APW LTD.
and
FIRSTAR BANK N.A.
as Rights Agent
RIGHTS AGREEMENT
Dated as of ______, 2000
TABLE OF CONTENTS
Section Page
------- ----
1. Certain Definitions....................................................... 4
2. Appointment of Rights Agent............................................... 8
3. Issue of Rights Certificates.............................................. 8
4. Form of Rights Certificates...............................................10
5. Countersignature and Registration.........................................10
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates..................11
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.............12
8. Cancellation and Destruction of Rights Certificates.......................14
9. Reservation and Availability of Common Stock..............................14
10. Common Stock Record Date.................................................. 16
11. The Flip-In............................................................... 16
12. The Flip-Over............................................................. 17
13. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights.......................................................... 20
14. Fractional Rights and Fractional Shares................................... 25
15. Rights of Action.......................................................... 26
16. Agreement of Rights Holders............................................... 26
17. Rights Holder Not Deemed a Shareholder.................................... 27
18. Concerning the Rights Agent............................................... 27
19. Merger or Consolidation or Change of Name of Rights Agent................. 27
2
20. Duties of Rights Agent.................................................. 28
21. Change of Rights Agent.................................................. 30
22. Issuance of New Rights Certificates..................................... 31
23. Redemption and Termination.............................................. 31
24. Exchange................................................................ 32
25. Notice of Certain Events................................................ 33
26. Notices................................................................. 34
27. Supplements and Amendments.............................................. 35
28. Determination and Actions by the Board of Directors..................... 35
29. Successors.............................................................. 35
30. Benefits of this Agreement.............................................. 36
31. Severability............................................................ 36
32. Governing Law........................................................... 36
33. Counterparts............................................................ 36
34. Descriptive Headings.................................................... 36
EXHIBITS
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EXHIBIT A -- Forms of Rights Certificates
EXHIBIT B -- Form of Rights Summary
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of ____________, 2000 (the "AGREEMENT"), between
APW LTD., a Bermuda corporation (the "COMPANY"), and FIRSTAR BANK N.A. (the
"Rights Agent").
W I T N E S S E T H:
WHEREAS, on ______, 2000 the Board of Directors of the Company authorized
and declared a dividend distribution of one Right (as defined below) for each
outstanding share of common stock, par value $.01 per share, of the Company (the
"COMMON STOCK") outstanding on ________, 2000 (the "RECORD DATE"), and the
issuance of one Right for each share of Common Stock of the Company issued
between the Record Date and the Separation Date and one Right for each share of
Common Stock of the Company issued upon exercise of stock options granted prior
to the Separation Date or under any employee plan or arrangement established
prior to the Separation Date, each Right representing the right to purchase one
one-ten thousandth (1/10,000) share of Preferred Shares, upon the terms and
subject to the conditions hereinafter set forth (the "RIGHTS");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as hereinafter defined) and
Associates (as hereinafter defined) of such Person, shall be the Beneficial
owner (as hereinafter defined) of 15% or more of the shares of Common Stock then
outstanding and shall include all Affiliates and Associates of such Person, but
shall not include the (i) Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company or any Subsidiary of the Company, or (iv)
any Person or entity holding shares of Common Stock organized, appointed or
established by the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an Acquiring Person as a
result of an acquisition of Common Stock by the Company which by reducing the
number of shares outstanding increases the proportionate number of shares
beneficially owned to 15% or more of the Common Stock then outstanding; provided
further that such Person nonetheless shall become an Acquiring Person in the
event such Person (together with Affiliates and Associates of such Person)
thereafter acquires an additional 1% of the Common Stock then outstanding.
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(b) "AFFILIATE" shall mean, with respect to a specified Person, a Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person specified.
(c) "ASSOCIATE" shall mean, with respect to a specified Person, (i) any
corporation or organization (other than the Company or a Subsidiary of the
Company) of which such Person is an officer, director or partner or is, directly
or indirectly, the beneficial owner of 10% or more of any class of equity
security as defined in Rule 3a-11 of the General Rules and Regulations under the
Exchange Act (or any successor rule or statutory provision), (ii) any trust or
other estate in which such Person has a substantial beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary capacity, and
(iii) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person, or is an officer or director of any
corporation controlling or controlled by such Person.
