Document:

exv4w1

Exhibit 4.1

POTASH CORPORATION OF SASKATCHEWAN INC.

and

CIBC MELLON TRUST COMPANY

as Rights Agent

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

August 16, 2010

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 

	ARTICLE 1

	INTERPRETATION

	 
	 	 	 	 	 	 
	Section 1.1
	 	Certain Definitions	 	 	2	 
	Section 1.2
	 	Currency	 	 	14	 
	Section 1.3
	 	Headings	 	 	14	 
	Section 1.4
	 	Number and Gender	 	 	14	 
	Section 1.5
	 	Acting Jointly or in Concert	 	 	14	 
	Section 1.6
	 	Statutory References	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE 2

	THE RIGHTS

	 
	 	 	 	 	 	 
	Section 2.1
	 	Legend on Common Share Certificates	 	 	15	 
	Section 2.2
	 	Initial Exercise Price; Exercise of Rights; Detachment of Rights	 	 	16	 
	Section 2.3
	 	Adjustments to Exercise Price; Number of Rights	 	 	19	 
	Section 2.4
	 	Date on Which Exercise is Effective	 	 	24	 
	Section 2.5
	 	Execution, Authentication, Delivery and Dating of Rights Certificates	 	 	24	 
	Section 2.6
	 	Registration, Registration of Transfer and Exchange	 	 	25	 
	Section 2.7
	 	Mutilated, Destroyed, Lost and Stolen Rights Certificates	 	 	25	 
	Section 2.8
	 	Persons Deemed Owners	 	 	26	 
	Section 2.9
	 	Delivery and Cancellation of Rights Certificates	 	 	26	 
	Section 2.10
	 	Agreement of Rights Holders	 	 	27	 
	Section 2.11
	 	Rights Certificate Holder not Deemed a Shareholder	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE 3

	ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN

	TRANSACTIONS

	 
	 	 	 	 	 	 
	Section 3.1
	 	Flip-in Event	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE 4

	THE RIGHTS AGENT

	 
	 	 	 	 	 	 
	Section 4.1
	 	General	 	 	29	 
	Section 4.2
	 	Merger or Amalgamation or Change of Name of Rights Agent	 	 	30	 
	Section 4.3
	 	Duties of Rights Agent	 	 	31	 
	Section 4.4
	 	Change of Rights Agent	 	 	32	 
	Section 4.5
	 	Compliance with Anti-Money Laundering Legislation	 	 	33	 
	Section 4.6
	 	Compliance with Privacy Legislation	 	 	33	 
	 
	 	 	 	 	 	 
	ARTICLE 5

	MISCELLANEOUS

	 
	 	 	 	 	 	 
	Section 5.1
	 	Redemption and Termination of Rights	 	 	34	 
	Section 5.2
	 	Waiver of Flip-In Events	 	 	35	 

( i )

 

 

	 	 	 	 	 	 	 

	Section 5.3
	 	Expiration	 	 	35	 
	Section 5.4
	 	Issuance of New Rights Certificates	 	 	36	 
	Section 5.5
	 	Supplements and Amendments	 	 	36	 
	Section 5.6
	 	Fractional Rights and Fractional Shares	 	 	36	 
	Section 5.7
	 	Rights of Action	 	 	36	 
	Section 5.8
	 	Notice of Proposed Actions	 	 	37	 
	Section 5.9
	 	Notices	 	 	37	 
	Section 5.10
	 	Successors	 	 	38	 
	Section 5.11
	 	Benefits of this Agreement	 	 	38	 
	Section 5.12
	 	Governing Law	 	 	38	 
	Section 5.13
	 	Severability	 	 	38	 
	Section 5.14
	 	Effective Date	 	 	38	 
	Section 5.15
	 	Determinations and Actions by the Board of Directors	 	 	38	 
	Section 5.16
	 	Rights of Board, Corporation and Offeror	 	 	39	 
	Section 5.17
	 	Regulatory Approvals	 	 	39	 
	Section 5.18
	 	Declaration as to Non-Canadian Holders	 	 	39	 
	Section 5.19
	 	Time of the Essence	 	 	39	 
	Section 5.20
	 	Execution in Counterparts	 	 	39	 

SCHEDULE

SCHEDULE “A” Forms of Rights Certificate, Election to Exercise, and Assignment

( ii )

 

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

          THIS SHAREHOLDER RIGHTS PLAN AGREEMENT dated August 16, 2010 between POTASH CORPORATION OF
SASKATCHEWAN INC. (the “Corporation”), a corporation incorporated under the laws of Canada, and
CIBC MELLON TRUST COMPANY, a trust company incorporated under the laws of Canada, as Rights Agent
(the “Rights Agent”, which term shall include any successor Rights Agent hereunder).

          WHEREAS the Board of Directors of the Corporation, in the exercise of its fiduciary duties to
the Corporation, has determined that it is advisable and in the best interests of the Corporation
to adopt and maintain a shareholder rights plan to:

	 	(i)	 	ensure, to the extent possible, that the shareholders of the Corporation and
the Board of Directors have adequate time to consider and evaluate any unsolicited
Offer to Acquire the outstanding Voting Shares;
	 
	 	(ii)	 	provide the Board of Directors with adequate time to identify, develop and
negotiate value-enhancing alternatives, if considered appropriate, to any such
unsolicited Offer to Acquire the outstanding Voting Shares;
	 
	 	(iii)	 	encourage the fair treatment of shareholders of the Corporation in
connection with any Offer to Acquire the Voting Shares; and
	 
	 	(iv)	 	generally prevent any Person from acquiring ownership (or the right to
acquire ownership) of, or the right to vote more than 20% of, the Voting Shares, and
prevent any Person from entering into arrangements or relationships that have a
similar effect, while the Board of Directors is conducting a process to consider and
evaluate any unsolicited Offer to Acquire the outstanding Voting Shares; and,

          WHEREAS in order to implement the adoption of the shareholder rights plan the Board of
Directors has authorized the issuance of one Right:

	 	(i)	 	effective at the Record Time in respect of each Common Share outstanding at
the Record Time; and
	 
	 	(ii)	 	in respect of each Common Share issued after the Record Time and prior to
the earlier of the Separation Time and the Expiration Time; 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 Rights Agent is willing to so act, in connection with the issuance, transfer,
exchange and replacement of Rights Certificates, the exercise of Rights and other matters referred
to herein;

          NOW THEREFORE, in consideration of the foregoing premises and the respective covenants and
agreements set forth herein, the parties hereby agree as follows:

 

 

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ARTICLE 1

INTERPRETATION

Section 1.1 Certain Definitions.

          For purposes of this Agreement, the following terms have the meanings indicated:

	 	(a)	 	“1933 Securities Act” shall mean the Securities Act of 1933 of the United
States, as amended, and the rules and regulations thereunder, and any comparable or
successor laws or regulations thereto.
	 
	 	(b)	 	“1934 Exchange Act” shall mean the Securities Exchange Act of 1934 of the
United States, as amended, and the rules and regulations thereunder, and any
comparable or successor laws or regulations thereto.
	 
	 	(c)	 	“Acquiring Person” means, 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)
Corporate Acquisitions, (B) Permitted Bid Acquisitions, (C) Corporate
Distributions, (D) Exempt Acquisitions, or (E) Convertible Security
Acquisitions; provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the Voting Shares then outstanding by reason of one or
more or any combination of (A), (B), (C), (D) or (E) above and thereafter
becomes the Beneficial Owner of an additional 0.25% or more of the
outstanding Voting Shares (other than pursuant to one or any combination of
(A), (B), (C), (D) or (E) above), 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 10 days after the Disqualification Date (as
hereinafter defined), 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 (g)(ii) of the definition of “Beneficial
Owner” solely because such Person makes or announces an intention to make a
Take-over Bid in respect of securities of the Corporation either alone,
through such Person’s Affiliates or Associates or by acting
jointly or in concert with any other Person or becomes otherwise
disqualified (the first date of public announcement (which, for the
purposes of this definition, shall include, without limitation, a report
filed pursuant to the Securities Act (Saskatchewan)) by such Person or the
Corporation of a current intent to commence such a Take-over Bid being
herein referred to as the “Disqualification Date”);
	 
	 	(iv)	 	an underwriter or member of a banking or selling group that
becomes the Beneficial Owner of Voting Shares from the Corporation in
connection

 

 

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	 	 	 	with a distribution of securities (including, for greater
certainty, by way of private placement of such securities) to the public; and

	 	(v)	 	a Person (a “Grandfathered Person”) who is the Beneficial
Owner of 20% or more of the outstanding Voting Shares as at the Record Time,
provided, however, that this exception shall not be, and shall cease to be,
applicable to a Grandfathered Person to the event that such Grandfathered
Person shall, after the Record Time: (1) cease to own 20% or more of the
outstanding Voting Shares or (2) become the Beneficial Owner (other than
pursuant to any one or a combination of a Corporate Acquisition, Permitted Bid
Acquisition, Corporate Distribution, Exempt Acquisition or Convertible
Security Acquisition) of additional Voting Shares constituting more than 0.25%
of the number of Voting Shares outstanding as at the Record Time.

	 	(d)	 	“Affiliate” when used to indicate a relationship with a specified Person,
means a Person that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such specified Person.
	 
	 	(e)	 	“Agreement” means this agreement as amended, modified or supplemented from
time to time.
	 
	 	(f)	 	“Associate” when used to indicate a relationship with a specified Person,
means any relative of such specified Person who has the same home as such specified
Person, or any Person to whom such specified Person is married or with whom such
specified Person is living in a conjugal relationship outside marriage who has the
same home as such specified Person, or any relative of such spouse or other Person who
has the same home as such specified Person.
	 
	 	(g)	 	A Person shall be deemed the “Beneficial Owner”, and to have “Beneficial
Ownership” of, and to “Beneficially Own”:

	 	(i)	 	any securities of which such Person or any Affiliate or
Associate of such Person is the owner in law or equity;
	 
	 	(ii)	 	any securities as to which such Person or any of such
Person’s Affiliates or Associates has the right to become the owner at law or
equity (A) upon the conversion, exchange or exercise of any Convertible
Securities, or (B) pursuant to any agreement, arrangement or understanding
(whether or not in writing), in each case if such right is exercisable within
a period of 60 days thereafter whether or not on condition or the happening of
any contingency (other than customary agreements with and between
underwriters, banking group or selling group members with respect to a
distribution of securities or pursuant to a pledge of securities in the
ordinary course of business);
	 
	 	(iii)	 	any securities as to which such Person or any of such
Person’s Affiliates or Associates has the right to vote, where such right is
exercisable immediately or after the passage of time and whether or not on
condition or the occurrence of any contingency, pursuant to any agreement,

 

 

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	 	 	 	arrangement, pledge or understanding, written or oral (other than pursuant to
pledges of securities in the ordinary course of business of the lender granted
as security for bona fide indebtedness) or otherwise; and

	 	(iv)	 	any securities that are Beneficially Owned within the meaning
of Clause 1.1(g)(i), (ii) or (iii) hereof by any other Person with whom such
Person is acting jointly or in concert with respect to the Corporation or any
of its securities;

	 	 	 	provided, however, that a Person shall not be deemed the “Beneficial Owner”, or to
have “Beneficial Ownership” of, or to “Beneficially Own”, any security solely as a
result of the existence of any one or more of the following circumstances:

	 	(1)	 	such security has been deposited or tendered, pursuant to a
Take-over Bid made by such Person or made by any Affiliate or Associate of
such Person or made by any other Person acting jointly or in concert with such
Person, until the earlier time at which any such deposited or tendered
security is accepted unconditionally for payment or exchange or is taken up
and paid for;
	 
