SHAREHOLDER RIGHTS PLAN AGREEMENT
This agreement, dated as of March 4, 2005 is between TLC
Vision Corporation, a corporation incorporated under the laws of New Brunswick
(the "CORPORATION"), and CIBC Mellon Trust Company, a trust company existing
under the laws of Canada, as rights agent (the "RIGHTS AGENT", which includes
any successor Rights Agent).
RECITALS:
1. The Board of Directors of the Corporation has determined that it is
advisable for and in the best interests of the Corporation to adopt a
shareholder rights plan (the "RIGHTS PLAN").
2. In order to implement the Rights Plan, the Board of Directors of the
Corporation has authorized:
(i) the issuance, effective at 4:00 p.m. (Eastern time)
on March 4, 2005, of one right (a "RIGHT") in respect
of each Common Share of the Corporation outstanding
at 4:00 p.m. (Eastern time) on March 4, 2005 (the
"RECORD TIME"); and
(ii) the issuance of one Right in respect of each Common
Share issued after the Record Time and prior to the
earlier of the Separation Time and the Expiration
Time.
3. Each Right entitles the holder thereof, after the Separation Time, to
purchase securities of the Corporation pursuant to the terms and
subject to the conditions set forth in this agreement.
4. The Corporation wishes to appoint the Rights Agent to act on behalf of
the Corporation and holders of Rights, and the Rights Agent is willing
to so act, in connection with the issuance, transfer, exchange and
replacement of Rights Certificates, the exercise of Rights and other
matters referred to in this agreement.
NOW THEREFORE, in consideration of the premises and the
respective covenants and agreements set forth in this agreement, the parties
agree as follows.
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ARTICLE 1
INTERPRETATION
1.1 CERTAIN DEFINITIONS
For the purpose of this agreement:
(a) "ACQUIRING PERSON" means any Person who is or becomes the
Beneficial Owner of 20% or more of the outstanding Voting
Shares; provided, however, that the term "Acquiring Person"
will not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares of the
Corporation as a result of any one or any combination
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;
provided, however, that if a Person becomes the
Beneficial Owner of 20% or more of the Voting Shares
then outstanding by reason of one or any combination
of a Voting Share Reduction, a Permitted Bid
Acquisition, an Exempt Acquisition, a Pro Rata
Acquisition or a Convertible Security Acquisition and
thereafter such Person, while such Person is the
Beneficial Owner of 20% or more of the Voting Shares
then outstanding, increases the number of Voting
Shares beneficially owned by such Person by more than
1.0% of the number of Voting Shares outstanding
(other than pursuant to one or any combination of a
Voting Share Reduction, a Permitted Bid Acquisition,
an Exempt Acquisition, a Pro Rata Acquisition or a
Convertible Security Acquisition) then, as of the
date such Person becomes the Beneficial Owner of such
additional outstanding Voting Shares, such Person
will be an "Acquiring Person"; or
(iii) an underwriter or member of a banking or selling
group acting in such capacity that becomes the
Beneficial Owner of 20% or more of the Voting Shares
in connection with a distribution of securities of
the Corporation;
(b) "AFFILIATE", when used to indicate a relationship with a
specified corporation, means a Person who directly, or
indirectly through one or more intermediaries,
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controls, or is controlled by, or is under common control
with, such specified corporation;
(c) "ASSOCIATE", where used to indicate a relationship with any
Person, means a spouse of that Person, any Person who resides
in the same home as that Person and to whom that Person is
married or with whom that Person is living in a conjugal
relationship outside marriage, a child of that Person or a
relative of that Person if the relative has the same home as
that Person;
(d) a Person will be deemed the "BENEFICIAL OWNER" of, and to have
"BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY OWN":
(i) any securities as to which such Person or any of such
Person's Affiliates or Associates is the owner at law
or in equity;
(ii) any securities as to which such Person or any of such
Person's Affiliates or Associates has the right to
acquire (if such right is exercisable immediately or
within a period of 60 days thereafter and whether or
not upon the occurrence of a contingency) pursuant to
any agreement, arrangement, pledge or understanding,
whether or not in writing, (other than customary
agreements with and between underwriters or banking
group or selling group members with respect to a
distribution of securities and other than pledges of
securities in the ordinary course of the pledgee's
business) or upon the exercise of any conversion
right, exchange right, share purchase right (other
than a Right), warrant or option; and
(iii) any securities which are Beneficially Owned within
the meaning of clauses (i) or (ii) by any other
Person with whom such Person is acting jointly or in
concert;
provided, however, that a Person will not be deemed the
"BENEFICIAL OWNER" of, or to have "BENEFICIAL OWNERSHIP" of,
or to "BENEFICIALLY OWN", any security because:
(iv) such security has been or agreed to be deposited or
tendered pursuant to a Lock-up Agreement or is
otherwise deposited or tendered pursuant to any
Take-over Bid made by such Person, any Affiliate or
Associate of such Person or any Person acting jointly
or in concert with such Person until such deposited
security has been taken up or paid for, whichever
occurs first;
(v) such Person or any Affiliate or Associate of such
Person or any other Person acting jointly or in
concert with such Person holds such security and:
(A) the ordinary 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 the Fund Manager's duties
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for the account of any other Person (a
"CLIENT"), including a non-discretionary
account held on behalf of a Client by a
broker or dealer registered under applicable
laws;
(B) such Person (the "TRUST COMPANY") is
licensed to carry on the business of a trust
company under applicable laws and, as such,
acts as trustee or administrator or in a
similar capacity in relation to the estates
of deceased or incompetent Persons (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 Estate Accounts or Other
Accounts;
(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 and
such security is held by the Plan
Administrator or the Plan in the ordinary
course of the Plan Administrator's or Plan's
activities;
(D) such Person (the "STATUTORY BODY") is
established by statute for purposes that
include, and the ordinary business or
activity of such Person includes, the
management of investment funds for employee
benefit plans, pension plans and insurance
plans of various public bodies and such
security is held by the Statutory Body in
the ordinary course of the management of
such investment funds;
(E) such Person is a Crown agent or agency (a
"CROWN AGENT"); or
(F) such Person is a Plan;
provided, however, that in any of the foregoing
cases, the Fund Manager, the Trust Company, the Plan
Administrator, the Statutory Body, the Crown Agent or
the Plan, as the case may be, is not then making a
Take-over Bid, has not then announced an intention to
make a Take-over Bid and is not then acting jointly
or in concert with any other Person who is making a
Take-over Bid or who has announced a current
intention to make a Take-over Bid, other than an
Offer to Acquire Voting Shares or other securities
(1) pursuant to a distribution by the Corporation,
(2) by means of a Permitted Bid or a Competing
Permitted Bid or (3) by means of market transactions
made in the ordinary course of 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) such Person is (A) a Client of the same Fund Manager
as another Person on whose account the Fund Manager
holds such security, (B) an Estate Account or Other
Account of the same Trust Company as another Person
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on whose account the Trust Company holds such
security or (C) a Plan with the same Plan
Administrator as another Plan on whose account the
Plan Administrator holds such security;
(vii) such Person is (A) a Client of a Fund Manager and
such security is owned at law or in equity by the
Fund Manager, (B) an Estate Account or Other Account
of a Trust Company and such security is owned at law
or in equity by the Trust Company or (C) a Plan and
such security is owned at law or in equity by the
Plan Administrator; or
(viii) because such Person is the registered holder of
securities as a result of carrying on the business of
or acting as a nominee of a securities depositary.
(e) "BOARD OF DIRECTORS" means the board of directors of the
Corporation or, if duly constituted and whenever duly
empowered, any committee of the board of directors of the
Corporation;
(f) "BUSINESS DAY" means any day other than a Saturday, a Sunday
or a day on which banking institutions in Toronto, Ontario or
the City of New York are authorized or obligated by law to
close;
(g) "CLOSE OF BUSINESS" on any given date means the time on such
date (or, if such date is not a Business Day, the time on the
next Business Day) at which the principal office in Toronto,
Ontario of the transfer agent for the Common Shares (or, after
the Separation Time, the office of the Rights Agent) is closed
to the public;
(h) "COMMON SHARE" means the common shares of the Corporation and
any other shares of the Corporation into which such shares may
be subdivided, consolidated, reclassified or changed;
(i) "COMMON SHARES", when used with reference to any Person other
than the Corporation, means the class or classes of shares (or
similar equity interest) with the greatest per share (or
similar interest) voting power entitled to vote generally in
the election of all directors of such other Person;
(j) "COMPETING PERMITTED BID" means a Take-over Bid that:
(i) is made after a Permitted Bid or another Competing
Permitted Bid has been made and prior to the expiry
of that Permitted Bid or Competing Permitted Bid (in
this definition, the "Prior Bid");
(ii) satisfies all components of the definition of
Permitted Bid other than the requirement set out in
clause (ii) of that definition; and
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(iii) contains, and the take up and payment for securities
tendered or deposited under the Take-over Bid is
subject to, irrevocable and unqualified conditions
that:
(A) no Voting Shares will be taken up or paid
for pursuant to the Take-over Bid (1) prior
to the close of business on a date that is
no earlier than the later of the date which
is 35 days (or such other minimum deposit
period for a take-over bid as is provided in
the Securities Act) after the date the
Take-over Bid is made and the 60th day after
the date of the Prior Bid that is then
outstanding and (2) then only if, at the
close of business on the date Voting Shares
are first taken up or paid for, more than
50% of the then outstanding Voting Shares
held by Independent Shareholders have been
deposited or tendered pursuant to such
Take-over Bid and not withdrawn; and
(B) if the requirement in clause (iii)(A)(2) is
satisfied, the Offeror will make a public
announcement of that fact and the Take-over
Bid will remain open for deposits and
tenders of Voting Shares for a period of at
least 10 Business Days after the date of the
announcement;
(k) "CONTROLLED": a corporation is controlled by another Person or
two or more Persons acting jointly or in concert if:
(i) securities entitled to vote in the election of
directors carrying more than 50% of the votes for the
election of the directors are held, directly or
indirectly, by or for the benefit of the other Person
or two or more Persons acting jointly or in concert;
and
(ii) the votes carried by such securities are entitled, if
exercised, to elect a majority of the board of
directors of such corporation;
and "CONTROLS", "CONTROLLING" and "UNDER COMMON CONTROL WITH"
will be interpreted accordingly;
(l) "CONVERTIBLE SECURITIES" means any securities issued by the
Corporation (including rights, warrants and options, but
excluding the Rights) carrying any purchase, exercise,
conversion or exchange rights, pursuant to which the holder of
Convertible Securities may acquire Voting Shares or other
securities convertible into or exercisable or exchangeable for
Voting Shares (in each case, whether such right is exercisable
immediately or after a specified period and whether or not on
condition or the happening of any contingency);
