EXHIBIT 4.1
================================================================================
AMENDED AND RESTATED RIGHTS AGREEMENT
--------------------------------------------------------------------------------
METRETEK TECHNOLOGIES, INC.
AND
COMPUTERSHARE INVESTOR SERVICES, LLC
AS RIGHTS AGENT
--------------------------------------------------------------------------------
DATED AS OF NOVEMBER 30, 2001
================================================================================
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions.............................................................................. 2
Section 2. Appointment of Rights Agent...................................................................... 7
Section 3. Issuance of Rights Certificates.................................................................. 7
Section 4. Form of Rights Certificates...................................................................... 9
Section 5. Countersignature and Registration................................................................ 10
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates.............................................................. 10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.................................... 11
Section 8. Cancellation and Destruction of Rights Certificates.............................................. 12
Section 9. Reservation and Availability of Preferred Shares................................................. 13
Section 10. Preferred Shares Record Date.................................................................... 14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights..................... 14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares...................................... 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power............................ 22
Section 14. Fractional Rights and Fractional Shares......................................................... 25
Section 15. Rights of Action................................................................................ 25
Section 16. Agreement of Rights Holders..................................................................... 26
Section 17. Rights Certificate Holder Not Deemed a Stockholder.............................................. 26
Section 18. Concerning the Rights Agent..................................................................... 27
Section 19. Merger or Consolidation or Change of Name of Rights Agent....................................... 27
Section 20. Duties of Rights Agent.......................................................................... 28
Section 21. Change of Rights Agent.......................................................................... 30
i
Section 22. Issuance of New Rights Certificates............................................................. 30
Section 23. Redemption ..................................................................................... 31
Section 24. Exchange........................................................................................ 32
Section 25. Notice of Certain Events........................................................................ 33
Section 26. Notices......................................................................................... 33
Section 27. Supplements and Amendments...................................................................... 34
Section 28. Successors...................................................................................... 35
Section 29. Determinations and Actions by the Board of Directors, etc....................................... 35
Section 30. Benefits of this Agreement...................................................................... 35
Section 31. Severability.................................................................................... 35
Section 32. Governing Law................................................................................... 36
Section 33. Counterparts.................................................................................... 36
Section 34. Descriptive Headings............................................................................ 36
EXHIBITS
--------
Exhibit A. Designation, Preferences and Rights of Series C Preferred Stock of Metretek Technologies, Inc.
Exhibit B. Form of Rights Certificate
Exhibit C. Summary of Rights to Purchase Preferred Shares
ii
AMENDED AND RESTATED
RIGHTS AGREEMENT
RIGHTS AGREEMENT, originally dated as of December 2, 1991, as amended
and restated as of November 30, 2001 (as amended and restated, this
"Agreement"), between Metretek Technologies, Inc. (formerly known as Xxxxxx
Natural Gas Services, Inc.), a Delaware corporation (the "Company"), and
Computershare Investor Services, LLC (formerly known as American Securities
Transfer, Inc. and American Securities Transfer & Trust, Inc.) (the "Rights
Agent").
WHEREAS, on December 2, 1991 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend of one
preferred share purchase right (each, a "Right") for each share of common stock,
par value $.01 per share, of the Company (the "Common Shares") outstanding on
December 2, 1991 (the "Record Date"), and further authorized the issuance of one
Right, subject to adjustment, with respect to each Common Share issued (whether
originally issued or delivered from the Company's treasury) between the Record
Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are defined herein), each Right initially
representing the right to purchase one one-hundredth of a share of Series C
Preferred Stock, par value $.01 per share, of the Company, having the rights,
preferences and privileges set forth in the Company's Certificate of
Incorporation (as defined below) upon the terms and subject to the conditions
set forth in the Rights Agreement, dated as of December 2, 1991, between the
Company and the Rights Agent (the "1991 Rights Agreement"); and
WHEREAS, the 1991 Rights Agreement was amended on March 23, 1998 and
December 9, 1999 (as amended prior hereto, the "Amended 1991 Rights Agreement");
and
WHEREAS, the Board of Directors of the Company has determined that it
is desirable and in the best interests of the Company and its stockholders for
the Company to amend and restate the Amended 1991 Rights Agreement in order to,
among other things, extend the Final Expiration Date (as defined in the Amended
1991 Rights Agreement) of and amend certain other provisions of the Amended 1991
Rights Agreement, and in order to restate the Amended 1991 Rights Agreement to
reflect the prior reverse stock splits of the Common Shares and all prior and
contemporaneous amendments to the 1991 Rights Agreement; and
WHEREAS, Section 27 of the Amended 1991 Rights Agreement provides that,
among other things, subject to the restrictions set forth in such Section, the
Company may, by resolution adopted by its Board of Directors, supplement or
amend any provisions thereof without the approval of any holders of certificates
representing Rights and, in the event of such amendment, the Company shall, and
the Rights Agent shall, if the Company so directs, sign a writing evidencing any
such supplement or amendment; and
WHEREAS, the Board of Directors of the Company has adopted a resolution
determining that the amendment and restatement of the Rights Agreement on the
terms and conditions set forth herein is advisable and in the best interests of
the Company and its stockholders;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding, but shall not include (i) the Company; (ii) any Subsidiary of the
Company; (iii) any employee benefit plan of the Company or of any Subsidiary of
the Company; or (iv) any Person holding Common Shares for or pursuant to the
terms of any such plan. Notwithstanding the foregoing, no Person shall be deemed
to be an "Acquiring Person" as the result of an acquisition of Common Shares by
the Company which, by reducing the number of Common Shares outstanding,
increases the proportionate number of Common Shares of the Company owned by such
Person to 15% or more of the Common Shares of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 15% or
more of the Common Shares of the Company then outstanding by reason of the share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Common Shares of the Company
(other than pursuant to a dividend or distribution paid or made by the Company
on the outstanding Common Shares in Common Shares or pursuant to a split or
subdivision of the outstanding Common Shares), then such Person shall be deemed
to be an "Acquiring Person". Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an Acquiring Person, as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an "Acquiring Person", as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement. Notwithstanding
anything to the contrary contained herein, (x) neither American Meter nor any of
its Affiliates or Associates shall be, become or be deemed to be an "Acquiring
Person" solely as a result of American Meter and its Affiliates and Associates
beneficially owning up to, but not in excess of, 25% of the Common Shares of the
Company then outstanding, and (y) neither a Unit Purchaser nor any of its
Affiliates or Associates shall be, become or be deemed to be an "Acquiring
Person" solely as a result of any actions taken by any of the Unit Purchasers
pursuant to the terms of any of the Unit Investment Documents, or the
consummation of the transactions contemplated by the Unit Investment Documents,
including, without limitation, the acquisition by any of the Unit Purchasers of
any Common Shares, Series B Preferred Shares, Unit Warrants, Common Shares
issued upon conversion of Series B Preferred Shares or upon exercise of Unit
Warrants, or any other acquisition of any of such securities, in each case
pursuant to the Unit Investment Documents.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the Exchange Act Regulations,
as is in effect on the date hereof.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
2
(d) "American Meter" shall mean American Meter Company, a
Delaware corporation.
(e) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, as determined pursuant to
Rule 13d-3 of the Exchange Act Regulations as in effect on the date hereof
(except to the extent contemplated by the provisos to Section 1(e)(ii)(B)
below);
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the satisfaction of
conditions) pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", any security if the
agreement, arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Exchange Act and the Exchange Act Regulations, and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate of such Person) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement, or understanding, whether or not in writing (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), for the purpose of
acquiring, holding, voting (except to the extent contemplated by the provisos to
Section 1(e)(ii)(B) hereof) or disposing of any securities of the Company.
