Moore Corporation Limited
1 First Canadian Place
P.O. Box 78
Toronto, Canada
M5X 1G5
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
The annual and special meeting of shareholders of Moore Corporation Limited will
be held at the Glenn Gould Studio, Canadian Broadcasting Centre, 250 Front
Street West, Toronto, Canada on Friday, the 28th day of April, 2000 at 10:00
a.m. for the following purposes:
1. To receive the consolidated financial statements of the Corporation for
the year ended December 31, 1999, together with the auditor's report on
those statements;
2. To elect directors for the ensuing year;
3. To appoint auditors for the ensuing year and to authorize the directors
to fix the remuneration to be paid to the auditors;
4. To consider and, if thought fit, reconfirm with or without variation
the adoption of the amended and restated Shareholder Rights Plan
Agreement; and
5. To transact any other business properly before the meeting.
Dated at Toronto, Canada, this 15th day of March, 2000.
By Order of the Board,
J.M. Wilson
Vice President and Secretary
IF YOU ARE A REGISTERED SHAREHOLDER, YOUR FORM OF PROXY, IMPRINTED WITH YOUR
NAME AND ADDRESS, IS ENCLOSED IN THE ENVELOPE IN WHICH YOUR MATERIALS FOR THE
ANNUAL AND SPECIAL MEETING WERE MAILED TO YOU. PLEASE EXERCISE YOUR RIGHT TO
VOTE BY SIGNING AND RETURNING YOUR FORM OF PROXY IN THE ENCLOSED ENVELOPE OR VIA
FACSIMILE TO CIBC MELLON TRUST COMPANY (416-368-2502).
PROXIES ARE COUNTED AND TABULATED BY CIBC MELLON TRUST COMPANY, MOORE'S
REGISTRAR AND TRANSFER AGENT, TO PROTECT THE CONFIDENTIALITY OF HOW A PARTICULAR
SHAREHOLDER VOTES. A PROXY IS REFERRED TO MOORE ONLY IN CASES WHERE IT IS
CLEARLY MARKED TO INDICATE A PARTICULAR INSTRUCTION TO MANAGEMENT, OR UNLESS IT
IS NECESSARY TO REFER TO THE PROXY IN ORDER TO DETERMINE ITS VALIDITY OR WHEN IT
IS NECESSARY TO DO SO TO PERMIT MANAGEMENT TO MEET ITS LEGAL RESPONSIBILITY TO
SHAREHOLDERS.
INVESTORS WHO HAVE QUESTIONS ABOUT ITEMS BEING VOTED ON AT THE MEETING MAY
TELEPHONE TOLL FREE MOORE'S PROXY SOLICITATION AGENTS IN CANADA AT
1-800-890-1037 AND IN THE UNITED STATES AT 1-800-223-2064 OR 212-440-9800
(COLLECT).
MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT
UNLESS OTHERWISE STATED, THE INFORMATION IN THIS STATEMENT IS AS OF FEBRUARY 15,
2000, AND UNLESS OTHERWISE INDICATED, ALL DOLLAR AMOUNTS ARE EXPRESSED IN UNITED
STATES CURRENCY.
SOLICITATION OF PROXIES
THIS MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT IS FURNISHED IN
CONNECTION WITH THE SOLICITATION OF PROXIES BY THE MANAGEMENT OF MOORE
CORPORATION LIMITED (THE "CORPORATION" AND COLLECTIVELY WITH ITS SUBSIDIARIES
"MOORE") TO BE USED AT THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS ON APRIL
28, 2000 AND AT ALL ADJOURNMENTS THEREOF, FOR THE PURPOSES SET FORTH IN THE
ACCOMPANYING NOTICE OF MEETING. Solicitation will be made by mail commencing
March 15, 2000, but proxies may also be solicited personally by employees of the
Corporation. In addition, the Corporation will retain Georgeson Shareholder
Communications Canada of Toronto, Ontario, to aid in the solicitation of proxies
at a fee of approximately $Cdn.25,000 plus expenses. The total cost of the
solicitation will be borne by the Corporation.
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the enclosed form of proxy are directors of the Corporation
and will vote or withhold from voting the shares in respect of which they are
appointed on any ballot that may be called for in accordance with the
instructions of the shareholder as indicated on the proxy. A SHAREHOLDER
DESIRING TO APPOINT SOME OTHER PERSON AS A REPRESENTATIVE AT THE MEETING MAY DO
SO either by inserting such person's name in the blank space provided in the
form of proxy or by completing another proper form of proxy and delivering the
completed form of proxy to the Secretary of the Corporation in time for use at
the meeting.
A shareholder who has given a proxy may revoke it either (a) by signing a form
of proxy bearing a later date and depositing it in time for use at the meeting
or (b) by depositing an instrument in writing executed by the shareholder or by
the shareholder's attorney authorized in writing at the registered office of the
Corporation at any time up to and including the last business day preceding the
day of the meeting, or any adjournment thereof, at which the proxy is to be
used, or with the Chairman of the meeting on the day of the meeting, or any
adjournment thereof, or (c) in any other manner permitted by law.
The enclosed form of proxy confers discretionary authority upon the persons
named therein with respect to amendments to or variations of matters identified
in the notice of meeting, and with respect to other matters which may properly
come before the meeting or any adjournment thereof. At the date of this
circular, the management of the Corporation knows of no such amendments,
variations or other matters.
VOTING SECURITIES
On February 15, 2000, the Corporation had 88,456,940 common shares outstanding.
Shareholders of record at the close of business on March 10, 2000 (record date)
will be entitled to one vote for each common share held by them. If a person has
transferred any common shares after the record date and the transferee of such
common shares establishes proper ownership and asks, not later than April 18,
2000, to be included in the list of shareholders entitled to vote at the
meeting, the transferee will be entitled to vote such common shares. A majority
of votes cast at the meeting is required for approval of each item of regular
business. A majority of votes cast by Independent Shareholders at the meeting is
required for adoption of the Shareholder Rights Plan. See Shareholder Approval
on page 21.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
On February 15, 2000, Trimark Investment Management Inc. of Toronto, Ontario had
voting control over 17,029,300 or 19.3% of the common shares of the Corporation.
The Corporation is not aware of any other person holding in excess of 10% of the
common shares of the Corporation.
2
ELECTION OF DIRECTORS
The Corporation's by-laws and articles allow for the election of between nine
and fifteen directors. On March 3, 2000, the directors of the Corporation
set the number of directors to be elected at the meeting at eleven. The persons
whose names are set out in the following table are proposed to be nominated as
directors at the annual and special meeting of shareholders. The management
representatives designated in the enclosed form of proxy intend to vote for the
election of such nominees. Management does not contemplate that any of the
proposed nominees will be unable to serve as a director but, if that should
occur for any reason prior to the meeting, the persons designated in the
enclosed form of proxy reserve the right to vote for another nominee at their
discretion. Each director elected will hold office until the next annual meeting
of shareholders or until a successor is elected or appointed.
Information is provided in the following table with respect to the persons to be
nominated for election as directors and contains the number of common shares of
the Corporation reported by such persons as being beneficially owned by them as
well as the number of share units owned by them, in each case, on February 15,
2000. For such purposes, a person who exercises control or direction over
securities is deemed to have beneficial ownership thereof. All officers and
directors of the Corporation as a group beneficially own approximately 1.3% of
the outstanding common shares.
Common
Principal Occupation or Employment Shares
Name, Age and During Past Five Years, Positions with Beneficially
Period of Service Moore and Directorships(1) Owned Units(2) Total
- -----------------------------------------------------------------------------------------------------------------
DEREK H. BURNEY, O.C. Director, President and Chief 2,300 4,539 6,839
Toronto, ON Executive Officer, CAE Inc. (advanced
60 technology company); prior to October,
Since April, 1993 1999 Mr. Burney was Chairman and Chief
Executive Officer of Bell Canada
International Inc. Mr. Burney is a
director of Rio Algom Limited,
Teleglobe Inc. and Northbridge
Programming Inc.
- -----------------------------------------------------------------------------------------------------------------
LEON COURVILLE Corporate Director, prior to November, 700 770 1,470
Outremont, PQ 1999 Mr. Courville was President,
54 Personal and Commercial Bank and Chief
Since April, 1999 Operating Officer, National Bank of
Canada
- -----------------------------------------------------------------------------------------------------------------
SHIRLEY A. DAWE President, Shirley Dawe Associates 4,100 4,898 8,998
Toronto, ON Inc. (consulting firm specializing in
53 retail management) and Corporate
Since November, 1989 Director. Ms. Dawe is a director of
Gilmore's Specialty Stores, National
Bank of Canada, OshKosh B'Gosh, Inc.
and Henry Birks & Sons Inc.
- -----------------------------------------------------------------------------------------------------------------
BARTON L. FABER Chairman and Chief Executive Officer 950 770 1,720
Phoenix, AZ FABERcapital Corporation (equity
52 investments); between June, 1996 and
Since April, 1999 June, 1998 Mr. Faber was Chairman of
Metromail Corporation; prior to June
1996 Mr. Faber was Chairman of
Metromail Corporation and President,
Information Resources Business Group,
R.R. Donnelley & Sons Company. Mr. Faber
is director, Interim President and
Chief Executive Officer, Document
Sciences Corporation, and a director of
Looking Glass Technologies and
Intervisual Communications.
- -----------------------------------------------------------------------------------------------------------------
3
Common
Principal Occupation or Employment Shares
Name, Age and During Past Five Years, Positions with Beneficially
Period of Service Moore and Directorships(1) Owned Units(2) Total
- -----------------------------------------------------------------------------------------------------------------
THOMAS E. KIERANS Chairman of the Board of the 10,000 25,370 35,370
Toronto, ON Corporation since October, 1997 and
59 Chairman and Chief Executive Officer,
Since October, 1997 Canadian Institute for Advanced
Research (social and natural sciences
research); prior to September, 1999
Mr. Kierans was President and Chief
Executive Officer, C.D. Howe Institute.
Mr. Kierans is chairman of the board of
The Toronto International Leadership
Centre for Financial Sector Supervision
and a director of BCE Inc., CGI Group
Inc., FPI Limited, Inmet Mining
Corporation, Ipsco Inc., The
Manufacturers Life Insurance
Company, National Bank Financial &
Co. Inc. and Petro-Canada.
- -----------------------------------------------------------------------------------------------------------------
RICHARD J. LEHMANN Retired Vice Chairman, Bank One 3,312 2,432 5,744
Phoenix, AZ Corporation (banking); prior to
55 December, 1999 Mr. Lehman was Vice
Since April, 1997 Chairman; between January, 1996 and
October, 1998 Mr. Lehmann was
President and Chief Operating Officer;
between April, 1995 and January, 1996
Mr. Lehmann was President; prior to
April, 1995 Mr. Lehmann was Chairman
and Chief Executive Officer, Banc One
Arizona Corporation and Bank One,
Arizona, N.A.
- -----------------------------------------------------------------------------------------------------------------
JEANETTE P. LERMAN President, J.P. Lerman & Co. 2,438 7,295 9,733
Philadelphia, PA (communications consulting); prior to
52 September, 1997 Ms. Lerman was Vice
Since June, 1995 President, Corporate Communications,
Time Warner Inc.
- -----------------------------------------------------------------------------------------------------------------
BRIAN M. LEVITT Corporate Director; prior to February, 1,600 4,863 6,463
Montreal, PQ 2000 Mr. Levitt was director, President
52 & Chief Executive Officer, Imasco
Since December, 1996 Limited (consumer products and
services); prior to May, 1995 Mr. Levitt
was President and Chief Operating
Officer. Mr. Levitt is a director of BCE
Inc. and Domtar Inc.
- -----------------------------------------------------------------------------------------------------------------
DAVID R. MCCAMUS Corporate Director. Mr. McCamus is a 1,000 2,300 3,300
Oakville, ON director of Dofasco Ltd. and Trilon
68 Financial Ltd.
Since November, 1997
- -----------------------------------------------------------------------------------------------------------------
4
Common
Principal Occupation or Employment Shares
Name, Age and During Past Five Years, Positions with Beneficially
Period of Service Moore and Directorships(1) Owned Units(2) Total
- -----------------------------------------------------------------------------------------------------------------
J. ROBERT S. PRICHARD, O.C. President, University of Toronto (post 1,681 7,295 8,976
Toronto, ON secondary educational institution).
51 Mr. Prichard is a director of BioChem
Since April, 1996 Pharma, Four Seasons Hotels Inc.,
Onex Corporation, Tesma International
Inc. and Visible Genetics.
- -----------------------------------------------------------------------------------------------------------------
W. ED TYLER President and Chief Executive Officer 756,173(3) 419,308 1,175,481
Chicago, IL of the Corporation; prior to April, 1998
47 Mr. Tyler held various positions with
Since April, 1998 R.R. Donnelley & Sons Company;
most recently he was Executive Vice
President. Mr. Tyler is a director of the
Cherry Corporation and Vista
Information Solutions, Inc.
- -----------------------------------------------------------------------------------------------------------------
NOTES
1. Membership on the various Committees of the Board of Directors is
listed in the Statement of Corporate Governance Practices below.
2. Represents deferred share units awarded to non-employee directors under
a share plan described under Compensation of Directors on page 8,
except for Mr. Tyler who does not participate in this plan. Share units
were awarded to Mr. Tyler as an inducement to join Moore.
3. Includes stock options to acquire 746,173 common shares which are
exercisable within 60 days of February 15, 2000.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
BOARD MANDATE
The Board of Directors assumes ultimate responsibility for the stewardship of
Moore and carries out its mandate directly and through considering
recommendations it receives from the five Committees of the Board and from
management.
Management is responsible for the day-to-day operations of Moore, and pursues
Board approved strategic initiatives within the context of authorized business
and capital plans and corporate policies. Management is expected to report to
the Board on a regular basis on short term results and longer term development
activities.
The Board is specifically responsible for:
5
(a) ADOPTION OF A STRATEGIC PLANNING PROCESS
The Board's role is to ensure a strategic planning process is in place, to
review corporate and business unit strategies annually and to approve Moore's
annual business plan. Quarterly updates on achievement of financial objectives
of the annual business plan, business development and strategic initiatives are
presented to the Board by management.
(b) IDENTIFICATION OF PRINCIPAL RISKS AND IMPLEMENTING RISK-MANAGEMENT SYSTEMS
The strategic planning process involves consideration and understanding by the
Board of the principal risks inherent in Moore's business. Committees of the
Board address specific risks. The Audit Committee reviews financial risk-
management issues and programs. During l998, the Audit Committee approved the
adoption of an integrated audit approach which involves undertaking audits based
on a risk assessment. The Environment, Health and Safety Committee monitors
risks and compliance issues related to Moore's environment, health and safety
policies and procedures.
(c) SUCCESSION PLANNING AND MONITORING SENIOR MANAGEMENT PERFORMANCE
The Management Resource Committee reviews the performance of the Chief Executive
Officer and all matters related to senior management recruitment, development,
performance, compensation, organization structure and succession planning. On an
annual basis, leadership development is reviewed with the Board.
(d) COMMUNICATIONS POLICY
The Board reviews and approves communications of a regulatory nature prior to
mailing to shareholders. The Board receives quarterly updates on reports by
analysts following the Corporation. Analyst meetings are held following the
release of quarterly results and management regularly meets with investors.
Shareholder and investor inquiries are handled promptly by or under the
direction of the appropriate officer of the Corporation. Moore has adopted a
confidential shareholder voting policy.
(e) INTEGRITY OF INTERNAL CONTROL AND MANAGEMENT INFORMATION SYSTEMS
The Audit Committee is responsible for overseeing reporting on internal control
and management information systems. The Audit Committee meets privately at each
meeting with the representatives of PricewaterhouseCoopers LLP, the
Corporation's auditors, to discuss matters of interest to the Committee.
The directors have confidence that the information provided by management is
accurate and sufficient to allow the Board to carry out its mandate.
HOW THE BOARD OPERATES
The Board currently has twelve members who are elected annually by shareholders.
Eleven directors are standing for election at the upcoming meeting of
shareholders. The Corporation's by-laws and articles allow for the election of
between nine and fifteen members; a range that allows for the active
participation of all members. The Board has a majority of Canadian resident
directors. Currently four of the directors are U.S. residents and a number of
the directors have international business experience.
W. Ed Tyler was appointed President and Chief Executive Officer and a director
of the Corporation in April, l998. All current directors except Mr. Tyler are
unrelated (within the meaning of that term in the l994 Report of The Toronto
Stock Exchange Committee on Corporate Governance in Canada).
Thomas E. Kierans, a director, serves as non-executive Chairman of the Board of
the Corporation. The separation of the roles of Chairman and Chief Executive
Officer enhances the ability of the Board to function independently of
management. The Corporate Governance Committee has implemented an annual review
process for evaluating the effectiveness of the Board. Directors may engage
outside advisors at the expense of the Corporation with approval from the
Chairman of the Corporate Governance Committee.
6
The Board has nine regularly scheduled meetings a year with special meetings to
review matters such as acquisitions when needed. Transactions involving amounts
in excess of $20 million are brought to the Board for review and approval. The
Board of Directors met nine times in 1999.
Orientation for new directors includes meetings with the Chief Executive Officer
and the Chief Financial Officer focusing on strategic direction, financial
matters and business operations. Director candidates are provided with
company-specific information during the selection process and a new directors'
manual when they join the Board.
To promote a greater alignment of interests between non-employee directors and
shareholders, between one third and the full amount of a director's retainer is,
at the election of each director, paid in the form of share units. Awarded share
units are held until a director is no longer serving on the Board.
BOARD COMMITTEES
All Committees report and make recommendations to the Board on matters reviewed.
Following is a brief description of each Committee.
AUDIT COMMITTEE
The principal duties of the Audit Committee are to review annual and interim
financial statements and all legally required public disclosure documents
containing financial information prior to their approval by the directors,
review the planned scope of the examination of the annual consolidated financial
statements by the auditors of the Corporation and review the adequacy of the
systems of internal accounting and audit controls established by the
Corporation. The Audit Committee met four times in 1999. The members of the
committee are J. Robert S. Prichard (Chairman), Leon Courville, Shirley A. Dawe,
Richard J. Lehmann and David R. McCamus.