(m) "CONVERTIBLE SECURITY ACQUISITION" means the acquisition of
Voting Shares on the exercise, conversion or exchange of
Convertible Securities acquired by any Person pursuant to a
Permitted Bid Acquisition, Exempt Acquisition or Pro Rata
Acquisition;
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(n) "CO-RIGHTS AGENT" has the meaning ascribed to it in subsection
5.1 (a);
(o) "DIVIDENDS PAID IN THE ORDINARY COURSE" means cash dividends
paid in any financial year of the Corporation to the extent
that such cash dividends do not exceed, in the aggregate, the
greatest of:
(i) 200% of the aggregate amount of cash dividends
declared payable by the Corporation on the Common
Shares in its immediately preceding financial year;
(ii) 300% of the arithmetic average of the aggregate
amounts of cash dividends declared payable by the
Corporation on the Common Shares in its three
immediately preceding financial years; and
(iii) 100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its
immediately preceding financial year;
(p) "ELECTION TO EXERCISE" has the meaning ascribed to it in
clause 3.1(e)(ii);
(q) "EXEMPT ACQUISITION" means an acquisition of Voting Shares:
(i) in respect of which the Board of Directors has waived
the application of section 4.1 pursuant to section
6.1;
(ii) pursuant to a distribution by the Corporation of
Voting Shares or Convertible Securities (and the
conversion or exchange of such securities) pursuant
to a prospectus or similar document (provided that
the purchaser does not thereby Beneficially Own a
greater percentage of the Voting Shares or
Convertible Securities so offered than the percentage
of Voting Shares or Convertible Securities
beneficially owned by the purchaser immediately prior
to that distribution) or by way of private placement
provided that, in the case of a private placement,
all necessary stock exchange approvals for the
private placement have been obtained and the private
placement complies with the terms and conditions of
those approvals and 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 that purchaser pursuant to
the private placement will be deemed to be held by
that purchaser but will not be included in the
aggregate number of outstanding Voting Shares
immediately prior to the private placement); and
(iii) pursuant to an amalgamation, merger or other
statutory procedure requiring shareholder approval;
(r) "EXERCISE PRICE" means, as of any date, the price at which a
holder of a Right may purchase the securities issuable upon
exercise of such Right and, until
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adjustment thereof in accordance with the terms hereof, the
Exercise Price will be $100.00;
(s) "EXPANSION FACTOR" has the meaning ascribed to it in
subsection 3.2(a);
(t) "EXPIRATION TIME" means the earlier of:
(i) the Termination Time; and
(ii) the close of the annual meeting of shareholders of
the Corporation in 2005 and every third anniversary
thereafter and so on unless the continuation of this
agreement for each such three year period (or other
period approved by the Independent Shareholders) is
approved in accordance with section 6.16;
(u) "FLIP-IN EVENT" means a transaction in or pursuant to which
any Person becomes an Acquiring Person;
(v) "HOLDER" has the meaning ascribed to it in section 2.5;
(w) "INDEPENDENT SHAREHOLDERS" means holders of Voting Shares
other than Voting Shares Beneficially Owned by:
(i) an Acquiring Person;
(ii) an Offeror, other than a Person described in any one
or more of paragraphs (A) through (E) of clause
1.1(d)(v);
(iii) any Associate or Affiliate of such Acquiring Person
or Offeror;
(iv) any Person acting jointly or in concert with such
Acquiring Person or Offeror; and
(v) any employee benefit plan, stock purchase plan,
deferred profit sharing plan and any other similar
plan or trust for the benefit of employees of the
Corporation or a Subsidiary of the Corporation,
unless the beneficiaries of the plan or trust direct
the manner in which the 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, any
Affiliate or Associate of the Offeror or any other Person
acting jointly or in concert with the Offeror and a Person
(the "LOCKED-UP PERSON") who is not an Affiliate or Associate
of the Offeror or a Person acting jointly or in concert with
the Offeror whereby the Locked-up Person agrees to deposit or
tender Voting Shares held by the Locked-up Person to the
Offeror's Take-over Bid or to any Take-over Bid made by an
Affiliate or Associate of the Offeror or made by any other
Person
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acting jointly or in concert with the Offeror (the "LOCK-UP
BID"), where the agreement:
(i) (A) permits the Locked-up Person to withdraw the
Voting Shares in order to tender or deposit the
Voting Shares to another Take-over Bid or to support
another transaction that contains an offering price
for each Voting Share that exceeds, or provides a
value for each Voting Share that is greater than, the
offering price contained or proposed to be contained
in the Lock-up Bid; or
(B) permits the Locked-up Person to withdraw the
Voting Shares in order to tender or deposit the
Voting Shares to another Take-over Bid or to support
another transaction that contains an offering price
for each Voting Share that exceeds, or provides a
value for each Voting Share that is greater than, the
offering price contained in or proposed to be
contained in the Lock-up Bid by as much or more than
a specified amount (the "SPECIFIED AMOUNT") where the
Specified Amount is not greater than 7% of the
offering price that is contained or proposed to be
contained in the Lock-up Bid; and
(ii) does not provide for any "break-up fees", "top-up
fees", "termination fees", penalties, expenses or
other amounts that exceed in the aggregate the
greater of (A) the cash equivalent of 2.5% of the
price or value payable to the Locked-up Person under
the Take-over Bid and (B) one-half of the increased
price or value that is paid pursuant to another
Take-over Bid or transaction, if the Locked-up Person
fails to tender Voting Shares pursuant thereto or
withdraws Voting Shares previously tendered in order
to accept the other Take-over Bid or support the
other transaction;
and for greater clarity, the agreement may contain a right of
first refusal or require a period of delay to give the Person
who made the Lock-up Bid an opportunity to match a higher
price in another Take-over Bid or other similar limitation on
a Locked-up Person's right to withdraw Voting Shares from the
agreement, so long as the limitation does not preclude the
exercise by the Locked-up Person of the right to withdraw
Voting Shares during the period for acceptance of the other
Take-over Bid or transaction;
(y) "MARKET PRICE" per share of any securities on any date of
determination shall mean the average of the daily Closing
Prices Per Share of such securities (determined as described
below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date;
provided, however, that if an event of a type analogous to any
of the events described in Section 3.2 hereof shall have
caused the price used to determine the Closing Price Per Share
on any Trading Day not to be fully comparable with the price
used to determine the Closing Price Per Share on such date of
determination or, if the date of determination is not a
Trading Day, on the immediately preceding Trading Day, each
such price so used shall be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section
3.2 hereof in order to make it fully comparable with the price
per share used to
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determine the Closing Price Per Share on such date of
determination or, if the date of determination is not a
Trading Day, on the immediately preceding Trading Day. The
"CLOSING PRICE PER SHARE" of any securities on any date shall
be:
(i) the last quoted price, or if not so quoted, the
average of the high bid and low asked prices for each
share of such securities as reported by NASDAQ;
(ii) if the securities are not quoted on NASDAQ, the
closing board lot sale price or, if such price is not
available, the average of the closing bid and asked
prices, for each share as reported in the principal
consolidated transaction reporting system with
respect to securities listed or admitted to trading
on the Toronto Stock Exchange; or
(iii) if the securities are not listed or admitted to
trading on the Toronto Stock Exchange or quoted on
NASDAQ, the average of the closing bid and asked
prices as furnished by a professional market maker
making a market in the securities selected in good
faith by the Board of Directors;
provided, however, that if on any such date the Closing Price
Per Share cannot be determined in accordance with the
foregoing, the Closing Price Per Share of such securities on
such date shall mean the fair value per share of such
securities on such date as determined in good faith by the
Board of Directors after consultation with an internationally
recognized investment dealer or investment banker with respect
to the fair value per share of such securities. The Market
Price shall be expressed in United States dollars and, if
initially determined in respect of any day forming part of the
20 consecutive Trading Day period in question in Canadian
dollars, such amount shall be translated into United States
dollars at the U.S. Dollar Equivalent thereof;
(z) "NASDAQ" shall mean the National Market of the National
Association of Securities Dealers Inc. Automated Quotation
System;
(aa) "NBBCA" means the Business Corporations Act (New Brunswick),
as amended, and the regulations made thereunder, and any
successor laws or regulations thereto;
(bb) "NOMINEE" has the meaning attributed to it in subsection
3.1(d);
(cc) "OFFER TO ACQUIRE" includes:
(i) an offer to purchase, or a solicitation of an offer
to sell; and
(ii) an acceptance of an offer to sell, whether or not
such offer to sell has been solicited,
or any combination thereof, and the Person accepting an offer
to sell will be deemed to be making an offer to acquire to the
Person who made the offer to sell;
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(dd) "OFFEROR" means a Person who has announced a current intention
to make or who is making a Take-over Bid;
(ee) "OFFEROR'S SECURITIES" means Voting Shares Beneficially Owned
by an Offeror on the date of a Take-over Bid;
(ff) "PERMITTED BID" means a Take-over Bid which is made by means
of a take-over bid circular and which also complies with the
following additional provisions:
(i) the Take-over Bid is made to all holders of Voting
Shares other than the Offeror;
(ii) 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 will be
taken-up or paid for pursuant to the Take-over Bid
prior to the close of business on the date which is
not less than 60 days after the date of the Take-over
Bid and only if at such date more than 50% of the
Voting Shares held by Independent Shareholders have
been deposited or tendered pursuant to the Take-over
Bid and not withdrawn;
(iii) the Take-over Bid contains an irrevocable and
unqualified provision that, unless the Take-over Bid
is withdrawn, Voting Shares may be deposited pursuant
to such Take-over Bid at any time during the period
of time between the date of the Take-over Bid and the
date on which the Voting Shares subject to the
Take-over Bid may be taken-up and paid for and that
any Voting Shares deposited pursuant to the Take-over
Bid may be withdrawn until taken-up and paid for;and
(iv) the Take-over Bid contains an irrevocable and
unqualified provision that, if on the date on which
Voting Shares may be taken up and paid for more than
50% of the Voting Shares held by Independent
Shareholders have been deposited or tendered pursuant
to the Take-over Bid and not withdrawn, the Offeror
will make a public announcement of that fact and the
Take-over Bid will remain open for deposits and
tenders of Voting Shares for not less than 10
Business Days from the date of such public
announcement;
(gg) "PERMITTED BID ACQUISITION" means an acquisition of Voting
Shares made pursuant to a Permitted Bid or a Competing
Permitted Bid;
(hh) "PERSON" includes any individual, body corporate, firm,
partnership, association, trust, trustee, executor,
administrator, legal personal representative, group (as such
term is used in Rule 13d-5 under the U.S. Exchange Act, as on
effect on the date of this agreement), unincorporated
organization, syndicate, government or governmental agency or
instrumentality or other entity;
(ii) "PRO RATA ACQUISITION" means:
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(i) the acquisition of Voting Shares as a result of a
stock dividend, a stock split or other event pursuant
