EXHIBIT 1
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QUAKER CHEMICAL CORPORATION
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF MARCH 6, 2000
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Table of Contents
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Section Page
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1. CERTAIN DEFINITIONS.....................................................1
2. APPOINTMENT OF RIGHTS AGENTS............................................5
3. ISSUE OF RIGHTS CERTIFICATES............................................5
4. FORM OF RIGHTS CERTIFICATES.............................................7
5. COUNTERSIGNATURE AND REGISTRATION.......................................8
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES................8
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS...........9
8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES................... 11
9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK:
REGISTRATION OF SECURITIES.............................................11
10. CAPITAL STOCK RECORD DATE..............................................13
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF
RIGHTS.................................................................13
12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.............23
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER...23
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES................................26
15. RIGHTS OF ACTION.......................................................27
16. AGREEMENT OF RIGHTS HOLDERS............................................27
17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.....................28
18. CONCERNING THE RIGHTS AGENT............................................28
19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT..............29
20. DUTIES OF RIGHTS AGENT.................................................29
21. CHANGE OF RIGHTS AGENT.................................................31
22. ISSUANCE OF NEW RIGHTS CERTIFICATES....................................32
23. REDEMPTION AND TERMINATION.............................................33
24. EXCHANGE...............................................................33
i.
Table of Contents
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(continued)
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25. NOTICE OF CERTAIN EVENTS...............................................34
26. NOTICES................................................................35
27. SUPPLEMENTS AND AMENDMENTS.............................................36
28. SUCCESSORS.............................................................36
29. DETERMINATIONS AND ACTIONS BY THE BOARD, ETC...........................36
30. BENEFITS OF THIS AGREEMENT.............................................37
31. SEVERABILITY...........................................................37
32. GOVERNING LAW..........................................................37
33. COUNTERPARTS...........................................................37
34. DESCRIPTIVE HEADINGS...................................................37
EXHIBIT A RESOLUTION OF THE BOARD OF DIRECTORS WITH RESPECT TO
SERIES B PREFERRED SHARES
EXHIBIT B FORM OF RIGHTS CERTIFICATE
ii
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of March 6, 2000 (the "Agreement"), between
QUAKER CHEMICAL CORPORATION, a Pennsylvania corporation (the "Company"), and
AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation (the "Rights
Agent").
BACKGROUND:
On March 6, 2000, the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each Common Share of the
Company outstanding at the Close of Business on March 20, 2000 (the "Record
Date") and has authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of Section 11) for each
Common Share of the Company issued between the Record Date (whether originally
issued or delivered from the Company's treasury) and the Distribution Date,
each Right initially representing the right to purchase one one-hundredth of a
share of Series B Preferred Stock of the Company having the rights, powers and
preferences set forth in the form of the Resolution of the Board attached
hereto as Exhibit A, and upon the terms and subject to the conditions
hereinafter set forth (the "Rights").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, and intending to be legally bound hereby, 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, without the prior approval
of the Board, shall after the date hereof become the Beneficial Owner of 20%
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, (iv)
any entity holding Common Shares for or pursuant to the terms of any such
plan, (v) any Person (an "Excluded Person") who would as of the Close of
Business on the date hereof be deemed to be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph, unless and until such
Excluded Person, without the prior approval of the Board, shall after the
date hereof acquire in one or more transactions, other than upon the exercise
of any options granted by the Company prior to or after the date hereof to
such Excluded Person under any employee benefit plan of the Company,
additional Common Shares aggregating 5% or more of the Common Shares of the
Company then outstanding, and (vi) any Person who is an immediate family
member of an Excluded Person and any trust for the benefit of such immediate
family member or such Excluded Person, which Person or trust acquires from
such Excluded
Person Common Shares (such Common Shares, "Excluded Shares") and any executor
or trustee for the estate of an Excluded Person, unless and until such Person,
trust or executor, together with all Affiliates and Associates of such Person,
trust or executor, shall become the Beneficial Owner of 20% or more of the
Common Shares not including Excluded Shares. Notwithstanding the foregoing,
(i) no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company and, without the prior approval of
the Board, shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company, then such
Person shall be deemed to be an "Acquiring Person," (ii) no Person shall
become an "Acquiring Person" as a result of the acquisition from time to time
of all of such Person's Common Shares in a merger, consolidation or other
combination of the Company with or into another Person if such merger,
consolidation or other combination was approved by the Board, provided,
however, that if after any such acquisition of Common Shares such Person,
without the prior approval of the Board, shall acquire in one or more
transactions additional Common Shares aggregating 5% or more of the Common
Shares of the Company then outstanding and after such acquisition, such
Person, together with all Affiliates and Associates of such Person, is the
Beneficial Owner of 20% or more of the Common Shares of the Company then
outstanding, then as of the date of the acquisition of such additional Common
Shares aggregating 5% or more, such Person shall be deemed to be an
"Acquiring Person" for any purpose of this Agreement, (iii) if the Board
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph,
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, then such Person shall not be deemed to have
become an "Acquiring Person" for any purposes of this Agreement, and (iv) any
Excluded Person who after the Close of Business on the date hereof becomes the
Beneficial Owner of less than 20% of the Common Shares of the Company then
outstanding shall cease to be an Excluded Person.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule l2b-2 of the General Rules and Regulations
under the Exchange Act.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement
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or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for payment, purchase or exchange, or (B) securities issuable
upon exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable 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 (the
"Original Rights") or pursuant to Section 11(i) in connection with an
adjustment made with respect to any Original Rights;
(ii) that such Person or any of such Persons Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule l3d-3 of
the General Rules and Regulations under the Exchange Act), including
without limitation pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this subparagraph (ii) as a result of an oral
or written agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act,
and (B) is not also then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or success or report); or
(iii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to subparagraph (ii) of this Section
1(d)), or disposing of any voting securities of the Company;
provided, however, that nothing in this Section 1(d) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any
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any securities acquired through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the Commonwealth of Pennsylvania are
authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M.,
Philadelphia time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Philadelphia time, on the next
succeeding Business Day.
