EXHIBIT 1
SHAREHOLDER RIGHTS PLAN AGREEMENT
DATED AS OF APRIL 24, 2003 AND
AMENDED AND RESTATED AS OF APRIL 23, 0000
XXXXXXX
XXXXXXXXXXX CORPORATION
AND
COMPUTERSHARE TRUST COMPANY OF CANADA
AS RIGHTS AGENT
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SHAREHOLDER RIGHTS PLAN AGREEMENT
TABLE OF CONTENTS
ARTICLE 1 - INTERPRETATION....................................................1
1.1 CERTAIN DEFINITIONS...............................................1
1.2 CURRENCY.........................................................14
1.3 HEADINGS.........................................................14
1.4 CALCULATION OF NUMBER AND PERCENTAGE OF BENEFICIAL OWNERSHIP
OF OUTSTANDING VOTING SHARES.....................................15
1.5 ACTING JOINTLY OR IN CONCERT.....................................15
1.6 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.........................15
ARTICLE 2 - THE RIGHTS.......................................................16
2.1 ISSUE OF RIGHTS: LEGEND ON COMMON SHARE CERTIFICATES............16
2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT
OF RIGHTS........................................................16
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS..................19
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE..............................24
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES.....................................................24
2.6 REGISTRATION, TRANSFER AND EXCHANGE..............................25
2.7 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES........26
2.8 PERSONS DEEMED OWNERS OF RIGHTS..................................26
2.9 DELIVERY AND CANCELLATION OF CERTIFICATES........................27
2.10 AGREEMENT OF RIGHTS HOLDERS......................................27
2.11 RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER...............28
ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS........................................28
3.1 FLIP-IN EVENT....................................................28
ARTICLE 4 - THE RIGHTS AGENT.................................................30
4.1 GENERAL..........................................................30
4.2 MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME
OF RIGHTS AGENT..................................................30
4.3 DUTIES OF RIGHTS AGENT...........................................31
4.4 CHANGE OF RIGHTS AGENT...........................................33
ARTICLE 5 - MISCELLANEOUS....................................................34
5.1 REDEMPTION AND WAIVER............................................34
5.2 EXPIRATION.......................................................35
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES..............................35
5.4 SUPPLEMENTS AND AMENDMENTS.......................................36
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES..........................37
5.6 RIGHTS OF ACTION.................................................38
5.7 REGULATORY APPROVALS.............................................38
5.8 DECLARATION AS TO NON-CANADIAN OR NON-U.S. HOLDERS...............38
5.9 NOTICES..........................................................38
5.10 COSTS OF ENFORCEMENT.............................................40
5.11 SUCCESSORS.......................................................40
5.12 BENEFITS OF THIS AGREEMENT.......................................40
5.13 GOVERNING LAW....................................................40
5.14 SEVERABILITY.....................................................40
5.15 EFFECTIVE DATE OF AGREEMENT......................................40
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5.16 RECONFIRMATION AND APPROVAL: RECONFIRMATION.....................40
5.17 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.............41
5.18 TIME OF THE ESSENCE..............................................41
5.19 EXECUTION IN COUNTERPARTS........................................41
SHAREHOLDER RIGHTS PLAN AGREEMENT
MEMORANDUM OF AGREEMENT dated as of April 24, 2003 and amended and
restated as of April 23, 2004 between TransCanada Corporation (the
"Corporation"), a corporation incorporated under the CANADA BUSINESS
CORPORATIONS ACT and Computershare Trust Company of Canada, a trust company
incorporated under the laws of Canada (the "Rights Agent");
WHEREAS in connection with the completion of the Plan of Arrangement
pursuant to the Arrangement Agreement the board of directors of the Corporation
has determined that it is in the best interests of the Corporation to adopt a
shareholder rights plan to insure, to the extent possible, that all shareholders
of the Corporation are treated fairly in connection with any take-over bid for
the Corporation;
AND WHEREAS each Right entitles the holder thereof, after the Separation
Time, to purchase securities of the Corporation pursuant to the terms and
subject to the conditions set forth herein;
AND WHEREAS the Corporation desires to appoint the Rights Agent to act on
behalf of the Corporation and the holders of Rights, and the Rights Agent is
willing to so act, in connection with the issuance, transfer, exchange and
replacement of Rights Certificates (as hereinafter defined), the exercise of
Rights and other matters referred to herein;
AND WHEREAS this agreement was originally entered into by the Corporation
and the Rights Agent as of April 24, 2003 (such agreement, the "Original
Agreement");
AND WHEREAS the Original Agreement is hereby amended and restated as
provided herein (the Original Agreement as so amended and restated being
referred to as the "Agreement");
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements set forth herein, and subject to such covenants and
agreements, the parties hereby agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "ACQUIRING PERSON" shall mean any Person who is the Beneficial Owner
of 20% or more of the outstanding Voting Shares; provided, however,
that the term "Acquiring Person" shall not include:
(i) the Corporation or any Subsidiary of the Corporation;
(ii) any Person who becomes the Beneficial Owner of 20% or more of the
outstanding Voting Shares as a result of one or any combination
of (A) a
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Voting Share Reduction, (B) Permitted Bid Acquisitions, (C) an
Exempt Acquisition or (D) Pro Rata Acquisitions; provided,
however, that if a Person becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares by reason of one or any
combination of the operation of Paragraphs (A), (B), (C) or (D)
above and such Person's Beneficial Ownership of Voting Shares
thereafter increases by more than 1.0% of the number of Voting
Shares outstanding (other than pursuant to one or any combination
of a Voting Share Reduction, a Permitted Bid Acquisition, an
Exempt Acquisition or a Pro Rata Acquisition), then as of the
date such Person becomes the Beneficial Owner of such additional
Voting Shares, such Person shall become an "Acquiring Person";
(iii) for a period of ten days after the Disqualification Date (as
defined below), any Person who becomes the Beneficial Owner of
20% or more of the outstanding Voting Shares as a result of such
Person becoming disqualified from relying on Clause 1.1(g)(v)
solely because such Person or the Beneficial Owner of such Voting
Shares is making or has announced an intention to make a
Take-over Bid, either alone or by acting jointly or in concert
with any other Person. For the purposes of this definition,
"Disqualification Date" means the first date of public
announcement that any Person is making or has announced an
intention to make a Take-over Bid;
(iv) an underwriter or member of a banking or selling group that
becomes the Beneficial Owner of 20% or more of the Voting Shares
in connection with a distribution of securities of the
Corporation; or
(v) a Person (a "Grandfathered Person") who is the Beneficial Owner
of 20% or more of the outstanding Voting Shares of the
Corporation determined as at the Record Time, provided, however,
that this exception shall not be, and shall cease to be,
applicable to a Grandfathered Person in the event that such
Grandfathered Person shall, after the Record Time, become the
Beneficial Owner of additional Voting Shares of the Corporation
that increases its Beneficial Ownership of Voting Shares by more
than 1% of the number of Voting Shares outstanding as at the
Record Time (other than pursuant to one or any combination of a
Voting Share Reduction, a Permitted Bid Acquisition, an Exempt
Acquisition or a Pro Rata Acquisition);
(b) "AFFILIATE" when used to indicate a relationship with a Person means a
Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such specified Person;
(c) "AGREEMENT" shall mean this shareholder rights plan agreement dated as
of April 24, 2003 and amended and restated as of April 23, 2004
between the Corporation and the Rights Agent, as the same may be
further amended or supplemented from time to time; "hereof", "herein",
"hereto" and similar
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expressions mean and refer to this Agreement as a whole and not to any
particular part of this Agreement;
(d) "ANNUAL CASH DIVIDEND" shall mean cash dividends paid in any fiscal
year of the Corporation to the extent that such cash dividends do not
exceed, in the aggregate, the greatest of:
(i) 200 per cent of the aggregate amount of cash dividends declared
payable by the Corporation on its Common Shares in its
immediately preceding fiscal year;
(ii) 300 per cent of the arithmetic mean of the aggregate amounts of
the annual cash dividends declared payable by the Corporation on
its Common Shares in its three immediately preceding fiscal
years; and
(iii) 100 per cent of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its immediately
preceding fiscal year;
(e) "ARRANGEMENT AGREEMENT" means the Arrangement Agreement made as of
March 4, 2003 between TransCanada PipeLines Limited and TransCanada
Corporation providing for the implementation of the Plan of
Arrangement;
(f) "ASSOCIATE" means, when used to indicate a relationship with a
specified Person, a spouse of that Person, any Person of the same or
opposite sex with whom that Person is living in a conjugal
relationship outside marriage, a child of that Person or a relative of
that Person if that relative has the same residence as that Person;
(g) A Person shall be deemed the "BENEFICIAL OWNER" of, and to have
"BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY OWN",
(i) any securities as to which such Person or any of such Person's
Affiliates or Associates is the owner at law or in equity;
(ii) any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to become the owner at law
or in equity (where such right is exercisable within a period of
60 days and whether or not on condition or the happening of any
contingency or the making of any payment) pursuant to any
agreement, arrangement, pledge or understanding, whether or not
in writing (other than (x) customary agreements with and between
underwriters and/or banking group members and/or selling group
members with respect to a public offering or private placement of
securities and (y) pledges of securities in the ordinary course
of business), or upon the exercise of any conversion right,
exchange right, share purchase right (other than the Rights),
warrant or option; or
(iii) any securities which are Beneficially Owned within the meaning
of Clauses 1.1(g)(i) and (ii) by any other Person with whom such
Person is acting jointly or in concert;
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provided, however, that a Person shall not be deemed the "BENEFICIAL
OWNER" of, or to have "BENEFICIAL OWNERSHIP" of, or to "BENEFICIALLY
OWN", any security:
(iv) where such security has been or has been agreed to be deposited
or tendered pursuant to a Lock-up Agreement, or is otherwise
deposited or tendered, to any Take-over Bid made by such Person,
made by any of such Person's Affiliates or Associates or made by
any other Person acting jointly or in concert with such Person
until such deposited or tendered security has been taken up or
paid for, whichever shall first occur;
(v) where such Person, any of such Person's Affiliates or Associates
or any other Person acting jointly or in concert with such Person
holds such security provided that:
(A) the ordinary business of any such Person (the "Investment
Manager") includes the management of investment funds for