to which a Person receives or acquires Voting Shares
on the same proportionate basis as all other holders
of the same class of Voting Shares;
(ii) the acquisition of Voting Shares pursuant to any
dividend reinvestment plan or other plan made
available by the Corporation to holders of all its
Voting Shares (other than holders resident in any
jurisdiction where participation in such plan is
restricted or impractical to the Corporation as a
result of applicable law); or
(iii) the receipt and/or exercise of rights (other than the
Rights) issued by the Corporation to all the holders
of a class of Voting Shares to subscribe for or
purchase Voting Shares (other than holders resident
in any jurisdiction where the distribution or
exercise of such rights is restricted or impractical
as a result of applicable law), provided that such
rights are acquired directly from the Corporation and
not from any other Person;
(jj) "RECORD TIME" has the meaning ascribed to it in the recitals;
(kk) "REDEMPTION PRICE" has the meaning ascribed to it in
subsection 6.1(a);
(ll) "RIGHT" has the meaning ascribed to it in the recitals;
(mm) "RIGHTS CERTIFICATES" means the certificates representing the
Rights after the Separation Time, which are to be
substantially in the form attached as Exhibit A;
(nn) "RIGHTS PLAN" has the meaning ascribed to it in the recitals;
(oo) "RIGHTS REGISTER" and "RIGHTS REGISTRAR" have the respective
meanings ascribed to them in subsection 2.3(a);
(pp) "SECURITIES ACT" means the Securities Act (Ontario), as
amended, and the regulations and rules thereunder, and any
comparable or successor laws or regulations thereto;
(qq) "SEPARATION TIME" means, subject to subsection 6.1(d), 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 Permitted
Bid or a Competing Permitted Bid);
or such later time as may be determined by the Board of
Directors; provided that (i) if the foregoing results in the
Separation Time being prior to the Record Time,
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the Separation Time will be the Record Time, (ii) if any
Take-over Bid referred to in clause (ii) expires or is
cancelled, terminated or otherwise withdrawn prior to the
Separation Time, such Take-over Bid will be deemed, for the
purposes of this definition, never to have been made (iii) if
the Board of Directors determines pursuant to section 6.1 to
waive the application of section 4.1 to have Flip-in Event,
the Separation Time in respect of that Flip-in Event will be
deemed never to have occurred;
(rr) "STOCK ACQUISITION DATE" means the date of the first public
announcement (which, for purposes of this definition, includes
the filing of a report pursuant to section 101 of the
Securities Act or section 13(d) of the U.S. Exchange Act) by
the Corporation or an Acquiring Person of facts indicating
that a Person has become an Acquiring Person;
(ss) "SUBSIDIARY" of a Person has the meaning ascribed to it in the
Securities Act;
(tt) "TAKE-OVER BID" means an Offer to Acquire Voting Shares or
securities convertible into or exchangeable for 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, together with the Offeror's Securities,
constitute, in the aggregate, 20% or more of the Voting Shares
outstanding on the date of the Offer to Acquire;
(uu) "TERMINATION TIME" means the time at which the right to
exercise Rights will terminate pursuant to subsection 6.1(g);
(vv) "TRADING DAY", when used with respect to any securities,
means, at any time that such securities are quoted on NASDAQ,
a day on which NASDAQ is open for the transaction of business
or, if such securities are not quoted on NASDAQ, a day on
which the Toronto Stock Exchange is open for the transaction
of business or, if the securities are not listed or admitted
to trading on the Toronto Stock Exchange, a Business Day;
(ww) "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 with a conversion of one
United States dollar into Canadian dollars, such
rate;
(ii) in any other case, the rate for such date for the
conversion of one United States dollar into Canadian
dollars which is calculated in the manner which shall
be determined by the Board of Directors from time to
time acting on good faith;
(xx) "U.S. DOLLAR EQUIVALENT" of any amount which is expressed in
Canadian dollars shall mean on any day the United States
dollar equivalent of such amount determined by reference to
the U.S.-Canadian Exchange Rate on such date;
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(yy) "U.S. EXCHANGE ACT" means the Securities Exchange Act of 1934
of the United States, as amended, and the rules and
regulations thereunder as from time to time in effect, and any
comparable or successor laws or regulations thereto;
(zz) "U.S. SECURITIES ACT" means the Securities Act of 1933 of the
United States, as amended, and the rules and regulations
thereunder, and any comparable or successor laws or
regulations thereto;
(aaa) "VOTING SHARES" means the Common Shares and any other shares
in the capital of the Corporation to which are attached a
right to vote for the election of directors generally; and
(bbb) "VOTING SHARE REDUCTION" means an acquisition or redemption by
the Corporation or a Subsidiary of the Corporation of Voting
Shares which, by reducing the number of Voting Shares
outstanding, increases the percentage of outstanding Voting
Shares Beneficially Owned by any Person to 20% or more of the
Voting Shares outstanding.
1.2 CURRENCY
All sums of money which are referred to in this agreement are
expressed in lawful money of the United States, unless otherwise specified.
1.3 DESCRIPTIVE HEADINGS
Descriptive headings are for convenience only and are not to
affect the meaning or construction of any of the provisions of this agreement.
1.4 REFERENCES TO AGREEMENT
References to "THIS AGREEMENT", "HERETO", "HEREIN", "HEREBY",
"HEREUNDER", "HEREOF" and similar expressions refer to this agreement, as
amended or supplemented from time to time, and not to any particular Article,
section, subsection, clause or other portion hereof and include any and every
instrument supplemental or ancillary hereto.
1.5 CALCULATION OF NUMBER AND PERCENTAGE OF
BENEFICIAL OWNERSHIP OF OUTSTANDING VOTING SHARES
(i) For the purposes of this agreement, in determining
the percentage of the outstanding Voting Shares of
the Corporation with respect to which a Person is or
is deemed to be the Beneficial Owner, all unissued
Voting Shares of the Corporation of which such Person
is deemed to be the Beneficial Owner will be deemed
to be outstanding.
(ii) The percentage of outstanding Voting Shares of the
Corporation Beneficially Owned by any Person, for the
purposes of this agreement, will be and be deemed to
be the product determined by the formula:
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100 x A/B
where: A = the number of votes for the election of all directors
generally attaching to the outstanding Voting Shares
Beneficially Owned by such Person; and
B = the number of votes for the election of all directors
generally attaching to all outstanding Voting Shares.
1.6 ACTING JOINTLY OR IN CONCERT
For purpose of this agreement, a Person is acting jointly or
in concert with every other Person who has any agreement, arrangement,
commitment or understanding (whether formal or informal and whether or not in
writing) with the first Person, or with any other Person acting jointly or in
concert with the first Person, to acquire or Offer to Acquire any Voting Shares
or securities convertible into or exchangeable for Voting Shares (other than
customary agreements with and between underwriters or banking group or selling
group members with respect to a distribution of securities and other than
pledges of securities in the ordinary course of the pledgee's business).
ARTICLE 2
THE RIGHTS
2.1 LEGEND ON CERTIFICATES
Certificates for Common Shares issued after the Record Time
but prior to the earlier of the Separation Time and the Expiration Time will
evidence, in addition to the Common Shares, but subject to section 3.2, one
Right for each Common Share evidenced thereby and will have impressed, printed
or written on or otherwise affixed to them substantially the following legend:
UNTIL THE SEPARATION TIME (AS DEFINED IN THE RIGHTS
AGREEMENT REFERRED TO BELOW), THIS CERTIFICATE ALSO
EVIDENCES AND ENTITLES THE HOLDER OF THIS CERTIFICATE
TO CERTAIN RIGHTS AS SET FORTH IN A SHAREHOLDER
RIGHTS PLAN AGREEMENT DATED AS OF MARCH 4, 2005 (AS
THE SAME MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME IN ACCORDANCE WITH THE TERMS THEREOF, THE
"RIGHTS AGREEMENT") BETWEEN TLC VISION CORPORATION
(THE "CORPORATION") AND CIBC MELLON TRUST COMPANY, AS
RIGHTS AGENT, THE TERMS OF WHICH ARE INCORPORATED
HEREIN BY REFERENCE AND A COPY OF WHICH MAY BE
INSPECTED DURING NORMAL BUSINESS HOURS AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, SUCH RIGHTS MAY BE AMENDED, REDEEMED OR
TERMINATED, MAY EXPIRE, MAY BECOME VOID (IF, IN
CERTAIN CASES, THEY ARE "BENEFICIALLY OWNED" BY AN
"ACQUIRING PERSON", WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR ANY SUBSEQUENT HOLDER) OR
MAY BE EVIDENCED BY SEPARATE CERTIFICATES AND MAY NO
LONGER BE EVIDENCED BY THIS CERTIFICATE. THE
CORPORATION WILL MAIL OR ARRANGE FOR THE MAILING OF A
COPY OF THE RIGHTS AGREEMENT TO THE HOLDER OF THIS
CERTIFICATE WITHOUT CHARGE AS SOON AS IS PRACTICABLE
AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
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Certificates representing Common Shares that are issued and
outstanding at the Record Time will evidence one Right for each Common Share
evidenced thereby, despite the absence of the foregoing legend until the earlier
of the Separation Time and the Expiration Time.
2.2 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES
(a) The Rights Certificates will be executed on behalf of the
Corporation by one of the Chairman of the Board, the Chief
Executive Officer, the President or any Vice-President and by
any other Vice-President or the Secretary. The signatures of
such officers may be mechanically reproduced in facsimile on
the Rights Certificates, and when so reproduced will be valid
and binding on the Corporation even though that the Persons
whose signatures are so reproduced may not hold office at the
time the Rights Certificates are issued.
(b) Promptly after the Separation Time, the Corporation will
notify the Rights Agent of the Separation Time and will
deliver Rights Certificates executed by the Corporation to the
Rights Agent for countersignature and a disclosure statement
describing the Rights, and the Rights Agent will manually
countersign such Rights Certificates and deliver such Rights
Certificates and disclosure statement to the holders of the
Rights pursuant to subsection 3.1(d). No Rights Certificate
will be valid for any purpose until countersigned by the
Rights Agent.
(c) Each Rights Certificate will be dated the date it is
countersigned.
2.3 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 the "RIGHTS
REGISTRAR" for the purpose of maintaining the Rights Register
for the Corporation and registering Rights and transfers of
Rights as provided in this agreement. If the Rights Agent
ceases to be the Rights Registrar, the Rights Agent will have
the right to examine the Rights Register at all reasonable
times. After the Separation Time and prior to the Expiration
Time, upon surrender for registration of transfer or exchange
of any Rights Certificate, but subject to subsection (c) and
subsection 4.1(b), the Corporation will execute, and the
Rights Agent will manually countersign and deliver, in the
name of the holder or the designated transferee or
transferees, as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing
the same aggregate number of Rights as did the Rights
Certificates so surrendered.
(b) All Rights issued upon any registration of transfer or
exchange of Rights Certificates will be valid obligations of
the Corporation, and such Rights will be entitled to the same
benefits under this agreement as the Rights surrendered upon
such registration of transfer or exchange.
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(c) Every Rights Certificate surrendered for registration of
transfer or exchange will be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to
the Corporation or the Rights Agent, as the case may be, duly
executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any
new Rights Certificate under this section 2.3, 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) in connection therewith.
2.4 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
will execute and the Rights Agent will manually countersign
and deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as the Rights Certificate
so surrendered.