Notwithstanding anything in this paragraph (e) to the contrary, (1) no Person
shall be deemed the "Beneficial Owner" of, or to "beneficially own", any (A)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (B) securities that
may be issued upon exercise of Rights at any time prior to the occurrence of a
Triggering Event or (C) securities that may be issued upon exercise of Rights
from and after the occurrence of a Triggering Event, which Rights were acquired
by such Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof or pursuant
to Section 11(i) hereof in connection with an adjustment made with respect to
any such Rights; and (2) the phrase "then outstanding," when used with reference
to a Person's beneficial ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to beneficially own hereunder.
3
(f) "Business Day" shall mean any day other than a Saturday,
a Sunday or a day on which banking institutions in the State of Colorado are
authorized or obligated by law or executive order to close.
(g) "Certificate of Incorporation" means the Second Restated
Certificate of Incorporation of the Company, as amended, supplemented or
restated from time to time.
(h) "Close of Business" on any given date shall mean 5:00
p.m., Denver, Colorado time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m., Denver, Colorado time, on the
next succeeding Business Day.
(i) "Common Shares", when used with reference to the
Company, shall mean shares of common stock, par value $.01 per share, of the
Company and any other class or classes or series of common stock of the Company
resulting from any subdivision, combination, recapitalization or
reclassification of shares of such common stock. "Common Shares", when used with
reference to any Person other than the Company, shall mean the capital stock
(or, if such Person shall have no capital stock, the equity securities or other
equity interest having power to control or direct the management of such Person)
with the greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(j) "Common Share Equivalent" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(k) "Company" means Metretek Technologies, Inc., a Delaware
corporation, subject to the terms of Section 13(a)(ii) hereof.
(l) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(m) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(n) "Equivalent Preferred Shares" shall have the meaning set
forth in Section 11(b) hereof.
(o) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(p) "Exchange Act Regulations" shall mean the General Rules
and Regulations promulgated under the Exchange Act.
(q) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(r) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(s) "Nasdaq" shall mean the Nasdaq Stock Market, Inc.
4
(t) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, association, trust, unincorporated
organization or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(u) "Preferred Shares" shall mean shares of Series C
Preferred Stock, par value $.01 per share, of the Company.
(v) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(w) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(x) "Record Date" shall have the meaning set forth in the
recitals at the beginning of this Agreement.
(y) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(z) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(aa) "Registered Common Shares" shall have the meaning set
forth in Section 13(b)(ii) hereof.
(bb) "Right" shall have the meaning set forth in the
recitals at the beginning this Agreement.
(cc) "Rights Agent" shall (i) Computershare Investor
Services, LLC, (ii) its successor or replacement as provided in Sections 19 and
21 hereof or (iii) any additional Person appointed pursuant to Section 2 hereof.
(dd) "Rights Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(ee) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(ff) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(gg) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(hh) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(ii) "Series B Preferred Shares" shall mean the shares of
Series B Preferred Stock, par value $.01 per share, of the Company.
(jj) "Shares Acquisition Date" shall mean the first date of
public announcement (including, without limitation, the filing or amendment of
any report pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become
5
such; provided, however, that if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a) hereof, then no Shares Acquisition
Date shall be deemed to have occurred. Notwithstanding anything to the contrary
contained herein, no Shares Acquisition Date shall be deemed to occur solely as
a result of (i) the beneficial ownership by American Meter and its Affiliates
and Associates of up to, but not in excess of, 25% of the Common Shares of the
Company then outstanding; or (ii) any actions taken by any of the Unit
Purchasers pursuant to the terms of any of the Unit Investment Documents, or the
consummation of the transactions contemplated by the Unit Investment Documents,
including, without limitation, the acquisition by any of the Unit Purchasers of
any Common Shares, Series B Preferred Shares, Unit Warrants, Common Shares
issued upon conversion of Series B Preferred Shares or upon exercise of Unit
Warrants, or any other acquisition of any of such securities, in each case
pursuant to the Unit Investment Documents.
(kk) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ll) "Subsidiary" shall mean, with reference to any Person,
any other Person of which a majority of the voting power of the voting equity
securities or equity interest is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such first-mentioned Person.
(mm) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(nn) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(oo) "Trading Day" shall mean a day on which the principal
national securities exchange on which a referenced security is listed or
admitted to trading is open for the transaction of business or, if the
referenced security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(pp) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
(qq) "Unit Investment Documents" shall mean (i) the
Securities Purchase Agreement, dated as of December 9, 1999 (the "Securities
Purchase Agreement"), by and among the Company and the Unit Purchasers, (ii) the
Unit Warrants issued or to be issued to the Unit Purchasers pursuant to the
Securities Purchase Agreement, (iii) the provisions of the Company's Certificate
of Incorporation relating to the Series B Preferred Shares, and (iv) any other
agreement or instrument executed by the Company and the Unit Purchasers in
connection with the foregoing, as each of the foregoing may be amended from time
to time in accordance with the respective terms thereof.
(rr) "Unit Purchaser" shall mean each Person that is a party
to the Securities Purchase Agreement as a purchaser of securities from the
Company.
(ss) "Unit Warrants" shall mean the warrants to purchase
Common Shares issued or issuable to the Unit Purchasers pursuant to the Unit
Investment Documents.
6
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date (as
such term is defined in Section 3 hereof) also be the holders of the Common
Shares) in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the tenth
(10) day after the Shares Acquisition Date or (ii) the Close of Business on the
tenth Business Day (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any Person becomes an
Acquiring Person) after the date that a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any Person holding
Common Shares of the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2 of the
Exchange Act Regulations or any successor rule if, upon consummation thereof,
such Person would become an Acquiring Person (the earlier of (i) and (ii) being
herein referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Sections 3(b) and 3(c) hereof) by the certificates
for Common Shares of the Company (or the book entry credits that represent the
Common Shares of the Company) registered in the names of the holders thereof
(which certificates or book-entry credits shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
Common Shares of the Company (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Company shall notify the Rights
Agent thereof and shall prepare and execute, and the Rights Agent shall
countersign and send by first-class, insured, postage-prepaid mail, to each
record holder of Common Shares of the Company as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more rights certificates, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing one Right for each Common Share
so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per Common Share has been made pursuant to
Section 11 hereof, at the time of distribution of the Rights Certificates, the
Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14 (a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of the Distribution Date, the Rights shall be evidenced
solely by such Rights Certificates. Notwithstanding anything to the contrary
contained herein, no Distribution Date shall be deemed to have occurred solely
as the result of (i) the beneficial ownership by American Meter and its
Affiliates and Associates of up to, but not in excess of, 25% of the Common
Shares of the Company then outstanding; or (ii) any actions taken by any of the
Unit Purchasers pursuant to the terms of the Unit Investment Documents, or the
transactions contemplated by the Unit Investment Documents, or the acquisition
by any of the Unit Purchasers of any Common Shares, Series B Preferred Shares,
Unit Warrants, Common Shares issued upon conversion of Series B Preferred Shares
or upon exercise of Unit Warrants, or any other acquisition of any such
securities, in each case pursuant to the Unit Transaction Documents.