CORPORATE GOVERNANCE COMMITTEE
The principal duties of the Corporate Governance Committee are to review matters
relating to effective corporate governance including director recruitment,
performance, compensation and board composition. The Corporate Governance
Committee met three times in 1999. The members of the committee are Derek H.
Burney (Chairman), Shirley A. Dawe, Thomas E. Kierans and Brian M. Levitt.
ENVIRONMENT, HEALTH AND SAFETY COMMITTEE
The principal duties of the Environment, Health and Safety Committee are to
review matters relating to the Corporation's environment, health and safety
policies including monitoring compliance with the policies and reviewing
responses to any related incidents. The Environmental Health and Safety
Committee met twice in 1999. The members of the committee are Jeanette P.
Lerman (Chair), Barton L. Faber, Thomas E. Kierans, David R. McCamus and
J. Robert S. Prichard.
MANAGEMENT RESOURCE COMMITTEE
The principal duties of the Management Resource Committee are to review matters
relating to executive recruitment, performance, development, compensation,
resignations, terminations and organization planning. The duties of the
Committee include evaluating the performance of senior executives, determining
appropriate policies and levels for executive officer compensation and
establishing and administering appropriate short and long term incentive
arrangements for executives. The Management Resource Committee met six times in
1999. The members of the committee are Brian M. Levitt (Chairman), Derek H.
Burney, Richard J. Lehmann, Thomas E. Kierans and Jeanette P. Lerman.
7
PENSION COMMITTEE
The principal duties of the Pension Committee are to review matters relating to
the supervision of Moore's pension and savings plans. The Pension Committee met
three times in 1999. The members of the committee are Shirley A. Dawe (Chair),
Jeanette P. Lerman and W. Ed Tyler and two management appointees, Charles E.
Canfield (Vice President, Human Resources and Corporate Communications) and
Michael S. Rousseau (Senior Vice President and Chief Financial Officer). In 1999
a Management Pension Committee was established which carries out delegated
responsibilities and makes recommendations to the Board Pension Committee.
DIRECTORS' AND EXECUTIVE OFFICERS' COMPENSATION
COMPENSATION OF DIRECTORS
Each director who is not an employee of Moore is entitled to receive an annual
retainer of $30,000. The Board of Directors has adopted the Share Plan for
Non-Employee Directors under which each director receives $10,000 of the
retainer in the form of deferred share units. Each director may then elect to
take the balance of $20,000 in cash, deferred share units or common shares
purchased on the open market. A deferred share unit is a bookkeeping entry,
equivalent in value to one common share of the Corporation. Deferred share units
awarded are held until the director is no longer serving on the Board. Following
termination of Board service, the fair market value of the equivalent number of
common shares is paid to a director, net of withholdings, in cash or common
shares. The Chairman of each Board Committee receives an additional retainer of
$3,500. A fee of $1,000 is paid for each meeting of the Board of Directors and
each meeting of a Committee which the director attends in person. The fee for
participating in Board of Directors or Board Committee meetings by telephone is
set at $500. Each director is reimbursed for expenses incurred in attending
meetings.
Mr. Thomas Kierans, the Chairman of the Board, is a non-executive director.
Until April 22, 1999, Mr. Kierans received an annual retainer of $200,000 paid
$100,000 in cash and $100,000 in deferred share units and meeting fees on the
basis described under Compensation of Directors. Effective April 22, 1999, Mr.
Kierans no longer received Committee chair retainer fees and meeting fees.
Effective July 1, 1999, Mr. Kierans received his total annual retainer in cash.
COMPENSATION OF EXECUTIVE OFFICERS
The following table provides a summary of the compensation earned by the Chief
Executive Officer in 1999 and the four other most highly compensated executive
officers of Moore (the "Named Executive Officers") who served as executive
officers at the end of 1999. In addition, Michael S. Rousseau, who was appointed
Senior Vice President and Chief Financial Officer in May, 1999, is included. It
is anticipated that Mr. Rousseau will be a Named Executive Officer in 2000.
Specific aspects of the compensation are dealt with further in the tables and
narrative following this table.
8
SUMMARY COMPENSATION TABLE
- ----------------------------- ------- ---------------------------------- ---------------------------------- -----------
Annual Compensation Long-Term Compensation
------------------------------------------ ----------------------------------
Awards Payouts
- ----------------------------- ------- ---------- ------------ ---------- ----------------------- --------- -----------
Name and Principal Position Year Salary Bonus(1) Other Securities Restricted LTIP All Other
Annual Under Shares Payouts Compen-
Compen- Options/ or sation
sation SARs Restricted
Granted(2) Share
Units(3)
$ $ $ (#) (#) ($) ($)
- ----------------------------- ------- ---------- ------------ ---------- ------------ ----------- --------- -----------
W. Ed Tyler(4) 1999 806,250 1,431,900 - 379,000 9,863 - 122,212(4)
President and Chief 1998 562,500 562,500 - 1,579,506 409,445 - -
Executive Officer
- ----------------------------- ------- ---------- ------------ ---------- ------------ ----------- --------- -----------
Thomas J. McKiernan 1999 430,000 458,208 - 42,000 - -
Executive Vice President 1998 410,000 123,000 - 70,000 - - 8,735(5)
1997 281,703 70,000 - 25,000 - - 2,000(5)
2,000(5)
- ----------------------------- ------- ---------- ------------ ---------- ------------ ----------- --------- -----------
Sieg E. Buck 1999 275,000 210,994 - 28,000 - - 28,870(6)
Vice President and 1998 237,500 59,375 - 28,000 - - 27,396(6)
President, Sales and 1997 220,417 18,000 - 20,000 - - 26,567(6)
Marketing, Moore North
America, Inc.
- ----------------------------- ------- ---------- ------------ ---------- ------------ ----------- --------- -----------
Robert M. Jones(7) 1999 262,500 209,790 - 25,000 - - 40,253(7)
Vice President and Chief 1998 250,000 56,250 - 20,000 - - -
Information Officer 1997 20,833 - - 40,000 - - 60,000(7)
- ----------------------------- ------- ---------- ------------ ---------- ------------ ----------- --------- -----------
James D. Wyner 1999 260,000 215,183 - 25,000 - - 31,848(8)
Vice President and 1998 250,000 277,750 - 30,000 - - 88,294(8)
President 1997 243,796 11,917 - 25,000 - - 64,743(8)
Peak Technologies Inc.
- ----------------------------- ------- ---------- ------------ ---------- ------------ ----------- --------- -----------
Michael S. Rousseau(9) 1999 177,686 244,200 - 130,000 - - 54,581(9)
Senior Vice President and
Chief Financial Officer
- ----------------------------- ------- ---------- ------------ ---------- ------------ ----------- --------- -----------
NOTES:
1. All Named Executive Officers are required to receive 25% of their 1999
bonus in the form of deferred share units to be held throughout their
employment at Moore.
2. Awards are options to acquire the Corporation's common shares under the
Corporation's Long Term Incentive Plan.
3. The aggregate value of all share units held by Mr. Tyler at December 31,
1999 is $2,499,076, based on the closing stock price on December 31, 1999.
In 1999 Mr. Tyler received 9,863 share units as dividend payments on share
units granted to him when he joined Moore.
9
4. Mr. Tyler became President and Chief Executive Officer of the Corporation
on April 1, 1998 and his 1998 compensation is shown from that date. Mr.
Tyler received moving expenses in 1999.
5. Mr. McKiernan received financial counseling in the amount of $6,675 in
1999. The amounts shown also include matching contributions made by Moore
pursuant to a Moore retirement savings plan available to all employees.
6. Mr. Buck received a relocation allowance in 1999 of $12,846, in 1998 of
$25,396 and in 1997 of $25,693. Mr. Buck received financial counseling in
1999 in the amount of $11,274. The amounts shown also include matching
contributions made by Moore pursuant to a Moore retirement savings plan
available to all employees.
7. Mr. Jones' employment commenced in December, 1997 and his 1997 compensation
is shown from that date. Mr. Jones received a hiring bonus of $60,000 in
1997. In 1999 Mr. Jones received a relocation allowance of $20,833 and
moving expenses of $19,420.
8. Mr. Wyner received financial counseling in the amount of $6,775 in 1999.
Mr. Wyner received a relocation allowance of $20,360 in each of 1999 and
1998 and $13,373 in 1997 plus moving expenses of $2,914 in 1999, $42,463 in
1998 and $51,170 in 1997. In 1998, Mr. Wyner received $23,500 in connection
with the cancellation of 20,000 of his stock options. The amounts shown
also include matching contributions made by Moore pursuant to a Moore
retirement savings plan available to all employees.
9. Mr. Rousseau's employment commenced in May, 1999 and his compensation is
shown from that date. In 1999 Mr. Rousseau received a relocation allowance
of $22,917 and moving expenses of $31,664.
OPTION/SAR GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
- --------------------- --------------- ------------- --------------- ---------------- --------------------
Market Value of
% of Total Securities
Options/SARs Underlying
Securities Granted to Exercise Options/SARs
Under Employees in Or on the Date of
Options/SARs Financial Base Price Grant
Name Granted (#) Year ($Cdn/Security) ($Cdn/Security) Expiration Date
- --------------------- --------------- ------------- --------------- ---------------- --------------------
W.E. Tyler 379,000(1) 21.2% 9.054 9.054 Dec. 13, 2009
- --------------------- --------------- ------------- --------------- ---------------- --------------------
T.J. McKiernan 42,000(2) 2.3% 11.875 11.875 July 21, 2009
- --------------------- --------------- ------------- --------------- ---------------- --------------------
S.E. Buck 28,000(2) 1.6% 11.875 11.875 July 21, 2009
- --------------------- --------------- ------------- --------------- ---------------- --------------------
R.M. Jones 25,000(2) 1.4% 11.875 11.875 July 21, 2009
- --------------------- --------------- ------------- --------------- ---------------- --------------------
J.D. Wyner 25,000(2) 1.4% 11.875 11.875 July 21, 2009
- --------------------- --------------- ------------- --------------- ---------------- --------------------
M.S. Rousseau 130,000(2) 7.3% 11.875 11.875 July 21, 2009
- --------------------- --------------- ------------- --------------- ---------------- --------------------
NOTES:
1. Options granted in 1999 are exercisable for common shares of the
Corporation on December 13, 2003, or upon the annual attainment of
targeted corporate performance measures at the rate of 25% per year
commencing December, 2000.
2. Options granted in 1999 are exercisable for common shares of the
Corporation on July 21, 2003, or upon the annual attainment of targeted
corporate performance measures at the rate of 25% per year commencing
December, 2000.
AGGREGATED OPTION/SAR EXERCISES DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION/SAR VALUES
- ---------------------------------------------------------------------------------------------------
Name Securities Aggregate Value Unexercised Value of Unexercised
Acquired on Realized Options/SARs at In-the-Money
Exercise ($) December 31, 1999 Options/SARs at
(#) (#) December 31, 1999(1)
($)
Exercisable/ Exercisable/
Unexercisable Unexercisable
- ---------------------------------------------------------------------------------------------------
W.E. Tyler - - 329,506/1,629,000 0/0
- ---------------------------------------------------------------------------------------------------
T.J. McKiernan - - 109,400/127,500 0/0
- ---------------------------------------------------------------------------------------------------
S.E. Buck - - 15,000/61,000 0/0
- ---------------------------------------------------------------------------------------------------
R.M. Jones - - 13,000/72,000 0/0
- ---------------------------------------------------------------------------------------------------
J.D. Wyner - - 17,500/62,500 0/0
- ---------------------------------------------------------------------------------------------------
M.S. Rousseau - - 0/130,000 0/0
- ---------------------------------------------------------------------------------------------------
NOTE:
1. The closing price of the Corporation's common shares on The Toronto Stock
Exchange on December 31, 1999 was $Cdn.8.60
LONG TERM INCENTIVE PLANS -- AWARDS IN THE MOST RECENTLY COMPLETED
FINANCIAL YEAR
- -----------------------------------------------------------------------------------------------------------------------
Estimated Future Payouts Under Non-Securities-Price
Based Plans(1)
- -----------------------------------------------------------------------------------------------------------------------
Performance or
Securities Units Other Period Until Threshold Target Maximum
Name or Other Rights(1) Maturation or
(#) Payout (#) (#) (#)
- -----------------------------------------------------------------------------------------------------------------------
W.E. Tyler 225,000 December, 2001 56,250 225,000 450,000
- -----------------------------------------------------------------------------------------------------------------------
T.J. McKiernan 22,800 December, 2001 5,700 22,800 24,200
- -----------------------------------------------------------------------------------------------------------------------
S.E. Buck 12,100 December, 2001 3,025 12,100 24,200
- -----------------------------------------------------------------------------------------------------------------------
R.M. Jones 10,400 December, 2001 2,600 10,400 20,800
- -----------------------------------------------------------------------------------------------------------------------
J.D. Wyner - December, 2001 - - -
- -----------------------------------------------------------------------------------------------------------------------
M.S. Rousseau 12,100 December, 2001 3,025 12,100 24,200
- -----------------------------------------------------------------------------------------------------------------------
NOTE:
1. Represents 1999 contingent grant denominated in Moore common shares as
first year of a three-year performance period under the Long Term Incentive
Performance Plan described more fully on page 14.
11
RETIREMENT ARRANGEMENTS
TABLE 1
ESTIMATED ANNUAL PENSION BENEFITS PAYABLE
- ---------------------------------------------------------------------------------------
Remuneration Years of Service
- ---------------------------------------------------------------------------------------
($) 15 20 25 30 35 40
- ---------------------------------------------------------------------------------------
300,000 72,000 96,000 120,000 144,000 168,000 192,000
- ---------------------------------------------------------------------------------------
400,000 96,000 128,000 160,000 192,000 224,000 256,000
- ---------------------------------------------------------------------------------------
500,000 120,000 160,000 200,000 240,000 280,000 320,000
- ---------------------------------------------------------------------------------------
600,000 144,000 192,000 240,000 288,000 336,000 384,000
- ---------------------------------------------------------------------------------------
700,000 168,000 224,000 280,000 336,000 392,000 448,000
- ---------------------------------------------------------------------------------------
800,000 192,000 256,000 320,000 384,000 448,000 512,000
- ---------------------------------------------------------------------------------------
Table 1 shows the total estimated annual retirement benefits payable to
Messrs. McKiernan, Wyner, Buck, Jones and Rousseau. Remuneration is based on
three-year final average earnings including salary and bonus. The benefits
shown are assumed to be payable at age 65 as a joint survivor annuity and are
subject to reduction by any social security benefits.
TABLE 2
ESTIMATED ANNUAL PENSION BENEFITS PAYABLE
- -------------------------------------------------------------------
Remuneration Years of Service
- -------------------------------------------------------------------
($) 25 30 35 40
- -------------------------------------------------------------------
1,900,000 855,000 1,026,000 1,197,000 1,368,000
- -------------------------------------------------------------------
2,000,000 900,000 1,080,000 1,260,000 1,440,000
- -------------------------------------------------------------------
2,100,000 945,000 1,134,000 1,323,000 1,512,000
- -------------------------------------------------------------------
2,200,000 990,000 1,188,000 1,386,000 1,584,000
- -------------------------------------------------------------------
2,300,000 1,035,000 1,242,000 1,449,000 1,656,000
- -------------------------------------------------------------------
Table 2 shows the total estimated annual retirement benefits payable to Mr.
Tyler. The benefits shown are assumed to be payable at age 60 as a surviving
spouse annuity.
The Named Executive Officers have the following periods of credited service
under the retirement program as of December 31, 1999: Mr. Tyler - 26.8 years;
Mr. McKiernan - 38.6 years; Mr. Wyner - 7.2 years; Mr. Buck - 4.0 years; Mr.
Jones - 2.1 years; and Mr. Rousseau - 0.6 years. Credited service for Mr.
Wyner is accruing at the rate of two years for each year during the first
five years of service. The average pensionable earnings as of December 31,
1999 were: $1,921,800 for Mr. Tyler; $590,970 for Mr. McKiernan; $419,549 for
Mr. Wyner; $340,429 for Mr. Buck; $384,314 for Mr. Jones; and $526,241 for
Mr. Rousseau.
In the event Mr. Wyner was to terminate prior to completing five years of
service, his credited service would be accelerated to ten years.
Messrs. McKiernan, Wyner, Buck, Jones and Rousseau are provided with the
option of purchasing an annuity only upon a defined change of control of the
Corporation, under a supplementary executive retirement plan. Moore will
equalize the executive's tax position for any additional income tax to be
paid as a result of the purchase of an annuity.
Mr. Tyler's supplemental executive retirement program provides for a target
retirement income of 72% of final average earnings, upon the completion of 40
years of pension service. This target benefit is payable at age 60 and is
inclusive of any other Moore pensions. Mr. Tyler was granted 25 years of
credited service at the time of hire. Upon a defined change of control and
under the terms of Mr. Tyler's employment agreement, the present value of the
annuity described above shall be paid in a lump sum.
12
EMPLOYMENT ARRANGEMENTS
Moore's employment arrangements with its Named Executive Officers provide for
their participation in Moore's executive compensation and benefit programs
which are available to all management employees. Confidentiality and
non-competition clauses are included to protect Moore should the employment
of any Named Executive Officer be terminated. In the event of such
termination, compensation would be provided in consideration of certain
non-competition covenants. Messrs. Buck, McKiernan and Wyner would receive
payments of an amount equal to two times their annual salary. Messrs.
Rousseau and Jones would receive a payment equal to their annual salary,
which would be extended by six months if they are not employed after one
year. Named Executive Officers may also receive vested benefits under Moore's
primary pension plans and supplemental executive retirement program.
Mr. Tyler's employment arrangements are described under the section "Chief
Executive Officer's Compensation."
Moore has change of control agreements with Messrs. Jones, McKiernan and
Rousseau. The change of control agreements are meant to induce these
employees to remain with the Corporation, and to reinforce and encourage
their continued attention and dedication when faced with the possibility of a
change of control of the Corporation. If a change of control of the
Corporation is effected, the agreements include provisions to pay
two-and-a-half years of salary and annual bonus for Mr. McKiernan and two
times salary and annual bonus for Messrs. Jones and Rousseau. All awards
under the Long Term Incentive Performance Plan will be paid out at target or
actual level of achievement, if that level exceeds target. Any options to
acquire shares of the Corporation which have been granted and are still
outstanding at the date of a change in control shall become fully exercisable.
