Time (defined in the Shareholder Rights
Agreement referred to below), this certificate also evidences rights
of the holder described in a Shareholder Rights Plan Agreement,
dated February 23, 1994 (the "Shareholder Rights Agreement"),
between Chieftain International, Inc., (the "Corporation") and the
R-M Trust Company, as Rights Agent, as supplemented and amended, the
terms of which are incorporated herein by reference and a copy of
which is on file at the principal executive offices of the
Corporation. Under certain circumstances set out in the Shareholder
Rights Agreement, the Rights may expire, may become null and void or
may be evidenced by separate certificates and no longer evidenced by
this certificate. The Corporation will mail or arrange for the
mailing of a copy of the Shareholder Rights Agreement to the holder
of this certificate without charge as soon as practicable after the
receipt of a written request therefor.
Certificates representing Common Shares that are issued and
outstanding at the Record Time shall also evidence one Right for each Common
Share evidenced thereby, notwithstanding the absence of the foregoing legend,
until the close of business on the earlier of the Separation Time and the
Expiration Time.
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights
(a) Subject to adjustment as herein set forth, each Right will entitle
the holder thereof, from and after the Separation Time and prior to
the Expiration Time, to purchase one Common Share for the Exercise
Price (and the Exercise Price and number of Common Shares are
subject to adjustment as set forth below). Notwithstanding any other
provision of this Agreement, any Rights held by the Corporation or
any of its subsidiaries shall be void.
(b) Until the Separation time,
(i) the Rights shall not be exercisable and no Right may be
exercised; and
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(ii) each Right will be evidenced by the certificate for the
associated Common Share of the Corporation registered in
the name of the holder thereof (which certificate shall
also be deemed to represent a Rights Certificate) and will
be transferable only together with, and will be
transferred by a transfer of, such associated Common Share
of the Corporation.
(c) From and after the Separation Time and prior to the Expiration
Time:
(i) the Rights shall be exercisable; and
(ii) the registration and transfer of Rights shall be separate
from and independent of Common shares of the Corporation.
Promptly following the Separation Time, the Corporation will
prepare and the Rights Agent will mail to each holder of record
of Common Shares as of the Separation Time (other than an
Acquiring Person and, in respect of any Rights Beneficially
Owned by such Acquiring Person which are not held of record by
such Acquiring Person, the holder of record of such Rights (a
"Nominee")), and to each holder of Convertible Preferred Shares
(other than an Acquiring Person or the Nominee of an Acquiring
Person) at such holder's address as shown by the records of the
Corporation (the Corporation hereby agreeing to furnish copies
of such records to the Rights Agent for this purpose):
(x) a Rights Certificate appropriately completed, representing
the number of Rights held by such holder at the Separation
Time and having such marks of identification or
designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law,
rule or regulation or with any rule or regulation of any
self-regulatory organization, stock exchange or quotation
system on which the Rights may from time to time be listed
or traded, or to conform to usage; and
(y) a disclosure statement describing the Rights; provided
that a Nominee shall be sent the materials provided for in
(x) and (y) in respect of all Common Shares of the
Corporation or the Convertible Preferred Shares held of
record by it which are not Beneficially Owned by an
Acquiring Person.
(d) Rights may be exercised, in whole or in part, on any Business
Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent:
(i) the Rights Certificate evidencing such Rights;
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(ii) an election to exercise such Rights (an "Election to
Exercise") substantially in the form attached to the
Rights Certificate appropriately completed and executed by
the holder or his executors or administrators or other
personal representatives or his or their legal attorney
duly appointed by an instrument in writing in form and
executed in a manner satisfactory to the Rights Agent; and
(iii) payment by certified cheque, banker's draft or money
order payable to the order of the Corporation, of a sum
equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any
transfer tax or charge which may be payable in respect of
any transfer involved in the transfer or delivery of
Rights Certificates or the issuance or delivery of
certificates for Common Shares in a name other than that
of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, together with a completed
Election to Exercise executed in accordance with Clause
2.2(d)(ii), which does not indicate that such Right is null and
void as provided by Subsection 3.1(b), and payment as set forth
in Clause 2.2(d)(iii), the Rights Agent (unless otherwise
instructed by the Corporation in the event that the Corporation
is of the opinion that the Rights cannot be exercised in
accordance with this Agreement) will thereupon promptly:
(i) requisition from the transfer agent certificates
representing the number of such Common Shares to be
purchased (the Corporation hereby irrevocably authorizing
its transfer agents to comply with all such requisitions);
(ii) when appropriate, requisition from the Corporation the
amount of cash to be paid in lieu of issuing fractional
Common Shares;
(iii) after receipt of the certificates referred to in Clause
2.2(e)(i), deliver the same to or upon the order of the
registered holder of such Rights Certificates, registered
in such name or names as may be designated by such holder;
(iv) when appropriate, after receipt, deliver the cash referred
to in Clause 2.2(e)(ii) to or to the order of the
registered holder of such Rights Certificate; and
(v) tender to the Corporation all payments received on
exercise of the Rights.
(f) In case the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a new
Rights Certificate evidencing the Rights remaining unexercised
(subject to
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the provisions of Subsection 6.5(a)) will be issued by the
Rights Agent to such holder or to such holder's duly authorized
assigns.
(g) The Corporation covenants and agrees that it will:
(i) take all such action as may be necessary and within its
power to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the
certificates for such Common Shares (subject to payment of
the Exercise Price), be duly and validly authorized,
executed, issued and delivered as fully paid and
non-assessable;
(ii) take all such action as may be necessary and within its
power to comply with the requirements of the Business
Corporations Act (Alberta), the Securities Act (Alberta)
and the securities laws or comparable legislation of each
of the provinces of Canada 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 upon exercise of Rights;
(iii) use reasonable efforts to cause all Common Shares issued
upon exercise of Rights to be listed on the stock
exchanges on which such Common Shares were traded
immediately prior to the Stock Acquisition Date;
(iv) cause to be reserved and kept available out of the
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
(v) pay when due and payable, if applicable, any and all
federal, provincial and municipal transfer taxes and
charges (not including any income or capital taxes of the
holder or exercising holder or any liability of the
Corporation to withhold tax) which may be payable in
respect of the original issuance or delivery of the Rights
Certificates, or certificates for Common Shares to be
issued upon exercise of any Rights, provided that the
Corporation shall not be required to pay any transfer tax
or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates
for Common Shares in a name other than that of the holder
of the Rights being transferred or exercised.
2.3 Adjustments to Exercise Price; Number of Rights
The Exercise Price, the number and kind of securities subject to
purchase upon exercise of each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 2.3.
