Air Canada 2014 Annual Report Download - page 118

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118118 2014 Annual Report
WARRANTS
In 2013, the Corporation purchased for cancellation
2,083,333 warrants expiring July 30, 2013 for an
aggregate purchase price of $2, representing the
average trading price, at the time of purchase, of
Air Canada shares on the Toronto Stock Exchange
less the exercise price of $1.51 of each warrant. In
addition, the outstanding number of common shares
increased by 7,916,667 upon exercise of warrants with
proceeds to Air Canada of $12.
The Corporation has no warrants left outstanding.
SHAREHOLDER RIGHTS PLAN
Under the terms of the shareholder rights plan
agreement (the “Rights Plan”), renewed until 2017
at Air Canada’s annual meeting of shareholders
held in 2014, one right (a “Right”) has been issued
with respect to each Class B Voting Share and each
Class A Variable Voting Share (each a “Share”) of
Air Canada issued and outstanding as of the close of
business on March 30, 2011 or subsequently issued.
These Rights would become exercisable only when
a person, including any party related to it, acquires
or announces its intention to acquire 20% or more
of the outstanding Class A Variable Voting Shares
and Class B Voting Shares of Air Canada calculated
on a combined basis, without complying with the
“Permitted Bid” provisions of the Rights Plan or, in
certain cases, without the approval of the Board.
Until such time, the Rights are not separable from
the shares, are not exercisable and no separate rights
certificates are issued. To qualify as a “Permitted Bid”
under the Rights Plan, a bid must, among other things:
(i) be made to all holders of Shares, (ii) remain open
for a period of not less than 60 days, (iii) provide that
no Shares shall be taken up unless more than 50% of
the then outstanding Class A Variable Voting Shares
and Class B Voting Shares, on a combined basis,
other than the Shares held by the person pursuing
the acquisition and parties related to it, have been
tendered and not withdrawn, and (iv) provide that
if such 50% condition is satisfied, the bid will be
extended for at least 10 business days to allow other
shareholders to tender.
Following the occurrence of an event which triggers
the right to exercise the Rights and subject to the
terms and conditions of the Rights Plan, each Right
would entitle the holders thereof, other than the
acquiring person or any related persons, to exercise
their Rights and purchase from Air Canada two
hundred dollars’ worth of Class A Variable Voting
Shares or Class B Voting Shares for one hundred
dollars (i.e. at a 50% discount to the market price
at that time). Upon such exercise, holders of rights
beneficially owned and controlled by Qualified
Canadians would receive Class B Voting Shares and
holders of rights beneficially owned or controlled
by persons who are not Qualified Canadians would
receive Class A Variable Voting Shares.