A deferred compensation plan is in place for senior executives of Moore North
America, Inc., the Corporation's principal U.S. subsidiary. The purpose of
the plan is to allow participating executives an opportunity to defer receipt
of their annual incentive plan compensation. In 1999 all Named Executive
Officers were required to defer 25% of their annual incentive plan
compensation.
COMPOSITION OF THE MANAGEMENT RESOURCE COMMITTEE
The Management Resource Committee members are Brian M. Levitt (Chairman),
Derek H. Burney, Thomas E. Kierans, Richard J. Lehmann and Jeanette P.
Lerman. With the exception of Mr. Kierans, who is Chairman of the Board, none
of the Committee members are, or have been, an officer or an employee of
Moore or any of its subsidiaries.
REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICY
The objectives of the executive compensation policies are to target a
competitive level of compensation which will enable Moore to attract, retain
and motivate qualified executives to create shareholder value, to carry out
its strategic objectives and to link the level of compensation to the
performance of Moore and the executive.
Moore's aim is to pay total compensation to its executives in the mid-range
of compensation paid to executives with similar responsibilities at
comparable corporations. Compensation packages at Moore consist of base
salary, annual incentive awards and equity based awards under long term
incentive plans. The compensation packages are designed to deliver up to 75th
percentile compensation for superior performance.
The Committee believes that providing an equity interest in the advancement
of Moore through the issuance of options and contingent share units, together
with the potential to achieve annual cash bonuses, serves to align effective
executive and corporate performance. In 1999 an incentive program was
introduced which focuses on improvement in Economic Value Added-Registered
Trademark- (EVA) as a performance measure to increase senior executive focus on
creating shareholder value.
13
From time to time, Moore retains independent consultants to assist its human
resources staff and the Committee in obtaining competitive data and to
provide advice on meeting its overall compensation objectives.
BASE SALARY
The executive salary structure consists of salary ranges for all executive
positions including those of the Named Executive Officers. The salary
structure is reviewed each year to determine its competitive level relative
to a group of comparable companies. Moore's objective is to establish
salary-range mid-points at the 50th (median) percentile of the comparator
group. The Committee reviews and recommends to the Board for approval any
proposed adjustment to the salary structure. With respect to senior
executives, the Committee assesses the overall scope and level of
responsibility of the senior executive position relative to other positions
within Moore and to the scope and level of responsibility of comparable
positions within the comparable group of companies. The executive salary
structure was increased by 3% for 1999.
Senior executive salary reviews are based on pay for performance and are
reviewed on an annual basis. The Committee takes into consideration Moore's
overall performance, the performance of the unit headed by the executive, the
performance of the executive, the relationship of the executive's salary to
the salary range for the position and other considerations the Committee
believes are appropriate in the circumstances. Assessment of performance
takes into consideration attainment of pre-established financial objectives
including revenues, earnings per share, cash flow and EVA targets and the
relative achievement of other operating objectives such as restructuring,
market share improvement, new product introduction and succession planning
and development. The Committee makes recommendations on salary adjustments
for senior executives to the Board for approval.
For l999 the Committee recommended increases for a number, but not all, of
the incumbent senior executives. The average increase was 3.6%. Effective
January 1, l999, Mr. Tyler received a 7.5% increase, Mr. Buck a 10% increase,
Mr. Jones a 5% increase and Mr. Wyner a 4% increase.
ANNUAL INCENTIVE PLAN
In 1999 the annual incentive plan focused on creating shareholder value and
was based on achievement of pre-established targets for operating income and
improvement in corporate EVA. A portion of the bonus for all participants was
based on corporate EVA improvement results. The balance of the bonus was
based on either corporate or business unit operating income results as
appropriate for each executive. Executives are required to receive 25% of
their 1999 bonuses in the form of deferred share units to be held throughout
their employment at Moore.
Results for corporate EVA improvement exceeded target and the maximum bonus
was paid on that portion of the plan. The corporate operating income target
was also exceeded which resulted in above target but less than maximum bonus
paid on that measure. Business unit operating income results varied by
business unit and bonuses were paid accordingly.
LONG TERM INCENTIVE PLAN
The purpose of the long term incentive plan is to advance the interests of
Moore by providing certain of its key employees with additional equity based
incentives; encouraging stock ownership by such employees, thereby increasing
their proprietary interest in the success of Moore; encouraging them to
remain employees of Moore; and attracting new key employees.
The plan is an integral part of total executive compensation. In 1999 the
Committee recommended and the Board approved option grants at the median
level of grants extended to positions within comparable companies.
LONG TERM INCENTIVE PERFORMANCE PLAN
In 1999 certain senior executives participated in a new incentive plan to
help focus executive management on the long term profitable growth of Moore
through the creation of shareholder value. Improvement in corporate EVA is
14
the performance measure used in the plan. Contingent annual grants are
denominated in Moore common shares and are earned over a three-year period.
Guidelines for share ownership have been established for the participants in
this plan at a value equal to two to five times annual salary. Earned awards
will be paid out in the form of deferred share units that the executive must
hold until they have reached the guideline level of share ownership.
Results for 1999 exceeded the targeted improvement in corporate EVA for the
year. Results achieved for 1999 exceeded the prorated target for the year but
the amount actually earned will be determined on the cumulative results over
a performance period of three years. Contingent share units of 354,800 were
granted in 1999. A contingent grant will also be made for the performance
period 2000 through 2002.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
W. Ed Tyler was appointed President and Chief Executive Officer of the
Corporation on April 1, 1998. At that time, an employment agreement was
entered into with Mr. Tyler which provides for an annual salary of not less
than $750,000. Mr. Tyler was given a 7.5% increase effective January 1, l999
to bring his annual salary to $806,250.
Mr. Tyler is eligible to receive an annual cash bonus not to exceed 200% of
his salary, with a target of 100%. In l999 the bonus was based on achievement
of established targets for improvement in corporate EVA and operating income.
Mr. Tyler's bonus of $1,431,900 was at 177.6% of his salary. Mr. Tyler is
required to receive 25% of this bonus in the form of deferred share units to
be held throughout his employment at Moore. Mr. Tyler received a stock option
grant of 379,000 common shares under the Long Term Incentive Plan in l999.
Mr. Tyler participated in the Long Term Incentive Performance Plan in l999
and received a 225,000 contingent grant denominated in Moore shares. Results
achieved for 1999 exceeded the prorated target for the year but the amount
actually earned will be determined on the cumulative results over a
performance period of three years.
In 1999 Mr. Tyler received 9,863 share units as dividend payments on share
units granted to him when he joined Moore.
Mr. Tyler participated in the deferred compensation plan for senior
executives of Moore North America, Inc. in 1999.
Mr. Tyler's employment agreement has change of control provisions. If a
change of control of the Corporation is effected, the provisions provide for
Mr. Tyler to be paid an amount equal to the greater of three years annualized
total compensation or the number of whole and fractional years remaining
under his employment agreement. Any options to acquire shares of the
Corporation, which have been granted and are still outstanding at the date of
a change in control, shall become fully exercisable.
Mr. Tyler's pension benefits are described under Retirement Arrangements on
page 12.
In the event of Termination without Cause (as defined) or a Termination for
Good Reason (as defined), Mr. Tyler shall be entitled to all amounts then
owing to him plus a lump sum equal to two times his Annualized Total
Compensation (as defined) and certain benefits for two years. In the event
such termination is within two years after a Change of Control, the multiple
is increased to three times. In addition, in calculating supplemental
retirement benefits, Mr. Tyler will be credited with these additional years
of service or, if greater, the period then remaining in the employment period.
MANAGEMENT RESOURCE COMMITTEE
Signed by:
Brian M. Levitt (Chairman), Derek H. Burney, Thomas E. Kierans,
Richard J. Lehmann and Jeanette P. Lerman.
15
PERFORMANCE GRAPH
The following graph and related information compares the annual changes over
the last five years in the value of $Cdn.100 invested in Moore common shares,
assuming reinvestment of dividends in Canadian dollars, and the TSE 300 Index
which incorporates dividend reinvestment.
[GRAPH]
MCL $100 $102 $119 $ 96 $ 75 $ 39
TSE 300 $100 $114 $147 $169 $166 $219
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS OTHER THAN
UNDER SECURITIES PURCHASE PROGRAMS
As at February 15, 2000, the aggregate indebtedness (other than routine
indebtedness) of directors, executive officers, senior officers and employees
outstanding to the Corporation and its subsidiaries was $945,834. These loans
are in excess of the employee's annual salary and represent house loans
provided to employees under the corporate house loan policy following a
company requested relocation. The loans bear interest at 4.3% per annum, have
a term of 7 years and are secured by mortgages on the houses.
Indebtedness under the house loan policy of senior officers is set out in the
table following.
16
TABLE OF INDEBTEDNESS OF DIRECTORS,
EXECUTIVE OFFICERS AND SENIOR OFFICERS
- ------------------------------------------------------------------------------------------------------------------
Name and Principal Position Involvement of Moore Largest Amount Outstanding Amount Outstanding as
During 1999 at February 15, 2000
($) ($)
- ------------------------------------------------------------------------------------------------------------------
J.D. Wyner A subsidiary of Moore 350,000 349,129
Vice President and President, as lender
Peak Technologies Inc.
Potomac, Maryland
- ------------------------------------------------------------------------------------------------------------------
M.S. Rousseau A subsidiary of Moore 600,000 596,705
Senior Vice President and Chief as lender
Financial Officer
- ------------------------------------------------------------------------------------------------------------------
DIRECTORS' AND OFFICERS' INSURANCE
The Corporation has purchased insurance for the benefit of the directors and
officers subject to certain limitations contained in the Business
Corporations Act (Ontario). The premium amounts to $177,104 annually. The
policies provide coverage of $50 million for each director and officer
subject to a maximum of $50 million in any policy year. Each claim against a
director or officer is not subject to any deductible for the individual
director or officer or directors and officers as a group. The policy provides
for a deductible of $500,000 per occurrence for losses occurring in the
United States and $250,000 per occurrence for losses occurring elsewhere.
The by-laws of the Corporation provide for the indemnification of directors
and officers from and against any liability and costs in respect of any
action or suit against them in respect of the execution of their duties of
office subject to the limitations referred to therein. In 1999
indemnification agreements were put in place for directors and officers of
the Corporation. These agreements are complementary to by-law and insurance
policy provisions and specify the process for indemnification claims.
APPOINTMENT OF AUDITORS
A resolution will be submitted to the meeting to appoint
PricewaterhouseCoopers LLP as auditors of the Corporation for a term expiring
with the annual meeting of shareholders in 2001 and to authorize the
directors to fix the remuneration to be paid to the auditors. To become
effective, such resolution must be approved by a majority of the votes cast
at the meeting. PricewaterhouseCoopers LLP have served as auditors of the
Corporation since 1929.
PricewaterhouseCoopers LLP will be represented at the meeting and will have
an opportunity to make a statement if they so desire and to answer
appropriate questions.
RECONFIRMATION OF SHAREHOLDER RIGHTS PLAN
At the meeting, shareholders will be asked to reconfirm the Corporation's
shareholder rights plan ("Rights Plan"), the terms and conditions of which
are set out in the amended and restated Shareholder Rights Plan Agreement
("Rights Agreement") dated as of February 28, 2000, between the Corporation
and Montreal Trust Company of Canada (the "Rights Agent"), a copy of which is
set forth in Schedule A. The Rights Agreement amends and restates the terms
of Moore's existing shareholder rights plan agreement.
17
RECONFIRMATION BY SHAREHOLDERS
Under the provisions of the Rights Agreement, the Rights and the Rights
Agreement will terminate if the Rights Agreement is not reconfirmed by
ordinary resolution passed by shareholders at the annual and special meeting.
See "Shareholder Approval" on page 21.
RECOMMENDATION OF THE BOARD OF DIRECTORS
In adopting the amended and restated Rights Agreement, the Board of Directors
of Moore considered the appropriateness of maintaining a shareholder rights
plan in place and concluded, for the reasons discussed below, that it was in
the best interests of the Corporation and its shareholders to do so. In
amending and restating the Rights Plan, the Board has taken into account
comments by institutional investors on the terms of rights plans generally.
The Rights Plan as amended and restated is consistent with the form of
current plans adopted by other major Canadian companies.
The Board of Directors has made few substantive changes to the Corporation's
existing Rights Plan. Those changes include the following:
(i) extending the Rights Plan for a period of three years;
(ii) reducing the period a Permitted Bid must be outstanding to 60 days;
(iii) facilitating so-called "lock-up agreements" between an Offeror and
shareholders provided such agreements meet certain requirements;
(iv) narrowing the definition of "acting jointly and in concert"; and
(v) appointing Montreal Trust Company of Canada as successor Rights
Agent.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS RECONFIRM THE
RIGHTS AGREEMENT, AS AMENDED AND RESTATED, BY VOTING IN FAVOUR OF THE
RESOLUTION TO BE SUBMITTED TO THE MEETING.
REASONS FOR RECONFIRMATION OF THE RIGHTS PLAN
The Rights Plan was originally adopted in 1990 (and renewed in 1995) to
provide the Board of Directors of the Corporation with sufficient time, in
the event of a public take-over bid or tender offer for the common shares of
the Corporation, to pursue alternatives to enhance shareholder value. These
alternatives could include take-over bids or offers from other interested
parties to provide shareholders the best opportunity to realize the maximum
sale price. In addition, the directors would be able to explore and, if
feasible, advance other alternatives to maximize share value through possible
corporate reorganizations or other transactions.
The Board of Directors believes that under the current rules relating to
take-over bids and tender offers in Canada and the United States, being
essentially the same rules that were applicable at the time the Rights Plan
was originally adopted, there is not sufficient time for the directors to
explore and develop alternatives for shareholders in the event of a bid.
Under these rules, a take-over bid must remain open in Canada for a minimum
of 21 days and in the United States for a minimum of 20 business days. The
result is that shareholders may fail, in the absence of the Rights Plan, to
realize the maximum value for their shares.
In addition, the Board of Directors believes that the Rights Plan will
encourage persons seeking to acquire control of the Corporation to do so by
means of a public take-over bid or tender offer available to all
shareholders. The Rights Plan will deter acquisitions by means that deny some
shareholders the opportunity to share in the premium that an acquiror is
likely to pay upon an acquisition of control. The common shares of the
Corporation are listed on stock exchanges in Canada and the United States and
there is no uniformity in the rules which apply in these markets to ensure
that the tactics of persons seeking to acquire control of the Corporation,
such as market accumulations and
18
"street sweeps", will not be contrary to the best interests of shareholders.
The Rights Plan is designed to ameliorate this situation.
Decisions of Canadian securities regulators indicate that a shareholder
rights plan can be appropriately used to encourage persons seeking to acquire
control of the Corporation to do so by means of a public take-over bid or
tender offer available to all shareholders.
The Board of Directors believes that the Rights Plan will not adversely limit
the opportunity for shareholders to dispose of their shares through a
take-over bid or tender offer for the Corporation which provides fair value
to all shareholders. The Directors will continue to be bound to consider
fully and fairly any take-over bid or tender offer for shares of the
Corporation and to discharge those responsibilities with a view to the best
interests of shareholders.
The provisions of the Rights Plan relating to Permitted Bids, which are
described below under "The Corporation's Rights Plan - Permitted Bids", will
permit shareholders to tender to a take-over bid or tender offer which is a
"Permitted Bid" regardless of the views of the Board of Directors as to the
acceptability of the bid or offer.
It is not the intention of the Board of Directors in recommending the
reconfirmation of the Rights Plan to secure the continuance in office of the
existing members of the Board or to avoid an acquisition of control of the
Corporation in a transaction that is fair and in the best interests of
shareholders. The rights of shareholders under existing law to seek a change
in the management of the Corporation or to influence or promote action of
management in a particular manner will not be affected by the Rights Plan.
The proposal to reconfirm the Rights Plan is not being made in response to or
in anticipation of any pending or threatened take-over bid or tender offer
for the common shares of the Corporation.
THE CORPORATION'S RIGHTS PLAN
The principal terms of the Rights Plan, as amended and restated, are
summarized below. Capitalized terms used but not defined in this summary are
used as defined in the Rights Agreement. For full particulars, please refer
to the text of the Rights Agreement attached as Schedule A. The summary below
is qualified by reference to the actual provisions of the Rights Agreement.
GENERAL
The Rights were issued pursuant to the Rights Agreement between the
Corporation and the former Rights Agent. Each Right entitles the registered
holder thereof to purchase from the Corporation on the occurrence of certain
events described below, one common share at the price of $120 per common
share, subject to adjustment (the "Exercise Price"). If a Flip-in Event
occurs, each of the Rights entitles the registered holder to receive, upon
payment of the Exercise Price, the number of common shares that have a Market
Price at the date of that occurrence equal to twice the Exercise Price. The
Rights are not exercisable until the Separation Time. The Rights expire on
the termination of the annual meeting of the Corporation in the year 2003,
unless earlier terminated by the Board in accordance with the Rights
Agreement.
TRADING OF RIGHTS
Until the Separation Time, the Rights are evidenced only by outstanding
common share certificates. The Rights Plan provides that, until the
Separation Time, the Rights will be transferred with and only with the
associated common shares. Promptly following the Separation Time, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
the holders of record of common shares as of the close of business at the
Separation Time and, thereafter, the Rights Certificates alone will evidence
the Rights.
SEPARATION TIME
The Rights will separate and trade apart from the common shares following the
Separation Time. The Separation Time means the close of business on the tenth
Trading Day after the earlier of (i) the first date (the "Stock
19
Acquisition Date") of public announcement of facts indicating that a person
has become an Acquiring Person; and (ii) the date of commencement of, or the
first public announcement of the intent of any person to commence a Take-over
Bid; or such later date as may be determined by the Board.
ACQUIRING PERSON AND BENEFICIAL OWNERSHIP
An "Acquiring Person" is a person who Beneficially Owns 20% or more of the
outstanding common shares of the Corporation. The Rights Agreement provides
certain exceptions including a person who acquires 20% or more of the
outstanding common shares through a Voting Share Reduction, a Permitted Bid
Acquisition, an Exempt Acquisition, a Pro-Rata Acquisition or a Convertible
Security Acquisition. There are also certain exceptions for the benefit of
Fund Managers, Trust Companies and administrators of pension funds or plans.