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(a) In the event the Corporation shall at any time after the date
of this Agreement:
(i) declare or pay a dividend on Common Shares payable in
Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common
Shares or other securities of the Corporation) other than
pursuant to any optional stock dividend program;
(ii) subdivide or change the then outstanding Common Shares
into a greater number of Common Shares;
(iii) consolidate or change the then outstanding Common Shares
into a smaller number of Common Shares; or
(iv) issue any Common Shares (or other securities exchangeable
for or convertible into or giving a right to acquire
Common Shares or other securities of the Corporation) in
respect of, in lieu of or in exchange for existing Common
Shares except as otherwise provided in this Section 2.3,
the Exercise Price and the number of Rights outstanding, or, if
the payment or effective date therefor shall occur after the
Separation Time, the securities purchasable upon exercise of
Rights, shall be adjusted as of the payment or effective date
in the manner set forth below.
If the Exercise Price and number of Rights outstanding are to
be adjusted:
(x) the Exercise Price in effect after such adjustment 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) (the "Expansion Factor") that a
holder of one Common Share immediately prior to such
dividend, subdivision, change, consolidation or issuance
would hold thereafter as a result thereof; and
(y) 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.
For greater certainty, if the securities purchasable upon
exercise of Rights are to be adjusted, the securities
purchasable upon exercise of each Right after such adjustment
will be the securities that a holder of the securities
purchasable upon exercise of one Right immediately prior to
such dividend, subdivision, change, consolidation or issuance
would hold thereafter as a result of such dividend,
subdivision, change, consolidation or issuance.
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If, after the Record Time and prior to the Expiration Time, the
Corporation shall issue any shares of capital stock other than
Common Shares in a transaction of a type described in Clause
2.3(a)(i) or (iv), shares of such capital stock shall be
treated herein as nearly equivalent to Common Shares as may be
practicable and appropriate under the circumstances and the
Corporation and the Rights Agent agree to amend this Agreement
in order to effect such treatment.
In the event the Corporation shall at any time after the Record
Time and prior to the Separation Time issue any Common Shares
otherwise than in a transaction referred to in this Subsection
2.3(a), each such Common share so issued shall automatically
have one new Right associated with it, which Right shall be
evidenced by the certificate representing such associated
Common Share.
(b) In the event the Corporation shall at any time after the Record
Time and prior to the Separation Time fix a record date for the
issuance of rights, options or warrants to all holders of
Common Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Common Shares (or securities convertible into or
exchangeable for or carrying a right to purchase Common Shares)
at a price per Common Share (or, if a security convertible into
or exchangeable for or carrying a right to purchase or
subscribe for Common Shares, having a conversion, exchange or
exercise price, including the price required to be paid to
purchase such convertible or exchangeable security or right per
share) less than the Market Price per Common Share on such
record date, the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a
fraction:
(i) the numerator of which shall 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 so to be offered (and/or the
aggregate initial conversion, exchange or exercise price
of the convertible or exchangeable securities or rights so
to be offered, including the price required to be paid to
purchase such convertible or exchangeable securities or
rights) would purchase at such Market Price per Common
Share; and
(ii) the denominator of which shall be the number of Common
Shares outstanding on such record date, plus the number of
additional Common Shares to be offered for subscription or
purchase (or into which the convertible or exchangeable
securities or rights so to be offered are initially
convertible, exchangeable or exercisable).
In case such subscription price may be paid by delivery of
consideration, part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in
good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of Rights.
Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights,
options or warrants are not so issued,
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or if issued, are not exercised prior to the expiration
thereof, the Exercise Price shall be readjusted to the Exercise
Price which would then be in effect if such record date had not
been fixed, or to the Exercise Price which would be in effect
based upon the number of Common Shares (or securities
convertible into, or exchangeable or exercisable for Common
Shares) actually issued upon the exercise of such rights,
options or warrants, as the case may be.
For purposes of this Agreement, the granting of the right to
purchase Common Shares (whether from treasury or otherwise)
pursuant to any Dividend Reinvestment Plan or any employee
benefit, stock option or similar plans shall be deemed not to
constitute an issue of rights, options or warrants by the
Corporation; provided, however, that, in all such cases, the
right to purchase Common Shares is at a price per share of not
less than 95% of the current market price per share (determined
as provided in such plans) of the Common Shares.
(c) In the event the Corporation shall at any time after the Record
Time and prior to the Separation Time fix a record date for the
making of a distribution to all holders of Common Shares
(including any such distribution made in connection with a
merger or amalgamation) of evidences of indebtedness, cash
(other than an annual cash dividend or a dividend paid in
Common Shares, but including any dividend payable in securities
other than Common Shares), assets or rights, options or
warrants (excluding those referred to in Subsection 2.3(b)),
the Exercise Price to be in effect after such record date shall
be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction:
(i) the numerator of which shall be the Market Price per
Common Share on such record date, less the fair market
value (as determined in good faith by the Board of
Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holders of Rights), on a per
share basis, of the portion of the cash, assets, evidences
of indebtedness, rights, options or warrants so to be
distributed; and
(ii) the denominator of which shall be such Market Price per
Common Share.
Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such a distribution
is not so made, the Exercise Price shall be adjusted to be the
Exercise Price which would have been in effect if such record
date had not been fixed.
(d) Notwithstanding anything herein to the contrary, no adjustment
in the Exercise Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the
Exercise Price; provided, however, that any adjustments which
by reason of this Subsection 2.3(d) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. All calculations under Section 2.3 shall
be made to the nearest cent or to the nearest ten-thousandth of
a share. Notwithstanding
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the first sentence of this Subsection 2.3(d), any adjustment
required by Section 2.3 shall be made no later than the earlier
of:
(i) three years from the date of the transaction which gives
rise to such adjustment; or
(ii) the Expiration Date.
(e) In the event the Corporation shall at any time after the Record
Time and prior to the Separation Time issue any shares of
capital stock (other than Common Shares), or rights, options or
warrants to subscribe for or purchase any such capital stock,
or securities convertible into or exchangeable for any such
capital stock, in a transaction referred to in Clause 2.3(a)(i)
or (iv), if the Board of Directors acting in good faith
determined that the adjustments contemplated by Subsections
2.3(a), (b) and (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 Subsections 2.3(a), (b) and
(c), such adjustments, rather than the adjustments contemplated
by Subsections 2.3(a), (b) and (c), shall be made. The
Corporation and the Rights Agent shall have authority without
the approval of the holders of the Common Shares or the holders
of Rights to amend this Agreement as appropriate to provide for
such adjustments.
(f) Each Right originally issued by the Corporation subsequent to
any adjustment made to the Exercise Price hereunder shall
evidence the right to purchase, at the adjusted Exercise Price,
the number of Common Shares purchasable from time to time
hereunder upon exercise of a Right immediately prior to such
issue, all subject to further adjustment as provided herein.
(g) Irrespective of any adjustment or change in the Exercise Price
or the number of Common Shares issuable upon the exercise of
the Rights, the Rights Certificates therefore and thereafter
issued may continue to express the Exercise Price per Common
Share and the number of Common Shares which were expressed in
the initial Rights Certificates issued hereunder.