	 	(2)	 	such Person or any Affiliate or Associate of such Person or any other
Person acting jointly or in concert with such Person, holds such security;
provided that (i) the ordinary business of any such Person (the “Fund
Manager”) includes the management of mutual funds or investment funds for
others (which others may include or be limited to one or more employee benefit
plans or pension plans) and/or includes the acquisition or holding of
securities for a non-discretionary account of a Client (as defined
below) by a dealer or broker registered under applicable securities laws
to the extent required, and such security is held by the Fund Manager in
the ordinary course of such business in the performance of such Fund
Manager’s duties for the account of any other Person (a “Client”), and
such Person holds any and all qualifications including registration, (ii)
such Person (the “Trust Company”) is licensed to carry on the business of
a trust company under applicable law and, as such, acts as trustee or
administrator or in a similar capacity in relation to the estates of
deceased or incompetent Persons or in relation to other accounts and holds
such security in the ordinary course of such duties for the estate of any
such deceased or incompetent Person (each an “Estate Account”) or for such
other accounts (each an “Other Account”), (iii) the Person (the “Statutory
Body”) is an independent Person established by statute for purposes that
include, and the ordinary business or activity of such person includes,
the management of investment funds for employee benefit plans, pension
plans, insurance plans of various public bodies and the Statutory Body
holds such security for the purposes of its activities as such, (iv) the
ordinary business of any such Person includes acting as an agent of the
Crown in the management of public assets (the “Crown Agent”), or (v) the
Person is the administrator or the trustee of one or more pension funds or
plans (each a “Pension Fund”) registered under

 

 

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	 	 	 	the laws of Canada or any
province thereof or the United States or any state thereof (the
“Independent Person”), or is a Pension Fund and holds such securities for
the purposes of its activities as an Independent Person or as a Pension
Fund;
	 
	 	 	 	provided, however, that in any of the foregoing cases no one of the
Fund Manager, the Trust Company, the Statutory Body, the Crown Agent, the
Independent Person the Pension Fund makes or announces a current intention
to make a Take-over Bid in respect of securities of the Corporation alone
or by acting jointly or in concert with any other Person (other than
pursuant to a distribution by the Corporation or by means of ordinary
market transactions (including prearranged trades entered in the ordinary
course of business of such Person) executed through the facilities of a
stock exchange or organized over-the-counter market);

	 	(3)	 	such Person is a Client of or has an account with the same
Fund Manager as another Person on whose account the Fund Manager holds such
security, or such Person is a Client of or has an account with the same Estate
Account or an Other Account of the same Trust Company as another Person on
whose account the Trust Company holds such security, or such Person is a
Pension Fund with the same Independent Person as another Pension Fund;
	 
	 	(4)	 	such Person is a Client of a Fund Manager and such security
is owned at law or in equity by the Fund Manager, or such Person is
an Estate Account or an Other Account of a Trust Company and such security
is owned at law or in equity by the Trust Company, or such Person is a
Pension Fund and such security is owned at law or in equity by the
Independent Person; or
	 
	 	(5)	 	such Person is a registered holder of securities as a result
of carrying on the business of, or acting as a nominee of, a securities
depository.

	 	 	 	For purposes of this Agreement, the percentage of Voting Shares Beneficially Owned
by any Person, shall be and be deemed to be the product of 100 and the number of
which the numerator is the number of votes for the election of all directors
generally attaching to the Voting Shares Beneficially Owned by such Person and the
denominator of which is the number of votes for the election of all directors
generally attaching to all outstanding Voting Shares. Where any Person is deemed
to Beneficially Own unissued Voting Shares, such Voting Shares shall be deemed to
be issued and outstanding for the purpose of calculating the percentage of Voting
Shares Beneficially Owned by such Person.
	 
	 	(h)	 	“Board of Directors” means, at any time, the duly constituted board of
directors of the Corporation.
	 
	 	(i)	 	“Business Day” means any day other than a Saturday, Sunday or a day on which
banking institutions in Toronto are authorized or obligated by law to close.

 

 

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	 	(j)	 	“Canadian Dollar Equivalent” of any amount which is expressed in United
States dollars shall mean on any date the Canadian dollar equivalent of such amount
determined by multiplying such amount by the U.S.-Canadian Exchange Rate in effect on
such date.
	 
	 	(k)	 	“Canadian-U.S. Exchange Rate” shall mean on any date the inverse of the
U.S.-Canadian Exchange Rate.
	 
	 	(l)	 	“CBCA” means the Canada Business Corporations Act R.S.C. 1985, c. C-44, and
the regulations thereunder, and any comparable or successor laws or regulations
thereto.
	 
	 	(m)	 	“close of business” on any given date means the time on such date (or, if
such date is not a Business Day, the time on the next succeeding Business Day) at
which the office of the transfer agent for the Common Shares in the City of Winnipeg
(or, after the Separation Time, the office of the Rights Agent in the City of
Winnipeg) is closed to the public.
	 
	 	(n)	 	“Common Shares”, when used with reference to the Corporation, means the
common shares in the capital of the Corporation.
	 
	 	(o)	 	“Competing Permitted Bid” means a Take-over Bid that: (i) is made while
another Permitted Bid or Competing Permitted Bid is in existence and open for
acceptance, and (ii) satisfies all the components of the definition of a Permitted
Bid, except that the requirements set out in Clause (ii) of the definition of a
Permitted Bid shall be satisfied if the Take-over Bid shall contain, and the take up
and payment for securities tendered or deposited thereunder shall be subject to, an
irrevocable and unqualified condition that no Voting Shares shall be taken up or paid
for pursuant to the Competing Permitted Bid prior to the close of business on the date
that is no earlier than the date which is the later of 35 days after the date the
Competing Permitted Bid is made or 90 days after the earliest date on which any other
Permitted Bid or Competing Permitted Bid that is then in existence was made and only
if at that date, more than 50% of the then outstanding Voting Shares held by
Independent Shareholders have been deposited or tendered to the Competing Permitted
Bid and not withdrawn; provided always that a Competing Permitted Bid will cease to be
a Competing Permitted Bid at any time when such bid ceases to meet any of the
provisions of this definition and any acquisitions of securities made pursuant to such
Competing Bid, including any acquisition of securities theretofore made, will cease to
be a Permitted Bid Acquisition.
	 
	 	(p)	 	A Person is “controlled” by another Person if:

	 	(i)	 	in the case of a body corporate:

	 	(A)	 	securities entitled to vote in the election
of directors carrying more than 50% of the votes for the election of
directors are held, other than by way of security only, directly or
indirectly, by or for the benefit of the other Person; and

 

 

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	 	(B)	 	the votes carried by such securities are
entitled, if exercised, to elect a majority of the board of directors
of such corporation; or

	 	(ii)	 	in the case of a Person that is not a body corporate, more
than 50% of the voting or equity interests of such entity are held, directly
or indirectly, 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.
	 
	 	(q)	 	“Convertible Security” means at any time:

	 	(i)	 	any right (regardless of whether such right constitutes a
security) to acquire Voting Shares from the Corporation; and
	 
	 	(ii)	 	any securities issued by the Corporation from time to time
(other than the Rights) carrying any exercise, conversion or exchange right;

	 	 	 	in each case pursuant to which the holder thereof may acquire Voting Shares or
other securities which are convertible into or exercisable or exchangeable for
Voting Shares (in each case, whether such right is exercisable immediately or after
a specified period and whether or not on condition or the happening of any
contingency).
	 
	 	(r)	 	“Convertible Security Acquisition” means the acquisition of Voting Shares
upon the exercise, conversion or exchange of Convertible Securities received by such
Person pursuant to a Permitted Bid Acquisition, Exempt Acquisition or a Corporate
Distribution.
	 
	 	(s)	 	“Corporate Acquisition” means an acquisition by the Corporation or a
Subsidiary of the Corporation or the 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.
	 
	 	(t)	 	“Corporate Distribution” means an acquisition as a result of:

	 	(i)	 	a stock dividend or a stock split or other event pursuant to
which such Person receives or acquires Voting Shares or Convertible Securities
on the same pro rata basis as all other holders of Voting Shares of the same
class or series of the Corporation; or
	 
	 	(ii)	 	any other event pursuant to which all holders of Voting
Shares are entitled to receive Voting Shares or Convertible Securities on a
pro rata basis, including, without limiting the generality of the foregoing,
pursuant to the receipt and/or exercise of rights issued by the Corporation
and distributed to all the holders of a series or class of Voting Shares to
subscribe for or purchase Voting Shares or Convertible Securities of the
Corporation, provided that such rights are acquired directly from the
Corporation and not from any other Person and provided further that the Person
in question does not thereby acquire a

 

 

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	 	 	 	greater percentage of Voting Shares, or
Convertible Securities representing the right to acquire Voting Shares of such
class, than the percentage of Voting Shares of the class Beneficially Owned
immediately prior to such acquisition.

	 	(u)	 	“Disqualification Date” has the meaning ascribed thereto in Section
1.1(c)(iii) hereof.
	 
	 	(v)	 	“Effective Date” has the meaning ascribed thereto in Section 5.14 hereof.
	 
	 	(w)	 	“Election to Exercise” has the meaning ascribed thereto in Section 2.2(4)
hereof.
	 
	 	(x)	 	“Exempt Acquisition” means an acquisition of Voting Shares:

	 	(i)	 	in respect of which the Board of Directors has waived the
application of Section 3.1 hereof pursuant to the provisions of Section 5.2;
	 
	 	(ii)	 	which was made on or prior to the Record Time;
	 
	 	(iii)	 	pursuant to the receipt or exercise of rights issued by the
Corporation to all the holders of the Voting Shares (other than holders
resident in a jurisdiction where such distribution is restricted or
impracticable as a result of applicable law) to subscribe for or purchase
Voting Shares or Convertible Securities, provided that such rights are
acquired directly from the Corporation and not from any other person and
provided that the Person does not thereby acquire a greater percentage of
Voting Shares or Convertible Securities so offered than the Person’s
percentage of Voting Shares or Convertible Securities beneficially owned
immediately prior to such acquisition;
	 
	 	(iv)	 	pursuant to a distribution by the Corporation of Voting
Shares or Convertible Securities made pursuant to a prospectus provided that
the Person does not thereby acquire a greater class percentage of Voting
Shares, or Convertible Securities so offered than the Person’s percentage of
Voting Shares or Convertible Securities Beneficially Owned immediately prior
to such acquisition;
	 
	 	(v)	 	pursuant to an issuance and sale by the Corporation of Voting
Shares or Convertible Securities by way of a private placement by the
Corporation, provided that (x) all necessary stock exchange approvals for such
private placement have been obtained and such private placement complies with
the terms and conditions of such approvals, and (y) the purchaser does not
become the Beneficial Owner of more than 25% of the Voting Shares outstanding
immediately prior to the private placement (and in making this determination,
the securities to be issued to such purchaser on the private placement shall
be deemed to be held by such purchaser but shall not be included in the
aggregate number of outstanding Voting Shares immediately prior to the private
placement).

 

 

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	 	(y)	 	“Exercise Price” means, as of any date, the price at which a holder may
purchase the securities issuable upon exercise of one whole Right. Until adjustment
thereof in accordance with the terms hereof, the Exercise Price shall be:

	 	(i)	 	until the Separation Time, an amount equal to three times the
Market Price, from time to time, per Common Share; and
	 
	 	(ii)	 	from and after Separation Time, an amount equal to three
times the Market Price, as at the Separation Time, per Common Share.

	 	(z)	 	“Expiration Time” means the close of business on that date that is the
earliest of (i) the Termination Time, and (ii) the date of termination of this
Agreement pursuant to Section 5.14 or, if this Agreement is confirmed pursuant to
Section 5.14, the close of business on the third anniversary of the date hereof.
	 
	 	(aa)	 	“Flip-in Event” means a transaction in or pursuant to which any Person
becomes an Acquiring Person.
	 
	 	(bb)	 	“Independent Shareholders” means holders of outstanding Voting Shares, but
shall not include (i) any Acquiring Person or any Offeror, or any Affiliate or
Associate of such Acquiring Person or such Offeror, or any Person acting jointly or in
concert with such Acquiring Person or such Offeror, or (ii) a Person who is a trustee
of any employee benefit plan, stock purchase plan, deferred profit sharing plan or any
similar plan or trust for the benefit of employees of the Corporation or a Subsidiary
of the Corporation, unless the beneficiaries of any such plan or trust direct the
manner in which the Voting Shares are to be voted or direct whether the Voting Shares
are to be deposited or tendered to a Take-over Bid.
	 