A Person is not deemed to Beneficially Own any security deposited, without
any prior agreement or arrangement with the Offeror, to a Take-over Bid until
such security is taken-up under the bid. In addition, a Person is not deemed
to Beneficially Own any security deposited to a Take-over Bid pursuant to a
Lock-up Agreement which meets certain requirements. For this purpose, a
Lock-up Agreement is an agreement between an Offeror and a shareholder under
which the shareholder agrees to deposit common shares to a Take-over Bid made
by the Offeror. In order to constitute a Lock-up Agreement as defined, the
agreement must permit the shareholder to withdraw any common shares tendered
to the Take-over Bid in order to deposit them to a higher offer. The Lock-up
Agreement may not provide for fees payable by the shareholder for doing so
which exceed the greater of 2.5% of the consideration payable to the
shareholder under the original Take-over Bid and 50% of the amount of the
increase in consideration offered pursuant to a competing bid.
FLIP-IN EVENT
If a person becomes an Acquiring Person (this is called a "Flip-in Event"),
each Right, other than those held by the Acquiring Person and certain related
parties, becomes the right to purchase from the Corporation, upon exercise,
the number of common shares having an aggregate Market Price on the date of
the Flip-in Event equal to twice the Exercise Price upon payment of an amount
in cash equal to the Exercise Price. The result is the potential for huge
dilution to the shareholding of an Acquiring Person. As a result, an Offeror
making a Take-over Bid will ensure that it does not become an Acquiring
Person and thereby trigger the Plan.
PERMITTED BIDS
A Flip-in Event does not occur if a Take-over Bid is a Permitted Bid. A
Permitted Bid is a Take-over Bid made by means of a Take-over Bid circular
which among other things contains, and the take-up and payment for common
shares deposited is subject to, an irrevocable and unqualified provision that:
(a) shares deposited pursuant to the Take-over Bid may be withdrawn at
any time prior to such shares being taken-up and paid for;
(b) no shares shall be taken-up or paid for pursuant to the Take-over Bid
(x) prior to the Close of Business on a date which is not less than
60 days following the date of the Take-over Bid and (y) unless at the
date of take-up and payment more than 50% of the then outstanding
common shares held by Independent Shareholders have been deposited to
the Take-over Bid and not withdrawn; and
(c) in the event that common shares are taken-up and paid for, a public
announcement will be made of that fact and the Take-over Bid will
remain open for further deposits of common shares on the same terms
for a period of not less than 10 days from the date of such public
announcement.
20
TAKE-OVER BID
A Take-over Bid is defined in the Rights Plan as an offer to acquire common
shares or securities convertible into common shares, where the common shares
subject to such offer, together with the common shares into which the
securities subject to the offer are convertible, and the Offeror's
Securities, constitute in the aggregate 20% or more of the outstanding common
shares of the Corporation at the date of such offer.
REDEMPTION
The Board of Directors may, with prior shareholder approval, and at any time
prior to the occurrence of a Flip-in Event, elect to redeem all, but not less
than all, of the outstanding Rights at a redemption price of $0.0001 per
Right, subject to adjustment in certain events.
WAIVER
The Board of Directors may at any time prior to the occurrence of a Flip-in
Event determine to waive the application of the Flip-in Event provisions of
the Rights Agreement to a Flip-in Event that may occur by reason of a
Take-over Bid made by means of a Take-over Bid circular. If the Board of
Directors waives the application of the Flip-in Event provisions to such a
Flip-in Event, the Board of Directors is deemed to have waived the
application of the Flip-in Event provisions to any other Flip-in Event
occurring by reason of any competing Take-over Bid made by means of a
Take-over Bid circular prior to or reasonably contemporaneously with the
granting of such waiver. The Board of Directors may also waive the
application of the Flip-in Event provisions to a Flip-in Event where the
Acquiring Person became such by inadvertence provided such Acquiring Person
reduces its beneficial ownership of shares within 30 days such that it is no
longer an Acquiring Person.
AMENDMENTS
The Corporation may make amendments to the Rights Agreement to correct
clerical or typographical errors or to make changes which the Board of
Directors considers are required to maintain the validity of the Rights
Agreement as a result of any change in applicable legislation. Any such
change must be submitted to shareholders for their approval at the next
meeting of shareholders (or if made after the Separation Time, to a meeting
of holders of the Rights at a meeting called for a date not later than the
date of the next meeting of shareholders of the Corporation). The Corporation
may, with the prior consent of the holders of common shares, at any time
before the Separation Time or, if after the Separation Time, with the prior
consent of holders of Rights, supplement, amend, vary or rescind any
provision of the Rights Agreement and the Rights (whether or not such action
would materially adversely affect the interests of holders of Rights,
generally). No such amendment or variation will be made without the prior
approval, where required, of The Toronto Stock Exchange.
SHAREHOLDER APPROVAL
In order for the Rights Agreement to remain effective, the Rights Agreement,
as amended and restated, must be reconfirmed by a resolution passed by a
majority of the votes cast by Independent Shareholders who vote in respect of
the reconfirmation of the Rights Agreement at the annual and special meeting.
As of the date of this circular, to the knowledge of the directors, all
outstanding common shares of the Corporation are eligible to be voted in
respect of the resolution reconfirming the Rights Plan. See the definition of
"Independent Shareholders" in the Rights Agreement.
SHAREHOLDER PROPOSALS
Any shareholder proposals for the 2001 annual meeting of shareholders must be
submitted no later than February 17, 2001 to the Secretary of the
Corporation, at 1 First Canadian Place, P.O. Box 78, Toronto, Canada M5X 1G5,
in order to be considered for inclusion in the Corporation's management
information circular and proxy statement for that meeting.
21
DIRECTORS' APPROVAL
The contents of this circular and the sending of it to the shareholders of
the Corporation have been approved by the Board of Directors of the
Corporation.
By order of the Board.
J.M. Wilson
Vice President and Secretary
Toronto, Canada
March 15, 2000
COPIES OF THE CORPORATION'S LATEST ANNUAL REPORT ON FORM 10-K AS FILED WITH
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND WITH THE CANADIAN
SECURITIES AUTHORITIES AS THE ANNUAL INFORMATION FORM (TOGETHER WITH THE
DOCUMENTS INCORPORATED THEREIN BY REFERENCE), MANAGEMENT'S DISCUSSION AND
ANALYSIS OF THE CORPORATION'S FINANCIAL CONDITION AND RESULTS FOR 1999,
COMPARATIVE CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION FOR 1999,
TOGETHER WITH THE REPORT OF THE AUDITORS THEREON AND THIS CIRCULAR ARE
AVAILABLE THROUGH SEDAR AT HTTP://WWW.SEDAR.COM AND EDGAR AT
HTTP://WWW.SEC.GOV/EDGARHP.HTM OR UPON REQUEST FROM THE CORPORATE
COMMUNICATIONS DEPARTMENT.
22
SCHEDULE A
SHAREHOLDER RIGHTS PLAN AGREEMENT
- ------------------------------------------------------------------------------
DATED AS OF FEBRUARY 28, 2000
BETWEEN
MOORE CORPORATION LIMITED
AND
MONTREAL TRUST COMPANY OF CANADA
AS RIGHTS AGENT
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE 1. INTERPRETATION.......................................................2
1.1. CERTAIN DEFINITIONS........................................................2
1.2. CURRENCY..................................................................16
1.3. NUMBER AND GENDER.........................................................16
1.4. SECTIONS AND HEADINGS.....................................................16
1.5. STATUTORY REFERENCES......................................................16
1.6. ACTING JOINTLY OR IN CONCERT..............................................17
1.7. DETERMINATION OF PERCENTAGE OWNERSHIP.....................................17
ARTICLE 2. THE RIGHTS..........................................................17
2.1. LEGEND ON VOTING SHARE CERTIFICATES.......................................17
2.2. EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS..................18
2.3. ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS...........................21
2.4. DATE ON WHICH EXERCISE IS EFFECTIVE.......................................27
2.5. EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES.....27
2.6. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.......................28
2.7. MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES.................29
2.8. PERSONS DEEMED OWNERS.....................................................29
2.9. DELIVERY AND CANCELLATION OF CERTIFICATES.................................30
2.10. AGREEMENT OF RIGHTS HOLDERS..............................................30
ARTICLE 3. ADJUSTMENTS TO THE RIGHTS UPON FLIP-IN EVENT........................31
3.1. FLIP-IN EVENT.............................................................31
ARTICLE 4. THE RIGHTS AGENT....................................................33
4.1. GENERAL...................................................................33
4.2. MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT...34
4.3. DUTIES OF RIGHTS AGENT....................................................34
4.4. CHANGE OF RIGHTS AGENT....................................................37
ARTICLE 5. MISCELLANEOUS.......................................................38
5.1. REDEMPTION AND TERMINATION................................................38
5.2. EXPIRATION................................................................39
5.3. ISSUANCE OF NEW RIGHTS CERTIFICATES.......................................40
5.4. SUPPLEMENTS AND AMENDMENTS................................................40
5.5. FRACTIONAL RIGHTS AND FRACTIONAL SHARES...................................41
5.6. RIGHTS OF ACTION..........................................................42
5.7. HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER.................................42
5.8. NOTICE OF PROPOSED ACTIONS................................................43
5.9. NOTICES...................................................................43
5.10. COSTS OF ENFORCEMENT.....................................................44
5.11. REGULATORY APPROVALS.....................................................44
5.12. DECLARATION AS TO NON-CANADIAN AND NON-U.S. HOLDERS......................44
5.13. SUCCESSORS...............................................................44
5.14. BENEFITS OF THIS AGREEMENT...............................................45
5.15. GOVERNING LAW............................................................45
5.16. LANGUAGE.................................................................45
5.17. COUNTERPARTS.............................................................45
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5.18. SEVERABILITY.............................................................45
5.19. EFFECTIVE DATE...........................................................45
5.20. SHAREHOLDER APPROVAL.....................................................46
5.21. TIME OF THE ESSENCE......................................................46
5.22. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.....................46
5.23. FIDUCIARY DUTIES OF THE BOARD OF DIRECTORS...............................46
AMENDED AND RESTATED
SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS AGREEMENT DATED AS OF FEBRUARY 28, 2000,
B E T W E E N:
MOORE CORPORATION LIMITED, a corporation incorporated
under the laws of Ontario (the "Corporation")
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MONTREAL TRUST COMPANY OF CANADA, a trust
company incorporated under the laws of
Canada, as Rights Agent (the "Rights Agent",
which term shall include any successor
Rights Agent hereunder),
WHEREAS the Corporation adopted an amended and restated Shareholder
Rights Plan Agreement as of February 22, 1995 (the "Former Rights Plan") to
ensure, to the extent possible, that all shareholders of the Corporation are
treated fairly in connection with any take-over bid for the Corporation;
AND WHEREAS the Former Rights Plan expires at the termination of
the annual meeting of the Corporation in the year 2000;
AND WHEREAS the Board of Directors has determined that it is
advisable and in the best interests of the Corporation to adopt an amended
and restated version of the Former Rights Plan ("the Amended and Restated
Rights Plan") and to propose that the shareholders of the Corporation approve
the Amended and Restated Rights Plan at the annual meeting of shareholders in
the year 2000;
AND WHEREAS in connection with the implementation of the Former
Rights Plan, the Board of Directors of the Corporation:
(a) authorized and declared a distribution of one right (a "Right") in
respect of each common share of the Corporation outstanding at the
Record Time; and
(b) authorized the issuance of one Right in respect of each common share
subsequently issued by the Corporation;
all on the terms provided in the Former Rights Plan, and such Rights remain
outstanding as of the date hereof;
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AND WHEREAS on and from the Effective Date each Right shall entitle
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 has appointed Montreal Trust Company of
Canada as successor Rights Agent to act on behalf of the Corporation, and the
Rights Agent is willing to so act, in connection with the issuance, transfer,
exchange and replacement of Rights Certificates (as hereinafter defined), the
exercise of Rights and other matters referred to herein;
NOW THEREFORE in consideration of the premises and their respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE 1.
INTERPRETATION
1.1. CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "ACQUIRING PERSON" means any Person who is the Beneficial Owner
of 20% or more of the outstanding Voting Shares of the Corporation,
but does not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or more
of the outstanding Voting Shares of the Corporation as a
result of:
(A) a Voting Share Reduction;
(B) a Permitted Bid Acquisition;
(C) an Exempt Acquisition;
(D) a Pro Rata Acquisition; or
(E) a Convertible Security Acquisition;
-3-
provided, however, that if a Person becomes the Beneficial Owner of
20% or more of the Voting Shares of the Corporation then
outstanding by reason of a Voting Share Reduction, a
Permitted Bid Acquisition, an Exemption Acquisition, a Pro
Rata Acquisition or a Convertible Security Acquisition and
thereafter becomes the Beneficial Owner of an additional 1%
of the Voting Shares then outstanding (other than pursuant to
a Voting Share Reduction, a Permitted Bid Acquisition, an
Exempt Acquisition, a Pro Rata Acquisition or a Convertible
Security Acquisition), then as of the date that such Person
becomes the Beneficial Owner of such additional Voting
Shares, such Person shall be an "Acquiring Person";
(iii) for the period of 10 days after the Disqualification Date
(as defined below), any Person who becomes the Beneficial
Owner of 20% or more of the outstanding Voting Shares as a
result of such Person becoming disqualified from relying on
Clause 1.1(e)(v) solely because such Person 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 that any Person is making or proposes to
make a Take-over Bid including, without limitation, a report
filed pursuant to Section 101 of the SECURITIES ACT or
Section 13(d) of the 1934 EXCHANGE ACT; or
(iv) an underwriter or member of the banking or selling group that
becomes the Beneficial Owner of 20% or more of the Voting
Shares in connection with a distribution to the public of
securities provided that such Person does not make or propose
to make a Take-over Bid alone or by acting jointly or in
concert with any other Person.
(b) "AFFILIATE" when used to indicate a relationship with a specified
Person, means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under
voting control with, such specified Person.
(c) "AGREEMENT" means this amended and restated shareholder rights plan
agreement, as it may be amended, modified or supplemented from time
to time hereafter.
(d) "ASSOCIATE", when used to indicate a relationship with a specified
Person, means any relative of such specified Person who has the same
home as such specified Person, or any person to whom such specified
Person is married, or any person with whom such specified Person is
living in a conjugal relationship outside marriage, or any relative
of such spouse or other person who has the same home as such
specified Person.
(e) A Person shall be deemed the "BENEFICIAL OWNER", and to have
"BENEFICIAL OWNERSHIP", of, and to "BENEFICIALLY OWN":
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(i) any securities as to which such Person or any Affiliate or
Associate of such Person is the owner in law or equity;
(ii) any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to acquire, whether or
not on condition or the happening of any contingency, either
immediately or at any time within a period of 60 days:
(A) upon the exercise of any Convertible Securities; or
(B) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between
underwriters and banking group or selling group members
with respect to a distribution of securities or pursuant
to a pledge of securities in the ordinary course of
business); and
(iii) any securities which are Beneficially Owned within the meaning
of Clauses 1.1(e)(i) or (ii) above by any other Person with
which such Person is acting jointly or in concert;
provided, however, that a Person shall not be deemed the "Beneficial
Owner", or to have "Beneficial Ownership" of, or to
"Beneficially Own", any security:
(iv) because such security has been deposited or tendered, without
any prior agreement (other than a Lock-up Agreement) or
arrangement in respect thereof, pursuant to any tender or
exchange offer or Take-over Bid made by such Person or made
by any Affiliate or Associate of such Person or made by any
other Person acting jointly or in concert with such Person,
unless such deposited or tendered security has been taken-up
under such offer or Take-over Bid;
(v) because:
(A) such Person, or any of such Person's Affiliates or
Associates or any other Person acting jointly or in
concert with such Person, holds such security, provided
that the ordinary course of business of any such Person
(the "Fund Manager") includes the management of
investment funds for others and such security is held by
the Fund Manager in the ordinary course of such business
in the performance of such Fund Manager's duties for the
account of any other Person (a "Client");
(B) such Person (the "Trust Company") is licensed to carry on
business of a trust company under applicable laws and, as
such, acts as trustee or administrator or in a similar
capacity in relation to the estates of deceased or
incompetent Persons (each an "Estate Account") or in
relation to other accounts (each an "Other Account") and
holds such security in the ordinary course of such duties
for such Estate Accounts or for such Other Accounts;
-5-
(C) such Person (the "Plan Administrator") is the
administrator or the trustee of one or more pension funds
or plans (a "Plan") registered under the laws of Canada
or any province thereof or the laws of the United States
of America or any state thereof;
(D) such Person (the "Crown Agent") is established by statute
for purposes that included, and the ordinary business or
activity of such Person includes, the management of
investment funds for employee benefit plans, pension
plans, insurance plans, or various public bodies; or
(E) such Person is a Plan;
provided, however, that in any of the foregoing cases the Fund Manager,
the Trust Company, the Plan Administrator, the Crown Agent or the
Plan, as the case may be, is not then making and has not then
announced a current intention to make a Take-over Bid, alone or by
acting jointly or in concert with any other Person, other than an
Offer to Acquire (x) in connection with a distribution by the
Corporation, (y) by means of a Permitted Bid Acquisition, or (z) by
means of market transactions made in the ordinary course of the
business of such Person (including pre-arranged trades entered into
in the ordinary course of business of such Person) executed through
the facilities of a stock exchange or organized over-the-counter
market;
(vi) because such Person is a Client of the same Fund Manager as
another Person on whose account the Fund Manager holds such
security, or because such Person is an Estate Account or an
Other Account of the same Trust Company as another Person on
whose account the Trust Company holds such security, or
because such Person is a Plan with the same Plan Administrator
as another Plan on whose account the Plan Administrator holds
such security;
(vii) because such Person is a Client of a Fund Manager and such
security is owned at law or in equity by the Fund Manager or
because such Person is an Estate Account or an Other Account
of a Trust Company and such security is owned at law or in
equity by the Trust Company or such Person is a Plan and such
security is owned at law or in equity by the Plan
Administrator;
(viii) because such Person is the registered holder of securities as
a result of carrying on the business of, or acting as, a
nominee of a securities depository.
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(f) "BOARD OF DIRECTORS" means, at any time, the board of directors of the
Corporation as then constituted.
(g) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day on which chartered banks in the City of Toronto are authorized or
obliged by law to close.