(h) In any case in which this Section 2.3 shall require that 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 the number
of Common Shares and other securities of the Corporation, if
any, issuable upon such exercise over and above the number of
Common Shares and other securities of the Corporation, if any,
issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the
Corporation shall deliver to such holder an appropriate
instrument evidencing such holder's right to receive such
additional shares (fraction or otherwise) or other securities
upon the occurrence of the event requiring such adjustment.
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(i) Notwithstanding anything contained in this Section 2.3 to the
contrary, the Corporation shall be entitled to make such
reductions in the Exercise Price, in addition to those
adjustments expressly required by this Section 2.3, as and to
the extent that in their good faith judgment the Board of
Directors shall determine to be advisable, in order that any:
(i) consolidation or subdivision of Common Shares;
(ii) issuance (wholly or in part for cash) of Common Shares or
securities that by their terms are convertible into or
exchangeable for Common Shares;
(iii) stock dividends; or
(iv) issuance of rights, options or warrants referred to in
this Section 2.3,
hereafter made by the Corporation to holders of its Common
Shares shall not be taxable to such shareholders.
2.4 Date on Which Exercise Is Effective
Each Person in whose name any certificate for Common Shares or other
securities, if applicable, is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Common Shares or
other securities, if applicable, represented thereon, and such certificate
shall be dated the date upon which the Rights Certificate evidencing such
Rights was duly surrendered in accordance with Subsection 2.2(d) (together
with a duly completed Election to Exercise) and payment of the Exercise Price
for such Rights (and any applicable transfer taxes and other governmental
charges payable by the exercising holder hereunder) was made; provided,
however, that if the date of such surrender and payment is a date upon which
the Common Share transfer books of the Corporation are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Common Share transfer books of the Corporation are open.
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, President or any Vice
President and by its Corporate Secretary or any Assistant Secretary
under the corporate seal of the Corporation reproduced thereon. The
signature of any of these officers on the Rights Certificates may be
manual or facsimile. Rights Certificates bearing the manual or
facsimile signature of individuals who were at any time the proper
officers of the Corporation shall bind the Corporation,
notwithstanding that such individuals or any of them have ceased to
hold such offices either before or after the countersignature and
delivery of such Rights Certificates.
(b) Promptly after the Corporation learns of the Separation Time, the
Corporation will notify the Rights Agent of such Separation Time and
will deliver Rights Certificates executed by the Corporation to the
Rights Agent for countersignature, and the Rights Agent shall
manually countersign (in a
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manner satisfactory to the Corporation) and send such Rights
Certificates to the holders of the Rights pursuant to Section 2.2(c)
hereof. No Rights Certificate shall be valid for any purpose until
countersigned by the Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 Registration, Transfer and Exchange
(a) The Corporation will cause to be kept a register (the
"Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Corporation will provide
for the registration and transfer of Rights. The Rights Agent
is hereby appointed registrar for the Rights (the "Rights
Registrar") for the purpose of maintaining the Rights Register
for the Corporation and registering Rights and transfers of
Rights as herein provided and the Rights Agent hereby accepts
such appointment. In the event that the Rights Agent shall
cease to be the Rights Registrar, the Rights Agent will have
the right to examine the Rights Register at all reasonable
times.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any
Rights Certificate, and subject to the provisions of Subsection
2.6(c), the Corporation will execute, and the Rights Agent will
manually 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 shall be the valid obligations of the
Corporation, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon
such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the
Corporation or the Rights Agent, as the case may be, duly
executed by the holders thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any
new Rights Certificate under this Section 2.6, the Corporation
may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation
thereto and any other expenses (including the reasonable fees
and expenses of the Rights Agent) connected therewith.
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates
---------------------------------------------------------
(a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, the Corporation
shall execute and the Rights Agent shall countersign and
deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights
Certificate so surrendered.
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(b) If there shall be delivered to the Corporation and the Rights
Agent prior to the Expiration Time:
(i) evidence to their reasonable satisfaction of the
destruction, loss or theft of any Rights Certificate; and
(ii) such security or indemnity as may be reasonably required
by them to save each of them and any of their agents
harmless, then, in the absence of notice to the
Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser,
the Corporation shall execute and upon the Corporation's
request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights
Certificate, a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.7, the Corporation may require the payment
of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other
expenses (including the reasonable fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section
2.7 in lieu of any destroyed, lost or stolen Rights Certificate
shall evidence the contractual obligation of the Corporation,
whether or not the destroyed, lost or stolen Rights Certificate
shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights duly issued
hereunder.
2.8 Persons Deemed Owners of Rights
The Corporation, the Rights Agent and any agent of the Corporation
or the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Separation Time, the associated Common Share
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement,
unless the context otherwise requires, the term "holder" of any Right shall
mean the registered holder of such Right (or, prior to the Separation Time, of
the associated Common Share).
2.9 Delivery and Cancellation of Certificates
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case,
shall be promptly cancelled by the Rights Agent. The Corporation may at any
time deliver to the Rights Agent for cancellation any Rights Certificates
previously countersigned and delivered hereunder which the Corporation may
have acquired in any manner whatsoever, and all Rights Certificates so
delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificate shall be countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.9, except as expressly
permitted by this Agreement. The Rights Agent shall,
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subject to applicable laws, destroy all cancelled Rights Certificates and
deliver a certificate of destruction to the Corporation.
2.10 Agreement of Rights Holders
Every holder of Rights, by accepting the same, consents and agrees
with the Corporation and the Rights Agent and with every other holder of
Rights:
(a) to be bound by and subject to the provisions of this Agreement,
as amended from time to time in accordance with the terms
hereof, in respect of all Rights held;
(b) that prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a
transfer of, the associated Common Share 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 may deem and treat the Person in whose name the Rights
Certificate (or, prior to the Separation Time, the associated
Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on such Rights
Certificate or the associated Common Share certificate made by
anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights
Agent shall be affected by any notice to the contrary;
(e) that such holder of Rights has waived his right to receive any
fractional Rights or any fractional shares or other securities
upon exercise of a Right (except as provided herein); and
(f) that without the approval of any holder of Rights or Voting
Shares and upon the sole authority of the Board of Directors,
acting in good faith, this Agreement may be supplemented or
amended from time to time to cure any ambiguity or to correct
or supplement any provision contained herein which may be
inconsistent with the intent of this Agreement or is otherwise
defective, as provided herein.
2.11 Rights Certificate Holder Not Deemed a Shareholder
No holder, as such, of any Rights or Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose whatsoever
the holder of any Common Share or any other share or security of the
Corporation which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed or deemed to confer upon the holder of any Right or
Rights Certificate, as such, any right, title, benefit or privilege of a
holder of Common Shares or any other shares or securities of the Corporation
or any right to vote at any meeting of
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shareholders of the Corporation whether for the election of directors or
otherwise or upon any matter submitted to holders of Common Shares or any
other 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 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 shall have been duly exercised in accordance
with the terms and provisions hereof.
ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS IN THE EVENT
OF CERTAIN TRANSACTIONS
3.1 Flip-in Event
(a) Subject to Subsection 3.1(b) and Section 6.1, in the event that
prior to the Expiration Time a Flip-in Event shall occur, each Right
shall constitute, effective at the close of business on the eighth
Trading Day after the Stock Acquisition Date, the right to purchase
from the Corporation, upon exercise thereof in accordance with the
terms hereof, that number of Common Shares 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 Section 2.3 in the event that after such consummation or
occurrence, an event of a type analogous to any of the events
described in Section 2.3 shall have occurred).
(b) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of any Flip-in Event, any Rights that are or were
Beneficially Owned on or after the earlier of the Separation Time
and the Stock Acquisition Date by:
(i) an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert
with an Acquiring Person or any Affiliate or Associate of an
Acquiring Person); or
(ii) a transferee of Rights, directly or indirectly, from an
Acquiring Person (or any Affiliate or Associate of an Acquiring
Person or any Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of an Acquiring
Person), where such transferee becomes a transferee
concurrently with or subsequent to the Acquiring Person
becoming such in a transfer that the Board of Directors has
determined is part of a plan, arrangement or scheme of an
Acquiring Person (or any Affiliate or Associate of an Acquiring
Person or any Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of an Acquiring
Person), that has the purpose or effect of avoiding Clause
3.1(b)(i),
shall become null and void without any further action, and any
holder of such Rights (including transferees) shall thereafter have
no right to exercise such Rights under any provision of this
Agreement and further shall thereafter not
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have any other rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise.
(c) From and after the Separation Time, the Corporation shall do all
such acts and things as shall be necessary and within its power to
ensure compliance with the provisions of this Section 3.1, including
without limitation, all such acts and things as may be required to
satisfy the requirements of the Business Corporations Act (Alberta),
the Securities Act (Alberta) and the securities laws or comparable
legislation of each of the provinces of Canada, of the United States
and of such other jurisdiction as may be applicable in respect of
the issue of Common Shares upon the exercise of Rights in accordance
with this Agreement.
(d) Any Rights Certificate that represents Rights Beneficially Owned by
a Person described in either Clause 3.1(b)(i) or (ii) or transferred
to any nominee of any such Person, and any Rights Certificate issued
upon transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain the
following legend:
The Rights represented by this Rights Certificate were 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 Shareholder Rights Plan Agreement) or a Person who was
acting jointly or in concert with an Acquiring Person or an
Affiliate or Associate of an Acquiring Person. This Rights
Certificate and the Rights represented hereby are void or shall
become void in the circumstances specified in Subsection 3.1(b)
of the Shareholder Rights Plan Agreement.
provided, however, that the Rights Agent shall not be under any
responsibility to ascertain the existence of facts that would
require the imposition of such legend but shall impose such legend
only if instructed to do so by the Corporation in writing or if a
holder fails to certify upon transfer or exchange in the space
provided on the Rights Certificate that such holder is not a Person
described in such legend.
ARTICLE 4 - THE RIGHTS AGENT
4.1 General
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation and the holders of the Rights and the Convertible
Rights in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Corporation may
from time to time appoint such Co-Rights Agents ("Co-Rights Agents")
as it may deem necessary or desirable. In the event the Corporation
appoints one or more Co- Rights Agents, the respective duties of the
Rights Agent and Co-Rights Agents shall be as the Corporation may
determine. The Corporation also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by
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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.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance
upon any certificate for Common Shares or Convertible Preferred
Shares, Rights Certificate, certificate for other securities of the
Corporation, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
4.2 Merger, Amalgamation or Consolidation or Change of Name of Rights
Agent
(a) Any corporation into which the Rights Agent 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 is a party, or any
corporation succeeding to the shareholder or stockholder services
business of the Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 4.4 hereof.
In case at the time such successor Rights Agent succeeds to the
agency created by this Agreement any of the Rights Certificates have
been countersigned but not delivered, any 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 have not been countersigned, any
successor Rights Agent may countersign such Rights Certificates in
the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Rights
Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
4.3 Duties of Rights Agent
The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Corporation and the
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holders of certificates for Common Shares and Convertible Preferred Shares and
the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) the Rights Agent may consult with legal counsel (who may be
legal counsel for the Corporation) and the opinion of such
counsel will be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion;
(b) whenever in the performance of its duties under this Agreement,
the Rights Agent deems it necessary or desirable that any fact
or matter be proved or established by the Corporation prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a Person
believed by the Rights Agent to be the Chairman of the Board,
President, any Vice President, Treasurer, Corporate Secretary,
or any Assistant Secretary of the Corporation and delivered to
the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate;
(c) the Rights Agent will be liable hereunder for its own
negligence, bad faith or willful misconduct;
(d) the Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement
or in the certificates for Common Shares, certificates for
Convertible Preferred 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 certificate for a Common Share or
Convertible Preferred Share or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any
breach by the Corporation of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor
will it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to
Subsection 3.1(b) hereof) or any adjustment required under the
provisions of Section 2.3 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights after receipt of
the certificate contemplated by Section 2.3 describing any such
adjustment); nor will it by any act hereunder be deemed to make
any representation or warranty as to the authorization of any
Common Shares to be issued pursuant to this Agreement or any
Rights or Convertible Rights or as to whether any Common Shares
will, when issued, be duly and validly authorized, executed,
issued and delivered and fully paid and non-assessable;
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(f) the Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement;
(g) the Rights Agent is hereby authorized and directed to accept
instructions in writing with respect to the performance of its
duties hereunder from any individual believed by the Rights
Agent to be the Chairman of the Board, President, any Vice
President, Treasurer, Corporate Secretary or any Assistant
Secretary of the Corporation, and to apply to such individuals
for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it
in good faith in accordance with instructions of any such
individual;
(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, Convertible Preferred Shares, Rights,
Convertible Rights or other securities of the Corporation or
become pecuniarily interested in any transaction in which the
Corporation may be interested, or contract with or lend money
to the Corporation or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other
capacity for the Corporation or for any other legal entity; and
(i) the Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents
or for any loss to the Corporation resulting from any such act,
default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
4.4 Change of Rights Agent
The Rights Agent may resign and be discharged from its duties under
this Agreement upon 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 Common Shares and Convertible Preferred Shares by registered or
certified mail. 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 Common Shares and Convertible Preferred Shares by registered or certified
mail. If the Rights Agent should resign or be removed or otherwise become
incapable of acting, the Corporation will appoint a successor to the Rights
Agent. If the Corporation fails to make such appointment within a period of 30
days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent, then
by prior written notice to the Corporation the resigning Rights Agent or the
holder of any Rights or Convertible Rights (which holder shall, with such
notice, submit such holder's Rights Certificate, if any, for inspection by the
Corporation), may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Corporation or by such a court, shall be a corporation
incorporated under the laws of Canada or a province thereof
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authorized to carry on the business of a trust company in the Province of
Alberta. After appointment, the successor Rights Agent will be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by its hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Corporation will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent
of the Common Shares and Convertible Preferred Shares, and mail a notice
thereof in writing to the holders of the Rights and the Convertible Rights in
accordance with Section 6.9. Failure to give any notice provided for in this
Section 4.4, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment
of any successor Rights Agent, as the case may be.