(h) "Common Share" shall mean, when used with reference to the
Company, a share of common stock, par value $1.00 per share, of the Company
and, to the extent for any purpose that there are not a sufficient number of
Common Shares authorized, shares of any other class or series of the Company
designated for such purpose containing terms substantially similar to the
terms of the Common Shares, except that "Common Share" when used with
reference to any Person other than the Company shall mean the shares of
common stock of such Person with the greatest voting power, or the equity
securities or other equity interest having power to control or direct the
management, of such Person.
(i) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended and in effect on the date of this Agreement. Unless otherwise
specified, where reference is made in this Agreement to sections of, and the
General Rules and Regulations under, the Exchange Act, such reference shall
mean such sections and rules as amended from time to time and any successor
provisions thereto.
(k) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(l) "Final Expiration Date" shall mean March 20, 2010.
(m) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity.
(n) "Preferred Share" shall mean a share of Series B Preferred Stock
of the Company and, to the extent that there are not a sufficient number of
shares of Series B Preferred Stock authorized to permit the full exercise of
the Rights, shares of any other series of Series Preferred Stock of the
Company designated for such purpose containing terms substantially similar to
the terms of the Series B Preferred Stock.
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(o) "Preferred Share Fraction" shall mean one one-hundredth of a
Preferred Share.
(p) "Redemption Date" shall mean the date on which the Rights are
redeemed as provided in Section 23.
(q) "Section 11 (a)(ii) Event" shall mean any event described in
Section 11 (a)(ii) (A), (B), or (C).
(r) "Section" references contained in this Agreement are to the
appropriate Sections of this Agreement, unless the context clearly indicates
to the contrary.
(s) "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a).
(t) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become
such.
(u) "Subsidiary" shall have the meaning ascribed to such term in
Rule l2b-2 of the General Rules and Regulations under the Exchange Act.
(v) "Trading Day" shall have the meaning set forth in Section
11(d)(i).
(w) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
SECTION 2. Appointment of Rights Agents. The Company hereby appoints the
Rights Agent to act as agent for the Company 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. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
Business Day after a Stock Acquisition Date involving an Acquiring Person that
has become such in a transaction (as to which the Board has not made the
determination referred to in Section 11 (a)(ii)(B)), or (ii) the tenth
Business Day (or such later date as may be determined by action of the Board
prior to such time any Person becomes an Acquiring Person) after the date that
a tender or exchange offer (as to which the Board has not made the
determination referred to in Section 11(a)(ii)(B))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 or entity
organized, appointed or established by 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(a) of the General
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Rules and Regulations under the Exchange Act, if upon consummation thereof,
such Person would be the Beneficial Owner of 20% or more of the Common Shares
then outstanding (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 paragraph (b) of this Section 3) by the certificates for the
Common Shares registered in the names of the holders thereof (which
certificates for Common Shares shall be deemed also to be Rights Certificates)
and not by separate certificates, and (y) the Rights (and the right to receive
Rights Certificates) will be transferable only in connection with the
transfer of the underlying Common Shares. The Company must promptly notify
the Rights Agent of such Distribution Date and request that its transfer agent
provide the Rights Agent with a list of the record holders of the Company's
Common Shares as of the close of business on the Distribution Date. As soon
as practicable after the Rights Agent receives such notice and list, the
Rights Agent will send by first-class, postage prepaid mail, to each record
holder of the Common Shares 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, 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 at the time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in accordance
with Section 14) so that Rights Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any fractional Rights.
As of and after the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) With respect to certificates for the Common Shares outstanding
as of the Record Date, until the Distribution Date (or the earlier occurrence
of the Redemption Date or the Final Expiration Date), the Rights will be
evidenced by such certificates registered in the names of the holders
thereof. Until the earlier of the Distribution Date or the Expiration Date,
the transfer of any certificates representing Common Shares in respect of
which Rights have been issued shall also constitute the transfer of the Rights
associated with such Common Shares.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (c)) after the Record Date (or as soon as is
reasonably practicable), but prior to the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date, shall have impressed,
printed, stamped, written or otherwise affixed onto them the following legend:
"This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the Rights
Agreement between Quaker Chemical Corporation (the "Company")
and American Stock Transfer & Trust Company (the "Rights
Agent") dated as of March 6 , 2000 (the "Rights Agreement"),
and as the same may be amended from time to time, the terms of
which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of the Company.
Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and interests therein will
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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 promptly 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
Distribution Date, the Rights associated with the Common Shares represented by
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the transfer of
the Rights associated with the Common Shares represented thereby. In the
event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
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 attached hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate (which do not
affect the duties or responsibilities of the Rights Agent) 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 the Nasdaq
Stock Market on which the Rights may from time to time be listed, or to
conform to usage. Subject to the other provisions of this Agreement, the
Rights Certificates shall entitle the holders thereof to purchase such number
of Preferred Share Fractions as shall be set forth therein at the Purchase
Price, but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price shall be subject to adjustment as provided
in this Agreement.
(b) Any Rights Certificate issued pursuant to this Agreement that
represents Rights that the Company knows are 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 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 to any Person with whom such
Acquiring Person has any continuing oral or written plan, agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer that the Board has determined is part of an oral or written plan,
agreement, arrangement or understanding that has as a primary
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purpose or effect avoidance of Section 7(e) and provided that the
Company shall have notified the Rights Agent that this Section 4(b) applies,
any Rights Certificate issued pursuant to Section 6 or Section 11 upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, 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 defined 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."