(b) If there will 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 each of them in their sole discretion to indemnify
each of them and any of their agents harmless, then, in the
absence of notice to the Corporation or the Rights Agent that
such Rights Certificate has been acquired by a bona fide
purchaser, the Corporation will execute, and upon its request
the Rights Agent will countersign and deliver, in lieu of any
such destroyed, lost or stolen Rights Certificate, a new
Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this section, 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) in
connection therewith.
(d) Every new Rights Certificate issued pursuant to this section
in lieu of any destroyed, lost or stolen Rights Certificate
will evidence a contractual obligation of the Corporation,
whether or not the destroyed, lost or stolen Rights
Certificate is at any time enforceable by anyone, and will be
entitled to all the benefits of this agreement equally and
proportionately with any and all other Rights duly issued by
the Corporation under this agreement.
2.5 PERSONS DEEMED OWNERS OF RIGHTS
The Corporation, the Rights Agent and any agent of the
Corporation or the Rights Agent may deem and treat the Person in whose name a
Rights Certificate (or, prior to the Separation Time, the associated Common
Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes. As used in this agreement, unless the
context otherwise requires, the term "HOLDER" of any Rights will mean the
registered holder of such Rights (or, prior to the Separation Time, of the
associated Common Shares).
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2.6 DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for
redemption, registration of transfer or exchange, if surrendered to any Person
other than the Rights Agent, will be delivered to the Rights Agent and, in any
case, will be promptly cancelled by the Rights Agent. The Corporation may
deliver at any time to the Rights Agent for cancellation any Rights Certificates
previously countersigned and delivered hereunder which the Corporation may have
acquired in any manner whatsoever, and all Rights Certificates so delivered will
be promptly cancelled by the Rights Agent. No Rights Certificate will be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided for in this section, except as expressly permitted by this agreement.
The Rights Agent will destroy all cancelled Rights Certificates and deliver a
certificate of destruction to the Corporation on request.
2.7 AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights, by accepting Rights, consents and
agrees with the Corporation and the Rights Agent and with every other holder of
Rights that:
(a) it will be bound by and subject to the provisions of this
agreement, as amended from time to time in accordance with the
terms hereof, in respect of the 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 Common Share certificate representing such
Right;
(c) after the Separation Time, the Rights Certificates will be
transferable only upon registration of the transfer on the
Rights Register as provided in this agreement;
(d) prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Share certificate)
for registration of transfer, the Corporation, the Rights
Agent and any agent of the Corporation or the Rights Agent may
deem and treat the Person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Share
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (despite any notations of
ownership or writing on such Rights Certificate or the
associated Common Share certificate made by anyone other than
the Corporation or the Rights Agent) for all purposes, and
neither the Corporation nor the Rights Agent will be affected
by any notice to the contrary;
(e) it has waived any right and is not entitled to receive any
fractional Rights or any fractional Common Shares upon
exercise of a Right (except as provided herein);
(f) subject to section 6.5, without the approval of the holders of
Voting Shares or Rights and on the sole authority of the Board
of Directors, this agreement may be amended or supplemented
from time to time as provided in this agreement; and
(g) notwithstanding anything in this agreement to the contrary,
neither the Corporation nor the Rights Agent will have any
liability to any holder of a Right or any other Person as a
result of its inability to perform any of its obligations
under this agreement by reason of any preliminary or permanent
injunction or
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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 a
governmental authority, prohibiting or otherwise restraining
performance of such obligations.
2.8 RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER
No holder, as such, of any Right or Rights Certificate will be
entitled to vote or receive dividends as, or be deemed for any purpose to be, a
holder of any Common Share which may at any time be issuable on the exercise of
such Right, nor will anything contained herein or in any Rights Certificate be
construed or deemed to confer on the holder of any Right or Rights Certificate,
as such, any of the rights, titles, benefits or privileges of a shareholder of
the Corporation or any right to vote at any meeting of shareholders of the
Corporation whether for the election of directors or otherwise or on any matter
submitted to shareholders of the Corporation at any meeting thereof, or to give
or withhold consent to any action of the Corporation, or to receive notice of
any meeting or other action affecting any shareholder of the Corporation except
as expressly provided herein, or to receive dividends, distributions or
subscription rights, or otherwise, until the Right or Rights evidenced by any
Rights Certificate will have been duly exercised in accordance with the terms
and provisions hereof.
ARTICLE 3
EXERCISE OF THE RIGHTS
3.1 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF
RIGHTS
(a) Subject to adjustment as set forth in this agreement, from and
after the Separation Time and prior to the Expiration Time,
each Right will entitle the holder thereof to purchase one
Common Share for the Exercise Price (which Exercise Price and
number of Common Shares are subject to adjustment as set forth
below).
(b) Until the Separation Time:
(i) the Rights are not exercisable and may not be
exercised; and
(ii) each Right will be evidenced by the certificate for
the associated Common Share registered in the name of
the holder thereof (which certificate will also be
deemed to be a Rights Certificate) and will be
transferable only together with, and will be
transferred by a transfer of, such associated Common
Share.
(c) From and after the Separation Time and prior to the Expiration
Time:
(i) the Rights will be exercisable; and
(ii) the registration and transfer of the Rights will be
separate from and independent of the Common Shares.
(d) Promptly following the Separation Time, the Rights Agent will
mail to each holder of record of Common Shares as of the
Separation Time (other than an Acquiring Person and other
than, in respect of any Rights Beneficially Owned by such
Acquiring Person which are not held of record by such
Acquiring Person, the holder of record of such Rights (a
"NOMINEE")), at such holder's address as
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shown by the records of the Corporation (and the Corporation
will furnish copies of such records to the Rights Agent for
this purpose):
(i) a Rights Certificate representing the number of
Rights held by such holder at the Separation Time in
substantially the form of Exhibit A, appropriately
completed, and having such marks of identification or
designation and such legends, summaries or
endorsements printed thereon as the Corporation may
deem appropriate and as are not inconsistent with the
provisions of this agreement, or as may be required
to comply with any law, rule, regulation or judicial
or administrative order or with any rule or
regulation made pursuant thereto or with any rule or
regulation of any stock exchange or quotation system
on which the Rights may be listed or traded from time
to time, or to conform to usage; and
(ii) a disclosure statement prepared by the Corporation
describing the Rights;
provided that a Nominee will be sent the materials provided
for in clauses (i) and (ii) only in respect of all Common
Shares held of record by it which are not Beneficially Owned
by an Acquiring Person. In order for the Corporation to
determine whether any Person is holding Common Shares which
are Beneficially Owned by another Person, the Corporation may
require the first-mentioned Person to furnish any information
and documentation as the Corporation deems necessary or
appropriate to make that determination.
(e) 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 principal office in
the city of Toronto or any other office of the Rights Agent
designated for that purpose from time to time by the
Corporation:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise such Rights (an "ELECTION TO
EXERCISE") substantially in the form attached to the
Rights Certificate duly completed and executed by the
holder or his or her executors or administrators or
other personal representatives or his, her or their
legal attorney duly appointed by an instrument in
writing in form and executed in a manner satisfactory
to the Rights Agent; and
(iii) payment by certified cheque, banker's draft or money
order payable to the order of the Rights Agent, or by
such other means of payment as the Rights Agent may
deem acceptable in its sole discretion, of a sum
equal to the applicable Exercise Price multiplied by
the number of Rights being exercised and an amount
sufficient to cover any tax or other governmental
charge which may be payable in respect of any
transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for the relevant
Common Shares in a name other than that of the holder
of the Rights being exercised.
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(f) Upon receipt of the Rights Certificate which is accompanied by
a completed Election to Exercise that does not indicate that
such Right is null and void as provided by subsection 4.1(b)
and payment as set forth in subsection 3.1(e), the Rights
Agent (unless otherwise instructed by the Corporation if the
Corporation is of the opinion that the Rights cannot be
exercised in accordance with this agreement) will promptly:
(i) requisition from the transfer agent of the Common
Shares, certificates representing the number of such
Common Shares to be purchased (the Corporation hereby
irrevocably authorizing its transfer agents to comply
with all such requisitions);
(ii) when appropriate, requisition from the Corporation
the amount of cash (if any) to be paid in lieu of
issuing fractional Common Shares;
(iii) after receipt of the Common Share certificates,
deliver them to or to the order of the registered
holder of such Rights Certificate, registered in such
name or names as may be designated by such holder;
(iv) after receipt, deliver such cash (if any) referred to
in clause (ii) to or to the order of the registered
holder of the Rights Certificate; and
(v) tender to the Corporation all payments received on
exercise of the Rights.
(g) In case the holder of any Rights exercises 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.
(h) The Corporation covenants and agrees that it will:
(i) take all such action as may be necessary and within
its power to ensure that all Common Shares delivered
upon exercise of Rights, at the time of delivery of
the certificates representing such Common Shares
(subject to payment of the Exercise Price), will be
duly and validly authorized, issued and delivered as
fully paid and non-assessable;
(ii) take all such action as may be necessary and within
its power to comply with any applicable requirements
of the NBBCA, the Securities Act (Ontario) and the
securities legislation of each of the other provinces
of Canada, the U.S. Securities Act and the U.S.
Exchange Act, or the rules and regulations
thereunder, and any other applicable law, rule or
regulation in connection with the issuance and
delivery of the Rights Certificates and the issuance
of any Common Shares upon exercise of Rights;
(iii) use its best efforts to (i) file, as soon as required
by law following the Separation Time, a registration
statement under the U.S. Securities Act,
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with respect to the Common Shares purchasable upon
exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective
as soon as practicable after such filing and (iii)
cause such registration statement to remain effective
(with a prospectus that at all times meets the
requirements of the U.S. Securities Act) until the
earlier of (A) the date as of which the Rights are no
longer exercisable for such Common Shares or (B) the
Expiration Time. The Corporation will also take such
action as may be appropriate under, and which will
ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the
exercisability of the Rights. The Corporation may
temporarily suspend, for a period of time not to
exceed ninety (90) days after the date determined in
accordance with the provisions of the first sentence
of this paragraph (iii), the exercisability of the
Rights in order to prepare and file such registration
statement and permit it to become effective. Upon
such suspension, the Corporation shall issue a public
announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is
no longer in effect, in each case with prompt written
notice to the Rights Agent. Notwithstanding any such
provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction
unless the requisite qualification in such
jurisdiction shall have been obtained;
(iv) use reasonable efforts to cause all Common Shares
issued on exercise of Rights to be listed on the
principal exchanges or over-the-counter markets on
which the Common Shares are then listed or traded;
(v) cause to be reserved and kept available out of its
authorized and unissued Common Shares the number of
Common Shares that, as provided in this agreement,
will be sufficient from time to time to permit the
exercise in full of all outstanding Rights; and
(vi) pay when due and payable any Canadian and United
States federal and provincial and state transfer
taxes and charges (for greater certainty, not in the
nature of income or withholding taxes) which may be
payable in respect of the original issuance or
delivery of the Rights Certificates, provided that
the Corporation will not be required to pay any tax
or other governmental charge which may be payable in
respect of any transfer or delivery of Rights
Certificates or the issuance or delivery of
certificates for Common Shares in a name other than
that of the holder of the Rights being transferred or
exercised.