ARTICLE 5 - CONVERTIBLE RIGHTS
5.1 Convertible Preferred Share Certificates
Certificates for the Convertible Preferred Shares outstanding at the
Record Time shall evidence one Convertible Right for each Convertible
Preferred Share represented thereby and each Convertible Right will be
transferable only together with, and will be transferred by a transfer of,
such Convertible Preferred Share. Notwithstanding any other provision of this
Agreement, any Convertible Rights held by the Corporation or any of its
Subsidiaries shall be void.
5.2 Conversion of Convertible Rights
(a) Each Convertible Right will entitle the holder thereof, prior to the
earlier of the Separation Time and the Expiration Time, to one Right
for each whole Common Share issued to the holder upon due exercise
of the conversion privilege attached to the Convertible Preferred
Share associated with such Convertible Right without any further
payment therefor, and upon such issuance of a Common Share, the
Convertible Right shall be deemed to have been automatically
converted into one Right for each Common Share so issued. The holder
of a Convertible Right shall not be entitled to, and the Corporation
shall not be required to issue, any fraction of a Right or any
payment in lieu thereof on exercise of such conversion privilege.
(b) In the event the Separation Time has occurred, each Convertible
Right will entitle the holder thereof to one Right for each whole
Common Share into which his Convertible Preferred Shares are then
convertible at the then applicable conversion price and, as of the
Separation Time, such holder's Convertible Rights shall be deemed to
have automatically become one Right for each such whole Common
Share.
5.3 Persons Deemed Owners
The Rights Agent and any agent of the Corporation or the Rights
Agent may deem and treat the Person in whose name a share certificate for a
Convertible Preferred Share is registered as the absolute owner thereof and of
the Convertible Rights evidenced thereby
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for all purposes whatsoever. As used in this Agreement, unless the context
otherwise requires, the term "holder" of any Convertible Rights shall mean the
registered holder of the associated Convertible Preferred Share.
5.4 Agreement of Convertible Rights Holders
Every holder of Convertible Rights by accepting the same consents
and agrees with the Corporation and the Rights Agent and with every other
holder of Convertible Rights that:
(a) he will be bound by and subject to the provisions of this Agreement,
as amended from time to time in accordance with the terms hereof, in
respect of all Convertible Rights held;
(b) each Convertible Right will be transferable only together with, and
will be transferred by a transfer of, the associated Convertible
Preferred Share;
(c) the Corporation, the Rights Agent and any agent of the Corporation
or the Rights Agent may deem and treat the person in whose name the
associated Convertible Preferred Share certificate is registered as
the absolute owner thereof and of the Convertible Rights evidenced
thereby (notwithstanding any notations of ownership or writing on
such associated Convertible Preferred Share certificate made by
anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights
Agent shall be affected by any notice to the contrary; and
(d) without the approval of any holder of Convertible Rights and upon
the sole authority of the Board of Directors, acting in good faith,
this Agreement may be supplemented or amended from time to time in
accordance with the provisions of Section 6.4.
ARTICLE 6 - MISCELLANEOUS
6.1 Redemption and Waiver
(a) The Board of Directors of the Corporation may waive the application
of Section 3.1 in respect of the occurrence of any Flip-in Event if
the Board of Directors has determined within eight Trading Days
following a Stock Acquisition Date that a Person became an Acquiring
Person by inadvertence and without any intention to become, or
knowledge that it would become, an Acquiring Person under this
Agreement and, in the event that such a waiver is granted by the
Board of Directors, such Stock Acquisition Date shall be deemed not
to have occurred. Any such waiver pursuant to this Subsection 6.1(a)
must be on the condition that such Person, within 14 days after the
foregoing determination by the Board of Directors or such earlier or
later date as the Board of Directors may determine (the "Disposition
Date"), has reduced its Beneficial Ownership of Voting Shares such
that the Person is no longer an Acquiring Person. If the Person
remains an Acquiring Person at the close of business on the
Disposition Date, the Disposition Date shall
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be deemed to be the date of occurrence of a further Stock
Acquisition Date and Section 3.1 shall apply thereto.
(b) In the event that prior to the occurrence of a Flip-in Event a
Person acquires, pursuant to a Permitted Bid or a Competing
Permitted Bid, not less than 90% of the outstanding Common Shares
other than Common Shares Beneficially Owned at the date of the
Permitted Bid or the Competing Permitted Bid by such Person, then
the Board of Directors of the Corporation shall, immediately upon
the consummation of such acquisition without further formality be
deemed to have elected to redeem the Rights and the Convertible
Rights at a redemption price of $0.001 per Right or Convertible
Right appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 if an event of the type
analogous to any of the events described in Section 2.3 shall have
occurred (such redemption price being herein referred to as the
"Redemption Price").
(c) Where a Take-over Bid that is not a Permitted Bid Acquisition is
withdrawn or otherwise terminated after the Separation Time has
occurred and prior to the occurrence of a Flip-in Event, the Board
of Directors may elect to redeem all the outstanding Rights and
Convertible Rights at the Redemption Price.
(d) If the Board of Directors is deemed to have elected, or elects under
Subsection 6.1(c), to redeem the Rights and Convertible Rights, the
right to exercise the Rights and the Convertible Rights will
thereupon, without further action and without notice, terminate and
the only right thereafter of the holders of Rights and Convertible
Rights shall be to receive the Redemption Price.
(e) Within 10 days after the Board of Directors is deemed under
Subsection 6.1(b) to have elected, or elects under Subsection
6.1(c), to redeem the Rights and Convertible Rights, the Corporation
shall give notice of redemption to the holders of the then
outstanding Rights and Convertible Rights by mailing such notice to
each such holder at his last address as it appears upon the registry
books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Voting Shares or
Convertible Preferred Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will
be made.
(f) Upon the Rights and Convertible Rights being redeemed pursuant to
Subsection 6.1(c), all the provisions of this Agreement shall
continue to apply as if the Separation Time had not occurred and
Rights Certificates representing the number of Rights and
Convertible Rights held by each holder of record of Common Shares
and Convertible Preferred Shares as of the Separation Time had not
been mailed to each such holder and for all purposes of this
Agreement the Separation Time shall be deemed not to have occurred.
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6.2 Expiration
No Person shall have any rights whatsoever pursuant to this
Agreement or in respect of any Right or Convertible Right after the Expiration
Time, except the Rights Agent as specified in Subsection 4.1(a) of this
Agreement.