others (which others, for greater certainty, may include or
be limited to one or more employee benefit plans or pension
plans) and such security is held by the Investment Manager
in the ordinary course of such business in the performance
of such Investment Manager's duties for the account of any
other Person (a "Client") including non-discretionary
accounts held on behalf of a Client by a broker or dealer
appropriately registered under applicable law;
(B) such Person (the "Trust Company") is licensed to carry on
the business of a trust company under applicable laws and,
as such, acts as trustee or administrator or in a similar
capacity in relation to the estates of deceased or
incompetent Persons (each an "Estate Account") or in
relation to other accounts (each an "Other Account") and
holds such security in the ordinary course of such duties
for the estate of any such deceased or incompetent Person or
for such Other Accounts;
(C) such Person is established by statute for purposes that
include, and the ordinary business or activity of such
Person (the "Statutory Body") includes, the management of
investment funds for employee benefit plans, pension plans,
insurance plans or various public bodies;
(D) such Person (the "Administrator") is the administrator or
trustee of one or more pension funds or plans (a "Plan"), or
is a Plan, registered under the laws of Canada or any
Province thereof or the laws of the United States of America
or any State thereof; or
(E) such Person (the "Crown Agent") is a Crown agent or agency;
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provided, in any of the above cases, that the Investment Manager,
the Trust Company, the Statutory Body, the Administrator, the
Plan or the Crown Agent, as the case may be, is not then making a
Take-over Bid or has not then announced an intention to make a
Take-over Bid alone or acting jointly or in concert with any
other Person, other than an Offer to Acquire Voting Shares or
other securities (x) pursuant to a distribution by the
Corporation (y) by means of a Permitted Bid or (z) by means of
ordinary market transactions (including prearranged trades
entered into in the ordinary course of business of such Person)
executed through the facilities of a stock exchange or organized
over the counter market;
(vi) where such Person is (A) a Client of the same Investment Manager
as another Person on whose account the Investment Manager holds
such security, (B) an Estate Account or an Other Account of the
same Trust Company as another Person on whose account the Trust
Company holds such security or (C) a Plan with the same
Administrator as another Plan on whose account the Administrator
holds such security;
(vii) where such Person is (A) a Client of an Investment Manager and
such security is owned at law or in equity by the Investment
Manager, (B) an Estate Account or an Other Account of a Trust
Company and such security is owned at law or in equity by the
Trust Company or (C) a Plan and such security is owned at law or
in equity by the Administrator of the Plan; or
(viii) where such Person is a registered holder of such security as a
result of carrying on the business of, or acting as a nominee of,
a securities depositary;
(h) "BOARD OF DIRECTORS" shall mean the board of directors of the
Corporation or any duly constituted and empowered committee thereof;
(i) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in Calgary are authorized or
obligated by law to close;
(j) "CANADA BUSINESS CORPORATIONS ACT" means the CANADA BUSINESS
CORPORATIONS ACT, R.S.C. 1985, c. C 44, as amended, and the
regulations made thereunder, and any comparable or successor laws or
regulations thereto or, if applicable, the comparable legislation of
any other jurisdiction pursuant to which the Corporation may be
continued;
(k) "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed in
United States Dollars means, on any date, the Canadian dollar
equivalent of such amount determined by multiplying such amount by the
U.S. Canadian Exchange Rate in effect on such date;
(l) "CLOSE OF BUSINESS" on any given date shall mean the time on such date
(or, if such date is not a Business Day, the time on the next
succeeding Business Day) at which the principal transfer office in
Calgary of the transfer agent for the
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Common Shares of the Corporation (or, after the Separation Time, the
principal transfer office in Calgary of the Rights Agent) is closed to
the public;
(m) "COMMON SHARES" shall mean the Common Shares in the capital of the
Corporation;
(n) "COMPETING PERMITTED BID" means a Take-over Bid that:
(i) is made after a Permitted Bid has been made and prior to the
expiry of the Permitted Bid;
(ii) satisfies all components of the definition of a Permitted Bid
other than the requirements set out in Clause 1.1(jj)(ii)(A) of
the definition of a Permitted Bid; and
(iii) contains, and the take up and payment for securities tendered or
deposited is subject to, an irrevocable and unqualified condition
that no Voting Shares will be taken up or paid for pursuant to
the Take-over Bid prior to the close of business on a date that
is no earlier than the later of: (A) the 60th day after the date
on which the earliest Permitted Bid which preceded the Competing
Permitted Bid was made; and (B) 35 days after the date of the
Take-over Bid constituting the Competing Permitted Bid;
(o) "CONTROLLED" a Person is "controlled" by another Person or two or more
other Persons acting jointly or in concert if:
(i) in the case of a body corporate, securities entitled to vote in
the election of directors of such body corporate carrying more
than 50% of the votes for the election of directors are held,
directly or indirectly, by or for the benefit of the other Person
or Persons and the votes carried by such securities are entitled,
if exercised, to elect a majority of the board of directors of
such body corporate; or
(ii) in the case of a Person which is not a body corporate, more than
50% of the voting or equity interests of such entity are held,
directly or indirectly, by or for the benefit of the other Person
or Persons;
and "controls", "controlling" and "under common control with" shall be
interpreted accordingly;
(p) "CO-RIGHTS AGENTS" shall have the meaning ascribed thereto in
Subsection 4.1(a);
(q) "DISPOSITION DATE" shall have the meaning ascribed thereto in
Subsection 5.1(h);
(r) "DIVIDEND REINVESTMENT ACQUISITION" shall mean an acquisition of
Voting Shares pursuant to a Dividend Reinvestment Plan;
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(s) "DIVIDEND REINVESTMENT PLAN" means a regular dividend reinvestment or
other plan of the Corporation made available by the Corporation to
holders of its securities where such plan permits the holder to direct
that some or all of:
(i) dividends paid in respect of shares of any class of the
Corporation;
(ii) proceeds of redemption of shares of the Corporation;
(iii) interest paid on evidences of indebtedness of the Corporation;
or
(iv) optional cash payments;
be applied to the purchase from the Corporation of Voting Shares;
(t) "ELECTION TO EXERCISE" shall have the meaning ascribed thereto in
Clause 2.2(d)(ii);
(u) "EFFECTIVE DATE" means the date the Plan of Arrangement takes effect;
(v) "EXEMPT ACQUISITION" means a share acquisition in respect of which the
Board of Directors has waived the application of Section 3.1 pursuant
to the provisions of Subsection 5.1(a) or (h);
(w) "EXERCISE PRICE" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole
Right which, until adjustment thereof in accordance with the terms
hereof, shall be $100;
(x) "EXPANSION FACTOR" shall have the meaning ascribed thereto in Clause
2.3(a)(x);
(y) "EXPIRATION TIME" shall mean the date of termination of this Agreement
pursuant to Section 5.16;
(z) "FLIP-IN EVENT" shall mean a transaction in or pursuant to which any
Person becomes an Acquiring Person;
(aa) "HOLDER" shall have the meaning ascribed thereto in Section 2.8;
(bb) "INDEPENDENT SHAREHOLDERS" shall mean holders of Voting Shares, other
than:
(i) any Acquiring Person;
(ii) any Offeror (other than any Person who by virtue of Clause
1.1(g)(v) is not deemed to Beneficially Own the Voting Shares
held by such Person);
(iii) any Affiliate or Associate of any Acquiring Person or Offeror;
(iv) any Person acting jointly or in concert with any Acquiring Person
or Offeror; and
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(v) any employee benefit plan, deferred profit sharing plan, stock
participation plan and any other similar plan or trust for the
benefit of employees of the Corporation unless the beneficiaries
of the plan or trust direct the manner in which the Voting Shares
are to be voted or withheld from voting or direct whether the
Voting Shares are to be tendered to a Take-over Bid;
(cc) "LOCK-UP AGREEMENT" means an agreement (the terms of which are
publicly disclosed and a copy of which is made available to the public
(including the Corporation):
(i) not later than the date on which the Lock-up Bid (as defined
below) is publicly announced); or
(ii) if the Lock-up Bid has been made prior to the date on which such
agreement has been entered into, forthwith and in any event not
later than the Business Day following the date of such agreement;
between an Offeror, any of its Affiliates or Associates or any other
Person acting jointly or in concert with the Offeror and a Person (the
"Locked-up Person") who is not an Affiliate or Associate of the
Offeror or a Person acting jointly or in concert with the Offeror
whereby the Locked-up Person agrees to deposit or tender the Voting
Shares held by the Locked-up Person to the Offeror's Take-over Bid or
to any Take-over Bid made by any of the Offeror's Affiliates or
Associates or made by any other Person acting jointly or in concert
with the Offeror (the "Lock-up Bid"), where the agreement:
(iii) (A) permits the Locked-up Person to withdraw the Voting Shares
from the agreement in order to tender or deposit the Voting
Shares to another Take-over Bid, or to support another
transaction that provides for a consideration for each
Voting Share that is higher than the consideration contained
in or proposed to be contained in the Lock-up Bid; or
(B) (a) permits the Locked-up Person to withdraw the Voting
Shares from the agreement in order to tender or deposit the
Voting Shares to another Take-over Bid, or to support
another transaction that provides for a consideration for
each Voting Share that exceeds by as much as or more than a
specified amount the ("Specified Amount") the consideration
for each Voting Share contained in or proposed to be
contained in, and is made for at least the same number of
Voting Shares as, the Lock-up Bid; and (b) does not by its
terms provide for a Specified Amount that is greater than 7%
over the consideration for each Voting Share contained in or
proposed to be contained in the Lock-up Bid;
and, for greater certainty, the Lock-up Agreement may contain a
right of first refusal or require a period of delay to give the
Offeror an opportunity
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to at least match a higher consideration in another Take-over Bid
or transaction or other similar limitation on a Locked-up
Person's rights to withdraw Voting Shares from the Lock-up
Agreement and not to tender such Voting Shares to the Take-over
Bid to which the Locked-up Person has agreed to deposit or tender
so long as the limitation does not preclude the exercise by the
Locked-up Person of the right to withdraw Voting Shares in
sufficient time to tender to the other Take-over Bid or
participate in the other transaction; and
(iv) the agreement does not provide for any "break-up fees", "top-up
fees", penalties, expenses reimbursement or other amounts that
exceed in the aggregate the greater of:
(A) the cash equivalent of 2.5% of the consideration payable
under the Take-over Bid to the Locked-up Person; and
(B) 50% of the amount by which the consideration payable under
another Take-over Bid or transaction to a Locked-up Person
exceeds the consideration that such Locked-up Person would
have received under the Lock-up Bid;
to be paid by a Locked-up Person pursuant to the Lock-up
Agreement in the event that the Locked-up Person fails to deposit
or tender Voting Shares to the Lock-up Bid or withdraws Voting
Shares in order to tender to another Take-over Bid or participate
in another transaction;
(dd) "MARKET PRICE" per share of any securities on any date of