3.2 ADJUSTMENTS TO EXERCISE PRICE: NUMBER OF RIGHTS
The Exercise Price, the number of Common Shares or other
securities subject to purchase on the exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this section.
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(a) If the Corporation at any time after the Record Time and prior
to the Expiration Time:
(i) declares or pays a dividend on the Common Shares
payable in Common Shares (or other securities
exchangeable for or convertible into or giving a
right to acquire Common Shares) other than pursuant
to any dividend reinvestment program;
(ii) subdivides or changes the outstanding Common Shares
into a greater number of Common Shares;
(iii) combines or changes the outstanding Common Shares
into a smaller number of Common Shares; or
(iv) issues any Common Shares (or other securities
exchangeable for or convertible into or giving a
right to acquire Common Shares) in respect of, in
lieu of or in exchange for existing Common Shares;
the Exercise Price and the number of Rights outstanding (or,
if the payment or effective date therefor occurs after the
Separation Time, the securities purchasable on exercise of
Rights) will be adjusted in the following manner. If the
Exercise Price and number of Rights are to be adjusted (i) the
Exercise Price in effect after such adjustment will be equal
to the Exercise Price in effect immediately prior to such
adjustment divided by the number of Common Shares (or other
securities of the Corporation) (the "EXPANSION FACTOR") that a
holder of one Common Share immediately prior to such dividend,
subdivision, combination, change or issuance would hold
thereafter as a result thereof and (ii) each Right held prior
to such adjustment will become that number of Rights equal to
the Expansion Factor, and the adjusted number of Rights will
be deemed to be allocated among the Common Shares with respect
to which the original Rights were associated (if they remain
outstanding) and the securities of the Corporation issued in
respect of such dividend, subdivision, consolidation, change
or issuance, so that each such Common Share (or other security
of the Corporation) will have exactly one Right associated
with it.
For greater certainty, if the securities purchasable upon
exercise of Rights are to be adjusted, the securities
purchasable on exercise of each Right after such adjustment
will be the securities that a holder of the securities
purchasable on exercise of one Right immediately prior to such
dividend, subdivision, consolidation, change or issuance would
hold thereafter as a result thereof.
Adjustments pursuant to this subsection will be made
successively whenever an event referred to in this subsection
occurs.
(b) If the Corporation at any time after the Record Time and prior
to the Expiration Time fixes a record date for the issuance of
rights, options or warrants to all or substantially all
holders of Common Shares entitling them to subscribe for or
purchase (for a period expiring within 45 calendar days after
such record date) Common Shares (or securities convertible
into or exchangeable for or carrying a right to acquire Common
Shares) at a price per Common Share (or, if a security
-23-
convertible into or exchangeable for or carrying a right to
acquire Common Shares, having a conversion, exchange or
exercise price, including the price required to be paid to
purchase such convertible or exchangeable security or right,
per share) less than 95% of the Market Price per Common Share
on the second Trading Day immediately preceding such record
date, the Exercise Price in respect of the Rights to be in
effect after such record date will be determined by
multiplying the Exercise Price in respect of the Rights in
effect immediately prior to such record date by a fraction (i)
the numerator of which will be the number of Common Shares
outstanding on such record date, plus the number of Common
Shares that the aggregate offering price of the total number
of Common Shares so to be offered (and/or the aggregate
initial conversion, exchange or exercise price of the
convertible or exchangeable securities or rights so to be
offered (including the price required to be paid to purchase
such convertible or exchangeable securities or rights)) would
purchase at such Market Price per Common Share and (ii) the
denominator of which will be the number of Common Shares
outstanding on such record date, plus the number of additional
Common Shares to be offered for subscription or purchase (or
into which the convertible or exchangeable securities or
rights so to be offered are initially convertible,
exchangeable or exercisable). In case such subscription price
may be paid by delivery of consideration, part or all of which
is in a form other than cash, the value of such consideration
will be as determined in good faith by the Board of Directors,
whose determination will be described in a statement filed
with the Rights Agent and will be binding on the Rights Agent
and the holders of the Rights. Such adjustment will be made
successively whenever such a record date is fixed. To the
extent that such rights, options or warrants are not exercised
prior to the expiration thereof, the Exercise Price will be
readjusted to the Exercise Price which would then be in effect
based on the number of Common Shares (or securities
convertible into or exchangeable for Common Shares) actually
issued on exercise of such rights, options or warrants.
(c) For purpose of this agreement, the granting of the right to
purchase Common Shares (whether from treasury or otherwise)
pursuant to a dividend reinvestment plan or any employee
benefit, stock option or similar plans will be deemed not to
constitute an issue of rights, options or warrants by the
Corporation; provided, however, that, in all such cases, the
right to purchase Common Shares is at a price per share of not
less than 90% of the then current market price per share
(determined as provided in such plans) of the Common Shares.
(d) If the Corporation at any time after the Record Time and prior
to the Expiration Time fixes a record date for a distribution
to all or substantially all holders of Common Shares
(including any such distribution made in connection with a
merger in which the Corporation is the continuing corporation)
of (i) evidences of indebtedness or assets, including cash
(other than a dividend paid in the ordinary course or a
dividend paid in Common Shares, but including any dividend
payable in securities other than Common Shares), (ii) rights,
options or warrants entitling them to subscribe for or
purchase Common Shares (or securities convertible into or
exchangeable for or carrying a right to acquire Common Shares)
(excluding
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those referred to in subsection 3.2(b)) at a price per Common
Share (or, if a security convertible into or exchangeable for
or carrying a right to acquire Common Shares, having a
conversion, exchange or exercise price, including the price
required to be paid to purchase such convertible or
exchangeable security or right, per share) that is less than
95% of the Market Price per Common Share on the second Trading
Day immediately preceding such record date or (iii) other
securities of the Corporation, the Exercise Price will be
adjusted as follows. The Exercise Price in effect after such
record date will equal the Exercise Price in effect
immediately prior to such record date less the fair market
value (as determined in good faith by the Board of Directors)
of the portion of the evidences of indebtedness, assets,
rights, options or warrants or other securities so to be
distributed applicable to the securities purchasable on
exercise of one Right. Such adjustments will be made
successively whenever such a record date is fixed and, if such
distribution is not so made, the Exercise Price in respect of
the Rights will be adjusted to be the Exercise Price in
respect of the Rights which would have been in effect if such
record date had not been fixed.
(e) Notwithstanding anything in this agreement to the contrary, no
adjustment of the Exercise Price will be required unless such
adjustment would require an increase or decrease of at least
1% in the Exercise Price; provided, however, that any
adjustments which by reason of this subsection are not
required to be made will be carried forward and taken into
account in any subsequent adjustment. All calculations under
section 3.2 will be made to the nearest cent or to the nearest
ten-thousandth of a Common Share or other share, as the case
may be.
(f) If as a result of an adjustment made pursuant to section 4.1,
the holder of any Right thereafter exercised will become
entitled to receive any shares other than Common Shares,
thereafter the number of such other shares so receivable upon
exercise of any Right and the applicable Exercise Price
thereof will be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as is practicable to
the provisions with respect to the Common Shares contained in
this section 3.2, and the provisions of this agreement with
respect to the Common Shares will apply on like terms to any
such other shares.
(g) All Rights originally issued by the Corporation subsequent to
any adjustment made to the Exercise Price will evidence the
right to purchase, at the adjusted Exercise Price, the number
of Common Shares purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Corporation has exercised its election as provided
in subsection (i), upon each adjustment of an Exercise Price
as a result of the calculations made in subsections (b) and
(d), each Right outstanding immediately prior to the making of
such adjustment will thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of
Common Shares obtained by:
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(i) multiplying (A) the number of Common Shares covered
by a Right immediately prior to such adjustment by
(B) the Exercise Price in effect immediately prior to
such adjustment; and
(ii) dividing the product so obtained by the Exercise
Price in effect immediately after such adjustment.
(i) 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 Common
Shares purchasable upon the exercise of a Right. Each of the
Rights outstanding after the adjustment in the number of
Rights will be exercisable for the number of Common Shares for
which such a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment
of the number of Rights will become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by
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 will make a
public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made.
This record date may be the date on which the relevant
Exercise Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, will be at least 10 days
later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this subsection, the Corporation,
as promptly as is practicable, will cause to be distributed to
holders of record of Rights Certificates on such record date,
Rights Certificates evidencing, subject to section 6.4, the
additional Rights to which such holders will be entitled as a
result of such adjustment, or, at the option of the
Corporation, will cause to be distributed to such holders of
record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Corporation, new Rights Certificates evidencing all the Rights
to which such holders will be entitled after such adjustment.
Rights Certificates to be so distributed will 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 will be registered in the names of
holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in an Exercise Price
or the number of Common Shares issuable upon the exercise of
the Rights, the Rights Certificates previously and thereafter
issued may continue to express the relevant Exercise Price per
Common Share and the number of Common Shares which were
expressed in the initial Rights Certificates issued hereunder.
(k) In any case in which this section requires 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
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Right exercised after such record date of the number of Common
Shares and other securities of the Corporation, if any,
issuable upon such exercise over and above the number of
Common Shares and other securities of the Corporation, if any,
issuable upon such exercise on the basis of the relevant
Exercise Price in effect prior to such adjustment; provided,
however, that the Corporation delivers to such holder a due
bill or other appropriate instrument evidencing such holder's
right to receive such additional Common Shares (fractional or
otherwise) or other securities upon the occurrence of the
event requiring such adjustment.
(l) Notwithstanding anything in this section to the contrary, the
Corporation will be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly
required by this section, as and to the extent that in its
good faith judgment the Board of Directors determines to be
advisable in order that any (i) consolidation or subdivision
of Common Shares, (ii) issuance wholly for cash of any Common
Share or securities that by their terms are convertible into
or exchangeable for Common Shares, (iii) stock dividends or
(iv) issuance of rights, options or warrants referred to in
this section, hereafter made by the Corporation to holders of
its Common Shares, will not be taxable to such shareholders.
(m) The Corporation covenants and agrees that, after the
Separation Time, except as permitted by section 6.1 or 6.5, it
will not take (or permit any Subsidiary of the Corporation to
take) any action if at the time such action is taken it is
reasonably foreseeable that such action would diminish
substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(n) 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, the Corporation will promptly:
(i) file with the Rights Agent and with the transfer
agent for the Common Shares a certificate specifying
the particulars of such adjustment or change; and
(ii) cause notice of the particulars of such adjustment or
change to be given to the holders of the Rights.
The failure to file such certificate or cause such notice to
be given as aforesaid, or any defect therein, will not affect
the validity of any such adjustment or change.
3.3 DATE ON WHICH EXERCISE IS EFFECTIVE
Each Person in whose name any certificate for Common Shares is
issued upon the exercise of Rights will be deemed for all purposes to have
become the holder of record of the Common Share represented thereby on, and such
certificate will be dated, the date upon which the Rights Certificate evidencing
such Rights was duly surrendered (together with a duly completed Election to
Exercise) and payment of the relevant Exercise Price for such Rights (and any
applicable transfer taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the relevant Common Share
transfer books of the Corporation are closed, such Person will be deemed to have
become
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the holder of record of such Common Shares on, and such certificate will be
dated, the next succeeding Business Day on which the relevant Common Share
transfer books of the Corporation are open.