6.3 Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement, the Rights
or the Convertible Rights to the contrary, the Corporation may, at its option,
issue new Rights Certificates evidencing Rights in such form as may be
approved by the Board of Directors to reflect any adjustment or change in the
number or kind or class of securities purchasable upon exercise of Rights made
in accordance with the provisions of this Agreement.
6.4 Supplements and Amendments
(a) The Corporation may make amendments to this Agreement to correct any
clerical or typographical error or which are required to maintain
the validity of the Agreement as a result of any change in any
applicable legislation or regulations thereunder. The Corporation
may, prior to the date of the shareholders' meeting referred to in
Section 6.15, supplement or amend this Agreement without the
approval of any holders of Rights or Voting Shares in order to make
any changes which the Board of Directors acting in good faith may
deem necessary or desirable. Notwithstanding anything in this
Section 6.4 to the contrary, no such supplement or amendment shall
be made to the provisions of Article 4 except with the written
concurrence of the Rights Agent to such supplement or amendment.
(b) Subject to Subsection 6.4(a), the Corporation may, with the prior
consent of the holders of Voting Shares obtained as set forth below,
at any time prior to the Separation Time, amend, vary or rescind any
of the provisions of this Agreement and the Rights (whether or not
such action would materially adversely affect the interests of the
holders of Rights generally). Such consent shall be deemed to have
been given if the action requiring such approval is authorized by
the affirmative vote of a majority of the votes cast by Independent
Shareholders present or represented at and entitled to vote at a
meeting of the holders of Voting Shares duly called and held in
compliance with applicable laws and the articles and by-laws of the
Corporation.
(c) The Corporation may, with the prior consent of the holders of
Rights, at any time on or after the Stock Acquisition Date, 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), provided that no
such amendment, variation or deletion shall be made to the
provisions of Article 4 except with the written concurrence of the
Rights Agent thereto. Such consent shall be deemed to have been
given if such amendment, variation or deletion is authorized by the
affirmative votes of the holders of Rights present or represented at
and entitled to vote at a meeting of the holders and representing
50% plus one of the votes cast in respect thereof. For the purposes
hereof, each outstanding Right (other than a Right which is void
pursuant to the provisions hereof) shall be entitled to
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one vote, and the procedures for the calling, holding and conduct of
the meeting shall be those, as nearly as may be, which are provided
in the Corporation's by-laws and the Business Corporations Act
(Alberta) with respect to meetings of shareholders of the
Corporation.
(d) Any approval of the holders of Rights shall be deemed to have been
given if the action requiring such approval is authorized by the
affirmative votes of the holders of Rights present or represented
and entitled to vote at a meeting of the holders of Rights and
representing a majority of the votes cast in respect thereof. For
the purposes hereof, each outstanding Right (other than rights which
are void pursuant to the provisions hereof) shall be entitled to one
vote, and the procedures for the calling, holding and conduct of the
meeting shall be those, as nearly as may be, which are provided in
the Corporation's by-laws and the Business Corporations Act
(Alberta) with respect to meetings of shareholders of the
Corporation.
(e) Any amendments made by the Corporation to this Agreement pursuant to
Subsection 6.4(a) which are required to maintain the validity of
this Agreement as a result of any change in any applicable
legislation or regulation thereunder shall:
(i) if made before the Separation Time, be submitted to the
shareholders of the Corporation at the next meeting of
shareholders and the shareholders may, by the majority referred
to in subsection 6.4(b) confirm or reject such amendment;
(ii) if made after the Separation Time, be submitted to the holders
of Rights at a meeting to be called for on a date no later than
immediately following the next meeting of shareholders of the
Corporation and the holders of Rights may, by resolution passed
by the majority referred to in Subsection 6.4(d) confirm or
reject such amendment.
Any such amendment shall be effective from the date of the
resolution of the Board of Directors adopting such amendment,
until it is confirmed or rejected or until is ceases to be
effective (as described in the next sentence) and, where such
amendment is confirmed, it continues in effect in the form so
confirmed. If such amendment is rejected by the shareholders or
the holders of Rights or is not submitted to the shareholders
or holders of Rights as required, then such amendment shall
cease to be effective from and after the termination of the
meeting at which it was rejected or to which it should have
been but was not submitted or from and after the date of the
meeting of holders of Rights that should have been but was not
held, and no subsequent resolution of the Board of Directors to
amend this Agreement to substantially the same effect shall be
effective until confirmed by the shareholders or holders of
Rights as the case may be.
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6.5 Fractional Rights and Fractional Shares
(a) The Corporation shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional
Rights. After the Separation Time, in lieu of issuing fractional
Rights, the Corporation shall pay to the holders of record of the
Rights Certificates (provided the Rights represented by such Rights
Certificates are not void pursuant to the provisions of Subsection
3.1(b), at the time such fractional Rights would otherwise be
issuable), an amount in cash equal to the fraction of the Market
Price of one whole Right that the fraction of a Right that would
otherwise be issuable is of one whole Right.
(b) The Corporation shall not be required to issue fractions of Common
Shares upon exercise of Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of issuing fractional
Common Shares, the Corporation shall pay to the registered holders
of Rights Certificates, at the time such Rights are exercised as
herein provided, an amount in cash equal to the fraction of the
Market Price of one Common Share that the fraction of a Common Share
that would otherwise be issuable upon the exercise of such Right is
of one whole Common Share at the date of such exercise.
6.6 Rights of Action
Subject to the terms of this Agreement, all rights of action in
respect of this Agreement, other than rights of action vested solely in the
Rights Agent, are vested in the respective holders of the Rights and the
Convertible Rights. Any holder of Rights or Convertible Rights, without the
consent of the Rights Agent or of the holder of any other Rights or
Convertible Rights, may, on such holder's own behalf and for such holder's own
benefit and the benefit of other holders of Rights or Convertible Rights, as
the case may be, enforce, and may institute and maintain any suit, action or
proceeding against the Corporation to enforce such holder's right to exercise
such holder's Rights, or Rights to which he is entitled, 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 or
Convertible Rights, as the case may be, it is specifically acknowledged that
the holders of Rights and Convertible 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.
6.7 Regulatory Approvals
Any obligations of the Corporation or action or event contemplated
by this Agreement shall be subject to the receipt of any requisite approval or
consent from any governmental or regulatory authority, and without limiting
the generality of the foregoing, necessary approvals of The Toronto Stock
Exchange, The Alberta Stock Exchange and the American Stock Exchange shall be
obtained, such as to the issuance of Common Stock upon the exercise of Rights
under Subsection 2.2(d).
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6.8 Declaration as to Non-Canadian Holders
If in the opinion of the Board of Directors (who may rely upon the
advice of counsel) any action or event contemplated by this Agreement would
require compliance by the Corporation with the securities laws or comparable
legislation of a jurisdiction outside Canada, the Board of Directors acting in
good faith shall take such actions as it may deem appropriate to ensure such
compliance. In no event shall the Corporation or the Rights Agent be required
to issue or deliver Rights, Convertible 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.
