Exhibit 2.3
PLAN OF ARRANGEMENT
UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Plan of Arrangement, unless there is something in the subject matter or
context inconsistent therewith, the following terms shall have the respective
meanings set out below and grammatical variations of such terms shall have
corresponding meanings:
"AFFILIATE" has the meaning ascribed thereto in the CBCA.
"ARRANGEMENT" means an arrangement under section 192 of the CBCA on the
terms and subject to the conditions set out in this Plan of Arrangement.
"ARRANGEMENT RESOLUTION" means the special resolution of the Company
Securityholders, to be substantially in the form and content of Exhibit
B to the Combination Agreement.
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of Company
in respect of the Arrangement that are required by the CBCA to be sent
to the Director after the Final Order is made.
"BUSINESS DAY" means any day on which commercial banks are open for
business in Montreal, Quebec, New York, New York and Milpitas,
California, other than a Saturday, a Sunday or a day observed as a
holiday in Montreal, Quebec under applicable laws, in Milpitas,
California under applicable laws or in New York, New York under
applicable laws.
"CBCA" means the Canada Business Corporations Act, as now in effect and
as it may be amended from time to time prior to the Effective Date.
"CALLCO" means 3942163 Canada Inc., a corporation existing under the
laws of Canada, and being a wholly-owned indirect subsidiary of Parent
and a corporation for U.S. federal income tax purposes.
"CANADIAN RESIDENT" means a resident of Canada for purposes of the ITA.
"CERTIFICATE" means the certificate of arrangement giving effect to the
Arrangement, issued pursuant to subsection 192(7) of the CBCA after the
Articles of Arrangement have been filed.
"CHANGE IN LAW EXCHANGE DATE" has the meaning ascribed thereto in
section 5.3(2).
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"COMBINATION AGREEMENT" means the combination agreement dated as of
August 8, 2001, as amended by way of an amending agreement dated as of
September 7, 2001, by and among Parent, Exchangeco, 3924548 Canada Inc.
and Company, as further amended, supplemented and/or restated in
accordance therewith prior to the Effective Date, providing for, among
other things, the Arrangement.
"COMPANY" means C-MAC Industries Inc., a corporation existing under the
laws of Canada.
"COMPANY CIRCULAR" means the notice of the Company Meeting and
accompanying management information circular, including all appendices
thereto, to be sent to Company Securityholders in connection with the
Company Meeting.
"COMPANY COMMON SHARES" means the outstanding common shares in the
capital of Company.
"COMPANY MEETING" means the special meeting of Company Securityholders,
including any adjournment or postponement thereof, to be called and held
in accordance with the Interim Order to consider the Arrangement.
"COMPANY MEETING DATE" means the date of the Company Meeting.
"COMPANY OPTIONS" means the Company Common Share purchase options
granted under the Company Stock Option Plan.
"COMPANY SECURITYHOLDERS" means Company Shareholders and holders of
Company Options.
"COMPANY SHAREHOLDERS" means holders of Company Common Shares or, as the
context requires, holders of Holding Company Shares.
"COMPANY STOCK OPTION PLAN" means Company's 1992 Stock Option Plan, as
amended, supplemented, restated or replaced from time to time.
"COURT" means the Superior Court of Justice (Quebec).
"CURRENT MARKET PRICE" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"DEPOSITARY" means National Bank Trust Inc. at its offices set out in
the Letter of Transmittal and Election Form.
"DIRECTOR" means the Director appointed pursuant to section 260 of the
CBCA.
"DISSENT RIGHTS" has the meaning ascribed thereto in section 3.1.
"DISSENTING SHAREHOLDER" means a holder of Company Common Shares who
dissents in respect of the Arrangement in strict compliance with the
Dissent Rights.
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"DIVIDEND AMOUNT" means an amount equal to the full amount of all
declared and unpaid dividends on an Exchangeable Share held by a holder
on any dividend record date which occurred prior to the date of purchase
of such share by Callco or Parent from such holder.
"EFFECTIVE DATE" means the date shown on the Certificate.
"EFFECTIVE TIME" means 12:01 a.m. (Montreal time) on the Effective Date.
"ELECTION DEADLINE" means 4:00 p.m. (Montreal time) at the place of
deposit on the date which is two Business Days prior to the Company
Meeting Date.
"EXCHANGE RATIO" means, subject to adjustment, if any, as provided
herein, 1.755.
"EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
capital of Exchangeco, having the rights, privileges, restrictions and
conditions set out in the Exchangeable Share Provisions.
"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges,
restrictions and conditions attaching to the Exchangeable Shares, which
rights, privileges, restrictions and conditions shall be as set out in
Appendix 1.
"EXCHANGEABLE SHARE VOTING EVENT" has the meaning ascribed thereto in
the Exchangeable Share Provisions.
"EXCHANGECO" means Solectron Global Services Canada Inc., a corporation
existing under the laws of Canada and being a subsidiary of Callco and a
corporation for U.S. federal income tax purposes.
"EXEMPT EXCHANGEABLE SHARE VOTING EVENT" has the meaning ascribed
thereto in the Exchangeable Share Provisions.
"FINAL ORDER" means the final order of the Court approving the
Arrangement as such order may be amended or varied at any time prior to
the Effective Date or, if appealed, then, unless such appeal is
withdrawn or denied, as affirmed or amended on appeal.
"GOVERNMENTAL ENTITY" means any court, administrative agency, tribunal,
bureau, board, commission, public authority, governmental or regulatory
authority, agency, ministry, crown corporation or other law, rule-or
regulation-making entity, domestic or foreign, or any quasi-governmental
body, self-regulatory organization or stock exchange, including without
limitation the TSE or the NYSE.
"HOLDERS" means, (a) when used with reference to any shares, the holders
of such shares shown from time to time in the register maintained by or
on behalf of the applicable corporation in respect thereof and (b) when
used with reference to Company Options, the holders thereof from time to
time.
"HOLDING COMPANY" means a single-purpose holding company that,
immediately before the Effective Time, (i) is a taxable Canadian
corporation for all purposes of the ITA, (ii) is incorporated after
August 8, 2001 and validly existing in good standing under the
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CBCA, (iii) has one or two shareholders (provided that two or more
shareholders holding shares of such holding company jointly shall be
considered to be one shareholder for this purpose), (iv) has no assets
other than Company Common Shares and no liabilities of any kind
(contingent or otherwise), (v) is not a party to nor bound by any
agreement, commitment or undertaking of any nature whatsoever other than
as specifically provided in the holding company participation agreement
described in (vii) below, (vi) the shareholders of which have chosen to
exercise the Holding Company Alternative by validly completing and
delivering to the Depositary by the Election Deadline the Holding
Company Letter of Transmittal and Election Form, certificates
representing the Holding Company Shares and certificates representing
the Company Common Shares held by such Holding Company (along with such
other documents as the Depositary, Parent or the Company may require),
(vii) is a party to (and the shareholders of which and such other
persons as Parent may reasonably require are a party to) a holding
company participation agreement with Exchangeco, Parent and the Company
in a form required by Parent, setting out the terms and conditions upon
which such shareholders may avail themselves of the Holding Company
Alternative, making such representations, warranties and covenants as
Parent may require for this purpose, providing for such shareholders to
pay for any costs or expenses incurred by Parent, Nova Scotia Company,
Callco, Exchangeco or the Company in connection with the Holding Company
Alternative, providing for an indemnity in favour of Parent, Nova Scotia
Company, Callco, Exchangeco, the Company and others for any liabilities
or claims arising in connection with the Holding Company Alternative and
providing for such other terms and conditions as Parent may reasonably
require, and (viii) in respect of which all conditions to closing set
out in the holding company participation agreement other than the
effectiveness of the Arrangement shall have been satisfied prior to the
Effective Time to the satisfaction of Parent.
"HOLDING COMPANY ALTERNATIVE" means the opportunity of Company
Shareholders holding Company Common Shares through a Holding Company to
participate in the Arrangement by transferring all of the Holding
Company Shares to Exchangeco and thereby receiving from Exchangeco the
Exchangeable Shares and ancillary rights and/or Parent Common Shares
that would otherwise have been received by such Holding Company, as
described in section 2.2(b) hereof.
"HOLDING COMPANY LETTER OF TRANSMITTAL AND ELECTION FORM" means the
letter of transmittal and election form for use by Company Shareholders
exercising the Holding Company Alternative, in the form to be provided
by Parent.
"HOLDING COMPANY SHARES" means, in respect of any particular Holding
Company, all of the issued and outstanding shares in the capital of such
Holding Company.
"INTERIM ORDER" means the interim order of the Court, as the same may be
amended, in respect of the Arrangement as contemplated by section 2.3 of
the Combination Agreement.
"ITA" means the Income Tax Act (Canada), as amended.
"LETTER OF TRANSMITTAL AND ELECTION FORM" means the letter of
transmittal and election form for use by Company Shareholders (other
than such Company Shareholders wishing
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to exercise the Holding Company Alternative) or for use by holders of
Company Options, as the case may be, in either such case, in the form
accompanying the Company Circular.
"LIQUIDATION AMOUNT" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed thereto in
section 5.1(1).
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in section
5.1(1).
"LIQUIDATION DATE" has the meaning ascribed thereto in the Exchangeable
Share Provisions.
"NYSE" means the New York Stock Exchange, Inc. or its successors.
"NOVA SCOTIA COMPANY" means Solectron Canada ULC, an unlimited liability
company existing under the laws of Nova Scotia, being a wholly-owned
direct subsidiary of Parent and a disregarded entity for U.S. federal
income tax purposes.
"PARENT" means Solectron Corporation, a corporation existing under the
laws of Delaware.
"PARENT CALL RIGHT" has the meaning ascribed thereto in section 5.3(1).
"PARENT CALL PURCHASE PRICE" has the meaning ascribed thereto in section
5.3(1).
"PARENT COMMON SHARES" means the shares of common stock in the capital
of Parent and any other securities into which such shares may be
changed, and in the event of any transaction described in section 11.3
of the Exchangeable Share Provisions, the corresponding shares in the
capital of Parent Successor.
"PARENT CONTROL TRANSACTION" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"PERSON" means any individual, corporation (including any non-profit
corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including
any limited liability company or joint stock company), firm or other
enterprise, association, organization, entity or Governmental Entity.
"PLAN OF ARRANGEMENT", "HEREOF", "HEREUNDER" and similar expressions
means this Plan of Arrangement, including the appendices hereto and
includes any agreement or instrument supplementary or ancillary hereto
and any amendments or variations hereto made in accordance herewith or
made at the direction of the Court.
"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in
section 5.2(1).
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in section
5.2(1).
"REDEMPTION DATE" has the meaning ascribed thereto in the Exchangeable
Share Provisions.
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"REPLACEMENT OPTION" has the meaning ascribed thereto in section
2.2(2)(f).
"REDEMPTION PRICE" has the meaning ascribed thereto in the Exchangeable
Share Provisions.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"SPECIAL VOTING SHARE" has the meaning ascribed thereto in the Voting
and Exchange Trust Agreement.
"STAMP TAXES" means all stamp, registration and transfer taxes and
duties or their equivalents plus interest and penalties in respect
thereof in all jurisdictions where such taxes and duties are payable as
a result of any of the transactions contemplated by this Plan of
Arrangement.
"SUPPORT AGREEMENT" means the Exchangeable Share support agreement made
among Parent, Nova Scotia Company, Callco and Exchangeco substantially
in the form and content of Exhibit D to the Combination Agreement, as
amended pursuant to the terms of the Support Agreement.
"TRANSFER AGENT" has the meaning ascribed thereto in section 5.1(2).
"TRUSTEE" means the trustee chosen by Parent, acting reasonably, to act
as trustee under the Voting and Exchange Trust Agreement, being a
corporation organized and existing under the laws of Canada and
authorized to carry on the business of a trust company in all the
provinces of Canada, and any successor trustee appointed under the
Voting and Exchange Trust Agreement.
"TSE" means The Toronto Stock Exchange or its successors.
"VOTING AND EXCHANGE TRUST AGREEMENT" means an agreement made among
Parent, Exchangeco and the Trustee in connection with the Plan of
Arrangement substantially in the form and content of Exhibit E to the
Combination Agreement, as amended pursuant to the terms of the Voting
and Exchange Trust Agreement.
1.2 SECTIONS AND HEADINGS
The division of this Plan of Arrangement into articles and sections and the
insertion of headings are for reference purposes only and shall not affect the
interpretation of this Plan of Arrangement. Unless otherwise indicated, any
reference in this Plan of Arrangement to an article, a section or an exhibit
refers to the specified article or section of or exhibit to this Plan of
Arrangement.
1.3 NUMBER, GENDER AND PERSONS
In this Plan of Arrangement, unless the context otherwise requires, words
importing the singular number include the plural and vice versa and words
importing any gender include all genders.
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1.4 DATE FOR ANY ACTION
In the event that any date on which any action is required to be taken hereunder
by any Person is not a Business Day, such action shall be required to be taken
on the next succeeding day which is a Business Day.
ARTICLE 2
ARRANGEMENT
2.1 BINDING EFFECT
This Plan of Arrangement will become effective at, and be binding at and after,
the Effective Time on (i) Company, Parent, Nova Scotia Company, Callco,
Exchangeco, and all Holding Companies (if any), (ii) all holders and all
beneficial owners of Company Common Shares, Holding Company Shares, Company
Options and Replacement Options, (iii) all holders and all beneficial owners of
Exchangeable Shares from time to time; and (iv) all holders and beneficial
owners of Parent Common Shares received in exchange for Company Common Shares or
Exchangeable Shares or on exercise of Replacement Options.