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 or any Vice President,
either manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by the
Rights Agent 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
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent 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 Certificates 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 and upon receipt by the Rights
Agent of the notice and list of recordholders of the Rights referred to in
Section 3(a), the Rights Agent will keep or cause to be kept, at its office or
offices designated pursuant to Section 25, 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,
the Certificate number 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 Section 4(b), Section 7(e) and
Section 14, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the earlier of the Redemption Date
or the Final Expiration Date, any Rights
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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 Preferred Share Fractions, as
the Rights Certificate or Certificates surrendered then entitled such holder
or former holder in the case of a transfer 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 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 or Certificates until the registered
holder shall have completed and signed the certificate contained 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) or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14, countersign and deliver
to the Person entitled thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Rights Agent shall not be obligated to
process the transaction until it has received evidence that all taxes and
charges arising from the transaction have been paid. The Company may require
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 Rights 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 satisfactory to them, and 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 will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and 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 Section 7(e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided in this Agreement including, without limitation, the restrictions on
exercisability set forth in Section 9 (c), Section 11(a)(iii) and Section
23(a)) 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 with respect to the total number
of Preferred Share Fractions as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) the Final Expiration Date, or
(ii) the time at which the Rights are redeemed or terminated as provided in
Section 23 (the earlier of (i) or (ii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each Preferred Share Fraction pursuant to
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the exercise of a Right shall initially be $65, and shall be subject to
adjustment from time to time as provided in Section 11 and Section 13(a) and
shall be payable in accordance with Section 7(c).
(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, with respect to each Right so exercised, of
the Purchase Price per Preferred Share Fraction to be purchased as set forth
below and an amount equal to any applicable tax or governmental charge, the
Rights Agent shall, subject to Section 20(k) and Section 14(b), thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Shares
certificates for the total number of Preferred Share Fractions 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
some or all of 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 Preferred Share
Fractions 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 will direct the
depositary agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14, (iii) 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,
deliver such cash, if any, to or upon the order of the registered holder of
such Rights Certificate. The payment of the Purchase Price shall be made, at
the election of the holder of the Rights Certificate, in cash or by certified
bank check or money order payable to the order of the Company.
(d) In case 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 holder, subject to the provisions of Section 6
and Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11 (a)(ii) 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 to
holders of equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing oral or written plan, agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board has determined is part of an oral or written plan,
agreement, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall
-10-
become 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 notify the
Rights Agent when this Section 7(e) applies and shall use all reasonable
efforts to insure that the provisions of this Section 7(e) and Section 4(b)
are complied with, but neither the Company nor the Rights Agent shall have any
liability to any holder of Rights Certificates or other Person as a result of
the Company's failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(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 exercise as set forth in this Section 7 unless such registered
holder shall have (i) properly completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii) provided such ad
ditional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall or
the Rights Agent reasonably requests.
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 any of its
agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the 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 canceled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. Reservation and Availability of Capital Stock: Registration of
Securities.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available for issuance upon the exercise of outstanding
Rights as many of its authorized and unissued Preferred Shares or out of its
authorized and issued Preferred Shares held in its treasury, which together,
shall at all times after the Distribution Date be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the Preferred Shares issuable and deliverable upon
the exercise of the Rights may be listed on any stock exchange, or quoted on
the Nasdaq Stock Market, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares and other
securities reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
-11-
(c) 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 on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11 (a)(iii), or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement or statements
under the Act with respect to the securities purchasable upon exercise of the
Rights on an appropriate form or forms, (ii) cause such registration statement
or statements to become effective as soon as practicable after such filing,
and (iii) cause such registration statement or statements to remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable for
such securities, and (B) the Expiration Date. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states 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 Section 9(c), the exercisability of
the Rights in order to prepare and file such registration statement and permit
it 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. In addition, if the Company shall
determine that a registration statement is required following the Distribution
Date, the Company may, by issuing a public announcement, temporarily suspend
the exercisability of the Rights until such time as a registration statement
has been declared effective. The Company shall notify the Rights Agent
whenever it makes a public announcement pursuant to this Section 9(c) and give
the Rights Agent a copy of the announcement. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained, nor shall the Rights be exercisable if the exercise
thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
Shares or other securities, be duly and validly authorized and issued and,
with respect to Preferred Shares, fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all taxes and governmental charges that may be payable
in respect of the issuance or delivery of the Rights Certificates and of any
certificates for a number of Preferred Share Fractions upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax
that may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a number
of Preferred Share Fractions in respect of a name other than that of the
registered holder of the Rights Certificates evidencing Rights surrendered for
exercise or to issue or deliver any certificates for a number of Preferred
Share Fractions in a name other than that of the registered holder upon the
exercise of any Rights until such tax shall have been paid (any such tax 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 tax
is due.
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SECTION 10. Capital Stock Record Date. Each Person in whose name any
certificate for a number of Preferred Share Fractions (or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of such Preferred Share
Fractions 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 all applicable taxes and
governmental charges) was made; provided, however, that if the date of such
surrender and payment is a date upon which the applicable transfer books of
the Company are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate
shall be dated, the next succeeding Business Day on which the applicable
transfer books of the Company are open. Prior to the exercise of the Rights,
the holder of a Rights Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares 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 shares and other
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.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on any security of the
Company payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares into a
smaller number of 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) and Section 7(e), 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
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
adjusted Purchase Price, the aggregate number and kind of Preferred
Shares or capital stock, as the case may be, that, if such Right had
been exercised immediately prior to such date and at a time when the
Preferred Share transfer books were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this Section 11
(a)(i) and Section 11 (a)(ii), the adjustment provided for in this
-13-
Section 11 (a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11 (a)(ii).
