Exhibit 4.2
ORIENT-EXPRESS HOTELS LTD.
and
FLEET NATIONAL BANK
as Rights Agent
Rights Agreement
Dated as of ______, 2000
TABLE OF CONTENTS
PAGE
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Section 1. Certain Definitions.............................................................................1
Section 2. Appointment of Rights Agent.....................................................................5
Section 3. Issue of Right Certificates.....................................................................5
Section 4. Form of Right Certificates......................................................................6
Section 5. Countersignature and Registration...............................................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.........................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................8
Section 8. Cancellation and Destruction of Right...........................................................9
Section 9. Reservation and Availability of Preferred Shares...............................................10
Section 10. Preferred Shares Record Date...................................................................10
Section 11. Adjustment of Purchase Price, Redemption Price,
Number of Shares or Number of Rights...........................................................11
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....................................18
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........................18
Section 14. Fractional Rights and Fractional Shares........................................................19
Section 15. Rights of Action...............................................................................20
Section 16. Agreement of Right Holders.....................................................................21
Section 17. Right Certificate Holder Not Deemed a Shareholder..............................................21
Section 18. Concerning the Rights Agent....................................................................21
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Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................22
Section 20. Duties of Rights Agent.........................................................................22
Section 21. Change of Rights Agent.........................................................................25
Section 22. Issuance of New Right Certificates.............................................................25
Section 23. Redemption.....................................................................................26
Section 24. Exchange.......................................................................................27
Section 25. Notice of Certain Events.......................................................................28
Section 26. Notices........................................................................................29
Section 27. Supplements and Amendments.....................................................................29
Section 28. Successors.....................................................................................30
Section 29. Benefits of this Agreement.....................................................................30
Section 30. Severability...................................................................................30
Section 31. Governing Law..................................................................................30
Section 32. Counterparts...................................................................................30
Section 33. Descriptive Headings...........................................................................30
Exhibit A - Form of Certificate of Designation of Terms of Series A
Junior Participating Preferred Shares
Exhibit B - Form of Right Certificate
ii
RIGHTS AGREEMENT
Agreement, dated as of ______________, 2000, between Orient-Express
Hotels Ltd., a Bermuda company (the "Company"), and Fleet National Bank, a
national banking association (the "Rights Agent").
The Board of Directors of the Company has authorized the distribution of
one preferred share purchase right (a "Right") for each common share, par
value $0.01 each, of the Company outstanding on ___________, 2000 (the
"Record Date"), each Right representing the right to purchase one
one-hundredth of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right with respect to each such common share
that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined).
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) "A Shares" shall mean the Class A Common Shares, par value
$0.01 each, of the Company.
(b) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall
be the Beneficial Owner (as such term is hereinafter defined) of shares
carrying 20% or more of the total voting rights which may be cast at any
general meeting of the Company, but shall not include the Company, SCL,
any Subsidiary (as such term is hereinafter defined) of the Company or
SCL or any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding shares of the Company for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, (i) no Person
shall be or have become an "Acquiring Person" if such Person, together
with all Affiliates and Associates of such Person, was on _________,
2000 the Beneficial Owner of shares carrying 20% or more of the total
voting rights which may be cast at any general meeting of the Company;
PROVIDED, HOWEVER, that if, after notice from the Company of the
adoption of this Agreement, such Person becomes the Beneficial Owner of
any additional shares entitling the holder thereof to vote at any
general meeting of the Company, then such Person shall be deemed an
"Acquiring Person", and (ii) no Person shall become an "Acquiring
Person" as the result of an acquisition of the Company's shares by the
Company or a Subsidiary of the Company which, by reducing the number of
shares outstanding, increases the proportionate voting rights of such
Person to 20% or more of the total voting rights which may be cast at
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any general meeting of the Company (or, in the case of a Person referred
to in clause (i), more than the percentage that was beneficially owned
by such Person at the time such Person received the notice referred to
in clause (i)); PROVIDED, HOWEVER, that if a Person becomes the
Beneficial Owner of shares carrying 20% or more of the total voting
rights which may be cast at any general meeting of the Company (or, in
the case of a Person referred to in clause (i), more than the percentage
that was beneficially owned by such Person at the time such Person
received the notice referred to in clause (i)) by reason of share
purchases by the Company or a Subsidiary of the Company and shall, after
such share purchases by the Company or a Subsidiary of the Company,
become the Beneficial Owner of any additional shares entitling the
holder thereof to vote at any general meeting of the Company, then such
Person shall be deemed to be an "Acquiring Person."
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on ______, 2000.
(e) "B Shares" shall mean the Class B Common Shares, par value $0.01
each, of the Company.
(f) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange
rights, rights (other than these Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; or (B)
the right to vote pursuant to any agreement, arrangement or
understanding; PROVIDED, HOWEVER, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, any security if
the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
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regulations of the Exchange Act and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso
to Section 1(f)(ii)(B)) or disposing of any securities of the
Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which
such Person would be deemed to own beneficially hereunder.
(g) "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the Islands of Bermuda or the
State of New York are authorized or obligated by law or executive order to
close.
(h) "close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(i) "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock (or other equity interest) with
the greatest voting power per share of such other Person or, if such other
Person is a Subsidiary of another Person, of the Person or Persons which
ultimately control such first-mentioned Person.
(j) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(k) "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
(l) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(m) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(n) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Shares, par value $.01 per share, of the Company
having the rights and preferences set forth in the form of Certificate of
Designation of Terms attached to this Agreement as Exhibit A.