7
(b) The Company shall make available, as promptly as practicable
after the date hereof, a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form attached hereto as Exhibit C hereof (the
"Summary of Rights"), by first-class, postage, prepaid mail, to any holder of
Rights who may so request from time to time prior to the Expiration Date at the
address of such holder of shares on the books of the Company. With respect to
certificates for outstanding Common Shares of the Company (or book-entry creates
that represent Common Shares of the Company), until the Distribution Date, the
Rights will be evidenced by such certificates (or book-entry credits) and the
registered holders of the Common Shares shall also be the registered holders of
the associated Rights. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the transfer of any certificate
for Common Shares of the Company of any book-entry credit that represents Common
Shares of the Company), with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(c) Rights shall, without any further action, be issued in
respect of all Common Shares of the Company that are issued (including any
Common Shares held in treasury) after the date hereof but prior to the earlier
of the Distribution Date or the Expiration Date. Certificates representing such
Common Shares shall also be deemed to be certificates for Rights, and shall bear
the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT, AS IT MAY FROM TIME
TO TIME BE SUPPLEMENTED OR AMENDED OR RESTATED, BETWEEN METRETEK
TECHNOLOGIES, INC. (THE "COMPANY") AND THE RIGHTS AGENT THEREUNDER (THE
"RIGHTS AGREEMENT"), 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 COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE
CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. THE
COMPANY WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE
RIGHTS AGREEMENT, AS IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE
AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR
HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY
ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
With respect to such certificates containing the foregoing legend,
until the earlier of the Distribution Date or the Expiration Date, the Rights
associated with the Common Shares of the Company represented by such
certificates shall be evidenced by such certificates alone, and registered
holders of the Common Shares shall also be the registered holders of the
associated
8
Rights, and the transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares of the Company
represented by such certificate.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or stock market on which the Rights may
from time to time be listed, or to conform to usage. Subject to the provisions
of Section 11 and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date (or, in the case of Rights
issued with respect to Common Shares issued by the Company after the Record
Date, as of the date of issuance of such Common Shares) and on their face shall
entitle the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price set forth therein
(the "Purchase Price"), but the number or type of such one one-hundredth of the
Preferred Share or other securities, cash or other assets purchasable upon the
exercise thereof and the Purchase Price thereof shall be subject to adjustment
as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and who receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such Acquiring Person (or
any such Associate or Affiliate) or to any Person with whom such Acquiring
Person (or any such Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof, shall contain (to the extent feasible) the
following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINE IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.
9
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President, its Chief Executive
Officer, or any of its Vice Presidents, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof, which shall be attested by its Secretary or any of its Assistant
Secretaries, either manually or by facsimile signature. The Rights Certificates
shall be countersigned by the Rights Agent, either manually or by facsimile
signature, and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
counter-signature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agents and issued and delivered by the Company with the same force and effect as
though the Person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificate may be signed on behalf of
the Company by any Person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Agreement any such
Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent shall keep
or cause to be kept, at its office designated as the appropriate place for
surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Sections 4(b), 7(e), 14 and 24
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the earliest of the Redemption Date or the
Final Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and executed the certificate set forth in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request;
whereupon the Rights Agent shall, subject to the provisions of Sections 4(b),
7(e), 14 and 24 hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Certificates, as the case may be, as so requested. The
Company may require
10
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate, if mutilated, the Company shall execute and deliver a
new Rights Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein), in whole or in part, at any time
after the Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the aggregate Purchase Price for the
number of one one-hundredths of a Preferred Share (or, following a Triggering
Event, other securities, cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable, at or prior to the earliest of (i)
the Close of Business on November 30, 2011 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), or (iii) the time at which the Rights are exchanged as
provided in Section 24 hereof (the "Exchange Date") (the earliest of (i), (ii)
and (iii) referred to herein as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a Preferred
Share issuable pursuant to the exercise of a Right shall initially be $15.00,
shall be subject to adjustment from time to time as provided in Sections 11 and
13(a) hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment of the Purchase Price for the number of
one one-hundredths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
such Rights Certificates in accordance with Section 9 hereof in cash, or by
certified bank check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of Preferred Shares issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to be
purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to
11
comply with such request, (ii) requisition from the Company the amount of cash,
if any, to be paid in lieu of fractional Preferred Shares in accordance with
Section 14 hereof, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered 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 holder, and (iv) after receipt thereof, promptly
deliver such cash, if any, to or upon the order of the registered holder of such
Rights Certificate.
(d) In the event that the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered 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 holders, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event or a Section 13
Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or any such Associate or Affiliate) or to
any Person with whom the Acquiring Person (or any such Associate or Affiliate)
has any agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer that the Board of Directors of the Company has
determined to be part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall be null and
void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and of Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights or any other
Person as a result of its failure to make any determination under this Section
7(e) or under Section 4(b) hereof with respect to any Acquiring Person or any of
its Associates or Affiliates or transferees.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
transfer or exercise by such registered holder unless such registered holder
shall have (i) completed and executed the certificate contained in the form of
assignment or election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such assignment or exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the
12
provisions of this Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Rights Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate confirming the destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company shall cause to be reserved and kept available
out of its authorized and unissued Preferred Shares (and, following the
occurrence of a Triggering Event, out of its authorized and unissued Common
Shares and/or other securities) or out of any authorized and unissued shares
held in its treasury, the number of Preferred Shares (and, following the
Triggering Event, Common Shares and/or other securities) that, as provided in
this Agreement including without limitation Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the Preferred Shares (or Common Shares and/or
other securities, as the case may be) issuable upon the exercise of Rights may
be listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on any national securities
exchange. The Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall take all such action as may be necessary
to ensure that all Preferred Shares (or Common Shares and/or other securities,
as the case may be) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Preferred Shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event in which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act, with respect to the Preferred Shares or other securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such Preferred Shares or other securities, or (B) the Expiration Date. The
Company shall also take such action as may be appropriate under, or to ensure
compliance with, the securities or any applicable "blue sky" laws of the various
states and other jurisdictions in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of time not to exceed
ninety (90) days after the date set forth in clause (i) of the first sentence of
this paragraph, the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective and to take such
13
actions under such other securities or blue sky laws and permit them to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained or the
exercise thereof shall not be permitted under applicable law or a registration
statement shall not have been declared and remain effective.
(e) The Company shall pay when due and payable any and all
transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates or of any Preferred Shares (or Common Shares
or other securities of the Company, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax or
charge which may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of certificates
or depository receipts for the Preferred Shares (or Common Shares or other
securities of the Company, as the case may be) in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates or depository receipts for
Preferred Shares (or Common Shares or other securities of the Company, as the
case may be) upon the exercise of any Rights until any such transfer tax or
charge shall have been paid (any such transfer tax or charge being payable by
the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such transfer tax or
charge is due.
Section 10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
certificate for Preferred Shares (or, following the occurrence of a Triggering
Event, Common Shares or other securities of the Company) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Shares (or, following the occurrence of a Triggering
Event, Common Shares or other securities of the Company) represented thereby on,
and such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes and charges) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Shares (or, following the occurrence of a Triggering Event, Common
Shares or other securities of the Company) transfer books of the Company 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 Preferred Shares (or, following the occurrence of a Triggering
Event, Common Shares or other securities of the Company) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to securities for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
14
(a) (i) In the event that the Company shall, at any time after
the date of this Agreement, (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
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 Preferred Shares or other shares of capital stock, as the
case may be, issuable on such date upon exercise of the Rights, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of Preferred
Shares or other shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Shares (or
following the occurrence of a Triggering Event, other securities of the Company)
transfer books of the Company were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. If an event occurs which would require an adjustment
under both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 24 hereof, in the
event any Person shall become an Acquiring Person, then, promptly following the
occurrence of such event, proper provision shall be made so that each holder of
a Right (except as provided below and in Section 7(e) hereof) shall thereafter
have a right to receive, upon exercise thereof at a price equal to the then
current Purchase Price in accordance with the terms of this Agreement, in lieu
of the number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the occurrence of such event, such number of
Common Shares of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right was exercisable immediately prior to the
occurrence of such event and (y) dividing that product (which, following such
occurrence, shall thereafter be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the then current market
price of the Common Shares of the Company (determined pursuant to Section 11(d)
hereof) per share on the date of such occurrence (such number of shares referred
to herein as the "Adjustment Shares").