	 	(cc)	 	“Market Price” per security of any securities on any date of determination
shall mean the average of the daily closing prices per security of such securities
(determined as described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however, that if
an event of a type analogous to any of the events described in Section 2.3 hereof
shall have caused the closing prices used to determine the Market Price on any Trading
Day not to be fully comparable with the closing price on 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 security of any securities on any date shall be:

	 	(i)	 	the closing board lot sale price or, in case no such sale
takes place on such date, the average of the closing bid and asked prices for
each of such securities as reported by the principal stock exchange
in Canada on which such securities are listed or posted for trading,

 

 

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	 	(ii)	 	if such securities are not listed or posted for trading on
any stock exchange in Canada, the last sale price, regular way, or, in case no
such sale takes place on such date, the average of the closing bid and asked
prices, regular way, for each share of such securities as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the principal national securities exchange in
the United States 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 stock
exchange in Canada or a national securities exchange in the United States, the
last quoted price, or if not so quoted, the average of the high bid and low
asked prices for each share of such securities in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System (“NASDAQ”) or such other system then in use, or
	 
	 	(iv)	 	if on any such date the securities are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the securities selected in good
faith by the Board of Directors;

	 	 	 	provided, however, that if on any such date the securities are not traded on any
stock exchange or in the over-the-counter market, the closing price per security of
such securities on such date shall mean the fair value per security of such
securities on such date as determined by a nationally recognized investment banking
firm with respect to the fair value per security of such securities. 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.
	 
	 	(dd)	 	“Offer to Acquire” shall include:

	 	(i)	 	an offer to purchase, a public announcement of an intention
to make an offer to purchase, or a solicitation of an offer to sell; and
	 
	 	(ii)	 	an acceptance of an offer to sell, whether or not such offer
to sell has been solicited;

	 	 	 	or any combination thereof, and the Person accepting an offer to sell shall be
deemed to be making an Offer to Acquire to the Person that made the offer to sell.
	 
	 	(ee)	 	“Offeror” means a Person who has announced a current intention to make, or
who makes and has outstanding, a Take-over Bid.

 

 

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	 	(ff)	 	“Offeror’s Securities” means Voting Shares Beneficially Owned by an Offeror,
any Affiliate or Associate of such Offeror or any Person acting jointly or in concert
with the Offeror.
	 
	 	(gg)	 	“Permitted Bid” means a Take-over Bid that is made by means of a take-over
bid circular and which also complies with the following additional provisions:

	 	(i)	 	the Take-over Bid shall be made to all holders of Voting
Shares (other than the Voting Shares held by the Offeror);
	 
	 	(ii)	 	the Take-over Bid shall contain, and the provisions for the
take up and payment for securities deposited thereunder shall be subject to,
an irrevocable and unqualified condition that no Voting Shares shall be taken
up or paid for pursuant to the Take-over Bid prior to the close of business on
the date which is not less than 90 days following the date of the Take-over
Bid;
	 
	 	(iii)	 	the Take-over Bid shall contain an irrevocable and
unqualified provision that, unless the Take-over Bid is withdrawn, Voting
Shares may be deposited pursuant to such Take-over Bid at any time prior to
the close of business on the date of first take-up or payment for Voting
Shares and that all Voting Shares deposited pursuant to the Take-over Bid may
be withdrawn at any time prior to the close of business on such date;
	 
	 	(iv)	 	the Take-over Bid shall contain an irrevocable and
unqualified condition that more than 50% of the outstanding Voting Shares held
by Independent Shareholders, determined as at the close of business on the
date of first take-up or payment for Voting Shares under the Take-over Bid,
must be deposited to the Take-over Bid and not withdrawn at the close of
business on the date of first take-up or payment for Voting Shares; and
	 
	 	(v)	 	the Take-over Bid shall contain an irrevocable and
unqualified provision that in the event that more than 50% of the then
outstanding Voting Shares held by Independent Shareholders shall have been
deposited to the Take-over Bid and not withdrawn as at the close on business
on the date of first take-up or payment for Voting Shares under the Take-over
Bid, the Offeror will make a public announcement of that fact and the
Take-over Bid will remain open for deposits of Voting Shares for not less
than 10 Business Days from the date of such public announcement;

	 	 	 	provided always that a Permitted Bid will cease to be a Permitted Bid at any time
when such bid ceases to meet any of the provisions of this definition and any
acquisitions of shares made pursuant to such Permitted Bid, including any
acquisition of shares theretofore made, will cease to be a Permitted Bid
Acquisition.
	 
	 	(hh)	 	“Permitted Bid Acquisitions” means share acquisitions made pursuant to a
Permitted Bid or a Competing Permitted Bid.

 

 

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	 	(ii)	 	“Person” means any individual, firm, partnership, limited partnership,
limited liability company or partnership, association, trust, trustee, executor,
administrator, legal or personal representative, government, governmental body, entity
or authority, group, body corporate, corporation, unincorporated organization or
association, syndicate, joint venture or any other entity, whether or not having legal
personality, and any of the foregoing in any derivative, representative or fiduciary
capacity and pronouns have a similar extended meaning.
	 
	 	(jj)	 	“Record Time” means the close of business on August 16, 2010.
	 
	 	(kk)	 	“Redemption Price” has the meaning ascribed thereto in Section 5.1 hereof.
	 
	 	(ll)	 	“regular periodic cash dividends” means cash dividends paid at regular
intervals in any fiscal year of the Corporation to the extent that such cash dividends
do not exceed, in the aggregate, the greatest of:

	 	(i)	 	100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its immediately preceding fiscal
year; and
	 
	 	(ii)	 	200% of the aggregate amount of cash dividends declared
payable by the Corporation on its Common Shares in its immediately preceding
fiscal year; and
	 
	 	(iii)	 	300% of the arithmetic mean of the aggregate amounts of cash
dividends declared payable by the Corporation on its Common Shares in its
three immediately preceding fiscal years divided by the arithmetic mean of the
number of Common Shares outstanding as at the end of each of such fiscal
years.

	 	(mm)	 	“Right” means a right issued pursuant to this Agreement.
	 
	 	(nn)	 	“Rights Certificate” has the meaning ascribed thereto in Section 2.2(3)
hereof.
	 
	 	(oo)	 	“Rights Register” has the meaning ascribed thereto in Section 2.6(1) hereof.
	 
	 	(pp)	 	“Securities Act (Saskatchewan)” shall mean The Securities Act 1988, S.S.
1988-9 c.S-42.2 and the regulations, rules, policies and notices made thereunder, and
any comparable or successor laws, regulations, rules, policies or notices thereto.
	 
	 	(qq)	 	“Separation Time” means the close of business on the 10th 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
Competing Permitted Bid), and

 

 

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	 	(iii)	 	the date on which a Permitted Bid or Competing Permitted Bid
ceases to qualify as such;

	 	 	 	or, in each case, such later date as may be determined by the Board of Directors;
provided that, if any Take-over Bid referred to in Clause (ii) of this Section
1.1(qq) or any Permitted Bid or Competing Permitted Bid referred to in Clause (iii)
of this Section 1.1(qq) expires, is cancelled, terminated or otherwise withdrawn
prior to the Separation Time, such Take-over Bid, Permitted Bid or Competing
Permitted Bid, as the case may be, shall be deemed, for the purposes of this
Section 1.1(qq), never to have been made and provided further that if the Board of
Directors determines pursuant to Section 5.2 hereof to waive the application of
Section 3.1 hereof to a Flip-in Event, the Separation Time in respect of such
Flip-in Event shall be deemed never to have occurred.
	 
	 	(rr)	 	“Stock Acquisition Date” means the first date of public announcement (which,
for purposes of this definition, shall include, without limitation, a report filed
pursuant to the Securities Act (Saskatchewan)) by the Corporation or an Offeror or
Acquiring Person of facts indicating that a Person has become an Acquiring Person.
	 
	 	(ss)	 	“Subsidiary”: a corporation shall be deemed to be a Subsidiary of another
corporation if:

	 	(i)	 	it is controlled by:

	 	(A)	 	that other;
	 
	 	(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.

	 	(tt)	 	“Take-over Bid” means an Offer to Acquire Voting Shares or securities
convertible into or exchangeable for or carrying a right to purchase Voting Shares
where the Voting Shares subject to the Offer to Acquire, together with the Voting
Shares into which the securities subject to the Offer to Acquire are convertible,
exchangeable or exercisable, 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.
	 
	 	(uu)	 	“Termination Time” means the time at which the right to exercise Rights shall
terminate pursuant to Section 5.1 hereof.
	 
	 	(vv)	 	“Trading Day”, when used with respect to any securities, shall mean a day on
which the securities exchange or national securities quotation system on which such
securities are listed or admitted for trading on which the largest number of such
securities were traded during the most recently completed calendar year is

 

 

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	 	 	 	open for
the transaction of business or, if the securities are not listed or admitted to
trading on any securities exchange, a Business Day.
	 
	 	(ww)	 	“U.S.-Canadian Exchange Rate” shall mean on any date: i) if on such date the
Bank of Canada sets an average noon spot rate of exchange 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 which is calculated in the manner which shall be determined by the Board of
Directors from time to time acting in good faith.
	 
	 	(xx)	 	“Voting Shares” means the Common Shares and any other shares of capital stock
or voting interests of the Corporation entitled to vote generally in the election of
all directors of the Corporation.

Section 1.2 Currency.

          All sums of money which are referred to in this Agreement are expressed in lawful money of
Canada, unless otherwise specified.

Section 1.3 Headings.

          The division of this Agreement into Articles, Sections and Clauses 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.

Section 1.4 Number and Gender.

          Wherever the context so requires, terms used herein importing the singular number only shall
include the plural and vice-versa and words importing only one gender shall include all others.

Section 1.5 Acting Jointly or in Concert.

          For purposes of this Agreement, it is a question of fact as to whether a Person is acting
jointly or in concert with another Person and, without limiting the generality of the foregoing,
the following shall be deemed to be acting jointly or in concert with a Person (the “First
Person”):

	 	(a)	 	every person who has any agreement, arrangement, commitment or understanding
(whether formal or informal and whether or not in writing) with the First Person, any
Associate or Affiliate of the First Person or any other Person acting jointly or in
concert with the First Person, for the purpose of acquiring or Offering to Acquire any
Voting Shares including, without limitation, any one or more of, or any combination
of, (i) a put, call, option, forward sale or purchase or other right or obligation
relating to the sale or disposition of any purchase or other right or obligation
relating to the sale or disposition of any Voting Shares to the First Person, any
Associate or Affiliate of the First Person or any other Person acting jointly or in
concert with the First Person (whether settled by delivery of securities, cash or a
combination thereof), (ii) any security the value of which varies with the value of
Voting Shares, or (iii) an agreement, arrangement, commitment or understanding
(whether formal or informal and whether or not in writing) pursuant to which all or
substantially all of the economic or market risk underlying a Voting Share, directly
or indirectly, is transferred to, or

 

 

- 15 -

	 	 	 	assumed by, the First Person, any Associate or
Affiliate of the First Person or any other Person acting jointly or in concert with
the First Person;
	 
	 	(b)	 	every Person who has any agreement, arrangement, commitment or understanding
(whether formal or informal and whether or not in writing) with the First Person, any
Associate or Affiliate of the First Person or any other Person acting jointly or in
concert with the First Person, for the purpose or with the intention of exercising
jointly or in concert with the First Person, any Associate or Affiliate of the First
Person or any other Person acting jointly or in concert with the First Person, any
voting rights attaching to any securities of the Corporation; and
	 
	 	(c)	 	every Person who has any agreement, arrangement, commitment or understanding
(whether formal or informal and whether or not in writing) with the First Person, any
Associate or Affiliate of the First Person or any other Person acting jointly or in
concert with the First Person, for the purpose of selling, offering to sell, acquiring
or offering to acquire any business, asset, subsidiary or investee company of the
Corporation through any one transaction or series of transactions where
the aggregate value of the business, asset, subsidiary or investee company to
acquired exceeds $100,000,000, such value to be determined in good faith by the
Board of Directors.

          Notwithstanding the foregoing and for greater certainty, the phrase “acting jointly or
in concert” shall not include conduct consisting solely of:

	 	(x)	 	voting or directing the vote of securities of the Corporation pursuant to a
revocable proxy given in response to a particular proxy solicitation (other than a
proxy solicitation initiated by an Offeror or any Associate or Affiliate of an Offeror
or any other Person acting jointly or in concert with an Offeror); or
	 
	 	(y)	 	voting or directing the vote of securities of the Corporation in connection
with or in order to participate in a particular proxy solicitation (other than a proxy
solicitation initiated by an Offeror or any Associate or Affiliate of an Offeror or
any other Person acting jointly or in concert with an Offeror).