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(o) "Principal Party" shall mean
(i) in the case of any transaction described in clause (a) or (b)
of the first sentence of Section 13, the Person that is the issuer of
any securities into which Voting Shares of the Company are converted
in such merger, amalgamation or consolidation, and if no securities
are so issued, the Person that is the other party to such merger,
amalgamation or consolidation (including, if applicable, the Company
if it is on the surviving corporation); and
(ii) in the case of any transaction described in clause (c) of
the first sentence of Section 13, 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 of the foregoing cases, (1) if the Common
Shares of such Person are not at such time and have not been
continuously over the preceding twelve (12) month period registered
under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Shares of which are and
have been so registered, "Principal Party" shall refer to such other
Person; (2) in case such Person is a Subsidiary, directly or indirectly,
of more than one Person, the Common Shares of two or more of which are
and have been so registered, "Principal Party" shall refer to whichever
of such Persons is the issuer of the Common Shares having the greatest
aggregate market value; and (3) in case such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons that are
not owned, directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were
a "Subsidiary" of both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set forth in
Section 13 in the same ratio as their direct or indirect interests in
such Person bear to the total of such interests.
(p) "Purchase Price" shall have the meaning set forth in Sections 4
and 7(b) hereof.
(q) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(r) "Redemption Price" shall have the meaning set forth in Section
23(b) hereof.
(s) "Securities Act" shall mean the United States Securities Act of
1933, as amended.
(t) "SCL" shall mean Sea Containers Ltd., a Bermuda company
incorporated on June 3, 1974.
(u) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
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(v) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
(w) "Voting Shares" shall mean the A Shares and the B Shares,
collectively.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Voting Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable upon 10 days prior written notice to the Rights Agent. The Rights
Agent shall have no liability for or duty to supervise any such co-Rights Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth day (or such later date as may be
determined by the Board of Directors of the Company) after the date of the
commencement of, or of the first public announcement of the intention of
any Person (other than the Company, SCL, any Subsidiary of the Company or
SCL, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Voting Shares for or pursuant to the terms of
any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of shares
carrying in the aggregate 30% or more of the total voting rights which may
be cast at any general meeting of the Company (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Voting Shares
registered in the names of the holders thereof (which certificates shall
also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Voting Shares. The
Company will give the Rights Agent prompt written notice of the
Distribution Date. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if
requested, at the Company's expense, send) by first-class, postage-prepaid
mail, to each record holder of Voting Shares as of the close of business on
the Distribution Date, at the address of such holder shown on the records
of the Company, a Right Certificate, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right for each Voting Share
so held. As of the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
(b) With respect to certificates for Voting Shares outstanding as of
the Record Date and thereafter, until the Distribution Date, the Rights
will be evidenced by such certificates
5
registered in the names of the holders thereof. Until the Distribution
Date (or the earlier of the Redemption Date or Final Expiration Date),
the surrender for transfer of any certificate for Voting Shares
outstanding on the Record Date shall also constitute the transfer of the
Rights associated with the Voting Shares represented thereby. As soon as
practicable after the Distribution Date, and after notifying the Rights
Agent that the Company will make the mailing described in this sentence,
the Company will send a summary description of the Rights, by
first-class, postage-prepaid mail, to each record holder of Voting
Shares as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company.
(c) Certificates for Voting Shares which have and will become
outstanding (including, without limitation, reacquired Voting Shares
referred to in the last sentence of this paragraph (c)) after the Record
Date but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between
Orient-Express Hotels Ltd. and Fleet National Bank, dated as
of ______, 2000 (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of
Orient-Express Hotels Ltd. 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. Orient-Express Hotels Ltd. will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to Acquiring
Persons (as defined in the Rights Agreement) shall become null
and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Voting Shares
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Voting Shares
represented thereby. In the event that the Company purchases or acquires
any Voting Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Voting Shares shall be deemed
cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Voting Shares which are no
longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required
6
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. The
Right Certificates shall be in machine printable format and in a form
reasonably satisfactory to the Rights Agent, and shall show the date of
countersignature by the Rights Agent. Subject to the provisions of Section 22
hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-hundredths of a Preferred Share as shall be set forth
therein at the price per one one-hundredth of a Preferred Share set forth
therein (the "Purchase Price"), but the number of such one one-hundredths of
a Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company by its President, any Vice
President or a director of the Company, either manually or by facsimile
signature, shall have affixed thereto the Company's common seal or a
facsimile thereof, and shall be attested by the Secretary or Assistant
Secretary or a second director of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually or by facsimile
signature countersigned by an authorized signatory of the Rights Agent and
shall not be valid for any purpose unless countersigned. In case any officer
or director of the Company who shall have signed any of the Right
Certificates shall cease to be such officer or director of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased
to be such officer or director of the Company; and any Right Certificate may
be signed on behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, shall be a proper officer or
director of the Company to sign such Right Certificate, although at the date
of the execution of this Rights Agreement any such person was not such an
officer or director. In case any authorized signatory of the Rights Agent who
shall have countersigned any of the Right Certificates shall cease to be such
signatory before delivery by the Company, such Right Certificates,
nevertheless, may be issued and delivered by the Company with the same force
and effect as though the person who countersigned such Right Certificates had
not ceased to be such signatory; and any Right Certificate may be
countersigned on behalf of the Rights Agent by any person who, at the actual
date of the countersignature of such Right Certificate, shall be a proper
signatory of the Rights Agent to countersign such Right Certificate, although
at the date of the execution of this Rights Agreement any such person was not
such a signatory.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its shareholder services office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates.