ARTICLE 4
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
4.1 FLIP-IN EVENT
(a) Subject to subsection 4.1(b) and section 6.1, if prior to the
Expiration Time a Flip-in Event occurs, each Right will
constitute, effective on and after the later of its date of
issue and the close of business on the tenth Trading Day
following the Stock Acquisition Date, the right to purchase
from the Corporation, upon payment of the relevant Exercise
Price and otherwise exercising such Right in accordance with
the terms hereof, that number of Common Shares having an
aggregate Market Price on the date of occurrence of such
Flip-in Event equal to twice the Exercise Price for an amount
in cash equal to the Exercise Price (such right to be
appropriately adjusted in a manner analogous to the applicable
adjustments provided for in section 3.2 if, after such date of
occurrence, an event of a type analogous to any of the events
described in section 3.2 has occurred with respect to the
Common Share).
(b) Notwithstanding anything in this agreement to the contrary,
upon the occurrence of any Flip-in Event, any Rights that are
or were Beneficially Owned on or after the earlier of the
Separation Time and the Stock Acquisition Date by (i) an
Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert
with an Acquiring Person or any Affiliate or Associate of an
Acquiring Person); or (ii) a transferee or other successor in
title, directly or indirectly, (a "TRANSFEREE") of Rights held
by an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert
with an Acquiring Person or any Affiliate or Associate of an
Acquiring Person) in a transfer that the Board of Directors
has determined is part of a plan, arrangement or scheme of an
Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert
with an Acquiring Person or any Affiliate or Associate of an
Acquiring Person) that has the purpose or effect of avoiding
clause (i), will become null and void without any further
action, and any holder of such Rights (including any
Transferee) will not have any right whatsoever to exercise
such Rights and will not have thereafter any 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 on 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 will be deemed to be an Acquiring Person for the
purpose of this section and such Rights will be null and void.
(c) Any Rights Certificate that represents Rights Beneficially
Owned by a Person described in clause (b)(i) or (ii) or
transferred to any nominee of any such person,
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and any Rights Certificate issued on transfer, exchange,
replacement or adjustment of any other Rights Certificate
referred to in this sentence, will 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 A PERSON ACTING JOINTLY OR IN
CONCERT WITH ANY OF THEM (AS SUCH TERMS ARE DEFINED
IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT). THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED BY THIS
CERTIFICATE WILL BE VOID IN THE CIRCUMSTANCES
SPECIFIED IN SUBSECTION 4.1(b) OF THE SHAREHOLDER
RIGHTS PLAN AGREEMENT.
The Rights Agent will not be under any responsibility to
ascertain the existence of facts that would require the
inclusion of that legend, but will be required to include the
legend only if instructed to do so in writing by the
Corporation or if a holder fails to certify on transfer or
exchange in the space provided on the Rights Certificate that
it is not an Acquiring Person or other Person referred to in
the legend. The issuance of a Rights Certificate without the
legend referred to in this subsection will not affect the
application of subsection (b).
(d) From and after the Separation Time, the Corporation will do
all such acts and things as will be necessary and within its
power to ensure compliance with the provisions of this
section, including all such acts and things as may be required
to satisfy the requirements of the NBBCA and the Securities
Act or comparable legislation of any other applicable
jurisdiction and the rules of any stock exchange or quotation
system where the Common Shares may then be quoted, listed or
traded in respect of the issuance of Common Shares upon the
exercise of Rights in accordance with this agreement.
(e) Notwithstanding any other provision of this agreement, any
Rights held by the Corporation or any of its Subsidiaries will
be void.
ARTICLE 5
THE RIGHTS AGENT
5.1 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 one or more co-rights agents
(each, a "CO-RIGHTS AGENT") as it may deem necessary or
desirable, subject to the approval of the Rights Agent. In the
event the Corporation appoints one or more Co-Rights Agents,
the respective duties of the Rights Agents and Co-Rights
Agents will be as the Corporation may determine with the
approval of the Rights Agent. The Corporation agrees to pay to
the Rights Agent reasonable compensation for all
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services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the
administration and execution of this agreement and the
exercise and performance of its duties hereunder (including
the fees and disbursements of any expert or advisor retained
by the Rights Agent pursuant to subsection 5.3(a)). The
Corporation also agrees to indemnify the Rights Agent, its
officers, directors and employees for, and to hold it and them
harmless against, any loss, liability cost, claim, action,
damage, suit or expense, incurred without negligence, bad
faith or wilful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this agreement,
including the costs and expenses of defending against any
claim of liability, which right to indemnification will
survive the termination of this agreement and/or the
resignation or removal of the Rights Agent.
(b) The Corporation will inform the Rights Agent in a reasonably
timely manner of events which may materially affect the
administration of this agreement by the Rights Agent and at
any time, upon request, will provide to the Rights Agent an
incumbency certificate with respect to the then current
directors and senior officers of the Corporation, provided
that failure to inform the Rights Agent of any such events, or
any defect therein, will not affect the validity of any action
taken hereunder in relation to such events.
(c) The Rights Agent will be protected and will incur no liability
for or in respect of any action taken, suffered or omitted by
it in connection with its administration of this agreement in
reliance upon any certificate for Common 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.
5.2 MERGER OR AMALGAMATION OR CHANGE OF NAME OF RIGHTS AGENT
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or amalgamated or with which it may
be consolidated, or any corporation resulting from any merger,
amalgamation 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, provided that such corporation
would be eligible for appointment as a successor Rights Agent
under the provisions of section 5.4. In case at the time such
successor Rights Agent succeeds to the agency created by this
agreement any of the Rights Certificates have been
countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have
not been countersigned, any successor Rights Agent may
countersign such Rights
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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 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 have not been countersigned, the
Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such
cases such Rights Certificates will have the full force
provided in the Rights Certificates and in this agreement.
5.3 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,
will 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 (where such approval may reasonably be obtained
and such approval not to be unreasonably withheld), consult
with such other experts as the Rights Agent considers
necessary or appropriate to properly carry out the duties and
obligations imposed under the agreement and the Rights Agent
will be entitled to rely in good faith on the advice of any
such expert;
(b) whenever in the performance of its duties under this agreement
the Rights Agent deems it necessary or desirable that any fact
or matter be proved or established by the Corporation prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof is specifically
prescribed in this agreement) may be deemed to be conclusively
proved and established by a certificate signed by a Person
believed by the Rights Agent to be a senior officer of the
Corporation and delivered to the Rights Agent; and such
certificate will be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this agreement in reliance upon such
certificate;
(c) the Rights Agent will be liable hereunder only for its own
negligence, bad faith or wilful misconduct;
(d) the Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this agreement
or in the certificates for Common Shares or the Rights
Certificates (except its countersignature thereof) or be
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required to verify the same, but all such statements and
recitals are and will be deemed to have been made by the
Corporation only;
(e) the Rights Agent will not be under any responsibility in
respect of the validity of this agreement or the execution and
delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Common Share certificate or
Rights Certificate (except its countersignature thereof); nor
will it be responsible for any breach by the Corporation of
any covenant or condition contained in this agreement or in
any Rights Certificate; nor will it be responsible for any
change in the exercisability of the Rights (including the
Rights becoming void pursuant to subsection 4.1(b)) or any
adjustment required under the provisions of section 3.2 or
responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the
exercise of Rights after receipt of the certificate
contemplated by section 3.2 describing any such adjustment);
nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization of any
Common Shares to be issued pursuant to this agreement or any
Rights or as to whether any Shares will, when issued, be duly
and validly authorized, executed, issued and delivered as
fully paid and non-assessable;
(f) the Corporation 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 designated in writing by the
Corporation, and to apply to such Persons for advice or
instructions in connection with its duties, and it will not be
liable for any action taken or suffered by it in good faith in
accordance with the written instructions of any such Person;
(h) the Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common
Shares, Rights or other securities of the Corporation or
become pecuniarily interested in any transaction in which the
Corporation may be interested, or contract with or lend money
to the Corporation or otherwise act as fully and freely as
though it were not the Rights Agent under this agreement.
Nothing herein will preclude the Rights Agent from acting in
any other capacity for the Corporation or for any other legal
entity; and
(i) the Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and
the Rights Agent will not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any
such act, default, neglect or
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misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
5.4 CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties
under this agreement upon 60 days' notice in writing (or such lesser notice as
is acceptable to the Corporation) mailed to the Corporation and to each transfer
agent of Common Shares by first class mail, and to the holders of Rights in
accordance with section 6.8, all of which will be at the Corporation's expense.
The Corporation may remove the Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent and to each transfer agent of the Common Shares by
first class mail, and to the holders of the Rights in accordance with section
6.8 at the expense of the Corporation. 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 or by the holder of any Rights (which holder shall, with such
notice, submit such holder's Rights Certificate for inspection by the
Corporation), then by prior written notice to the Corporation the resigning
Rights Agent (at the Corporation's expense) or the holder of any Rights may
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Corporation or by
such a court, must 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, upon payment by the Corporation to the predecessor
Rights Agent of all outstanding fees and expenses owing by the Corporation to
the predecessor Rights Agent pursuant to this agreement, will deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder and execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any such
appointment, the Corporation will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares, and mail
a notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this section 5.4, however, or any defect therein, will
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
ARTICLE 6
MISCELLANEOUS
6.1 REDEMPTION AND WAIVER
(a) Until the occurrence of a Flip-in Event as to which the
application of section 4.1 has not been waived pursuant to
this section, the Board of Directors, with the prior consent
of the holders of Voting Shares or the holders of Rights given
in accordance with subsection (i) or (j), as the case may be,
may 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
adjustment provided for in section 3.2, if an event of the
type analogous to any of the events described in section 3.2
have occurred (such redemption price being herein referred to
as the "REDEMPTION PRICE").
(b) Until the occurrence of a Flip-in Event as to which the
application of section 4.1 has not been waived pursuant to
this section, upon written notice to the Rights Agent, the
Board of Directors, with the prior consent of the holders of
Voting Shares given in accordance with subsection (i), may
determine, if such Flip-in Event would occur by reason of an
acquisition of Voting Shares otherwise than
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pursuant to a Take-over Bid made by means of a take-over bid
circular to all holders of Voting Shares and otherwise than in
the circumstances set forth in subsection (d), to waive the
application of section 4.1 to such Flip-in Event. If the Board
of Directors proposes such a waiver, the Board of Directors
will extend the Separation Time to a date subsequent to and
not more than ten Business Days following the meeting of
shareholders called to approve such waiver.