Section 1.6 Statutory References.

          Unless the context otherwise requires or except as expressly provided herein, any
reference herein to a specific part, section, clause or Rule of any statute or regulation shall be
deemed to refer to the same as it may be amended, re-enacted or replaced or, if repealed and there
shall be no replacement therefor, to the same as it is in effect on the date of this Agreement.

ARTICLE 2

THE RIGHTS

Section 2.1 Legend on Common Share Certificates.

	(1)	 	Certificates issued for Common Shares, including without limitation Common Shares issued upon
the conversion of Convertible Securities, after the Record Time but prior to the earlier of
the Separation Time and the Expiration Time shall evidence one Right for

 

 

- 16 -

	 	 	each Common Share represented thereby and, commencing as soon as reasonably practicable after the effective date
of this Agreement, shall have impressed on, printed on, written on or otherwise affixed to
them, a legend in substantially the following form:

Until the Separation Time (defined in the Rights Agreement referred to
below), this certificate also evidences rights of the holder described in
a Shareholder Rights Plan Agreement, dated August 16, 2010, as such may
from time to time be amended, restated, varied or replaced (the “Rights
Agreement”), between the Corporation and CIBC Mellon Trust Company, as
Rights Agent, the terms of which are hereby incorporated herein by
reference and, a copy of which is on file at the principal executive
offices of the Corporation and is available for viewing at www.sedar.com.
Under certain circumstances set out in the Rights Agreement, the rights
may be redeemed, may expire, may become null
and void or may be evidenced by separate certificates and no longer
evidenced by this certificate.

	(2)	 	Until the earlier of the Separation Time and the Expiration Time, certificates representing
Common Shares that are issued and outstanding at the Record Time shall evidence one Right for
each Common Share evidenced thereby notwithstanding the absence of the foregoing legend.
Following the Separation Time, Rights will be evidenced by Rights Certificates issued pursuant
to Section 2.2 hereof.

Section 2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights.

	(1)	 	Right to entitle holder to purchase one Common Share prior to adjustment. Subject to
adjustment as herein set forth and subject to Section 3.1(1) hereof, each Right will entitle
the holder thereof, from and after the Separation Time and prior to the Expiration Time, to
purchase, for the Exercise Price as at the Business Day immediately preceding the date of
exercise of the Right, one Common Share (which price and number of Common Shares are subject
to adjustment as set forth below and are subject to Section 3.1(1) hereof). Notwithstanding
any other provision of this Agreement, any Rights held by the Corporation or any of its
Subsidiaries shall be void.
	 
	(2)	 	Rights not exercisable until Separation Time. Until the Separation Time, (i) the Rights
shall not be exercisable and no Right may be exercised, and (ii) for administrative purposes
each Right will be evidenced by the certificates for the associated Common Shares registered
in the names of the holders thereof (which certificates shall also be deemed to be Rights
Certificates) and will be transferable only together with, and will be transferred by a
transfer of, such associated Common Shares.
	 
	(3)	 	Delivery of Rights Certificate and disclosure statement. 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 the Rights shall be separate from, and independent of, Common
Shares. Promptly following the Separation Time, the Corporation will prepare and the Rights
Agent will mail to each holder of record of Rights as of the Separation Time and, in respect
of each Convertible Security converted into Common Shares after the Separation Time and prior
to the Expiration Time promptly after such conversion to the holder so converting (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

 

 

- 17 -

	 	 	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), (A) a certificate (a “Rights Certificate”) in substantially the form of Schedule “A”
hereto appropriately completed, representing the number of Rights held by such holder at the
Separation Time, and having such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Corporation may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any law, rule, regulation or judicial or administrative order or with any rule
or regulation made pursuant thereto 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 (B) a disclosure statement describing the
Rights, provided that a Nominee shall be sent the materials provided for in (A) and (B) in
respect of all Common Shares held of record by it which are not Beneficially Owned by an
Acquiring Person. In order for the Corporation to determine whether any Person is holding
Common Shares which are Beneficially Owned by another Person, the Corporation may require
such first mentioned Person to furnish it with such information and documentation as the
Corporation considers advisable.

	(4)	 	Exercise of Rights. Rights may be exercised in whole or in part on any Business Day after
the Separation Time and prior to the Expiration Time by submitting to the Rights Agent (at the
office of the Rights Agent in the City of Winnipeg or any other office of the Rights Agent in
the cities designated from time to time for that purpose by the Corporation) the Rights
Certificate evidencing such Rights together with an election to exercise such Rights (an
“Election to Exercise”) substantially in the form attached to the Rights Certificate duly
completed and executed by the holder or his or her executors or administrators or other legal
personal representative or his or their attorney duly appointed by an instrument in writing in
form and executed in a manner satisfactory to the Corporation and the Rights Agent,
accompanied by payment by certified cheque, banker’s draft or money order payable to the order
of the Rights Agent, of a sum equal to the Exercise Price multiplied by the number of Rights
being exercised and a sum sufficient to cover any transfer tax or charge which may be payable
in respect of any transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for Common Shares in a name other than that of the holder
of the Rights being exercised, all of the above to be received before the Expiration Time by
the Rights Agent at its principal office in any of the cities listed on the Rights
Certificate.
	 
	(5)	 	Duties of Rights Agent upon receipt of Election to Exercise. Upon receipt of a Rights
Certificate, which is accompanied by (i) a completed and duly executed Election to Exercise,
and (ii) payment as set forth in Section 2.2(4) above, the Rights Agent (unless otherwise
instructed by the Corporation) will thereupon promptly:

	 	(A)	 	requisition from the transfer agent for the Common Shares certificates representing the number
of Common Shares to be purchased (the Corporation hereby irrevocably authorizing its transfer agent
to comply with all such requisitions);

 

 

- 18 -

	 	(B)	 	when appropriate, requisition from the Corporation the amount of cash to be
paid in lieu of issuing fractional Common Shares;
	 
	 	(C)	 	after receipt of such certificates, deliver the same to or upon the order of
the registered holder of such Rights Certificate, registered in such name or names as
may be designated by such registered holder;
	 
	 	(D)	 	when appropriate, after receipt, deliver such cash (less any amounts required
to be withheld) to or to the order of the registered holder of the Rights Certificate;
and
	 
	 	(E)	 	tender to the Corporation all payments received on exercise of the Rights.

	(6)	 	Partial Exercise of Rights. In case the holder of any Rights shall exercise less than all of
the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing
the Rights remaining unexercised will be issued by the Rights Agent to such holder or to such
holder’s duly authorized assigns.
	 
	(7)	 	Duties of the Corporation. The Corporation covenants and agrees that it will:

	 	(a)	 	take all such action as may be necessary and within its power to ensure that
all Common Shares or other securities delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Exercise Price), be duly and validly authorized, executed, issued and delivered and
fully paid and non-assessable;
	 
	 	(b)	 	take all such action as may be necessary and within its power to ensure
compliance with the provisions of Section 3.1 hereof including, without limitation,
all such action to comply with any applicable requirements of the CBCA, the Securities
Act (Saskatchewan) and any applicable comparable securities legislation of each of the
provinces of Canada and the rules and regulations thereunder, the 1933 Securities Act
and the 1934 Exchange Act, or 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 or other securities upon exercise of Rights;
	 
	 	(c)	 	use reasonable efforts to cause, from and after such time as the Rights become
exercisable, all Common Shares issued upon exercise of Rights to be listed upon
issuance on the principal stock exchange on which the Common Shares were traded
immediately prior to the Stock Acquisition Date;
	 
	 	(d)	 	cause to be reserved and kept available out of its authorized and unissued
Common Shares, the number of Common Shares that, as provided in this Agreement, will
from time to time be sufficient to permit the exercise in full of all outstanding
Rights;
	 
	 	(e)	 	pay when due and payable any and all Canadian federal and provincial 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

 

- 19 -

	 	 	 	Certificates, 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 shares or other securities in a name other than that of the
registered holder of the Rights being transferred or exercised; and
	 
	 	(f)	 	after the Separation Time, except as permitted by this Agreement, 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.

Section 2.3 Adjustments to Exercise Price; Number of Rights.

The Exercise Price, the number and kind of Common Shares or other 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)	 	Adjustment to Exercise Price upon changes to share capital. In the event the
Corporation shall at any time after the Record Time:

	 	(i)	 	declare or pay a dividend on the Common Shares payable in
Common Shares (or other securities exchangeable for or convertible into or
giving a right to acquire Common Shares or other securities) other than the
issue of Common Shares or such exchangeable or convertible securities to
holders of Common Shares in lieu of but not in an amount which exceeds the
value of regular periodic cash dividends;
	 
	 	(ii)	 	subdivide or change the then outstanding Common Shares into a
greater number of Common Shares;
	 
	 	(iii)	 	combine 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) 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 in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of Common Shares, or other securities, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the Exercise
Price then in effect, the aggregate number and kind of Common Shares or other
securities, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Common Share transfer books of the
Corporation were open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under both
this Section 2.3 and Section 3.1 hereof, the adjustment

 

- 20 -

	 	 	 	provided for in this Section 2.3 shall be in addition to and, shall be made prior
to, any adjustment required pursuant to Section 3.1 hereof.
	 
	 	(b)	 	Adjustment to Exercise Price upon issue of rights, options and warrants. In
case the Corporation shall at any time after the Record 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 shares having the same rights, privileges and preferences
as Common Shares (“equivalent common shares”)) or securities convertible into or
exchangeable for or carrying a right to purchase Common Shares or equivalent common
 shares at a price per Common Share or per equivalent common share (or having a
conversion price or exchange price or exercise price per share, if a security
convertible into or exchangeable for or carrying a right to purchase Common Shares or
equivalent common shares) less than 90% of 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, 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 and/or equivalent 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 so to be offered) would purchase at such Market Price per Common Share, and the
denominator of which shall be the number of Common Shares outstanding on such record
date, plus the number of additional Common Shares and/or equivalent common shares to be
offered for subscription or purchase (or into which the convertible or exchangeable
securities 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
certificate filed with the Rights Agent and shall be binding on the Rights Agent and
the holders of the Rights. Such adjustment shall be made successively whenever such a
record date is fixed and, in the event that such rights or warrants are not so issued,
the Exercise Price shall be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.
	 
	 	 	 	For purposes of this Agreement, the granting of the right to purchase Common Shares
(or equivalent common shares) (whether from treasury shares or otherwise) pursuant
to any dividend or interest reinvestment plan and/or any Common Share purchase plan
providing for the reinvestment of dividends or interest payable on securities of the
Corporation and/or the investment of periodic optional payments and/or employee
benefit, stock option or similar plans (so long as such right to purchase is in no
case evidenced by the delivery of rights or warrants) shall not be deemed to
constitute an issue of rights, options or warrants by the Corporation; provided,
however, that, in the case of any dividend or interest reinvestment plan, the right
to purchase Common Shares (or

 

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	 	 	 	equivalent common shares) is at a price per share of not less than 90% of the
current market price per share (determined as provided in such plans) of the Common
Shares.
	 
	 	(c)	 	Adjustment to Exercise Price upon Corporate Distributions. In case the
Corporation shall at anytime after the Record Time fix a record date for a distribution
to all holders of Common Shares (including any such distribution made in connection
with a merger, amalgamation, arrangement, plan, compromise or reorganization in which
the Corporation is the continuing or successor corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend or a regular periodic
cash dividend paid in Common Shares, but including any dividend payable in securities
other than Common Shares), assets or subscription rights, options or warrants
(excluding those referred to in Section 2.3(b) above), 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, 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) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such subscription
rights, options or warrants applicable to a Common Share and 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
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)	 	De minimis threshold for adjustment to Exercise Price. Notwithstanding
anything herein to the contrary, no adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in the
Exercise Price; provided, however, that any adjustments which by reason of this
Section 2.3(d) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 2.3 shall
be made to the nearest cent or to the nearest one-hundredth of a Common Share or other
share, as the case may be. Notwithstanding the first sentence of this Section 2.3(d),
any adjustment required by this Section 2.3 shall be made no later than the earlier of
(i) 3 years from the date of the transaction which mandates such adjustment or (ii) the
Expiration Time.
	 