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Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(iii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the designated office of the
Rights Agent or its office in New York, New York, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably require. Thereupon the Rights Agent shall countersign and deliver to
the person entitled hereto a Right Certificate or Right 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 Right
Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's or the Rights
Agent's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent,
along with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably require, and cancellation of the Right Certificate
if mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the designated office of the
Rights Agent, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably require, together with
payment of the Purchase Price for each one one-hundredth of a Preferred
Share as to which the Rights are exercised, at or prior to the earlier of
(i) the close of business on ______, 2010 (the "Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
8
(b) The Purchase Price for each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall be $ , shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check, bank draft or money order payable to the order of
the Company or the Rights Agent, the Rights Agent shall thereupon promptly
(i) requisition from any transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such
certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the registered holder of
such Right Certificate. In the event that the Company is obligated to issue
other securities (including Voting Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements, including determination of exchange ratios,
reasonably necessary so that such other securities, cash or other property
shall be available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
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Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. The Company
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
If the Preferred Shares issuable upon the exercise of Rights are to be
listed on any national securities exchange, the Company covenants and agrees to
use its best efforts to cause, from and after such time as the Rights become
exercisable, all Preferred Shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
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 Right Certificates or of
any Preferred Shares 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 Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right 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. PREFERRED SHARES RECORD DATE. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
10
Section 11. ADJUSTMENT OF PURCHASE PRICE, REDEMPTION PRICE, NUMBER OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the Redemption Price, the number
of Preferred Shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a reclassification
of the Preferred Shares (including any such reclassification in connection
with a consolidation, amalgamation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination
or reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; PROVIDED, HOWEVER,
that in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right.
(ii) Subject to Sections 23(b) and 24 of this Rights Agreement, in the
event any Person shall become an Acquiring Person, proper provision shall
be made so that each holder of a Right, except as provided in Section
11(a)(iii) hereof, shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price multiplied by
the number of one one-hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of A Shares (in the case of a Right
which prior to the Distribution Date was evidenced by a certificate for A
Shares) or B Shares (in the case of a Right which prior to the Distribution
Date was evidenced by a certificate for B Shares) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the then
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (B) 50% of the then current per
share market price of the A Shares or B Shares, as appropriate, (determined
pursuant to Section 11(d)) on the date such Person became an Acquiring
Person (such number of shares, the "Adjustment Shares").
11
(iii) Notwithstanding the foregoing provisions of subparagraph (ii),
from and after the occurrence of such event, any Rights that are or were
acquired or beneficially owned by an Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant
to Section 3 that represents Rights beneficially owned by an Acquiring
Person or any Associate or Affiliate thereof and no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring
Person or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate. Where a Right Certificate is to
be issued or is delivered to the Rights Agent for transfer to such an
Acquiring Person and the Rights Agent has received notice from the Company
that the beneficial owner or transferee is an Acquiring Person, that Right
Certificate shall be cancelled or shall not be issued. The Rights Agent
shall have no liability for refusing to issue or cancelling such Right
Certificates.
(iv) In the event that there shall not be sufficient A Shares or B
Shares issued but not outstanding or authorized but not issued (and
unreserved) to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Company shall take all action as may
be necessary to authorize additional A Shares or B Shares for issuance upon
exercise of the Rights. The Company covenants and agrees to use its best
efforts to (A) cause a registration statement under the Securities Act on
an appropriate form, with respect to the A Shares and B Shares purchasable
upon exercise of the Rights, to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the Final
Expiration Date; (B) qualify or register the A Shares and B Shares
purchasable upon exercise of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate; and (C) list the A Shares
and B Shares purchasable upon the exercise of the Rights on each national
securities exchange on which the A Shares and B Shares are listed prior to
the exercisability of the Rights.
(v) In the event that the number of A Shares or B Shares which are
authorized for issuance but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall: (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) A Shares or B Shares, as appropriate, or other equity securities of the
Company (including, without limitation, preferred shares, or units of
preferred shares, which the Board of Directors of the Company has deemed to
have the same
12
value as A Shares or B Shares (such preferred shares, "common stock
equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined by the
Board of Directors of the Company with the advice of a nationally
recognized investment banking firm selected by the Board of Directors of
the Company; PROVIDED, HOWEVER, that if the Company shall not have made
adequate provision to deliver Current Value pursuant to clause (B) above
within thirty (30) days following the later of (x) the first occurrence of
an event described in Section 11(a)(ii) and (y) the date on which the
Company's right of redemption pursuant to Section 23 expires (the later of
(x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase
Price, A Shares or B Shares (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Company shall determine in
good faith that it is likely that sufficient additional A Shares or B
Shares could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such period, as
it may be extended, the "Substitution Period"). To the extent that the
Company determines that some action must be taken pursuant to the first
and/or second sentences of this Section 11(a)(v), the Company (x) shall
provide, subject to Section 11(a)(iii) hereof, that such action shall apply
uniformly to all outstanding Rights to purchase Adjustment Shares which are
A Shares and to all outstanding Rights to purchase Adjustment Shares which
are B Shares, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine
the aggregate value thereof. In the event of any such suspension, the
Company shall issue a public announcement and simultaneously provide the
Rights Agent with written notice stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement
when the suspension is no longer in effect. For purposes of this Section
11(a)(v), the value of the A Shares and B Shares shall be the current
market price (as determined pursuant to Section 11(d) hereof) of an A Share
and a B Share on the Section 11(a)(ii) Trigger Date and the value of any
"common stock equivalent" shall be deemed to have the same value as the A
Shares on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares
13
at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible
into Preferred Shares or equivalent preferred shares) less than
the then current per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at
such current market price and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid 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 binding upon the Rights Agent and the holders. Preferred Shares
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed; and in the event
that such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares (as defined in Section 11(d)) 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 assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the denominator of
which shall be such current per share market price of the Preferred Shares.