(h) "BUSINESS CORPORATIONS ACT (ONTARIO)" shall mean the BUSINESS
CORPORATIONS ACT, R.S.O. 1990, c.B.16, and the regulations
thereunder.
(i) "CANADIAN-U.S. EXCHANGE RATE" shall mean on any date the inverse of
the U.S.-Canadian Exchange Rate in effect on such date.
(j) "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed in
United States dollars shall mean on any day the Canadian dollar
equivalent of such amount determined by multiplying such amount by
the Canadian-U.S. Exchange Rate in effect on such date.
(k) "CLOSE OF BUSINESS" on any given date shall mean the time on such
date (or, if such date is not a Business Day, the time on the next
succeeding Business Day) at which the office of the transfer agent
for the Voting Shares in the City of Toronto (or, after the
Separation Time, the offices of the Rights Agent in the City of
Toronto) becomes closed to the public.
(l) "COMMON SHARES" means the common shares in the capital of the
Corporation and "common shares", when used with reference to any
Person other than the Corporation means the class or classes of
shares (or similar equity interests) with the greatest per share
voting power entitled to vote generally in the election of all
directors of such other Person or the class or classes of shares
(or similar equity interests) having power (whether or not
exercised) to control or direct the management of such other
Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned
other Person.
(m) "COMPETING PERMITTED BID" means a Take-over Bid that:
(i) is made while another Take-over Bid which is a Permitted Bid
is outstanding;
(ii) satisfies all components of the definition of a Permitted Bid
except that the definition of a Permitted Bid shall be
satisfied for the purposes of this Clause 1.1(m)(ii) if the
Take-over Bid contains, and the take-up and payment for
securities tendered or deposited thereunder is subject to, an
irrevocable and unqualified condition that no Voting Shares
shall be taken-up or paid for pursuant to the Competing Bid
prior to the later of:
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(A) the date which is 21 days after the date the Competing
Permitted Bid is made; and
(B) the 60th day after the earliest of any other Permitted
Bid that is then outstanding, provided that the expiry
of the Competing Permitted Bid shall not occur at a time
of day that is prior to the time of expiry of the
earliest Permitted Bid on such date.
(n) "CONTROL": a corporation is "controlled" by another Person if:
(i) securities entitled to vote in the election of directors
carrying more than fifty percent (50%) of the votes for the
election of directors are held, directly or indirectly, by or
for the benefit of the other Person; and
(ii) the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of directors of
such corporation;
and "controls", "controlling" and "under voting control with" shall be
interpreted accordingly.
(o) "CONVERTIBLE SECURITIES" means at any time any right (regardless of
whether such right constitutes a security) to acquire Voting Shares
from the Corporation and any securities issued by the Corporation
from time to time (other than the Rights) carrying any exercise,
conversion or exchange right (whether such right is exercisable
immediately or within a period of 60 days after the relevant time
and whether or not on condition or the happening of any contingency).
(p) "CONVERTIBLE SECURITY ACQUISITION" means the acquisition of Voting
Shares upon the exercise of Convertible Securities received by a
Person pursuant to a Permitted Bid Acquisition, an Exempt Acquisition
or Pro Rata Acquisition.
(q) "EFFECTIVE DATE" shall have the meaning attributed thereto in
Section 5.19.
(r) "ELECTION TO EXERCISE" has the meaning attributed thereto in Clause
2.2(d)(i).
(s) "EXEMPT ACQUISITION" means an acquisition:
(i) in respect of which the Board of Directors has waived the
application of Section 3.1 hereof pursuant to the provisions
of Subsections 5.1(b), 5.1(c) or 5.1(d) hereof;
(ii) which was made pursuant to a dividend reinvestment plan of the
Corporation;
-8-
(iii) pursuant to a distribution to the public by the Corporation of
Voting Shares or Convertible Securities made pursuant to a
prospectus; or
(iv) pursuant to a distribution by the Corporation of Voting Shares
or Convertible Securities by way of a private placement by the
Corporation, provided that:
(A) all necessary stock exchange approvals for such private
placement have been obtained and such private placement
complies with the terms and conditions of such approvals;
and
(B) the purchaser does not become the Beneficial Owner of
more than 25% of the Voting Shares outstanding
immediately prior to the private placement (and in making
this determination, the securities to be issued to such
purchaser pursuant to the private placement shall be
deemed to be held by such purchaser but shall not be
included in the aggregate number of outstanding Voting
Shares immediately prior to the private placement).
(t) "EXERCISE PRICE" shall mean, as of any date, the price at which a
holder of a Right may purchase the securities issuable upon exercise
of one whole Right and until adjustment thereof in accordance with
the terms hereof, the Exercise Price shall equal $120.00 (Canadian).
(u) "EXPIRATION TIME" shall mean the earlier of:
(i) the Termination Time;
(ii) the termination of the annual meeting of the Corporation held
in the year 2000 if the resolution referred to in Section 5.20
to be submitted to the annual meeting of the Corporation in
the year 2000 is submitted to Independent Shareholders for
their consideration and approval and if such approval is not
given by the Independent Shareholders in accordance with
Section 5.20 at such meeting;
(iii) the termination of the annual meeting of shareholders of the
Corporation held in the year 2003 if the resolution referred
to in Section 5.20 to be submitted to the annual meeting of
the Corporation in the year 2003 is submitted to Independent
Shareholders for their consideration and approval and if
such approval is not given by the Independent Shareholders
in accordance with Section 5.20; and
(iv) the termination of the annual meeting of shareholders of the
Corporation in the year 2006.
-9-
(v) A "FLIP-IN EVENT" shall mean any transaction or event in or pursuant
to which any Person becomes an Acquiring Person.
(w) "INDEPENDENT SHAREHOLDERS" shall mean holders of Voting Shares of the
Corporation but shall not include:
(i) any Acquiring Person;
(ii) any Offeror other than one referred to in Clause 1.1(e)(v);
(iii) any Affiliate or Associate of such Acquiring Person;
(iv) any Person acting jointly or in concert with such Acquiring
Person; or
(v) any employee benefit plan, stock purchase plan, deferred
profit sharing plan or any similar plan or trust for the
benefit of employees of the Corporation or a Subsidiary of the
Corporation, unless the beneficiaries of any such plan or
trust direct the manner in which the Voting Shares are to be
voted or direct whether the Voting Shares are to be tendered
to a take-over bid.
(x) "LOCK-UP AGREEMENT" means an agreement between an Offeror and another
Person (the "Locked-up Person") under which the Locked-up Person
agrees to deposit or tender the Voting Shares held by the Locked-up
Person to the Offeror's Take-over Bid where:
(i) the agreement:
(A) permits the Locked-up Person to withdraw the Voting
Shares from the agreement in order to tender or deposit
the Voting Shares to another Take-over Bid, or to support
another transaction, that provides for a consideration
for each Voting Share that is higher than the
consideration contained in or proposed to be contained
in, and is made for at least the same number of Voting
Shares as, the Take-over Bid that the Locked-up Person
has agreed to deposit or tender Voting Shares to pursuant
to the Lock-up Agreement; or
(B) (a) permits the Locked-up Person to withdraw the Voting
Shares from the agreement in order to tender or deposit
the Voting Shares to another Take-over Bid, or to support
another transaction, that provides for a consideration
for each Voting Share that exceeds by as much as or more
than a specified amount (the "Specified Amount") the
consideration for each Voting Share contained in or
-10-
proposed to be contained in, and is made for at least the
same number of Voting Shares as, the Take-over Bid that
the Locked-up Person has agreed to deposit or tender
Voting Shares to pursuant to the Lock-up Agreement, and
(b) does not by its terms provide for a Specified Amount
that is greater than 7% over the consideration for each
Voting Share contained in or proposed to be contained in
the Take-over Bid that the Locked-up Person has agreed
to deposit or tender Voting Shares to pursuant to the
Lock-up Agreement;
and for greater certainty, the Lock-up Agreement may contain a right of
first refusal or require a period of delay to give the Offeror an
opportunity to at least match a higher consideration in another
Take-over Bid or transaction or other similar limitation on a
Locked-up Person's right to withdraw Voting Shares from the Lock-up
Agreement and not tender such Voting Shares to the Take-over Bid to
which the Locked-up Person has agreed to deposit or tender, so long
as the limitation does not preclude the exercise by the Locked-up
Person of the right to withdraw Voting Shares in sufficient time to
tender to the other Take-over Bid or participate in the other
transaction; and
(ii) the agreement does not provide for any "break-up fees", "top-up
fees", penalties, expense reimbursement or other amounts that
exceed in the aggregate the greater of:
(A) the cash equivalent of 2.5% of the consideration payable
under the Take-over Bid to the Locked-up Person; and
(B) 50% of the amount by which the consideration payable
under another Take-over Bid or transaction to a Locked-up
Person exceeds the consideration that such Locked-up
Person would have received under the Take-over Bid;
to be paid by a Locked-up Person pursuant to the Lock-up Agreement in the
event that the Locked-up Person fails to deposit or tender Voting
Shares to the Take-over Bid or withdraws Voting Shares in order to
tender to another Take-over Bid or participate in another
transaction.
(y) "MARKET PRICE" per security of any securities on any date of
determination shall mean the average of the daily closing prices per
security of such securities (determined as described below) on each of
the 20 consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however, that if an event
of a type analogous to any of the events described in Section 2.3
hereof shall have caused the closing prices used to determine the
Market Price on any Trading Day not to be fully comparable with the
closing price on the Trading Day immediately preceding such date of
determination, each such closing price so used shall be appropriately
-11-
adjusted in a manner analogous to the applicable adjustment provided
for in Section 2.3 in order to make it fully comparable with the
closing price on the Trading Day immediately preceding such date of
determination. The closing price per security 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 such securities as reported by the principal
Canadian stock exchange on which such securities are listed
or admitted to trading; or
(ii) if for any reason none of such prices is available on such day
or the securities are not listed or 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 such securities as reported by the
principal national United States securities exchange on which
such securities are listed or admitted to trading;
(iii) if for any reason none of the foregoing prices are 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 such securities in the
over-the-counter market, as quoted by any reporting system
then in use; or
(iv) if for any reason none of the foregoing prices are 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 (selected by the
Board of Directors) making a market in the securities;
provided, however, that if for any reason none of such prices is
available on such day, the closing price per security of such
securities on such date means the fair value per security of such
securities on such date as determined by a nationally recognized
investment dealer or investment banker (selected by the Board of
Directors). The Market Price shall be expressed in Canadian dollars
and if initially determined in respect of any day forming part of
the 20 consecutive Trading Day period in question in United States
dollars, such amount shall be translated into Canadian dollars at
the Canadian Dollar Equivalent thereof.
(z) "1933 SECURITIES ACT" shall mean the SECURITIES ACT OF 1933 of the
United States, as amended, and the rules and regulations thereunder.
(aa) "1934 EXCHANGE ACT" shall mean the SECURITIES EXCHANGE ACT OF 1934
of the United States, as amended, and the rules and regulations
thereunder.
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(bb) "OFFER TO ACQUIRE" shall include:
(i) an offer to purchase, or a solicitation of an offer to sell,
Voting Shares, or a public announcement of an intention to
make such an offer or solicitation; and
(ii) an acceptance of an offer to sell Voting Shares, whether or
not such offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer to sell
shall be deemed to be making an Offer to Acquire to the Person that
made the offer to sell.
(cc) "OFFEROR" means a Person who has announced (and has not withdrawn) an
intention to make, or who has made (and has not withdrawn), a
Take-over Bid and includes any Affiliate or Associate of the Offeror
and any person acting jointly and in concert with the Offeror but
does not include a Person who has made a Take-over Bid that has
terminated or expired and in respect of which such Person has no
continuing right to take-up Voting Shares tendered to such
Take-over Bid.
(dd) "OFFEROR'S SECURITIES" means the Voting Shares Beneficially Owned on
the date of a Take-over Bid by an Offeror.
(ee) "PERMITTED BID" means a Take-over Bid made by an Offeror that is made
by means of a Take-over Bid circular and which complies with the
following provisions:
(i) the Take-over Bid contains, and the take-up and payment for
securities tendered or deposited is subject to, an irrevocable
and unqualified condition that no Voting Shares of the
Corporation shall be taken-up or paid for pursuant to the
Take-over Bid (x) prior to the Close of Business on the date
which is not less than 60 days following the date of the
Take-over Bid and (y) unless, at such date, more than 50% of
the then outstanding Voting Shares held by Independent
Shareholders have been deposited pursuant to the Take-over
Bid and not withdrawn;
(ii) the Take-over Bid contains an irrevocable and unqualified
provision that, unless the Take-over Bid is withdrawn, Voting
Shares of the Corporation may be deposited pursuant to the
Take-over Bid at any time during the period of time described
in Clause (i) of this Subsection 1.1(ee) and that any Voting
Shares deposited pursuant to the Take-over Bid may be
withdrawn until taken-up and paid for;
(iii) the Take-over Bid contains an irrevocable and unqualified
provision that in the event that the condition set forth in
Clause (i) of this Subsection 1.1(ee) is satisfied, the Offeror
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making the Take-over Bid will make a public announcement of
that fact and the Take-over Bid will remain open for deposits
and tenders of Voting Shares for not less than 10 days from
the date of such public announcement;
and the term Permitted Bid shall include a Competing Permitted Bid.
(ff) "PERMITTED BID ACQUISITION" means an acquisition of Voting Shares
made pursuant to a Permitted Bid or a Competing Permitted Bid.
(gg) "PERSON" includes any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal personal
representative, government, governmental body or authority, group
(as such term is used in Rule 13d-5 under the 1934 EXCHANGE ACT, as
in effect on the date of this Agreement), corporation or other
incorporated or unincorporated organization.
(hh) "PRO RATA ACQUISITION" means an acquisition as a result of:
(i) a stock dividend or a stock split or other event pursuant to
which a Person receives or acquires Voting Shares or
Convertible Securities on the same pro rata basis as all
other holders of Voting Shares of the same class; or
(ii) any other event pursuant to which all holders of Voting Shares
of the Corporation are entitled to receive Voting Shares or
Convertible Securities on a pro rata basis, including,
without limiting the generality of the foregoing, pursuant to
the receipt or exercise of rights issued by the Corporation and
distributed to all the holders of a series or class of Voting
Shares to subscribe for or purchase Voting Shares or
Convertible Securities of the Corporation, provided that such
rights are acquired directly from the Corporation and not from
any other Person.
(ii) "RECORD TIME" shall have the meaning ascribed to that term in the
Former Rights Plan.
(jj) "REDEMPTION PRICE" has the meaning attributed thereto in Subsection
5.1(a).
(kk) "REGULAR PERIODIC CASH DIVIDEND" shall mean cash dividends paid on
Voting Shares at regular intervals in any fiscal year of the
Corporation to the extent that such cash dividends do not exceed,
in the aggregate in any fiscal year, the greatest of:
(i) 200% of the aggregate amount of cash dividends declared
payable by the Corporation on its Voting Shares in its
immediately preceding fiscal year;
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(ii) 300% of the arithmetic mean of the aggregate amounts of cash
dividends declared payable by the Corporation on its Voting
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.
(ll) "RIGHTS CERTIFICATE" means the certificates representing the Rights
after the Separation Time which shall be substantially in the form
attached hereto as Exhibit A.
(mm) "SECURITIES ACT" shall mean the SECURITIES ACT, R.S.O. 1990, c. s.5
and the rules and regulations thereunder.
(nn) "SEPARATION TIME" shall mean the close of business on the tenth
Trading Day after the earlier of:
(i) the Stock Acquisition Date; and
(ii) the date of the commencement of, or first public announcement
of the intent of any Person (other than the Corporation or any
Subsidiary of the Corporation) to commence, a Take-over Bid
other than a Take-over Bid which is a Permitted Bid or a
Competing Permitted Bid;
or such later date as may from time to time be determined by the Board of
Directors, provided that, if any such Take-over Bid expires, is
cancelled, terminated or otherwise withdrawn prior to the Separation
Time, such Take-over Bid shall be deemed, for purposes of this
Subsection 1.1(nn), never to have been made, and provided further
that if the Board of Directors determines pursuant to Subsections
5.1(b), 5.1(c) or 5.1(d) hereof to waive the application of Section
3.1 hereof to a Flip-in Event, the Separation Time in respect of
such Flip-in Event shall be deemed never to have occurred.
(oo) "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 101 of the
SECURITIES ACT or the 1934 EXCHANGE ACT) of facts indicating that a
Person has become an Acquiring Person.
(pp) "SUBSIDIARY" shall mean, in relation to another corporation, a
corporation which:
(i) is controlled by:
(A) that other corporation; or
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(B) that other corporation and one or more corporations each
of which is controlled by that other corporation; or
(C) two or more corporations each of which is controlled by
that other; or
(ii) is a Subsidiary of a corporation that is that other
corporation's Subsidiary.
(qq) "TAKE-OVER BID" shall mean an Offer to Acquire Voting Shares or
securities convertible into Voting Shares, where the Voting Shares
subject to the Offer to Acquire, together with the Voting Shares into
which the securities subject to the Offer to Acquire are convertible
or exchangeable, and the Offeror's Securities, constitute in the
aggregate 20% or more of the outstanding Voting Shares at the date of
the Offer to Acquire.
(rr) "TERMINATION TIME" shall mean the time at which the right to exercise
Rights shall terminate pursuant to Section 5.1 or 5.20 hereof.
(ss) "TRADING DAY", when used with respect to any securities, shall mean a
day on which the principal Canadian or United States securities
exchange (as determined by the Board of Directors) on which such
securities are listed or admitted to trading is open for the
transaction of business or, if the securities are not listed or
admitted to trading on any Canadian or United States securities
exchange, a Business Day.
(tt) "U.S. - CANADIAN EXCHANGE RATE" shall mean, 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
such manner as may be determined by the Board of Directors
from time to time acting in good faith.
(uu) "U.S. DOLLAR EQUIVALENT" of any amount which is expressed in Canadian
dollars shall mean on any day the United States dollar equivalent of
such amount determined by multiplying such amount by the
U.S.-Canadian Exchange Rate in effect on such date.
(vv) "VOTING SHARES" means the Common Shares of the Corporation and any
other shares of capital stock or voting interests of the Corporation
entitled to vote generally in the election of directors and "Voting
Shares", when used with reference to any Person other than the
Corporation, means Voting Shares of such other Person and any other
shares of capital stock or voting interests of such other Person
entitled to vote generally in the election of the directors of
such other person.