determination shall mean the average of the daily closing prices per
share of such securities (determined as described below) on each of
the 20 consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however, that if an event
of a type analogous to any of the events described in Section 2.3
hereof shall have caused the closing prices used to determine the
Market Price on any Trading Days not to be fully comparable with the
closing price on such date of determination or, if the date of
determination is not a Trading Day, on the immediately preceding
Trading Day, each such closing price so used shall be appropriately
adjusted in a manner analogous to the applicable adjustment provided
for in Section 2.3 hereof in order to make it fully comparable with
the closing price on such date of determination or, if the date of
determination is not a Trading Day, on the immediately preceding
Trading Day. The closing price per share of any securities on any date
shall be:
(i) the closing board lot sale price or, in case no such sale takes
place on such date, the average of the closing bid and asked
prices for each of such securities as reported by the principal
Canadian stock exchange (as determined by volume of trading) on
which such securities are listed or admitted to trading;
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(ii) if for any reason none of such prices is available on such day or
the securities are not listed or posted for trading on a Canadian
stock exchange, the last sale price or, in case no such sale
takes place on such date, the average of the closing bid and
asked prices for each of such securities as reported by the
principal national United States securities exchange (as
determined by volume of trading) on which such securities are
listed or admitted to trading;
(iii) if for any reason none of such prices is available on such day
or the securities are not listed or admitted to trading on a
Canadian stock exchange or a national United States securities
exchange, the last sale price or, in case no sale takes place on
such date, the average of the high bid and low asked prices for
each of such securities in the over the counter market, as quoted
by any recognized reporting system then in use; or
(iv) if for any reason none of such prices is available on such day or
the securities are not listed or admitted to trading on a
Canadian stock exchange or a national United States securities
exchange or quoted by any such reporting system, the average of
the closing bid and asked prices as furnished by a recognized
professional market maker making a market in the securities;
provided, however, that if for any reason none of such prices is
available on such day, the closing price per share of such securities
on such date means the fair value per share of such securities on such
date as determined by a nationally recognized investment dealer or
investment banker; and provided further that if an event of a type
analogous to any of the events described in Section 2.3 hereof shall
have caused any price used to determine the Market Price on any
Trading Day not to be fully comparable with the price as so determined
on the Trading Day immediately preceding such date of determination,
each such price so used shall be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section 2.3
hereof in order to make it fully comparable with the price on the
Trading Day immediately preceding such date of determination. The
Market Price shall be expressed in Canadian dollars and, if initially
determined in respect of any day forming part of the 20 consecutive
Trading Day period in question in United States dollars, such amount
shall be translated into Canadian dollars on such date at the Canadian
Dollar Equivalent thereof;
(ee) "1934 EXCHANGE ACT" means the SECURITIES EXCHANGE ACT OF 1934 of the
United States, as amended, and the rules and regulations thereunder as
now in effect or as the same may from time to time be amended,
re-enacted or replaced;
(ff) "NOMINEE" shall have the meaning ascribed thereto in Subsection
2.2(c);
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(gg) "OFFER TO ACQUIRE" shall include:
(i) an offer to purchase or a solicitation of an offer to sell Voting
Shares; and
(ii) an acceptance of an offer to sell Voting Shares, whether or not
such offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer to sell
shall be deemed to be making an Offer to Acquire to the Person that
made the offer to sell;
(hh) "OFFEROR" shall mean a Person who has announced, and has not
withdrawn, an intention to make or who has made, and has not
withdrawn, a Take-over Bid, other than a Person who has completed a
Permitted Bid, a Competing Permitted Bid or an Exempt Acquisition;
(ii) "OFFEROR'S SECURITIES" means Voting Shares Beneficially Owned by an
Offeror on the date of the Offer to Acquire;
(jj) "PERMITTED BID" means a Take-over Bid made by an Offeror by way of
take-over bid circular which also complies with the following
additional provisions:
(i) the Take-over Bid is made to all holders of Voting Shares as
registered on the books of the Corporation, other than the
Offeror;
(ii) the Take-over Bid contains, and the take up and payment for
securities tendered or deposited is subject to, an irrevocable
and unqualified provision that no Voting Shares will be taken up
or paid for pursuant to the Take-over Bid (A) prior to the close
of business on the date which is not less than 60 days following
the date of the Take-over Bid and (B) only if at such date more
than 50% of the Voting Shares held by Independent Shareholders
shall have been deposited or tendered pursuant to the Take-over
Bid and not withdrawn;
(iii) unless the Take-over Bid is withdrawn, the Take-over Bid
contains an irrevocable and unqualified provision that Voting
Shares may be deposited pursuant to such Take-over Bid at any
time during the period of time described in Clause 1.1(jj)(ii)
and that any Voting Shares deposited pursuant to the Take-over
Bid may be withdrawn until taken up and paid for; and
(iv) the Take-over Bid contains an irrevocable and unqualified
provision that in the event that the deposit condition set forth
in Clause 1.1(jj)(ii) is satisfied the Offeror will make a public
announcement of that fact and the Take-over Bid will remain open
for deposits and tenders of Voting Shares for not less than ten
Business Days from the date of such public announcement;
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(kk) "PERMITTED BID ACQUISITION" shall mean an acquisition of Voting Shares
made pursuant to a Permitted Bid or a Competing Permitted Bid;
(ll) "PERSON" shall include any individual, firm, partnership, association,
trust, trustee, executor, administrator, legal personal
representative, body corporate, corporation, unincorporated
organization, syndicate, governmental entity or other entity;
(mm) "PLAN OF ARRANGEMENT" means the Plan of Arrangement set forth as
Appendix 1 to the Arrangement Agreement;
(nn) "PRO RATA ACQUISITION" means an acquisition by a Person of Voting
Shares pursuant to:
(i) a Dividend Reinvestment Acquisition;
(ii) a stock dividend, stock split or other event in respect of
securities of the Corporation of one or more particular classes
or series pursuant to which such Person becomes the Beneficial
Owner of Voting Shares on the same pro rata basis as all other
holders of securities of the particular class, classes or series;
(iii) the acquisition or the exercise by the Person of only those
rights to purchase Voting Shares distributed to that Person in
the course of a distribution to all holders of securities of the
Corporation of one or more particular classes or series pursuant
to a rights offering or pursuant to a prospectus, provided that
the Person does not thereby acquire a greater percentage of
Voting Shares than the Person's percentage of Voting Shares
Beneficially Owned immediately prior to such acquisition or
exercise; or
(iv) a distribution of Voting Shares, or securities convertible into
or exchangeable for Voting Shares (and the conversion or exchange
of such convertible or exchangeable securities), made pursuant to
a prospectus or by way of a private placement or securities
exchange take-over bid, provided that the Person does not thereby
acquire a greater percentage of such Voting Shares, or securities
convertible into or exchangeable for Voting Shares, so offered
than the Person's percentage of Voting Shares Beneficially Owned
immediately prior to such acquisition;
(oo) "RECORD TIME" has the meaning set forth in Section 2.1(a);
(pp) "RIGHT" means a right to purchase a Common Share of the Corporation
upon the terms and subject to the conditions set forth in this
Agreement;
(qq) "RIGHTS CERTIFICATE" means the certificates representing the Rights
after the Separation Time, which shall be substantially in the form
attached hereto as Attachment 1;
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(rr) "RIGHTS REGISTER" shall have the meaning ascribed thereto in
Subsection 2.6(a);
(ss) "SECURITIES ACT (ALBERTA)" shall mean the SECURITIES ACT, S.A. 1991,
c.S 6.1, as amended, and the regulations thereunder, and any
comparable or successor laws or regulations thereto;
(tt) "SEPARATION TIME" shall mean the close of business on the eighth
Trading Day after the earlier of:
(i) the Stock Acquisition Date;
(ii) the date of the commencement of or first public announcement of
the intent of any Person (other than the Corporation or any
Subsidiary of the Corporation) to commence a Take-over Bid (other
than a Permitted Bid or a Competing Permitted Bid), or such later
time as may be determined by the Board of Directors, provided
that, if any Take-over Bid referred to in this Clause (ii)
expires, is cancelled, terminated or otherwise withdrawn prior to
the Separation Time, such Take-over Bid shall be deemed, for the
purposes of this definition, never to have been made; and
(iii) the date on which a Permitted Bid or Competing Permitted Bid
ceases to be such;
(uu) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to section 176 of the
SECURITIES ACT (Alberta) or Section 13(d) of the 1934 EXCHANGE ACT) by
the Corporation or an Acquiring Person that an Acquiring Person has
become such;
(vv) "SUBSIDIARY": a corporation is a Subsidiary of another corporation if:
(i) it is controlled by:
(A) that other; or
(B) that other and one or more corporations each of which is
controlled by that other; or
(C) two or more corporations each of which is controlled by that
other; or
(ii) it is a Subsidiary of a corporation that is that other's
Subsidiary;
(ww) "TAKE-OVER BID" shall mean an Offer to Acquire Voting Shares, or
securities convertible into Voting Shares if, assuming that the Voting
Shares or convertible securities subject to the Offer to Acquire are
acquired and are Beneficially Owned at the date of such Offer to
Acquire by the Person making such Offer to Acquire, such Voting Shares
(including Voting Shares that may be acquired upon
- 14 -
conversion of securities convertible into Voting Shares) together with
the Offeror's Securities, constitute in the aggregate 20% or more of
the outstanding Voting Shares at the date of the Offer to Acquire;
(xx) "TRADING DAY", when used with respect to any securities, shall mean a
day on which the principal Canadian stock exchange on which such
securities are listed or admitted to trading is open for the
transaction of business or, if the securities are not listed or
admitted to trading on any Canadian stock exchange, a Business Day;
(yy) "U.S. CANADIAN EXCHANGE RATE" means, on any date:
(i) if on such date the Bank of Canada sets an average noon spot rate
of exchange for the conversion of one United States dollar into
Canadian dollars, such rate; and
(ii) in any other case, the rate for such date for the conversion of
one United States dollar into Canadian dollars calculated in such
manner as may be determined by the Board of Directors from time
to time acting in good faith;
(zz) "VOTING SHARE REDUCTION" means an acquisition or redemption by the
Corporation of Voting Shares which, by reducing the number of Voting
Shares outstanding, increases the proportionate number of Voting
Shares Beneficially Owned by any person to 20% or more of the Voting
Shares then outstanding; and
(aaa) "VOTING SHARES" shall mean the Common Shares of the Corporation and
any other shares in the capital of the Corporation entitled to vote
generally in the election of all directors.