Such adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall
14
be deemed to be the average of the daily closing prices per share
of such Security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date;
PROVIDED, HOWEVER, that in the event that the current per share
market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price
per share equivalent of such Security. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the last
sale price or, in case no such sale takes place on such day, the average of
the high bid and low asked prices in the Nasdaq Stock Market or, if on any
such date the Security is not quoted in the Nasdaq Stock Market, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of
Directors of the Company. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security is listed
or admitted to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share
market price of the A Shares or B Shares, as appropriate, as determined
pursuant to Section 11(d)(i) (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof), multiplied by one hundred. If neither the A Shares or B Shares, as
appropriate, nor the Preferred Shares are publicly held or so listed or
traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and binding upon the Rights Agent and the holders.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(e) are not required to be
15
made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest one millionth of a
Preferred Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right 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 Preferred Shares contained in Section 11(a) through
(c), inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect
to the Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths
of a Preferred Share purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement and
16
simultaneously provide the Rights Agent with written notice 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 Right
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right 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 Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any,
of the Preferred Shares issuable upon exercise of the Rights, the Company
shall 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 Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the
Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; PROVIDED, HOWEVER, that the Company shall
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment and shall provide the
Rights Agent with prompt written notice of any such election.
17
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such shareholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Voting Shares payable in Voting Shares or (ii) effect a
subdivision, combination or consolidation of the Voting Shares (by
reclassification or otherwise than by payment of dividends in Voting
Shares) into a greater or lesser number of Voting Shares, then in any such
case (i) the number of one one-hundredths of a Preferred Share purchasable
after such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Voting Shares outstanding immediately before such
event and the denominator of which is the number of Voting Shares
outstanding immediately after such event, (ii) each Voting Share
outstanding immediately after such event shall have issued with respect to
it that number of Rights which each Voting Share outstanding immediately
prior to such event had issued with respect to it and (iii) the Redemption
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or consolidation shall be
adjusted so that the holder of any Right redeemed after such time shall be
entitled to receive the aggregate payment which, if such Right had been
redeemed immediately prior to such date, he would have received upon such
redemption. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Voting Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent may rely, and shall incur no liability for relying upon, the most
recent such certificate which it has received.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. In the event that following the Distribution Date, directly or
indirectly, (a) the Company shall consolidate with, amalgamate with or merge
with and into, any other Person, (b) any Person shall consolidate
18
or amalgamate 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 Voting Shares shall be
changed into or exchanged for stock or other securities of any other Person
(or the Company) or cash or any other property, or (c) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than the Company or
one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which
a Right is then exercisable, in accordance with the terms of this Agreement,
such number of Common Shares of the Principal Party (including the Company as
successor thereto or as the surviving corporation, in which event the term
"Common Shares" as used in this Section 13 shall mean A Shares (in the case
of a Right which prior to the Distribution Date was evidenced by a
certificate for A Shares) and B Shares (in the case of a Right which prior to
the Distribution Date was evidenced by a certificate for B Shares)) as shall
be equal to the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a
Right is then exercisable and dividing that product by (y) 50% of the then
current per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d)) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
amalgamation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" herein shall
thereafter be deemed to refer to such Principal Party; and (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares) in connection with
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 the Common Shares thereafter deliverable upon the exercise of the Rights.
The Company shall not enter into any transaction of the kind referred to in
this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits intended to be
afforded by the Rights. The Company shall not consummate any such
consolidation, amalgamation, merger, sale or transfer unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement so providing. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations,
amalgamations or sales or other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction
19
of the current market value of a whole Right. For the purposes of this
Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange
or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted
to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last sale price or, in case no
such sale takes place on such day, the average of the high bid and low
asked prices in the Nasdaq Stock Market or, if on any such date the
Rights are not quoted in the Nasdaq Stock Market, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in
the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of Preferred
Shares upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares. In lieu of fractional Preferred
Shares, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one Preferred Share. For purposes of this Section 14(b), the current market
value of a Preferred Share shall be the closing price of a Preferred Share
(as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise or
exchange.
(c) The holder of a Right by the acceptance of the Right expressly
waives his 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, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Voting Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Voting Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Voting Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company or a Principal Party to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
20
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Voting Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal offices of the Rights Agent or at its office in New York,
New York, duly endorsed or accompanied by a proper instrument of transfer,
along with a signature guarantee and such other and further documentation
as the Rights Agent may reasonably require; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificates (or, prior to the Distribution Date, the
associated Voting Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificates or the associated Voting
Shares certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
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 gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the
21
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 and including reasonable counsel fees and expenses.
The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Voting Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, instructions 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, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
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 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 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 such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificate shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
22
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the President,
any Executive Vice President or Senior Vice President or Vice President,
the Treasurer, the Secretary, or any Assistant Treasurer or Assistant
Secretary of the Company and delivered to the Rights Agent; and such
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 upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right 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 Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice that such
change or adjustment is required); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Preferred Shares will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
23
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the President,
any Executive Vice President or Senior Vice President or Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and is authorized 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 such instructions of any such officer. An application by
the Rights Agent for instructions may set forth in writing any action
proposed to be taken or omitted by the Rights Agent with respect to its
duties and obligations under this Agreement and the date on and/or after
which such action shall be taken, and the Rights Agent shall not be liable
for any action taken or omitted in accordance with a proposal included in
any such application on or after the date specified therein (which date
shall not be less than two Business Days after the Company receives such
application) without the consent of the Company unless prior to taking or
omitting such action, the Rights Agent has received written instructions in
response to such application specifying the actions to be taken or omitted.