(iii) In the event that the number of Common Shares which
are authorized by the Company's Certificate of Incorporation, as then amended
and restated, but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Company shall (A) determine the excess of (1) the value of
the Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess is herein called the "Spread"),
and (B) with respect to each Right, make adequate provision to substitute for
the Adjustment Shares, upon the exercise of the Rights, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Shares or other equity securities of
the
15
Company (including, without limitation, shares, or units of shares, of preferred
stock which the Board of Directors of the Company has deemed to have the same
value as Common Shares (such shares or units of shares of preferred stock are
referred to herein as "Common Share Equivalents"), (4) debt securities of the
Company, (5) other assets or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the Board of Directors
of the Company; provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within 30 days
following the later of (x) the first occurrence of a Section 11(a)(iii) Event
and (y) the date on which the Company's right of redemption pursuant to Section
23(a) expires (the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the
Purchase Price, Common Share (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread. If
the Board shall determine in good faith that it is likely that sufficient
additional Common Shares could be authorized for issuance upon exercise in full
of the Rights, the 30-day period set forth above may be extended to the extent
necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek stockholder approval for the authorization of
such additional shares (such 30-day period, as it may be extended, the
"Substitution Period". To the extent that the Company determines that some
action should be taken pursuant to the first and/or third sentences of this
Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights, and
(2) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder approval for such
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Shares shall be the current market price per Common Share on
the Section 11(a)(ii) Trigger Date and the value of any Common Share Equivalent
shall be deemed to have the same value as the Common Shares on such date.
(b) In the event the Company shall, at any time after the date
of this Agreement, fix a record date for the issuance of rights (other than the
Rights), options or warrants to all holders of Preferred Shares entitling them
to subscribe for or purchase (for a period expiring within 45 calendar days
after such record date) Preferred Shares (or shares having substantially the
same rights, privileges and preferences as the Preferred Shares ("Equivalent
Preferred Shares")) or securities convertible into Preferred Shares or
Equivalent Preferred Shares at a price per Preferred Share or Equivalent
Preferred Share (or having a conversion price per share, if a security
convertible into Preferred Shares or Equivalent Preferred Shares) less than the
current market price (as determined pursuant to Schedule 11(d) hereof) per share
of the Preferred Shares or Equivalent Preferred Shares on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the sum of the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or Equivalent Preferred Shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at
16
such current market price, and the denominator of which shall be the number of
Preferred Shares and/or Equivalent Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares and/or Equivalent Preferred
Shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In the event such subscription price may be
paid by delivery of consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Preferred Shares owned by or held for the
account of the Company or any Subsidiary of the Company shall not be deemed
outstanding for the purpose of any such computation. 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 Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In the event that the Company shall, at any time after the
date of this Agreement, fix a record date for a distribution to all holders of
Preferred Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Shares but including any dividend payable in stock
other than Preferred Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price (as determined pursuant to Section 11(d)
hereof) per share of the Preferred Shares on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agreement and the holders of the
Rights) of the cash, assets or evidences of indebtedness to be distributed or of
such subscription rights or warrants applicable to one Preferred Share, and the
denominator of which shall be such current market price (as determined pursuant
to Section 11(d) hereof) per share of the Preferred Shares; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. 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 Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" per share of any security (a "Security" for purposes of
this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days immediately prior to, but not including, such date; provided, however, that
in the event that the current market price per share of the Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in such
Security or securities convertible into such Securities or (B) any
subsidivision, combination or reclassification of such Security and prior to the
expiration of 30
17
Trading Days after the ex-dividend date of such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, in each
such case, the current market price shall be properly adjusted to take into
account such event. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case, as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use, or, if on any such date the Security is 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 such shares selected by the
Board of Directors of the Company. If on any such date no market maker is making
a market in the Common Shares, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be used.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of the Preferred Shares shall be determined in
the same manner as set forth in clause (i) of this Section 11(d) (other than the
fourth sentence thereof). If the current market price per share of the Preferred
Shares cannot be determined in the manner provided above or if the Preferred
Shares are not publicly held or listed or traded in a manner described in clause
(i) of this Section 11(d), the "current market price" per share of the Preferred
Shares shall be conclusively deemed to be 100 (as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof) multiplied by the current market
price per share of the Common Shares. If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or traded, the "current market
price" per share of the Preferred Shares shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% of the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one-millionth (0.000001) of a Preferred Share
or ten-thousandth (0.0001) of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Rights and the Purchase Price thereof shall be
subject to adjustment from to time in a manner and on terms as nearly equivalent
as practicable to the
18
provisions with respect to the Preferred Shares contained in Sections 11(a),
(b), (c), (d), (e), (g), (h), (i), (j), (k), (l) and (m) hereof, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share (or other securities or amount of cash or combination thereof)
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Section 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth (0.000001) of a Preferred Share) obtained by (i) multiplying (x)
the number of one one-hundredths of a Preferred Share covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one one-hundredths of a Preferred Share 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 one one-hundredths of a
Preferred Share 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 Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company 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 Purchase
Price is adjusted or any day thereafter, but, if the 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 11(i), the Company 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 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, 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, if required by the Company, 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 Company, the adjusted Purchase Price), and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
19
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-hundredth of a
Preferred Share and the number of one one-hundredths of a Preferred Share which
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall taken any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date of a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such Holder's right to receive such additional
Preferred Shares or other capital stock or securities upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent it, in the good faith judgment of the Board of Directors of the
Company, shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of any of
Preferred Shares at less than the current market price, (iii) issuance wholly
for cash of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, (iv) stock dividends on Preferred
Shares, or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Shares,
shall not be taxable to such stockholders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction, or a series
of transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
Person which constitutes, or would constitute, the "Principal Party" for
purposes of Section
20
13(a) hereof shall have distributed or otherwise transferred to its stockholders
or other persons holding an equity interest in such Person Rights previously
owned by such Person or any of its Affiliates and Associates; provided, however,
that this Section 11(n) shall not affect the ability of any Subsidiary of the
Company to consolidate with, merge with or into, or sell or transfer assets or
earning power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except
as permitted by Section 23, 24 or 27 hereof, 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.
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall, at any time after the date of this
Agreement and prior to the Distribution Date, (i) declare or pay a dividend on
the Common Shares payable in Common Shares, (ii) subdivide the Common Shares,
(iii) combine the outstanding Common Shares into a smaller number of Common
Shares or (iv) issue any shares of its capital stock in a reclassification of
its Common Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the surviving corporation),
then, in any such case, the number of Rights associated with each Common Share
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each Common Share following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction, the
numerator of which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of Common Shares outstanding immediately following the
occurrence of such event.
