Exhibit 4.1
APW LTD.
and
FIRSTAR BANK N.A.
as Rights Agent
RIGHTS AGREEMENT
Dated as of ______, ____
TABLE OF CONTENTS
Section Page
------- ----
1. Certain Definitions............................................................................. 4
2. Appointment of Rights Agent..................................................................... 8
3. Issue of Rights Certificates.................................................................... 8
4. Form of Rights Certificates..................................................................... 10
5. Countersignature and Registration............................................................... 10
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates....................................... 11
7. Exercise of Rights; Purchase Price; Expiration Date of Rights................................... 12
8. Cancellation and Destruction of Rights Certificates............................................. 14
9. Reservation and Availability of Common Stock.................................................... 14
10. Common Stock Record Date........................................................................ 16
11. The Flip-In..................................................................................... 16
12. The Flip-Over................................................................................... 17
13. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights............................................................................ 20
14. Fractional Rights and Fractional Shares......................................................... 25
15. Rights of Action................................................................................ 26
16. Agreement of Rights Holders..................................................................... 26
17. Rights Holder Not Deemed a Shareholder.......................................................... 27
18. Concerning the Rights Agent..................................................................... 27
19. Merger or Consolidation or Change of Name of Rights Agent....................................... 27
2
20. Duties of Rights Agent......................................................................... 28
21. Change of Rights Agent......................................................................... 30
22. Issuance of New Rights Certificates............................................................ 31
23. Redemption and Termination..................................................................... 31
24. Exchange....................................................................................... 32
25. Notice of Certain Events....................................................................... 33
26. Notices........................................................................................ 34
27. Supplements and Amendments..................................................................... 35
28. Determination and Actions by the Board of Directors............................................ 35
29. Successors..................................................................................... 35
30. Benefits of this Agreement..................................................................... 35
31. Severability................................................................................... 36
32. Governing Law.................................................................................. 36
33. Counterparts................................................................................... 36
34. Descriptive Headings........................................................................... 36
EXHIBITS
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EXHIBIT A -- Forms of Rights Certificates
EXHIBIT B -- Form of Rights Summary
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of ____________, 2000 (the "AGREEMENT"), between
APW LTD., a Bermuda corporation (the "COMPANY"), and FIRSTAR BANK N.A. (the
"Rights Agent").
W I T N E S S E T H:
WHEREAS, on ______, 2000 the Board of Directors of the Company authorized
and declared a dividend distribution of one Right (as defined below) for each
outstanding share of common stock, par value $.001 per share, of the Company
(the "COMMON STOCK") outstanding on ________, 2000 (the "RECORD DATE"), and the
issuance of one Right for each share of Common Stock of the Company issued
between the Record Date and the Separation Date and one Right for each share of
Common Stock of the Company issued upon exercise of stock options granted prior
to the Separation Date or under any employee plan or arrangement established
prior to the Separation Date, each Right representing the right to purchase one
share of Common Stock, 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, 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 (as such term is hereinafter
defined) who or which, together with all Affiliates (as hereinafter defined) and
Associates (as hereinafter defined) of such Person, shall be the Beneficial
owner (as hereinafter defined) of 15% or more of the shares of Common Stock then
outstanding and shall include all Affiliates and Associates of such Person, but
shall not include the (i) Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company or any Subsidiary of the Company (iv) any
Person or entity holding shares of Common Stock organized, appointed or
established by the Company for or pursuant to the terms of any such plan, or (v)
an institutional investor who qualifies for use of a Schedule 13G and files a
Schedule 13G provided it does not state any intention or reserve the right to
control or influence the Company. Notwithstanding the foregoing, no Person
shall become an Acquiring Person as a result of an acquisition of Common Stock
by the Company which by reducing the number of shares outstanding increases the
proportionate number of shares beneficially owned to 15% or more of the Common
Stock then outstanding.
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(b) "AFFILIATE" shall mean, with respect to a specified Person, a Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person specified.
(c) "ASSOCIATE" shall mean, with respect to a specified Person, (i) any
corporation or organization (other than the Company or a Subsidiary of the
Company) of which such Person is an officer, director or partner or is, directly
or indirectly, the beneficial owner of 10% or more of any class of equity
security as defined in Rule 3a-11 of the General Rules and Regulations under the
Exchange Act (or any successor rule or statutory provision), (ii) any trust or
other estate in which such Person has a substantial beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary capacity, and
(iii) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person, or is an officer or director of any
corporation controlling or controlled by such Person.
(d) "BENEFICIAL OWNERSHIP" shall be determined pursuant to Rule 13d-3 of
the General Rules and Regulations under Exchange Act (or any successor rule or
statutory provision) or, if Rule 13d-3 shall be rescinded and there shall be no
successor rule or statutory provision thereto, pursuant to Rule 13d-3 as in
effect on the date hereof; provided, however, that a Person shall, in any event,
also be deemed to be the "Beneficial Owner" of any securities:
(i) which such Person or any Affiliate or Associate thereof
beneficially owns, directly or indirectly;
(ii) which such Person or any Affiliate or Associate thereof,
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 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 or on behalf of
such Person or any Affiliate or Associate thereof until the tendered
securities are accepted for purchase or exchange, or (B) securities
issuable upon exercise of the Rights;
(iii) which such Person or any Affiliate or Associate thereof,
directly or indirectly, has sole or shared voting or investment power with
respect thereto 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 (iii) as a result of an agreement, arrangement or
understanding to vote such security if the agreement, arrangement or
understanding (A) arises solely from a revocable
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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
(iv) which are beneficially owned, directly or indirectly, by any other
Person or any Affiliate or Associate thereof with which such Person or any
Affiliate or Associate thereof 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
subparagraph (iii) of this paragraph (e)) or disposing of any voting
securities of the Company.
Nothing in this Section 1(d) shall cause a Person engaged in business as an
underwriter to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of such
acquisition.
(e) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the Country of Bermuda are authorized or
obligated by law or executive order to close.
(f) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., Central
Standard time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Central Standard time, on the next
succeeding Business Day.