(c) Until the occurrence of a Flip-in Event as to which the
application of section 4.1 has not been waived pursuant to
this section, upon written notice delivered to the Rights
Agent, the Board of Directors may determine to waive the
application of section 4.1 to any Flip-in Event provided that
the Flip-in Event would occur by reason of a Take-over Bid
made by take-over bid circular sent to all holders of Voting
Shares and provided further that if the Board of Directors
waives the application of section 4.1 to such Flip-in Event,
the Board of Directors will be deemed to have waived the
application of section 4.1 to any other Flip-in Event
occurring by reason of any Take-over Bid made by take-over bid
circular to all holders of Voting Shares which is made prior
to the expiry of any Take-over Bid (as the same may be
extended from time to time) made by take-over bid circular in
respect of which a waiver is, or is deemed to have been,
granted under this subsection.
(d) Notwithstanding subsections (b) and (c), upon written notice
to the Rights Agent, the Board of Directors may waive the
application of section 4.1 in respect of any Flip-in Event,
provided that both of the following conditions are satisfied:
(i) the Board of Directors has determined that the Person
became an Acquiring Person by inadvertence and
without any intention to become, or knowledge that it
would become, an Acquiring Person; and
(ii) such Person has reduced its Beneficial Ownership of
Voting Shares such that at the time of the granting
of a waiver pursuant to this subsection, such Person
is no longer an Acquiring Person;
In the event of any such waiver, for the purposes of this
agreement, such Flip-in Event will be deemed not to have
occurred and the Separation Time will be deemed not to have
occurred as a result of such Person having inadvertently
become an Acquiring Person.
(e) The Board of Directors will be deemed to have elected to
redeem, without further formality, the Rights at the
Redemption Price on the date that a Person who has made a
Permitted Bid, a Competing Permitted Bid or Take-over Bid in
respect of which the Board of Directors has waived, or is
deemed to have waived, pursuant to this section the
application of section 4.1, takes up and pays for Voting
Shares pursuant to the terms and conditions of such Permitted
Bid, Competing Permitted Bid or Take-over Bid, as the case may
be.
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(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 then outstanding Rights
without the consent of the holders of Voting Shares or the
holders of Rights, as the case may be, at the Redemption Price
and reissue Rights under this agreement to holders of record
of Common Shares immediately following the time of such
redemption and, thereafter, all of the provisions of this
agreement will continue in full force and effect and such
Rights, without any further formality, will be attached to the
outstanding Common Shares in the same manner as prior to the
occurrence of such Separation Time.
(g) If the Board of Directors elects or is deemed to have elected
to redeem the Rights and, in circumstances in which subsection
(a) is applicable, such redemption is approved by the holders
of Voting Shares or the holders of Rights in accordance with
subsection (i) or (j), as the case may be, the right to
exercise the Rights will thereupon, without further action and
without notice, terminate, and the only right thereafter of
the holders of Rights will be to receive the Redemption Price.
(h) Within 10 days after the Board of Directors electing or having
been deemed to have elected to redeem the Rights or, if
subsection (a) applies, within 10 Business Days after the
holders of Voting Shares or the holders of Rights have
approved the redemption of Rights in accordance with
subsection (i) or (j), as the case may be, the Corporation
will give notice of redemption to the holders of the then
outstanding Rights by mailing such notice to each such holder
at such holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Separation Time, on
the registry books of the Transfer Agent for the Common
Shares. Any notice which is mailed in the manner herein
provided will be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will
be made. The Corporation may not redeem, acquire or purchase
for value any Rights at any time in any manner other than that
specifically set forth in this section, and other than in
connection with the purchase of Common Shares prior to the
Separation Time.
(i) If a redemption of Rights pursuant to subsection (a) or a
waiver of a Flip-in Event pursuant to subsection (b) is
proposed at any time prior to the Separation Time, such
redemption or waiver must be submitted for approval to the
holders of Voting Shares. Such approval will be deemed to have
been given if the redemption or waiver is approved by the
affirmative vote of a majority of the votes cast by
Independent Shareholders represented in person or by proxy at
a meeting of such holders duly held in accordance with
applicable laws and the Corporation's by-laws.
(j) If a redemption of Rights pursuant to subsection (a) is
proposed at any time after the Separation Time, such
redemption must be submitted for approval to the holders of
Rights. Such approval will be deemed to have been given if the
redemption is approved by holders of Rights by a majority of
the votes cast by the
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holders of Rights represented in person or by proxy at and
entitled to vote at a meeting of such holders. For the
purposes hereof, each outstanding Right (other than Rights
which are Beneficially Owned by any Person referred to in
clauses (i) to (v) inclusive of the definition of Independent
Shareholders) will be entitled to one vote, and the procedures
for the calling, holding and conduct of the meeting will be
those, as nearly as may be, which are provided in the
Corporation's by-laws and the NBBCA with respect to meetings
of shareholders of the Corporation.
6.2 EXPIRATION
No Person will 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 5.1.
6.3 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this agreement or of
the Rights to the contrary, the Corporation, at its option, may issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board of
Directors to reflect any adjustment or change in the number or kind or class of
securities purchasable upon exercise of Rights made in accordance with the
provisions of this agreement.
6.4 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Corporation will not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
will be paid to the registered holders of the Rights
Certificates with regard to which such fractional Right would
otherwise be issuable, an amount in cash equal to the fraction
of the Market Price of a whole Right that the fraction of a
Right which would otherwise be issuable is of one whole Right.
(b) The Corporation will not be required to issue fractions of
Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares. In lieu
of issuing fractional Common Shares, the Corporation will pay
to the registered holders of Rights Certificates, at the time
such Rights are exercised as herein provided, an amount in
cash equal to the same fraction of the Market Price of a whole
Common Share that the fraction of a Common Share which would
otherwise be issuable upon the exercise of such right is of
one whole Common Share at the date of such exercise.
(c) The Rights Agent will have no obligation to make any payments
in lieu of issuing fractions of Rights or Common Shares
pursuant to subsection (a) or (b), respectively, unless and
until the Corporation has provided to the Rights Agent the
amount of cash to be paid in lieu of issuing such fractional
Rights or Common Shares, as the case may be.
6.5 SUPPLEMENTS AND AMENDMENTS
(a) The Corporation may make amendments to this agreement from
time to time to correct any clerical or typographical error or
which are required to maintain the
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validity of this agreement as a result of any change in any
applicable legislation, rules or regulations or decision of a
court or regulatory authority. The Corporation, at or prior to
the meeting of shareholders of the Corporation, or any
adjournment or postponement thereof, to be held for
shareholders of the Corporation to consider and, if deemed
advisable, to adopt a resolution approving, ratifying and
confirming this agreement and the Rights issued pursuant
thereto, may supplement or amend this agreement without the
approval of any holders of Rights or Voting Shares in order to
make any changes which the Board of Directors acting in good
faith may deem necessary or desirable to make this agreement
effective (provided such action would not materially adversely
affect the interests of the holders of Rights generally).
Notwithstanding anything in this section to the contrary, no
such supplement or amendment may be made to the provisions of
Article 5 except with the written concurrence of the Rights
Agent to such supplement or amendment.
(b) Subject to subsection (a), the Corporation, with the prior
consent of the holders of Voting Shares obtained as set forth
below, at any time prior to the Separation Time, may
supplement or amend any of the provisions of this agreement
and the Rights (whether or not such action would materially
adversely affect the interests of the holders of Rights
generally). Such consent will be deemed to have been given if
the action requiring such approval is authorized by the
affirmative vote of a majority of the votes cast by
Independent Shareholders present or represented at and
entitled to vote at a meeting of the holders of Voting Shares
duly called and held in compliance with applicable laws and
the Corporation's by-laws.
(c) Subject to subsection (a), the Corporation, with the prior
consent of the holders of Rights, at any time on or after the
Separation Time, may supplement or amend any of the provisions
of this agreement and the Rights (whether or not such action
would materially adversely affect the interests of the holders
of Rights generally), provided that no such supplement or
amendment may be made to the provisions of Article 5 except
with the written concurrence of the Rights Agent thereto.
(d) Any approval of the holders of Rights will be deemed to have
been given if the action requiring such approval is authorized
by the affirmative votes of the holders of Rights present or
represented at and entitled to be voted at a meeting of the
holders of Rights and representing a majority of the votes
cast in respect thereof. For the purposes hereof, each
outstanding Right (other than Rights which are void pursuant
to the provisions hereof) will be entitled to one vote, and
the procedures for the calling, holding and conduct of the
meeting will be those, as nearly as may be, which are provided
in the Corporation's by-laws and the NBBCA with respect to
meetings of shareholders of the Corporation.
(e) Any amendments made by the Corporation to this agreement
pursuant to subsection 6.5(a) which are required to maintain
the validity of this agreement:
(i) if made before the Separation Time, be submitted to
the holders of Voting Shares of the Corporation at
the next meeting of shareholders and the
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holders of Voting Shares, by the majority referred to
in subsection (b), may confirm or reject such
amendment; and
(ii) if made after the Separation Time, be submitted to
the holders of Rights at a meeting to be called for a
date not later than immediately following the next
meeting of shareholders of the Corporation and the
holders of Rights, by resolution passed by the
majority referred to in subsection (d), may confirm
or reject such amendment.
Any such amendment will be effective from the date of the
resolution of the Board of Directors adopting such amendment,
until it is confirmed or rejected or until it ceases to be
effective (as described in the next sentence) and, where such
amendment is confirmed, it continues in effect in the form so
confirmed. If such amendment is rejected by the holders of
Voting Shares or the holders of Rights or is not submitted to
the holders of Voting Shares or holders of Rights as required,
then such amendment will cease to be effective from and after
the termination of the meeting at which it was rejected or to
which it should have been but was not submitted or from and
after the date of the meeting of holders of Rights that should
have been but was not held, and no subsequent amendment to
this agreement to substantially the same effect will be
effective until confirmed by the shareholders or holders of
Rights, as the case may be.
(f) The Corporation will give notice in writing to the Rights
Agent of any amendment or supplement to this agreement
pursuant to this section within five Business Days of the date
of any such amendment or supplement, provided that failure to
give such notice, or any defect therein, will not affect the
validity of any such supplement or amendment.
(g) For greater certainty, neither the exercise by the Board of
Directors of any power or discretion conferred on it under
this agreement nor the making by the Board of Directors of any
determination or the granting of any waiver it is permitted to
make or give under this agreement will constitute an
amendment, variation or rescission of the provisions of this
agreement or Rights for purposes of this section or otherwise.
6.6 RIGHTS OF ACTION
Subject to the terms of this agreement, all rights of action
in respect of this agreement, other than rights of action vested solely in the
Rights Agent, are vested in the respective holders of the Rights; and any holder
of any Rights, without the consent of the Rights Agent or of the holder of any
other Rights, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, may 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 such holder's Rights Certificate and in this
agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against, actual or threatened violations of the obligations of
any Person subject to, this agreement.