1.2 CURRENCY
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
1.3 HEADINGS
The division of this Agreement into Articles, Sections, Subsections,
Clauses, Paragraphs, Subparagraphs or other portions hereof and the insertion of
headings, subheadings and a table of contents are for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
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1.4 CALCULATION OF NUMBER AND PERCENTAGE OF BENEFICIAL OWNERSHIP OF
OUTSTANDING VOTING SHARES
For purposes of this Agreement, the percentage of Voting Shares
Beneficially Owned by any Person, shall be and be deemed to be the product
(expressed as a percentage) determined by the formula:
100 x A/B
where:
A = the number of votes for the election of all
directors generally
B = the number of votes for the election of all
directors generally
Where any Person is deemed to Beneficially Own unissued Voting Shares, such
Voting Shares shall be deemed to be outstanding for the purpose of calculating
the percentage of Voting Shares Beneficially Owned by such Person.
1.5 ACTING JOINTLY OR IN CONCERT
For the purposes hereof, a Person is acting jointly or in concert with
every Person who, as a result of any agreement, commitment or understanding,
whether formal or informal, with the first Person or any Affiliate thereof,
acquires or offers to acquire Voting Shares (other than customary agreements
with and between underwriters and/or banking group members and/or selling group
members with respect to a public offering or private placement of securities or
pledges of securities in the ordinary course of business).
1.6 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to generally accepted
accounting principles, such reference shall be deemed to be the recommendations
at the relevant time of the Canadian Institute of Chartered Accountants, or any
successor institute, applicable on a consolidated basis (unless otherwise
specifically provided herein to be applicable on an unconsolidated basis) as at
the date on which a calculation is made or required to be made in accordance
with generally accepted accounting principles. Where the character or amount of
any asset or liability or item of revenue or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purpose of this Agreement or any document, such determination or
calculation shall, to the extent applicable and except as otherwise specified
herein or as otherwise agreed in writing by the parties, be made in accordance
with generally accepted accounting principles applied on a consistent basis.
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ARTICLE 2 - THE RIGHTS
2.1 ISSUE OF RIGHTS: LEGEND ON COMMON SHARE CERTIFICATES
(a) One Right shall be issued on the Effective Date in respect of each
Common Share of the Corporation issued under the Plan of Arrangement
(the time of issue of such Rights being herein called the "Record
Time") and one Right shall be issued in respect of each Common Share
of the Corporation issued after the Record Time and prior to the
earlier of the Separation Time and the Expiration Time.
(b) Certificates representing Common Shares which are issued at and after
the Record Time but prior to the earlier of the Separation Time and
the Expiration Time, shall also evidence one Right for each Common
Share represented thereby and shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
Until the Separation Time (defined in the Agreement below),
this certificate also evidences the holder's rights described
in a Shareholder Rights Plan Agreement dated as of April 24,
2003 (the `Agreement') between TransCanada Corporation and
Computershare Trust Company of Canada, as amended from time to
time, the terms of which are incorporated herein and a copy of
which is available on demand without charge. Under certain
circumstances set out in the Agreement, the rights may expire,
may become null and void or may be evidenced by separate
certificates and no longer evidenced by this certificate.
Certificates for Common Shares of the Corporation which by the terms of the
Plan of Arrangement will represent, on the Effective Date, Common Shares of the
Corporation that are issued and outstanding shall also evidence one Right for
each Common Share represented thereby, notwithstanding the absence of the
foregoing legend, until the close of business on the earlier of the Separation
Time and the Expiration Time.
2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS
(a) Subject to adjustment as herein set forth, each Right will entitle the
holder thereof, from and after the Separation Time and prior to the
Expiration Time, to purchase one Common Share for the Exercise Price
(and the Exercise Price and number of Common Shares are subject to
adjustment as set forth below). Notwithstanding any other provision of
this Agreement, any Rights held by the Corporation or any of its
Subsidiaries shall be void.
(b) Until the Separation Time,
(i) the Rights shall not be exercisable and no Right may be
exercised; and
(ii) each Right will be evidenced by the certificate for the
associated Common Share of the Corporation registered in the name
of the holder thereof (which certificate shall also be deemed to
represent a Rights Certificate)
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and will be transferable only together with, and will be
transferred by a transfer of, such associated Common Share of the
Corporation.
(c) From and after the Separation Time and prior to the Expiration Time:
(i) the Rights shall be exercisable; and
(ii) the registration and transfer of Rights shall be separate from
and independent of Common Shares of the Corporation.
Promptly following the Separation Time, the Corporation will prepare and
the Rights Agent will mail to each holder of record of Common Shares as of the
Separation Time (other than an Acquiring Person and, in respect of any Rights
Beneficially Owned by such Acquiring Person which are not held of record by such
Acquiring Person, the holder of record of such Rights (a "Nominee")), at such
holder's address as shown by the records of the Corporation (the Corporation
hereby agreeing to furnish copies of such records to the Rights Agent for this
purpose):
(x) a Rights Certificate appropriately completed, representing the
number of Rights held by such holder at the Separation Time and
having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the
Corporation may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply
with any law, rule or regulation or with any rule or regulation
of any self regulatory organization, stock exchange or quotation
system on which the Rights may from time to time be listed or
traded, or to conform to usage; and
(y) a disclosure statement describing the Rights,
provided that a Nominee shall be sent the materials provided for in
(x) and (y) in respect of all Common Shares of the Corporation held of
record by it which are not Beneficially Owned by an Acquiring Person.
(d) Rights may be exercised, in whole or in part, on any Business Day
after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise such Rights (an "Election to Exercise")
substantially in the form attached to the Rights Certificate
appropriately completed and executed by the holder or his
executors or administrators or other personal representatives or
his or their legal attorney duly appointed by an instrument in
writing in form and executed in a manner satisfactory to the
Rights Agent; and
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(iii) payment by certified cheque, banker's draft or money order
payable to the order of the Corporation, of a sum equal to the
Exercise Price multiplied by the number of Rights being exercised
and a sum sufficient to cover any transfer tax or charge which
may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for Common Shares in a name other than
that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, together with a completed
Election to Exercise executed in accordance with Clause 2.2(d)(ii),
which does not indicate that such Right is null and void as provided
by Subsection 3.1(b), and payment as set forth in Clause 2.2(d)(iii),
the Rights Agent (unless otherwise instructed by the Corporation in
the event that the Corporation is of the opinion that the Rights
cannot be exercised in accordance with this Agreement) will thereupon
promptly:
(i) requisition from the transfer agent certificates representing the
number of such Common Shares to be purchased (the Corporation
hereby irrevocably authorizing its transfer agent to comply with
all such requisitions);
(ii) when appropriate, requisition from the Corporation the amount of
cash to be paid in lieu of issuing fractional Common Shares;
(iii) after receipt of the certificates referred to in Clause
2.2(e)(i), deliver the same to or upon the order of the
registered holder of such Rights Certificates, registered in such
name or names as may be designated by such holder;
(iv) when appropriate, after receipt, deliver the cash referred to in
Clause 2.2(e)(ii) to or to the order of the registered holder of
such Rights Certificate; and
(v) remit to the Corporation all payments received on exercise of the
Rights.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised (subject to
the provisions of Subsection 5.5(a)) will be issued by the Rights
Agent to such holder or to such holder's duly authorized assigns.
(g) The Corporation covenants and agrees that it will:
(i) take all such action as may be necessary and within its power to
ensure that all Common Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such
Common Shares (subject to payment of the Exercise Price), be duly
and validly authorized, executed, issued and delivered as fully
paid and non-assessable;
- 19 -
(ii) take all such action as may be necessary and within its power to
comply with the requirements of the CANADA BUSINESS CORPORATIONS
ACT, the SECURITIES ACT (Alberta) and the securities laws or
comparable legislation of each of the provinces of Canada and any
other applicable law, rule or regulation, in connection with the
issuance and delivery of the Rights Certificates and the issuance
of any Common Shares upon exercise of Rights;
(iii) use reasonable efforts to cause all Common Shares issued upon
exercise of Rights to be listed on the stock exchanges on which
such Common Shares were traded immediately prior to the Stock
Acquisition Date;
(iv) cause to be reserved and kept available out of the authorized and
unissued Common Shares, the number of Common Shares that, as
provided in this Agreement, will from time to time be sufficient
to permit the exercise in full of all outstanding Rights;
(v) pay when due and payable, if applicable, any and all federal,
provincial and municipal transfer taxes and charges (not
including any income or capital taxes of the holder or exercising
holder or any liability of the Corporation to withhold tax) which
may be payable in respect of the original issuance or delivery of
the Rights Certificates, or certificates for Common Shares to be
issued upon exercise of any Rights, provided that the Corporation
shall not be required to pay any transfer tax or charge which may
be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of
certificates for Common Shares in a name other than that of the
holder of the Rights being transferred or exercised; and
(vi) after the Separation Time, except as permitted by Section 5.1,
not take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
The Exercise Price, the number and kind of securities subject to purchase
upon exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 2.3.
(a) In the event the Corporation shall at any time after the date of this
Agreement:
(i) declare or pay a dividend on Common Shares payable in Common
Shares (or other securities exchangeable for or convertible into
or giving a right to acquire Common Shares or other securities of
the Corporation) other than pursuant to any optional stock
dividend program;
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(ii) subdivide or change the then outstanding Common Shares into a
greater number of Common Shares;
(iii) consolidate or change the then outstanding Common Shares into a
smaller number of Common Shares; or
(iv) issue any Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares or
other securities of the Corporation) in respect of, in lieu of or
in exchange for existing Common Shares except as otherwise
provided in this Section 2.3,
the Exercise Price and the number of Rights outstanding, or, if the
payment or effective date therefore shall occur after the Separation
Time, the securities purchasable upon exercise of Rights shall be
adjusted as of the payment or effective date in the manner set forth
below.
If the Exercise Price and number of Rights outstanding are to be
adjusted:
(x) the Exercise Price in effect after such adjustment will be equal
to the Exercise Price in effect immediately prior to such
adjustment divided by the number of Common Shares (or other
capital stock) (the "Expansion Factor") that a holder of one
Common Share immediately prior to such dividend, subdivision,
change, consolidation or issuance would hold thereafter as a
result thereof; and
(y) each Right held prior to such adjustment will become that number
of Rights equal to the Expansion Factor,
and the adjusted number of Rights will be deemed to be distributed
among the Common Shares with respect to which the original Rights were
associated (if they remain outstanding) and the shares issued in
respect of such dividend, subdivision, change, consolidation or
issuance, so that each such Common Share (or other capital stock) will
have exactly one Right associated with it following the payment or
effective date of the event referred to in Clause 2.3(a)(i), (ii),
(iii) or (iv), as the case may be.