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the Stock Acquisition Date,
directly or indirectly, shall (1) merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and the Common Shares
of the Company or other equity securities of the Company shall remain
outstanding, (2) in one transaction or a series of transactions, transfer
any assets to the Company or to any of its Subsidiaries in exchange (in
whole or in part) for Common Shares, for shares of other equity
securities of the Company, or for securities exercisable for or
convertible into shares of such equity securities (other than pursuant to
a pro rata distribution to all holders of Common Shares), (3) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of assets in one transaction or a series of
transactions, to, from or with (as the case may be) the Company or any of
its Subsidiaries, on terms and conditions less favorable to the Company
than the Company would be able to obtain in arm's-length negotiation with
an unaffiliated third party, other than pursuant to a Section 13 event,
(4) sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of assets having an aggregate fair market value of more
than $5,000,000 in one transaction or a series of transactions, to, from
or with (as the case may be) the Company or any of the Company's
Subsidiaries (other than pursuant to a Section 13 Event, (5) receive any
compensation from the Company or any of the Company's Subsidiaries other
than compensation for full-time employment as a regular employee at rates
in accordance with the Company's (or its Subsidiaries) past practices, or
(6) receive the benefit, directly or indirectly (except proportionately
as a shareholder and except if resulting from a requirement of law or
governmental regulation), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax advantages
provided by the Company or any of its Subsidiaries; or
(B) any Person shall become an Acquiring
-14-
Person unless the event causing such Person to become an Acquiring
Person is a Section 13 Event, or is an acquisition of Common
Shares pursuant to a tender offer or an exchange offer for all
outstanding Common Shares at a price and on terms determined by at least
a majority of the Board, after receiving advice from one or more
nationally recognized investment banking firms, to be in the best
interests of the Company and its shareholders (a "Qualifying Offer"), a
fter taking into consideration all factors that the Board deems relevant,
including, without limitation, effects upon employees, upon suppliers of
the Company and upon the communities in which offices or other
establishments of the Company are located, the long-term prospects and
value of the Company and the prices and terms that such members of the
Board believe, in good faith, could reasonably be achieved if the Company
or its assets were sold on an orderly basis designed to realize maximum
value; or
(C) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of its
Subsidiaries, other than a Section 13 Event or series of such Section 13
Events (whether or not with or into or otherwise involving an Acquiring
Person) that has the effect, directly or indirectly, of increasing by
more than 1% the proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its Subsidiaries that
is directly or indirectly beneficially owned by any Acquiring Person or
any Associate or Affiliate of any Acquiring Person,
then, promptly following the first occurrence of a Section 11(a)(ii)
Event, proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e)) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of the
number of Preferred Share Fractions for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event,
such number of Preferred Share Fractions as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then
number of
-15-
Preferred Share Fractions for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product by 50% of the then current market price (as defined
in and determined pursuant to Section 11(d)) per Preferred Share Fraction
on the date of such first occurrence. In the event that any Person shall
become an Acquiring Person and the Rights shall then be outstanding, the
Company shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights.
From and after the date any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person, any Rights
that are or were acquired or beneficially owned by such Acquiring Person
(or any Associate or Affiliate of such Acquiring Person) shall be void
and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement. No Right Certificate
shall be issued pursuant to this Agreement that represents Rights
beneficially owned by an Acquiring Person (or any Associate or Affiliate
thereof) whose Rights would be void pursuant to the preceding sentence;
no Right Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person (or any Associate or Affiliate thereof)
whose Rights would be void pursuant to the preceding sentence or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person (or any Associate or Affiliate thereof) whose Rights would be
void pursuant to the preceding sentence shall be canceled.
(iii) In the event that the number of Preferred Shares that are
authorized by the Company's Articles of Incorporation but not outstanding
or reserved for issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii) of this Section 11(a),
or should the Board so elect, the Company shall: (A) determine the excess
of the value of the Preferred Shares issuable upon the exercise of a
Right (the "Current Value") over the Purchase Price (such excess, the
"Spread"), and (B) with respect to each Right, make adequate provision to
substitute for the Preferred Shares, upon payment of the applicable
Purchase Price, any one or more of the following having an aggregate
value determined by the Board to be equal to the Current Value: (1) cash,
(2) a reduction in the Purchase Price, (3) Common Shares of the same or a
different class or other equity securities of the Company (including,
without limitation, preferred
-16-
shares or units of preferred shares that the Board has deemed (based,
among other things, on the dividend and liquidation rights of such
preferred shares) to have substantially the same economic value as
Preferred Shares (such preferred shares herein after referred to as
"preferred 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; provided, however, if the
Company shall not have made adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following the later of the
first occurrence of a Section 11(a)(ii) Event and the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the
later of such events 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 Shares (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 thirty (30) day period
set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11 (a)(ii) Trigger Date, in order
that the Company may seek shareholder approval for the authorization of
such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or second sentences
of this Section 11 (a)( iii), the Company shall provide, subject to
Section 7(e), that such action shall apply uniformly to all outstanding
Rights, and may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any 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 make a public announcement when the exercisability of the Rights
has been temporarily suspended, and again when such suspension is no
longer in effect. The Company shall notify the Rights Agent of the
suspension of the exercisability of the Rights, and provide the Rights
Agent with a copy of such public announcement. For purposes of this
Section 11 (a)(iii), the value of the Preferred Shares shall be the
current market price (as determined pursuant to Section 11(d)) per
Preferred Share on the Section 11(a)(ii) Trigger Date and the value of
any "preferred share equivalent" shall be deemed to have the same value
as the Preferred Shares on such date.
-17-
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to holders of any security of the Company
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Shares (or
shares having 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 per 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 Section 11 (d))
per Preferred Share 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 number of Preferred Shares outstanding on such record
date, plus the number of Preferred Shares that 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 convert ible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of 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). In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Company, the Rights Agent and the holders of the
Rights. Preferred Shares owned by or held for the account 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 that would then be in effect
if such record date had not been fixed.