(q) Anything in this Agreement to the contrary notwithstanding,
the provisions of this Section 11 shall not apply or be triggered by (i) the
beneficial ownership by American Meter and its Affiliates and Associates of up
to, but not in excess of, 25% of the Common Shares of the Company then
outstanding, or (ii) any actions taken by any of the Unit Purchasers pursuant to
the terms of any of the Unit Investment Documents, or the consummation of any of
the transactions contemplated by the Unit Investment Documents, including,
without limitation, the acquisition by any of the Unit Purchasers of any Common
Shares, Series B Preferred Shares, Unit Warrants, Common Shares issued upon
conversion of Series B Preferred Shares or upon exercise of Unit Warrants, or
any other acquisition of any such securities, in each case pursuant to the Unit
Investment Documents.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever
an adjustment is made as provided in Section 11 or 13 hereof, the Company shall
promptly (a) prepare a certificate setting forth such adjustment, and a brief
statement of the facts and computations accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Common Shares and the
Preferred Shares a copy of such certificate and (c) if such adjustment occurs at
any time after the Distribution Date, mail a brief summary thereof to each
holder of a Rights Certificate in accordance with Section 25 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
21
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Shares Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof) and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) shall consolidate with, or merge with and
into, the Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding Common Shares shall be
converted into or exchanged for stock or other securities of any other Person or
cash or any other property, or (z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer) to any
Person or Persons (other than the Company or any of its Subsidiaries in one or
more transaction each of which complies with Section 11(o) hereof), in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
(any such event described in clause (x), (y) or (z) being a "Section 13 Event"),
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of validly authorized and issued, fully paid and
nonassessable Common Shares of the Principal Party, free and clear of any liens,
encumbrances, rights of first refusal, transfer restrictions or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number of such one
one-hundredths of a Preferred Share for which a Right would be exercisable
hereunder but for the occurrence of such Section 11(a)(ii) Event by the Purchase
Price which would be in effect hereunder but for such first occurrence) and (2)
dividing that product (which, following the first occurrence of a Section 13
Event, shall be the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (determined pursuant to Section
11(d) hereof) per Common Share of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall for all
purposes of this Agreement thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its Common Shares) in connection with the consummation of any such transaction
as may be necessary to ensure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no further effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
22
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), (A) the Person that is the issuer
of any securities into which Common Shares of the Company are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of Common Shares that has the highest aggregate current market price (determined
pursuant to Section 11(d) hereof) and (B) if no securities are so issued, the
Person that is the other party to such merger or consolidation, or, if there is
more than one such Person, the Person the Common Shares of which has the highest
aggregate current market price (determined pursuant to Section 11(d) hereof);
and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the party receiving
the largest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Shares of which has the highest
aggregate current market price (determined pursuant to Section 11(d) hereof);
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act ("Registered
Common Shares"), of such Person is not a corporation, and such Person is a
direct or indirect Subsidiary of another Person that has Registered Common
Shares outstanding, "Principal Party" shall refer to such other Person; (2) if
the Common Shares of such Person are not Registered Common Shares or such Person
is not a corporation, and such Person is a direct or indirect Subsidiary of
another Person but is not a direct or indirect Subsidiary of another Person
which has Registered Common Shares outstanding, "Principal Party " shall refer
to the ultimate parent entity of such first-mentioned Person; (3) if the Common
Shares of such Person is not Registered Common Shares or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one Person, and one or more of such other Persons have Registered Common Shares
outstanding, "Principal Party" shall refer to whichever of such other Persons is
the issuer of the Registered Common Shares having the highest aggregate current
market price (determined pursuant to Section 11(d)); and (4) if the Common
Shares of such Person are not Registered Common Shares or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one Person, and none of such other Persons have Registered Common Shares
outstanding, "Principal Party" shall refer to whichever ultimate parent entity
is the corporation having the greatest stockholders' equity or, if no such
ultimate parent entity is a corporation, shall refer to whichever ultimate
parent entity is the entity having the greatest net assets.
(c) In the event that the Principal Party which is to be a
party to a transaction referred to in this Section 13 has a provision in any of
its authorized securities or in its certificate of incorporation or by-laws or
other instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, Common Shares of such Principal Party at less than the then current market
price per share (determined pursuant to Section 11(d)) or securities exercisable
for, or convertible into, Common Shares of such Principal Party at less than
such then current market price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar provisions
in connection with the issuance of the Common Shares of such Principal Party
pursuant to the provisions of this Section 13; then, in
23
such event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been cancelled, waived or amended,
or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation or the proposed transaction.
(d) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of its authorized Common
Shares which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless,
prior thereto, the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of such Section 13 Event, the
Principal Party shall:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and shall use its best efforts to
cause such registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date;
(ii) take all such other action as may be necessary to
enable the Principal Party to issue the securities purchasable upon exercise of
the Rights, including but not limited to the registration or qualification of
such securities under all requisite securities laws of jurisdictions of the
various states and the listing of such securities on such exchanges and trading
markets as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration and Form 10 (or any
successor form) under the Exchange Act.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, sales or other transfers. In the event that
a Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) hereof.
(f) Notwithstanding anything to the contrary contained herein,
the provisions of this Section 13 shall not apply to or be triggered by (i) the
beneficial ownership by American Meter and its Affiliates and Associates of up
to, but not in excess of, 25% of the Common Shares of the Company then
outstanding, or (ii) any actions taken by any of the Unit Purchasers pursuant to
the terms of any of the Unit Investment Documents, or the consummation of the
transactions contemplated by the Unit Investment Documents, including, without
limitation, the acquisition by any of the Unit Purchasers of Common Shares,
Series B Preferred Shares, Unit Warrants, Common Shares issued upon conversion
of Series B Preferred Shares or upon exercise of Unit Warrants, or any other
acquisition of any of such securities, in each case pursuant to the Unit
Investment Documents.
24
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, the Company shall pay to the registered holders
of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of the
Rights for any Trading Day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if on any
such date the Rights 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 Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board of
Directors of the Company shall be used and such determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share). In lieu
of fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company may 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 current market
value of one Preferred Share. For purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to Section 11(d) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right, by the acceptance of such Right,
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of actions vested in the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares of the Company); and any registered holder of a Rights Certificate
(or, prior to the
25
Distribution Date, of the Common Shares of the Company), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of the Common Shares of the Company), may, in such
registered holder's own behalf and for such registered holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company or any other Person to enforce, or otherwise act in respect of, such
registered holder's right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such 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
shall 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 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares of the
Company;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates duly executed;
(c) subject to Sections 6(a) and 7(e) hereof, the Company
and the Rights Agent may deem and treat the Person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Shares certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e), shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company 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 (whether interlocutory
of final) 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;
provided, however, the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as promptly as practicable.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to
26
any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions shall have been exercised in accordance with the provisions
hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company shall 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
fees and disbursements of its counsel incurred in connection with the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company shall indemnify the Rights Agent for, and
hold it harmless against, any loss, liability or expense incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
any action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including without limitation
the costs and expenses of defending against any claim of liability hereunder.
(b) The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement or the exercise or
performance of its duties hereunder in reliance upon any Rights Certificate or
certificate for Preferred Shares, Common Shares or other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, instruction, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation or other entity into which the Rights
Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation or other entity resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a
party, or any corporation or other entity succeeding to the corporate trust or
shareholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any document or any further action on the part of any of
the parties hereto; provided, however, that such corporation or other entity
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In the event that at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall 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 the event
that at that time any of the Rights Certificates shall not have 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
shall have the full force provide in the Right Certificates and in this
Agreement.
(b) In the event that at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the
27
Rights Agent may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in the event that 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.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") be proved or established by the
Company prior to taking, suffering or omitting any action hereunder, such fact
or matter (unless other evidence in respect thereof be specified herein) may be
deemed to be conclusively proved and established by a certificate signed by any
one of the Chairman of the Board, the President, the Chief Executive Officer,
the President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization and protection to the
Rights Agent for any action taken, suffered or omitted in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section 7(e) hereof) or
for any adjustment in the terms of the Rights required under the provisions of
Sections 3, 11, 13, 23 or 24 hereof or any other provision hereof, or for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after actual notice
of any such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
28
Preferred Shares or any other securities to be issued pursuant to this Agreement
or any Rights Certificate or as to whether any Preferred Shares or any other
securities will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company shall 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 performance by the Rights Agent of its duties under this
Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept written instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President, the Chief
Executive Officer, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken, suffered or omitted by it in good faith in
accordance with instructions of any such officer. Any application by the Rights
Agent for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken, suffered or omitted by the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall be not less than five Business
Days after the date any such officer of the Company receives such application,
unless any such officer shall have consented in writing at an earlier date)
unless, prior to taking or omitting any such action, the Rights Agent shall have
received written instructions in response to such application specifying the
action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, director, officer,
employee or Affiliate of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become peculiarly interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company 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 Company or for any Person.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
29
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares and Preferred Shares by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, to each transfer agent of the Preferred Shares and the Common Shares by
registered or certified mail, and to the holders of the Rights Certificates (or
certificates for the Common Shares prior to the Distribution Date) by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of 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 the Rights Certificate or, prior
to the Distribution Date, the holder of a certificate for Common Shares (which
holder shall, with such notice, submit such holder's Rights Certificate or
certificate for Common Shares, as the case may be, for inspection by the
Company), then the registered holder of any Rights Certificate or, prior to the
Distribution Date, of any certificate for Common Shares may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a Person organized and doing business under the laws of the United
States or of any State of the United States, in good standing, which is
authorized under such laws to exercise corporate trust powers or stock transfer
or shareholder services powers, and shall be subject to supervision or
examination by federal or state authority and shall have at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000, or (b) an Affiliate of a Person described in clause (a). After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and the
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Rights Certificates (or certificates for Common Shares prior to the
Distribution Date). Failure to give any notice provided for in this Section 21,
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 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Board of Directors of the Company to reflect
any adjustment or change in the Purchase Price and the number or kind or class
of shares or other securities or property purchasable under the Rights
Certificates made in
30
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale by the Company of Common Shares following the
Distribution Date and prior to the Expiration Date, the Company (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise of stock
option or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereunder issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing an appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Rights Certificates shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would crate a
significant risk of material adverse tax consequences to the Company or to the
Person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
otherwise shall have been made in lieu of the issuance thereof.