(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 the repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) In addition to the foregoing, the Rights Agent shall be protected
and shall incur no liability for, or in respect of, any action taken or
omitted by it in connection with its administration of this Agreement in
reliance upon (i) the proper execution of the certification concerning
beneficial ownership appended to the Form of Assignment and the Form of
Election to Purchase included as part of Exhibit B hereto (the
"Certification"), unless the Rights Agent shall have actual knowledge that,
as executed, the Certification is untrue or (ii)
24
the non-execution or failure to complete the Certification including,
without limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such non-execution or failure.
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 Company's
expense, to each transfer agent of the Voting Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right 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
Voting Shares or Preferred Shares by registered or certified mail, and to the
holders of the Right 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 Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the Company shall become the Rights Agent and
the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of New York (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 New York), in good standing, having an office in the State of New York,
which is authorized under such 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 any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Voting Shares or Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Right 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 RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind of class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Voting Shares
25
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to Voting Shares so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue
Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; PROVIDED, HOWEVER, that (i) no such
Right Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the Person to
whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of Directors
pursuant to subsection (b) of this Section 23 and shall not be redeemed in
any other manner.
(b) The Board of Directors of the Company may, at its option, at any
time prior to the close of business on the 10th day following such time as
any Person becomes an Acquiring Person, redeem all but not less than all
the then outstanding Rights at a redemption price of $.05 per Right,
appropriately adjusted as provided in Section 11(n) 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 contained in this Agreement
to the contrary, the Rights shall not be exercisable after the first
occurrence of an event described in Section 11(a)(ii) until such time as
the Company's right of redemption hereunder has expired. The Company may,
at its option, pay the Redemption Price in cash, A Shares (based on the
"current market price," as defined in Section 11(d)(i) hereof, of the A
Shares at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to subsection (b) of
this Section 23, 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 such action of the Board of Directors ordering the redemption
of the Rights pursuant to subsection (b), the Company shall give written
notice of redemption to the Rights Agent and shall give notice of
redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Voting Shares. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Affiliates or
Associates may
26
redeem, acquire or purchase for value any Rights at any time in any manner
other than that specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of Voting Shares
prior to the Distribution Date.
Section 24. EXCHANGE. (a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a)(iii)
hereof) (i) for A Shares at an exchange ratio of one A Share per Right (in the
case of Rights which prior to the Distribution Date were evidenced by
certificates for A Shares), and (ii) for B Shares at a ratio of one B Share per
Right (in the case of Rights which prior to the Distribution Date were evidenced
by certificates for B Shares), appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after __________, 2000
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, SCL,
any Subsidiary of the Company or SCL, any employee benefit plan of the Company
or any Subsidiary of the Company, or any entity holding Voting Shares for or
pursuant to the terms of any such a plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of shares carrying 50%
or more of the total voting rights which may be cast at any general meeting of
the Company.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24, and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of A Shares or B
Shares equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of any
such exchange; PROVIDED, HOWEVER, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
shall promptly mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the A Shares for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 11(a)(iii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient A Shares or B
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize
additional A Shares or B Shares for issuance upon exchange of the Rights.
27
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 its Preferred Shares or to make any
other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), or (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), or (iv) to effect any
consolidation, amalgamation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer), in one or more transactions, of 50% or more of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, or (v) to effect the liquidation, dissolution
or winding up of the Company, or (vi) to declare or pay any dividend on the
Voting Shares payable in Voting Shares or to effect a subdivision,
combination or consolidation of the Voting Shares (by reclassification or
otherwise than by payment of dividends in Voting Shares), then, in each
such case, the Company shall give to the Rights Agent and to each holder of
a Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of
such stock dividend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, amalgamation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Voting Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least 20 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such
other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Voting Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to the Rights Agent and to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.
28
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 Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Orient-Express Hotels Ltd.
00 Xxxxx Xxxxxx
P.O. Box HM 1179
Xxxxxxxx XX EX, Bermuda
Attention: Secretary
with a copy to:
Orient-Express Hotels Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Fleet National Bank
c/o Boston EquiServe L.P.
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the Rights Agent
may deem necessary or desirable and which shall be consistent with, and for the
purpose of
29
fulfilling, the objectives of the Board of Directors in adopting this
Agreement; PROVIDED, HOWEVER, the Rights Agent shall not be required to
consent to any amendment which is adverse to its own interests; and PROVIDED,
FURTHER, HOWEVER, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights.
Section 28. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Voting Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Voting Shares).
Section 30. 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 31. GOVERNING LAW. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the Islands of
Bermuda and for all purposes shall be governed by and construed in accordance
with such laws, except that the rights, duties and obligations of the Rights
Agent shall be governed by and construed in accordance with the laws of the
State of New York.
Section 32. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. 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.
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ORIENT-EXPRESS HOTELS LTD.
Attest:
By: By:
--------------------------- --------------------------
Name: Name:
Title: Title:
FLEET NATIONAL BANK
Attest:
By: By:
--------------------------- --------------------------
Name: Name:
Title: Title:
31
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATION OF TERMS
of
SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
(Par Value $.01 Per Share)
of
ORIENT-EXPRESS HOTELS LTD.