(c) If the Company shall 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 dividend out of the earnings or retained earnings of the
Company), assets (other than a regular quarterly dividend referred to above or
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)), 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)) per Preferred Share on such record date, less the then fair
market value (as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes) of the portion of the cash, assets or evidences
of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a Preferred Share and the denominator of which shall
be such current market price (as determined pursuant to Section 11(d)) per
Preferred Share. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such distribution is not so made,
the
-18-
Purchase Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" of any security (a "Security") on any date shall
be deemed to be the average of the daily closing prices per share of such
Security for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to and 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 shares of such Security or
securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Common Shares, and prior to the
expiration of the requisite thirty (30) Trading Days after the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each
such case, the "current market price" shall be properly adjusted to take
into account ex-dividend trading. The closing price for each 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 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 Common Shares are listed or admitted to trading or,
if the Common Shares 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 the National Association of Securities Dealers,
Inc. Automated Quotation System ("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 the Security
selected by the Board. If on any such date no market maker is making a
market in the Security, the fair value of such shares on such date as
determined in good faith by the Board shall be used. The term "Trading
Day" shall mean a day on which the principal national securities exchange
on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on
-19-
any national securities exchange, a Business Day. If the Security
is not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as determined in
good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per Preferred Share shall be determined in the same manner
as set forth above for the Common Shares in clause (i) of this Section 11
(d) (other than the last sentence thereof). If the current market price
per Preferred Share (or Preferred Share Fraction) 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 Preferred Share shall be
conclusively deemed to be an amount equal to one hundred (as such number
may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations, with respect to the Common Shares
occurring after the date of this Agreement) multiplied by the current
market price per Common Share, and the "current market price" per one
one-hundredth of a Preferred Share shall be equal to the current market
price per share of the Common Shares (as appropriately adjusted). If
neither the Common Shares nor the Preferred Shares are publicly held or
so listed or traded, "current market price" per Preferred Share shall
mean the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(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 one percent (1%) in 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 ten-thousandth of a Common
Share or one millionth of a Preferred Share, 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 (3) years from the date of the transaction that mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
-20-
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained
in Sections 11(a) through (c) inclusive, and the provisions of Sections 7, 9,
10, 13 and 14 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 Preferred Shares
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), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), 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
Preferred Share Fractions (calculated to the nearest one millionth) obtained
by (i) multiplying (x) the number of Preferred Share Fractions 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 Preferred Share Fractions 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 Preferred Share Fractions 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-one millionth of a
Preferred Share) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediate ly 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. The Company shall forward a copy of such public
announcement to the Rights Agent. The record date for the adjustment 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 ten (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, 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 the
-21-
names of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of Preferred Share Fractions issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Preferred Share Fraction and the number of
Preferred Share Fractions that were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated or par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action that may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue such number of fully paid
and nonassessable Preferred Share Fractions 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 for 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 the number of Preferred Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
Preferred Shares and other capital stock or securities of the Co mpany, 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 shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such adjustment, and the
Company shall also deliver a copy of such xxxx or instrument to the Rights
Agent.
(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 that in their good faith judgment the Board shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Shares, (ii) issuance wholly for cash of any Preferred Shares at less than the
current market price, (iii) issuance wholly for cash for Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to
holder s of its Preferred Shares shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it 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)), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)), or (iii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets
-22-
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)), 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 that 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 shareholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27, 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 Record Date and prior
to the Distribution Date (i) declare a dividend on the outstanding Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares,
or (iii) combine the outstanding Common Shares into a smaller number of
shares, unless and until 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.
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief, reasonably detailed statement of the facts and computations
accounting for such adjustment, (b) promptly file with the Rights Agent, and
with each transfer agent for the Preferred Shares and the Common Shares, a
copy of such certificate, and (c) mail a brief summary thereof to each holder
of a Rights Certificate (or, if prior to the Distribution Date, to each holder
of a certificate representing Common Shares) in accordance with Section 25.
The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall have no duty with respect
to and shall not be deemed to have knowledge of any such adjustment unless and
until it shall have received such a certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or
-23-
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
which complies with Section 11 ( o)), 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 which complies
with Section 11 (o)) shall consolidate with, or merge with or 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 changed 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), in one transaction
or a series of related transactions, assets or earning power aggregating more
than 50% of the assets, operating income, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11 (o)), then, and in each
such case and except as contemplated by subsection (d), proper provision shall
be made so that: (i) each holder of a Right, except as otherwise provided in
Section 7(e), 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 such number of shares of Preferred Share
Fractions for which a Right is then exercisable, such number of validly
authorized and issued, fully paid, non assessable and freely tradable Common
Shares of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
clai ms, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of Preferred Share Fractions for which a
Right is exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 1 1(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such shares for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and (2) dividing that product (which, following the
first occurrence of a Section 13 Event, shall be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of the
cur rent market price (determined pursuant to Section 11(d)) per Common Share
of such Principal Party on the date of consummation of such Section 13 Event;
(ii) such Principal Party shall 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 assure 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 provis ions of Section 11(a)(ii) shall be
of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean: (i) in the case of any transaction
described in clause (x) or (y) of the first sentence of subsection (a), the
Person that is the issuer of any securities into which Common Shares of the
Company are converted in such merger or
-24-
consolidation, and if no securities are so issued, the Person that is the
other party to such merger or consolidation; and (ii) in the case of any
transaction described in clause (z) of the first sentence of subsection (a),
the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions;
provided, however, that in either case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person, and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Shares that 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 subsections (a) and (b) of this Section
13 and further providing that, as soon as practicable after the date of any
Section 13 event, the Principal Party will (i) prepare and file a registration
statement under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and will 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) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under blue sky laws
of such jurisdiction, 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 that comply in all respects with the requirements
for registration on Form 10 under the Exchange Act. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.
(d) In case the Principal Party which is to be a party to a Section 13
Event has provision in any of its authorized securities or in its Charter or
Bylaws 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 the Section 13
Event, shares of Common Stock of such Principal Party at less than the then
current market price per share (determined pursuant to Section 11) or
securities exercisable for, or convertible into, Common Stock 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 Stock of such Principal Party pursuant to the provisions of Section
13; then, in 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 canceled, waived
or amended,
-25-
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 of the proposed transaction.
SECTION 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Rights Certificates that evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid 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 purposes of this subsection (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 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. 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 shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares, except in each case for 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 a Preferred Share. For purposes of this subsection (b), the
current market value of one Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to Section 11(d)(ii)) for the Trading
Day immediately prior to the date of such exercise.