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(ww) "VOTING SHARE REDUCTION" means an acquisition by the Corporation or
the redemption by the Corporation of Voting Shares of the Corporation
which by reducing the number of Voting Shares of the Corporation
outstanding increases the proportionate number of Voting Shares
Beneficially Owned by any Person.
1.2. CURRENCY
All sums of money which are referred to in this Agreement are
expressed in lawful money of Canada, unless otherwise specified.
1.3. NUMBER AND GENDER
Wherever the context so requires, terms used herein importing the
singular number only shall include the plural and vice versa and words
importing any one gender shall include all others.
1.4. SECTIONS AND HEADINGS
The division of this Agreement into Articles, Sections,
Subsections, Clauses and Subclauses and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. The terms "this Agreement", "hereof",
"hereunder" and similar expressions refer to this Agreement and not to any
particular Article, Section or other portion hereof and include any agreement
or instrument supplemental or ancillary hereto. Unless something in the
subject matter or context is inconsistent therewith, references herein to
Articles, Sections, Subsections, Clauses and Subclauses are to Articles,
Sections, Subsections, Clauses and Subclauses of this Agreement.
1.5. STATUTORY REFERENCES
Unless the context otherwise requires, any reference herein to any
act or rule or regulation thereunder shall be deemed to refer to the same as
it may be amended, re-enacted or replaced or, if repealed and there shall be
no replacement therefor, to the same as it was in effect on the date of such
repeal.
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1.6. ACTING JOINTLY OR IN CONCERT
For the purposes of this Agreement, a person is acting jointly or
in concert with every Person who is a party to an agreement, commitment or
understanding, whether formal or informal, with the first mentioned Person or
any Associate or Affiliate of such first mentioned Person to acquire or make
an Offer to Acquire Voting Shares of the Corporation (other than customary
agreements with and between underwriters or banking group members or selling
group members with respect to a distribution of securities or to a pledge of
securities in the ordinary course of business).
1.7. DETERMINATION OF PERCENTAGE OWNERSHIP
For purposes of this Agreement, the percentage of Voting Shares
Beneficially Owned by any Person shall be, and be deemed to be, the product
determined by the formula:
100 X A
B
where
A = the aggregate number of votes for the election of all directors
generally attaching to the Voting Shares Beneficially Owned by
such person; and
B = the aggregate number of votes for the election of all directors
generally attaching to all outstanding Voting Shares.
For purposes of this Agreement, in determining the percentage of
the outstanding Voting Shares with respect to which a Person is or is deemed
to be the Beneficial Owner, all unissued Voting Shares as to which such
Person is deemed the Beneficial Owner shall be deemed outstanding.
ARTICLE 2.
THE RIGHTS
2.1. LEGEND ON VOTING SHARE CERTIFICATES
(a) Certificates for the Voting Shares issued after the Effective Date
but prior to the earlier of (i) the Separation Time and (ii) the
Expiration Time, shall, subject to Subsection 2.3, evidence one Right
for each Voting Share represented thereby and shall have impressed
on, printed on, written on or otherwise affixed to them the following
legend:
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"Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in
the Amended and Restated Shareholder Rights Plan Agreement
(the "Rights Agreement"), dated as of February 28, 2000 between
Moore Corporation Limited (the "Corporation") and Montreal
Trust Company of Canada, as Rights Agent, the terms of which
are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the
Corporation. In certain circumstances, as set forth in the
Rights Agreement, such Rights may be amended or redeemed, may
expire, may become void (if, in certain cases, they are
"Beneficially Owned" by an "Acquiring Person", as such terms
are defined in the Rights Agreement, or a transferee thereof)
or may be evidenced by separate certificates and may no longer
be evidenced by this certificate. The Corporation will mail or
arrange for the mailing of, a copy of the Rights Agreement to
the holder of this certificate without charge promptly after
receipt of a written request therefor."
(b) Certificates representing Voting Shares that are issued and
outstanding on the Effective Date shall evidence one Right for each
Voting Share evidenced thereby, notwithstanding the absence of the
foregoing legend, until the earlier of (i) the Separation Time and
(ii) the Expiration Time.
2.2. EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS
(a) Subject to adjustment as herein set forth, each Right shall entitle
the holder thereof, after the Separation Time and prior to the
Expiration Time, to purchase one Voting Share for the Exercise Price,
or the U.S. Dollar Equivalent of the Exercise Price, as at the
Business Day immediately preceding the Separation Time (which
Exercise Price and number of Voting 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 exerciseable
and no Right may be exercised and (ii) each Right shall be evidenced
by the certificate for the associated Voting Share registered in the
name of the holder thereof and shall be transferable only together
with, and shall be transferred by a transfer of, such associated
Voting Share.
(c) From and after the Separation Time and prior to the Expiration Time,
the Rights may be exercised and the registration and transfer of the
Rights shall be separate from and independent of Voting Shares.
Promptly following the Separation Time, the Corporation shall issue
and the Rights Agent shall mail to each holder of record of Voting
Shares as of the Separation Time (other than an
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Acquiring Person and, in respect of any Rights Beneficially Owned by
such Acquiring Person which are not held of record by such Acquiring
Person, the holder of record of such Rights) at such 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):
(i) a Rights Certificate in substantially the form set out in
Exhibit A hereto, appropriately completed, representing the
number of Rights held by such holder at the Separation Time
and having such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the
Corporation may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required
to comply with any law or with any rule, regulation or
judicial or administrative order made pursuant thereto or with
any rule or regulation of any stock exchange or quotation
system or self-regulatory organization on which the Rights may
from time to time be listed or traded, or to conform to usage,
and
(ii) a disclosure statement prepared by the Corporation describing
the Rights,
provided that such materials shall not be sent to (A) an Acquiring
Person or (B) to a holder of record (a "Nominee") of Voting
Shares or securities convertible into Voting Shares in respect
of any Rights Beneficially Owned by an Acquiring Person; and
the Corporation may require any Nominee or suspected Nominee
to provide such information and documentation as the
Corporation may reasonably require for such purpose.
(d) Rights may be exercised in whole or in part on any Business Day after
the Separation Time and prior to the Expiration Time by submitting
to the Rights Agent (at its office in the city of Toronto, Canada
or at any other office of the Rights Agent in the cities designated
from time to time for that purpose by the Corporation):
(i) the Rights Certificate evidencing such Rights, with an
election to exercise an "Election to Exercise" substantially
in the form attached to the Rights Certificate appropriately
completed and duly executed by the holder or his executors or
administrators or other legal personal representatives or his
or their attorney duly appointed by an instrument in writing
in form and executed in a manner satisfactory to the Rights
Agent; and
(ii) payment by certified cheque or money order payable to the
order of the Rights Agent, of a sum equal to the Exercise
Price multiplied by the number of Rights being exercised and
a sum sufficient to cover any transfer tax or charge which may
be payable in respect of any transfer involved in the transfer
or delivery of Rights Certificates or the issuance or delivery
of certificates for Voting Shares in a name other than that of
the holder of the Rights being exercised.
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(e) Upon receipt of a Rights Certificate, with an Election to Exercise
appropriately completed and duly executed, which does not indicate
that such Rights are null and void as provided by Subsection 3.1(b),
accompanied by payment as set forth in Clause 2.2(d)(ii), the Rights
Agent (unless otherwise instructed in writing by the Corporation)
will thereupon promptly:
(i) requisition from the transfer agent of the Voting Shares
certificates for the number of Voting Shares to be purchased
(the Corporation hereby agreeing to authorize its transfer
agent to comply with all such requisitions);
(ii) after receipt of such Voting Share certificates, deliver the
same to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may
be designated by such holder;
(iii) when appropriate, requisition from the Corporation the amount
of cash, if any, to be paid in lieu of issuing fractional
Voting Shares or fractional Rights;
(iv) after receipt of such cash, deliver such cash to or to the
order of the registered holder of the Rights Certificate;
(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 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 Voting Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Exercise Price), be
duly and validly authorized, executed, issued and delivered
and fully paid and non-assessable;
(ii) take all such action as may reasonably be considered to be
necessary and within its power to comply with any applicable
requirements of the BUSINESS CORPORATIONS ACT (Ontario), the
SECURITIES ACT and the securities legislation of each of the
other provinces and territories of Canada, in connection with
the issuance and delivery of the Rights Certificates and the
issuance of any Voting Shares upon exercise of Rights;
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(iii) use reasonable efforts to cause all Voting Shares issued upon
exercise of Rights to be listed on the stock exchange(s) where
the Voting Shares may be listed at that time;
(iv) cause to be reserved and kept available out of its authorized
and unissued Voting Shares, the number of Voting Shares that,
as provided in this Agreement, will from time to time be
sufficient to permit the exercise in full of all outstanding
Rights;
(v) pay when due and payable, any and all Canadian and United
States federal, provincial and state transfer taxes (not in
the nature of income or withholding taxes) and charges which
may be payable in respect of the original issuance or delivery
of the Rights Certificates or certificates for Voting Shares,
provided that the Corporation shall not be required to pay any
transfer tax or charge which may be payable in respect of any
transfer of Rights or the issuance or delivery of certificates
for Voting Shares issued upon exercise of Rights in a name
other than that of the holder of the Rights being exercised;
and
(vi) after the Separation Time, except as permitted by Section 5.1
or authorized under Section 5.4, not take (or permit any
corporation it controls to take) any action if at the time
such action is taken it is reasonably foreseeable that such
action would diminish substantially or eliminate the benefits
intended to be afforded by the Rights.
2.3. ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
(a) The Exercise Price, the number and kind of securities subject to
purchase upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided
in this Section 2.3. Fractional interests in securities resulting
from such adjustments are subject to Section 5.5;
(b) In the event that the Corporation at any time after the Record Time
and prior to the Expiration Time:
(i) declares or pays a dividend on the Voting Shares payable in
Voting Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Voting Shares)
other than pursuant to any dividend reinvestment plan of the
Corporation and other than a dividend payable in Voting Shares
(or other securities exchangeable for or convertible into or
giving a right to acquire Voting Shares) in lieu of (and
having a value no greater than) a regular periodic cash
dividend;
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(ii) subdivides or changes the then outstanding Voting Shares into
a greater number of Voting Shares;
(iii) consolidates or changes the then outstanding Voting Shares
into a smaller number of Voting Shares;
(iv) issues any Voting Shares (or other securities exchangeable for
or convertible into or giving a right to acquire Voting Shares)
in respect of, in lieu of or in exchange for existing Voting
Shares;
the Exercise Price and the number of Rights outstanding shall be adjusted
as follows:
(A) the Exercise Price in effect after such adjustment will be
equal to the Exercise Price in effect immediately prior to such
adjustment divided by the number of Voting Shares (the
"Adjustment Factor") that a holder of one Voting Share
immediately prior to such dividend, subdivision, change,
consolidation or issuance would hold thereafter as a result
thereof (assuming the exercise of all such exchange or
conversion rights, if any); and
(B) each Right held prior to such adjustment will become that number
of Rights equal to the Adjustment Factor, and the adjusted
number of Rights will be deemed to be distributed among the
Voting 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 Voting Share will have exactly
one Right associated with it.
(c) Adjustments pursuant to Subsection 2.3(b) shall be made successively,
whenever an event referred to in Subsection 2.3(b) occurs.
(d) If an event occurs which would require an adjustment under both this
Section 2.3 and Section 3.1 hereof, the adjustment provided for in
this Section 2.3 shall be in addition to, and shall be made prior
to, any adjustment pursuant to Section 3.1 hereof.
(e) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any Voting Shares or otherwise
change the number of outstanding Voting Shares (otherwise than in a
transaction referred to in Subsection 2.3(b)), each such Voting Share
so issued and each outstanding Voting Share after giving effect to
such change shall automatically have one Right associated with it,
which Right shall be evidenced by the certificate representing such
Voting Share.
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(f) In the event that the Corporation at any time on or after the
Separation Time and prior to the Expiration Time fixes a record date
for the making of a distribution to substantially all holders of
Voting Shares of rights or warrants entitling them (for a period
expiring within 45 calendar days after such record date) to
subscribe for or purchase Voting Shares (or securities convertible
into or exchangeable for or carrying a right to purchase or
subscribe for Voting Shares) at a price per Voting Share (or, in the
case of a security convertible into or exchangeable for or carrying
a right to purchase or subscribe for Voting Shares, having a
conversion, exchange or exercise price per share (including the
price required to be paid to purchase such convertible or
exchangeable security or right)) less than 90 per cent of the Market
Price per Voting Share on such record date, the Exercise Price shall
be adjusted. The Exercise Price in effect after such record date
will equal the Exercise Price in effect immediately prior to such
record date multiplied by a fraction, of which the numerator shall
be the number of Voting Shares outstanding on such record date plus
the number of Voting Shares which the aggregate offering price of
the total number of Voting 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 Voting Share and of which the denominator
shall be the number of Voting Shares outstanding on such record date
plus the number of additional Voting Shares to be offered for
subscription or purchase (or into which the convertible or
exchangeable securities or rights to be so offered are initially
convertible, exchangeable or exercisable). In case such subscription
price may be paid in a 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. To the extent
that such rights or warrants are not exercised prior to the
expiration thereof, the Exercise Price shall be readjusted to the
Exercise Price which would then be in effect based on the number of
Voting Shares (or securities convertible into or exchangeable for
Voting Shares) actually issued upon the exercise of such rights. For
purposes of this Agreement, the granting of the right to purchase
Voting Shares (whether from treasury shares or otherwise) pursuant
to any dividend reinvestment plan and/or any share purchase plan (so
long as such right to purchase is in no case evidenced by the
delivery of rights or warrants by the Corporation) shall not be
deemed to constitute an issue of rights or warrants by the
Corporation; provided, however, that, in the case of any dividend
reinvestment plan or share purchase plan, the right to purchase
Voting Shares is at a price per share of not less than 90 per cent
of the current market price per share (determined in accordance with
such plans) of the Voting Shares.
(g) In the event that the Corporation at any time on or after the
Separation Time and prior to the Expiration Time fixes a record date
for the making of a distribution to substantially all holders of
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Voting Shares of (i) evidences of indebtedness or assets (other than
a Regular Periodic Cash Dividend or a dividend paid in Voting Shares
but including any dividend payable in securities other than Voting
Shares) or (ii) rights or warrants entitling them to subscribe for
or purchase Voting Shares (or securities convertible into or
exchangeable for or carrying a right to purchase or subscribe for
Voting Shares) at a price per Voting Share (or, in the case of a
security convertible into or exchangeable for or carrying a right to
purchase or subscribe for Voting Shares, having a conversion,
exchange or exercise price per share (including the price required
to be paid to purchase such convertible or exchangeable security or
right) less than 90 per cent of the Market Price per Voting Share on
such record date (excluding rights or warrants referred to in
Subsection 2.3 (c)), then, in the case of each of (i) or (ii), the
Exercise Price in effect after such record date shall be equal to
the Exercise Price in effect immediately prior to such record date
less the fair market value (as determined by the Board of Directors)
of the portion of the assets, evidences of indebtedness, rights or
warrants so to be distributed applicable to a Voting Share.
(h) Each adjustment made pursuant to this Section 2.3 shall be made as of:
(i) the payment or effective date for the applicable dividend,
subdivision, change, consolidation or issuance, in the case of
an adjustment made pursuant to Subsection 2.3(b); and
(ii) the record date for the applicable dividend or distribution, in
the case of an adjustment made pursuant to Subsections 2.3(f)
or (g).
(i) In the event that the Corporation shall at any time on or after the
Separation Time and prior to the Expiration Time issue any shares of
capital stock (other than Voting Shares), or rights or warrants to
subscribe for or purchase any such capital stock, or securities
convertible into or exchangeable for any such capital stock, in a
transaction referred to in Clause (i) or (v) of Subsection 2.3(b),
if the Board of Directors acting in good faith determines that the
adjustments contemplated by Subsections 2.3(b), (f) or (g) in
connection with such transaction will not appropriately protect the
interests of the holders of Rights, the Corporation may determine
what other adjustments to the Exercise Price, number of Rights
and/or securities purchasable upon exercise of Rights would be
appropriate and, notwithstanding Subsections 2.3(b), (f) and (g),
such adjustments, rather than the adjustments contemplated by
Subsections 2.3(b), (f) and (g) shall be made. The Corporation and
the Rights Agent shall amend this Agreement, in accordance with
Section 5.4, as appropriate to provide for such adjustments.
(j) Notwithstanding anything herein to the contrary, no adjustment of
the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least one per cent in such
Exercise Price; provided, however, that any adjustments which by
reason of this Subsection 2.3 (j) are not required to be made shall
be carried forward and taken into account in any
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subsequent adjustment. All adjustments made pursuant to this Section
2.3 shall be made to the nearest cent or to the nearest one
ten-thousandth of a Voting Share or a Right, as the case may be.
(k) All Rights originally issued by the Corporation subsequent to any
adjustment made to an Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of
Voting Shares purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(l) Unless the Corporation shall have exercised its election, as
provided in Subsection 2.3(m), upon each adjustment of an Exercise
Price as a result of the calculations made in Subsections 2.3 (f)
and (g), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at
the adjusted Exercise Price, that number of Voting Shares obtained
by:
(i) multiplying (A) the number of Voting Shares covered by a Right
immediately prior to this adjustment, by (B) the relevant
Exercise Price in effect immediately prior to such adjustment
of the relevant Exercise Price; and
(ii) dividing the product so obtained by the relevant Exercise Price
in effect immediately after such adjustment of the relevant
Exercise Price.
(m) The Corporation may elect on or after the date of any adjustment of
an Exercise Price to adjust the number of Rights, in lieu of any
adjustment in the number of Voting Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the
number of Voting Shares for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become the
number of Rights obtained by dividing the relevant Exercise Price in
effect immediately prior to adjustment of the relevant Exercise
Price by the relevant Exercise Price in effect immediately after
adjustment of the relevant Exercise Price. The Corporation shall
make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This record
date may be the date on which the relevant Exercise Price is
adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least 10 calendar days later than the date
of the public announcement. If Rights Certificates have been
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issued, upon each adjustment of the number of Rights pursuant to
this Subsection 2.3 (m) the Corporation shall, as promptly as
practicable, cause to be distributed to holders of record of Rights
Certificates on such record date, Rights Certificates evidencing,
subject to Section 5.5, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option
of the Corporation, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates
held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Corporation, new Rights
Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein and may bear, at the option of the
Corporation, the relevant adjusted Exercise Price and shall be
registered in the names of holders of record of Rights Certificates
on the record date specified in the public announcement.