(g) "CLOSING PRICE" of any security on any given day shall be the last
sale price, regular way, of such security or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, on
the principal trading market on which such security is then traded.
(h) "COMMON STOCK" shall mean the common stock, par value $.001 per share,
of the Company; and "COMMON STOCK" when used with reference to any Person other
than the Company shall mean the capital stock 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) "CURRENT MARKET PRICE" of any security on any given day shall be
deemed to be the average of the daily Closing Prices per share or other trading
unit of such security for 10 consecutive Trading Days (as hereinafter defined)
immediately preceding such date; provided, however, that with respect to shares
of capital stock, in the event that the current market price per share of the
capital stock is determined during a period following the announcement of (i) a
dividend or distribution on the capital stock payable in shares of such capital
stock or securities convertible into shares of such capital stock (other than
the Rights), or (ii) any subdivision, combination or
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reclassification of the capital stock, and prior to the expiration of the
requisite 10 Trading Day period, as set forth above, 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; and
provided further that if the security is not publicly held or not so listed or
traded, Current Market Price per share or other trading unit shall mean the fair
value per share or other trading unit as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(j) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement, and all references to any
rule or regulation of the General Rules and Regulations under the Exchange Act
shall be, except as otherwise specifically provided herein, to such rule or
regulation as was in effect on the date of this Agreement.
(k) "EXCHANGE DATE" shall mean the date at which the Rights are exchanged
as provided in Section 24 of this Agreement.
(l) "EXPIRATION DATE" shall mean the Close of Business on _______, 20__
subject to extension as provided in Section 12(c) of this Agreement.
(m) "FLIP-IN EVENT" shall mean any Person becoming an Acquiring Person.
(n) "FLIP-OVER EVENT" shall mean any of the events described in Section
12(a) of this Agreement.
(o) "PERSON" shall mean any individual, firm, corporation, partnership or
other entity and shall include any "group" as that term is used in Rule 13d-5(b)
under the Exchange Act (or any successor rule or statutory provision).
(p) "PURCHASE PRICE" shall mean with respect to each Right, the price set
forth in Section 7(b) of this Agreement (subject to adjustment).
(q) "PRINCIPAL PARTY" shall have the meaning set forth in Section 12(b) of
this Agreement.
(r) "REDEMPTION DATE" shall mean the time at which the Rights are ordered
to be redeemed pursuant to Section 23 of this Agreement.
(s) "SEPARATION DATE" shall mean the earlier of (i) the tenth day after
the Stock Acquisition Date (as hereinafter defined) or (ii) the tenth day after
the date of the commencement of, or first public announcement of the intent to
commence, a tender or
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exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company or any entity holding shares of Common Stock organized, appointed or
established by the Company for or pursuant to the terms of any such plan), if
upon consummation thereof, such Person would be the Beneficial Owner of 50% or
more of the shares of Common Stock then outstanding (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights).
(t) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement by the Company, an Acquiring Person or otherwise, that an Acquiring
Person, has become such.
(u) "SUBSIDIARY" shall mean, with reference to any Person, any corporation
of which a majority of any class of equity security is Beneficially Owned,
directly or indirectly, by such Person.
(v) "TRADING DAY," with respect to any security 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 any national securities exchange, a
Business Day.
(w) "TRIGGERING EVENT" shall mean a Flip-In Event or a Flip-Over Event.
Any determination required by the definitions contained in this Section 1
shall be made by the Board of Directors of the Company in its good faith
judgment, which determination shall be final and binding on the Rights Agent.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 of this Agreement, shall prior to the Separation
Date also be the holders of the Common Stock) 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 Separation Date, (i) the Rights will be evidenced by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (ii) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company).
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(b) As soon as practicable after the Separation Date, the Rights Agent
will send by first-class, postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Separation Date, at the address
of such holder shown on the records of the Company, a Rights certificate (the
"RIGHTS CERTIFICATE"), evidencing one Right (as adjusted from time to time prior
to the Separation Date pursuant to this Agreement) for each share of Common
Stock so held. As of and after the Separation Date, the Rights will be
evidenced solely by Rights Certificates.
(c) As soon as practicable after the Record Date, the Company will send a
copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit B (the "SUMMARY OF RIGHTS"), by first-class, postage prepaid mail to
each record holder of the Common Stock as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the Company.
(d) Certificates for the Common Stock issued after the Record Date, but
prior to the earlier of the Separation Date or the Expiration Date (as
hereinafter defined), shall be deemed also to be certificates for Rights, and
shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between APW Ltd. (the
"Company") and Firstar Bank N.A., dated as of _________, ____ (the "Rights
Agreement"), 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 will no longer be
evidenced by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor. Under certain circumstances, Rights
beneficially owned by Acquiring Persons (as defined in the Rights
Agreement) become null and void and the holder of such Rights (including
any subsequent holder) shall not have any right to exercise the Rights.
(e) After the Separation Date, but prior to the Expiration Date, Rights
shall be issued in connection with the issuance of Common Stock upon the
exercise of stock options granted prior to the Separation Date or pursuant to
other benefits under any employee plan or arrangement established prior to the
Separation Date; provided, however, that if, pursuant to the terms of any option
or other benefit plan, the number of shares issuable thereunder is adjusted
after the Separation Date, the number of Rights issuable upon issuance of the
shares shall be equal only to the number of shares which would have been
issuable prior to the adjustment.
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Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the form of election to purchase shares
and form of assignment) shall be in substantially the form attached hereto as
Exhibit A and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or to conform to
usage. Subject to the provisions of this Agreement, the Rights Certificates,
whenever issued, shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of shares of Common Stock
which shall be set forth therein at the Purchase Price set forth therein,
subject to adjustment as provided in this Agreement.