(c) Whenever a payment for fractional Rights or fractional shares is
to be made by the Rights Agent, the Company shall (i) promptly prepare and
deliver to the Rights Agent a certificate setting forth in reasonable detail
the facts related to such payment and the process and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights
Agent in the form of collected funds to make such payments. The Rights Agent
shall be fully protected in relying on such certificate and shall have no
duty with respect to and shall not be deemed to have knowledge of any payment
for fractional Rights or fractional shares
-26-
Section 14 unless and until it shall have received such a certificate
and sufficient monies.
(d) The holder of a Right by the acceptance thereof expressly waives
any 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 are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the Common Shares), 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), may, in said holder's own
behalf and for said holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, said 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 or beneficial interests therein,
it is specifically acknowledged that the holders of Rights or beneficial
interests therein would not have an adequate remedy at law for any breach of
this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this
Agreement. Holders of Rights shall be entitled to recover the reasonable
costs and expenses, including attorney's fees, incurred by them in any action
to enforce the provisions of this Agreement in which they successfully
prosecute their claims.
SECTION 16. Agreement of Rights Holders. Every holder of a Right or a
beneficial interest in a Right by accepting the same consents and agrees with
the Company and the Rights Agent and with every other such holder that:
(a) Prior to the Distribution Date, beneficial interests in the
Rights will be transferable only in connection with the transfer of Common
Shares;
(b) After the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office 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 fully executed;
(c) Subject to Section 6(a) and Section 7(f), the Company and the
Rights Agent may deem and treat the Person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Share certificate)
is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Share certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be required to be affected by
any notice to the contrary; and
-27-
(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 a beneficial interest in a Right or 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, judgment or ruling (whether interlocutory or 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, judgment or ruling
lifted or otherwise overturned as soon as possible.
SECTION 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of Preferred
Share Fractions or any other securities of the Company (including the Common
Shares) that 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 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 Section 24), 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 hereof.
SECTION 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the preparation, execution,
delivery, amendment, administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent and its directors, officers, employees and agents,
for and to hold each of them harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent or any such indemnified party, for any action taken, suffered or
omitted by the Rights Agent in connection with the acceptance or
administration of this Agreement or the exercise of its duties hereunder,
including without limitation the costs and expenses of defending against any
claim of liability in the premises.
(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 the acceptance and administration of this Agreement or in the exercise of
its duties hereunder in reliance upon any Rights Certificate or certificate
for Common Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine
-28-
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 Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services or stock transfer 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 paper or any further act on
the part of any of the parties hereto; provided, however, that such Person
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement any of the Right
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 Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
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 Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case 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 Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations, and only the duties and obligations, expressly imposed
by this Agreement (and no implied duties or obligations) upon the following
terms and conditions, by all of which the Company and the holders of Rights
Certificates or beneficial interests in the Rights, 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 advice or written opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent, and the Rights Agent shall incur no liability for or in respect of, any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or 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")
-29-
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 herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, 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 and the Rights Agent shall
incur no liability for or in respect of 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; provided, however that the
Rights Agent shall not be liable for special, indirect, incidental or
consequential loss or damage of any kind whatsoever, even if the Rights Agent
has been advised of the likelihood of such loss or damage.
(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 liability or
responsibility in respect of the validity of any provision 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
adjustment required under the provisions of this Agreement or responsible for
the manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights 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
Common Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Common Shares or Preferred Shares will, when
so issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, 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 such instructions shall be full authorization
and protection for the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted to be
taken by it in good faith in accordance with
-30-
with instructions of any such officer. The Rights Agent may conclusively rely
on the most recent instructions provided to it by any such officer.
(h) The Rights Agent and any shareholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniary 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 the Rights Agent under this Agreement and none of such actions shall
constitute a breach of trust. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other Person or
legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, 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 or any other Person
resulting from any such act, default, neglect or misconduct, absent gross
negligence, bad faith or willful misconduct 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
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(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 thirty (30) days prior written notice 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 thirty (30) days prior written notice mailed to the Rights Agent or
successor Rights Agent, as the case may be, 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. 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 thirty (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 a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then
any registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of
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a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a Person organized, doing business
and in good standing under the laws of the United States or of any state,
having a principal office in the State of New York or the Commonwealth of
Pennsylvania, that is authorized by law to exercise shareholder services and
stock transfer powers and is subject to supervision or examination by federal
or state authority and that has 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
any such Person. 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 Preferred Shares and mail a notice thereof in
writing to the registered holders of the Rights Certificates or, prior to the
Distribution Date, to the registered holders of the Common Shares. In case at
the time such successor Rights Agent shall succeed to the agency and trust
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 a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case 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 or
in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement. 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 its Board of Directors 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
accordance with the provisions of this Agreement. In addition, in connection
with the issuance, sale or delivery of Common Shares following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to Common Shares so issued, sold or delivered
pursuant to the exercise of stock options, stock appreciation rights, grants
or awards outstanding on the Distribution Date under any benefit plan or
arrangement for employees or directors, or upon the exercise, conversion or
exchange of securities outstanding on the Record Date or hereinafter 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 the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or 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 shall otherwise have been made in
lieu of the issuance
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thereof.
SECTION 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the earlier
of (i) the Close of Business on the tenth day following a Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred prior to the
Record Date, the Close of Business on the tenth day following the Record
Date), or (ii) the Close of Business on 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") and the Company may, at its option, pay the Redemption Price either in
Common Shares (based on the "current market price," as defined in Section
11(d), of the Common Shares at the time of redemption) or cash; provided,
however, that if, following the occurrence of a Stock Acquisition Date and
following the expiration of the right of redemption hereunder but prior to
any Triggering Event, (i) an Acquiring Person shall have transferred or
otherwise disposed of a number of Common Shares in one transaction or series
of transactions, not directly or indirectly involving the Company or any of
its Subsidiaries, which did not result in the occurrence of a Triggering Event
such that such Person is thereafter a Beneficial Owner of 10% or less of the
outstanding Common Shares, and (ii) there is no other Acquiring Person
immediately following the occurrence of the event described in clause (i),
then the right of redemption shall be reinstated and thereafter be subject to
the provisions of this Section 23. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11 (a)(ii) Event until such time as the
Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board ordering the redemption
of the Rights, without any notice, or further action, the right to exercise
the Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board 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, in the case of notice to holders,
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. Any notice that is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made.