	 	(e)	 	Corporation may provide for alternate means of adjustment. In the event the
Corporation shall at any time after the Record Time issue any shares of capital stock
(other than Common Shares), or rights or warrants to subscribe for or purchase any such
capital stock, or securities convertible into or exchangeable for any such capital
stock, in a transaction referred to in Section 2.3(a)(i) or Section 2.3(a)(iv) or
Section 2.3(b) or Section 2.3(c) above, if the Board of Directors acting in good
faith determines that the adjustments contemplated by Section 2.3(a), Section 2.3(b)
and Section 2.3(c) above in connection with such transaction will not appropriately
protect the interests of the holders of Rights, the Corporation shall be entitled to
determine what other adjustments to the

 

- 22 -

	 	 	 	Exercise Price, number of Rights and/or securities purchasable upon exercise of
Rights would be appropriate and, notwithstanding Section 2.3(a), Section 2.3(b)
and Section 2.3(c) above, such adjustments, rather than the adjustments
contemplated by Section 2.3(a), Section 2.3(b) and Section 2.3(c) above, shall be
made. The Corporation and the Rights Agent shall amend this Agreement as
appropriate to provide for such adjustments.
	 
	 	(f)	 	Adjustment to Rights exercisable into shares other than Common Shares. If as a
result of an adjustment made pursuant to Section 3.1 hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares other than Common
Shares, thereafter the number of such other shares so receivable upon exercise of any
Right and the Exercise Price thereof shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Shares contained in Section 2.3(a), Section 2.3(b),
Section 2.3(c), Section 2.3(d), Section 2.3(e), Section 2.3(g), Section 2.3(h),
Section 2.3(i), Section 2.3(j), Section 2.3(k) and Section 2.3(l) above and below,
as the case may be, and the provisions of this Agreement with respect to the Common
Shares shall apply on like terms to any such other shares.
	 
	 	(g)	 	Rights to evidence right to purchase Common Shares at adjusted Exercise Price.
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 such Right, all subject to further adjustment as provided herein.
	 
	 	(h)	 	Adjustment to number of Common Shares purchasable upon adjustment to Exercise
Price. Unless the Corporation shall have exercised its election as provided in
Section 2.3(i) below, upon each adjustment of the Exercise Price as a result of the
calculations made in Section 2.3(b) and Section 2.3(c) above, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the right
to purchase, at the adjusted Exercise Price, that number of Common Shares (calculated
to the nearest one ten-thousandth) obtained by (A) multiplying (x) the number of shares
purchasable upon exercise of a Right immediately prior to this adjustment by (y) the
Exercise Price in effect immediately prior to such adjustment of the Exercise Price,
and (B) dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment of the Exercise Price.
	 
	 	(i)	 	Election to adjust number of Rights upon adjustment to Exercise Price. The
Corporation shall be entitled to elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Rights, in lieu of any adjustment in the number
of Common Shares purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be exercisable for the
number of Common Shares for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Exercise Price in effect immediately prior to adjustment of
the Exercise Price by the

 

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	 	 	 	Exercise Price in effect immediately after adjustment of the Exercise Price. The
Corporation shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which the
Exercise Price is adjusted or any day thereafter but, if Rights Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment, of the
number of Rights pursuant to this Section 2.3(i), the Corporation shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 5.6 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Corporation, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, new Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided for
herein and may bear, at the option of the Corporation, the adjusted Exercise Price
and shall be registered in the names of the holders of record of Rights Certificates
on the record date for the adjustment specified in the public announcement.
	 
	 	(j)	 	Rights Certificates may contain Exercise Price before adjustment. 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 share and the number
of shares which were expressed in the initial Rights Certificates issued hereunder.
	 
	 	(k)	 	Corporation may in certain cases defer issues of securities. In any case in
which this Section 2.3 shall require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the Corporation may elect to defer
until the occurrence of such event the issuance to the holder of any Right exercised
after such record date the number of Common Shares and other securities of the
Corporation, if any, issuable upon such exercise over and above the number of Common
Shares and other securities of the Corporation, if any, issuable upon such exercise on
the basis of the Exercise Price in effect prior to such adjustment; provided, however,
that the Corporation shall deliver to such holder an appropriate instrument evidencing
such holder’s right to receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such adjustment.
	 
	 	(l)	 	Corporation has discretion to reduce Exercise Price for tax reasons.
Notwithstanding anything in this Section 2.3 to the contrary, the Corporation shall be
entitled to make such reductions in the Exercise Price, in addition to those
adjustments expressly required by this Section 2.3, as and to the extent that in their
good faith judgment, the Board of Directors shall determine to be advisable in order
that any (A)

 

- 24 -

	 	 	 	consolidation or subdivision of the Common Shares, (B) issuance of any Common Shares
at less than the Market Price, (C) issuance of securities convertible into or
exchangeable for Common Shares, (D) stock dividends or (E) 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.
	 
	 	(m)	 	Notice in Respect of Adjustments. Whenever an adjustment to the Exercise Price
or a change in the securities purchasable upon exercise of the Rights is made at any
time after the Separation Time pursuant to this Section 2.3, the Corporation shall
promptly:

	 	(i)	 	file with the Rights Agent and with the transfer agent for the
Common Shares a certificate specifying the particulars of such adjustment or
change; and
	 
	 	(ii)	 	cause notice of the particulars of such adjustment or change to
be given to the holders of the Rights; provided that failure to file such
certificate or cause such notice to be given as aforesaid, or any defect
therein, shall not affect the validity of any such adjustment or change.

Section 2.4 Date on Which Exercise is Effective.

     Each person in whose name any certificate for Common Shares is issued upon the exercise of
Rights, shall for all purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered (together with 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.

Section 2.5 Execution, Authentication, Delivery and Dating of Rights Certificates

	(1)	 	The Rights Certificates shall be executed on behalf of the Corporation by its Chairman,
President, Chief Executive Officer, Vice President or Chief Financial Officer, under its
corporate seal reproduced thereon attested by its Vice President, General Counsel, Secretary
or Assistant Secretary. The signature of any of these officers on the Rights Certificates may
be manual or facsimile. Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Corporation shall bind the
Corporation, notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the countersignature and delivery of such Rights Certificates.

 

- 25 -

	(2)	 	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 disclosure statements as described in
Section 2.2(3), and the Rights Agent shall manually or by facsimile signature countersign and
send such Rights Certificates and disclosure statements to the holders of the Rights pursuant
to Section 2.2(3) hereof. No Rights Certificate shall be valid for any purpose until
countersigned by the Rights Agent as aforesaid.
	 
	(3)	 	Each Rights Certificate shall be dated the date of countersignature thereof.

Section 2.6 Registration, Registration of Transfer and Exchange.

	(1)	 	Following the Separation Time, the Corporation will cause to be kept a register (the “Rights
Register”) in which, subject to such reasonable regulations as it may prescribe, the
Corporation will provide for the registration and transfer of Rights. The Rights Agent is
hereby appointed “Rights Registrar” for the purpose of maintaining the Rights Register for the
Corporation and registering Rights and transfers 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
Section 2.6(3) below and the other provisions of this Agreement, the Corporation will
execute and the Rights Agent will countersign, register 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.
	 
	(2)	 	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.
	 
	(3)	 	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 registered 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 or the Rights Agent may
require the payment of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and the Corporation may require payment of a sum sufficient to
cover any other expenses (including the fees and expenses of the Rights Agent) in connection
therewith.

Section 2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates.

	(1)	 	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.

 

- 26 -

	(2)	 	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 ownership, destruction, loss or
theft of any Rights Certificate, and (ii) such indemnity or other security as may be required
by each of them in their own discretion to save each of them and any of their agents harmless
then, in the absence of notice to the Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Corporation shall execute and upon
its request the Rights Agent shall countersign and deliver, in lieu of any such destroyed,
lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so destroyed, lost or stolen.
	 
	(3)	 	As a condition to the issuance of any new Rights Certificate under this Section 2.7, the
Corporation or the Rights Agent may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and the Corporation may
require payment of a sum sufficient to cover any other expenses (including the fees and
expenses of the Rights Agent) in connection therewith.
	 
	(4)	 	Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of any destroyed,
lost or stolen Rights Certificate shall evidence an original additional contractual obligation
of the Corporation, whether or not the destroyed lost or stolen Rights Certificate shall be at
any time enforceable by anyone, and the holder thereof shall be entitled to all the benefits
of this Agreement equally and proportionately with any and all other holders of Rights duly
issued by the Corporation.

Section 2.8 Persons Deemed Owners.

     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 shall be entitled to 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 Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated Common Shares).

Section 2.9 Delivery and Cancellation of Rights 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.

 

- 27 -

Section 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 or
supplemented 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 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
shall be entitled to 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 upon exercise of Right;
	 
	 	(f)	 	that, in accordance with Section 5.5 hereof, without the approval of any
holder of Rights and upon the sole authority of the Board of Directors acting in good
faith this Agreement may be supplemented or amended from time to time pursuant to and
as provided herein; and
	 
	 	(g)	 	that notwithstanding anything in this Agreement to the contrary, neither the
Corporation nor the Rights Agent shall have any liability to any holder of a Right or
any other Person as a result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule, regulation, or
executive order promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation.

Section 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

 

- 28 -

the Rights represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed or deemed to confer upon the holder of any Right or Rights Certificate, as
such, any of the rights, titles, benefits or privileges 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 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 or securities of the Corporation except as expressly provided
herein, or to receive dividends, distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by Rights Certificates shall have been duly exercised in accordance with
the terms and provisions hereof.

ARTICLE 3

ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

Section 3.1 Flip-in Event.

	(1)	 	Subject to Section 3.1(2) below, and Section 5.2 hereof, in the event that prior to the
Expiration Time a Flip-in Event shall occur, the Corporation shall take such action as may be
necessary to ensure and provide within 10 Business Days of such occurrence, or such longer
period as may be required to satisfy all applicable requirements of the Securities Act
(Saskatchewan), and the securities legislation of each other province of Canada that, except
as provided below, each Right shall thereafter constitute the right to purchase from the
Corporation upon exercise thereof in accordance with the terms hereof that number of Common
Shares of the Corporation having an aggregate Market Price on the date of the 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 hereof in the event that after such date of
occurrence an event of a type analogous to any of the events described in Section 2.3 hereof
shall have occurred with respect to such Common Shares).
	 
	(2)	 	Notwithstanding anything in this Agreement to the contrary, upon the occurrence of any
Flip-in Event, any Rights that are Beneficially Owned 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 such Acquiring Person, or any Affiliate
or Associate of such Person so acting jointly or in concert, or (ii) a transferee or other
successor in title of Rights, directly or indirectly, of an Acquiring Person (or of any
Affiliate or Associate of an Acquiring Person) or of any Person acting jointly or in concert
with an Acquiring Person or any Associate or Affiliate of an Acquiring Person (or of any
Affiliate or Associate of such Person so acting jointly or in concert) who becomes a
transferee or successor in title concurrently with or subsequent to the Acquiring Person
becoming such, shall become null and void without any further action, and any holder of such
Rights (including transferees or successors in title) shall not have any rights whatsoever to
exercise such Rights under any provision of this Agreement and shall not have thereafter any
other rights whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise.
	 
	(3)	 	Any Rights Certificate that represents Rights Beneficially Owned by a Person described in
either clauses (i) or (ii) of Section 3.1(2) or transferred to any nominee of any such

 

- 29 -

	 	 	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 Beneficially
Owned by a Person who was an Acquiring Person or who was an Affiliate or
an Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement) or was acting jointly or in concert with any of them.
This Rights Certificate and the Rights represented hereby shall become
void in the circumstances specified in subsection 3.1(2) of the Rights
Agreement.”,

	 	 	provided that the Rights Agent shall not be under any responsibility to ascertain the
existence of facts that would require the imposition of such legend but shall be required to
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 an Acquiring Person, an Affiliate or Associate thereof or a Person
acting jointly or in concert with any of them.
	 
	(4)	 	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 CBCA, the Securities Act (Saskatchewan), the securities laws
or comparable legislation of each of the provinces of Canada, the 1933 Securities Act and the
1934 Exchange Act, and any other applicable laws in respect of the issue of Common Shares upon
the exercise of Rights in accordance with this Agreement.