2.2 ARRANGEMENT
Commencing at the Effective Time, the following shall occur and shall be deemed
to occur in the following order (except that the issuance of Exchangeable Shares
pursuant to sections 2.2(a) and (b) and the entering into of the Support
Agreement and the Voting and Exchange Trust Agreement pursuant to section 2.2(e)
shall occur and shall be deemed to occur simultaneously) without any further act
or formality:
(a) the outstanding Company Common Shares held by each Company
Shareholder other than,
(i) Company Common Shares held by a holder who has exercised its
Dissent Rights and is ultimately entitled to be paid the fair
value of its Company Common Shares,
(ii) Company Common Shares held by Parent or any Affiliate
thereof, and
(iii) Company Common Shares held by any Holding Company,
(b) shall be transferred by the holder thereof to Exchangeco in
exchange for,
(iv) that number of fully paid and non-assessable Parent Common
Shares equal to the product of the total number of such Company
Common Shares held by that Company Shareholder multiplied by the
Exchange Ratio,
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(v) that number of fully paid and non-assessable Exchangeable
Shares (and certain ancillary rights) equal to the product of the
total number of such Company Common Shares held by that Company
Shareholder multiplied by the Exchange Ratio, or
(vi) a combination of fully paid and non-assessable Parent Common
Shares and fully paid and non-assessable Exchangeable Shares (and
certain ancillary rights) which aggregate number of Parent Common
Shares and Exchangeable Shares is equal to the product of the
total number of such Company Common Shares held by that Company
Shareholder multiplied by the Exchange Ratio,
the whole as set forth in the Company Shareholder's validly
completed Letter of Transmittal and Election Form delivered to
the Depositary by the Election Deadline, provided that
notwithstanding the foregoing, only Company Shareholders who are
either, (1) Canadian Residents who hold such Company Common
Shares on their own behalf, or (2) Persons who hold such Company
Common Shares on behalf of one or more Canadian Residents, shall
be entitled to receive Exchangeable Shares in respect of any such
Company Common Shares as set out in (v) and (vi) above, and any
elections to receive Exchangeable Shares made by any other
Company Shareholders shall be invalid, and the Company Common
Shares of any such invalidly electing Company Shareholders and of
Company Shareholders who do not validly complete and deliver a
Letter of Transmittal and Election Form to the Depositary by the
Election Deadline shall be deemed to have been transferred to
Exchangeco solely in consideration for Parent Common Shares
pursuant to (iv) above;
(c) all of the outstanding Holding Company Shares in respect of each
particular Holding Company shall be transferred by the holder(s)
thereof to Exchangeco in exchange for,
(i) that number of fully paid and non-assessable Parent Common
Shares equal to the product of the total number of Company Common
Shares held by that Holding Company multiplied by the Exchange
Ratio,
(ii) that number of fully paid and non-assessable Exchangeable
Shares (and certain ancillary rights) equal to the product of the
total number of Company
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Common Shares held by that Holding Company multiplied by the
Exchange Ratio, or
(iii) a combination of fully paid and non-assessable Parent
Common Shares and fully paid and non-assessable Exchangeable
Shares (and certain ancillary rights) which aggregate number of
Parent Common Shares and Exchangeable Shares is equal to the
product of the total number of Company Common Shares held by that
Holding Company multiplied by the Exchange Ratio,
the whole as set forth in the validly completed Holding Company
Letter of Transmittal and Election Form delivered to the
Depositary by the Election Deadline, provided that
notwithstanding the foregoing, only holders of Holding Company
Shares who are either, (1) Canadian Residents who hold such
Holding Company Shares on their own behalf, or (2) Persons who
hold such Holding Company Shares on behalf of one or more
Canadian Residents, shall be entitled to elect to receive
Exchangeable Shares in respect of any such Holding Company Shares
as set out in (ii) and (iii) above, and any elections to receive
Exchangeable Shares made by any other holder of Holding Company
Shares shall be invalid, and the Holding Company Shares of any
such invalidly electing holders shall be deemed to have been
transferred to Exchangeco solely in consideration for Parent
Common Shares pursuant to (i) above;
(d) the names of the holders of the Company Common Shares and Holding
Company Shares transferred to Exchangeco pursuant to sections
2.2(a) and 2.2(b) shall be removed from the applicable register
of holders of Company Common Shares or Holding Company Shares and
added to the applicable register of holders of Parent Common
Shares and/or Exchangeable Shares, and Exchangeco shall be
recorded as the registered holder of the Company Common Shares
and Holding Company Shares so exchanged and shall be deemed to be
the legal and beneficial owner thereof;
(e) for greater certainty, where a beneficial owner of Company
Common Shares or shares of a class of Holding Company Shares
receives a combination of Parent Common Shares and Exchangeable
Shares (and certain ancillary rights) under sections 2.2(a) or
2.2(b) in respect of such Company Common Shares or Holding
Company Shares
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of that class (respectively), a pro rata portion of the total
number of Parent Common Shares and the total number of
Exchangeable Shares (and certain ancillary rights) so received by
such beneficial owner in respect of such Company Common Shares or
Holding Company Shares of that class (respectively) will be
allocated to each Company Common Share or Holding Company Share
of that class (respectively) beneficially owned by that Person at
the Effective Time, so that such beneficial owner will receive
for each Company Common Share or Holding Company Share of that
class (respectively) the same combination of Parent Common Shares
and Exchangeable Shares (and certain ancillary rights) as is
received for every other Company Common Share or Holding Company
Share of that class (respectively) of that beneficial owner at
that time;
(f) coincident with the share exchanges set out in sections 2.2(a)
and 2.2(b), Parent, Nova Scotia Company, Callco and Exchangeco
shall execute the Support Agreement and Parent, Exchangeco and
the Trustee shall execute the Voting and Exchange Trust Agreement
and Parent shall issue to and deposit with the Trustee the
Special Voting Share, in consideration of the payment to Parent
of US$1.00, to be thereafter held of record by the Trustee as
trustee for and on behalf of, and for the use and benefit of, the
holders of the Exchangeable Shares in accordance with the Voting
and Exchange Trust Agreement. All rights of holders of
Exchangeable Shares under the Voting and Exchange Trust Agreement
shall be received by them as part of the property receivable by
them under sections 2.2(a) and 2.2(b) in exchange for the Company
Common Shares or Holding Company Shares for which they were
exchanged; and
(g) subject to applicable laws and regulatory requirements, each
outstanding Company Option that has not been duly exercised prior
to the Effective Time shall be exchanged for an option (a
"REPLACEMENT OPTION") to purchase from Parent or the Company, as
Parent may determine, a number of Parent Common Shares equal to
the product of the Exchange Ratio multiplied by the number of
Company Common Shares subject to such Company Option. Such
Replacement Option shall provide for an exercise price per Parent
Common Share equal to the exercise price per Company Common Share
of such Company Option immediately prior to the Effective Time
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divided by the Exchange Ratio. If the foregoing calculation
results in the total Replacement Options of a particular holder
being exercisable for a total number of Parent Common Shares that
includes a fraction of a Parent Common Share, then the total
number of Parent Common Shares subject to such holder's total
Replacement Options shall be rounded down to the next whole
number of Parent Common Shares and the total exercise price for
such Replacement Options shall be reduced by the exercise price
of the fractional Parent Common Share. The term to expiry,
conditions to and manner of exercising, vesting schedule and all
other terms and conditions of a Replacement Option will be the
same as the Company Option for which it is exchanged, and any
document or agreement previously evidencing a Company Option
shall thereafter evidence and be deemed to evidence such
Replacement Option. If any Company Option is subject to a
condition that the price of the Company Common Shares on the TSE
reach or exceed a minimum price before such option may be
exercised, the Replacement Option for such Company Option shall
also have such condition, with the following adjustments: (i) the
minimum price will be adjusted by dividing such minimum price by
the Exchange Ratio; and (ii) such minimum price shall be deemed
to refer to the price of Parent Common Shares on the NYSE.
2.3 TAX ELECTION
Each beneficial owner of Company Common Shares or Holding Company Shares who is
a Canadian Resident (other than any such owner who is exempt from tax under Part
I of the ITA), and who has validly elected (or for whom the holder has validly
elected on such beneficial owner's behalf) to receive consideration that
includes Exchangeable Shares shall be entitled to make an income tax election
pursuant to subsection 85(1) of the ITA or, if such beneficial owner is a
partnership, subsection 85(2) of the ITA (and in each case, where applicable,
the corresponding provisions of any applicable provincial income tax
legislation) with respect to the transfer of its Company Common Shares or
Holding Company Shares to Exchangeco by providing two signed copies of the
necessary prescribed election form(s) to KPMG LLP within 90 days following the
Effective Date, duly completed with the details of the number of Company Common
Shares or Holding Company Shares transferred and the applicable agreed amounts
for the purposes of such elections. Thereafter, subject to the election forms
being correct and complete and complying with the provisions of the ITA (or the
corresponding provisions of any applicable provincial income tax legislation),
the forms will be signed by Exchangeco and returned to such beneficial owner of
Company Common Shares or Holding Company Shares, as applicable, within 30 days
after the receipt thereof by KPMG LLP, for filing with the Canada Customs and
Revenue Agency (or the applicable provincial taxing authority) by such
beneficial owner. Exchangeco will not be responsible for the proper completion
of any election form and, except for Exchangeco's obligation to return duly
completed election forms which are received
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by KPMG LLP within 90 days of the Effective Date, within 30 days after the
receipt thereof by KPMG LLP, Exchangeco will not be responsible for any taxes,
interest or penalties resulting from the failure by a beneficial owner of
Company Common Shares or Holding Company Shares to properly complete or file the
election forms in the form and manner and within the time prescribed by the ITA
(or any applicable provincial income tax legislation). In its sole discretion,
Exchangeco may choose to sign and return an election form received by KPMG LLP
more than 90 days following the Effective Date, but Exchangeco will have no
obligation to do so.
2.4 ADJUSTMENTS TO EXCHANGE RATIO
The Exchange Ratio shall be adjusted to reflect fully the effect of any stock
split, reverse split, stock dividend (including any dividend or distribution of
securities convertible into Parent Common Shares or Company Common Shares, other
than stock dividends paid in lieu of ordinary course dividends), consolidation,
reorganization, recapitalization or other like change with respect to Parent
Common Shares or Company Common Shares occurring after the date of the
Combination Agreement and prior to the Effective Time.
ARTICLE 3
RIGHTS OF DISSENT
3.1 RIGHTS OF DISSENT
Holders of Company Common Shares may exercise rights of dissent with respect to
such shares pursuant to and in the manner set forth in section 190 of the CBCA
and this section 3.1 (the "DISSENT RIGHTS") in connection with the Arrangement;
provided that, notwithstanding subsection 190(5) of the CBCA, the written
objection to the Arrangement Resolution referred to in subsection 190(5) of the
CBCA must be received by Company not later than 4:00 p.m. (Montreal time) on the
Business Day preceding the Company Meeting. Holders of Company Common Shares who
duly exercise such rights of dissent and who:
(a) are ultimately determined to be entitled to be paid fair value
for their Company Common Shares, shall be deemed to have
transferred such Company Common Shares immediately prior to the
Effective Time to the Company, without any further act or
formality, and free and clear of all liens, claims and
encumbrances, and such shares shall be cancelled as of the
Effective Time, or
(b) are ultimately determined not to be entitled, for any reason, to
be paid fair value for their Company Common Shares, shall be
deemed to have participated in the Arrangement on the same basis
as a non-dissenting holder of Company Common Shares who did not
make a valid election to receive Exchangeable Shares and did not
exercise the Holding Company Alternative, and shall receive
Parent Common Shares in exchange for
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their Company Common Shares on the basis determined in accordance
with section 2.2(a)(iv) above;
but in no case shall Parent, Nova Scotia Company, Callco, Exchangeco, the
Company, the Depositary or any other Person be required to recognize such
Dissenting Shareholders as holders of Company Common Shares after the Effective
Time, and the names of such Dissenting Shareholders shall be deleted from the
registers of holders of Company Common Shares at the Effective Time.
ARTICLE 4
CERTIFICATES AND FRACTIONAL SHARES
4.1 ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES
At or promptly after the Effective Time, Exchangeco shall deposit with the
Depositary, for the benefit of the holders of Company Common Shares or Holding
Company Shares who will receive Exchangeable Shares in connection with the
Arrangement, certificates representing that number of whole Exchangeable Shares
to be delivered pursuant to sections 2.2(a) and 2.2(b). Upon surrender to the
Depositary for cancellation of a certificate which immediately prior to the
Effective Time represented Company Common Shares or Holding Company Shares which
were exchanged for Exchangeable Shares under the Arrangement, together with such
other documents and instruments as would have been required to effect the
transfer of the Company Common Shares or Holding Company Shares under the CBCA
and the bylaws of the Company or the Holding Company, as applicable and such
other documents and instruments as the Depositary may reasonably require, the
holder of such surrendered certificate shall be entitled to receive in exchange
therefor, and the Depositary shall deliver to such holder, a certificate
representing that number (rounded down to the nearest whole number) of
Exchangeable Shares which such holder has the right to receive (together with
any dividends or distributions with respect thereto pursuant to section 4.3 and
any cash in lieu of fractional Exchangeable Shares pursuant to section 4.4, in
each case, less any amounts withheld pursuant to section 4.7), and the
certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Company Common Shares which was not registered in the
transfer records of Company, a certificate representing the proper number of
Exchangeable Shares may, subject to section 2.2, be issued to the transferee if
the certificate which immediately prior to the Effective Time represented
Company Common Shares that were exchanged for Exchangeable Shares under the
Arrangement, is presented to the Depositary accompanied by all documents
required to evidence and effect such transfer. Until surrendered as contemplated
by this section 4.1, each certificate which immediately prior to the Effective
Time represented one or more outstanding Company Common Shares that were
exchanged for Exchangeable Shares under the Arrangement, shall be deemed at all
times after the Effective Time to represent only the right to receive upon such
surrender (i) the certificate representing Exchangeable Shares as contemplated
by this section 4.1, (ii) a cash payment in lieu of any fractional Exchangeable
Shares as contemplated by section 4.4 and (iii) any dividends or distributions
with a record date after the Effective Time theretofore paid or payable with
respect to Exchangeable Shares as contemplated by section 4.3, in each case,
less any amounts withheld pursuant to section 4.7.