For greater certainty, if the securities purchasable upon exercise of
Rights are to be adjusted, the securities purchasable upon exercise of
each Right after such adjustment will be the securities that a holder
of the securities purchasable upon exercise of one Right immediately
prior to such dividend, subdivision, change, consolidation or issuance
would hold thereafter as a result of such dividend, subdivision,
change, consolidation or issuance.
If, after the Record Time and prior to the Expiration Time, the
Corporation shall issue any shares of capital stock other than Common
Shares in a transaction of a type described in Clause 2.3(a)(i) or
(iv), shares of such capital stock shall be treated herein as nearly
equivalent to Common Shares as may be practicable and
- 21 -
appropriate under the circumstances and the Corporation and the Rights
Agent agree to amend this Agreement in order to effect such treatment.
In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any Common Shares otherwise
than in a transaction referred to in this Subsection 2.3(a), each such
Common Share so issued shall automatically have one new Right
associated with it, which Right shall be evidenced by the certificate
representing such associated Common Share.
(b) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares entitling
them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or securities
convertible into or exchangeable for or carrying a right to purchase
Common Shares) at a price per Common Share (or, if a security
convertible into or exchangeable for or carrying a right to purchase
or subscribe for Common Shares, having a conversion, exchange or
exercise price, including the price required to be paid to purchase
such convertible or exchangeable security or right per share) less
than the Market Price per Common Share on such record date, the
Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction:
(i) the numerator of which shall be the number of Common Shares
outstanding on such record date, plus the number of Common Shares
that the aggregate offering price of the total number of Common
Shares so to be offered (and/or the aggregate initial conversion,
exchange or exercise price of the convertible or exchangeable
securities or rights so to be offered, including the price
required to be paid to purchase such convertible or exchangeable
securities or rights) would purchase at such Market Price per
Common Share; and
(ii) the denominator of which shall be the number of Common Shares
outstanding on such record date, plus the number of additional
Common Shares to be offered for subscription or purchase (or into
which the convertible or exchangeable securities or rights so to
be offered are initially convertible, exchangeable or
exercisable).
In case such subscription price may be paid by delivery of
consideration, part or all of which may be in a form other than cash,
the value of such consideration shall be as determined in good faith
by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of Rights. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event
that such rights, options or warrants are not so issued, or if issued,
are not exercised prior to the expiration thereof, the Exercise Price
shall be readjusted to the Exercise Price which would then be in
effect if such record date had not been
- 22 -
fixed, or to the Exercise Price which would be in effect based upon
the number of Common Shares (or securities convertible into, or
exchangeable or exercisable for Common Shares) actually issued upon
the exercise of such rights, options or warrants, as the case may be.
For purposes of this Agreement, the granting of the right to purchase
Common Shares (whether from treasury or otherwise) pursuant to the
Dividend Reinvestment Plan or any employee benefit, stock option or
similar plans shall be deemed not to constitute an issue of rights,
options or warrants by the Corporation; provided, however, that, in
all such cases, the right to purchase Common Shares is at a price per
share of not less than 95 per cent of the current market price per
share (determined as provided in such plans) of the Common Shares.
(c) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time fix a record date for the making of a
distribution to all holders of Common Shares (including any such
distribution made in connection with a merger or amalgamation) of
evidences of indebtedness, cash (other than an annual cash dividend or
a dividend paid in Common Shares, but including any dividend payable
in securities other than Common Shares), assets or rights, options or
warrants (excluding those referred to in Subsection 2.3(b)), the
Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction:
(i) the numerator of which shall be the Market Price per Common Share
on such record date, less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall
be binding on the Rights Agent and the holders of Rights), on a
per share basis, of the portion of the cash, assets, evidences of
indebtedness, rights, options or warrants so to be distributed;
and
(ii) the denominator of which shall be such Market Price per Common
Share.
Such adjustments shall be made successively whenever such a record
date is fixed, and in the event that such a distribution is not so
made, the Exercise Price shall be adjusted to be the Exercise Price
which would have been in effect if such record date had not been
fixed.
(d) Notwithstanding anything herein to the contrary, no adjustment in the
Exercise Price shall be required unless such adjustment would require
an increase or decrease of at least one per cent in the Exercise
Price; provided, however, that any adjustments which by reason of this
Subsection 2.3(d) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations
under Section 2.3 shall be made to the nearest cent or to the nearest
ten thousandth of a share. Notwithstanding the first sentence of this
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Subsection 2.3(d), any adjustment required by Section 2.3 shall be
made no later than the earlier of:
(i) three years from the date of the transaction which gives rise to
such adjustment; or
(ii) the Expiration Date.
(e) In the event the Corporation shall at any time after the Record Time
and prior to the Separation Time issue any shares of capital stock
(other than Common Shares), or rights, options or warrants to
subscribe for or purchase any such capital stock, or securities
convertible into or exchangeable for any such capital stock, in a
transaction referred to in Clause 2.3(a)(i) or (iv), if the Board of
Directors acting in good faith determines that the adjustments
contemplated by Subsections 2.3(a), (b) and (c) in connection with
such transaction will not appropriately protect the interests of the
holders of Rights, the Board of Directors may determine what other
adjustments to the Exercise Price, number of Rights and/or
securities purchasable upon exercise of Rights would be appropriate
and, notwithstanding Subsections 2.3(a), (b) and (c), such
adjustments, rather than the adjustments contemplated by Subsections
2.3(a), (b) and (c), shall be made. Subject to the prior consent of
the holders of the Voting Shares or the Rights obtained as set forth
in Subsection 5.4(b) or (c), the Corporation and the Rights Agent
shall have authority to amend this Agreement as appropriate to
provide for such adjustments.
(f) Each Right originally issued by the Corporation subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of
Common Shares purchasable from time to time hereunder upon exercise
of a Right immediately prior to such issue, all subject to further
adjustment as provided herein.
(g) Irrespective of any adjustment or change in the Exercise Price or
the number of Common Shares issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued
may continue to express the Exercise Price per Common Share and the
number of Common Shares which were expressed in the initial Rights
Certificates issued hereunder.
(h) In any case in which this Section 2.3 shall require that an
adjustment in the Exercise rice be made effective as of a record
date for a specified event, the Corporation may elect to defer until
the occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of Common Shares and
other securities of the Corporation, if any, issuable upon such
exercise over and above the number of Common Shares and other
securities of the Corporation, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such
adjustment; provided, however, that the Corporation shall deliver to
such holder an appropriate instrument evidencing such holder's right
to
- 24 -
receive such additional shares (fractional or otherwise) or other
securities upon the occurrence of the event requiring such adjustment.
(i) Notwithstanding anything contained in this Section 2.3 to the
contrary, the Corporation shall be entitled to make such reductions in
the Exercise Price, in addition to those adjustments expressly
required by this Section 2.3, as and to the extent that in their good
faith judgment the Board of Directors shall determine to be advisable,
in order that any:
(i) consolidation or subdivision of Common Shares;
(ii) issuance (wholly or in part for cash) of Common Shares or
securities that by their terms are convertible into or
exchangeable for Common Shares;
(iii) stock dividends; or
(iv) issuance of rights, options or warrants referred to in this
Section 2.3,
hereafter made by the Corporation to holders of its Common Shares,
shall not be taxable to such shareholders.
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE
Each Person in whose name any certificate for Common Shares or other
securities, if applicable, is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Common Shares or
other securities, if applicable, represented thereon, and such certificate shall
be dated the date upon which the Rights Certificate evidencing such Rights was
duly surrendered in accordance with Subsection 2.2(d) (together with a duly
completed Election to Exercise) and payment of the Exercise Price for such
Rights (and any applicable transfer taxes and other governmental charges payable
by the exercising holder hereunder) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Common Share
transfer books of the Corporation are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Share transfer books
of the Corporation are open.
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES
(a) The Rights Certificates shall be executed on behalf of the Corporation
by its Chairman of the Board, President or any Vice President and by
its Corporate Secretary or any Assistant Secretary under the corporate
seal of the Corporation reproduced thereon. The signature of any of
these officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Corporation shall bind the Corporation, notwithstanding that such
individuals or any of them have ceased to hold such offices either
before or after the countersignature and delivery of such Rights
Certificates.
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(b) Promptly after the Corporation learns of the Separation Time, the
Corporation will notify the Rights Agent of such Separation Time and
will deliver Rights Certificates executed by the Corporation to the
Rights Agent for countersignature, and the Rights Agent shall manually
countersign (in a manner satisfactory to the Corporation) and send
such Rights Certificates to the holders of the Rights pursuant to
Subsection 2.2(c) hereof. No Rights Certificate shall be valid for any
purpose until countersigned by the Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 REGISTRATION, TRANSFER AND EXCHANGE
(a) The Corporation will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Corporation will provide for the registration and
transfer of Rights. The Rights Agent is hereby appointed registrar for
the Rights (the "Rights Registrar") for the purpose of maintaining the
Rights Register for the Corporation and registering Rights and
transfers of Rights as herein provided and the Rights Agent hereby
accepts such appointment. In the event that the Rights Agent shall
cease to be the Rights Registrar, the Rights Agent will have the right
to examine the Rights Register at all reasonable times.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Subsection 2.6(c), the
Corporation will execute, and the Rights Agent will manually
countersign and deliver, in the name of the holder or the designated
transferee or transferees, as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificates so
surrendered.
(b) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be the valid obligations of the Corporation,
and such Rights shall be entitled to the same benefits under this
Agreement as the Rights surrendered upon such registration of transfer
or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Corporation or the
Rights Agent, as the case may be, duly executed by the holder thereof
or such holder's attorney duly authorized in writing. As a condition
to the issuance of any new Rights Certificate under this Section 2.6,
the Corporation may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the reasonable fees and
expenses of the Rights Agent) connected therewith.
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2.7 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, the Corporation shall execute and the
Rights Agent shall countersign and deliver in exchange therefor a new
Rights Certificate evidencing the same number of Rights as did the
Rights Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time:
(i) evidence to their reasonable satisfaction of the destruction,
loss or theft of any Rights Certificate; and
(ii) such security or indemnity as may be reasonably required by them
to save each of them and any of their agents harmless;
then, in the absence of notice to the Corporation or the Rights Agent
that such Rights Certificate has been acquired by a bona fide
purchaser, the Corporation shall execute and upon the Corporation's
request the Rights Agent shall countersign and deliver, in lieu of any
such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights
Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.7, the Corporation may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the
reasonable fees and expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7 in
lieu of any destroyed, lost or stolen Rights Certificate shall
evidence the contractual obligation of the Corporation, whether or not
the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other
Rights duly issued hereunder.