(Pursuant to Section 42 of
The Companies Act 1981 of Bermuda)
We, the undersigned, _______________________ and _____________________,
being respectively the __________________ and the Secretary of ORIENT-EXPRESS
HOTELS LTD., a company organized and existing under laws of the Islands of
Bermuda (hereinafter called the "Company"), DO HEREBY CERTIFY:
FIRST: That, the Board of Directors of the Company at a meeting thereof
held and convened on ___________, at which a quorum was present and acting
throughout has duly adopted resolutions providing for the issuance of a series
of preferred shares of the Company and that there is set forth below a copy of
said resolutions:
RESOLVED that the Board of Directors hereby authorizes the issue of a
series of preferred shares of the Company and hereby fixes the designation,
preferences and the relative, participating, optional and other special
rights and qualifications, limitations and restrictions thereof as follows:
1. NUMBER AND DESIGNATION. The number of shares to constitute this
series of the total authorized amount of 15,000,000 preferred shares of the
Company shall be [300,000] shares and the designation of such shares shall
be "Series A Junior Participating Preferred Shares," par value $.01 per
share (hereinafter called "this Series"). All shares of this Series shall
be identical with each other in all respects.
A-1
2. DIVIDENDS AND DISTRIBUTIONS. (a) Subject to the prior and superior
rights of the holders of shares of any other series of preferred shares or
other class of shares not by its terms ranking on a parity with, or junior
to, this Series with respect to dividends, the holders of shares of this
Series shall be entitled to receive, when, as and if declared by the Board
of Directors, quarterly dividends payable in cash on the first day of
March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a
share of this Series in an amount per share (rounded to the nearest cent)
equal to the greater of (i) $1.00 or (ii) an amount per share equal to the
Formula Number (as hereinafter defined) then in effect times the aggregate
per share amount of all cash dividends declared on the A Shares since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share of this Series. In addition, if the Company shall pay any dividend or
make any distribution on the A Shares payable in assets, securities or
other forms of noncash consideration (other than dividends or distributions
solely in A Shares) then, in each such case, the Company shall
simultaneously pay or make on each outstanding share of this Series a
dividend or distribution in like kind of the Formula Number then in effect
times such dividend or distribution on each A Share. As used herein, the
"Formula Number" shall be 100; PROVIDED, HOWEVER, that if at any time the
Company shall (i) declare or pay any dividend on the Voting Shares payable
in Voting Shares or make any distribution on the Voting Shares in Voting
Shares, (ii) subdivide (by a stock split or otherwise) the outstanding
Voting Shares into a larger number of Voting Shares or (iii) combine (by a
reverse stock split or otherwise) the outstanding Voting Shares into a
smaller number of Voting Shares, then in each such event the Formula Number
shall be adjusted to a number determined by multiplying the Formula Number
in effect immediately prior to such event by a fraction, the numerator of
which is the aggregate number of Voting Shares that are outstanding
immediately after such event and the denominator of which is the aggregate
number of Voting Shares that are outstanding immediately prior to such
event (and rounding the result to the nearest whole number); and PROVIDED
FURTHER, that if at any time the Company shall issue any shares of its
capital stock in a reclassification or change of the outstanding Voting
Shares (including any such reclassification or change in connection with a
merger in which the Company is the surviving corporation), then in each
such event the Formula Number shall be appropriately adjusted to reflect
such reclassification or change.
(b) The Company shall declare a dividend or distribution on the shares
of this Series as provided in paragraph (a) above immediately prior to or
at the same time it declares a dividend or distribution on the A Shares
(other than a dividend or distribution in A Shares), PROVIDED, HOWEVER,
that, in the event no dividend or distribution (other than a dividend or
distribution in A Shares) shall have been declared on the A Shares during
the period between any Quarterly Dividend Payment
A-2
Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1.00 per share on this Series shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may
fix a record date for the determination of holders of shares of this
Series entitled to receive a dividend or distribution declared thereon,
which record date shall be the same as the record date for any
corresponding dividend or distribution on the A Shares.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of this Series from and after the Quarterly Dividend Payment Date
next preceding the date of original issue of such shares of this Series;
PROVIDED, HOWEVER, that dividends on such shares which are originally
issued after the record date for the determination of holders of shares of
this Series entitled to receive a quarterly dividend and on or prior to the
next succeeding Quarterly Dividend Payment Date shall begin to accrue and
be cumulative from and after such Quarterly Dividend Payment Date.
Notwithstanding the foregoing, dividends on shares of this Series which are
originally issued prior to the record date for the first Quarterly Dividend
Payment shall be calculated as if cumulative from and after the March 1,
June 1, September 1 or December 1, as the case may be, next preceding the
date of original issuance of such shares. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of this Series in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding.
(d) The holders of the shares of this Series shall not be entitled to
receive any dividends or other distributions except as provided herein.
3. VOTING RIGHTS. The holders of shares of this Series shall have the
following voting rights:
(a) Each holder of this Series shall be entitled to a number of votes
equal to the Formula Number then in effect, for each share of this Series
held of record on each matter on which holders of the Voting Shares
generally are entitled to vote, multiplied by the number of votes per share
which the holders of the A Shares then have with respect to such matter.
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of this Series and the holders of Voting Shares shall
vote together as one class for the election of directors of the Company and
on all other matters submitted to a vote of shareholders of the Company.
(c) Without the consent of the holders of at least two-thirds of the
number of shares of this Series at the time outstanding, given in person or
by proxy, either
A-3
in writing or by vote at a meeting called for that purpose at which the
holders of this Series shall vote as a separate class, there shall be no:
(i) amendment, alteration or repeal of any of the preferences,
rights or powers of this Series, as set forth in this Certificate of
Designation of Terms; or
(ii) authorization or creation of, or increase in the authorized
amount of, any shares of any class or any security convertible into
shares of any class, ranking prior to this Series.