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4.2 EXCHANGE OF CERTIFICATES FOR PARENT COMMON SHARES
At or promptly after the Effective Time, Exchangeco shall deposit or cause the
deposit with the Depositary, for the benefit of the holders of Company Common
Shares or Holding Company Shares who will receive Parent Common Shares on the
Arrangement, certificates representing that number of whole Parent Common Shares
to be delivered pursuant to sections 2.2(a) and 2.2(b). Upon surrender to the
Depositary for cancellation of a certificate which immediately prior to the
Effective Time represented one or more Company Common Shares or Holding Company
Shares that were exchanged for Parent Common Shares under the Arrangement,
together with such other documents and instruments as would have been required
to effect the transfer of the Company Common Shares or Holding Company Shares
under the CBCA and the bylaws of the Company or the Holding Company, as
applicable, and such other documents and instruments as the Depositary may
reasonably require, the holder of such surrendered certificate shall be entitled
to receive in exchange therefor, and the Depositary shall deliver to such
holder, a certificate representing that number (rounded down to the nearest
whole number) of Parent Common Shares which such holder has the right to receive
(together with any dividends or distributions with respect thereto pursuant to
section 4.3 and any cash in lieu of fractional Parent Common Shares pursuant to
section 4.4, less any amounts withheld pursuant to section 4.7), and the
certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Company Common Shares which was not registered in the
transfer records of Company, a certificate representing the proper number of
Parent Common Shares may, subject to section 2.2, be issued to the transferee if
the certificate which immediately prior to the Effective Time represented
Company Common Shares that were exchanged for Parent Common Shares under the
Arrangement, is presented to the Depositary, accompanied by all documents
reasonably required to evidence and effect such transfer. Until surrendered as
contemplated by this Section 4.2, each certificate which immediately prior to
the Effective Time represented one or more outstanding Company Common Shares
that were exchanged for Parent Common Shares under the Arrangement, shall be
deemed at all times after the Effective Time to represent only the right to
receive upon such surrender (i) a certificate representing the Parent Common
Shares as contemplated by this section 4.2, (i) a cash payment in lieu of
fractional Parent Common Shares as contemplated by section 4.4 and (iii) any
dividends or distributions with a record date after the Effective Time
theretofore paid or payable with respect to Parent Common Shares as contemplated
by section 4.3, in each case, less any amounts withheld pursuant to section 4.7.
4.3 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES
No dividends or other distributions declared or made after the Effective Time
with respect to Exchangeable Shares or Parent Common Shares with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
certificate which immediately prior to the Effective Time represented
outstanding Company Common Shares that were exchanged pursuant to section
2.2(a), and no cash payment in lieu of fractional shares shall be paid to any
such holder pursuant to section 4.4, unless and until the holder of such
certificate shall surrender such certificate in accordance with section 4.1
and/or 4.2, as the case may be. Subject to applicable law, at the time of such
surrender of any such certificate (or, in the case of clause (iii) below, at the
appropriate payment date), there shall be paid to the holder of the certificates
representing Company Common Shares without interest, (i) the amount of any cash
payable in lieu of a fractional share to which such holder is entitled pursuant
to section 4.4, (ii) the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with
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respect to the Exchangeable Shares or Parent Common Shares, as the case may be,
to which such holder is entitled pursuant hereto and (iii) to the extent not
paid under clause (ii), on the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior to
surrender and the payment date subsequent to surrender payable with respect to
such Exchangeable Shares or Parent Common Shares.
4.4 NO FRACTIONAL SHARES
No certificates representing fractional Exchangeable Shares or fractional Parent
Common Shares shall be issued upon the surrender for exchange of certificates
pursuant to sections 4.1 and/or 4.2 and no dividend, stock split or other change
in the capital structure of Exchangeco or Parent shall relate to any such
fractional security and such fractional interests shall not entitle the owner
thereof to exercise any rights as a security holder of Exchangeco or Parent. In
lieu of any such fractional securities, each Person otherwise entitled to a
fractional interest in an Exchangeable Share and/or a Parent Common Share will
be entitled to receive a cash payment equal to such Person's pro rata portion of
the net proceeds after expenses received by the Depositary upon the sale of
whole shares representing an accumulation of all fractional interests in
Exchangeable Shares or Parent Common Shares, as the case may be, to which all
such Persons would otherwise be entitled. The Depositary will sell such
Exchangeable Shares by private sale (including by way sale through the
facilities of any stock exchange upon which the Exchangeable Shares are then
listed) as soon as reasonably practicable following the Effective Date. The
aggregate net proceeds after expenses of such sale will be distributed by the
Depositary, pro rata in relation to the respective fractions, among Persons
otherwise entitled to receive fractional interests in Exchangeable Shares. The
Depositary will sell such Parent Common Shares on the NYSE as soon as reasonably
practicable following the Effective Date. The aggregate net proceeds after
expenses of such sale will be distributed by the Depositary, pro rata in
relation to the respective fractions, among Persons otherwise entitled to
receive fractional interests in Parent Common Shares.
A holder of an Exchangeable Share shall not be entitled to any fraction of a
Parent Common Share upon the exercise by Callco of the Liquidation Call Right or
the Redemption Call Right or upon the exercise by Parent of the Parent Call
Right and no certificates representing any such fractional interest shall be
issued and such holder otherwise entitled to a fractional interest will receive
for such fractional interest from Callco or Parent, as the case may be, on the
designated payment date a cash payment equal to such fractional interest
multiplied by the Current Market Price.
4.5 LOST CERTIFICATES
In the event any certificate which immediately prior to the Effective Time
represented one or more outstanding Company Common Shares that were exchanged
pursuant to section 2.2 shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such certificate to
be lost, stolen or destroyed, the Depositary will issue in exchange for such
lost, stolen or destroyed certificate, certificates representing Exchangeable
Shares or Parent Common Shares (and a cheque for any dividends or distributions
with respect thereto and any cash pursuant to section 4.4) deliverable in
accordance with section 2.2 and such holder's Letter of Transmittal and Election
Form. When authorizing such payment in exchange for any lost, stolen or
destroyed certificate, the Person to whom cash and/or certificates representing
Exchangeable Shares or Parent Common Shares are to be issued shall, as a
condition precedent
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to the issuance thereof, give a bond satisfactory to Company, Exchangeco, Parent
and their respective transfer agents in such sum as Company, Exchangeco or
Parent may direct or otherwise indemnify Company, Exchangeco and Parent and the
Depositary in a manner satisfactory to Company, Exchangeco and Parent against
any claim that may be made against Company, Exchangeco or Parent with respect to
the certificate alleged to have been lost, stolen or destroyed.
4.6 EXTINCTION OF RIGHTS
Any certificate which immediately prior to the Effective Time represented
outstanding Company Common Shares that were exchanged pursuant to section 2.2(a)
that is not deposited with all other instruments required by Section 4.1 and/or
4.2, as the case may be, on or prior to the fifth anniversary of the Effective
Date shall cease to represent a claim or interest of any kind or nature as a
shareholder of Company, Exchangeco or Parent. On such date, the Exchangeable
Shares (and ancillary rights) or Parent Common Shares (or cash in lieu of
fractional interests therein, as provided in section 4.4) to which the former
holder of the certificate referred to in the preceding sentence was ultimately
entitled shall be deemed to have been surrendered for no consideration to Parent
or Callco. None of Parent, Company, Exchangeco or the Depositary shall be liable
to any person in respect of any Exchangeable Shares or Parent Common Shares (or
dividends, distributions and interest in respect thereof) delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
4.7 WITHHOLDING RIGHTS
Exchangeco, Callco, Company, Parent, the Depositary and the Transfer Agent shall
be entitled to deduct and withhold from any dividend or consideration otherwise
payable to any holder of Company Common Shares, Parent Common Shares, Holding
Company Shares or Exchangeable Shares such amounts as Company, Exchangeco,
Callco, Parent, the Depositary or the Transfer Agent is required to deduct and
withhold with respect to such payment under the ITA, the United States Internal
Revenue Code of 1986 or any provision of federal, provincial, territorial,
state, local or foreign tax law, in each case, as amended or succeeded, or
entitled to withhold under section 116 of the ITA or any corresponding
provisions of provincial law. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes as having been paid to the
holder of the shares in respect of which such deduction and withholding was
made, provided that such withheld amounts are actually remitted to the
appropriate taxing authority. To the extent that the amount so required or
entitled to be deducted or withheld from any payment to a holder exceeds the
cash portion of the consideration otherwise payable to the holder, Exchangeco,
Callco, Company, Parent, the Depositary and the Transfer Agent are hereby
authorized to sell or otherwise dispose of such portion of the consideration as
is necessary to provide sufficient funds to Exchangeco, Callco, Company, Parent,
the Depositary or the Transfer Agent, as the case may be, to enable it to comply
with such deduction or withholding requirement or entitlement and Exchangeco,
Callco, Company, Parent, the Depositary or the Transfer Agent shall notify the
holder thereof and remit to such holder any unapplied balance of the net
proceeds of such sale.
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ARTICLE 5
CERTAIN RIGHTS OF CALLCO TO ACQUIRE EXCHANGEABLE SHARES
5.1 CALLCO LIQUIDATION CALL RIGHT
In addition to Callco's rights contained in the Exchangeable Share Provisions,
including, without limitation, the Retraction Call Right, Callco shall have the
following rights in respect of the Exchangeable Shares:
(1) Callco shall have the overriding right (the "LIQUIDATION CALL RIGHT"),
in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of Exchangeco or any other distribution of the
assets of Exchangeco for the purpose of winding up its affairs pursuant
to Article 5 of the Exchangeable Share Provisions, to purchase from all
but not less than all of the holders of Exchangeable Shares (other than
any holder of Exchangeable Shares which is Parent or an Affiliate of
Parent) on the Liquidation Date all but not less than all of the
Exchangeable Shares held by each such holder on payment by Callco to
each such holder of an amount per Exchangeable Share (the "LIQUIDATION
CALL PURCHASE PRICE") equal to the sum of (i) the Current Market Price
of a Parent Common Share on the last Business Day prior to the
Liquidation Date, which shall be satisfied in full by Callco delivering
or causing to be delivered to such holder one Parent Common Share, plus
(ii) any Dividend Amount. In the event of the exercise of the
Liquidation Call Right by Callco, each holder (other than Parent and its
Affiliates) shall be obligated to sell all the Exchangeable Shares held
by the holder to Callco on the Liquidation Date on payment by Callco to
the holder of the Liquidation Call Purchase Price for each such share,
and Exchangeco shall have no obligation to pay any Liquidation Amount to
the holders of such shares so purchased by Callco.
(2) To exercise the Liquidation Call Right, Callco must notify Exchangeco's
transfer agent (the "TRANSFER AGENT"), as agent for the holders of
Exchangeable Shares, and Exchangeco of Callco's intention to exercise
such right at least 45 days before the Liquidation Date in the case of a
voluntary liquidation, dissolution or winding-up of Exchangeco or any
other distribution of the assets of Exchangeco for the purpose of
winding up its affairs and at least five Business Days before the
Liquidation Date in the case of an involuntary liquidation, dissolution
or winding-up of Exchangeco. The Transfer Agent will notify the holders
of Exchangeable Shares as to whether or not Callco has exercised the
Liquidation Call Right forthwith after
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the expiry of the period during which the same may be exercised by
Callco. If Callco exercises the Liquidation Call Right, then on the
Liquidation Date, Callco will purchase and the holders (other than
Parent and its Affiliates) will sell all of the Exchangeable Shares then
outstanding for a price per Exchangeable Share equal to the Liquidation
Call Purchase Price.
(3) For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Liquidation Call Right, Callco shall deposit or cause to
be deposited with the Transfer Agent, on or before the Liquidation Date,
certificates representing the aggregate number of Parent Common Shares
deliverable by Callco and a cheque or cheques of Callco payable at par
at any branch of the bankers of Callco representing the aggregate
Dividend Amount, if any, in payment of the total Liquidation Call
Purchase Price for all holders of Exchangeable Shares (other than Parent
and its Affiliates), less any amounts withheld pursuant to section 4.7.
Provided that Callco has complied with the immediately preceding
sentence, on and after the Liquidation Date, each holder of Exchangeable
Shares (other than Parent and its Affiliates) shall cease to be a holder
of Exchangeable Shares and shall not be entitled to exercise any of the
rights of a holder of Exchangeable Shares (including, without
limitation, any rights under the Voting and Exchange Trust Agreement),
other than the right to receive, without interest, its proportionate
part of the total Liquidation Call Purchase Price payable by Callco upon
presentation and surrender by such holder of certificates representing
the Exchangeable Shares held by such holder and the holder shall on and
after the Liquidation Date be considered and deemed for all purposes to
be the holder of the Parent Common Shares to which it is entitled. Upon
surrender to the Transfer Agent of a certificate or certificates
representing Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable
Shares under the CBCA and the by-laws of Exchangeco and such additional
documents, instruments and payments (including, without limitation, any
applicable Stamp Taxes) as the Transfer Agent may reasonably require,
the holder of such surrendered certificate or certificates shall be
entitled to receive in exchange therefor, and the Transfer Agent on
behalf of Callco shall deliver to such holder, certificates representing
the Parent Common Shares to which the holder is entitled and a cheque or
cheques of Callco payable at par at any branch of the bankers of Callco
in payment of the remaining portion, if any, of the total
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Liquidation Call Purchase Price, less any amounts withheld pursuant to
section 4.7. If Callco does not exercise the Liquidation Call Right in
the manner described above, on the Liquidation Date the holders of the
Exchangeable Shares will be entitled to receive in exchange therefor the
Liquidation Amount otherwise payable by Exchangeco in connection with
the liquidation, dissolution or winding-up of Exchangeco or any other
distribution of the assets of Exchangeco for the purpose of winding up
its affairs pursuant to Article 5 of the Exchangeable Share Provisions.
5.2 CALLCO REDEMPTION CALL RIGHT
In addition to Callco's rights contained in the Exchangeable Share Provisions,
including, without limitation, the Retraction Call Right, Callco shall have the
following rights in respect of the Exchangeable Shares:
(1) Callco shall have the overriding right (the "REDEMPTION CALL RIGHT"),
notwithstanding the proposed redemption of the Exchangeable Shares by
Exchangeco pursuant to Article 7 of the Exchangeable Share Provisions,
to purchase from all but not less than all of the holders of
Exchangeable Shares (other than any holder of Exchangeable Shares which
is Parent or an Affiliate of Parent) on the Redemption Date all but not
less than all of the Exchangeable Shares held by each such holder on
payment by Callco to each such holder of an amount per Exchangeable
Share (the "REDEMPTION CALL PURCHASE PRICE") equal to the sum of (i) the
Current Market Price of a Parent Common Share on the last Business Day
prior to the Redemption Date, which shall be satisfied in full by Callco
delivering or causing to be delivered to such holder one Parent Common
Share, plus (ii) any Dividend Amount. In the event of the exercise of
the Redemption Call Right by Callco, each holder (other than Parent and
its Affiliates) shall be obligated to sell all the Exchangeable Shares
held by the holder to Callco on the Redemption Date on payment by Callco
to the holder of the Redemption Call Purchase Price for each such share,
and Exchangeco shall have no obligation to redeem, or to pay any
Dividend Amount in respect of, such shares so purchased by Callco.