(n) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates
heretofore and hereafter issued may continue to identify the
securities so purchasable which were identified in the Rights
Certificates issued hereunder.
(o) In any case in which this Section 2.3 shall require that an
adjustment in an Exercise Price be made effective as of a record
date for a specified event, the Corporation may elect to defer until
the occurrence of such event the issuance to the holder of any Right
exercised after such record date of the number of Voting Shares and
other securities of the Corporation, if any, issuable upon such
exercise over and above the number of Voting Shares and other
securities of the Corporation, if any, issuable upon such exercise
on the basis of the relevant Exercise Price in effect prior to such
adjustment; provided, however, that the Corporation shall deliver to
such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional Voting Shares
(fractional or otherwise) or other securities upon the occurrence of
the event requiring such adjustment.
(p) Notwithstanding anything in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required
by this Section 2.3, as and to the extent that in its good faith
judgment the Board of Directors shall determine to be advisable in
order that any (i) subdivision or consolidation of the Voting
Shares, (ii) issuance wholly for cash of any Voting Shares at less
than the applicable Market Price, (iii) issuance wholly for cash of
any Voting Shares or securities that by their terms are exchangeable
for or convertible into or give a right to acquire Voting Shares,
(iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 2.3, hereafter made by the Corporation to
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holders of its Voting Shares, subject to applicable taxation laws,
shall not be taxable to such shareholders.
(q) Whenever an adjustment to the Exercise Price or a change in the
securities purchasable upon exercise of the Rights is made pursuant
to this Section 2.3, the Corporation shall:
(i) promptly file with the Rights Agent and with the transfer agent
for the Voting Shares a certificate specifying the particulars
of such adjustment or change; and
(ii) promptly on or after the Separation Time cause notice of the
particulars of all prior adjustments or changes to be given to
the holders of the Rights.
Failure to file such certificate or to cause such notice to be given as
aforesaid, or any defect therein, shall not affect the validity of
any such adjustment or change.
2.4. DATE ON WHICH EXERCISE IS EFFECTIVE
Each Person in whose name any certificate for Voting Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of the Voting Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered (together with an appropriately
completed and a duly executed Election to Exercise) and payment of the
Exercise Price for such Rights (and any applicable transfer taxes and other
governmental charges payable by such person hereunder) was made in accordance
with Subsection 2.2(d); provided, however, that if the date of such surrender
and payment is a date upon which the Voting 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 Voting 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 Chief Executive Officer, its Chief Financial
Officer or its Secretary. The signature of any of these officers on
the Rights Certificates may be manual or facsimile. Rights
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Corporation shall bind the Corporation, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to
the countersignature and delivery of such Rights Certificates.
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(b) Promptly following the Separation Time, the Corporation will notify
the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Corporation to the Rights Agent for
countersignature, together with a disclosure statement describing
the Rights, and the Rights Agent shall countersign (manually or by
facsimile signature in a manner satisfactory to the Corporation) and
mail such Rights Certificates and disclosure statement to the
holders of the Rights pursuant to Subsection 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, REGISTRATION OF TRANSFER AND EXCHANGE
(a) After the Separation Time, the Corporation will cause to be kept a
register (the "Rights Register") in which, subject to such
reasonable regulations as it may prescribe, the Corporation will
provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Corporation and registering
Rights and transfers and exchanges of Rights as herein provided. In
the event that the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent will have the right to examine the
Rights Register at all reasonable times.
(b) After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Subsections 2.6(d) and
3.1(b), the Corporation will execute, and the Rights Agent will
countersign, deliver and register, in the name of the holder or the
designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights
Certificates so surrendered.
(c) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be the valid obligations of the
Corporation, and such Rights shall be entitled to the same benefits
under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(d) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Corporation or
the Rights Agent, as the case may be, duly executed by the holder
thereof or such holder's attorney duly authorized in writing. As a
condition to the issuance of any new Rights Certificate under this
Section 2.6, the Corporation may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the
fees and expenses of the Rights Agent) connected therewith.
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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.
(b) If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of
the destruction, loss or theft of any Rights Certificate and (ii)
such security or indemnity as may be required by them to save each
of them and any of their agents harmless, then, in the absence of
notice to the Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the
Corporation shall execute and upon its request the Rights Agent
shall countersign and deliver, in lieu of any such destroyed, lost
or stolen Rights Certificate, a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.7, the Corporation may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the
fees and expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7 in
lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the
Corporation, whether or not the destroyed, lost or stolen Rights
Certificate shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights duly issued hereunder.
2.8. PERSONS DEEMED OWNERS
Prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Voting Share certificate) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation
or the Rights Agent may deem and treat the Person in whose name such Rights
Certificate (or, prior to the Separation Time, such Voting Share certificate)
is registered as the absolute owner thereof and of the Rights evidenced
thereby for all purposes whatsoever. As used in this Agreement, unless the
context otherwise requires, the term "holder" of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated Voting Shares).
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2.9. DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case,
shall be promptly cancelled by the Rights Agent. The Corporation may at any
time deliver to the Rights Agent for cancellation any Rights Certificates
previously countersigned and delivered hereunder which the Corporation may
have acquired in any manner whatsoever, and all Rights Certificates so
delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificate shall be countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.9, except as expressly
permitted by this Agreement. The Rights Agent shall, subject to applicable
law, destroy all cancelled Rights Certificates and deliver a certificate of
destruction to the Corporation.
2.10. AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights by accepting the same consents and agrees with
the Corporation and the Rights Agent and with every other holder of Rights that:
(a) such holder shall be bound by and subject to the provisions of this
Agreement, as amended from time to time in accordance with the terms
hereof, in respect of all Rights held;
(b) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the
associated Voting Share certificate representing such Right;
(c) after the Separation Time, the Rights will be transferable only on
the Rights Register as provided herein;
(d) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Voting Share certificate) for
registration of transfer, the Corporation, the Rights Agent and any
agent of the Corporation or the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Voting Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on
such Rights Certificate or the associated Voting Share certificate
made by anyone other than the Corporation or the Rights Agent) for
all purposes whatsoever, and neither the Corporation nor the Rights
Agent shall be affected by any notice to the contrary;
(e) such holder is not entitled to receive any fractional Rights or any
fractional Voting Shares upon the exercise of Rights;
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(f) that, subject to the provisions of Section 5.4, without the approval
of any holder of Rights and upon the sole authority of the Board of
Directors this Agreement may be supplemented or amended from time to
time as provided herein; and
(g) that notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any
liability whatsoever to any holder of a Right or any other Person as
a result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent injunction
or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation.
ARTICLE 3.
ADJUSTMENTS TO THE RIGHTS UPON FLIP-IN EVENT
3.1. FLIP-IN EVENT
(a) Subject to Subsection 3.1(b) and Section 5.1 hereof, in the event
that prior to the Expiration Time a Flip-in Event shall occur, each
Right shall constitute, effective from and after the Close of
Business on the tenth Trading Day following the Stock Acquisition
Date, the right to purchase from the Corporation, upon exercise
thereof in accordance with the terms hereof, that number of Voting
Shares of the Corporation having an aggregate Market Price on the
date of consummation or occurrence of such Flip-in Event equal to
twice the Exercise Price upon payment to the Corporation of an
amount in cash equal to the Exercise Price (such right to be
appropriately adjusted pursuant to Section 2.3 in the event that
after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.3 shall have
occurred with respect to the Voting Shares).
(b) Subject to Section 5.1 but notwithstanding any other provision of
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, direct or indirect, 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
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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 that has the purpose or effect
of avoiding Clause (i) of this Section 3.1(b),
shall become 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 shall have no
other rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The holder of any
Rights represented by a Rights Certificate which is submitted to the
Rights Agent upon exercise or for registration of transfer or
exchange which does not contain the necessary certifications set
forth in the Rights Certificate establishing that such Rights are
not void under this Subsection 3.1(b) shall be deemed to be an
Acquiring Person for the purposes of this Subsection 3.1(b) and such
Rights shall become null and void.
(c) Any Rights Certificate that represents Rights Beneficially Owned by
a Person described in either Clause (i) or (ii) of Subsection 3.1(b)
or transferred to any nominee of any such Person, and any Rights
Certificate issued upon transfer, exchange, replacement or
adjustment of any Rights Certificate referred to in this sentence,
shall contain the following legend:
"The Rights represented by this Rights Certificate are or were
Beneficially Owned by a Person who was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person or who was
acting jointly or in concert with such Person. This Rights
Certificate and the Rights represented hereby are void."
provided that the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition
of such legend but shall impose such legend only if instructed to do
so by the Corporation in writing or if a holder fails to certify
upon transfer or exchange in the space provided on the Rights
Certificate that such holder is not a Person described in Subsection
3.1(b). The issuance of a Rights Certificate without the legend
referred to in this Subsection 3.1(c) shall not affect the
application of Subsection 3.1(b)
(d) After the Separation Time, the Corporation shall do all such acts
and things as are 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 CORPORATION ACT (Ontario),
the SECURITIES ACT, the securities laws or comparable legislation in
each of the provinces of Canada and in any other jurisdiction where
the Corporation is subject to such laws, and the rules of the stock
exchanges where the Voting Shares are listed at such time, in
connection with the issue of Voting Shares upon the exercise of
Rights in accordance with this Agreement.
- 33 -
ARTICLE 4.
THE RIGHTS AGENT
4.1. GENERAL
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation and the holders of Rights in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Corporation may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. In the event
the Corporation appoints one or more Co-Rights Agents, the
respective duties of the Rights Agent and Co-Rights Agents shall be
as the Corporation may determine with the approval of the Rights
Agent and the Co-Rights Agent. The Corporation agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the execution and administration of this Agreement and
the exercise and performance of its duties hereunder (including the
fees and disbursements of any expert retained by the Rights Agent).
The Corporation also agrees to indemnify the Rights Agent, its
directors, officers, employees and agents for, and to hold it
harmless against, any loss, liability, cost, claim, action, suit,
damage or expense, incurred without gross negligence, bad faith or
wilful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance,
execution and administration of this Agreement, including but not
limited to the costs and expenses of defending against any claim of
liability, which right to indemnification will survive the
termination of this Agreement and the resignation or removal of the
Rights Agent.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance
upon any certificate for Voting Shares, Rights Certificate,
certificate for other securities of the Corporation, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
(c) The Corporation shall inform the Rights Agent in a reasonably timely
manner of events which may materially affect the administration of
this Agreement by the Rights Agent and, at any time upon request,
shall provide to the Rights Agent an incumbency certificate
certifying the then current officers of the Corporation.
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4.2. MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or amalgamated or with which it may be
consolidated, or any corporation resulting from any merger,
amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation succeeding to
the shareholder or stockholder services business of the Rights Agent
or any successor Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 4.4 hereof.
In case, at the time such successor Rights Agent succeeds to the
agency created by this Agreement, any of the Rights Certificates
have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights Agent
and deliver such Right Certificates so countersigned; and in case at
that time any of the Rights Certificates have not been
countersigned, any successor Right Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or
in the name of the successor Rights Agent; and in all such cases
such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
4.3. DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Corporation and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may retain and consult with legal counsel (who may
be legal counsel for the Corporation and the opinion of such counsel
will be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion; the Rights Agent may also, with the
approval of the Corporation (such approval not to be unreasonably
withheld) and at the expense of the Corporation, consult with such
other experts as the Rights Agent shall consider necessary or
appropriate to properly carry out the duties and obligations imposed
under this Agreement and the Rights Agent shall be entitled to rely
in
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good faith on the advice of any such expert. Any remuneration
so paid by the Rights Agent shall be repaid to the Rights Agent in
accordance with Section 4.1(a).
(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, a Vice-Chairman of the Board, the President, any
Vice-President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Corporation and
delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own gross
negligence, bad faith or wilful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Voting Shares or the Rights Certificates (except
its countersignature thereof) or be required to verify the same, but
all such statements and recitals are and will be deemed to have been
made by the Corporation only.
(e) The Rights Agent will not be under any responsibility in respect of:
(i) the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery
hereof by the Rights Agent) or in respect of the validity or
execution of any Voting Share certificate or Rights Certificate
(except its countersignature thereof);
(ii) any breach by the Corporation of any covenant or condition
contained in this Agreement or in any Rights Certificate;
(iii) any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Subsection 3.1(b) hereof);
(iv) any adjustment made under the provisions of Section 2.3 hereof;
(v) 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 a certificate contemplated by Subsection
2.3(r) describing any such adjustment);
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(vi) will not by any act hereunder be deemed to make any
representation or warranty as to the authorization of any
Voting Shares to be issued pursuant to this Agreement or any
Rights or as to whether any Voting Shares will, when issued, be
duly and validly authorized, executed, issued and delivered and
fully paid and non-assessable.
(f) The Corporation agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any person believed by the Rights Agent to be the Chairman of
the Board, a Vice Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer or the Secretary
or Assistant Secretary of the Corporation, and to apply to such
persons for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered by it in
good faith in reliance upon instructions of any such person: it is
understood that instructions to the Rights Agent shall, except where
circumstances make it impracticable or the Rights Agent otherwise
agrees, be given in writing and, where not in writing, such
instructions shall be confirmed in writing as soon as reasonably
possible after the giving of such instructions.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in Voting Shares, Rights
or other securities of the Corporation or become pecuniarily
interested in any transaction in which the Corporation may be
interested, or contract with or lend money to the Corporation or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Corporation or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act, omission,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Corporation resulting from any such act,
omission, default, neglect or misconduct, provided reasonable care
was exercised in the selection and continued employment of such
attorney or agent.
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4.4. CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties under
this Agreement upon 60 days' notice (or such lesser notice as is acceptable to
the Corporation) in writing mailed to the Corporation and to the transfer
agent of Voting Shares by registered and certified mail, and to the holders of
the Rights in accordance with Section 5.9, all of which shall be at the
expense of the Corporation. The Corporation may remove the Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent and to the transfer
agent of the Voting Shares by registered or certified mail and to the holders
of the Rights in accordance with Section 5.9. If the Rights Agent should
resign or be removed or otherwise become incapable of acting, the Corporation
will appoint a successor to the Rights Agent. If the Corporation fails to make
such appointment within a period of 30 days after such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent then the holder of any Rights (which holder shall,
with such notice, submit such holder's Rights Certificate for inspection by
the Corporation) may (at the Corporation's expense) 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 authorized to carry on the business of a trust company in the
Province of Ontario. After appointment, the successor Rights Agent will be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall, upon payment in full of any outstanding
amounts owing by the Corporation to the Rights Agent under this Agreement,
deliver and transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Corporation will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent
of the Voting Shares, and mail a notice thereof to the holders of the Rights.
Failure to give any notice provided for in this Section 4.4, however, or any
defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
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ARTICLE 5.
MISCELLANEOUS
5.1. REDEMPTION AND TERMINATION
(a) The Board of Directors acting in good faith may, with prior
shareholder approval, and at any time prior to the occurrence of a
Flip-in Event, elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.0001 per Right
appropriately adjusted in a manner analogous to the applicable
adjustments provided for in Section 2.3 if an event of a type
analogous to any of the events described in Section 2.3 shall have
occurred (such redemption price being herein referred to as the
"Redemption Price").
(b) The Board of Directors acting in good faith 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, following the Stock
Acquisition Date and prior to the Separation Time, that a Person
became an Acquiring Person by inadvertence and without any intention
to become, or knowledge that it would become, an Acquiring Person
under this Agreement and, in the event that such a waiver is granted
by the Board of Directors, such Stock Acquisition Date shall be
deemed not to have occurred. Any such waiver pursuant to this
Subsection 5.1(b) may only be given on the condition that such Person,
within 30 days after the foregoing determination by the Board of
Directors or such later date as the Board of Directors may determine
(the "Disposition Date"), has reduced its Beneficial Ownership of
Voting Shares such that the Person is no longer an Acquiring Person.
If the Person remains an Acquiring Person at the Close of Business
on the Disposition Date, the Disposition Date shall be deemed to be
the date of occurrence of a further Stock Acquisition Date and
Section 3.1 shall apply thereto.
(c) The Board of Directors acting in good faith may, prior to the
occurrence of the relevant Flip-in Event, upon prior written notice
delivered to the Rights Agent, determine to waive the application of
Section 3.1 to a Flip-in Event that may occur by reason of a
Take-over Bid made by means of a Take-over Bid circular to all
holders of Voting Shares, provided that if the Board of Directors
waives the application of Section 3.1 in respect of a Take-over Bid
pursuant to this Subsection 5.1(c), the Board of Directors shall be
deemed to have waived the application of Section 3.1 in respect of
any other Take-over Bid made by means of a Take-over Bid circular to
all holders of Voting Shares prior to the expiry of any Take-over Bid
in respect of which a waiver is, or is deemed to have been, granted
under this Subsection 5.1(c).
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(d) The Board of Directors acting in good faith may, prior to the Close
of Business on the tenth Trading Day following a Stock Acquisition
Date or such later Trading Day as the Board of Directors may from
time to time determine, upon prior written notice delivered to the
Rights Agent, waive the application of Section 3.1 to the relevant
Flip-in Event, provided that the Acquiring Person has reduced its
Beneficial Ownership of Voting Shares (or has entered into a
contractual arrangement with the Corporation acceptable to the Board
of Directors to do so within 10 days of the date on which such
contractual arrangement is entered into or such later date as the
Board of Directors may determine) such that at the time the waiver
becomes effective pursuant to this Subsection 5.1(d) such Person is
no longer (or would no longer be) an Acquiring Person. In the event
of such a waiver becoming effective prior to the Separation Time,
such Flip-in Event shall be deemed not to have occurred.
(e) Where a Person acquires pursuant to a Permitted Bid or a Competing
Permitted Bid outstanding Voting Shares, other than Voting Shares
Beneficially Owned by such Person at the date of such Permitted Bid
or Competing Permitted Bid, then the Corporation shall immediately
upon the consummation of such acquisition redeem the Rights at the
Redemption Price.