(b) Any Rights Certificate issued pursuant to Section 3(a) of this
Agreement that represents Rights beneficially owned by an Acquiring Person or
that represents any Rights owned on or after the Separation Date by any Person
who subsequently becomes an Acquiring Person and any Rights Certificate issued
at any time upon the transfer of any Rights to an Acquiring Person or to any
nominee of such Acquiring Person and any Rights Certificate issued pursuant to
Section 6 or Section 13 of this Agreement upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence, may
contain 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). This Rights Certificate and the Rights represented
hereby may become 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
the Chairman of its Board of Directors, its President, its Secretary, 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. Each Rights Certificate 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 counter-
signature by the Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the
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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 Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Separation Date, the Rights Agent will keep or cause to
be kept, at one of its offices, 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 by each of the Rights Certificates, and 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 14 of this Agreement, at any time
after the Close of Business on the Separation Date, and at or prior to the Close
of Business on the Expiration Date, any Rights Certificate or Certificates may
be transferred, split up, combined or exchanged for another Rights Certificate
or Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock (or other securities, cash or other property, as the case
may be) 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 principal office of the
Rights Agent designated for such purpose. Thereupon, the Rights Agent shall
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. 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 reasonably 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.
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Until the Separation Date, no Right may be exercised. Each Right
shall entitle (except as otherwise provided in this Agreement) the registered
holder thereof, upon the exercise thereof as provided in this Agreement, to
purchase, for the Purchase Price, at any time after the Separation Date and
prior to the earliest of the Expiration Date, the Exchange Date and the
Redemption Date, one share of Common Stock, subject to adjustment from time to
time as provided in Section 13 of this Agreement, payable in lawful money of the
United States of America in accordance with Paragraph (c) below.
(b) Subject to Section 7(e), Section 23(a) and Section 24 of this
Agreement, the registered holder of any Rights Certificate may exercise the
Rights evidenced thereby in whole or in part at any time after the Separation
Date upon surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof including the certificate contained therein
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each share of Common Stock as to
which the Rights are exercised prior to the earliest of the Expiration Date, the
Exchange Date and the Redemption Date. The Purchase Price for each share of
Common Stock purchasable pursuant to the exercise of a Right shall initially be
$15.00 (Fifteen & 00/100 dollars), and shall be payable in lawful money of the
United States of America in accordance with Paragraph (c) below. The Purchase
Price and the number of shares of Common Stock to be acquired upon exercise of a
Right shall be subject to adjustment from time to time as provided in Section 13
of this Agreement.
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase including the certificate contained
therein duly executed, accompanied by payment of the Purchase Price for the
shares (or cash or other assets as the case may be) to be purchased and an
amount equal to any applicable transfer tax in cash, or by certified check or
bank draft payable to the order of the Company, the Rights Agent shall thereupon
promptly:
(i)(A) requisition from any transfer agent of the Common Stock
certificates for the total number of shares of Common Stock to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) requisition from the depositary agent
depositary receipts representing such number of shares of Common Stock as
are to be purchased (in which case certificates for the shares of Common
Stock 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;
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(ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 of this
Agreement;
(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, deliver such cash, if any, to or upon the order of
the registered holder of such Rights Certificate.
In the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to this Agreement,
the Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.
(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 the registered holder of such Rights Certificate
or to his duly authorized assigns, subject to the provisions of Section 6 and
Section 14 of this Agreement.
(e) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of the earlier of (x) the date on which the Board of Directors of the
Company decides to exchange the Rights pursuant to Section 24 of this Agreement
and (y) a Triggering Event, any unexercised 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 Associate or Affiliate thereof) who
becomes a transferee after the Acquiring Person becomes such, (iii) a transferee
of an Acquiring Person (or of any Associate or Affiliate thereof) 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 agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall immediately
become permanently null and void without any further action, and no holder of
such Rights shall have any right whatsoever with respect to such Rights under
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) of this
Agreement are complied with, but shall have no liability to any holder of Rights
Certificates or to any other Person as a result of
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its 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 of any Rights Certificate upon the occurrence of
any purported exercise thereof unless such registered holder shall have (i)
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 additional evidence of the identity of the
Beneficial Owner (or former or proposed Beneficial Owner) or Affiliates thereof
as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the 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 Certificates purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available at all times out of its authorized and unissued shares of Common
Stock (and/or other shares of capital stock or securities) or its authorized and
issued shares of Common Stock (and/or other shares of capital stock or
securities) held in its treasury, free from preemptive rights or any right of
first refusal, the number of shares of Common Stock (and/or other shares of
capital stock or securities) that will be sufficient to permit the exercise in
full of all Rights from time to time outstanding.
(b) So long as the shares of Common Stock (and/or other shares of capital
stock or securities) issuable upon the exercise of the Rights may be listed on
any national securities exchange, the Company shall use its reasonable efforts
to cause, from and after the time the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to:
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(i) file, as soon as practicable following the earlier of the
Separation Date or as soon as is required by law, a registration statement
under the Securities Act of 1933 (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form;
(ii) cause such registration statement to become effective as soon
as practicable after the filing; and
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earliest of (A) the date as of which Rights are no longer exercisable for
such securities, (B) the Expiration Date and (C) the Redemption Date.
The Company will also take all action necessary 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 statements and permit them to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in that jurisdiction shall have been obtained and, if
applicable, until a registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Common Stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any shares of Common Stock (and/or other shares of capital stock of securities,
as the case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of any certificate for shares of Common Stock (and/or other
shares of capital stock of securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificate evidencing
Rights surrendered for exercise or the issuance or delivery of any certificates
for shares of Common Stock (and/or other shares of capital stock of
15
securities, as the case may be), 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.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for shares of Common Stock (and/or other shares of capital stock of
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 the shares of
Common Stock (and/or other shares of capital stock of securities, as the case
may be) 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 transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Common Stock (and/or other shares of capital stock of securities, as
the case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Common Stock
(and/or other shares of capital stock of securities, as the case may be)
transfer books of the Company are open.