(2) To exercise the Redemption Call Right, Callco must notify the Transfer
Agent, as agent for the holders of Exchangeable Shares, and Exchangeco
of Callco's intention to exercise such right at least 60 days before the
Redemption Date, except in the case of a redemption occurring as a
result of a Parent Control Transaction, an Exchangeable Share Voting
Event or an Exempt Exchangeable Share Voting Event, in which case Callco
shall so notify
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the Transfer Agent and Exchangeco on or before the Redemption Date. The
Transfer Agent will notify the holders of the Exchangeable Shares as to
whether or not Callco has exercised the Redemption Call Right forthwith
after the expiry of the period during which the same may be exercised by
Callco. If Callco exercises the Redemption Call Right, on the Redemption
Date, Callco will purchase and the holders (other than Parent and its
Affiliates) will sell all of the Exchangeable Shares then outstanding
for a price per Exchangeable Share equal to the Redemption Call Purchase
Price.
(3) For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Redemption Call Right, Callco shall deposit or cause to
be deposited with the Transfer Agent, on or before the Redemption Date,
certificates representing the aggregate number of Parent Common Shares
deliverable by Callco and a cheque or cheques of Callco payable at par
at any branch of the bankers of Callco representing the aggregate
Dividend Amount, if any, in payment of the total Redemption Call
Purchase Price for all holders of Exchangeable Shares (other than Parent
and its Affiliates), less any amounts withheld pursuant to section 4.7.
Provided that Callco has complied with the immediately preceding
sentence, on and after the Redemption Date each holder of Exchangeable
Shares (other than Parent and its Affiliates) shall cease to be a holder
of the Exchangeable Shares and shall not be entitled to exercise any of
the rights of holders of Exchangeable Shares (including, without
limitation, any rights under the Voting and Exchange Trust Agreement),
other than the right to receive, without interest, its proportionate
part of the total Redemption Call Purchase Price payable by Callco upon
presentation and surrender by such holder of certificates representing
the Exchangeable Shares held by such holder and the holder shall on and
after the Redemption Date be considered and deemed for all purposes to
be the holder of the Parent Common Shares to which it is entitled. Upon
surrender to the Transfer Agent of a certificate or certificates
representing Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable
Shares under the CBCA and the by-laws of Exchangeco and such additional
documents, instruments and payments (including, without limitation, any
applicable Stamp Taxes) as the Transfer Agent may reasonably require,
the holder of such surrendered certificate or certificates shall be
entitled to receive in exchange therefor, and the Transfer Agent on
behalf of Callco shall deliver to such holder, certificates
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representing the Parent Common Shares to which the holder is entitled
and a cheque or cheques of Callco payable at par at any branch of the
bankers of Callco in payment of the remaining portion, if any, of the
total Redemption Call Purchase Price, less any amounts withheld pursuant
to section 4.7. If Callco does not exercise the Redemption Call Right in
the manner described above, on the Redemption Date the holders of the
Exchangeable Shares will be entitled to receive in exchange therefor the
Redemption Price otherwise payable by Exchangeco in connection with the
redemption of the Exchangeable Shares pursuant to Article 7 of the
Exchangeable Share Provisions, together with accrued and unpaid
dividends on such Exchangeable Shares held by the holder on any dividend
record date prior to the Redemption Date.
5.3 PARENT CALL RIGHT
(1) Parent will have the right (the "PARENT CALL RIGHT") to purchase, or to
cause Callco to purchase, from all but not less than all of the holders
of Exchangeable Shares (other than Parent and its Affiliates) on the
Change in Law Exchange Date all but not less than all of the
Exchangeable Shares held by each such holder on payment by Parent or
Callco, as the case may be, of an amount per Exchangeable Share (the
"PARENT CALL PURCHASE PRICE") equal to the sum of (i) the Current Market
Price of a Parent Common Share on the last Business Day prior to the
Change in Law Exchange Date, which shall be satisfied in full by Parent
delivering or causing to be delivered, or Callco causing to be
delivered, to such holder one Parent Common Share, plus, (ii) any
Dividend Amount. In the event of the exercise of the Parent Call Right
by Parent each holder (other than Parent and its Affiliates) shall be
obligated to sell all of the Exchangeable Shares held by such holder to
Parent or Callco, as the case may be, on the Change in Law Exchange Date
on payment by Parent or Callco, as the case may be, to the holder of the
Parent Call Purchase Price for each such share.
(2) To exercise the Parent Call Right, (i) Parent must notify the Transfer
Agent, as agent for the holders of Exchangeable Shares, and Exchangeco
of Parent's intention to exercise or cause Callco to exercise such right
at least 45 days before the Business Day on which the purchase of such
Exchangeable Shares shall occur (the "CHANGE IN LAW EXCHANGE DATE") and
such notice shall specify whether Parent or Callco will effect such
purchase, and (ii) Parent must deliver to the Trustee an opinion in
writing signed by
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Canadian counsel to Parent (which counsel must be acceptable to the
Trustee) stating that since the Effective Date there has been a change
enacted to the ITA and any applicable Quebec provincial income tax
legislation to the effect that the sale by beneficial owners of
Exchangeable Shares (other than Parent and its Affiliates) who are
Canadian Residents and who hold their Exchangeable Shares as capital
property for the purposes of the ITA and any applicable Quebec
provincial income tax legislation of Exchangeable Shares to Parent or
Callco, as the case may be, pursuant to the Parent Call Right will
qualify as a tax deferred transaction for purposes of the ITA and any
applicable Quebec provincial income tax legislation which opinion, for
greater certainty, shall take into account in determining the tax
deferred nature of such sale pursuant to the Parent Call Right, the
disposition and receipt of any rights pursuant to a shareholder rights
plan of Exchangeco or Parent. The Transfer Agent will notify the holders
of Exchangeable Shares that the Parent Call Right has been exercised by
Parent or Callco. If Parent exercises the Parent Call Right, then on the
Change in Law Exchange Date Parent or Callco, as the case may be, will
purchase and the holders (other than Parent and its Affiliates) will
sell to Parent or Callco, as the case may be, all of the Exchangeable
Shares held by such holders for a price per share equal to the Parent
Call Purchase Price.
(3) For the purposes of completing the purchase of the Exchangeable Shares
pursuant to the Parent Call Right, Parent or Callco, as the case may be,
shall deposit or cause to be deposited with the Transfer Agent, on or
before the Change in Law Exchange Date, certificates representing the
aggregate number of Parent Common Shares deliverable by Parent or
Callco, as the case may be, and a cheque or cheques of Parent or Callco,
as the case may be, payable at par at any branch of the bankers of
Parent or Callco, as the case may be, representing the aggregate
Dividend Amount, if any, in payment of the total Parent Call Purchase
Price for all holders of Exchangeable Shares (other than Parent and its
Affiliates) less any amounts withheld pursuant to section 4.7. Provided
that Parent or Callco, as the case may be, has complied with the
immediately preceding sentence, on and after the Change in Law Exchange
Date, each holder of Exchangeable Shares (other than Parent and its
Affiliates) shall cease to be a holder of Exchangeable Shares and shall
not be entitled to exercise any of the rights of a holder of
Exchangeable Shares (including, without limitation, any rights under the
Voting and Exchange Trust Agreement) other than the right
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to receive, without interest, its proportionate part of the total Parent
Call Purchase Price payable by Parent or Callco, as the case may be,
upon presentation and surrender by such holder of certificates
representing the Exchangeable Shares held by such holder and the holder
shall on and after the Change in Law Exchange Date be considered and
deemed for all purposes to be the holder of the Parent Common Shares to
which it is entitled. Upon surrender to the Transfer Agent of a
certificate or certificates representing Exchangeable Shares, together
with such other documents and instruments as may be required to effect a
transfer of Exchangeable Shares under the CBCA and the by-laws of
Exchangeco and such additional documents, instruments and payments
(including, without limitation, any applicable Stamp Taxes) as the
Transfer Agent may reasonably require, the holder of such surrendered
certificate or certificates shall be entitled to receive in exchange
therefor, and the Transfer Agent on behalf of Parent or Callco, as the
case may be, shall deliver to such holder, certificates representing the
Parent Common Shares to which the holder is entitled and a cheque or
cheques of Parent or Callco, as the case may be, payable at par at any
branch of the bankers of Parent or Callco, as the case may be, in
payment of the remaining portion, if any, of the Parent Call Purchase
Price less any amounts withheld pursuant to section 4.7 hereof.
ARTICLE 6
AMENDMENTS
6.1 AMENDMENTS TO PLAN OF ARRANGEMENT
(1) Company reserves the right to amend, modify or supplement this Plan of
Arrangement at any time and from time to time prior to the Effective
Date, provided that each such amendment, modification or supplement must
be (i) set out in writing, (ii) approved by Parent, (iii) filed with the
Court and, if made following the Company Meeting, approved by the Court,
and (iv) communicated to Company Securityholders if and as required by
the Court.
(2) Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by Company at any time prior to the Company Meeting
(provided that Parent shall have consented thereto) with or without any
other prior notice or communication, and if so proposed and accepted by
the Persons voting at the Company Meeting (subject to the requirements
of the Interim Order), shall become part of this Plan of Arrangement for
all purposes.
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(3) Any amendment, modification or supplement to this Plan of Arrangement
that is approved or directed by the Court following the Company Meeting
shall be effective only (i) if it is consented to by each of Company,
Exchangeco and Parent and (ii) if required by the Court, it is consented
to by Company Securityholders voting in the manner directed by the
Court.
(4) Any amendment, modification or supplement to this Plan of Arrangement
may be made following the Effective Date unilaterally by Parent,
provided that it concerns a matter which, in the reasonable opinion of
Parent, is of an administrative nature required to better give effect to
the implementation of this Plan of Arrangement and is not adverse to the
financial or economic interests of any holder of Exchangeable Shares.
ARTICLE 7
FURTHER ASSURANCES
7.1 FURTHER ASSURANCES
Each of the parties to the Combination Agreement shall make, do and execute, or
cause to be made, done and executed, all such further acts, deeds, agreements,
transfers, assurances, instruments or documents as may reasonably be required by
any of them in order further to document or evidence any of the transactions or
events set out herein.
APPENDIX 1
TO THE PLAN OF ARRANGEMENT
PROVISIONS ATTACHING TO THE
EXCHANGEABLE SHARES
The Exchangeable Shares shall have the following rights, privileges,
restrictions and conditions:
ARTICLE 1
INTERPRETATION
1.1 For the purposes of these share provisions:
"AFFILIATE" has the meaning ascribed thereto in the CBCA.
"ARRANGEMENT" means an arrangement under section 192 of the CBCA on the
terms and subject to the conditions set out in the Plan of Arrangement,
to which Plan of Arrangement these share provisions are attached as
Appendix 1 and which Plan of Arrangement (other than Appendix 1 thereto)
is attached to these share provisions as Exhibit A.
"BOARD OF DIRECTORS" means the Board of Directors of the Corporation.
"BUSINESS DAY" means any day on which commercial banks are open for
business in Milpitas, California, New York, New York and Montreal,
Quebec, other than a Saturday, a Sunday or a day observed as a holiday
in Milpitas, California under applicable laws, in Montreal, Quebec under
applicable laws or in New York, New York under applicable laws.
"CALLCO" means 3942163 Canada Inc., a corporation existing under the
laws of Canada, and being a wholly-owned indirect subsidiary of Parent
and a corporation for U.S. federal income tax purposes.
"CALLCO CALL NOTICE" has the meaning ascribed thereto in section 6.3 of
these share provisions.
"CBCA" means the Canada Business Corporations Act, as amended from time
to time.
"COMBINATION AGREEMENT" means the combination agreement dated as of
August 8, 2001, as amended by an amending agreement dated as of
September 7, 2001, by and among Parent, the Corporation, 3924548 Canada
Inc. and C-MAC Industries Inc., as further amended, supplemented and/or
restated in accordance with its terms prior to the Effective Date,
providing for, among other things, the Arrangement.
"CANADIAN DOLLAR EQUIVALENT" means in respect of an amount expressed in
a currency other than Canadian dollars (the "FOREIGN CURRENCY AMOUNT")
at any date the product obtained by multiplying:
(a) the Foreign Currency Amount; by
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(b) the noon spot exchange rate on such date for such foreign
currency expressed in Canadian dollars as reported by the Bank of
Canada or, in the event such spot exchange rate is not available,
such spot exchange rate on such date for such foreign currency
expressed in Canadian dollars as may be determined by the Board
of Directors to be appropriate for such purpose.
"CLASS A NON-VOTING SHARES" means the Class A Non-Voting Shares in the
capital of the Corporation.
"COMMON SHARES" means the common shares in the capital of the
Corporation.
"CORPORATION" means Solectron Global Services Canada Inc., a corporation
existing under the CBCA.
"CURRENT MARKET PRICE" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing
prices of Parent Common Shares during a period of 20 consecutive trading
days ending not more than three trading days before such date on the
NYSE, or, if the Parent Common Shares are not then listed on the NYSE,
on such other stock exchange or automated quotation system on which the
Parent Common Shares are listed or quoted, as the case may be, as may be
selected by the Board of Directors for such purpose; provided, however,
that if in the opinion of the Board of Directors the public distribution
or trading activity of Parent Common Shares during such period does not
create a market which reflects the fair market value of a Parent Common
Share, then the Current Market Price of a Parent Common Share shall be
determined by the Board of Directors, in good faith and in its sole
discretion, and provided further that any such selection, opinion or
determination by the Board of Directors shall be conclusive and binding.
"DEPOSITARY" means any trust company in Canada selected by the
Corporation for purposes of holding some or all of the Liquidation
Amount or Redemption Price in accordance with Article 5 or 7,
respectively.
"DIRECTOR" means the Director appointed pursuant to section 260 of the
CBCA.
"DIVIDEND AMOUNT" means an amount equal to the full amount of all
declared and unpaid dividends on an Exchangeable Share held by a holder
on any dividend record date which occurred prior to the date of purchase
of such share by Callco from such holder.