Section 23. REDEMPTION.
(a) The Company may, at its option, by action of its Board of
Directors, at any time prior to the earlier of (i) the Close of Business on the
tenth day following the Shares Acquisition Date, or (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter referred to as
the "Redemption Price"). The Company may, at its option, by action of its Board
of Directors, pay the Redemption Price in cash, Common Shares of the Company
(based on the current market price, determined in accordance with Section 11(d)
hereof, of the Common Shares at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors of the Company.
Subject to the foregoing, the redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors of
the Company in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of which shall be
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights shall terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Promptly after the action of the Board of Directors of the Company ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares of the Company;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such redemption. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption shall state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23
or in Section 24 hereof, and other than in connection with the purchase of
Common Shares of the Company prior to the Distribution Date.
31
Section 24. EXCHANGE.
(a) The Company may, at its option, by action of its Board of
Directors, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the provisions of
Section 7(e) hereof) for Common Shares of the Company at an exchange ratio of
one Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Company shall not
be empowered to effect such exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any Person holding Common Shares of the
Company for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares of the Company then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly notify the Rights Agent and give public notice of any
such exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
shall state the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become null and void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that the number of Common Shares which are
authorized by the Company's Certificate of Incorporation, as then amended and
restated, but not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights are not sufficient to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to authorize
such additional Common Shares, the Company shall substitute, for each Common
Share that would otherwise be issuable upon exchange of a Right, a number of
Preferred Shares or fraction thereof such that the current market price per
Preferred Share multiplied by such number or fraction is equal to the current
market price per Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares, would otherwise be issuable an amount in cash
32
equal to the same fraction of the current market value of a whole Common Share.
For the purposes of this paragraph (d), the current market value of a whole
Common Share shall be the Closing Price of a Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In the event that the Company shall, at any time
after the Distribution Date, propose (i) to pay any dividend payable in stock of
any class to the holders of Preferred Shares or to make any other distribution
to the holders of the Preferred Shares or to make any other distribution to the
holders of the Preferred Shares (other than a regular quarterly cash dividend
out of earnings or retained earnings of the Company), (ii) to offer to the
holders of the Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of the
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof), or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to the Rights Agent and to each holder of a
Rights Certificate in accordance with Section 26 hereof, a notice of such
proposed action, which notice shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 days prior to the record date
for determining holders of the Preferred Shares for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier; provided, however, no such notice shall be required pursuant to this
Section 25 if any Subsidiary of the Company effects a consolidation or merger
with or into, or effects a sale or other transfer of assets or earning power to,
any other Subsidiary of the Company.
(b) In case the event set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall, as soon as practicable thereafter,
give to each holder of a Rights Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall describe
the event and the consequences of such event to holders of Rights under Section
11(a)(ii) hereof.
Section 26. NOTICES. All notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
33
Metretek Technologies, Inc.
000 00xx Xxxxxx, Xxxxx 000 Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: W. Xxxxxxx Xxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Subject to the provisions of Section 21 hereof, any notice of demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Computershare Investor Services, LLC
00000 Xxxx Xxxxxxx Xxxxxxx
Xxxxx X-0
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Action
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date,
and subject to the last sentence of this Section 27, the Company may supplement
or amend any provision of this Agreement without the approval of any holders of
certificates representing Common Shares. From and after the Distribution Date,
the Company may supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided,
however, that this Agreement may not be supplemented or amended to lengthen any
time period hereunder, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27 (and provided such supplement or amendment does not change or increase the
Rights Agent's duties, liabilities or obligations hereunder, unless the Rights
Agents has consented), the Rights Agent shall execute any such supplement or
amendment. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of
34
Common Shares. Notwithstanding anything herein to the contrary, this Agreement
may not be amended at any time to lower the percentages of beneficial ownership
relevant to "Acquiring Person" status set forth in Section 1(a) hereof that are
applicable to either American Meter or to the Unit Holders (and their respective
Affiliates and Associates) without the written consent of American Meter or the
Unit Holders, as the case may be.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of Common
Shares of the Company or any other class of capital stock outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding Common Shares of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
Exchange Act Regulations. Except as otherwise specifically provided herein, the
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Company in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other Persons, and (y) not subject the Board of Directors of the Company or any
member thereof to any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Shares) any legal or
equitable right, remedy or claim under this Agreement. This Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of Common Shares).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that, notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement and the Rights shall not then be redeemable, the right
of redemption set forth in Section 23 shall be reinstated and shall not expire
until the Close of Business on the tenth Business Day following the date of such
determination by the Board of Directors of the Company.
35
Section 32. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 33. 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 but one
and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provision hereof.
(Next Page is the Signature Page)
36
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Rights Agreement to be duly executed and attested as of the date first
above written.
METRETEK TECHNOLOGIES, INC.
Attest:
By: /s/ Xxxx X. Xxxxxxxxxx By: /s/ W. Xxxxxxx Xxxxxx
-------------------------------- -----------------------------------
Xxxx X. Xxxxxxxxxx, Secretary W. Xxxxxxx Xxxxxx, President
COMPUTERSHARE INVESTOR SERVICES, LLC
Attest:
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------- -----------------------------------
Name: Xxxxxx Xxxxx Name: Xxxxxxxx X. Xxxxx
------------------------------ ---------------------------------
Title: VP Title: VP
----------------------------- ----------------------------------
37
EXHIBIT A
DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES C PREFERRED STOCK
OF
METRETEK TECHNOLOGIES, INC.
B. SERIES C PREFERRED STOCK
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series C Preferred Stock" and the number of shares constituting
such series shall be Five Hundred Thousand (500,000). Such number of shares may
be increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series C Preferred Stock
to a number less than that of the shares then outstanding.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
A. The holders of shares of Series C Preferred Stock in preference to
the holders of Common Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series C Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (i) Four Dollars ($4.00) value or (ii) subject to the
provision for adjustment hereinafter set forth, One Hundred (100) times the
aggregate per share amount of all cash dividends, and One Hundred (100) times
the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series C Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series C
Preferred Stock were entitled immediately prior to such event under clause (ii)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
B. The Corporation shall declare a dividend or distribution on the
Series C Preferred Stock as provided in paragraph (a) of this section
immediately after it declares a dividend or distribution on the
A-1
Common Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of Four Dollars
($4.00) per share on the Series C Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
C. Dividends shall begin to accrue and be cumulative on outstanding
shares of Series C Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series C Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series C Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series C Preferred Stock in
an amount not less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series C Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than sixty (60) days prior to the
date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of Series C Preferred Stock shall
have the following voting rights:
A. Subject to the provision for adjustment hereinafter set forth, each
share of Series C Preferred Stock shall entitle the holder thereof to One
Hundred (100) votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series C Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event, and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
B. Except as otherwise provided herein or by law, the holders of shares
of Series C Preferred Stock and the holders of shares of Common Stock shall vote
together as one (1) class on all matters submitted to a vote of stockholders of
the Corporation.