ARTICLE 4

THE RIGHTS AGENT

Section 4.1 General.

	(1)	 	The Corporation hereby appoints the Rights Agent to act as agent for the Corporation and
holders of Rights in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Corporation may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable, subject to the prior approval of the Rights
Agent. In the event the Corporation appoints one or more co-Rights Agents, the respective
duties of the Rights Agents and co-Rights Agents shall be as the Corporation may determine,
with the approval of the Rights Agent. The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses (including reasonable counsel fees and
disbursements) incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Corporation also agrees to indemnify the Rights
Agent, its officers, directors and employees for, and to hold such persons harmless against,
any loss, liability, cost, claim, action, suit, damage, or expense incurred (that is not the
result of negligence, bad faith or wilful misconduct on the part of any one or all of the
Rights Agent, its officers, directors or employees) for anything done, suffered or omitted by
the Rights Agent in connection with the acceptance, execution and administration of this
Agreement and the exercise and performance of its duties hereunder, including the costs

 

- 30 -

	 	 	and expenses of defending against any claim of liability, which right to indemnification
will survive the termination of this Agreement or the resignation or removal of the Rights
Agent.
	 
	(2)	 	The Rights Agent shall be protected from and shall incur no liability for or in respect of
any action taken, suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any certificate for Common Shares or any Rights Certificate or
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 reasonably believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper Person or
Persons.
	 
	(3)	 	The Corporation shall inform the Rights Agent in a reasonably timely manner of events which
may materially affect the administration of this Agreement by the Rights Agent and at any
time, upon request, shall provide to the Rights Agent an incumbency certificate certifying the
then current officers of the Corporation.

Section 4.2 Merger or Amalgamation or Change of Name of Rights Agent.

	(1)	 	Any corporation into which the Rights Agent or any successor Rights Agent may be merged or
amalgamated or with which it may be consolidated, or any corporation resulting from any
merger, amalgamation, statutory arrangement or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation succeeding to the shareholder or
stockholder services business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under the provisions
of Section 4.4 hereof. In case at the time such successor Rights Agent succeeds to the
agency created by this Agreement any of the Rights Certificates have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates have not been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such Rights
Certificates will have the full force provided in the Rights Certificates and in this
Agreement.
	 
	(2)	 	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.

 

- 31 -

Section 4.3 Duties of Rights Agent.

     The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, to all of which the Corporation and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:

	 	(a)	 	The Rights Agent may, at the expense of the Corporation, retain and consult
with legal counsel (who may be legal counsel for the Corporation) and the opinion of
such counsel will be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted to be taken by it in good faith and in accordance
with such opinion. Subject to the prior written consent of the Corporation, which
consent will not be unreasonably withheld, the Rights Agent may also consult with such
other experts as the Rights Agent shall consider necessary or appropriate to properly
carry out the duties and obligations imposed under this Agreement at the expense of the
Corporation and the Rights Agent shall be entitled to act and rely in good faith on the
advice of any such expert.
	 
	 	(b)	 	Whenever in the performance of its duties under this Agreement the Rights Agent
deems it necessary or desirable that any fact or matter be proved or established by the
Corporation prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proven and established by a certificate signed by a person
reasonably believed by the Rights Agent to be Chairman, President, Chief Executive
Officer, Chief Operating Officer or Chief Financial Officer of the Corporation and
delivered to the Rights Agent; and such certificate will be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
	 
	 	(c)	 	The Rights Agent will be liable hereunder only for events which are the result
of its own negligence, bad faith or wilful misconduct and that of its officers,
directors and employees.
	 
	 	(d)	 	The Rights Agent will not be liable for or by reason of any of the statements
of fact or recitals contained in this Agreement or in the certificates for Common
Shares or the Rights Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and will be deemed to have
been made by the Corporation only.
	 
	 	(e)	 	The Rights Agent will not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
authorization, execution and delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Common Share certificate or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the Corporation
of any covenant or condition contained in this Agreement or in any Rights Certificate;
nor will it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 3.1(2) hereof) or any
adjustment required under the provisions of Section 2.3 hereof or responsible for the
manner, method or amount of any such

 

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	 	 	 	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 hereof 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 or fully paid and non-assessable.
	 
	 	(f)	 	The Corporation agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged, and delivered all such further and
other acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions of this
Agreement.
	 
	 	(g)	 	The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any person reasonably believed
by the Rights Agent to be the Chairman, President, Chief Executive Officer, Chief
Operating Officer or Chief Financial Officer of the Corporation and to apply to such
persons for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in accordance with
instructions of any such person. It is understood that instructions to the Rights
Agent shall, except where circumstances make it impracticable or the Rights Agent
otherwise agrees, be given in writing and, where not in writing, such instructions
shall be confirmed in writing as soon as reasonably possible after the giving of such
instructions.
	 
	 	(h)	 	The Rights Agent and any shareholder 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 money to the
Corporation or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Corporation or for any other legal entity.
	 
	 	(i)	 	The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or, by or through its
attorneys or agents. The Rights Agent will not be answerable or accountable for any
act, omission, default, neglect or misconduct of any such attorneys or agents or for
any loss to the Corporation resulting from any such act, omission, default, neglect or
misconduct, provided reasonable care was exercised in the selection and continued
employment thereof.

Section 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 Voting Shares by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9 hereof (all of which shall be at

 

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the expense of the Corporation). The Corporation may remove the Rights Agent upon 30 days’
notice in writing, given to the Rights Agent and to each transfer agent of the Voting Shares by
registered or certified mail and to the holders of the Rights in accordance with Section 5.9
hereof. If the Rights Agent should resign or be removed or otherwise become incapable of acting,
the Corporation will appoint a successor to the Rights Agent. If the Corporation fails to make
such appointment within a period of 30 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the
holder of any Rights (which holder shall, with such notice, submit such holder’s Rights Certificate
for inspection by the Corporation), then the Rights Agent or the holder of any Rights may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent at the Corporation’s
expense. 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 Canada. After appointment, the successor Rights Agent
will be vested with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the predecessor Rights Agent,
upon receiving from the Corporation payment in full of all amounts outstanding under this
Agreement, 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
Voting Shares, and mail a notice thereof in writing to the holders of the Rights. The cost of
giving any notice required under this Section 4.4 shall be borne solely by the Corporation.
Failure to give any notice provided for in this Section 4.4 however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.

Section 4.5 Compliance with Anti-Money Laundering Legislation.

     The Rights Agent shall retain the right not the act and shall not be liable for refusing to
act if, due to a lack of information or for any reason whatsoever, the Rights Agent reasonably
determines that such an act might cause it to be in non-compliance with any applicable anti-money
laundering or anti-terrorist financing legislation, regulation or guideline. Further, should the
Rights Agent reasonably determine at any time that its acting under the Agreement has resulted in
it being in non-compliance with any applicable anti-money laundering or anti-terrorist legislation,
regulation or guideline, then it shall have the right to resign on 10 days’ written notice to the
Corporation, provided that: (i) the Rights Agent’s written notice shall describe the circumstances
of such non-compliance; and (ii) that if such circumstances are rectified to the Rights Agent’s
satisfaction within such 10 day period, then such resignation shall not be effective.

Section 4.6 Compliance with Privacy Legislation.

     The parties acknowledge that the federal and/or provincial legislation that addresses the
protection of individual’s personal information (collectively, “Privacy Laws”) applies to
obligations and activities under this Agreement. Despite any other provision of this Agreement,
neither party will take or direct any action that would contravene, or cause the other to
contravene, applicable Privacy Laws. The Corporation will, prior to transferring or causing to be
transferred personal information to the Rights Agent, obtain and retain required information, or
will have determined that such consents either have previously been given upon which the

 

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parties can rely or are not required under applicable Privacy Laws. The Rights Agent will use
commercially reasonable efforts to ensure that its services hereunder comply with applicable
Privacy Laws.

ARTICLE 5

MISCELLANEOUS

Section 5.1 Redemption and Termination of Rights.

	(1)	 	The Board of Directors acting in good faith may, at any time prior to the occurrence of a
Flip-in Event as to which the application of Section 3.1 has not been waived pursuant to
Section 5.2, elect to redeem all but not less than all of the outstanding Rights at a
redemption price of $0.000001 per Right, appropriately adjusted in a manner analogous to the
applicable adjustment to the Exercise Price provided for in Section 2.3 if an event 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”).
	 
	(2)	 	Where a Person acquires, pursuant to a Permitted Bid, a Competing Permitted Bid or an Exempt
Acquisition occurring under Section 5.2, outstanding Voting Shares and/or Convertible
Securities, the Board of Directors shall, notwithstanding the provisions of Section 5.1(1),
immediately upon such acquisition and without further formality, be deemed to have elected to
redeem the Rights at the Redemption Price.
	 
	(3)	 	Where a Take-over Bid that is not a Permitted Bid or a Competing Permitted Bid expires, is
terminated or is otherwise withdrawn 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 of the
outstanding Rights at the Redemption Price.
	 
	(4)	 	If the Board of Directors elects or is deemed to have elected to redeem the Rights (i) the
right to exercise the Rights will thereupon, without further action and without notice,
terminate and each Right will after redemption be null and void and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price, and (ii) subject to
Section 5.1(6), no further Rights shall thereafter be issued.
	 
	(5)	 	Within 10 Business Days of the Board of Directors electing or having been deemed to have
elected to redeem the Rights the Corporation shall give or cause to be given notice of
redemption to the holders of the outstanding Rights by mailing such notice to each such holder
at his last address as it appears upon the Rights Register or, prior to the Separation Time,
on the register of Voting Shares maintained by the Corporation’s transfer agent or transfer
agents. Each such notice of redemption shall state the method by which the payment of the
Redemption Price shall be made.
	 
	(6)	 	Upon the Rights being redeemed pursuant to Section 5.1(3), 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 Voting Shares
as of the Separation Time had not been mailed to each such holder and, for all purposes of
this Agreement, the Separation Time shall be deemed not to have occurred and Rights shall
remain attached to the outstanding Voting Shares, subject to and in accordance with the
provisions of this Agreement.

 

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	(7)	 	The Corporation shall not be obligated to make a payment of the Redemption Price to any
holder of Rights unless such holders is entitled to receive at least $1.00 in respect of all
Rights held by such holder.

Section 5.2 Waiver of Flip-In Events.

	(1)	 	The Board of Directors may, at any time prior to the occurrence of a Flip-in Event that would
occur by reason of an acquisition of Voting Shares otherwise than in the circumstances
described in Section 5.2(2) or Section 5.2(3), waive the application of Section 3.1 to such
Flip-in Event by written notice delivered to the Rights Agent.
	 
	(2)	 	The Board of Directors may, at any time prior to the occurrence of a Flip-in Event that would
occur by reason of a Take-over Bid for all Voting Shares made by means of a take-over bid
circular sent to all holders of record of Voting Shares (which, for greater certainty, shall
not include the circumstances described in Section 5.2(3)), waive the application of
Section 3.1 to such Flip-in Event by written notice delivered to the Rights Agent, provided,
however, that if the Board of Directors waives the application of Section 3.1 to such a
Flip-in Event, 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 for all
Voting Shares which is made by means of a take-over bid circular sent to all holders of record
of Voting Shares prior to the expiry, termination or withdrawal of any Take-over Bid in
respect of which a waiver is, or is deemed to have been, granted under this Section 5.2(2).
	 
	(3)	 	The Board of Directors may waive the application of Section 3.1 to a Flip-in Event provided
that the following conditions are satisfied:

	 	(a)	 	the Board of Directors has determined that the Acquiring Person became an
Acquiring Person by inadvertence and without any intention to become, or knowledge that
it would become, an Acquiring Person; and
	 
	 	(b)	 	such Acquiring Person:

	 	(i)	 	has reduced its Beneficial Ownership of Voting Shares such
that, at the time of the waiver pursuant to this Section 5.2(3), it is no
longer an Acquiring Person; or
	 
	 	(ii)	 	covenants in favour of the Corporation, on terms acceptable to
the Board of Directors, to reduce its Beneficial Ownership of Voting Shares
within a period of time specified by the Board of Directors such that, at the
time the waiver becomes effective at the expiry of such period of time, it is
no longer an Acquiring Person;

	 	 	and in the event of such waiver, for the purposes of the Agreement, the Flip-in Event shall
be deemed never to have occurred.