SECTION 24. Exchange.
(a) The Board may, at its option, 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) and Section 11(a)(ii)) for
Preferred Shares or Common Shares at an exchange ratio of one one-hundredth of
a Preferred Share or one Common Share per Right, appropriately adjusted to
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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 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 organized, appointed or
established by 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 fifty percent (50%) or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board ordering the exchange
of any Rights pursuant to subsection (a) and without any further action and
without any notice, the right to exercise such Rights shall terminate and the
only right thereafter of the holders of such Rights shall be to receive that
number of Preferred Shares or Common Shares equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall
promptly 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 shall promptly notify the Rights Agent of any
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 will 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 void pursuant to the
provisions of Section 7(e) and Section 11(a)(ii)) held by each holder of
Rights.
(c) In the event that there shall not be sufficient Preferred Shares
authorized by the Company's articles of incorporation and not outstanding or
subscribed for, or reserved or otherwise committed for issuance for purposes
other than upon exercise of Rights, 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 Preferred Shares for
issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of
Preferred Shares or to distribute certificates which evidence fractional
Preferred Shares, other than as provided in Section 14.
SECTION 25. Notice of Certain Events.
(a) If the Company shall after the Distribution Date propose (i) to
pay any dividend payable in stock of any class to the holders of its Preferred
Shares or to make any other distribution to the holders of its Preferred
Shares, (ii) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the
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subdivision of outstanding shares of Preferred Shares, (iv) to effect any
consolidation or merger into or with, 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, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, (v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Preferred Shares
payable in shares of Preferred Shares or to effect a subdivision, combination
or consolidation of the Preferred Shares (by reclassification or otherwise
than by payment of dividends in shares of Preferred Shares), then, in each
such case, the Company shall give to the Rights Agent and each holder of a
Rights Certificate, in accordance with Section 26, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or 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 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 ten (10) 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 ten (10) days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of the Preferred Stock, whichever shall be the earlier.
(b) If a Section 11(a)(ii) Event shall occur, then the Company shall
as soon as practicable thereafter give to the Rights Agent and each holder of
a Rights Certificate, in accordance with Section 26, a notice of the
occurrence of such Event, which notice shall describe such Event and the
consequences of such Event to holders of Rights.
SECTION 26. Notices. 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:
Quaker Chemical Corporation
Elm and Xxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or 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:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the
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Rights Agent to the holder of any Rights Certificate (or, if prior to the
Distribution Date to the holder of certificates representing Common Shares)
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. The Company may from time to
time, and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Right Certificates
in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, or to make any change to or delete any provision hereof or
to adopt any other provisions with respect to the Rights which the Company may
deem necessary or desirable. Any such supplement or amendment will be
evidenced by a writing signed by the Company and the Rights Agent; provided,
however, that from and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended or supplemented in any manner
which would adversely affect the interests of the holders of Rights (other
than an Acquiring Person and its Affiliates and Associates). Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares. 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, the Rights Agent shall execute such supplement or
amendment, and such supplement or amendment shall be effective regardless of
whether or when executed by the Rights Agent. Notwithstanding any other
provision hereof, the Rights Agent's consent must be obtained regarding any
supplement or amendment pursuant to this Section 27 which alters the Rights
Agent's rights or duties.
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, etc. For all
purposes of this Agreement, any calculation of the number of Common Shares
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 General Rules and Regulations under the Exchange
Act. The Board shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to
the Board 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 or supplement the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) that are done or made by
the Board 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 to any liability to the holders of the Rights.
For purposes of this Agreement, the Rights Agent shall be allowed to assume
that all such actions, calculations, interpretations and
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determinations have been done or made by the Board in good faith.
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; but this Agreement
shall be for the sole and exclusive benefit of 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).
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 for any purpose or under
any set of circumstances or as applied to any Person, such invalid, void or
unenforceable term, provision, covenant or restriction shall continue in
effect to the maximum extent possible for all other purposes, under all other
circumstances and as applied to all other Persons; and 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 determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in
Section 23 shall be reinstated and shall not expire until the Close of
Business on the tenth day following the date of such determination by the
Board.
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 Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania applicable to contracts made and to be performed entirely within
the Commonwealth of Pennsylvania.
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 provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
QUAKER CHEMICAL CORPORATION AMERICAN STOCK TRANSFER &
TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
----------------------------- ------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Chairman Title: Vice President
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EXHIBIT A
---------
RESOLUTION OF THE BOARD OF DIRECTORS OF
QUAKER CHEMICAL CORPORATION
ESTABLISHING AND DESIGNATING
SERIES B PREFERRED STOCK
AS A SERIES OF THE PREFERRED STOCK
RESOLVED, that pursuant to the authority expressly vested in the Board of
Directors of Quaker Chemical Corporation (the "Corporation") by Article FIFTH
of the Articles of Incorporation of the Corporation, the Board of Directors
hereby fixes and determines the voting rights, designations, preferences,
qualifications, privileges, limitations, restrictions, options, conversion
rights and other special or relative rights of a series of Preferred Stock, as
follows:
Section 1. Designation, Par Value and Amount. The shares of such series
shall be designated as "Series B Preferred Stock" (hereinafter referred to as
"Series B Preferred"), the shares of such series shall be with par value of
$.01 per share, and the number of shares constituting such series shall be
500,000; provided, however, that, if more than a total of 500,000 shares of
Series B Preferred shall be issuable upon the exercise of Rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of March 6, 2000
between the Company and American Stock Transfer & Trust Company, as Rights
Agent (as amended from time to time) (the "Rights Agreement"), the Board of
Directors, pursuant to the Business Corporation Law of the Commonwealth of
Pennsylvania, shall direct by resolution or resolutions that a statement be
properly executed, acknowledged and filed providing for the total number of
shares of Series B Preferred authorized to be issued to be increased (to the
extent that the Articles of Incorporation then permits) to the largest number
of whole shares (rounded up to the nearest whole number) issuable upon
exercise of the Rights.