C. Except as set forth herein, holders of Series C Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
A-2
SECTION 4. CERTAIN RESTRICTIONS.
A. Whenever quarterly dividends or other dividends or distributions
payable on the Series C Preferred Stock as provided in section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series C Preferred Stock outstanding shall have
been paid in full, the corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series C Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series C Preferred Stock, except dividends paid ratably on the Series C
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled.
SECTION 5. REACQUIRED SHARES. Any shares of Series C Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (i) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C
Preferred Stock unless, prior thereto, the holders of shares of Series C
Preferred Stock shall have received the greater of (y) Sixteen Dollars ($16.00)
per share, plus an additional amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, or
(z) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to One Hundred (100) times the aggregate amount to
be distributed per share to holders of Common Stock, or (ii) to the holders of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series C Preferred Stock, except
distributions made ratably on the Series C Preferred Stock and all other such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event under the proviso in clause (i) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or other property, then in any such case the shares of Series C Preferred
A-3
Stock shall at the same time be similarly exchanged or changed in an amount per
share (subject to the provision for adjustment hereinafter set forth) equal to
One Hundred (100) times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series C Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 8. AMENDMENT. The Restated Certificate of Incorporation shall
not be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series C Preferred Stock, so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds (2/3) of the outstanding shares of Series C Preferred Stock, voting
together as a single series.
A-4
EXHIBIT B
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R-_______ ________ Rights
NOT EXERCISABLE AFTER NOVEMBER 30, 2011, UNLESS EXTENDED PRIOR THERETO BY
THE COMPANY, OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT.) ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
RIGHTS CERTIFICATE
METRETEK TECHNOLOGIES, INC.
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 Amended and Restated Rights Agreement, dated as of November
30, 2001, as from time to time amended or supplemented (the "Rights Agreement";
terms defined therein are used herein with the same meaning unless otherwise
defined herein), between Metretek Technologies, Inc., a Delaware corporation
(the "Company"), and Computershare Investor Services, LLC, as agent (the "Rights
Agent", which term shall include any successor Rights Agent under the Rights
Agreement), to purchase from the Company at any time after the Distribution Date
and prior to the Expiration Date, at the office of the Rights Agent designated
for such purpose, one one-hundredth of a fully paid and non-assessable share of
Series C Preferred Stock, par value $.01 per share (the "Preferred Shares"), of
the Company, at the Purchase Price of $15.00 per one one-hundredth of a
Preferred Share, upon presentation and surrender of this Rights Certificate with
the Form of Election to Purchase and related Certificate duly executed. As
provided in the Rights Agreement, the number of Rights evidenced by this Rights
Certificate (and the number and kind of Preferred Shares or other securities
which may be purchased upon exercise thereof) set forth above, and the Purchase
Price set forth above, and subject to modification and adjustment upon the
happening of certain events.
This Rights Certificate is subject to all of the terms and conditions
of the Rights Agreement, which terms 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 hereunder of the Rights Agent, the
Company and the holders of the Rights Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Rights under the
specific
--------------------
* The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
B-1
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement
are on file at the principal executive offices of the Company and the
above-mentioned offices of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-hundredths of a Preferred Share or other securities
as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. [The Rights evidenced
by this Rights Certificate may be transferred, in whole or in part, upon
surrender of this Rights Certificate at the principal office of the Rights Agent
designated for such purpose, with the Form of Assignment and related Certificate
duly executed.] 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 Certificate (i) may be redeemed by the Company, at its option, at a
redemption price of $.01 per Right (subject to adjustment in certain events as
provided in the Rights Agreement), or (ii) may be exchanged, in whole or in
part, for shares of the common stock, par value $.01 per share, of the Company
or shares of preferred stock of the Company having essentially the same value or
economic rights as such shares.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or other distribution
or exercise any preemptive or subscription rights, or otherwise, until the Right
or 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 countersigned by the Rights Agent.
B-2
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of __________________, _____.
ATTEST: METRETEK TECHNOLOGIES, INC.
By:
------------------------------------ ---------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------ ------------------------------
Countersigned:
Computershare Investor Services, LLC,
as Rights Agent,
By:
------------------------------------
Authorized Signature
B-3
[Form of Reverse Side of Rights Certificate]
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)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ,
----------------------- -----
-------------------------------------
Signature
Signature Guaranteed:
-----------------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
1. this Rights Certificate is [ ] is [ ] not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
2. after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated: ,
--------------------- ----- ---------------------------------------
Signature
Signature Guaranteed:
--------------------------------------
B-4
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidence by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Amended Rights Agreement) and, in the case of an Assignment, will
affix a legend to that effect on any Rights Certificates issued in exchange for
this Rights Certificate.
B-5
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights represented
by the Rights Certificate.)
To: Metretek Technologies, Inc.
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Rights Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights (or such other securities of the Company or of
any other person which may be issuable upon the exercise of the Rights) and
requests that certificates for such Preferred Shares (or such other securities)
be issued in the name of:
-------------------------------------------------------------------------------
(Please print name and address)
Please insert social security or other identifying number
---------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
Please insert social security or other identifying number
----------------------
Dated: ,
------------------------------ -----
--------------------------------------------
Signature
Signature Guaranteed:
---------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
1. the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
2. after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,
------------------------------ ----- --------------------------------
Signature
Signature Guaranteed:
B-6
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in ever particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidence by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Amended Rights Agreement) and, in the case of an Assignment, will
affix a legend to that effect on any Rights Certificates issued in exchange for
this Rights Certificate.
B-7
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On December 2, 1991, the Board of Directors of Metretek Technologies,
Inc. (formerly known as Xxxxxx Natural Gas Services, Inc.), a Delaware
corporation (the "Company"), declared a dividend of one preferred share purchase
right (a "Right") for each share common stock, par value $.01 per share ("Common
Stock"), of the Company outstanding on December 2, 1991 (the "Record Date"), and
further authorized the issuance of one Right for each share of Common Stock
issued after the Record Date and prior to the Distribution Date (as defined
below). The Board of Directors extended and amended the terms of the Rights
pursuant to an Amended and Restated Rights Agreement, November 30, 2001 (the
"Restated Rights Agreement"), between the Company and Computershare Investor
Services, LLC (formerly known as American Securities Transfer, Inc.), as rights
agent (the "Rights Agent"). The Restated Rights Agreement amends and restates
the Rights Agreement, dated December 2, 1991, between the Company and the Rights
Agent. Once exercisable, each Right entitles the registered holder thereof to
purchase from the Company one one-hundredth of a share of Series C Preferred
Stock, par value $.01 per share ("Preferred Shares"), of the Company at a
purchase price of $15.00 per one one-hundredth of a Preferred Share (the
"Purchase Price"), subject to adjustment.
The Board of Directors originally adopted the Rights Agreement, and has
subsequently authorized the extension and the amendments thereto and the
restatement thereof as set forth in the Restated Rights Agreement, in order to
protect stockholders from coercive or otherwise unfair takeover tactics. In
general terms, the Restated Rights Agreement works by imposing a significant
economic penalty upon any person or group that acquires 15% or more of the
outstanding shares of Common Stock of the Company without the approval of the
Board of Directors of the Company. The Restated Rights Agreement should not
interfere with any merger or other business combination approved by the Board of
Directors.