Section 5.3 Expiration.

     No person shall have any rights whatsoever pursuant to or arising out of this Agreement or in
respect of any Right after the Expiration Time, except the Rights Agent as specified in
Section 4.1(1) hereof.

 

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Section 5.4 Issuance of New Rights Certificates.

     Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Rights Certificates evidencing Rights in such form as may
be approved by its Board of Directors to reflect any adjustment or change in the number or kind or
class of shares purchasable upon exercise of Rights made in accordance with the provisions of this
Agreement.

Section 5.5 Supplements and Amendments.

	(1)	 	Prior to the occurrence of a Flip-in Event, the Corporation may at any time amend,
supplement, vary or delete any of the provisions of this Agreement and the Rights in its sole
discretion by resolution of the Board of Directors acting in good faith (whether or not such
action would materially adversely affect the interests of the holders of Rights generally);
provided that no such amendment, supplement, variation or deletion shall be made to the
provisions of Article 4 except with the written concurrence of the Rights Agent. Any such
amendment, supplement, variation or deletion shall be effective from the date of the
resolution of the Board of Directors adopting such amendment, supplement, variation or
deletion or such earlier or later date as the Board of Directors may otherwise determine. The
implementation of any such amendment, supplement, variation or deletion will be subject to
receipt of any necessary regulatory approval including that of any securities regulatory
authority or stock exchange.
	 
	(2)	 	The Corporation shall be required to provide the Rights Agent with notice in writing of any
such amendment, supplement, variation or deletion to this Agreement as referred to in this
Section 5.5 within 5 days of effecting such amendment, supplement, variation or deletion.

Section 5.6 Fractional Rights and Fractional Shares.

	(1)	 	The Corporation shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. Any such fractional Right shall be null and
void and the Corporation will not have any obligation or liability in respect thereof.
	 
	(2)	 	The Corporation shall not be required to issue fractions of Common Shares or other securities
upon exercise of the Rights or to distribute certificates which evidence fractional Common
Shares or other securities. In lieu of issuing fractional Common Shares or other securities,
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 same fraction of the
Market Price of one Common Share. The Rights Agent shall have no obligation to make any
payments in lieu of fractional Common Shares unless the Corporation shall have provided the
Rights Agent with the necessary funds to pay in full all amounts payable in accordance with
Section 2.2(5).

Section 5.7 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
registered holders of the Rights; and any registered holder of any Rights, without the consent of
the Rights Agent or of the registered 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

 

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such holder’s right to exercise such holder’s Rights in the manner provided in such holder’s
Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.

Section 5.8 Notice of Proposed Actions.

     In case the Corporation shall propose after the Separation Time and prior to the Expiration
Time to effect the liquidation, dissolution or winding-up of the Corporation or the sale of all or
substantially all of the Corporation’s assets, then, in each such case, the Corporation shall give
to each holder of a Right, in accordance with Section 5.9 hereof, a notice of such proposed
action, which shall specify the date on which such Flip-in Event, liquidation, dissolution, winding
up, or sale is to take place, and such notice shall be so given at least 20 Business Days prior to
the date of taking of such proposed action.

Section 5.9 Notices.

	(1)	 	Notices or demands authorized or required by this Agreement to be given or made by the Rights
Agent or by the holder of any Rights to or on the Corporation shall be sufficiently given or
made if delivered or sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:

	 	 	 	Potash Corporation of Saskatchewan Inc.

Suite 500, 122 — 1st Avenue South

Saskatoon, Saskatchewan

S7K 7G3

Attention: Secretary

	(2)	 	Any notice or demand 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 or sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Corporation) as follows:

	 	 	 	CIBC Mellon Trust Company

600, 333-7th Ave SW

Calgary, Alberta

T2P-2Z1

Attention: Manager

	(3)	 	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 Rights Register or, prior to the Separation
Time, on the registry books of the transfer agent for the Common Shares. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the holder receives
the notice.

 

- 38 -

	(4)	 	Notwithstanding the foregoing provisions of this Section 5.9, if mail service is or is
threatened to be interrupted at a time when the Corporation or the Rights Agent wishes to give
a notice or demand hereunder to or on the holders of the Rights, the Corporation or the Rights
Agent may give such notice by means of a publication in the business section of the Globe and
Mail and the Wall Street Journal or in such other publications as may be designated by the
Corporation.

Section 5.10 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.

Section 5.11 Benefits of this Agreement.

     This Agreement shall be for the sole and exclusive benefit of the Corporation, the Rights
Agent and the holders of the Rights; 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.

Section 5.12 Governing Law.

     This Agreement and each Right issued hereunder shall be deemed to be a contract made under the
laws of the Province of Saskatchewan and for all purposes shall be governed by and construed in
accordance with the laws of such province.

Section 5.13 Severability.

     If any Section, Clause, term or provision hereof or the application thereof to any
circumstances or any right hereunder shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such Section, Clause, term or provision or such right shall be ineffective only in
such jurisdiction and to the extent of such invalidity or unenforceability in such jurisdiction
without invalidating or rendering unenforceable or ineffective the remaining Sections, Clauses,
terms and provisions hereof or rights hereunder in such jurisdiction or the application of such
Section, Clause, term or provision or rights hereunder in any other jurisdiction or to
circumstances other than those as to which it is specifically held invalid or unenforceable.

Section 5.14 Effective Date.

     This Agreement is effective and in full force and effect in accordance with its terms and
conditions from and after the date hereof (the “Effective Date”). If this Agreement is not
approved by resolution passed by a majority of greater than 50% of the votes cast by (i) holders of
Voting Shares, and (ii) holders of Voting Shares other than Grandfathered Persons, if any, in each
case present in person or voting by proxy at a meeting of those shareholders of the Corporation who
vote in respect of such confirmation at a meeting to be held not later than six months from the
date hereof, then this Agreement and all outstanding Rights shall terminate and be void and of no
further force and effect on and from that date.

Section 5.15 Determinations and Actions by the Board of Directors.

     All actions, calculations and determinations (including all omissions with respect to the
foregoing) which are done or made by the Board of Directors, in good faith, in relation to or in
connection with this Agreement, shall not subject the Board of Directors or any director of the
Corporation to any liability to the holders of the Rights.

 

- 39 -

Section 5.16 Rights of Board, Corporation and Offeror.

     Without limiting the generality of the foregoing, nothing contained herein shall be construed
to suggest or imply that the Board of Directors shall not be entitled to recommend that holders of
Voting Shares reject or accept any Take-over Bid or take any other action (including, without
limitation, the commencement, prosecution, defence or settlement of any litigation and the
submission of additional or alternative Take-over Bids or other proposals to the holders of Voting
Shares) with respect to any Take-over Bid or otherwise that the Board of Directors believes is
necessary or appropriate in the exercise of its fiduciary duties.

Section 5.17 Regulatory Approvals.

     This Agreement shall be subject in any jurisdiction to the receipt of any required prior or
subsequent approval or consent from any governmental or regulatory authority in such jurisdiction
including any securities regulatory authority or stock exchange.

Section 5.18 Declaration as to Non-Canadian Holders.

     If in the opinion of the Board of Directors (who may rely upon the advice of counsel) any
action or event contemplated by this Agreement would require compliance with the securities laws or
comparable legislation of a jurisdiction outside Canada, the Board of Directors acting in good
faith may 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, or (until
such notice is given as required by law) without advance notice to any regulatory or
self-regulatory body.

Section 5.19 Time of the Essence.

     Time shall be of the essence in this Agreement.

Section 5.20 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.

[Remainder of page intentionally left blank]

 

 

     IN WITNESS WHEREOF, the parties have executed this Agreement.

	 	 	 	 	 	 	 

	 	 	POTASH CORPORATION OF SASKATCHEWAN INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	(signed) Wayne R. Brownlee
 

Authorized Signing Officer
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	(signed) Joseph A. Podwika	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Signing Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CIBC MELLON TRUST COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	(signed) Jacquie Fisher	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Signing Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	(signed) Cathy Scherle	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Signing Officer	 	 

 

 

SCHEDULE “A”

FORM OF RIGHTS CERTIFICATE

			
	 	 	 
	Certificate No.                     
	 	                     Rights

THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 3.1(2) OF THE RIGHTS
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, ANY PERSON ACTING JOINTLY OR IN
CONCERT WITH AN ACQUIRING PERSON OR THEIR RESPECTIVE ASSOCIATES AND AFFILIATES (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND THEIR RESPECTIVE TRANSFEREES SHALL BECOME VOID WITHOUT ANY
FURTHER ACTION.

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 August 16,
2010, as amended and restated from time to time (the “Rights Agreement”), between POTASH
CORPORATION OF SASKATCHEWAN INC., a corporation incorporated under the laws of Canada (the
“Corporation”), and CIBC MELLON TRUST COMPANY, a trust company incorporated under the laws of
Canada, as rights agent (the “Rights Agent”, which term shall include any successor Rights Agent
under the Rights Agreement) to purchase from the Corporation at any time after the Separation Time
(as such term is defined in the Rights Agreement) and prior to the Expiration Time (as such term is
defined in the Rights Agreement) (or such earlier expiration time as is provided in the Rights
Agreement) one fully paid and non-assessable Common Share of the Corporation (a “Common Share”) at
the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate
together with the Form of Election to Exercise duly executed and submitted to the Rights Agent at
its principal offices in any of the cities of Montreal, Toronto, Halifax, Calgary, and Vancouver.
The Exercise Price shall initially be an $l (Canadian) per Right and shall be
subject to adjustment in certain events as provided in the Rights Agreement.

     In certain circumstances described in the Rights Agreement, each Right evidenced hereby may
entitle the registered holder thereof to purchase or receive assets, debt securities or other
equity securities of the Corporation (or a combination thereof) all as provided in the Rights
Agreement.

     This Rights Certificate is subject to all of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and immunities thereunder of
the Rights Agent, the Corporation and the holders of the Rights. Copies of the Rights Agreement
are on file at the registered head office of the Corporation and are available upon written
request.

 

- 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
entitling the holder to purchase a like aggregate number of Common Shares as the 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.

     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Rights
Certificate may be, and under certain circumstances are required to be, redeemed by the Corporation
at a redemption price of $0.000001 per Right.

     No fractional Common Shares will be issued upon the exercise of any Right or Rights evidenced
hereby.

     No holder of this Rights Certificate, as such, shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of Common Shares or of any other securities of the Corporation
which may at any time be issuable upon the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof any of the rights of a
shareholder of the Corporation or any right to vote for the election of directors or upon any
matter submitted to shareholders of the Corporation at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other actions affecting
shareholders of the Corporation (except as expressly provided in the Rights Agreement), or to
receive dividends, distributions or subscription rights, or otherwise until the Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights Agreement.

     This Rights Certificate shall not be valid or obligatory for any purpose until it shall have
been manually countersigned by the Rights Agent.

     WITNESS the facsimile signature of the proper officers of the Corporation.

Dated l

	 	 	 	 	 
	 	POTASH CORPORATION OF SASKATCHEWAN INC.

 	 
	 	By:  	 	 
	 	 	Authorized Signing Officer 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Authorized Signing Officer 	 
	 	 	 	 

 

- 3 -

	 	 	 	 	 

	 	 	 	 	 
	 	CIBC MELLON TRUST COMPANY

 	 
	 	By:  	 	 
	 	 	Authorized Signing Officer 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Authorized Signing Officer 	 
	 	 	 	 
	 

 

 

(To be attached to each Rights Certificate)

FORM OF ELECTION TO EXERCISE

TO:  POTASH CORPORATION OF SASKATCHEWAN INC.

     The undersigned hereby irrevocably elects to exercise                      whole Rights represented by
the attached Rights Certificate to purchase the Common Shares issuable upon the exercise of such
Rights and requests that certificates for such Shares be issued to:

 

(NAME)

 

(ADDRESS)

(CITY AND PROVINCE OR STATE )

     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 OR STATE )

SOCIAL INSURANCE, SOCIAL SECURITY OR OTHER TAXPAYER 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 schedule I Canadian chartered bank, a member of a recognized
stock exchange or a member a recognized Medallion Program.