2.8 PERSONS DEEMED OWNERS OF RIGHTS
The Corporation, the Rights Agent and any agent of the Corporation or the
Rights Agent may deem and treat the Person in whose name a Rights Certificate
(or, prior to the Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever. As used in this Agreement, unless the context otherwise
requires, the term "holder" of any Right shall mean the registered holder of
such Right (or, prior to the Separation Time, of the associated Common Share).
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2.9 DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9, except as expressly permitted by this Agreement.
The Rights Agent shall, subject to applicable laws, destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Corporation.
2.10 AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights, by accepting the same, consents and agrees with the
Corporation and the Rights Agent and with every other holder of Rights:
(a) to be bound by and subject to the provisions of this Agreement, as
amended from time to time in accordance with the terms hereof, in
respect of all Rights held;
(b) that prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the
associated Common Share certificate representing such Right;
(c) that after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(d) that prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Share certificate) for
registration of transfer, the Corporation, the Rights Agent and any
agent of the Corporation or the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on such
Rights Certificate or the associated Common Share certificate made by
anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights Agent
shall be affected by any notice to the contrary;
(e) that such holder of Rights has waived his right to receive any
fractional Rights or any fractional shares or other securities upon
exercise of a Right (except as provided herein);
(f) that notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability
to any holder of a Right or any other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or
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other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; and
(g) that, subject to the provisions of Section 5.4, without the approval
of any holder of Rights or Voting Shares and upon the sole authority
of the Board of Directors, acting in good faith, this Agreement may be
supplemented or amended from time to time to cure any ambiguity or to
correct or supplement any provision contained herein which may be
inconsistent with the intent of this Agreement or is otherwise
defective, as provided herein.
2.11 RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER
No holder, as such, of any Rights or Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose whatsoever the holder of
any Common Share or any other share or security of the Corporation which may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed or
deemed or confer upon the holder of any Right or Rights Certificate, as such,
any right, title, benefit or privilege of a holder of Common Shares or any other
shares or securities of the Corporation or any right to vote at any meeting of
shareholders of the Corporation whether for the election of directors or
otherwise or upon any matter submitted to holders of Common Shares or any other
shares of the Corporation at any meeting thereof, or to give or withhold consent
to any action of the Corporation, or to receive notice of any meeting or other
action affecting any holder of Common Shares or any other shares of the
Corporation except as expressly provided herein, or to receive dividends,
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by Rights Certificates shall have been duly exercised in accordance
with the terms and provisions hereof.
ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS
3.1 FLIP-IN EVENT
(a) Subject to Subsection 3.1(b) and Section 5.1, in the event that prior
to the Expiration Time a Flip-in Event shall occur, each Right shall
constitute, effective at the close of business on the eighth Trading
Day after the Stock Acquisition Date, the right to purchase from the
Corporation, upon exercise thereof in accordance with the terms
hereof, that number of Common Shares having an aggregate Market Price
on the date of consummation or occurrence of such Flip-in Event equal
to twice the Exercise Price for an amount in cash equal to the
Exercise Price (such right to be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section 2.3 in
the event that after such consummation or occurrence, an event of a
type analogous to any of the events described in Section 2.3 shall
have occurred).
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(b) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of any Flip-in Event, any Rights that are or were
Beneficially Owned on or after the earlier of the Separation Time or
the Stock Acquisition Date by:
(i) an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert with
an Acquiring Person or any Affiliate or Associate of an Acquiring
Person); or
(ii) a transferee of Rights, directly or indirectly, from an Acquiring
Person (or any Affiliate or Associate of an Acquiring Person or
any Person acting jointly or in concert with an Acquiring Person
or any Affiliate or Associate of an Acquiring Person), where such
transferee becomes a transferee concurrently with or subsequent
to the Acquiring Person becoming such in a transfer that the
Board of Directors has determined is part of a plan, arrangement
or scheme of an Acquiring Person (or any Affiliate or Associate
of an Acquiring Person or any Person acting jointly or in concert
with an Acquiring Person or any Affiliate or Associate of an
Acquiring Person), that has the purpose or effect of avoiding
Clause 3.1(b)(i),
shall become null and void without any further action, and any holder
of such Rights (including transferees) shall thereafter have no right
to exercise such Rights under any provision of this Agreement and
further shall thereafter not have any other rights whatsoever with
respect to such Rights, whether under any provision of this Agreement
or otherwise.
(c) From and after the Separation Time, the Corporation shall do all such
acts and things as shall be necessary and within its power to ensure
compliance with the provisions of this Section 3.1, including without
limitation, all such acts and things as may be required to satisfy the
requirements of the CANADA BUSINESS CORPORATIONS ACT, the SECURITIES
ACT (Alberta) and the securities laws or comparable legislation of
each of the provinces of Canada and of the United States and each of
the states thereof in respect of the issue of Common Shares upon the
exercise of Rights in accordance with this Agreement.
(d) Any Rights Certificate that represents Rights Beneficially Owned by a
Person described in either Clause 3.1(b)(i) or (ii) or transferred to
any nominee of any such Person, and any Rights Certificate issued upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain the following
legend:
The Rights represented by this Rights Certificate were issued to
a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in
the Shareholder Rights Plan Agreement) or a Person who was acting
jointly or in concert with an Acquiring Person or an Affiliate or
Associate of an Acquiring Person. This Rights Certificate and the
Rights represented hereby are void or shall
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become void in the circumstances specified in Subsection 3.1(b)
of the Shareholder Rights Plan Agreement.
provided, however, that the Rights Agent shall not be under any
responsibility to ascertain the existence of facts that would require
the imposition of such legend but shall impose such legend only if
instructed to do so by the Corporation in writing or if a holder fails
to certify upon transfer or exchange in the space provided on the
Rights Certificate that such holder is not a Person described in such
legend.
ARTICLE 4 - THE RIGHTS AGENT
4.1 GENERAL
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation and the holders of the Rights in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such co
Rights Agents ("Co-Rights Agents") as it may deem necessary or
desirable. In the event the Corporation appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and Co-Rights Agents
shall be as the Corporation may determine. The Corporation agrees to
pay all reasonable fees and expenses of the Rights Agent in respect of
the performance of its duties under this Agreement. The Corporation
also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence,
bad faith or wilful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability, which right
to indemnification will survive the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon
any certificate for Common Shares, Rights Certificate, certificate for
other securities of the Corporation, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
4.2 MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
(a) Any corporation into which the Rights Agent may be merged or
amalgamated or with which it may be consolidated, or any corporation
resulting from any merger, amalgamation, statutory arrangement or
consolidation to which the Rights Agent is a party, or any corporation
succeeding to the shareholder or stockholder services business of the
Rights Agent, will be the successor to the Rights Agent
- 31 -
under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case at
the time such successor Rights Agent succeeds to the agency created by
this Agreement any of the Rights Certificates have been countersigned
but not delivered, any successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of
the Rights have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all
such cases such Rights Certificates will have the full force provided
in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have
been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
4.3 DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, all of which the Corporation
and the holders of certificates for Common Shares and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) the Rights Agent may consult with legal counsel (who may be legal
counsel for the Corporation) and the opinion of such counsel will be
full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance
with such opinion;
(b) whenever in the performance of its duties under this Agreement, the
Rights Agent deems it necessary or desirable that any fact or matter
be proved or established by the Corporation prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by a Person believed by the Rights Agent to be the Chairman of
the Board, President, any Vice President, Treasurer, Corporate
Secretary, or any Assistant Secretary of the Corporation and delivered
to the Rights Agent; and such certificate will be full authorization
to the Rights Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon such
certificate;
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(c) the Rights Agent will be liable hereunder for its own negligence, bad
faith or wilful misconduct;
(d) the Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement, or in the
certificates for Common Shares or in the Rights Certificates (except
its countersignature thereof) or be required to verify the same, but
all such statements and recitals are and will be deemed to have been
made by the Corporation only;
(e) the Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any
certificate for a Common Share or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach
by the Corporation of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor will it be responsible for
any change in the exerciseability of the Rights (including the Rights
becoming void pursuant to Subsection 3.1(b) hereof) or any adjustment
required under the provisions of Section 2.3 hereof or responsible for
the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.3 describing any
such adjustment); nor will it by any act hereunder be deemed to make
any representation or warranty as to the authorization of any Common
Shares to be issued pursuant to this Agreement or any Rights or as to
whether any Common Shares will, when issued, be duly and validly
authorized, executed, issued and delivered and fully paid and
non-assessable;
(f) the Corporation agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement;
(g) the Rights Agent is hereby authorized and directed to accept
instructions in writing with respect to the performance of its duties
hereunder from any individual believed by the Rights Agent to be the
Chairman of the Board, President, any Vice President, Treasurer,
Corporate Secretary or any Assistant Secretary of the Corporation, and
to apply to such individuals for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any
such individual;
(h) the Rights Agent and any shareholder or stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in Common
Shares, Rights or other securities of the Corporation or become
pecuniarily interested in any transaction in which the Corporation may
be interested, or contract with or lend
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money to the Corporation or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for
the Corporation or for any other legal entity; and
(i) the Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any
loss to the Corporation resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
4.4 CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days' notice (or such lesser notice as is acceptable to the
Corporation) in writing mailed to the Corporation and to each transfer agent of
Common Shares by registered or certified mail. The Corporation may remove the
Rights Agent upon 60 days' notice in writing, mailed to the Rights Agent and to
each transfer agent of the Common Shares by registered or certified mail. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Corporation will appoint a successor to the Rights Agent. If the
Corporation fails to make such appointment within a period of 60 days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent, then by prior written
notice to the Corporation the resigning Rights Agent or the holder of any Rights
(which holder shall, with such notice, submit such holder's Rights Certificate,
if any, for inspection by the Corporation), may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Corporation or by such a court, shall be a
corporation incorporated under the laws of Canada or a province thereof
authorized to carry on the business of a trust company in the Province of
Alberta. After appointment, the successor Rights Agent will be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Corporation will file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares and mail a notice thereof in writing to the holders of the Rights in
accordance with Section 5.9. Failure to give any notice provided for in this
Section 4.4, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
any successor Rights Agent, as the case may be.
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ARTICLE 5 - MISCELLANEOUS
5.1 REDEMPTION AND WAIVER
(a) The Board of Directors acting in good faith may, until the occurrence
of a Flip-in Event, upon prior written notice delivered to the Rights
Agent, determine to waive the application of Section 3.1 to a
particular Flip-in Event that would result from a Take-over Bid made
by way of take-over bid circular to all holders of Voting Shares
(which for greater certainty shall not include the circumstances
described in Subsection 5.1(h)); provided that if the Board of
Directors waives the application of Section 3.1 to a particular
Flip-in Event pursuant to this Subsection 5.1(a), the Board of
Directors shall be deemed to have waived the application of Section
3.1 to any other Flip-in Event occurring by reason of any Take-over
Bid which is made by means of a take-over bid circular to all holders
of Voting Shares prior to the expiry of any Take-over Bid in respect
of which a waiver is, or is deemed to have been, granted under this
Subsection 5.1(a).