"EFFECTIVE DATE" means the date shown on the certificate of arrangement
to be issued by the Director under the CBCA giving effect to the
Arrangement.
"EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
capital of the Corporation, having the rights, privileges, restrictions
and conditions set forth herein.
"EXCHANGEABLE SHARE VOTING EVENT" means any matter in respect of which
holders of Exchangeable Shares are entitled to vote as shareholders of
the Corporation, other than an
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Exempt Exchangeable Share Voting Event, and, for greater certainty,
excluding any matter in respect of which holders of Exchangeable Shares
are entitled to vote (or instruct the Trustee to vote) in their capacity
as Beneficiaries under (and as that term is defined in) the Voting and
Exchange Trust Agreement.
"EXEMPT EXCHANGEABLE SHARE VOTING EVENT" means any matter in respect of
which holders of Exchangeable Shares are entitled to vote as
shareholders of the Corporation in order to approve or disapprove, as
applicable, any change to, or in the rights of the holders of, the
Exchangeable Shares, where the approval or disapproval, as applicable,
of such change would be required to maintain the economic equivalence of
the Exchangeable Shares and the Parent Common Shares.
"GOVERNMENTAL ENTITY" means any court, administrative agency, tribunal,
bureau, board, commission, public authority, governmental or regulatory
authority, agency, ministry, crown corporation or other law, rule-or
regulation-making entity, domestic or foreign, or any quasi-governmental
body, self-regulatory organization or stock exchange, including without
limitation the Toronto Stock Exchange or the NYSE.
"HOLDER" means, when used with reference to the Exchangeable Shares, a
holder of Exchangeable Shares shown from time to time in the register
maintained by or on behalf of the Corporation in respect of the
Exchangeable Shares.
"LIQUIDATION AMOUNT" has the meaning ascribed thereto in section 5.1 of
these share provisions.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"LIQUIDATION DATE" has the meaning ascribed thereto in section 5.1 of
these share provisions.
"NOVA SCOTIA COMPANY" means Solectron Canada ULC, an unlimited liability
company existing under the laws of Nova Scotia, being a wholly-owned
direct subsidiary of Parent.
"NYSE" means the New York Stock Exchange, Inc. or its successors.
"PARENT" means Solectron Corporation, a corporation existing under the
laws of Delaware.
"PARENT CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"PARENT COMMON SHARE" means a share of common stock in the capital of
Parent and any other securities into which such shares may be changed
and, in the event of any transaction described in Section 11.3, the
corresponding shares in the capital of Parent Successor.
"PARENT CONTROL TRANSACTION" means any merger, amalgamation,
arrangement, tender offer, material sale of shares or rights or
interests therein or thereto or similar transactions involving Parent,
or any proposal to do so.
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"PARENT DIVIDEND DECLARATION DATE" means the date on which the board of
directors of Parent declares any dividend on the Parent Common Shares.
"PERSON" means any individual, corporation (including any non-profit
corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including
any limited liability company or joint stock company), firm or other
enterprise, association, organization, entity or Governmental Entity.
"PLAN OF ARRANGEMENT" means the plan of arrangement relating to the
arrangement of C-MAC Industries Inc. under section 192 of the CBCA,
which plan of arrangement (other than Appendix 1) is attached to these
share provisions as Exhibit A and any amendments or variations thereto
made in accordance with the Plan of Arrangement or made at the direction
of the Court.
"PURCHASE PRICE" has the meaning ascribed thereto in section 6.3 of
these share provisions.
"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in the
Plan of Arrangement.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"REDEMPTION DATE" means the date, if any, established by the Board of
Directors for the redemption by the Corporation of all but not less than
all of the outstanding Exchangeable Shares (other than any such shares
then held by Parent or an Affiliate of Parent) pursuant to Article 7 of
these share provisions, which date shall be no earlier than the seventh
anniversary of the Effective Date, unless:
(a) at any time after the fifth anniversary of the Effective Date,
there are fewer than 15,748,337 Exchangeable Shares outstanding
(other than Exchangeable Shares held by Parent and its
Affiliates, and as such number of shares may be adjusted as
deemed appropriate by the Board of Directors to give effect to
any subdivision or consolidation of or stock dividend on the
Exchangeable Shares, any issue or distribution of rights to
acquire Exchangeable Shares (other than rights issued pursuant to
the Shareholder Rights Agreement) or securities exchangeable for
or convertible into Exchangeable Shares, any issue or
distribution of other securities or rights or evidences of
indebtedness or assets, or any other capital reorganization or
other transaction affecting the Exchangeable Shares), in which
case the Board of Directors may accelerate such redemption date
to such date as they may determine, upon at least 60 days' prior
written notice to the holders of the Exchangeable Shares and the
Trustee;
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(b) at any time, there are fewer than 5,249,446 Exchangeable Shares
outstanding (other than Exchangeable Shares held by Parent and
its Affiliates, and as such number of shares may be adjusted as
deemed appropriate by the Board of Directors to give effect to
any subdivision or consolidation of or stock dividend on the
Exchangeable Shares, any issue or distribution of rights to
acquire Exchangeable Shares (other than rights issued pursuant to
the Shareholder Rights Agreement) or securities exchangeable for
or convertible into Exchangeable Shares, any issue or
distribution of other securities or rights or evidences of
indebtedness or assets, or any other capital reorganization or
other transaction affecting the Exchangeable Shares), in which
case the Board of Directors may accelerate such redemption date
to such date as they may determine, upon at least 60 days' prior
written notice to the holders of the Exchangeable Shares and the
Trustee;
(c) a Parent Control Transaction occurs, in which case, provided that
the Board of Directors determines, in good faith and in its sole
discretion, that the Parent Control Transaction involves a bona
fide third party and is not for the primary purpose of causing
the occurrence of a Redemption Date, and that it is not
reasonably practicable to substantially replicate the terms and
conditions of the Exchangeable Shares in connection with such
Parent Control Transaction and that the redemption of all but not
less than all of the outstanding Exchangeable Shares is necessary
to enable the completion of such Parent Control Transaction in
accordance with its terms, the Board of Directors may accelerate
such redemption date to such date as they may determine, upon
such number of days' prior written notice to the holders of the
Exchangeable Shares and the Trustee as the Board of Directors may
determine to be reasonably practicable in such circumstances;
(d) an Exchangeable Share Voting Event is proposed and (i) the Board
of Directors has determined, in good faith and in its sole
discretion, that it is not reasonably practicable to accomplish
the business purpose intended by the Exchangeable Share Voting
Event, which business purpose must be bona fide and not for the
primary purpose of causing the occurrence of a Redemption Date,
in any other commercially reasonable manner that does not result
in an Exchangeable Share
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Voting Event, and (ii) the holders of the Exchangeable Shares
fail to take the necessary action, at a meeting or other vote of
holders of Exchangeable Shares, to approve or disapprove, as
applicable, the Exchangeable Share Voting Event, in which case
the redemption date shall be the Business Day following the day
on which the holders of the Exchangeable Shares failed to take
such action; or
(e) an Exempt Exchangeable Share Voting Event is proposed and the
holders of Exchangeable Shares fail to take the necessary action
at a meeting or other vote of holders of Exchangeable Shares, to
approve or disapprove, as applicable, the Exempt Exchangeable
Share Voting Event, in which case the redemption date shall be
the Business Day following the day on which the holders of the
Exchangeable Shares failed to take such action,
provided, however, that the accidental failure or omission to give any
notice of redemption under clauses (a), (b), (c), (d), or (e) above to
less than 20% of such holders of Exchangeable Shares shall not affect
the validity of any such redemption.
"REDEMPTION PRICE" has the meaning ascribed thereto in section 7.1 of
these share provisions.
"RETRACTED SHARES" has the meaning ascribed thereto in section 6.1(a) of
these share provisions.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in section
6.1(c) of these share provisions.
"RETRACTION DATE" has the meaning ascribed thereto in section 6.1(b) of
these share provisions.
"RETRACTION PRICE" has the meaning ascribed thereto in section 6.1 of
these share provisions.
"RETRACTION REQUEST" has the meaning ascribed thereto in section 6.1 of
these share provisions.
"SHAREHOLDER RIGHTS AGREEMENT" means the Exchangeable Share Rights
Agreement made among the Corporation, Parent and National Bank Trust
Inc., dated as of December 2, 2001 providing for the rights to purchase
Exchangeable Shares upon the terms and conditions set out therein.
"SUPPORT AGREEMENT" means the Exchangeable Share support agreement made
among Parent, Callco, Nova Scotia Company and the Corporation
substantially in the form and content of Exhibit D to the Combination
Agreement, as amended pursuant to the terms of the Support Agreement.
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"TRANSFER AGENT" means National Bank Trust Inc. or such other Person as
may from time to time be appointed by the Corporation as the registrar
and transfer agent for the Exchangeable Shares.
"TRUSTEE" means the trustee chosen by Parent, acting reasonably, to act
as trustee under the Voting and Exchange Trust Agreement, being a
corporation organized and existing under the laws of Canada and
authorized to carry on the business of a trust company in all the
provinces of Canada, and any successor trustee appointed under the
Voting and Exchange Trust Agreement.
"VOTING AND EXCHANGE TRUST AGREEMENT" means the agreement made among
Parent, the Corporation and the Trustee in connection with the Plan of
Arrangement substantially in the form and content of Exhibit E to the
Combination Agreement, as amended pursuant to the terms of the Voting
and Exchange Trust Agreement.
ARTICLE 2
RANKING OF EXCHANGEABLE SHARES
2.1 The Exchangeable Shares shall be entitled to a preference over the
Common Shares, the Class A Non-Voting Shares and any other shares
ranking junior to the Exchangeable Shares with respect to the payment of
dividends and the distribution of assets in the event of the
liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary, or any other distribution of the assets of the
Corporation among its shareholders for the purpose of winding up its
affairs.
ARTICLE 3
DIVIDENDS
3.1 A holder of an Exchangeable Share shall be entitled to receive and the
Board of Directors shall, subject to applicable law, on each Parent
Dividend Declaration Date, declare a dividend on each Exchangeable
Share:
(a) in the case of a cash dividend declared on the Parent Common
Shares, in an amount in cash for each Exchangeable Share equal to
and in the currency of or the Canadian Dollar Equivalent of the
cash dividend declared on each Parent Common Share on the Parent
Dividend Declaration Date;
(b) in the case of a stock dividend declared on the Parent Common
Shares to be paid in Parent Common Shares, by the issue by the
Corporation of such number of Exchangeable Shares for each
Exchangeable Share as is equal to the number of Parent Common
Shares to be paid on each Parent Common Share unless in lieu of
such
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stock dividend the Corporation elects to effect a corresponding
and contemporaneous and economically equivalent (as determined by
the Board of Directors in accordance with section 3.5 hereof)
subdivision of the outstanding Exchangeable Shares; or
(c) in the case of a dividend declared on the Parent Common Shares in
property other than cash or Parent Common Shares, in such type
and amount of property for each Exchangeable Share as is the same
as or economically equivalent to (to be determined by the Board
of Directors as contemplated by section 3.5 hereof) the type and
amount of property declared as a dividend on each Parent Common
Share.
Such dividends shall be paid out of money, assets or property of the
Corporation properly applicable to the payment of dividends, or out of
authorized but unissued shares of the Corporation, or through the
subdivision of outstanding Exchangeable Shares, as applicable. The
holders of Exchangeable Shares shall not be entitled to any dividends
other than or in excess of the dividends referred to in this section
3.1.
3.2 Cheques of the Corporation payable at par at any branch of the bankers
of the Corporation shall be issued in respect of any cash dividends
contemplated by section 3.1(a) hereof and the sending of such a cheque
to each holder of an Exchangeable Share shall satisfy the cash dividend
represented thereby unless the cheque is not paid on presentation.
Certificates registered in the name of the registered holder of
Exchangeable Shares shall be issued or transferred in respect of any
stock dividends contemplated by section 3.1(b) hereof and the sending of
such a certificate to each holder of an Exchangeable Share shall satisfy
the stock dividend represented thereby. Such other type and amount of
property in respect of any dividends contemplated by section 3.1(c)
hereof shall be issued, distributed or transferred by the Corporation in
such manner as it shall determine and the issuance, distribution or
transfer thereof by the Corporation to each holder of an Exchangeable
Share shall satisfy the dividend represented thereby. No holder of an
Exchangeable Share shall be entitled to recover by action or other legal
process against the Corporation any dividend that is represented by a
cheque that has not been duly presented to the Corporation's bankers for
payment or that otherwise remains unclaimed for a period of six years
from the date on which such dividend was payable.
3.3 The record date for the determination of the holders of Exchangeable
Shares entitled to receive payment of, and the
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payment date for, any dividend declared on the Exchangeable Shares under
section 3.1 hereof shall be the same dates as the record date and
payment date, respectively, for the corresponding dividend declared on
the Parent Common Shares.
3.4 If on any payment date for any dividends declared on the Exchangeable
Shares under section 3.1 hereof the dividends are not paid in full on
all of the Exchangeable Shares then outstanding, any such dividends that
remain unpaid shall be paid on a subsequent date or dates determined by
the Board of Directors on which the Corporation shall have sufficient
moneys, assets or property properly applicable to the payment of such
dividends.
3.5 The Board of Directors shall determine, in good faith and in its sole
discretion, economic equivalence for the purposes of section 3.1 hereof,
and each such determination shall be conclusive and binding on the
Corporation and its shareholders. In making each such determination, the
following factors shall, without excluding other factors determined by
the Board of Directors to be relevant, be considered by the Board of
Directors:
(a) in the case of any stock dividend or other distribution payable
in Parent Common Shares, the number of such shares issued as a
result of such dividend or distribution in proportion to the
number of Parent Common Shares previously outstanding;
(b) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase Parent Common
Shares (or securities exchangeable for or convertible into or
carrying rights to acquire Parent Common Shares), the
relationship between the exercise price of each such right,
option or warrant and the Current Market Price of a Parent Common
Share;
(c) in the case of the issuance or distribution of any other form of
property (including without limitation any shares or securities
of Parent of any class other than Parent Common Shares, any
rights, options or warrants other than those referred to in
section 3.5(b) hereof, any evidences of indebtedness of Parent or
any assets of Parent), the relationship between the fair market
value (as determined by the Board of Directors) of such property
to be issued or distributed with respect to each outstanding
Parent
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Common Share and the Current Market Price of a Parent Common
Share;
(d) in the case of any subdivision, redivision or change of the then
outstanding Parent Common Shares into a greater number of Parent
Common Shares or the reduction, combination, consolidation or
change of the then outstanding Parent Common Shares into a lesser
number of Parent Common Shares or any amalgamation, merger,
reorganization or other transaction affecting Parent Common
Shares, the effect thereof upon the then outstanding Parent
Common Shares; and
(e) in all such cases, the general taxation consequences of the
relevant event to beneficial owners of Exchangeable Shares to the
extent that such consequences may differ from the taxation
consequences to such owners determined as if they owned Parent
Common Shares at the relevant time as a result of differing tax
treatment under the laws of Canada and the United States (except
for any differing consequences arising as a result of differing
marginal taxation rates and without regard to the individual
circumstances of beneficial owners of Exchangeable Shares).