6.9 Notices
(a) Notices or demands authorized or required by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights or
Convertible Rights to or on the Corporation shall be sufficiently
given or made if delivered, sent by registered or certified mail,
postage prepaid (until another address is filed in writing with the
Rights Agent) or sent by facsimile or other form of recorded
electronic communication, charges prepaid as follows:
Chieftain International, Inc.
1201 Toronto Dominion Tower, Edmonton Centre
Edmonton, Alberta
T5J 2Z1
Attention: Vice President and Secretary
Telecopy No.: (403) 429-4681
(b) Notices or demands authorized or required by this Agreement to be
given or made by the Corporation or by the holder of any Rights or
Convertible Rights to or on the Rights Agent shall be sufficiently
given or made if delivered, sent by registered or certified mail,
postage prepaid (until another address is filed in writing with the
Corporation), or sent by facsimile or other form of recorded
electronic communication, as follows:
The R-M Trust Company
600, 333 Seventh Avenue S.W.
Calgary, Alberta
T2P 2Z1
Attention: Assistant Vice President
Telecopy No.: (403) 264-2100
(c) Notices or demands authorized or required by this Agreement to be
given or made by the Corporation or the Rights Agent to or on the
holder of any Rights or Convertible Rights shall be sufficiently
given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as
it appears upon the register of the Rights or, prior
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to the Separation Time, on the register of the Common Shares or the
Convertible Preferred Shares, as the case may be. Any notice which
is mailed or sent in the manner herein provided shall be deemed
given, whether or not the holder receives the notice.
(d) Any notice given or made in accordance with this Section 6.9 shall
be deemed to have been given and to have been received on the date
of delivery, if so delivered, on the third Business Day (excluding
each day during which there exists any general interruption of
postal service due to strike, lockout or other cause) following the
mailing thereof, if so mailed, and on the day of telegraphing,
telecopying or sending of the same by other means of recorded
electronic communication (provided such sending is during the normal
business hours of the addressee on a Business Day and if not, on the
first Business Day thereafter). Each of the Corporation and the
Rights Agent may from time to time change its address for notice by
notice to the other given in the manner aforesaid.
6.10 Costs of Enforcement
The Corporation agrees that if the Corporation fails to fulfill any
of its obligations pursuant to this Agreement, then the Corporation will
reimburse the holder of any Rights or Convertible Rights for the costs and
expenses (including legal fees) incurred by such holder to enforce his rights
pursuant to any Rights or Convertible Rights or this Agreement.
6.11 Successors
All the covenants and provisions of this Agreement by or for the
benefit of the Corporation or the Rights Agent shall bind and enure to the
benefit of their respective successors and assigns hereunder.
6.12 Benefits of this Agreement
Nothing in this Agreement shall be construed to give to any Person
other than the Corporation, the Rights Agent and the holders of the Rights or
Convertible Rights any legal or equitable right, remedy or claim under this
Agreement; further, this Agreement shall be for the sole and exclusive benefit
of the Corporation, the Rights Agent and the holders of the Rights and the
Convertible Rights.
6.13 Governing Law
This Agreement and each Right and Convertible Right issued hereunder
shall be deemed to be a contract made under the laws of the Province of
Alberta and for all purposes shall be governed by and construed in accordance
with the laws of such Province applicable to contracts to be made and
performed entirely within such Province.
6.14 Severability
If any form or provision hereof or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective only as to such
jurisdiction and to the extent of such invalidity
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or unenforceability in such jurisdiction without invalidating or rendering
unenforceable or ineffective the remaining terms and provisions hereof in such
jurisdiction or the application of any such term or provision in any other
jurisdiction or to circumstances other than those as to which it is
specifically held invalid or unenforceable.
6.15 Effective Date
This Agreement is effective and in full force and effect in
accordance with its terms from and after the Effective Date. At the first
annual meeting of holders of Voting Shares of the Corporation following the
Effective Date, the Corporation shall request confirmation of this Agreement
by the holders of its Voting Shares. If this Agreement is not confirmed by a
majority of the votes cast by holders of Voting Shares who vote in respect of
confirmation of the Agreement at such meeting, then this Agreement and all
outstanding Rights shall terminate and be void and of no further force and
effect on and from the close of business on the date of termination of such
meeting.
6.16 Reconfirmation
Notwithstanding the confirmation of this Agreement pursuant to
Section 6.15, this Agreement must be reconfirmed by a resolution passed by a
majority of greater than 50% of the votes cast by all holders of Voting Shares
who vote in respect of such reconfirmation at a meeting of holders of Voting
Shares to be held not earlier than February 1, 1999 and not later than the
date on which the 1999 annual meeting of holders of Voting Shares terminates.
If the Agreement is not so reconfirmed, the Agreement and all outstanding
Rights and Convertible Rights shall terminate and be void and of no further
force and effect on and from the close of business on that date which is the
earlier of the date of termination of the meeting called to consider the
reconfirmation of this Agreement and the date of termination of the 1999
annual meeting of holders of Voting Shares; provided, that termination shall
not occur if a Flip-in Event has occurred (other than a Flip-in Event which
has been waived pursuant to Subsection 6.1(a) hereof), prior to the date upon
which this Agreement would otherwise terminate pursuant to this Section 6.16.
6.17 Determinations and Actions by the Board of Directors
The Board of Directors shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or the Corporation, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations and determinations (including all omissions with respect
to the foregoing) which are done or made by the Board of Directors, in good
faith, shall not subject the Board of Directors or any director of the
Corporation to any liability to the holders of the Rights or the Convertible
Rights.
6.18 Time of the Essence
Time shall be of the essence in this Agreement.
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6.19 Execution in Counterparts
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
CHIEFTAIN INTERNATIONAL, INC.
By: (signed) Esther S. Ondrack
-------------------------------------
Vice President and Secretary and
Director
By: (signed) Edward L. Hahn
-------------------------------------
Vice President, Finance and Treasurer
THE R-M TRUST COMPANY
By: (signed) Michael J. Guitard
-------------------------------------
Assistant Vice President, Western
Region
By: (signed) Barbara Lathrop
-------------------------------------
Account Manager
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ATTACHMENT 1
CHIEFTAIN INTERNATIONAL, INC.
SHAREHOLDER RIGHTS PLAN AGREEMENT
[Form of Rights Certificate]
Certificate No. Rights
THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE
SHAREHOLDERS RIGHTS PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN
SUBSECTION 3.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES OR
TRANSFEREES OF AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, WILL BECOME
VOID.