 

- 2 -

To be completed if true

     The undersigned 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 any Person acting jointly or in consent with any of the foregoing or any
Affiliate or Associate of such Person (as defined in the Rights Agreement).

	 	 	 	 	 
	 	 	 
	 	 
 	 
	 	Signature 	 
	 	 	 
	 

 

 

NOTICE

     In the event the certification set forth in the Form of Election to Exercise 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 (as defined in the Rights Agreement)
and accordingly such Rights shall be null and void.

 

 

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 schedule I Canadian chartered bank, a member of a recognized
stock exchange or a member a recognized Medallion Program.

To be completed if true

     The undersigned 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 any Person acting jointly or in consent with any of the foregoing (as defined
in the Rights Agreement).

	 	 	 	 	 
	 	 	 
	 	 
 	 
	 	Signature 	 
	 	 	 

 

- 2 -

	 	 	 	 	 

NOTICE

     In the event the certification set forth in the Form of Assignment 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 (as defined in the Rights Agreement) and
accordingly such Rights shall be null and void.exv10w1

EXHIBIT 10.1

SANDERSON FARMS, INC. AND AFFILIATES

EMPLOYEE STOCK OWNERSHIP PLAN

(As Amended and Restated Effective August 1, 2006)

WHEREAS, Sanderson Farms Inc. (the “Corporation”) maintains the Sanderson Farms, Inc. and
Affiliates Employee Stock Ownership Plan, as amended and restated effective August 1, 2006 (the
“Plan”) for the benefit of the employees of the Corporation and its participating affiliates;

WHEREAS, Section 12.1 of the Plan provides that the Corporation, through action of its Board of
Directors, may amend the Plan at any time; and

WHEREAS, the Corporation desires to amend the Plan to reflect the Pension Protection Act of 2006
and the Heroes Earnings Assistance and Relief Tax Act of 2008, and to make certain technical and
clarifying changes.

NOW THEREFORE BE IT RESOLVED, that, effective August 1, 2006, Section 7.2(a) of the Plan shall be
amended by inserting the phrase “made in one lump sum payment” between the phrases “shall be” and
“in the form of”.

AND BE IT FURTHER RESOLVED, that, effective January 1, 2007, the Plan shall be amended as follows:

               Restate the heading of Section 2.35 in its entirety as “Total and Permanent Disability” or
“Totally and Permanently Disabled”.

               Restate Article 14 in its entirety as follows:

ARTICLE 14

VETERANS RIGHTS

Section 14.1         Veterans’ Rights. Notwithstanding any provision of
the Plan to the contrary, contributions, benefits and service credit with
respect to Qualified Military Service shall be provided in accordance with
Section 414(u) of the Code.

Section 14.2         Death or Disability During Qualified Military Service.

                (a)         In the case of a Participant who dies after December 31, 2006,
while performing Qualified Military Service with respect to the Employer,
the survivors of the Participant shall be entitled to any additional
benefits (other than benefit accruals relating to the period of Qualified
Military Service, except as provided under (b) below) provided under the
Plan to which they would have been entitled had the Participant resumed
employment with the Employer on the day before his date of death and then
Terminated Employment on account of death the next day. In addition, the
period of such a deceased Participant’s Qualified Military Service (through
his date of death) shall be treated as service with the Employer for
purposes of determining his Years of Service under Section 6.1 hereof.

                (b)         If an individual dies or becomes Totally and Permanently Disabled
after July 31, 2010, while performing Qualified Military Service with
respect to the Employer, the individual shall be treated for purposes of
receiving an allocation of Contributions hereunder as if the individual had
resumed employment with the Employer in accordance with his employment
rights under Section 14.1 hereof and Section 414(u) of the Code on the day
preceding death or becoming Totally and Permanently Disabled,

 

 

as the case may be, and Terminated Employment on the actual date of
death or becoming Totally and Permanently Disabled.

Section 14.3         Differential Wage Payments.

                (a)         If the Employer makes a Differential Wage Payment to an individual
after December 31, 2008, (i) the individual shall be treated as an Employee
of the Employer making the payment, (ii) the Differential Wage Payment shall
be treated as Section 415 Compensation and, for periods after July 31, 2010,
Compensation hereunder, and (iii) the Plan shall not be treated as failing
to meet the requirements of any provision described in Section 414(u)(1)(C)
of the Code by reason of any Contribution that is based on the Differential
Wage Payment. The foregoing clause (iii) shall apply (taking into account
Sections 410(b)(3), (4) and (5) of the Code) only if all employees of the
Employer and the Affiliates performing Qualified Military Service are
entitled to receive Differential Wage Payments on reasonably equivalent
terms and, if eligible to participate in a retirement plan maintained by the
Employer or an Affiliate, to make contributions based on Differential Wage
Payments on reasonably equivalent terms.

                (b)         If an individual who receives Differential Wage Payments from the
Employer returns to employment with the Employer, or dies or becomes
Permanently and Totally Disabled while performing Qualified Military Service
with respect to the Employer, and consequently is entitled to an allocation
of Contributions under Section 14.1 or 14.2(b) hereof, the amount of such
Contributions to be allocated to the individual’s Accounts shall be offset
by the amount of Contributions previously allocated to the individual’s
Accounts based on the individual’s Differential Wage Payments.

Section 14.4         Definitions. For purposes of this Article 14, (i) the
term “Differential Wage Payment” means any payment made after December 31,
2008, by the Employer to an individual with respect to any period during
which the individual is performing service in the uniformed services (as
defined in chapter 43 of title 38, United States Code) while on active duty
for a period of more than 30 days, and represents all or a portion of the
wages the individual would have received from the Employer if the individual
were performing services for the Employer; and (ii) the term “Qualified
Military Service” means any service in the uniformed services (as defined in
chapter 43 of title 38, United States Code) by any individual if such
individual is entitled to reemployment rights under such chapter with
respect to such service and the Employer.

               Restate Section 7.7(b)(2) in its entirety as follows:

(2)         Notwithstanding (b)(1) above, a portion of a distribution shall not
fail to be an Eligible Rollover Distribution merely because the portion
consists of after-tax employee contributions which are not includable in
gross income. However, such portion may be transferred only to (i) an
individual retirement account or annuity described in Section 408(a) or (b)
of the Code, (ii) with respect to distributions made prior to January 1,
2007, a qualified trust described in Section 401(a) of the Code forming part
of a defined contribution plan that agrees to separately account for amounts
so transferred, including separately accounting for the portion of such
distribution which is includable in gross income and the portion of such
distribution which is not so includable, or (iii) with respect to
distributions made after December 31, 2006, a qualified trust described in
Section 401(a) of the Code or an annuity contract described in
Section 403(b) of the Code that agrees to separately account for amounts so
transferred, including separately accounting for the portion of such
distribution which is includible in gross income and the portion of such
distribution which is not so includable.

               AND BE IT FURTHER RESOLVED, that, effective April 6, 2007, the Plan shall be amended by adding
the following sentences to the end of Section 13.1(b):

2

 

Effective April 6, 2007, a domestic relations order shall not fail to be a
qualified domestic relations order solely because (i) the order is issued
after, or revises, another domestic relations order or qualified domestic
relations order, or (ii) of the date on which the domestic relations order
is issued, including issuance after a Participant’s annuity starting date or
death. A domestic relations order described in the foregoing sentence shall
be subject to the same requirements and protections that apply to a
qualified domestic relations order, including the provisions of
Section 414(p)(7) of the Code.

               AND BE IT FURTHER RESOLVED, that, effective August 1, 2007, the Plan shall be amended by
restating Section 7.8(a) in its entirety as follows:

               (a)         The Administrative Committee clearly informs the Participant that
the Participant has a right to a period of at least 30 days after receiving
the notice to consider (i) whether or not to defer the distribution, if
applicable, and the consequences of the failure to defer the distribution,
and (ii) the form of the distribution, if applicable, and

               AND BE IT FURTHER RESOLVED, that, effective January 1, 2008, the Plan shall be amended by
adding the following sentences to the end of Section 7.7(c):

Effective for distributions made after December 31, 2007, an Eligible
Retirement Plan includes a Roth IRA described in Section 408A of the Code.
For distributions made after December 31, 2007, and before January 1, 2010,
however, a Distributee shall not be eligible to elect a Direct Rollover to a
Roth IRA if the Distributee’s modified adjusted gross income exceeds
$100,000 or the Distributee is a married individual filing a separate
return. Notwithstanding anything to the contrary herein, the
Administrative Committee shall not be responsible for ensuring that a
Distributee is eligible to make a Direct Rollover to a Roth IRA.

               AND BE IT FURTHER RESOLVED, that, effective November 1, 2008, the Plan shall be amended by
adding the following new Section 11.6(e):

               (e)         A plan shall not be considered a Top-Heavy Plan if the plan
consists solely of (i) a cash or deferred arrangement meeting the
requirements of Section 401(k)(12) or 401(k)(13) of the Code, and
(ii) matching contributions with respect to which the requirements of
Section 401(m)(11) or (12) of the Code are met. If, but for the preceding
sentence, such a plan would be treated as a Top-Heavy Plan because it is a
member of a Top-Heavy Group, contributions under the plan may be taken into
account in determining whether any other plan in the Top-Heavy Group meets
the requirements of Section 11.5 hereof.

               AND BE IT FURTHER RESOLVED, that, effective January 1, 2010, the Plan shall be amended by
restating 7.7(f) in its entirety as follows:

               (f)         Effective for distributions made on and after November 1, 2007, a
nonspouse Beneficiary who is eligible to receive a distribution of a
Participant’s Account that would otherwise constitute an Eligible Rollover
Distribution, and who is a designated Beneficiary (within the meaning of
Treasury Regulation Section 1.401(a)(A)-4), is also a Distributee with
respect to his interest hereunder, and the nonspouse Beneficiary may direct
a trustee to trustee transfer of the distribution of the Participant’s
Account only to an individual retirement account or an individual retirement
annuity described in Section 408(a) or 408(b) of the Code (other than an
endowment contract) established for the purpose of receiving the
distribution on behalf of the nonspouse Beneficiary. Such transfer shall be
treated as a Direct Rollover of an Eligible Rollover Distribution (solely
for purposes of Section 402(c) of the Code with respect to transfers prior
to January 1, 2010), and such individual retirement account or individual
retirement

3

 

annuity shall be treated as an inherited individual retirement account
or inherited individual retirement annuity (within the meaning of
Section 408(d)(3)(C) of the Code).

               AND BE IT FURTHER RESOLVED, that, effective August 1, 2010, the Plan shall be amended
as follows:

               1.           Add the following new Section 7.9(f):

                (f)         Effective August 1, 2010, a Participant may make a hardship
withdrawal under this Section 7.9 for expenses described in (d)(1), (3), or
(5) above incurred by the Participant’s primary Beneficiary, provided that
all other applicable requirements of this Section 7.9 are satisfied. For
this purpose, a Participant’s primary Beneficiary is an individual who is
designated as the Participant’s Beneficiary and has an unconditional right
to all or a portion of the Participant’s Account balances upon the
Participant’s death.

               2.           Restate Section 7.10 in its entirety:

Section 7.10         Missing Persons. In the event the whereabouts of a
person entitled to benefits under the Plan cannot be determined after
diligent search by the Administrative Committee or the Trustee, and the
person’s whereabouts continue to be unknown for a period of five years, then
the Accounts of the person shall be forfeited. Notwithstanding the
foregoing, effective with respect to distributions made on and after
August 1, 2010, if the amount to be distributed to such person is a
mandatory distribution made pursuant to Section 7.3 hereof, then the amount
distributable may, in the sole discretion of the Administrative Committee,
be treated as a Forfeiture at the time it is determined that the whereabouts
of the person cannot be determined. If the person is subsequently located,
his Accounts shall be restored to him without earnings.

               AND BE IT FURTHER RESOLVED, that the cross references in the Plan shall be redesignated, as
necessary, to reflect the foregoing resolutions.

               IN WITNESS WHEREOF, the undersigned has executed this Amendment to the Sanderson Farms, Inc.
and Affiliates Employee Stock Ownership Plan on this 21st day of July, 2010.

	 	 	 	 	 	 	 

	 	 	SANDERSON FARMS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Mike Cockrell	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	Treasurer and CFO	 	 
	 

	 	 	 	 

	 	 

4

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