Section 11. The Flip-In. (a) In the event any Person shall become an
Acquiring Person, then, subject to the provisions of Section 24 of this
Agreement, each holder of a Right, except as provided below and in Section 7(e)
of this Agreement, shall thereafter have a right to receive, upon exercise of
the Right at the then current Purchase Price, in accordance with the terms of
this Agreement, in lieu of one share of Common Stock per Right held, such number
of shares of Common Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of shares of
Common Stock for which a Right is then exercisable and dividing that product by
(y) 50% of the Current Market Price per share of the Common Stock on the date on
which the first of the events listed above in this subparagraph (a) occurs (such
number of shares being herein referred to as the "ADJUSTMENT SHARES").
(b) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (a), the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exercise of the Rights; provided, however, that
if the Company is unable to cause the authorization of a sufficient number of
additional shares of Common Stock, then, in the event the Rights become so
exercisable, the Company, with respect to each Right and to the extent necessary
and permitted by applicable law and any agreements or instruments in effect on
the date hereof to which the Company is a party, shall, upon the exercise of
such Rights,
16
(i) pay an amount in cash equal to the excess of (A) the product of
(1) the number of Adjustment Shares, multiplied by (2) the Current Market
Price of the Common Stock (such product being herein referred to as the
"CURRENT VALUE"), over (B) the Purchase Price, in lieu of issuing shares of
Common Stock and requiring payment therefor, or
(ii) issue debt or equity securities, or a combination thereof,
having a value equal to the Current Value, where the value of such
securities shall be determined by a recognized investment banking firm
selected by the Board of Directors of the Company, and require the payment
of the Purchase Price, or
(iii) deliver any combination of cash, property, Common Stock and/or
other securities having the requisite value, and require payment of all or
any requisite portion of the Purchase Price.
To the extent that the Company determines that some action need be taken
pursuant to clauses (i), (ii), or (iii) of the proviso of this Section 11(b), a
majority of the directors of the Company may suspend the exercisability of the
Rights for a period of up to 60 days following the date on which the first of
the events listed in Section 11 of this Agreement shall have occurred, in order
to decide the appropriate form of distribution to be made pursuant to the above
proviso and to determine the value thereof. In the event of any 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 the
time the suspension is no longer in effect.
Section 12. The Flip-Over.
(a) In the event that, following the Separation Date, directly or
indirectly:
(w) the Company shall consolidate with, or merge with and into, any
other Person; or
(x) any Person shall consolidate with the Company, or merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part
of the shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other Person or cash or any other property; or
(y) the Company shall effect a share exchange in which all or part of
the Common Stock of the Company shall be changed into (including, without
limitation, any conversion into or exchange for) securities of any other
Person, cash or any other property; or
17
(z) the Company shall sell, lease, exchange, mortgage, pledge or
otherwise transfer (or one or more of its Subsidiaries shall sell, lease,
exchange, mortgage, pledge or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons then, and in each such case, subject
to the provisions of Section 24 of this Agreement,
(i) each holder of a Right, except as provided in Section 7(e) of
this Agreement, 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, such number of shares of freely tradeable common
stock of the Principal Party, free and clear of any lien, encumbrance or
other adverse claim, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the then number of shares of
Common Stock for which a Right is then exercisable (or the number of shares
of Common Stock for which a Right was exercisable immediately prior to the
occurrence of the Flip-In Event if a Flip-In Event has previously occurred)
and dividing that product by (2) 50% of the Current Market Price per share
of the common stock of such Principal Party on the date of consummation of
the Flip-Over Event;
(ii) all common stock of any Person for which any Right may be
exercised after consummation of a business combination as provided in this
Section 12(a) shall, when issued upon exercise thereof in accordance with
this Agreement, be duly and validly authorized and issued and fully paid
and nonassessable;
(iii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of the Flip-Over Event, all the obligations and duties of
the Company pursuant to this Agreement;
(iv) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 13 hereof shall apply to such Principal Party;
(v) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its common
stock) in connection with such consummation as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of common stock thereafter
deliverable upon the exercise of the Rights; and
(vi) the provisions of Section 11 of this Agreement shall be of no
effect following the first occurrence of any Flip-Over Event.
18
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in (w), (x) or (y) of
the first sentence of Section 12(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
or exchanged in such merger, consolidation or other business combination,
and if no securities are so issued, the Person that is the other party to
the merger, consolidation or other business combination; and
(ii) in the case of any transaction described in (z) of the first
sentence in this Section 12(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 any such case, (1) if the common stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under the Exchange Act, as then in effect, and such Person is
a direct or indirect Subsidiary of another Person the common stock of which is
and has 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 stocks 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 stock having the greatest aggregate market value.
(c) The Company shall not consummate any Flip-Over Event unless prior
thereto the Company and each Principal Party and each other Person who may
become a Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 12 and further providing that, as soon as practicable after
the date of any Flip-Over Event, the Principal Party will:
(i) prepare and file at its own expense a registration statement
under the Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, will use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earliest of the Expiration
Date, the Exchange Date and the Redemption Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act.
19
The Principal Party shall temporarily suspend, for a period of time not to
exceed 90 days following the occurrence of a Flip-Over Event, the exercisability
of the Rights in order to prepare and file the registration statement referred
to in clause (i) above, and the Expiration Date shall be extended by the number
of days of such suspension. The provisions of this Section 12 shall similarly
apply to successive Flip-Over Events. In the event that a Flip-Over Event shall
occur at any time after the occurrence of a Flip-In Event, the Rights which have
not theretofore been exercised shall thereafter become exercisable in the manner
described in Section 12(a).
Section 13. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 13.