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6.7 NOTICE OF PROPOSED ACTIONS
If the Corporation proposes after the Separation Time and
prior to the Expiration Time to effect the liquidation, dissolution or
winding-up of the Corporation or the sale of all or substantially all of the
Corporation's assets, then, in each such case, the Corporation will give to each
holder of a Right, in accordance with section 6.8, a notice of such proposed
action. The notice must specify the date on which such liquidation, dissolution,
winding-up or sale is to take place, and such notice must be so given at least
20 Business Days prior to the date of taking such proposed action.
6.8 NOTICES
(a) Notices or demands authorized or required by this agreement to
be given or made by the Rights Agent or by the holder of any
Rights to or on the Corporation will be sufficiently given or
made if delivered or sent by facsimile or by first-class mail,
postage prepaid, addressed (until another facsimile number or
address is filed in writing with the Rights Agent) as follows:
TLC Vision Corporation
540 Maryville Centre Drive
Suite 200
St. Louis, MO
63141
Attention: General Counsel
Facsimile: (314) 434-7251
(b) Notices or demands authorized or required by this agreement to
be given or made by the Corporation or by the holder of any
Rights to or on the Rights Agent will be sufficiently given or
made if delivered or sent by facsimile or by first-class mail,
postage prepaid, addressed (until another facsimile number or
address is filed in writing with the Corporation) as follows:
CIBC Mellon Trust Company
320 Bay St. Ground Floor
Toronto, Ontario
M5H 4A6
Attention: Vice President, Client Services
Facsimile: (416) 643-5570
(c) Notices or demands authorized or required by this agreement to
be given or made by the Corporation or the Rights Agent to or
on the holder of any Rights will be sufficiently given or made
if delivered or sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior
to the Separation Time, on the registry books of the
Corporation for the Common Shares. Any notice which is mailed
in the manner herein provided will be deemed given, whether or
not the holder receives the notice.
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(d) Notices will be deemed to have been received as follows:
(i) in the case of personal delivery, on the day of
delivery, unless delivered on a day that is not a
Business Day or after 4:00 p.m. on the day of
delivery, in which case notice will be deemed to have
been received on the next Business Day;
(ii) in the case of facsimile, on the Business Day of
transmission if transmitted before 4:00 p.m. on that
Business Day or, otherwise, on the next Business Day
following the day of transmission; and
(iii) in the case of first class mail, on the fifth
Business Day following mailing.
(iv) Any accidental error, omission or failure in giving
or delivering or mailing any such notice will not
invalidate or otherwise prejudicially affect any
action or proceeding founded thereon.
6.9 COSTS OF ENFORCEMENT
The Corporation agrees that, if it 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 or such
Person will reimburse the holder of any Rights for the costs and expenses
(including reasonable legal fees) incurred by such holder in actions to enforce
the holder's rights pursuant to any Rights or this agreement.
6.10 SUCCESSORS
All the covenants and provisions of this agreement by or for
the benefit of the Corporation or the Rights Agent bind and enure to the benefit
of their respective successors and assigns hereunder.
6.11 BENEFITS OF THIS AGREEMENT
Nothing in this agreement will be construed to give to any
Person other than the Corporation, the Rights Agent and the holders of the
Rights any legal or equitable right, remedy or claim under this agreement; but
this agreement will be for the sole and exclusive benefit of the Corporation,
the Rights Agent and the holders of the Rights.
6.12 GOVERNING LAW
This agreement and each Right issued hereunder will be deemed
to be a contract made under the laws of the Province of Ontario and for all
purposes will be governed by and construed in accordance with the laws of such
province applicable to contracts to be made and performed entirely within such
province.
6.13 COUNTERPARTS
This agreement may be executed in any number of counterparts
and each of such counterparts for all purposes will be deemed to be an original,
and all such counterparts together will constitute one and the same instrument.
6.14 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 will be ineffective as to such
-40-
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.
6.15 EFFECTIVE DATE
This agreement is in force in accordance with its terms.
6.16 SHAREHOLDER APPROVAL
At the annual meeting of shareholders of the Corporation in
2005 and every third anniversary thereafter and so on, 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 4.1 has been waived pursuant to section
6.1), the board of directors may submit a resolution to the Independent
Shareholders for their consideration and approval ratifying this agreement (as
may be amended and restated) and its continued existence after each such
meeting. If a majority of the votes cast by Independent Shareholders present or
represented by proxy at any such meeting are not voted in favour of this
agreement and its continued existence, then the Board of Directors, immediately
upon confirmation by the chair of such shareholders meeting of the results of
the vote on such resolution, without further formality, will be deemed to have
elected to redeem the Rights at the Redemption Price.
6.17 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
All actions, calculations and determinations (including all
omissions with respect to the foregoing) which are done or made by the Board of
Directors in good faith in connection with this agreement will not subject the
Board of Directors or any director of the Corporation to any liability to the
holders of the Rights.
6.18 TIME OF THE ESSENCE
Time will be of the essence of this agreement.
6.19 REGULATORY APPROVALS
Any obligation of the Corporation or action contemplated by
this agreement, including any amendment hereto, will be subject to the receipt
of any requisite approval or consent from any applicable regulatory authority,
including any necessary approvals of the Toronto Stock Exchange, NASDAQ or any
other stock exchange.
6.20 DECLARATION AS TO NON-CANADIAN AND NON-UNITED STATES HOLDERS
If in the opinion of the Board of Directors (who may rely on
the advice of legal counsel) any action or event contemplated by this agreement
would require compliance by the Corporation with the securities laws or
comparable legislation of a jurisdiction outside Canada or the United States,
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
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 and the sale thereof and remittance of
the proceeds of such sale (if any) to the Persons entitled thereto. In no event
will the Corporation or the Rights Agent be required to issue or deliver Rights
or securities issuable on exercise of Rights to Persons who are citizens,
residents or nationals of any jurisdiction other than Canada 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.
6.21 FIDUCIARY DUTIES OF THE BOARD OF DIRECTORS
For greater certainty, this agreement will not be construed to
suggest or imply that the Board of Directors is not 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 the
-41-
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.
-42-
IN WITNESS WHEREOF, the parties have caused this agreement to
be duly executed as of the date first above written.
TLC VISION CORPORATION
By: /s/ Brian Andrew
----------------------------
Name: Brian Andrew
Title:
By:
----------------------------
Name:
Title:
CIBC MELLON TRUST COMPANY
By: /s/ Warren Jensen
----------------------------
Authorized Signatory
By: /s/ Bruce Cornish
----------------------------
Authorized Signatory
-43-
EXHIBIT A
FORM OF RIGHTS CERTIFICATE
Certificate No. Rights
------------- ------------
RIGHTS CERTIFICATE
This certifies that ______________________ is the registered
holder of the number of Rights set forth above, each of which entitles the
registered holder thereof, subject to the terms, provisions and conditions of
the Shareholder Rights Plan Agreement dated as of March 4, 2005, as the same may
be amended, restated or supplemented from time to time (the "RIGHTS AGREEMENT")
between TLC Vision Corporation, a corporation existing under the laws of New
Brunswick (the "CORPORATION"), and CIBC Mellon Trust Company, a trust company
existing under the laws of Ontario, 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 Expiration Time (as such terms are defined in the Rights Agreement), one
fully paid Common Share of the Corporation (a "COMMON SHARE") at the Exercise
Price referred to below, upon presentation and surrender of this Rights
Certificate together with the Form of Election to Exercise and Declaration of
Ownership duly executed and submitted to the Rights Agent at its principal
office in the city of Toronto or any other office of the Rights Agent designated
for that purpose from time to time by the Rights Agent. The Exercise Price
initially is U.S.$100 per Right and will be subject to adjustment in certain
events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement,
each Right evidenced hereby may entitle the registered holder thereof to
purchase or receive assets, debt securities or shares in the capital of the
Corporation other than Common Shares, or more or less than one Common Share, all
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 incorporated
herein by reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Rights Agent, the
Corporation and the holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the registered office of the Corporation and are
available upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at any of the offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing an aggregate number of
Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this Rights Certificate is
exercised in part, the registered holder will be entitled to receive, upon
surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate may be, and under certain circumstances are
required to be, redeemed by the Corporation at a redemption price of U.S.$0.0001
per Right, subject to adjustment in certain events.
Fractional Common Shares will not be issued upon the exercise
of any Right or 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, will be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Common Shares or of any other shares of the Corporation which may at any time be
issuable upon the exercise hereof, nor will anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, 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 of the
Corporation at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders of the Corporation (except as 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 will not be valid or obligatory for
any purpose until it will have been manually countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Date:
TLC VISION CORPORATION
By:
-----------------------------
By:
-----------------------------
Countersigned: CIBC MELLON TRUST COMPANY
By:
-----------------------------
Authorized Signature
-2-
FORM OF ELECTION TO EXERCISE
(to be attached to each Rights Certificate)
TO: TLC VISION CORPORATION
The undersigned hereby irrevocably elects to exercise _______
whole Rights represented by the attached Rights Certificate to purchase the
Common Shares issuable upon the exercise of such Rights and requests that
certificates for such Common Shares be issued to:
Name
Address
City and Province/State
Social Insurance Number or other taxpayer identification number
If such number of Rights are not all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Name
Address
City and Province/State
Social Insurance Number or other taxpayer identification number
Dated:
------------------------------ -------------------------------------
Signature
Signature Guaranteed:
(Signature must correspond to name as written upon the face of
this Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.)
Signature must be guaranteed by an Eligible Institution being
either a Canadian Schedule I chartered bank or major trust company in Canada,
member of the Securities Transfer Association Medallion Program (STAMP), a
member of the Stock Exchange Medallion Program (SEMP) or a member of the New
York Stock Exchange, Inc. Medallion Signature Program (MSP). Members of these
programs are usually members of a recognized stock exchange in Canada and the
United States, members of the Investment Dealers Association of Canada, member
of the National Association of Securities Dealers or banks and trust companies
in the United States.
(To be completed if true)
The undersigned hereby represents, for the benefit of the
Corporation and all holders of Rights and Common Shares, that the Rights
evidenced by this Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person, an
Affiliate or Associate of an Acquiring Person or any Person acting jointly or in
concert with an Acquiring Person or with an Associate or Affiliate of an
Acquiring Person (as such terms are defined in the Rights Agreement).
Signature
-2-
FORM OF ASSIGNMENT
FOR VALUE RECEIVED _________________________________________
hereby sells, assigns and transfers unto _____________________________________
(please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein.
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 an Eligible Institution being
either a Canadian Schedule I chartered bank or major trust company in Canada,
member of the Securities Transfer Association Medallion Program (STAMP), a
member of the Stock Exchange Medallion Program (SEMP) or a member of the New
York Stock Exchange, Inc. Medallion Signature Program (MSP). Members of these
programs are usually members of a recognized stock exchange in Canada and the
United States, members of the Investment Dealers Association of Canada, member
of the National Association of Securities Dealers or banks and trust companies
in the United States.
(To be completed if true)
The undersigned hereby represents, for the benefit of the
Corporation and all holders of Rights and Common Shares, that the Rights
evidenced by this Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person, an
Affiliate or Associate of an Acquiring Person or any Person acting jointly or in
concert with an Acquiring Person or with an Associate or Affiliate of an
Acquiring Person (as such terms are defined in the Rights Agreement).
Signature
NOTICE
If the certification set forth above in the Form of Election
to Exercise or the Form of Assignment is not completed, the Corporation reserves
the right to treat the Beneficial Owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and accordingly such Rights will be null and
void.
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