(d) Without the consent of the holders of at least a majority of the
number of shares of this Series at the time outstanding, given in person or
by proxy, by vote at a meeting called for that purpose at which the holders
of this Series shall vote as a separate class, there shall be no:
(i) increase in the authorized amount of this Series, or the
authorization or creation of, or increase in the authorized amount of,
any shares of any class or any security convertible into shares of any
class, ranking equal to or on a parity with this Series unless the
consolidated amounts available under Bermuda law for payment of
dividends during a period of 12 consecutive calendar months out of the
immediately preceding 18 calendar months are at least two times the
annual pro forma dividend requirements on all shares (including this
Series) ranking prior to or on a parity with this Series which would
be outstanding thereafter; PROVIDED, HOWEVER, that notwithstanding
anything to the contrary contained in this clause, the Company may
issue up to 10,000,000 additional shares without any authorization or
vote by the holders of this Series if such shares rank on a parity
with this Series; or
(ii) consolidation or merger of the Company with another
corporation, unless the preferences, rights or powers of the shares of
this Series outstanding immediately prior to the effective date of the
consolidation or merger are not adversely affected.
For the purposes hereof, annual dividend requirements of any
outstanding shares ranking prior to or on a parity with this Series shall
be computed by multiplying the annual dividend requirements of such shares
by the ratio that consolidated pre-tax income bears to consolidated net
income (after taxes) before deduction of such annual dividend requirements
of such shares.
(e) Except as provided herein, or by applicable law, holders of this
Series shall have no special voting rights and their consent shall not be
required (except to
A-4
the extent they are entitled to vote with holders of Voting Shares as
set forth herein) for authorizing or taking any corporate action.
4. CERTAIN RESTRICTIONS. (a) Whenever quarterly dividends or other
dividends or distributions payable on this Series as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of this Series outstanding
shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any
shares ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to this Series;
(ii) declare or pay dividends on or make any other distributions
on any shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with this Series except
dividends paid ratably on this Series and all such parity shares on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
any shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with this Series provided that
the Company may at any time redeem, purchase or otherwise acquire
shares of any such parity shares in exchange for shares of the Company
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to this Series; or
(iv) purchase or otherwise acquire for consideration any shares
of this Series, or any shares ranking on a parity with this Series,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of the Company
unless the Company could, under subsection (a) of this Section 4, purchase
or otherwise acquire such shares at such time and in such manner.
A-5
5. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary,
no distribution shall be made (i) to the holders of shares ranking junior
(either as to dividends or upon liquidation, dissolution, or winding up) to
this Series unless, prior thereto, the holders of shares of this Series
shall have received an amount equal to the accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, plus an amount equal to the greater of (x) $100 per share or (y)
an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Voting
Shares, or (ii) to the holders of shares ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with this Series,
except distributions made ratably on this Series and all other such parity
shares in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up.
6. CONSOLIDATION, MERGER, ETC. In case the Company shall enter into
any consolidation, merger, combination or other transaction in which the
Voting Shares are exchanged for or changed into other shares or securities,
cash or any other property, then in any such case the then outstanding
shares of this Series shall at the same time be similarly exchanged or
changed in an amount per share equal to the Formula Number then in effect
times the aggregate amount of shares, securities, cash or any other
property (payable in kind), as the case may be, into which or for which
each Voting Share is exchanged or changed.
7. REDEMPTION. The shares of this Series shall not be redeemable.
8. RANKING. The shares of this Series shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series
of any other preferred shares of the Company issued either before or after
the issuance of this Series, unless such other preferred shares shall
specifically provide otherwise.
9. REACQUIRED SHARES. Any shares of this Series purchased or otherwise
acquired by the Company in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such shares shall
upon their cancellation become authorized but unissued preferred shares,
without designation as to series until such shares are once more designated
as part of a particular series by resolution of the Board of Directors of
the Company.
A-6
10. MISCELLANEOUS.
(a) For the purposes hereof:
(i) the term "outstanding," when used in reference to
shares, shall mean issued shares, excluding shares held by the
Company, SCL or a subsidiary of the Company or SCL;
(ii) "SCL" shall mean Sea Containers Ltd., a Bermuda company
incorporated on June 3, 1974.
(iii) the term "subsidiary" shall mean any company a
majority of whose outstanding voting capital stock (other than
directors' qualifying shares), at the time as of which any
determination is being made, shall be owned by the parent of such
company either directly or through other subsidiaries;
(iv) the term "A Shares" shall mean the Class A Common
Shares, par value $0.01 each, of the Company;
(v) the term "B Shares" shall mean the Class B Common
Shares, par value $0.01 each, of the Company;
(vi) the term "Voting Shares" shall mean the A Shares and
the B Shares, collectively.
(vii) the amount of dividends "accrued" on any share of this
Series or on any share of the Company of any other series as at
any dividend date shall be deemed to be the amount of any unpaid
dividends accumulated thereon to and including such dividend
date, whether or not earned or declared, and the amount of
dividends "accrued" on any share of this Series or of any such
other series as at any date other than a dividend date shall be
calculated as the amount of any unpaid dividends accumulated
thereon to and including the last preceding dividend date,
whether or not earned or declared, plus an amount calculated on
the basis of the annual dividend rate fixed for the shares of
such series for the period after such last preceding dividend
date to and including the date as of which the calculation is
made, based on a 360-day year of twelve 30-day months; and
(vii) any series or class of shares of the Company shall be
deemed to rank:
(A) prior to this Series, whether or not the dividend
rates, dividend payment dates or redemption or liquidation
prices per share thereof be different from those of this
Series, if the holders of such series or class shall be
entitled to receipt from the Company of dividends or of
amounts
A-7
distributable upon liquidation, dissolution or winding up,
in preference or priority to the holders of this Series, as
the case may be;
(B) on a parity with or equal to this Series, whether
or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be
different from those of this Series, if the holders of such
series or class shall be entitled to the receipt from the
Company of dividends or of amounts distributable upon
liquidation, dissolution or winding up, in proportion to
their respective dividend rates or liquidation prices,
without preference or priority one over the other as between
the holders of such series or class and the holders of this
Series; and
(C) junior to this Series, whether or not the dividend
rates, dividend payment dates or redemption or liquidation
prices per share thereof be different from those of this
Series, if the rights of the holders of such series or class
shall be subordinate to the rights of the holders of this
Series in respect of the receipt from the Company of
dividends and of amounts distributable upon liquidation,
dissolution or winding up, including, without limitation,
the A Shares and the B Shares.