(a) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend or make a distribution on the Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding Common Stock
into a larger number of shares, (C) combine the outstanding Common Stock into a
smaller number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then in each such event, except as otherwise provided
in this Section 13(a), the Purchase Price in effect at the time of the record
date for such dividend or distribution, or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of Common Stock or capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Rights (except as provided in Section 7(e) of
this Agreement) exercised on or after such time shall be entitled to receive
upon payment of the Purchase Price in effect immediately prior to such date, the
aggregate number and kind of shares of Common Stock or capital stock which, if
such Rights had been exercised immediately prior to such date and at a time when
the Common Stock transfer books of the Company were open, that holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, distribution, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both Section 11(a) of this
Agreement and this Section 13(a), the adjustment provided for in this Section
13(a) shall be in addition to, and shall be made prior to any adjustment
required pursuant to Section 11(a).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock entitling them to
subscribe for or purchase Common Stock or securities convertible into Common
Stock at a price per share of Common Stock(or having a conversion price per
share, if a security convertible into Common Stock) of less than the Current
Market Price per share of Common Stock on such record date, the Purchase Price
to be in effect after the record date shall be
20
determined by multiplying the Purchase Price in effect immediately prior to the
record date by a fraction,
(1) the numerator of which shall be the number of shares of Common
Stock outstanding on the record date, plus the number of shares of Common
Stock which the aggregate exercise price of the total number of shares of
Common Stock which are obtainable upon the exercise of the rights, options
or warrants (and/or the aggregate initial conversion price of the
convertible securities so offered) would purchase at the Current Market
Price; and
(2) the denominator of which shall be the number of shares of Common
Stock outstanding on the record date, plus the number of additional shares
of Common Stock which may be obtained upon exercise of the rights, options
or warrants (or into which the convertible securities so offered are
initially convertible).
If the subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent. Shares of Common Stock 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 rights, options or warrants
are not issued following an adjustment, the Purchase Price shall again be
adjusted to be the Purchase Price which would be in effect if the record date
had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all
holders of Common Stock (including any such distribution made in connection with
a consolidation or merger in which the Company is the surviving corporation) of
evidences of indebtedness, cash (other than a regular periodic cash dividend out
of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Common Stock, but including any dividend payable in stock
other than Common Stock) or subscription rights or warrants (excluding those
referred to in Section 13(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,
(1) the numerator of which shall be the Current Market Price per
share of Common Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to
one share of Common Stock; and
21
(2) the denominator of which shall be such Current Market Price per
share of Common Stock.
Such adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would be in effect
if such record date had not been fixed.
(d) 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 13(d)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 13 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share as the case may be. Notwithstanding the first sentence of this
Section 13(d), any adjustment required by this Section 13 shall be made no later
than the earlier of (i) three years from the date of the transaction which
mandates the adjustment or (ii) the earliest of the Expiration Date, the
Exchange Date and the Redemption Date.
(e) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Rights thereafter exercised shall become entitled to receive any
securities of the Company other than shares of Common Stock, thereafter the
number of such other securities so receivable upon exercise of any Rights shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares contained
in Section 13(a) through (c), inclusive, and the provisions of Sections 7, 9,
10, 12 and 14 of this Agreement with respect to the Common Stock shall apply on
like terms to any such other securities.
(f) 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 shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided in this Agreement.
(g) Unless the Company shall have exercised its election as provided in
Section 13(h), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 13(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 shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by
22
(i) multiplying (x) the number of shares of Common Stock 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.
(h) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common Stock 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 shares of Common Stock 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 obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 13(h), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(i) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Common Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of shares which were expressed in
the initial Rights Certificates issued hereunder.
23
(j) Before taking any action that would cause an adjustment reducing the
Purchase Price below the par value of the shares of Common Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock at
such adjusted Purchase Price.
(k) In any case in which this Section 13 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 Rights exercised after such record date the shares
of Common Stock and other capital stock or securities, cash or property of the
Company, if any, issuable upon such exercise over and above the shares of Common
Stock and other capital stock or securities, cash or property of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares and other capital stock or securities,
cash or property upon the occurrence of the event requiring such adjustment.
(l) Anything in this Section 13 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 13, as and to
the extent that in its sole discretion the Company shall determine to be
advisable in order that any (i) consolidation or subdivision of the Common
Stock, (ii) issuance wholly for cash of any shares of Common Stock at less than
the Current Market Price, (iii) issuance wholly for cash of shares of Common
Stock or securities which by their terms are convertible into or exchangeable or
exercisable for shares of Common Stock, (iv) stock dividends, or (v) issuance of
rights, options or warrants referred to in this Section 13, hereafter made by
the Company to holders of its Common Stock shall, if practicable, not be taxable
to such shareholders.
(m) The Company covenants and agrees that it shall not (i) consolidate
with, (ii) merge with or into, or (iii) directly or indirectly sell, lease or
otherwise transfer or dispose of, in one or more transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries taken as a whole, to any other Person, if at the time of or
immediately after such consolidation, merger, sale, lease, transfer or
disposition there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(n) The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Section 23 or Section 27 of this
Agreement, take any
24
action the purpose or effect of which is to diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(o) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time prior to the Separation Date (i)
declare a dividend or distribution on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Separation Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to the event by a
fraction, (1) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the event and
(2) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of the event.
(p) Whenever an adjustment is made as provided in Sections 11, 12 and 13
of this Agreement, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for the
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Common Stock and the Common Stock a copy of the certificate and (c) mail
a brief summary thereof to each holder of a Rights Certificate in accordance
with Section 26 of this Agreement. The Rights Agent shall be fully protected in
relying on the certificate and on any adjustment therein contained.
Section 14. Fractional Rights and Fractional Shares.
(a) In no case shall the Company be required to issue fractional Rights or
to distribute Rights Certificates which evidence fractional Rights. In lieu of
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the Current Market Price of a
whole Right as of the date on which fractional Rights would have been otherwise
issuable.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, 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 Price of one
share of Common Stock as of the date of such exercise.
25
(c) The holder of a Right by its acceptance thereof expressly waives any
right to receive any fractional Rights or any fractional shares upon exercise of
a Right.
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 Separation Date, the registered holders of the
Common Stock); and any registered holder of a Rights Certificate (or, prior to
the Separation Date, of the Common Stock) without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Separation Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his rights
pursuant to this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Separation Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
(b) after the Separation Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
corporate trust office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Separation Date, the
associated Common Stock 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 Stock 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 affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted
26
by any governmental authority prohibiting or otherwise restraining performance
of such obligation; provided, however, the Company must use its best efforts to
have any order, decree or ruling lifted or otherwise overturned.