(b) Subject to the prior consent of the holders of the Voting Shares or
the Rights obtained as set forth in Subsection 5.4(b) or (c), the
Board of Directors of the Corporation acting in good faith may, at its
option, at any time prior to the provisions of Section 3.1 becoming
applicable as a result of the occurrence of a Flip-in Event, elect to
redeem all but not less than all of the outstanding Rights at a
redemption price of $0.001 per Right appropriately adjusted in a
manner analogous to the applicable adjustment provided for in Section
2.3 if an event of the type analogous to any of the events described
in Section 2.3 shall have occurred (such redemption price being herein
referred to as the "Redemption Price").
(c) Where a Person acquires pursuant to a Permitted Bid, a Competing
Permitted Bid or an Exempt Acquisition under Subsection 5.1(a)
outstanding Voting Shares, other than Voting Shares Beneficially Owned
at the date of the Permitted Bid, the Competing Permitted Bid or the
Exempt Acquisition under Subsection 5.1(a) by such Person, then the
Board of Directors of the Corporation shall immediately upon the
consummation of such acquisition without further formality and without
any approval under Subsection 5.4(b) or (c) be deemed to have elected
to redeem the Rights at the Redemption Price.
(d) Where a Take-over Bid that is not a Permitted Bid Acquisition is
withdrawn or otherwise terminated after the Separation Time has
occurred and prior to the occurrence of a Flip-in Event, the Board of
Directors may elect to redeem all the outstanding Rights at the
Redemption Price.
(e) If the Board of Directors is deemed under Subsection 5.1(c) to have
elected, or elects under either of Subsection 5.1(b) or (d), to redeem
the Rights, the right to exercise the Rights will thereupon, without
further action and without notice, terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price.
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(f) Within 10 days after the Board of Directors is deemed under Subsection
5.1(c) to have elected, or elects under Subsection 5.1(b) or (d), to
redeem the Rights, the Corporation shall give notice of redemption to
the holders of the then outstanding Rights by mailing such notice to
each such holder at his last address as it appears upon the registry
books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Voting Shares. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made.
(g) Upon the Rights being redeemed pursuant to Subsection 5.1(d), all the
provisions of this Agreement shall continue to apply as if the
Separation Time had not occurred and Rights Certificates representing
the number of Rights held by each holder of record of Common Shares as
of the Separation Time had not been mailed to each such holder and for
all purposes of this Agreement the Separation Time shall be deemed not
to have occurred.
(h) The Board of Directors may waive the application of Section 3.1 in
respect of the occurrence of any Flip-in Event if the Board of
Directors has determined within eight Trading Days following a Stock
Acquisition Date that a Person became an Acquiring Person by
inadvertence and without any intention to become, or knowledge that it
would become, an Acquiring Person under this Agreement and, in the
event that such a waiver is granted by the Board of Directors, such
Stock Acquisition Date shall be deemed not to have occurred. Any such
waiver pursuant to this Subsection 5.1(h) must be on the condition
that such Person, within 14 days after the foregoing determination by
the Board of Directors or such earlier or later date as the Board of
Directors may determine (the "Disposition Date"), has reduced its
Beneficial Ownership of Voting Shares such that the Person is no
longer an Acquiring Person. If the Person remains an Acquiring Person
at the close of business on the Disposition Date, the Disposition Date
shall be deemed to be the date of occurrence of a further Stock
Acquisition Date and Section 3.1 shall apply thereto.
5.2 EXPIRATION
No Person shall have any rights whatsoever pursuant to this Agreement or in
respect of any Right after the Expiration Time, except the Rights Agent as
specified in Subsection 4.1(a) of this Agreement.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or the Rights to
the contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board of Directors to
reflect any adjustment or change in the number or kind or class of securities
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
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5.4 SUPPLEMENTS AND AMENDMENTS
(a) The Corporation may make amendments to this Agreement to correct any
clerical or typographical error or, subject to Subsection 5.4(e),
which are required to maintain the validity of this Agreement as a
result of any change in any applicable legislation, rules or
regulations thereunder. Notwithstanding anything in this Section 5.4
to the contrary, no such supplement or amendment shall be made to the
provisions of Article 4 except with the written concurrence of the
Rights Agent to such supplement or amendment.
(b) Subject to Section 5.4(a), the Corporation may, with the prior consent
of the holders of Voting Shares obtained as set forth below, at any
time prior to the Separation Time, amend, vary or rescind any of the
provisions of this Agreement and the Rights (whether or not such
action would materially adversely affect the interests of the holders
of Rights generally). Such consent shall be deemed to have been given
if the action requiring such approval is authorized by the affirmative
vote of a majority of the votes cast by Independent Shareholders
present or represented at and entitled to be voted at a meeting of the
holders of Voting Shares duly called and held in compliance with
applicable laws and the articles and by laws of the Corporation.
(c) The Corporation may, with the prior consent of the holders of Rights,
at any time on or after the Stock Acquisition Date, amend, vary or
delete any of the provisions of this Agreement and the Rights (whether
or not such action would materially adversely affect the interests of
the holders of Rights generally), provided that no such amendment,
variation or deletion shall be made to the provisions of Article 4
except with the written concurrence of the Rights Agent thereto. Such
consent shall be deemed to have been given if such amendment,
variation or deletion is authorized by the affirmative votes of the
holders of Rights present or represented at and entitled to be voted
at a meeting of the holders (such meeting to be called and held in
compliance with applicable laws and regulatory requirements and, to
the extent possible, with the requirements in the articles and by-laws
of the Corporation applicable to meetings of holders of Voting Shares,
applied MUTATIS MUTANDIS) and representing 50% plus one of the votes
cast in respect thereof (other than holders of Rights whose Rights
have become null and void pursuant to Subsection 3.1(b)).
(d) Any approval of the holders of Rights shall be deemed to have been
given if the action requiring such approval is authorized by the
affirmative votes of the holders of Rights present or represented at
and entitled to be voted at a meeting of the holders of Rights and
representing a majority of the votes cast in respect thereof. For the
purposes hereof, each outstanding Right (other than Rights which are
void pursuant to the provisions hereof) shall be entitled to one vote,
and the procedures for the calling, holding and conduct of the meeting
shall be those, as nearly as may be, which are provided in the
Corporation's by laws and the CANADA BUSINESS CORPORATIONS ACT with
respect to meetings of shareholders of the Corporation.
- 37 -
(e) Any amendments made by the Corporation to this Agreement pursuant to
Subsection 5.4(a) which are required to maintain the validity of this
Agreement as a result of any change in any applicable legislation,
rule or regulation thereunder shall:
(i) if made before the Separation Time, be submitted to the
shareholders of the Corporation at the next meeting of
shareholders and the shareholders may, by the majority referred
to in Subsection 5.4(b), confirm or reject such amendment;
(ii) if made after the Separation Time, be submitted to the holders of
Rights at a meeting to be called for on a date not later than
immediately following the next meeting of shareholders of the
Corporation and the holders of Rights may, by resolution passed
by the majority referred to in Subsection 5.4(d), confirm or
reject such amendment.
Any such amendment shall be effective from the date of the resolution
of the Board of Directors adopting such amendment, until it is
confirmed or rejected or until it ceases to be effective (as described
in the next sentence) and, where such amendment is confirmed, it
continues in effect in the form so confirmed. If such amendment is
rejected by the shareholders or the holders of Rights or is not
submitted to the shareholders or holders of Rights as required, then
such amendment shall cease to be effective from and after the
termination of the meeting at which it was rejected or to which it
should have been but was not submitted or from and after the date of
the meeting of holders of Rights that should have been but was not
held, and no subsequent resolution of the Board of Directors to amend
this Agreement to substantially the same effect shall be effective
until confirmed by the shareholders or holders of Rights as the case
may be.
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights.
After the Separation Time, in lieu of issuing fractional Rights, the
Corporation shall pay to the holders of record of the Rights
Certificates (provided the Rights represented by such Rights
Certificates are not void pursuant to the provisions of Subsection
3.1(b), at the time such fractional Rights would otherwise be
issuable), an amount in cash equal to the fraction of the Market Price
of one whole Right that the fraction of a Right that would otherwise
be issuable is of one whole Right.
(b) The Corporation shall not be required to issue fractions of Common
Shares upon exercise of Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of issuing fractional
Common Shares, the Corporation shall pay to the registered holders of
Rights Certificates, at the time such Rights are exercised as herein
provided, an amount in cash equal to the fraction of the Market Price
of one Common Share that the fraction of a Common Share that would
otherwise be
- 38 -
issuable upon the exercise of such Right is of one whole Common Share
at the date of such exercise.
5.6 RIGHTS OF ACTION
Subject to the terms of this Agreement, all rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective holders of the Rights. Any holder of Rights,
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights enforce, and may institute and maintain any
suit, action or proceeding against the Corporation to enforce such holder's
right to exercise such holder's Rights, or Rights to which such holder is
entitled, in the manner provided in such holder's Rights and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights it is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief against
actual or threatened violations of the obligations of any Person subject to,
this Agreement.
5.7 REGULATORY APPROVALS
Any obligation of the Corporation or action or event contemplated by this
Agreement shall be subject to the receipt of any requisite approval or consent
from any governmental or regulatory authority, and without limiting the
generality of the foregoing, necessary approvals of The Toronto Stock Exchange
and other exchanges shall be obtained, such as to the issuance of Common Shares
upon the exercise of Rights under Subsection 2.2(d).
5.8 DECLARATION AS TO NON-CANADIAN OR NON-U.S. HOLDERS
If in the opinion of the Board of Directors (who may rely upon the advice
of counsel) any action or event contemplated by this Agreement would require
compliance by the Corporation with the securities laws or comparable legislation
of a jurisdiction outside Canada, the Board of Directors acting in good faith
shall take such actions as it may deem appropriate to ensure such compliance. In
no event shall the Corporation or the Rights Agent be required to issue or
deliver Rights or securities issuable on exercise of Rights to persons who are
citizens, residents or nationals of any jurisdiction other than Canada or the
United States, in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes.
5.9 NOTICES
(a) Notices or demands authorized or required by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights to or
on the Corporation shall be sufficiently given or made if delivered,
sent by registered or certified mail, postage prepaid (until another
address is filed in writing with the Rights Agent), or sent by
facsimile or other form of recorded electronic communication, charges
prepaid and confirmed in writing, as follows:
- 39 -
TransCanada Corporation
TransCanada XxxxXxxxx Xxxxx
000 - 0 Xxxxxx X.X.