ARTICLE 4
CERTAIN RESTRICTIONS
4.1 So long as any of the Exchangeable Shares are outstanding, the
Corporation shall not at any time without, but may at any time with, the
approval of the holders of the Exchangeable Shares given as specified in
section 10.2 of these share provisions:
(a) pay any dividends on the Common Shares or any other shares
ranking junior to the Exchangeable Shares, other than stock
dividends payable in Common Shares or any such other shares
ranking junior to the Exchangeable Shares, as the case may be;
(b) redeem or purchase or make any capital distribution in respect of
Common Shares or any other shares ranking junior to the
Exchangeable Shares;
(c) redeem or purchase any other shares of the Corporation ranking
equally with the Exchangeable Shares with respect to the payment
of dividends or on any liquidating distribution; or
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(d) issue any Exchangeable Shares or any other shares of the
Corporation ranking equally with, or superior to, the
Exchangeable Shares other than pursuant to a shareholders rights
plan adopted by the Corporation or by way of stock dividends to
the holders of such Exchangeable Shares.
The restrictions in this Section 4.1 shall not apply if all dividends on the
outstanding Exchangeable Shares corresponding to dividends declared and paid on
the Parent Common Shares shall have been declared and paid on the Exchangeable
Shares.
ARTICLE 5
DISTRIBUTION ON LIQUIDATION
5.1 In the event of the liquidation, dissolution or winding-up of the
Corporation or any other distribution of the assets of the Corporation
among its shareholders for the purpose of winding up its affairs,
subject to the exercise by Callco of the Liquidation Call Right, a
holder of Exchangeable Shares shall be entitled, subject to applicable
law, to receive from the assets of the Corporation in respect of each
Exchangeable Share held by such holder on the effective date (the
"LIQUIDATION DATE") of such liquidation, dissolution or winding-up or
other distribution, before any distribution of any part of the assets of
the Corporation among the holders of the Common Shares or any other
shares ranking junior to the Exchangeable Shares, an amount per share
(the "LIQUIDATION AMOUNT") equal to the sum of: (i) the Current Market
Price of a Parent Common Share on the last Business Day prior to the
Liquidation Date, which shall be satisfied in full by the Corporation
delivering or causing to be delivered to such holder one Parent Common
Share, and (ii) an amount equal to all declared and unpaid dividends on
each such Exchangeable Share held by such holder on any dividend record
date which occurred prior to the Liquidation Date.
5.2 On or promptly after the Liquidation Date, and provided the Liquidation
Call Right has not been exercised by Callco, the Corporation shall pay
or cause to be paid to the holders of the Exchangeable Shares the
Liquidation Amount for each such Exchangeable Share upon presentation
and surrender of the certificates representing such Exchangeable Shares,
together with such other documents and instruments as may be required to
effect a transfer of Exchangeable Shares under the CBCA and the by-laws
of the Corporation and such additional documents, instruments and
payments as the Transfer Agent and the Corporation may reasonably
require, at the registered office of the
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Corporation or at any office of the Transfer Agent as may be specified
by the Corporation by notice to the holders of the Exchangeable Shares.
Payment of the total Liquidation Amount for such Exchangeable Shares
shall be made by transferring or causing to be transferred to each
holder the Parent Common Shares to which such holder is entitled and by
delivering to such holder, at the address of such holder recorded in the
register of shareholders of the Corporation for the Exchangeable Shares
or by holding for pick-up by such holder at the registered office of the
Corporation or at any office of the Transfer Agent as may be specified
by the Corporation by notice to the holders of Exchangeable Shares, on
behalf of the Corporation certificates representing Parent Common Shares
(which shares shall be fully paid and non-assessable and shall be free
and clear of any lien, claim or encumbrance) and a cheque of the
Corporation payable at par at any branch of the bankers of the
Corporation in respect of the remaining portion, if any, of the total
Liquidation Amount (in each case, less any amounts withheld on account
of tax pursuant to section 13.3). On and after the Liquidation Date,
each holder of Exchangeable Shares shall cease to be a holder of
Exchangeable Shares and shall not be entitled to exercise any of the
rights of a holder of Exchangeable Shares (including, without
limitation, any rights under the Voting and Exchange Trust Agreement),
other than the right to receive its proportionate part of the total
Liquidation Amount, unless payment of the total Liquidation Amount for
such Exchangeable Shares shall not be made upon presentation and
surrender of share certificates in accordance with the foregoing
provisions, in which case the rights of the holder shall remain
unaffected until the total Liquidation Amount has been paid in the
manner hereinbefore provided. The Corporation shall have the right at
any time after the Liquidation Date to transfer or cause to be issued or
transferred to, and deposited with, the Depositary the total Liquidation
Amount in respect of the Exchangeable Shares represented by certificates
that have not at the Liquidation Date been surrendered by the holders
thereof, such Liquidation Amount to be held by the Depositary as trustee
for and on behalf of, and for the use and benefit of, such holders. Upon
such deposit being made, the rights of a holder of Exchangeable Shares
after such deposit shall be limited to receiving its proportionate part
of the total Liquidation Amount for such Exchangeable Shares so
deposited, without interest, (in each case less any amounts withheld on
account of tax pursuant to section 13.3) against presentation and
surrender of the certificates for the Exchangeable Shares held by them
in
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accordance with the foregoing provisions. Upon such payment or deposit
of the total Liquidation Amount, the holders of Exchangeable Shares
shall thereafter be considered and deemed for all purposes to be holders
of the Parent Common Shares delivered to them or the Depositary on their
behalf.
5.3 After the Corporation has satisfied its obligations to pay the holders
of the Exchangeable Shares the Liquidation Amount per Exchangeable Share
pursuant to section 5.1 of these share provisions, such holders shall
not be entitled to share in any further distribution of the assets of
the Corporation.
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ARTICLE 6
RETRACTION OF EXCHANGEABLE SHARES BY HOLDER
6.1 A holder of Exchangeable Shares shall be entitled at any time, subject
to the exercise by Callco of the Retraction Call Right and otherwise
upon compliance with, and subject to, the provisions of this Article 6,
to require the Corporation to redeem any or all of the Exchangeable
Shares registered in the name of such holder for an amount per share
equal to the sum of: (i) the Current Market Price of a Parent Common
Share on the last Business Day prior to the Retraction Date (the
"RETRACTION PRICE"), which shall be satisfied in full by the Corporation
delivering or causing to be delivered to such holder one Parent Common
Share for each Exchangeable Share presented and surrendered by the
holder, and (ii) on the designated payment date therefor, the full
amount of all declared and unpaid dividends on any such Exchangeable
Share held by such holder on any dividend record date which occurred
prior to the Retraction Date. To effect such redemption, the holder
shall present and surrender at the registered office of the Corporation
or at any office of the Transfer Agent as may be specified by the
Corporation by notice to the holders of Exchangeable Shares the
certificate or certificates representing the Exchangeable Shares which
the holder desires to have the Corporation redeem, together with such
other documents and instruments as may be required to effect a transfer
of Exchangeable Shares under the CBCA and the by-laws of the Corporation
and such additional documents, instruments and payments as the Transfer
Agent and the Corporation may reasonably require, and together with a
duly executed statement (the "RETRACTION REQUEST") in the form of
Schedule A hereto or in such other form as may be acceptable to the
Corporation:
(a) specifying that the holder desires to have all or any number
specified therein of the Exchangeable Shares represented by such
certificate or certificates (the "RETRACTED SHARES") redeemed by
the Corporation;
(b) stating the Business Day on which the holder desires to have the
Corporation redeem the Retracted Shares (the "RETRACTION DATE"),
provided that the Retraction Date shall be not less than 10
Business Days nor more than 15 Business Days after the date on
which the Retraction Request is received by the Corporation and
further provided that, in the event that no such Business Day is
specified by the holder in the Retraction Request, the Retraction
Date shall be
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deemed to be the 15th Business Day after the date on which the
Retraction Request is received by the Corporation; and
(c) acknowledging the overriding right (the "RETRACTION CALL RIGHT")
of Callco to purchase all but not less than all the Retracted
Shares directly from the holder and that the Retraction Request
shall be deemed to be a revocable offer by the holder to sell the
Retracted Shares to Callco in accordance with the Retraction Call
Right on the terms and conditions set out in section 6.3 hereof.
6.2 Subject to the exercise by Callco of the Retraction Call Right, upon
receipt by the Corporation or the Transfer Agent in the manner specified
in section 6.1 of a certificate or certificates representing the number
of Retracted Shares, together with a Retraction Request, and provided
that the Retraction Request is not revoked by the holder in the manner
specified in section 6.7, the Corporation shall redeem the Retracted
Shares effective at the close of business on the Retraction Date and
shall transfer or cause to be issued or transferred to such holder the
Parent Common Shares to which such holder is entitled and shall comply
with section 6.4 hereof. If only a part of the Exchangeable Shares
represented by any certificate is redeemed (or purchased by Callco
pursuant to the Retraction Call Right), a new certificate for the
balance of such Exchangeable Shares shall be issued to the holder at the
expense of the Corporation.
6.3 Upon receipt by the Corporation of a Retraction Request, the Corporation
shall immediately notify Callco thereof and shall provide to Callco a
copy of the Retraction Request. In order to exercise the Retraction Call
Right, Callco must notify the Corporation of its determination to do so
(the "CALLCO CALL NOTICE") within five Business Days of notification to
Callco by the Corporation of the receipt by the Corporation of the
Retraction Request. If Callco does not so notify the Corporation within
such five Business Day period, the Corporation will notify the holder as
soon as possible thereafter that Callco will not exercise the Retraction
Call Right. If Callco delivers the Callco Call Notice within such five
Business Day period, and provided that the Retraction Request is not
revoked by the holder in the manner specified in section 6.7, the
Retraction Request shall thereupon be considered only to be an offer by
the holder to sell the Retracted Shares to Callco in accordance with the
Retraction Call Right. In such event, the
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Corporation shall not redeem the Retracted Shares and Callco shall
purchase from such holder and such holder shall sell to Callco on the
Retraction Date the Retracted Shares for a purchase price (the "PURCHASE
PRICE") per share equal to the sum of: (i) the Retraction Price per
share, and (ii) on the designated payment date therefor, to the extent
not paid by the Corporation on or before the designated payment date
therefor, any Dividend Amount. To the extent that Callco pays the
Dividend Amount in respect of the Retracted Shares, the Corporation
shall no longer be obligated to pay any declared and unpaid dividends on
such Retracted Shares. Provided that Callco has complied with section
6.4 hereof, the closing of the purchase and sale of the Retracted Shares
pursuant to the Retraction Call Right shall be deemed to have occurred
as at the close of business on the Retraction Date and, for greater
certainty, no redemption by the Corporation of such Retracted Shares
shall take place on the Retraction Date. In the event that Callco does
not deliver a Callco Call Notice within such five Business Day period,
and provided that the Retraction Request is not revoked by the holder in
the manner specified in section 6.7, the Corporation shall redeem the
Retracted Shares on the Retraction Date and in the manner otherwise
contemplated in this Article 6.
6.4 The Corporation or Callco, as the case may be, shall deliver or cause
the Transfer Agent to deliver to the relevant holder, at the address of
the holder recorded in the register of shareholders of the Corporation
for the Exchangeable Shares or at the address specified in the holder's
Retraction Request or by holding for pick-up by the holder at the
registered office of the Corporation or at any office of the Transfer
Agent as may be specified by the Corporation by notice to the holders of
Exchangeable Shares, certificates representing the Parent Common Shares
(which shares shall be fully paid and non-assessable and shall be free
and clear of any lien, claim or encumbrance) registered in the name of
the holder or in such other name as the holder may request, and, if
applicable and on or before the payment date therefor, a cheque payable
at par at any branch of the bankers of the Corporation or Callco, as
applicable, in an amount equal to declared and unpaid dividends or the
aggregate Dividend Amount, as the case may be, in payment of the total
Retraction Price or the total Purchase Price, as the case may be, in
each case, less any amounts withheld on account of tax pursuant to
section 13.3, and such delivery of such certificates and cheques on
behalf of the Corporation or by Callco, as the case may be, or by the
Transfer Agent shall be deemed to be payment of
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and shall satisfy and discharge all liability for the total Retraction
Price or total Purchase Price, as the case may be, to the extent that
the same is represented by such share certificates and cheques (plus any
tax deducted and withheld therefrom and remitted to the proper tax
authority).
6.5 On and after the close of business on the Retraction Date, the holder of
the Retracted Shares shall cease to be a holder of such Retracted Shares
and shall not be entitled to exercise any of the rights of a holder in
respect thereof (including, without limitation, any rights under the
Voting and Exchange Trust Agreement), other than the right to receive
its proportionate part of the total Retraction Price or total Purchase
Price, as the case may be, unless upon presentation and surrender of
certificates in accordance with the foregoing provisions, payment of the
total Retraction Price or the total Purchase Price, as the case may be,
shall not be made as provided in section 6.4 hereof, in which case the
rights of such holder shall remain unaffected until the total Retraction
Price or the total Purchase Price, as the case may be, has been paid in
the manner hereinbefore provided. On and after the close of business on
the Retraction Date, provided that presentation and surrender of
certificates and payment of the total Retraction Price or the total
Purchase Price, as the case may be, has been made in accordance with the
foregoing provisions, the holder of the Retracted Shares so redeemed by
the Corporation or purchased by Callco shall thereafter be a holder of
the Parent Common Shares delivered to it.