(b) So long as any shares of this Series are outstanding, in the
event of any conflict between the provisions of this resolution and
the Bye-laws or any other corporate document of the Company (both as
presently existing or hereafter amended and supplemented) the
provisions of this resolution, as the same may be amended or
supplemented pursuant to its provisions, shall be and remain
controlling.
(c) The holders of the shares of this Series shall have no
preemptive rights.
(d) All references herein to "$" mean United States dollars.
11. SERVICE OF PROCESS. The Company hereby irrevocably submits itself
to the jurisdiction of the Supreme Court of the State of New York, New York
County, of the United States of America, and to the jurisdiction of the
United States District Court for the Southern District of New York, for the
purposes of any suit, action or other proceeding brought by any holder of
shares of this Series, or by his successors or assigns, arising out of, or
relating to, the enforcement of any designation, preferences or other
special rights set forth in these resolutions. The Company shall
irrevocably designate and appoint a corporation, with offices in the State
of New York, United States of America (hereinafter called the "Agent For
Service"), as its attorney-in-fact, to receive service of process in any
action, suit or proceeding with respect to any matter as to which it
submits to jurisdiction as set forth above, and shall, upon request,
furnish any holder of shares of this Series with the name and address of
the Agent For Service. The Company hereby agrees that service upon the
A-8
Agent for Service shall constitute valid service upon the Company or its
successors or assigns. The Company agrees that: (a) the sole
responsibilities of the Agent For Service shall be (i) to receive such
process, (ii) to send a copy of such process so received to the Company, by
registered airmail, return receipt requested, at its offices at 00 Xxxxx
Xxxxxx, X.X. Xxx 0000, Xxxxxxxx XX XX, Xxxxxxx, Xxxxxxxxx: Secretary, or at
the last address filed in writing by the Company with the Agent For
Service, and (iii) to give prompt telegraphic notice of receipt thereof to
the Company at such address; and (b) the Agent For Service shall have no
responsibility for the receipt or nonreceipt by the Company of such
process, nor for any performance or nonperformance by the Company, its
successors or assigns.
SECOND: That said determination of the designation, preferences and the
relative participating, optional and other special rights and qualifications,
limitations and restrictions thereof relating to said Series A Junior
Participating Preferred Shares was duly made by the Board of Directors of the
Company, in accordance with the provisions of Section 42 of The Companies Xxx
0000 of Bermuda.
IN WITNESS WHEREOF, this Certificate of Designation of Terms has been
signed by the ____________________ and the Secretary of ORIENT-EXPRESS HOTELS
LTD., and said company has caused its corporate seal to be hereunto affixed, all
as of the day of , 2000.
ORIENT-EXPRESS HOTELS LTD.
By:
----------------------------
Title:
[Corporate Seal]
Attest:
-----------------------------------
Secretary
A-9
EXHIBIT B
Form of Right Certificate
Certificate No. R-[A][B] _______ Rights
NOT EXERCISABLE AFTER ______ __, 2010, OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.05 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
ORIENT-EXPRESS HOTELS 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 ______, 2000, (the "Rights Agreement"), between
Orient-Express Hotels Ltd., a Bermuda company (the "Company"), and Fleet
National Bank (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on ______, 2010 at the designated
office of the Rights Agent, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Shares, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $___ per one one-hundredth of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed along with
a signature guarantee and such other and further documentation as the Rights
Agent may reasonably require. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of ______, 2000, based on the
Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
B-1
PRIOR TO THE DISTRIBUTION DATE (AS DEFINED IN THE RIGHTS AGREEMENT), THE
RIGHTS EVIDENCED BY THIS CERTIFICATE WERE EVIDENCED BY ONE OR MORE CERTIFICATES
FOR THE CLASS [A][B] COMMON SHARES OF THE COMPANY.
This Right 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 Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent. This Right
Certificate, with or without other Right Certificates, upon surrender at the
designated office of the Rights Agent, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably require, may
be exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of Preferred Shares as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Right Certificate or Right 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 a redemption price of $.05
per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
B-2
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ___________, ____.
ATTEST: ORIENT-EXPRESS HOTELS LTD.
By:
-------------------------------------- --------------------------------
Countersigned:
FLEET NATIONAL BANK
By:
-----------------------------------
Authorized Signature
Date:
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED, _________________________________ hereby
sells, assigns and transfers unto ________________________________
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________ _______________ , _______
-------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in the Security Transfer
Agents Medallion Program or the Stock Exchange Medallion Program (generally, 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).
-------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
-------------------------------
Signature
B-4
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires
to exercise the Right Certificate.)
To: ORIENT EXPRESS HOTELS LTD.
The undersigned hereby irrevocably elects to exercise
_______________________ Rights represented by this Right Certificate to purchase
the Preferred Shares issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares be issued in the name of:
Please insert social security or other identifying number
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
Dated: ,
----------- ---
-----------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in the Security
Transfer Agents Medallion Program or the Stock Exchange Medallion Program
(generally, 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).
B-5
Form of Reverse Side of Right Certificate - continued
-------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
--------------------------
Signature
-------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6