The description and the terms and conditions of the Rights are set
forth in the Restated Rights Agreement, including the exhibits thereto. The
Restated Rights Agreement, including the terms of the Preferred Shares attached
as an exhibit thereto, has been filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement on Form 8-A/A, Amendment
No. 5 and is incorporated herein by reference. A copy of the Restated Rights
Agreement is available free of charge from the Company. The following summary
description of the Restated Rights Agreement, including the terms of the Rights
and the Preferred Shares, does not purport to be complete and is qualified in
its entirety by reference to all the provisions of the Restated Rights
Agreement, including the exhibits thereto (which exhibits include the rights,
privileges and preferences of the Preferred Shares) and the definitions
contained therein.
C-1
THE RIGHTS
The Board of Directors of the Company authorized the issuance of one
Right with respect to each share of Common Stock outstanding on or issued after
December 2, 1991 until the Distribution Date. The Rights currently trade with,
and are inseparable from, the Common Stock. Currently, the Rights are attached
to and evidenced only by all certificates or book-entry credits representing
outstanding shares of Common Stock, and the Rights will be attached to any
shares of Common Stock issued until the Distribution Date (as defined below).
The Rights will separate from the Common Stock on the Distribution Date.
PURCHASE PRICE
Each Right entitles the registered holder thereof to purchase from the
Company one one-hundredth of a Preferred Share of the Company at a Purchase
Price of $15.00 per one one-hundredth of a Preferred Share, subject to
adjustment, once the Rights become exercisable. This portion of a Preferred
Share will provide the holder of a Right approximately the same dividend, voting
and liquidation rights as would one share of Common Stock. Prior to exercise, a
Right does not provide its holder any dividend, voting or liquidation rights.
EXERCISABILITY
The Rights are not exercisable until the Distribution Date. The
"Distribution Date" will occur upon the earlier of: (i) ten days following the
public announcement (the date of such announcement being the "Shares Acquisition
Date") that a person or group of affiliated or associated persons (other than
the Company, any such subsidiary of the Company or any employee benefit plan of
the Company or any of its subsidiaries) (an "Acquiring Person") has acquired,
obtained the right to acquire, or otherwise obtained beneficial ownership of,
15% or more of the then outstanding shares of Common Stock, and (ii) ten
business days (or such later date which may be determined by action of the Board
of Directors prior to such time as any person or group would become an Acquiring
Person) following the commencement of a tender offer or exchange offer that
would result in a person or group becoming an Acquiring Person. However,
American Meter Company, a Delaware corporation, and its associates and
affiliates will not be deemed to be an "Acquiring Person" so long as their
collective beneficial ownership of Common Stock is below 25% of the outstanding
shares of Common Stock. In addition, persons that purchased units of the
Company's Common Stock, Series B Preferred Stock and Common Stock Purchase
Warrants pursuant to a Securities Purchase Agreement, dated as of December 9,
1999, as amended, will not be deemed to become Acquiring Persons based solely
upon their purchases of the securities of the Company, and their subsequent
acquisition of shares of Common Stock pursuant to the exercise and special
conversion of the securities, in accordance with the terms of these securities.
After the Distribution Date, the Rights will separate from the Common Stock, and
as soon thereafter as practicable separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of record of Common Stock as
of the close of business on the Distribution Date, and such separate Rights
Certificates alone will evidence the Rights. Any Rights held by an Acquiring
Person, or its associates or affiliates, will be null and void and will not be
exercisable.
C-2
CONSEQUENCES OF A PERSON OR GROUP BECOMING AN ACQUIRING PERSON
In the event any person or group becomes an Acquiring Person, each
holder of a Right, other than Rights beneficially owned by an Acquiring Person
(which thereafter be void), will thereafter have the right to receive upon
exercise that number of shares of Common Stock having a market value equal to
two times the Purchase Price of the Right then in effect. For example, so long
as the Purchase Price of a Right is $15.00, if a person or group becomes an
Acquiring Person, then each holder of a Right will have the right to purchase
shares of Common Stock with a market value of $30.00, based on the market price
of the Common Stock immediately prior to the date the person or group became an
Acquiring Person.
In the event that, at any time following the Shares Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction, or (ii) any entity consolidates or merges with or into the Company
and the Company is the surviving corporation, but the Common Stock is converted
into or exchanged for securities, cash or property of any other entity, or (iii)
50% or more of the consolidated assets or earning power of the Company are sold,
each holder of a Right (except Rights which have previously been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a market value equal to two times the
Purchase Price of the Right then in effect.
TERMS OF PREFERRED SHARES
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each one one-hundredth of a Preferred Share will entitle the holder
thereof to a minimum preferential quarterly dividend payment equal to the
greater of $.04 per share or the dividend payable on one share of Common Stock.
In the event of liquidation, the holders of Preferred Shares will be entitled,
with respect each one one-hundredth of a Preferred Share held, to a minimum
preferential liquidation payment of the greater of $.16 or the amount payable
per share of Common Stock. Each one one-hundredth of a Preferred Share will have
one vote, and will vote together with the Common Stock. Finally, in the event of
a merger, consolidation or other transaction in which the Common Stock is
exchanged, each one one-hundredth of a Preferred Share will entitle the holder
thereof to receive the same payment to be received by a holder of one share of
Common Stock.
Due to the nature of the Preferred Shares' dividend, liquidation and
voting rights, as described above, the value of one one-hundredth of a Preferred
Share should approximate the value of one share of Common Stock. The rights of
holders of Preferred Share are protected by customary anti-dilution protections.
EXPIRATION
The Rights will expire at the close of business on November 30, 2011
(the "Final Expiration Date"), unless the Final Expiration Date is extended
prior thereto by action of the Board of Directors or unless the Rights are
earlier redeemed or exchanged by the Company, as described below.
C-3
REDEMPTION OF RIGHTS
At any time prior to the close of the tenth business day following the
Shares Acquisition Date, the Company, by action of the Board of Directors, may
redeem the Rights in whole, but not in part, at a price of $.01 per Right,
subject to adjustment in certain events (the "Redemption Price") payable in
cash, Common Stock or any other form of consideration deemed appropriate by the
Board of Directors. Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
EXCHANGE OF RIGHTS
At any time after a person or group becomes an Acquiring Person, but
before an Acquiring Person becomes the beneficial owner of 50% or more of the
outstanding Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by an Acquiring Person, which shall have become
void), in whole or in part, at an exchange ratio of one share of Common Stock
per Right, subject to adjustment.
ANTI-DILUTION PROVISIONS AND ADJUSTMENTS
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of Preferred Shares of certain rights or
warrants that subscribes for or purchases Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares, or (iii) upon the
distribution to holders of Preferred Shares of evidences of indebtedness of
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of a subscription
rights or warrants (other than those referred to above). With certain
exceptions, no adjustments of the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price.
No fractional Preferred Shares will be issued (other than fractions
which are intrical multiples of one one-hundredth of a Preferred Share, which
may, at the election of the Company, be evidenced by depositary receipts). In
thereof, a payment in cash will be made based on the market price of the
Preferred Shares of the last trading day prior to the date of exercise.
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock dividend
on the Common Stock payable in Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
C-4
RIGHTS OF RIGHTS HOLDERS
Until a Right is exercised for Preferred Shares or exchanged for Common
Stock, the holder thereof, as such, will have no rights as a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights is not taxable to stockholders
or to the Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable or are redeemed
or exchanged as provided above.
AMENDMENTS
Prior to the Distribution Date, any of the provisions of the Restated
Rights Agreement may be amended by the Board of Directors of the Company without
the consent of the holders of the Rights. Thereafter, the provisions of the
Restated Rights Agreement may be amended by the Board of Directors of the
Company in order to cure any ambiguity, defect or inconsistency, to make changes
which do not adversely effect the interest of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Restated Rights Agreement; provided, however, that no amendment to
adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.
C-5