(f) Where a Take-over Bid that is not a Permitted Bid is withdrawn or
otherwise terminated after the Separation Time has occurred and prior
to the occurrence of a Flip-In Event, the Board of Directors may
elect to redeem all the outstanding Rights at the Redemption Price.
In such event, all the provisions of this Agreement shall continue to
apply as if the Separation Time had not occurred and as if Rights
Certificates representing the number of Rights held by each holder of
Voting Shares as of the Separation Time had not been mailed to each
such holder and for all purposes of this Agreement the Separation
Time shall be deemed not to have occurred.
(g) If the Board of Directors elects or the Corporation is obliged to
redeem the Rights, the right to exercise the Rights will thereupon
without further action and without notice terminate and the only
right thereafter of the holder of a Right shall be to receive the
Redemption Price. Within 10 days of the Board of Directors electing
or being deemed to have elected to redeem the Rights, the Corporation
shall give notice of such redemption to the holders of the then
outstanding Rights. Each such notice of redemption shall state the
method by which the payment of the Redemption Price shall be made.
5.2. EXPIRATION
No Person shall have any rights pursuant to this Agreement or in
respect of any Right after the Expiration Time, except the Rights Agent as
specified in Section 4.1(a) of this Agreement.
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5.3. ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board
of Directors to reflect any adjustment or change in the number of Voting
Shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.
5.4. SUPPLEMENTS AND AMENDMENTS
(a) The Corporation may from time to time supplement, amend or vary this
Agreement without the approval of any holder of Rights or Voting
Shares to correct any clerical or typographical error or to maintain
the validity of the Agreement as a result of any change in any
applicable legislation, rules or the regulations thereunder.
(b) Any supplement, amendment or variation made by the Board of Directors
pursuant to Subsection 5.4(a) shall:
(i) if made prior to the Separation Time, be submitted to the
holders of Voting Shares at the next meeting of shareholders
of the Corporation and the holders of Voting Shares may, by
resolution passed by a majority of the votes cast by
Independent Shareholders who vote in respect of such
supplement, amendment or variation, confirm or reject such
supplement, amendment or variation; or
(ii) if made after the Separation Time, be submitted to the holders
of Rights at a meeting to be held on a date not later than the
date of the next meeting of shareholders of the Corporation
and the holders of Rights may, by resolution passed by a
majority of the votes cast by the holders of Rights who vote
in respect of such supplement, amendment or variation confirm
or reject such supplement, amendment or variation.
(c) Any supplement, amendment or variation pursuant to Subsection 5.4(a)
shall be effective from the date of the resolution of the Board of
Directors adopting such supplement, amendment or variation and shall
continue in effect until it ceases to be effective in accordance with
this Subsection. If a supplement, amendment or variation pursuant to
Subsection 5.4(a) is not approved by the holders of Voting Shares or
the holders of Rights or is not submitted to the holders of Voting
Shares or the holders of Rights as required pursuant to Clauses (i)
or (ii) of Subsection 5.4(b), then such supplement, amendment or
variation shall cease to be effective from and after the termination
of the meeting at which it was not approved 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 supplement,
amend or vary any
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provision of this Agreement to substantially the same effect shall be
effective until confirmed by the holders of Voting Shares or the
holders of Rights, as the case may be.
(d) The Corporation may, with the prior consent of the holders of Voting
Shares obtained as set forth below, at any time before the Separation
Time, supplement, 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 approved 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
(e) The Corporation may, with the prior consent of the holders of Rights
obtained as set forth below, at any time after the Separation Time,
supplement, 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 approved by the affirmative vote of a
majority of the votes cast by the holders of Rights (other than any
holder of Rights whose Rights have become null and void pursuant to
the provisions hereof) present or represented at and entitled to vote
at a meeting of the holders of Rights. For the purposes hereof, the
procedures for the calling, holding and conduct of a meeting of the
holders of Rights shall be those, as nearly as may be, which are
provided in the Corporation's by-laws with respect to meetings of its
shareholders.
(f) For greater certainty, neither the exercise by the Board of Directors
of any power or discretion conferred on it hereunder nor the making
by the Board of Directors of any determination or the granting of any
waiver it is permitted to make or give hereunder shall constitute an
amendment, variation or rescission of the provisions of this
Agreement or the Rights for purposes of this Section 5.4 or
otherwise.
(g) Notwithstanding anything in this Section 5.4 to the contrary, no such
supplement, amendment, variation or rescission shall be made to the
provisions of Article 4 except with the written concurrence of the
Rights Agent to such supplement, amendment, variation or rescission.
The Corporation shall be required to provide the Rights Agent with
notice in writing of any such supplement, amendment, variation or
rescission within 5 days of effecting such supplement, amendment,
variation or rescission.
5.5. FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights.
After the Separation Time, there shall be paid to the
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registered holders of the Rights Certificates with regard to which
fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Market Price of a whole Right in
lieu of such fractional Rights. The Rights Agent shall have no
obligation to make any payments in lieu of fractional Rights unless
the Corporation shall have provided the Rights Agent with the
necessary funds to pay in full all amounts payable in accordance with
Section 2.2(e).
(b) The Corporation shall not be required to issue fractional Voting
Shares upon exercise of the Rights or to distribute certificates
which evidence fractional Voting Shares. In lieu of issuing
fractional Voting Shares, the Corporation shall pay to the registered
holder of Rights at the time such Rights are exercised as herein
provided, an amount in cash equal to the same fraction of the Market
Price of one Voting Share. The Rights Agent shall have no obligation
to make any payments in lieu of fractional Voting Shares unless the
Corporation shall have provided the Rights Agent with the necessary
funds to pay in full all amounts payable in accordance with Section
2.2(e).
5.6. RIGHTS OF ACTION
Subject to the terms of this Agreement, rights of action in respect
of this Agreement, other than rights of action vested solely in the Rights
Agent, are vested in the respective holders of the Rights; and any holder of
any Rights, without the consent of the Rights Agent or of the holder of any
other Rights, may, on such holder's own behalf and for such holder's own
benefit and the benefit of other holders of Rights, enforce, and may
institute and maintain any suit, action or proceeding against the Corporation
to enforce, or otherwise act in respect of, such holder's right to exercise
such holder's Rights in the manner provided in this Agreement and in such
holder's Rights Certificate. Without limiting the foregoing or any remedies
available to the holders of Rights it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
5.7. HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER
No holder, as such, of any Rights shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of Voting Shares or
any other securities which may at any time be issuable on the exercise of
such Rights, nor shall anything contained herein or in any Rights Certificate
be construed to confer upon the holder of any Rights, as such, any of the
rights of a shareholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except
as provided in Section 5.8 hereof), or to receive dividends or subscription
rights or otherwise, until such Rights shall have been exercised in
accordance with the provisions hereof.
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5.8. NOTICE OF PROPOSED ACTIONS
In case the Corporation shall propose after the Separation Time and
prior to the Expiration Time to effect the liquidation, dissolution or
winding-up of the Corporation or the sale of all or substantially all of the
Corporation's assets, then, in each case, the Corporation shall give to each
holder of a Right a notice of such proposed action which shall specify the
date on which such liquidation, dissolution, or winding up is to take place,
and such notice shall be so given at least 20 Business Days prior to the date
of taking of such proposed action by the Corporation.
5.9. NOTICES
Notices or demands authorized or required by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights to or on the
Corporation shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, or by facsimile transmission addressed
(until another address is filed in writing with the Rights Agent) as follows:
Moore Corporation Limited
72nd Floor, P.O. Box 78
1 First Canadian Place
Toronto, Ontario
M5X 1G5
Attention: The Secretary
Fax: (416) 364-1667
Notices or demands authorized or required by this Agreement to be
given by the Corporation or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, or by facsimile transmission addressed (until another
address is filed in writing with the Corporation) as follows:
Montreal Trust Company of Canada
151 Front Street West, 8th Floor
Toronto, Ontario
M5J 2N1
Attention: Senior Manager - Client Services
Fax: (416) 981-9800
Notices or demands authorized or required by this Agreement to be
given or made by the Corporation or the Rights Agent to or on the holder of
any Rights shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as it appears upon the
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Rights Register or, prior to the Separation Time, on the register of the
Corporation for the Voting Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice.
5.10. COSTS OF ENFORCEMENT
The Corporation agrees that if the Corporation or any other Person
the securities of which are purchasable upon exercise of Rights fails to
fulfil any of its obligations pursuant to this Agreement, then the
Corporation shall reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in any successful
action to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.11. REGULATORY APPROVALS
Any obligation of the Corporation or action or event contemplated
by this Agreement shall be subject to the receipt of any required approval or
consent from any governmental or regulatory authority. Without limiting the
generality of the foregoing, any issuance or delivery of securities of the
Corporation upon the exercise of Rights and any amendment to this Agreement
shall be subject, if required, to the consent of The Toronto Stock Exchange.
5.12. DECLARATION AS TO NON-CANADIAN AND NON-U.S. HOLDERS
If in the opinion of the Board of Directors (who may rely upon the
advice of counsel) any action or event contemplated by this Agreement would
require compliance with the securities laws or comparable legislation of a
jurisdiction outside Canada and the United States of America, the Board of
Directors acting in good faith may take such actions as it may deem
appropriate to ensure that such compliance is not required, including without
limitation establishing procedures for the issuance to a Canadian resident
fiduciary of Rights or securities issuable on exercise of Rights, the holding
thereof in trust for the Persons entitled thereto (but reserving to the
fiduciary or to the fiduciary and the Corporation, as the Corporation may
determine, absolute discretion with respect thereto) and the sale thereof and
remittance of the proceeds of such sale, if any, to the Persons entitled
thereto. In no event shall the Corporation or the Rights Agent be required to
issue or deliver Rights or securities issuable on exercise of Rights to
Persons who are citizens, residents or nationals of any jurisdiction other
than Canada and any province or territory thereof and the United States of
America in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes.
5.13. SUCCESSORS
All the covenants and provisions of this Agreement by or for the
benefit of the Corporation or the Rights Agent shall bind and enure to the
benefit of their respective successors and assigns hereunder.
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5.14. BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person
other than the Corporation, the Rights Agent and the holders of the Rights
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Corporation, the
Rights Agent and the holders of the Rights.
5.15. GOVERNING LAW
This Agreement and each Right issued hereunder shall be deemed to
be a contract made under the laws of the Province of Ontario and for all
purposes shall be governed by and construed in accordance with the laws of
such province applicable to contracts to be made and performed entirely
within such Province.
5.16. LANGUAGE
Les parties aux presentes ont exigees que la presente convention
ainsi que tous les documents et avis qui s'y rattachent et/ou qui en
decouleront soient rediges en langue anglaise. The parties hereto have
required that this Agreement and all documents and notices related thereto
and/or resulting therefrom be in the English language.
5.17. COUNTERPARTS
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
5.18. SEVERABILITY
If any term or provision hereof or the application thereof to any
circumstance is, in any jurisdiction and to any extent, invalid or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other
than those as to which it is held invalid or unenforceable.
5.19. EFFECTIVE DATE
This Agreement shall be effective on and from the date of
termination of the annual meeting of the Corporation in the year 2000 if the
resolution referred to in Section 5.20 to be submitted to the annual meeting
of the Corporation in the year 2000 is submitted to Independent Shareholders
for their consideration and approval and if such approval is given by the
Independent Shareholders in accordance with Section 5.20 (the "Effective
Date").
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5.20. SHAREHOLDER APPROVAL
At each of (i) the annual meeting of shareholders of the
Corporation held in the year 2000 and (ii) the annual meeting of shareholders
of the Corporation held in the year 2003, provided that a Flip-in Event has
not occurred prior to such time (other than a Flip-in Event in respect of
which the application of Section 3.1 has been waived pursuant to Section
5.1), the Board of Directors shall submit a resolution to the Independent
Shareholders for their consideration and approval, ratifying this Agreement
and its continued existence after each such meeting. If a majority of the
votes cast by Independent Shareholders who vote in respect of such resolution
at any such meeting are not voted in favour of this Agreement and its
continued existence, then the Board of Directors shall immediately upon the
confirmation by the Chairman of such shareholders' meeting of the result of
the vote on such resolution, without further formality, be deemed to have
elected to redeem the Rights at the Redemption Price.
5.21. TIME OF THE ESSENCE
Time shall be of the essence hereof.
5.22. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
All actions and determinations (including all omissions with
respect to the foregoing) which are done or made by the Board of Directors in
good faith pursuant to this Agreement shall not subject the Board of
Directors to any liability to the holders of the Rights or any other Person.
5.23. FIDUCIARY DUTIES OF THE BOARD OF DIRECTORS
For greater certainty, nothing contained herein shall be construed
to suggest or imply that the Board of Directors shall not be entitled to
recommend that holders of Voting Shares reject or accept any Take-over Bid
(whether or not such Take-over Bid is a Permitted Bid or a Competing
Permitted Bid) or take any other action (including, without limitation, the
commencement, prosecution, defence or settlement of any litigation) with
respect to any Take-over Bid or otherwise that the Board of Directors
believes is necessary or appropriate in the exercise of its fiduciary duties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
MOORE CORPORATION LIMITED
By: s/b J. M. WILSON
---------------------------------
J. M. Wilson
Vice President and Secretary
and: s/b J.V. LAURIE
---------------------------------
J. V. Laurie
Vice President and Treasurer
MONTREAL TRUST COMPANY OF CANADA
By: s/b SARAH JACKEL
---------------------------------
Sarah Jackel
Senior Account Manager
and: s/b LARA DONALDSON
---------------------------------
Lara Donaldson
Senior Account Manager
EXHIBIT A
[Form of Rights Certificates]
Certificate No. Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE CORPORATION ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN CERTAIN CIRCUMSTANCES (SPECIFIED
IN SUBSECTION 3.1(b) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR TRANSFEREES OF AN ACQUIRING PERSON MAY BECOME VOID.
Rights Certificate
This certifies that _______________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions
of the amended and restated Shareholder Rights Plan Agreement dated as of
February 28, 2000 (the "Rights Agreement") between Moore Corporation Limited,
a corporation incorporated under the laws of Ontario (the "Corporation") and
Montreal Trust Company of Canada, a trust company incorporated under the laws
of Canada, as Rights Agent (the "Rights Agent", which term includes any
successor Rights Agent under the Rights Agreement) to purchase from the
Corporation at any time after the Separation Time and prior to the
Termination Time one fully paid Voting Share of the Corporation (a "Voting
Share") at the Exercise Price, upon presentation and surrender of this Rights
Certificate together with the Form of Election to Exercise duly executed to
the Rights Agent at its principal office in the City of Toronto or in such
other cities as may be designated by the Corporation from time to time. The
Exercise Price is initially $120.00 (Canadian) per Right and is subject to
adjustment in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the number
of Voting Shares which each Right entitles the registered holder thereof to
purchase may be adjusted as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms and conditions of
the Rights Agreement which terms and conditions are hereby incorporated by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Rights Agent, the
Corporation and the holders of the Rights Certificates. Except as otherwise
expressly provided in this Rights Certificate, all terms used in this Rights
Certificate which are defined in the Rights Agreement are used herein as so
defined. Copies of the Rights Agreement are on file at the principal
executive offices of the Corporation and are available upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate
or Rights Certificates surrendered. If this Rights Certificate is exercised
in part, the registered
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holder is entitled to receive, upon surrender hereof, another Rights
Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may in certain circumstances be redeemed by the
Corporation at its option at a redemption price of $0.0001 per Right, subject
to adjustment in certain events.
No fractional Voting Shares will be issued upon the exercise of any
Rights evidenced hereby but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, is entitled to vote or
receive dividends or to be treated for any purpose as the holder of Voting
Shares; nor is anything contained in the Rights Agreement or herein to be
construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights evidenced by this Rights Certificate
have been exercised as provided in the Rights Agreement.
This Rights Certificate is not valid or obligatory for any purpose until
it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Date: _______________________________
MOORE CORPORATION LIMITED
By: _________________________________ By: _________________________________
President Secretary
Countersigned:
MONTREAL TRUST COMPANY OF CANADA
By: _________________________________
Authorized Signature
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder wishes to transfer
the Rights represented by this Rights Certificate.)
FOR VALUE RECEIVED __________________________________ hereby sells, assigns and
transfers to __________________________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein.
Dated: ______________________________
Signature Guaranteed: ______________________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement
or any change whatsoever).
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company, a member of a recognized stock exchange or a member of the Transfer
Agents Medallion Program (STAMP).
- -------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights
and Voting Shares, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof or by any
Person acting jointly or in concert with any of the foregoing (all
capitalized terms are used as defined in the Rights Agreement).
Dated: ______________________________ ______________________________________
Signature
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(To be attached to each Rights Certificate)
FORM OF ELECTION TO EXERCISE
TO: MOORE CORPORATION LIMITED
The undersigned hereby irrevocably elects to exercise [insert number] whole
Rights represented by the attached Rights Certificate to purchase the Voting
Shares issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
_______________________________________
(Name)
_______________________________________
(Street)
_______________________________________
(City and State or Province)
_______________________________________
(Postal Code or Zip Code)
_______________________________________
SOCIAL INSURANCE, SOCIAL SECURITY
OR OTHER TAXPAYER IDENTIFICATION NUMBER
If such number of Rights is not all of the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
_______________________________________
(Name)
_______________________________________
(Street)
_______________________________________
(City and State or Province)
_______________________________________
(Postal Code or Zip Code)
_______________________________________
SOCIAL INSURANCE, SOCIAL SECURITY
OR OTHER TAXPAYER IDENTIFICATION NUMBER
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Dated: ______________________________
Signature Guaranteed: ______________________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever).
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company, a member of a recognized stock exchange or a member of the Transfer
Agents Medallion Program (STAMP).
- -------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights
and Voting Shares, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof or by any
Person acting jointly or in concert with any of the foregoing (all
capitalized terms are used as defined in the Rights Agreement).
Dated: ______________________________ ______________________________________
Signature
NOTICE
In the event the certification set forth above in the Form of Election
to Exercise is not completed upon exercise of the Right(s) evidenced hereby
or in the event that the certification set forth above in the Form of
Assignment is not completed upon the assignment of the Right(s) evidenced
hereby, the Corporation will deem and treat the Beneficial Owner of the
Right(s) evidenced by this Rights Certificate to be an Acquiring Person (as
defined in the Rights Agreement) and, in the case of an assignment, will
affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.