X.X. Xxx 0000, Xxxxxxx X
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Corporate Secretary
Telecopy No.: (000) 000-0000
(b) Notices or demands authorized or required by this Agreement to be
given or made by the Corporation or by the holder of any Rights to or
on the Rights Agent shall be sufficiently given or made if delivered,
sent by registered or certified mail, postage prepaid (until another
address is filed in writing with the Corporation), or sent by
facsimile or other form of recorded electronic communication, charges
prepaid and confirmed in writing, as follows:
Computershare Trust Company of Canada
000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Manager, Corporate Trust Department
Telecopy No.: (000) 000-0000
(c) Notices or demands authorized or required by this Agreement to be
given or made by the Corporation or the Rights Agent to or on the
holder of any Rights shall be sufficiently given or made if delivered
or sent by first class mail, postage prepaid, addressed to such holder
at the address of such holder as it appears upon the register of the
Rights Agent or, prior to the Separation Time, on the register of the
Corporation for its Common Shares. Any notice which is mailed or sent
in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
(d) Any notice given or made in accordance with this Section 5.9 shall be
deemed to have been given and to have been received on the day of
delivery, if so delivered, on the third Business Day (excluding each
day during which there exists any general interruption of postal
service due to strike, lockout or other cause) following the mailing
thereof, if so mailed, and on the day of telegraphing, telecopying or
sending of the same by other means of recorded electronic
communication (provided such sending is during the normal business
hours of the addressee on a Business Day and if not, on the first
Business Day thereafter). Each of the Corporation and the Rights Agent
may from time to time change its address for notice by notice to the
other given in the manner aforesaid.
- 40 -
5.10 COSTS OF ENFORCEMENT
The Corporation agrees that if the Corporation fails to fulfil any of its
obligations pursuant to this Agreement, then the Corporation will reimburse the
holder of any Rights for the costs and expenses (including legal fees) incurred
by such holder to enforce his rights pursuant to any Rights or this Agreement.
5.11 SUCCESSORS
All the covenants and provisions of this Agreement by or for the benefit of
the Corporation or the Rights Agent shall bind and enure to the benefit of their
respective successors and assigns hereunder.
5.12 BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person other
than the Corporation, the Rights Agent and the holders of the Rights any legal
or equitable right, remedy or claim under this Agreement; further, this
Agreement shall be for the sole and exclusive benefit of the Corporation, the
Rights Agent and the holders of the Rights.
5.13 GOVERNING LAW
This Agreement and each Right issued hereunder shall be deemed to be a
contract made under the laws of the Province of Alberta and for all purposes
shall be governed by and construed in accordance with the laws of such Province
applicable to contracts to be made and performed entirely within such Province.
5.14 SEVERABILITY
If any term or provision hereof or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective only as to such
jurisdiction and to the extent of such invalidity or unenforceability in such
jurisdiction without invalidating or rendering unenforceable or ineffective the
remaining terms and provisions hereof in such jurisdiction or the application of
such term or provision in any other jurisdiction or to circumstances other than
those as to which it is specifically held invalid or unenforceable.
5.15 EFFECTIVE DATE
Upon being confirmed and approved by the holders of Voting Shares of the
Corporation at its 2004 annual meeting of shareholders, this Agreement shall be
effective and in full force and effect in accordance with its terms from and
after the Effective Date and amends, restates and replaces in its entirety the
Original Agreement.
5.16 RECONFIRMATION AND APPROVAL
This Agreement must be reconfirmed and approved by a resolution passed by a
majority of greater than 50 per cent of the votes cast by all holders of Voting
Shares who vote in
- 41 -
respect of such reconfirmation and approval at a meeting of holders of Voting
Shares to be held not earlier than February 1, 2007 and not later than the date
on which the 2007 annual meeting of holders of Voting Shares terminates and
thereafter at such a meeting to be held, MUTATIS MUTANDIS, every three years
thereafter. If this Agreement is not so reconfirmed and approved or is not
presented for reconfirmation at any such meeting, this Agreement and all
outstanding Rights shall terminate and be void and of no further force and
effect on and from the close of business on that date which is the earlier of
the date of termination of the meeting called to consider the reconfirmation and
approval of this Agreement and the date of termination of the annual meeting of
holders of Voting Shares in the applicable year; provided, that termination
shall not occur if a Flip-in Event has occurred (other than a Flip-in Event
which has been waived pursuant to Subsection 5.1(a) hereof), prior to the date
upon which this Agreement would otherwise terminate pursuant to this Section
5.16.
5.17 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
All actions, calculations and determinations (including all omissions with
respect to the foregoing) which are done or made by the Board of Directors in
good faith for the purposes hereof shall not subject the Board of Directors or
any director of the Corporation to any liability to the holders of the Rights.
5.18 TIME OF THE ESSENCE
Time shall be of the essence in this Agreement.
5.19 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute one and the same instrument.
- 42 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
TRANSCANADA CORPORATION
By: /s/ Xxxxxxxx W.A. Xxxxxxxxx
----------------------------------
Xxxxxxxx W.A. Bellstedt
Executive Vice-President,
Law and General Counsel
By: /s/ Rhondda X.X. Xxxxx
----------------------------------
Rhondda X.X. Xxxxx
Vice-President and
Corporate Secretary
c/s
COMPUTERSHARE TRUST COMPANY OF CANADA
By: /s/ Xxxx Safiniuk
----------------------------------
Xxxx Safiniuk, General Manager
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx,
Relationship Manager
c/s
ATTACHMENT 1
TRANSCANADA CORPORATION
SHAREHOLDER RIGHTS PLAN AGREEMENT
[Form of Rights Certificate]
Certificate No. ___________ Rights ___________
THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER
RIGHTS PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION
3.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, OR TRANSFEREES OF AN ACQUIRING
PERSON OR CERTAIN RELATED PARTIES, MAY BECOME VOID.
RIGHTS CERTIFICATE
This certifies that ________________________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Shareholder Rights Plan Agreement, dated as of
April 24, 2003, as the same may be amended or supplemented from time to time
(the "Shareholder Rights Agreement"), between TransCanada Corporation, a
corporation duly incorporated under the CANADA BUSINESS CORPORATIONS ACT (the
"Corporation") and Computershare Trust Company of Canada, a trust company
incorporated under the laws of Canada (the "Rights Agent") (which term shall
include any successor Rights Agent under the Shareholder Rights Agreement), to
purchase from the Corporation at any time after the Separation Time (as such
term is defined in the Shareholder Rights Agreement) and prior to the Expiration
Time (as such term is defined in the Shareholder Rights Agreement), one fully
paid common share of the Corporation (a "Common Share") at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate
with the Form of Election to Exercise (in the form provided hereinafter) duly
executed and submitted to the Rights Agent at its principal office in any of the
cities of Vancouver, Calgary, Xxxxxx, Winnipeg, Toronto and Montreal or to the
principal office of The Bank of Montreal Trust Company in New York City, New
York. The Exercise Price shall initially be $100 (Cdn.) per Right and shall be
subject to adjustment in certain events as provided in the Shareholder Rights
Agreement.
This Rights Certificate is subject to all of the terms and provisions of
the Shareholder Rights Agreement, which terms and provisions are incorporated
herein by reference and made a part hereof and to which Shareholder Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates. Copies
of the Shareholder Rights Agreement are on file at the registered office of the
Corporation.
- 2 -
This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities which may at any time be issuable upon the exercise hereof,
nor shall anything contained in the Shareholder Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the Rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Shareholder Rights Agreement), or to receive dividends or subscription rights,
or otherwise, until the Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Shareholder Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation
and its corporate seal.
Date: ________________________________
TRANSCANADA CORPORATION
By: ________________________________ By: ________________________________
[President] [Corporate Secretary]
Countersigned
COMPUTERSHARE TRUST COMPANY OF CANADA
By: ________________________________
Authorized Signature
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee.)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
____________________________, as attorney, to transfer the within Rights on the
books of the Corporation, with full power of substitution.
Dated: _____________________________
Signature Guaranteed: Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.)
Signature must be guaranteed by a member firm of a recognized stock
exchange in Canada, or a commercial bank or trust company having an office or
correspondent in Canada.
................................................................................
CERTIFICATE
(To be completed if true.)
The undersigned party transferring Rights hereunder, hereby represents, for
the benefit of all holders of Rights and Common Shares, that the Rights
evidenced by this Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof or a Person acting jointly or in concert with an
Acquiring Person or an Affiliate or Associate thereof. Capitalized terms shall
have the meaning ascribed thereto in the Shareholder Rights Agreement.
________________________________________
Signature
................................................................................
(To be attached to each Rights Certificate.)
FORM OF ELECTION TO EXERCISE
(To be exercised by the registered holder if such holder desires to exercise the
Rights Certificate.)
TO: _____________________________
The undersigned hereby irrevocably elects to exercise ____________________
whole Rights represented by the attached Rights Certificate to purchase the
Common Shares or other securities, if applicable, issuable upon the exercise of
such Rights and requests that certificates for such securities be issued in the
name of:
----------------------------------------------------------------
(Name)
----------------------------------------------------------------
(Address)
----------------------------------------------------------------
(City and Province)
----------------------------------------------------------------
Social Insurance Number or other taxpayer identification number.
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
----------------------------------------------------------------
(Name)
----------------------------------------------------------------
(Address)
----------------------------------------------------------------
(City and Province)
----------------------------------------------------------------
Social Insurance Number or other taxpayer identification number.
Dated: ___________________________
Signature Guaranteed: Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.)
Signature must be guaranteed by a member firm of a recognized stock
exchange in Canada, or a commercial bank or trust company having an office or
correspondent in Canada.
................................................................................
- 2 -
CERTIFICATE
(To be completed if true.)
The undersigned party exercising Rights hereunder, hereby represents, for
the benefit of all holders of Rights and Common Shares, that the Rights
evidenced by this Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof or a Person acting jointly or in concert with an
Acquiring Person or an Affiliate or Associate thereof. Capitalized terms shall
have the meaning ascribed thereto in the Shareholder Rights Agreement.
________________________________________
Signature
................................................................................
(To be attached to each Rights Certificate.)
NOTICE
In the event the certification set forth above in the Forms of Assignment
and Election is not completed, the Corporation will deem the Beneficial Owner of
the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof. No Rights Certificates shall be issued in
exchange for a Rights Certificate owned or deemed to have been owned by an
Acquiring Person or an Affiliate or Associate thereof, or by a Person acting
jointly or in concert with an Acquiring Person or an Affiliate or Associate
thereof.