Section 17. Rights Holder Not Deemed a Shareholder. Except as otherwise
expressly provided in this Agreement, no holder of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any purpose the holder
of the shares of Common Stock or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate 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, or to receive dividends or subscription
rights, or otherwise, until and only to the extent that the Right or Rights
evidenced by the Rights Certificate shall have been exercised in accordance with
the provisions of this Agreement.
Section 18. Concerning the Rights Agent. 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 administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises. The
indemnification provided for hereunder shall survive the expiration of the
rights and the termination of this Agreement. The costs and expenses of
enforcing this right of indemnification shall be paid by the Company.
The Rights Agent may conclusively rely upon, and shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in
reliance upon, any Rights Certificate or certificate for Common Stock 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
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.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged
27
or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust 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 that the
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 of this Agreement. In case at the time the
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Rights Certificates shall have been countersigned but not delivered,
the successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver the 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 the Rights Certificates either in the
name of the predecessor or in its name as successor Rights Agent; and in all
such cases the Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
that 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 the Rights Certificates either in its prior name or in its
changed name; and those Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, it may consult
with legal counsel (who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with the 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) be proved
or established by the Company prior to taking or suffering any action hereunder,
the 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
28
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 the certificate shall be full authorization to the
Rights Agent, for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance thereon.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of facts or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except its countersignature),
but all statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under Sections 11 or 13 of this
Agreement or responsible for the manner, method or amount of any adjustment or
the ascertaining of the existence of facts that would require an adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of an adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common Stock
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
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 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 it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer.
29
(h) The Rights Agent and any shareholder, 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 pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of funds or
adequate indemnification against the risk or liability is not reasonably assured
to it.
(k) The Rights Agent shall not be required to take notice or be deemed to
have notice of any fact event or determination (including, without limitation,
any dates or events defined in this Agreement or the designation of any Person
as an Acquiring Person, Affiliate or Associate thereof) under the Rights
Agreement unless and until the Rights Agent shall be specifically notified in
writing by the Company of the fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company, and at the expense of the
Company, to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock, 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 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 the registered holder of
any Rights Certificate may
30
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by the
court, shall be a corporation organized and doing business under the laws of the
United States or of the State of Wisconsin (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the State of Wisconsin), in good standing or in active status, as
the case may be, which is authorized under the laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. 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 the appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and mail a notice thereof in writing to the
registered holders of the Rights Certificates. 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 per share and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with the provision of this Agreement.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any time
prior to 5:00 P.M., Central Standard time, on the earlier of (i) the tenth day
following the Stock Acquisition Date, subject to extension by the Board of
Directors for a period of time, or (ii) the Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $0.0001 per
Right, 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"). Notwithstanding anything in
this Agreement to the contrary, no Rights may be exercised at any time that the
Rights are subject to redemption in accordance with the terms of this Agreement.
31
(b) Immediately upon the action of the Board of Directors of the Company
extending the redemption period pursuant to Section 23(a)(i), evidence of which
shall have been filed with the Rights Agent, the Company shall issue a press
release indicating the date to which the Board of Directors has extended its
right to redeem the Rights.
(c) Notwithstanding anything in this Agreement to the contrary, no
redemption of the Rights shall be permitted after 5:00 P.M., Central Standard
time, on the earlier of (i) the tenth day following the Stock Acquisition Date,
subject to extension by the Board of Directors for a period of time up to, but
not exceeding, ten additional days, or (ii) the Expiration Date.
(d) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, evidence of which shall have been filed
with the Rights Agent, and without any further action and without any notice,
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. Within 10 days
after the action of the Board of Directors ordering the redemption of the
Rights, the Company shall mail notice of the redemption to the Rights Agent and
the holders of the then outstanding Rights to all holders at their last
addresses as they appear upon the registry books of the Rights Agent or prior to
the Separation Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each notice of redemption
will state the method by which the payment of the Redemption Price will be made.
In any case, failure to give notice to any particular holder of Rights shall not
affect the sufficiency of the notice to other holders of Rights. Neither the
Company nor any of its Affiliates or Associates may redeem for value any Rights
at any time, in any manner, other than that specifically set forth in this
Section 23, and neither the Company nor any of its Affiliates or Associates may
acquire or purchase for value any Rights at any time, in any manner, other than
in connection with the purchase of shares of associated Common Stock prior to
the Separation Date.
Section 24. Exchange.
(a) The Company may, at its option, but subject to receipt of any required
regulatory approvals, by action of the Board of Directors, at any time after any
Person becomes an Acquiring Person, exchange all or any part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e)) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being herein referred to as
the "EXCHANGE RATIO"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect an exchange at any
32
time after any Person (other than the Company, any Subsidiary of the Company,
any employee plan of the Company or of a Subsidiary of the Company or any Person
holding Common Stock for or pursuant to the terms of any employee plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50 percent or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of Rights shall be to
receive that number of shares of Common Stock equal to the number of such Rights
held by the holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of the exchange.
The Company promptly shall mail a notice of any exchange to all of the holders
of Rights at their last addresses as they appear upon the registry books of
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 notice of
exchange will state the method by which the exchange of the Common Stock 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)) held by each holder of Rights.
(c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional Common
Stock. In lieu of fractional shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which fractional shares would
otherwise be issuable an amount in cash equal to the same fraction of the
Current Market Value of a whole share of Common Stock.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock, or (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase any additional
shares of Common Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Common Stock,
or (iv) to effect any Flip-Over Event, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each case, the Company shall
give to each holder of a Rights Certificate, in accordance with Section 26, a
notice of the proposed action, which shall specify the record date for the
purposes of the stock dividend, distribution of rights or warrants, or the date
on which the reclassification, Flip-Over Event, liquidation, dissolution, or
winding up is to take place
33
and the date of participation therein by the holders of the shares of Common
Stock, if any date is to be fixed, and the notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of the shares of Common Stock for purposes
of such action, and in the case of any other action, at least 20 days prior to
the date of the taking of the proposed action or the date of participation
therein by the holders of the shares of Common Stock whichever shall be the
earlier.