6.6 Notwithstanding any other provision of this Article 6, the Corporation
shall not be obligated to redeem Retracted Shares specified by a holder
in a Retraction Request to the extent that such redemption of Retracted
Shares would be contrary to solvency requirements or other provisions of
applicable law. If the Corporation believes that on any Retraction Date
it would not be permitted by any of such provisions to redeem the
Retracted Shares tendered for redemption on such date, and provided that
Callco shall not have exercised the Retraction Call Right with respect
to the Retracted Shares, the Corporation shall only be obligated to
redeem Retracted Shares specified by a holder in a Retraction Request to
the extent of the maximum number that may be so redeemed (rounded down
to a whole number of shares) as would not be contrary to such provisions
and shall notify the holder and the Trustee at least two Business Days
prior to the Retraction Date as to the number of Retracted Shares which
will not be redeemed by the
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Corporation. In any case in which the redemption by the Corporation of
Retracted Shares would be contrary to solvency requirements or other
provisions of applicable law, the Corporation shall redeem Retracted
Shares in accordance with section 6.2 of these share provisions on a pro
rata basis and shall issue to each holder of Retracted Shares a new
certificate, at the expense of the Corporation, representing the
Retracted Shares not redeemed by the Corporation pursuant to section 6.2
hereof. Provided that the Retraction Request is not revoked by the
holder in the manner specified in section 6.7 and that Callco has not
exercised the Retraction Call Right with respect to the Retracted
Shares, the holder of such Retracted Shares not redeemed by the
Corporation pursuant to section 6.2 as a result of solvency requirements
or other provisions of applicable law shall be deemed by giving the
Retraction Request to constitute notice by the holder to the Trustee
instructing the Trustee to require Parent to, subject to applicable law,
purchase such Retracted Shares from such holder on the Retraction Date
or as soon as practicable thereafter on payment by Parent to such holder
of the Purchase Price for each such Retracted Share, all as more
specifically provided in the Voting and Exchange Trust Agreement.
6.7 A holder of Retracted Shares may, by notice in writing given by the
holder to the Corporation before the close of business on the Business
Day immediately preceding the Retraction Date, withdraw its Retraction
Request, in which event such Retraction Request shall be null and void
and, for greater certainty, the revocable offer constituted by the
Retraction Request to sell the Retracted Shares to Callco shall be
deemed to have been revoked.
ARTICLE 7
REDEMPTION OF EXCHANGEABLE SHARES BY THE CORPORATION
7.1 Subject to applicable law, and provided Callco has not exercised the
Redemption Call Right, the Corporation shall on the Redemption Date
redeem all but not less than all of the then outstanding Exchangeable
Shares (other than any such shares then held by Parent or an Affiliate
of Parent) for an amount per share equal to the sum of: (i) the Current
Market Price of a Parent Common Share on the last Business Day prior to
the Redemption Date (the "REDEMPTION PRICE"), which shall be satisfied
in full by the Corporation causing to be delivered to each holder of
Exchangeable Shares one Parent Common Share for each Exchangeable Share
held by such holder, together with (ii)
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the full amount of all declared and unpaid dividends on each such
Exchangeable Share held by such holder on any dividend record date which
occurred prior to the Redemption Date.
7.2 In any case of a redemption of Exchangeable Shares under this Article 7,
the Corporation shall, at least 60 days before the Redemption Date
(other than a Redemption Date established in connection with a Parent
Control Transaction, an Exchangeable Share Voting Event or an Exempt
Exchangeable Share Voting Event), send or cause to be sent to each
holder of Exchangeable Shares a notice in writing of the redemption by
the Corporation or the purchase by Callco under the Redemption Call
Right, as the case may be, of the Exchangeable Shares held by such
holder. In the case of a Redemption Date established in connection with
a Parent Control Transaction, an Exchangeable Share Voting Event or an
Exempt Exchangeable Share Voting Event, the written notice of the
redemption by the Corporation or the purchase by Callco under the
Redemption Call Right will be sent on or before the Redemption Date, on
as many days prior written notice as may be determined by the Board of
Directors to be reasonably practicable in the circumstances. In any such
case, such notice shall set out the formula for determining the
Redemption Price or the Redemption Call Purchase Price, as the case may
be, the Redemption Date and, if applicable, particulars of the
Redemption Call Right.
7.3 On or after the Redemption Date and subject to the exercise by Callco of
the Redemption Call Right, the Corporation shall pay or cause to be paid
to the holders of the Exchangeable Shares to be redeemed the Redemption
Price for each such Exchangeable Share, together with the full amount of
all declared and unpaid dividends on each such Exchangeable Share held
by such holder on any dividend record date which occurred prior to the
Redemption Date, less any amounts withheld on account of tax pursuant to
section 13.3, upon presentation and surrender at the registered office
of the Corporation or at any office of the Transfer Agent as may be
specified by the Corporation in such notice of the certificates
representing such Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the CBCA and the by-laws of the Corporation
and such additional documents, instruments and payments as the Transfer
Agent and the Corporation may reasonably require. Payment of the total
Redemption Price for such Exchangeable Shares, together with payment of
such
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dividends, shall be made by transferring or causing to be issued or
transferred to each holder the Parent Common Shares to which such holder
is entitled and by delivering to such holder, at the address of such
holder recorded in the register of shareholders of the Corporation for
the Exchangeable Shares or by holding for pick-up by such holder at the
registered office of the Corporation or at any office of the Transfer
Agent as may be specified by the Corporation in such notice, on behalf
of the Corporation certificates representing Parent Common Shares (which
shares shall be fully paid and non-assessable and shall be free and
clear of any lien, claim or encumbrance) and, if applicable, a cheque of
the Corporation payable at par at any branch of the bankers of the
Corporation in payment of any such dividends, in each case, less any
amounts withheld on account of tax pursuant to section 13.3. On and
after the Redemption Date, the holders of the Exchangeable Shares called
for redemption shall cease to be holders of such Exchangeable Shares and
shall not be entitled to exercise any of the rights of holders in
respect thereof (including, without limitation, any rights under the
Voting and Exchange Trust Agreement), other than the right to receive
their proportionate part of the total Redemption Price and any such
dividends, unless payment of the total Redemption Price and any such
dividends for such Exchangeable Shares shall not be made upon
presentation and surrender of certificates in accordance with the
foregoing provisions, in which case the rights of the holders shall
remain unaffected until the total Redemption Price and any such
dividends have been paid in the manner hereinbefore provided. The
Corporation shall have the right at any time after the sending of notice
of its intention to redeem the Exchangeable Shares as aforesaid to
transfer or cause to be issued or transferred to, and deposited with,
the Depositary named in such notice the total Redemption Price for and
the full amount of such dividends on the Exchangeable Shares (except as
otherwise provided in this section 7.3) so called for redemption, or of
such of the said Exchangeable Shares represented by certificates that
have not at the date of such deposit been surrendered by the holders
thereof in connection with such redemption, less any amounts withheld on
account of tax pursuant to section 13.3, such Redemption Price to be
held by the Depositary as trustee for and on behalf of, and for the use
and benefit of, such holders. Upon the later of such deposit being made
and the Redemption Date, the Exchangeable Shares in respect whereof such
deposit shall have been made shall be redeemed and the rights of the
holders thereof after such deposit or Redemption Date, as
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the case may be, shall be limited to receiving their proportionate part
of the total Redemption Price and such dividends for such Exchangeable
Shares, without interest, and when received by the Depositary, all
dividends and other distributions with respect to the Parent Common
Shares to which such holder is entitled with a record date after the
later of the date of such deposit and the Redemption Date and before the
date of transfer of such Parent Common Shares to such holder (in each
case less any amounts withheld on account of tax pursuant to section
13.3), without interest, against presentation and surrender of the
certificates for the Exchangeable Shares held by them in accordance with
the foregoing provisions. Upon such payment or deposit of the total
Redemption Price and the full amount of such dividends, the holders of
Exchangeable Shares shall thereafter be considered and deemed for all
purposes to be holders of the Parent Common Shares delivered to them or
the Depositary on their behalf.
ARTICLE 8
PURCHASE FOR CANCELLATION
8.1 Subject to applicable law and notwithstanding section 8.2 hereof, the
Corporation may at any time and from time to time purchase for
cancellation all or any part of the Exchangeable Shares by private
agreement with any holder of Exchangeable Shares.
8.2 Subject to applicable law, the Corporation may at any time and from time
to time purchase for cancellation all or any part of the outstanding
Exchangeable Shares at any price by tender to all the holders of record
of Exchangeable Shares then outstanding or through the facilities of any
stock exchange on which the Exchangeable Shares are listed or quoted at
any price per share. If in response to an invitation for tenders under
the provisions of this section 8.2, more Exchangeable Shares are
tendered at a price or prices acceptable to the Corporation than the
Corporation is prepared to purchase, the Exchangeable Shares to be
purchased by the Corporation shall be purchased as nearly as may be pro
rata according to the number of shares tendered by each holder who
submits a tender to the Corporation, provided that when shares are
tendered at different prices, the pro rating shall be effected
(disregarding fractions) only with respect to the shares tendered at the
price at which more shares were tendered than the Corporation is
prepared to purchase after the Corporation has purchased all the shares
tendered at lower prices. If part only of the Exchangeable Shares
represented
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by any certificate shall be purchased, a new certificate for the balance
of such shares shall be issued at the expense of the Corporation.
ARTICLE 9
VOTING RIGHTS
9.1 Except as required by applicable law and by section 10 hereof, the
holders of the Exchangeable Shares shall not be entitled as such to
receive notice of or to attend any meeting of the shareholders of the
Corporation or to vote at any such meeting.
ARTICLE 10
AMENDMENT AND APPROVAL
10.1 The rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be added to, changed or removed but only with
the approval of the holders of the Exchangeable Shares given as
hereinafter specified.
10.2 Any approval given by the holders of the Exchangeable Shares to add to,
change or remove any right, privilege, restriction or condition
attaching to the Exchangeable Shares or any other matter requiring the
approval or consent of the holders of the Exchangeable Shares shall be
deemed to have been sufficiently given if it shall have been given in
accordance with applicable law subject to a minimum requirement that
such approval be evidenced by resolution passed by not less than
two-thirds of the votes cast on such resolution at a meeting of holders
of Exchangeable Shares duly called and held at which the holders of at
least 20% of the outstanding Exchangeable Shares at that time are
present or represented by proxy; provided that if at any such meeting
the holders of at least 20% of the outstanding Exchangeable Shares at
that time are not present or represented by proxy within one-half hour
after the time appointed for such meeting, then the meeting shall be
adjourned to such date not less than five days thereafter and to such
time and place as may be designated by the Chairman of such meeting. At
such adjourned meeting the holders of Exchangeable Shares present or
represented by proxy thereat may transact the business for which the
meeting was originally called and a resolution passed thereat by the
affirmative vote of not less than two-thirds of the votes cast on such
resolution at such meeting shall constitute the approval or consent of
the holders of the Exchangeable Shares.
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ARTICLE 11
RECIPROCAL CHANGES, ETC. IN RESPECT OF PARENT COMMON SHARES
11.1 Each holder of an Exchangeable Share acknowledges that the Support
Agreement provides, in part, that so long as any Exchangeable Shares not
owned by Parent or its Affiliates are outstanding, Parent will not
without the prior approval of the Corporation and the prior approval of
the holders of the Exchangeable Shares given in accordance with section
10.2 of these share provisions:
(a) issue or distribute Parent Common Shares (or securities
exchangeable for or convertible into or carrying rights to
acquire Parent Common Shares) to the holders of all or
substantially all of the then outstanding Parent Common Shares by
way of stock dividend or other distribution, other than an issue
of Parent Common Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Parent Common
Shares) to holders of Parent Common Shares (i) who exercise an
option to receive dividends in Parent Common Shares (or
securities exchangeable for or convertible into or carrying
rights to acquire Parent Common Shares) in lieu of receiving cash
dividends, or (ii) pursuant to any dividend reinvestment plan;
(b) issue or distribute rights, options or warrants to the holders of
all or substantially all of the then outstanding Parent Common
Shares entitling them to subscribe for or to purchase Parent
Common Shares (or securities exchangeable for or convertible into
or carrying rights to acquire Parent Common Shares); or
(c) issue or distribute to the holders of all or substantially all of
the then outstanding Parent Common Shares:
(i) shares or securities of Parent of any class other than
Parent Common Shares (other than shares or securities
convertible into or exchangeable for or carrying rights to
acquire Parent Common Shares);
(ii) rights, options or warrants other than those referred to
in section 11.1(b) above;
(iii) evidences of indebtedness of Parent; or
(iv) assets of Parent,
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unless the economic equivalent on a per share basis of such rights,
options, warrants, securities, shares, evidences of indebtedness or
other assets is issued or distributed simultaneously to holders of the
Exchangeable Shares; provided that, for greater certainty, the above
restrictions shall not apply to any securities issued or distributed by
Parent in order to give effect to and consummate the transactions
contemplated by, and in accordance with, the Combination Agreement.
11.2 Each holder of an Exchangeable Share acknowledges that the Support
Agreement further provides, in part, that so long as any Exchangeable
Shares not owned by Parent or its Affiliates are outstanding, Parent
will not without the prior approval of the Corporation and the prior
approval of the holders of the Exchangeable Shares given in accordance
with section 10.2 of these share provisions:
(a) subdivide, redivide or change the then outstanding Parent Common
Shares into a greater number of Parent Common Shares;
(b) reduce, combine, consolidate or change the then outstanding
Parent Common Shares into a lesser number of Parent Common
Shares; or
(c) reclassify or otherwise change the Parent Common Shares or effect
an amalgamation, merger, reorganization or other transaction
affecting the Parent Common Shares,
unless the same or an economically equivalent change shall
simultaneously be made to, or in, the rights of the holders of the
Exchangeable Shares, provided that, for greater certainty, the above
restrictions shall not apply to any securities issued or distributed by
Parent in order to give effect to and consummate the transactions
contemplated by, and in accordance with, the Combination Agreement. The
Support Agreement further provides, in part, that the aforesaid
provisions of the Support Agreement shall not be changed without the
approval of the holders of the Exchangeable Shares given in accordance
with section 10.2 of these share provisions.