Rights Certificate
This certifies that , or registered assigns, is the registered
holder of the number of Rights set forth above, each of which entitles the
registered holder thereof, subject to the terms, provisions and conditions of
the Shareholder Rights Plan Agreement, dated as of February 23, 1994 (the
"Shareholder Rights Agreement"), between Chieftain International, Inc., a
corporation duly incorporated under the Business Corporations Act (Alberta)
(the "Corporation") and The R-M Trust Company, a trust company incorporated
under the laws of Canada (the "Rights Agent") (which term shall include any
successor Rights Agent under the Shareholder Rights Agreement), to purchase
from the Corporation at any time after the Separation Time (as such term is
defined in the Shareholder Rights Agreement), and prior to the Expiration Time
(as such term is defined in the Shareholder Rights Agreement), one fully paid
common share of the Corporation (a "Common Share") at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate
with the Form of Election to Exercise (in the form provided hereinafter) duly
executed and submitted to the Rights Agent at its principal office in any of
the cities of Vancouver, Calgary, Winnipeg and Toronto. The Exercise Price
shall initially be $80 (Cdn.) per Right and shall be subject to adjustment in
certain events as provided in the Shareholder Rights Agreement.
This Rights Certificate is subject to all of the terms and
provisions of the Shareholder Rights Agreement, which terms and provisions are
incorporated herein by reference and made a part hereof and to which
Shareholder 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 Rights
Certificates. Copies of the Shareholder Rights Agreement are on file at the
registered office of the Corporation.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at any of the offices of the Rights Agent designated for such
purposes, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates surrendered. If this Rights
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Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Common
Shares or of any other securities which may at any time be issuable upon the
exercise hereof, nor shall anything contained in the Shareholder Rights
Agreement or herein be construed to confer upon the holder thereof, as such ,
any of the rights of a shareholder of the Corporation or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Shareholder Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Shareholder Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Date:
CHIEFTAIN INTERNATIONAL, INC.
By:
By:
Countersigned:
THE R-M TRUST COMPANY
By:
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Rights.)
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
Signature Guaranteed: (Signature must correspond to name as written
upon the face of this Rights Certificate in
every particular, without alteration or
enlargement or any change whatsoever.)
Signature must be guaranteed by a member firm of a recognized stock
exchange in Canada, or a commercial bank or trust company having an office or
correspondent in Canada.
- -------------------------------------------------------------------------------
CERTIFICATE
The undersigned party transferring Rights hereunder, 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 a Person acting jointly or in concert
with an Acquiring Person or an Affiliate or Associate thereof. Capitalized
terms shall have the meaning ascribed thereto in the Shareholder Rights
Agreement.
-------------------------------------
Signature
- -------------------------------------------------------------------------------
(To be attached to each Rights Certificate.)
46
<PAGE>
FORM OF ELECTION TO EXERCISE
(To be exercised by the registered holder if such holder desires to exercise
the Rights Certificate.)
TO: Chieftain International, Inc.
The undersigned hereby irrevocably elects to exercise
whole Rights represented by this Rights Certificate to purchase the Common
Shares or other securities, if applicable, issuable upon the exercise of such
Rights and requests that certificates for such securities be issued in the
name of and delivered to:
- -------------------------------------------------------------------------------
(Name)
- -------------------------------------------------------------------------------
(Address)
- -------------------------------------------------------------------------------
(City and Province)
- -------------------------------------------------------------------------------
Social Insurance Number or other taxpayer identification number.
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
- -------------------------------------------------------------------------------
(Name)
- -------------------------------------------------------------------------------
(Address)
- -------------------------------------------------------------------------------
(City and Province)
- -------------------------------------------------------------------------------
Social Insurance Number or other taxpayer identification number.
Dated:
-------------------------------------------------------------------------
Signature
Signature Guaranteed: (Signature must correspond to name as written upon the
face of this Rights Certificate in every particular,
without alternation or enlargement or any change
whatsoever.)
Signature must be guaranteed by a member firm of a recognized stock
exchange in Canada, or a commercial bank or trust company having an office or
correspondent in Canada.
- -------------------------------------------------------------------------------
CERTIFICATE
The undersigned party exercising Rights hereunder, 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 a Person acting jointly or in concert with an Acquiring
Person or an Affiliate or Associate thereof. Capitalized terms shall have the
meaning ascribed thereto in the Shareholder Rights Agreement.
------------------------------------
Signature
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NOTICE
In the event the certification set forth in the Forms of Assignment
and Election is not able to be 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 or by a Person acting
jointly or in concert with an Acquiring Person or an Affiliate or Associate
thereof. No Rights Certificates shall be issued in exchange for a Rights
Certificate owned or deemed to have been owned by an Acquiring Person or an
Affiliate or Associate thereof, or by a Person acting jointly or in concert
with an Acquiring Person or an Affiliate or Associate thereof.
48
CHIEFTAIN NEWS RELEASE
INTERNATIONAL, INC.
May 26, 1994
CHIEFTAIN OUTLINES EXPLORATION ACTIVITIES
Edmonton, Alberta - Chieftain International, Inc. has expanded exploration
activity in the Gulf of Mexico region; is evaluating recent drilling in Libya
and the North Sea and is preparing for a significant exploration wildcat in
Peru.
Company officials reviewed exploration and development activities
today at the Company's Annual Meeting. The Company's US$35 million (C$48
million) 1994 exploration and development budget is directed toward four major
areas: the U.S. Gulf of Mexico region, Libya, Peru and the North Sea. They
said new technology is being used to define exploration and development
prospects in the Company's main area of activity, the gas-prone Gulf of Mexico
region. Chieftain will participate in 10 to 15 significant exploration wells,
both offshore and onshore in southern Louisiana, Texas and Mississippi over
the next 12 months.
In Libya, the Company is participating with a 7.5% interest in a
12-well exploration program. It was recently reported that the second well of
the program was production tested at 2,200 barrels per day. The third well,
drilled approximately 100 miles south of the second well, is being evaluated.
In Peru, Chieftain will participate with a 19.6% interest in a 6,500-foot
well, scheduled to commence drilling by August 1, to test a large geological
feature near the border with Ecuador. In the British sector of the North Sea,
Chieftain has a 17.8% interest in the Galahad gas field. Two horizontal
laterals, drilled from a 1991 gas discovery, are currently being evaluated and
production is expected to commence in 1996.
The shareholders ratified Chieftain's Shareholder Rights Plan
adopted by the Board of Directors on February 23, 1994 as modified in response
to suggestions received from shareholders and the investment community.
Stanley A. Milner, President and Chief Executive Officer, said "the Plan is
designed for the benefit of shareholders and we are pleased to respond to
shareholder input with these modifications." The Plan ensures that any
take-over bid for the Company's voting shares will be made for all the shares,
at the most favorable possible price and with sufficient time for the
shareholders to fully consider the offer. While the principal features of the
Plan remain substantially the same, terms used in the Plan were clarified,
including terms relating to exemptions for professional fund managers.
Contact: Tom Campbell
Telephone: (403) 425-1950