(b) Upon the occurrence of a Flip-In Event or a Flip-Over Event, the
Company or Principal Party, as the case may be, shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26, a notice of the occurrence of the event and
the consequences thereof to holders of Rights under Sections 11 or 12 of this
Agreement, as the case may be.
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 sent by registered or certified mail and shall be
deemed given upon receipt and addressed (until another address is filed in
writing with the Rights Agent) as follows:
APW Ltd.
N22 X00000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: 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
delivered by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Firstar Bank N.A.
0000 Xxxxx Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: ______________
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the holder's address as shown on the registry books
of the Company. The Company shall deliver a copy of any notice or demand it
delivers to the holder of any Rights
34
Certificate to the Rights Agent and the Rights Agent shall deliver to the
Company a copy of any notice or demand it delivers to the holder of any Rights
Certificate.
Section 27. Supplements and Amendments. The Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Rights 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 change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates other than an Acquiring Person; provided, however, that no
amendment or supplement may be made if the effect would be to extend or shorten
the redemption period after the Stock Acquisition Date or (subject to the
following sentence) change the Purchase Price or the Redemption Price.
Notwithstanding the other provisions of this Section 27, the Board shall retain
the right to amend the Purchase Price for a period of six (6) months from the
date hereof.
Section 28. Determination and Actions by the Board of Directors. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Company or as may be necessary or advisable in the administration
of this Agreement, including without limitation the right and power to (a)
interpret the provisions of this Agreement and (b) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including without limitation a determination to redeem or not to redeem the
Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations which are done by the Board of Directors of
the Company in good faith shall be final, conclusive and binding on the Company,
the Rights Agent and holders of the Rights and all other interested parties and
shall not subject the Board of Directors of the Company to any liability to the
holders of the Rights.
Section 29. 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 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 Separation
Date, the Common Stock) 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 Separation Date, the Common Stock).
35
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
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 Country of Bermuda and for all purposes shall be governed by and
construed in accordance with the laws of Bermuda applicable to contracts made
and to be performed entirely within Bermuda.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of which shall for all purposes be deemed to be an
original, and all 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.
* * * *
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
FIRSTAR BANK N.A. APW LTD.
By: By:
----------------------------- ---------------------------------
Name: Name:
--------------------------- -------------------------------
Title: Vice President Title: President and Chief Executive
Officer
Attest: Attest:
By: By:
----------------------------- -------------------------------
Name: Name:
--------------------------- -----------------------------
Title: Assistant Secretary Title: Secretary
37
Exhibit A
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER ________, 20__ OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
THE RIGHTS REPRESENTED BY THIS 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 THE 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.
RIGHTS CERTIFICATE
APW LTD.
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 ______, ____ (the "RIGHTS AGREEMENT") between
APW Ltd., a Bermuda corporation (the "COMPANY"), and Firstar Bank N.A. (the
"RIGHTS AGENT"), unless notice of redemption shall have been previously given by
the Company, to purchase from the Company at any time after the Separation Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Central Standard time) on _________________ at the principal corporate trust
office of the Rights Agent, or at the office of its successor as Rights Agent,
one fully paid nonassessable share of the Common Stock, par value $.001 per
share, of the Company (the "COMMON STOCK"), at a purchase price of $15.00 per
share (the "PURCHASE PRICE") upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase duly executed. The Purchase
Price may be paid by certified bank check or money order payable to the order of
the Company.
38
The number of Rights evidenced by this Rights Certificate (and the number
of shares of Common Stock which may be purchased upon exercise thereof) and the
Purchase Price set forth above have been determined as of ________, ____, based
on the Common Stock of the Company as constituted at that date. As provided in
the Rights Agreement, the Purchase Price and the number of shares of Common
Stock or other securities, cash or other property 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.
If the Rights evidenced by this Rights Certificate are or were formerly
beneficially owned, on or after the earlier of the Separation Date and the Stock
Acquisition Date, by an Acquiring Person or an Affiliate, Associate or direct or
indirect transferee of an Acquiring Person, the Rights may become null and void
and the holder of the Right (including any subsequent holder) shall not have any
right with respect to the Right.
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.
Capitalized terms used in this Rights Certificate have the same meanings as such
terms are defined in the Rights Agreement. Copies of the Rights Agreement are
on file at the principal executive offices of the Company and the office of the
Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal corporate trust 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 Common Stock or other property as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered entitled the 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 may be redeemed by the Company at its option at a redemption
price of $.0001 per Right at any time prior to the earlier of (i) the close of
business on the tenth day following the time it becomes public that an Acquiring
Person has become such (with the possibility of an extension for an additional
ten days) and (ii) the Expiration Date.
39
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof the Company will make
a cash payment, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
to receive dividends or shall be deemed, for any purpose, the holder of Common
Stock or of any other securities, cash or property which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or this Rights Certificate be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the Company, including,
without limitation, any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or to institute, as a holder of
Common Stock or other securities issuable on the exercise of the Rights
represented by this Certificate, any derivative action, or otherwise, until and
only to the extent 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 __________, ____.
APW LTD.
By:
------------------------------------
Title: President and Chief Executive
Officer
ATTEST:
--------------------------
, Secretary
Countersigned:
By:
-----------------------
Firstar Bank N.A.
Authorized Signature
40
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if the holder desires to transfer
the Rights Certificates.)
FOR VALUE RECEIVED, _________________________________ hereby sells, assigns
and transfers ____________________________ (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 this Rights Certificate on the books of the Company, with
full power of substitution.
Dated: , ____
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: , ____ Signature
41
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment is
not completed, the Company 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 defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificate issued
in exchange for this Rights Certificate.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights represented by
this Rights Certificate)
To: APW Ltd.
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock or other securities, cash or other property issuable upon the exercise of
the Rights and requests that certificates for the shares or other securities be
issued in the name of, and such cash or other property be paid to:
Please insert social security or other identifying number
(Please print name and address)
If the number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the remaining balance of the 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 must conform in all respects to
name of holder as specified on the face of
this Rights Certificate)
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Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being exercised by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: , ____ Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
NOTICE
The signature on the foregoing Form of Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Election is
not completed, the Company will deem the beneficial owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificate issued
in exchange for this Rights Certificate.