11.3 If Parent, at any time after the date hereof, consummates any
transaction (whether by way of reconstruction, reorganization,
consolidation, arrangement, merger, transfer, sale, lease or otherwise)
whereby all or substantially all of its undertaking, property and assets
would become the property of any other Person or, in the case of a
merger, of the continuing corporation or other entity resulting
therefrom (such other person or continuing corporation (or, in the event
of a merger, amalgamation or similar transaction pursuant to which
holders of shares in the capital of Parent are entitled to receive
shares or other ownership interests in the capital of any corporation
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or other legal entity other than such other person or continuing
corporation, then such corporation or other legal entity in which
holders of shares in the capital of Parent are entitled to receive an
interest) is herein called the "Parent Successor") then, provided that
the Parent Successor is bound, or has agreed to be bound, by the
provisions of the Voting and Exchange Trust Agreement and Support
Agreement and to assume the obligations of Parent thereunder to the
satisfaction of the Board of Directors, all references in these share
provisions to Parent Common Shares shall be deemed to be references to
the shares of the Parent Successor which has assumed the obligations of
Parent and all references to Parent shall be to Parent Successor,
without amendment to these share provisions or any further action
whatsoever. For greater certainty, if a transaction described in this
section 11.3 results in holders of Exchangeable Shares being entitled to
exchange their Exchangeable Shares for shares of a Parent Successor in a
different ratio than that set out in these share provisions, then these
share provisions shall be deemed to be amended to refer to such
different ratio(s).
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ARTICLE 12
ACTIONS BY THE CORPORATION UNDER SUPPORT AGREEMENT
12.1 The Corporation will take all such actions and do all such things as
shall be necessary or advisable to perform and comply with and to ensure
performance and compliance by Parent, Callco, Nova Scotia Company and
the Corporation with all provisions of the Support Agreement applicable
to Parent, Callco, Nova Scotia Company and the Corporation,
respectively, in accordance with the terms thereof including, without
limitation, taking all such actions and doing all such things as shall
be necessary or advisable to enforce to the fullest extent possible for
the direct benefit of the Corporation all rights and benefits in favour
of the Corporation under or pursuant to such agreement.
12.2 The Corporation shall not propose, agree to or otherwise give effect to
any amendment to, or waiver or forgiveness of its rights or obligations
under, the Support Agreement without the approval of the holders of the
Exchangeable Shares given in accordance with section 10.2 of these share
provisions other than such amendments, waivers and/or forgiveness as may
be necessary or advisable for the purposes of:
(a) adding to the covenants of the other parties to such agreement
for the protection of the Corporation or the holders of the
Exchangeable Shares thereunder;
(b) making such provisions or modifications not inconsistent with
such agreement as may be necessary or desirable with respect to
matters or questions arising thereunder which, in the good faith
opinion of the Board of Directors, it may be expedient to make,
provided that the Board of Directors shall be of the good faith
opinion, after consultation with counsel, that such provisions
and modifications will not be prejudicial to the interests of the
holders of the Exchangeable Shares; or
(c) making such changes in or corrections to such agreement which, on
the advice of counsel to the Corporation, are required for the
purpose of curing or correcting any ambiguity or defect or
inconsistent provision or clerical omission or mistake or
manifest error contained therein, provided that the Board of
Directors shall be of the good faith opinion, after consultation
with counsel, that such changes or
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corrections will not be prejudicial to the interests of the
holders of the Exchangeable Shares.
ARTICLE 13
LEGEND; CALL RIGHTS; WITHHOLDING RIGHTS
13.1 The certificates evidencing the Exchangeable Shares shall contain or
have affixed thereto a legend in form and on terms approved by the Board
of Directors, with respect to the Support Agreement, the provisions of
the Plan of Arrangement relating to the Liquidation Call Right, the
Redemption Call Right and the Parent Call Right, the Voting and Exchange
Trust Agreement (including the provisions with respect to the voting
rights, exchange right and automatic exchange rights thereunder) and the
Retraction Call Right.
13.2 Each holder of an Exchangeable Share, whether of record or beneficial,
by virtue of becoming and being such a holder shall be deemed to
acknowledge each of the Liquidation Call Right, the Retraction Call
Right, the Redemption Call Right and the Parent Call Right, in each
case, in favour of Callco or Parent, as the case may be, and in the case
of the Liquidation Call Right, the Retraction Call Right and the
Redemption Call Right, the overriding nature thereof in connection with
the liquidation, dissolution or winding-up of the Corporation or other
distribution of the assets of the Corporation among its shareholders for
the purpose of winding up its affairs or the retraction or redemption of
Exchangeable Shares, as the case may be, and to be bound thereby in
favour of Callco or Parent, as the case may be, as therein provided.
13.3 The Corporation, Callco, Parent, the Depositary and the Transfer Agent
shall be entitled to deduct and withhold from any dividend or
consideration otherwise payable to any holder of Exchangeable Shares
such amounts as the Corporation, Callco, Parent, the Depositary or the
Transfer Agent is required to deduct and withhold with respect to such
payment under the Income Tax Act (Canada), the United States Internal
Revenue Code of 1986 or any provision of federal, provincial,
territorial, state, local or foreign tax law, in each case, as amended
or succeeded, or entitled to withhold under section 116 of the Income
Tax Act (Canada) or any corresponding provision of provincial laws. To
the extent that amounts are so withheld, such withheld amounts shall be
treated for all purposes as having been paid to the holder of the
Exchangeable Shares in respect of which such deduction and withholding
was made, provided that such withheld amounts are actually remitted to
the
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appropriate taxing authority. To the extent that the amount so required
or entitled to be deducted or withheld from any payment to a holder
exceeds the cash portion of the consideration otherwise payable to the
holder, the Corporation, Callco, Parent, the Depositary and the Transfer
Agent are hereby authorized to sell or otherwise dispose of such portion
of the consideration as is necessary to provide sufficient funds to the
Corporation, Callco, Parent, the Depositary or the Transfer Agent, as
the case may be, to enable it to comply with such deduction or
withholding requirement or entitlement and the Corporation, Callco,
Parent, the Depositary or the Transfer Agent shall notify the holder
thereof and remit to such holder any unapplied balance of the net
proceeds of such sale.
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ARTICLE 14
NOTICES
14.1 Any notice, request or other communication to be given to the
Corporation by a holder of Exchangeable Shares shall be in writing and
shall be valid and effective if given by mail (postage prepaid) or by
telecopy or by delivery to the registered office of the Corporation and
addressed to the attention of the Secretary of the Corporation. Any such
notice, request or other communication, if given by mail, telecopy or
delivery, shall only be deemed to have been given and received upon
actual receipt thereof by the Corporation.
14.2 Any presentation and surrender by a holder of Exchangeable Shares to the
Corporation or the Transfer Agent of certificates representing
Exchangeable Shares in connection with the liquidation, dissolution or
winding-up of the Corporation or other distribution of the assets of the
Corporation for the purpose of winding up its affairs or the retraction
or redemption of Exchangeable Shares shall be made by registered mail
(postage prepaid) or by delivery to the registered office of the
Corporation or to such office of the Transfer Agent as may be specified
by the Corporation, in each case, addressed to the attention of the
Secretary of the Corporation. Any such presentation and surrender of
certificates shall only be deemed to have been made and to be effective
upon actual receipt thereof by the Corporation or the Transfer Agent, as
the case may be. Any such presentation and surrender of certificates
made by registered mail shall be at the sole risk of the holder mailing
the same.
14.3 Any notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of the Corporation shall be in
writing and shall be valid and effective if given by mail (postage
prepaid) or by delivery to the address of the holder recorded in the
register of shareholders of the Corporation or, in the event of the
address of any such holder not being so recorded, then at the last known
address of such holder. Any such notice, request or other communication,
if given by mail, shall be deemed to have been given and received on the
third Business Day following the date of mailing and, if given by
delivery, shall be deemed to have been given and received on the date of
delivery. Accidental failure or omission to give any notice, request or
other communication to one or more holders of Exchangeable Shares shall
not invalidate or
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otherwise alter or affect any action or proceeding to be taken by the
Corporation pursuant thereto.
14.4 If the Corporation determines that mail service is or is threatened to
be interrupted at the time when the Corporation is required or elects to
give any notice to the holders of Exchangeable Shares hereunder, the
Corporation shall, notwithstanding the provisions hereof, give such
notice by means of publication in The Globe and Mail, national edition,
or any other English language daily newspaper or newspapers of general
circulation in Canada and in a French language daily newspaper of
general circulation in the Province of Quebec, once in each of two
successive weeks, and notice so published shall be deemed to have been
given on the latest date on which the first publication has taken place.
ARTICLE 15
DISCLOSURE OF INTERESTS IN EXCHANGEABLE SHARES
15.1 The Corporation shall be entitled to require any holder of an
Exchangeable Share or any Person who the Corporation knows or has
reasonable cause to believe holds any interest whatsoever in an
Exchangeable Share to confirm that fact or to give such details as to
who has an interest in such Exchangeable Share as would be required (if
the Exchangeable Shares were a class of "equity shares" of the
Corporation) under section 101 of the Securities Act (Ontario) or under
section 147.11 of the Securities Act (Quebec), or as would be required
under the articles of Parent or any laws or regulations, or pursuant to
the rules or regulations of any regulatory authority, of Canada or the
United States if the Exchangeable Shares were Parent Common Shares.
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ARTICLE 16
NO FRACTIONAL SHARES
16.1 A holder of Exchangeable Shares shall not be entitled to any fraction of
a Parent Common Share upon the exchange or purchase of such holder's
Exchangeable Shares pursuant to Articles 5, 6 or 7 and no certificates
representing any such fractional interest shall be issued and such
holder otherwise entitled to a fractional interest will receive for such
fractional interest from the Corporation or Callco as the case may be on
the designated payment date a cash payment equal to such fractional
interest multiplied by the Current Market Price.
SCHEDULE A
NOTICE OF RETRACTION
To: Solectron Global Services Canada Inc. (the "Corporation"), National Bank
Trust Inc. and 3942163 Canada Inc. ("Callco").
This notice is given pursuant to Article 6 of the provisions (the "Share
Provisions") attaching to the Exchangeable Shares of the Corporation represented
by this certificate and all capitalized words and expressions used in this
notice that are defined in the Share Provisions have the meanings ascribed to
such words and expressions in such Share Provisions.
The undersigned hereby notifies the Corporation that, subject to the Retraction
Call Right referred to below, the undersigned desires to have the Corporation
redeem in accordance with section 6 of the Share Provisions:
[ ] all share(s) represented by this certificate; or
[ ]_____________share(s) only represented by this certificate.
The undersigned hereby notifies the Corporation that the Retraction Date
shall be________________________.
NOTE: The Retraction Date must be a Business Day and must not be less than 10
Business Days nor more than 15 Business Days after the date upon which this
notice is received by the Corporation. If no such Business Day is specified
above, the Retraction Date shall be deemed to be the 15th Business Day after the
date on which this notice is received by the Corporation.
The undersigned acknowledges the overriding Retraction Call Right of Callco to
purchase all but not less than all the Retracted Shares from the undersigned and
that this notice is and shall be deemed to be a revocable offer by the
undersigned to sell the Retractable Shares to Callco in accordance with the
Retraction Call Right on the Retraction Date for the Purchase Price and on the
other terms and conditions set out in Article 6 of the Share Provisions. This
notice of retraction, and this offer to sell the Retracted Shares to Callco, may
be revoked and withdrawn by the undersigned only by notice in writing given to
the Corporation at any time before the close of business on the Business Day
immediately preceding the Retraction Date.
The undersigned acknowledges that if, as a result of solvency provisions of
applicable law, the Corporation is unable to redeem all Retracted Shares, and
provided that Callco shall not have exercised the Retraction Call Right with
respect to the Retracted Shares, the undersigned will be deemed to have
exercised the Exchange Right (as defined in the Voting and Exchange Trust
Agreement) pursuant to which Parent will purchase the unredeemed Retracted
Shares.
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The undersigned hereby represents and warrants to Callco and the Corporation
that the undersigned:
[ ] is
(select one)
[ ] is not
a non-resident of Canada for purposes of the Income Tax Act (Canada).
THE UNDERSIGNED ACKNOWLEDGES THAT IN THE ABSENCE OF AN INDICATION THAT THE
UNDERSIGNED IS NOT A NON-RESIDENT OF CANADA, DEDUCTION AND WITHHOLDING ON
ACCOUNT OF CANADIAN TAX MAY BE MADE FROM AMOUNTS PAYABLE TO THE UNDERSIGNED ON
THE REDEMPTION OR PURCHASE OF THE RETRACTED SHARES.
The undersigned hereby represents and warrants to Callco and the Corporation
that the undersigned has good title to, and owns, the share(s) represented by
this certificate to be acquired by Callco or the Corporation, as the case may
be, free and clear of all liens, claims and encumbrances.
_____________ _____________________________ ___________________________
(Date) (Signature of Shareholder) (Guarantee of Signature)
[ ] Please check box if the securities and any cheque(s) resulting from
the retraction or purchase of the Retracted Shares are to be held for
pick-up by the shareholder from the Transfer Agent, failing which the
securities and any cheque(s) will be mailed to the last address of
the shareholder as it appears on the register.
NOTE: This panel must be completed and this certificate, together with such
additional documents as the Transfer Agent may require, must be
deposited with the Transfer Agent. The securities and any cheque(s)
resulting from the retraction or purchase of the Retracted Shares
will be issued and registered in, and made payable to, respectively,
the name of the shareholder as it appears on the register of the
Corporation and the securities and any cheque(s) resulting from such
retraction or purchase will be delivered to such shareholder as
indicated above, unless the form appearing immediately below is duly
completed.
Date: _________________________
Name of Person in Whose Name Securities or Cheque(s) Are to be Registered,
Issued or Delivered (please print):
Street Address or P.O. Box: _______________________________
Signature of Shareholder: _______________________________
City, Province and Postal Code: _______________________________
Signature Guaranteed by: _______________________________
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NOTE: If this notice of retraction is for less than all of the shares
represented by this certificate, a certificate representing the remaining
share(s) of the Corporation represented by this certificate will be issued and
registered in the name of the shareholder as it appears on the register of the
Corporation, unless the Share Transfer Power on the share certificate is duly
completed in respect of such share(s).