Section 2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series B Preferred with respect to dividends, the holders of shares
of Series B Preferred, in preference to the holders of shares of Common Stock,
par value $1.00 per share, of the Corporation ("Common Stock") and any other
junior 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 30th day of each of April, July, October and
January in each year (or, in each case, if not a date on which the Corporation
is open for business, the next succeeding business day) or such earlier date
in any such month on which dividends on the Common Stock are payable (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 B Preferred, in an amount
per share (rounded to the nearest cent) equal to 100 times the aggregate per
share amount of all cash dividends and 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 B Preferred. In the event the Corporation shall at any time after
March 6, 2000 (the "Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of shares
of Series B Preferred were entitled immediately prior to such event under
clause (b) 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 B Preferred as provided in paragraph (a) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock).
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series B Preferred, 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 B Preferred 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 B
Preferred in an amount 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 B Preferred entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series B Preferred
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Preferred shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of the stockholders of the Corporation. In
the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
number of votes per share to which holders of shares of Series B Preferred
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 B Preferred and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of stockholders
of the Corporation.
(c) Except as set forth herein, holders of Series B Preferred 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.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred 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 B Preferred 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 B Preferred;
(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
B Preferred, except dividends paid ratably on the Series B Preferred 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;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred,
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares
of any stock of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series B Preferred;
or
(iv) purchase or otherwise acquire for consideration any shares
of Series B Preferred, or any shares of stock ranking on a parity with
the Series B Preferred, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series B Preferred 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 Series B Preferred and
may be reissued as part of a new series of Series B Preferred 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. (a) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred unless, prior thereto, the holders of
shares of Series B Preferred shall have received $1.00 per share (the "Series
B Liquidation Preference"), plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment. Following the payment of the full amount of the Series B
Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series B Preferred unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series B
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph (c) below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series B Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Series B Preferred and Common Stock, respectively,
holders of Series B Preferred and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to one with respect to such
Series B Preferred and Common Stock, on a per share basis, respectively.
(b) In the event there are not sufficient assets available to permit
payment in full of the Series B Liquidation Preference and the liquidation
preferences of all other series of Series B Preferred, if any, which rank on a
parity with the Series B Preferred, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to
their respective liquidation preferences. In the event there are not
sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(c) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment 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.
Section 7. Consolidation, Merger, etc. 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 any other property, then in any such case the
shares of Series B Preferred 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 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 after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series B Preferred 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 are
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series B Preferred shall not be
redeemable.
Section 9. Ranking. The Series B Preferred shall rank junior to all
other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment. The Articles of Incorporation of the Corporation
shall not be further amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series B Preferred so
as to affect them adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series B Preferred, voting
separately as a class.
Section 11. Fractional Share. Series B Preferred may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holders fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series B Preferred.
EXHIBIT B
---------
FORM OF RIGHTS CERTIFICATE
Certificate No. R-________ ________________ Rights
NOT EXERCISABLE AFTER MARCH 20, 2010 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY
ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR 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
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 NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.]*
Rights Certificate
QUAKER CHEMICAL CORPORATION
This certifies that _________________________________________, or
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of March 6, 2000
(the "Rights Agreement"), between Quaker Chemical Corporation, a Pennsylvania
corporation (the "Company"), and American Stock Transfer & Trust Company (the
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 P.M., Philadelphia time, on March 20, 2010 at the designated office of
the Rights Agent, or at the office of its successor as Rights Agent, one
one-hundredth of a fully paid, non-assessable share of Series B Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Company, at a
purchase price of $65 (the "Purchase Price") per one one-hundredth of a share
of Preferred Stock (each such one one-hundredth of a share being a "Unit"),
upon presentation and surrender of this Rights Certificate with the
certification and the Form of Election to Purchase duly executed. The number
of Rights evidenced by this Rights Certificate (and the number of Units which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
per Unit set forth above, are the number and Purchase Price as of March 20,
000, based on the Preferred Stock as constituted at such
---------------
*The portion of the legend in brackets shall be inserted only if applicable,
and shall replace the preceding sentence.
date. As provided in the Rights Agreement, the Purchase Price and the
number of Units which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events.
From and after the occurrence of any of the events described in Section
11 (a)(ii) of the Rights Agreement, if the Rights evidenced by this Rights
Certificate are or were at any time on or after the earlier of (x) the Stock
Acquisition Date (as such term is defined in the Rights Agreement) and (y) the
Distribution Date (as such term is defined in the Rights Agreement)
beneficially owned by an Acquiring Person or an Associate or Affiliate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall become null and void, and any holder of such Rights shall
thereafter have no right to exercise such Rights.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates.
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.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office of the Rights Agent, 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
shares of Preferred Stock or Units as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase. If this Rights Certificate shall be exercised in part, the
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 a redemption price
of $.01 per Right or (ii) may be exchanged in whole or in part for Preferred
Stock.
No fractional share of Preferred Stock 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 share of Preferred Stock), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the shares of Preferred
Stock 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 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 any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends 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.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ______________, 20___.
ATTEST: QUAKER CHEMICAL CORPORATION
BY:____________________________________ By:_________________________________
Name: Name:
Title: Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
By:____________________________________
Authorized Signatory
Date of Countersignature:
__________________________, 20____
[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 Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned 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:
__________________________________
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: QUAKER CHEMICAL CORPORATION:
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Rights Certificate to purchase the Preferred Stock
or Units issuable upon the exercise of the Rights (or such other securities of
the Company or of any other person that may be issuable upon the exercise of
the Rights) and requests that certificates for such securities be issued in
the name of and delivered to:
Please insert social security
or other identifying number
______________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
______________________________________________________________________________
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, the
undersigned [ ] 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:
_______________________________
NOTICE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Rights Agent, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Rights Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement) and
such Assignment or Election to Purchase will not be honored.