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Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On ______, ____, the Board of Directors of APW Ltd., a Bermuda corporation
(the "COMPANY"), declared a dividend of one common share purchase right (a
"RIGHT") for each share of Common Stock, par value $.001 per share of the
Company (the "COMMON STOCK"). The dividend is payable to shareholders of record
at the close of business on ________, ____ (the "RECORD DATE") and with respect
to all shares of Common Stock that become outstanding after the Record Date and
prior to the earliest of the Separation Date (as defined below), the redemption
of the Rights, the exchange of the Rights and the expiration of the Rights.
Except as set forth below and subject to adjustment as provided in the Rights
Agreement (as defined below), each Right entitles the registered holder to
purchase from the Company shares of the Company's Common Stock (the "COMMON
STOCK"), at an exercise price of $15.00 per share (the "PURCHASE PRICE"). The
description and terms of the Rights are set forth in a Rights Agreement dated as
of ______, ____ (the "RIGHTS AGREEMENT"), between the Company and Firstar Bank
N.A., as Rights Agent (the "RIGHTS AGENT").
The Rights will be evidenced by Common Stock certificates and not separate
certificates until the earlier to occur of (i) 10 days following the date of
public disclosure that a person or group, together with persons affiliated or
associated with such person or group (an "ACQUIRING PERSON") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding Common Stock (the "STOCK ACQUISITION DATE") and (ii) 10 days
following commencement or disclosure of an intention to commence a tender offer
or exchange offer by a person or group other than the Company and certain
related entities if, upon consummation of the offer, such person or group,
together with persons affiliated or associated with such person or group, could
acquire beneficial ownership of 50% or more of the outstanding Common Stock (the
earlier of such dates being called "SEPARATION DATE"). Until the Separation
Date (or earlier redemption or expiration of the Rights), the transfer of Common
Stock will also constitute transfer of the associated Rights. Following the
Separation Date, separate certificates will evidence the Rights.
The Rights will first become exercisable on the Separation Date (unless
sooner redeemed). The Rights will expire at the close of business on ________,
20__ (the "EXPIRATION DATE"), unless earlier redeemed or exchanged by the
Company as described below.
The Purchase Price and the number of shares of Common Stock or other
securities, cash or other property issuable upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend or
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distribution on, or a subdivision, combination or reclassification of, the
Common Stock, (ii) upon the grant to holders of the Common Stock of certain
rights, options or warrants to subscribe for Common Stock or securities
convertible into Common Stock at less than the current market price of the
Common Stock, or (iii) upon the distribution to holders of the Common Stock of
other securities, cash, property, evidences of indebtedness, or assets.
In the event that, following the Separation Date, the Company is acquired
in a merger or other business combination in which the Common Stock does not
remain outstanding or is changed or 50% or more of its consolidated assets is
sold, leased, exchanged, mortgaged, pledged or otherwise transferred or disposed
of (in one transaction or a series of transactions) the Rights will "FLIP OVER"
and entitle each holder of a Right to purchase, upon the exercise of the Right
at the then-current Purchase Price, that number of shares of common stock of the
acquiring company (or, in certain circumstances, one of its affiliates) which at
the time of such transaction would have a market value of two times the Purchase
Price.
If a person or group acquires beneficial ownership of 15% or more of the
Common Stock, the Rights will "FLIP IN" and entitle each holder of a Right,
except as provided below, to purchase, upon exercise at the then-current
Purchase Price, that number of shares of Common Stock having a market value of
two times the Purchase Price.
Any "flip over" event or "flip in" event is a "TRIGGERING EVENT."
Any Rights beneficially owned at any time on or after the Separation Date
by an Acquiring Person or an affiliate or associate of an Acquiring Person
(whether or not such ownership is subsequently transferred) will become null and
void upon the occurrence of the earlier of the Board of Directors' decision to
exchange the Rights and a Triggering Event, and any holder of the Rights will
have no right to exercise the Rights.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% of
the Purchase Price. Holders will have no right to receive fractional shares of
Common Stock upon the exercise of Rights. In lieu of fractional shares, an
adjustment in cash may be made based on the market price of the Common Stock on
the last trading date prior to the date of exercise.
The number of outstanding Rights and the number shares of Common Stock
issuable upon exercise of each Right and the Purchase Price are also subject to
adjustment in the event of a stock split of the Common Stock or distributions,
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subdivisions, consolidations or combinations of the Common Stock occurring, in
any case, prior to the Separation Date.
At any time prior to the earlier of (i) the closing of business on the
tenth day following the time that it becomes public that an Acquiring Person has
become such (with the possibility for the Board of Directors to extend this time
for an additional 10 days) and (ii) the Expiration Date, the Company may redeem
the Rights in whole, but not in part, at a price of $0.0001 per Right.
Immediately upon the action of the Company's Board of Directors electing to
redeem the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights thereafter will be to receive the applicable
redemption price.
At any time any person becomes an Acquiring Person and prior to such time
as such person, together with its affiliates becomes the beneficial owner of at
least 50% of the Company's outstanding Common Stock, the Company may, provided
that all necessary regulatory approvals have been obtained, exchange the Rights
(other than Rights owned by the Acquiring Person which become null and void), in
whole or in part, at a ratio of one share of Common Stock per Right, subject to
adjustment.
Until a Right is exercised, the holder has no rights as a shareholder of
the Company, including, without limitation, the right to vote or to receive
dividends or distributions.
The Company may, without the approval of any holder of the Rights,
supplement or amend any provision of the Rights Agreement, except the redemption
window, the Purchase Price or the redemption price; provided, however, that the
Company's directors have the right to amend the Purchase Price.
Common Stock purchasable upon exercise of the Rights will not be
redeemable.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors prior to the time a person or group has acquired beneficial
ownership of 15% or more of the Common Stock, because until such time, the
Rights may be redeemed by the Company at $.0001 per Right.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission and is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
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