(d) "BENEFICIAL OWNERSHIP" shall be determined pursuant to Rule 13d-3 of
the General Rules and Regulations under Exchange Act (or any successor rule or
statutory provision) or, if Rule 13d-3 shall be rescinded and there shall be no
successor rule or statutory provision thereto, pursuant to Rule 13d-3 as in
effect on the date hereof; provided, however, that a Person shall, in any event,
also be deemed to be the "Beneficial Owner" of any securities:
(i) which such Person or any Affiliate or Associate thereof
beneficially owns, directly or indirectly;
(ii) which such Person or any Affiliate or Associate thereof,
directly or indirectly, has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon
the exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any Affiliate or Associate thereof until the tendered
securities are accepted for purchase or exchange, or (B) securities
issuable upon exercise of the Rights;
(iii) which such Person or any Affiliate or Associate thereof,
directly or indirectly, has sole or shared voting or investment power with
respect thereto pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (iii) as a result of an agreement, arrangement or
understanding to vote such security if the agreement, arrangement or
understanding (A) arises solely from a revocable
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proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not also
then reportable by such Person on Schedule 13D under the Exchange Act; or
(iv) which are beneficially owned, directly or indirectly, by any other
Person or any Affiliate or Associate thereof with which such Person or any
Affiliate or Associate thereof has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in
subparagraph (iii) of this paragraph (e)) or disposing of any voting
securities of the Company.
Nothing in this Section 1(e) shall cause a Person engaged in business as an
underwriter to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of such
acquisition.
(e) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the Country of Bermuda are authorized or
obligated by law or executive order to close.
(f) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., Central
Standard time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Central Standard time, on the next
succeeding Business Day.
(g) "CLOSING PRICE" of any security on any given day shall be the last
sale price, regular way, of such security or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, on
the principal trading market on which such security is then traded.
h) "COMMON STOCK" shall mean the common stock, par value $.01 per share,
of the Company; and "COMMON STOCK" when used with reference to any Person other
than the Company shall mean the capital stock with the greatest voting power, or
the equity securities or other equity interest having power to control or direct
the management, of such Person.
(i) "CURRENT MARKET PRICE" of any security on any given day shall be
deemed to be the average of the daily Closing Prices per share or other trading
unit of such security for 10 consecutive Trading Days (as hereinafter defined)
immediately preceding such date; provided, however, that with respect to shares
of capital stock, in the event that the current market price per share of the
capital stock is determined during a period following the announcement of (i) a
dividend or distribution on the capital stock payable in shares of such capital
stock or securities convertible into shares of such capital stock (other than
the Rights), or (ii) any subdivision, combination or
6
reclassification of the capital stock, and prior to the expiration of the
requisite 10 Trading Day period, as set forth above, after the ex-dividend date
for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then and in each such case, the Current Market
Price, shall be properly adjusted to take into account ex-dividend trading; and
provided further that if the security is not publicly held or not so listed or
traded, Current Market Price per share or other trading unit shall mean the fair
value per share or other trading unit as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(j) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement, and all references to any
rule or regulation of the General Rules and Regulations under the Exchange Act
shall be, except as otherwise specifically provided herein, to such rule or
regulation as was in effect on the date of this Agreement.
(k) "EXCHANGE DATE" shall mean the date at which the Rights are exchanged
as provided in Section 24 of this Agreement.
(l) "EXPIRATION DATE" shall mean the Close of Business on _______, 2010,
subject to extension as provided in this Agreement.
(m) "FLIP-IN EVENT" shall mean any Person becoming an Acquiring Person.
(n) "FLIP-OVER EVENT" shall mean any of the events described in Section
12(a) of this Agreement.
(o) "PERSON" shall mean any individual, firm, corporation, partnership or
other entity and shall include any "group" as that term is used in Rule 13d-5(b)
under the Exchange Act (or any successor rule or statutory provision).
(p) "PREFERRED SHARES" shall mean the Series A Junior Participating
Preferred Stock, $.01 par value, of the Company, which series shall have the
powers, rights and preferences as set forth in a filing with the appropriate
Bermuda government authority.
(q) "PURCHASE PRICE" shall mean with respect to each Right, the price set
forth in Section 7(b) of this Agreement (subject to adjustment).
(r) "PRINCIPAL PARTY" shall have the meaning set forth in Section 12(b) of
this Agreement.
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(s) "REDEMPTION DATE" shall mean the time at which the Rights are ordered
to be redeemed pursuant to Section 23 of this Agreement.
(t) "SEPARATION DATE" shall mean the earlier of (i) the tenth day after
the Stock Acquisition Date (as hereinafter defined) or (ii) the tenth day (or
such later date as may be determined by action of the Board of Directors prior
to such time as any Person becomes an Acquiring Person) after the date of the
commencement of, or first public announcement of the intent to commence, a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any Subsidiary of
the Company or any entity holding shares of Common Stock organized, appointed or
established by the Company for or pursuant to the terms of any such plan), if
upon consummation thereof, such Person would be the Beneficial Owner of 50% or
more of the shares of Common Stock then outstanding (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights).
(u) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement by the Company, an Acquiring Person or otherwise, that an Acquiring
Person, has become such.
(v) "SUBSIDIARY" shall mean, with reference to any Person, any corporation
of which a majority of any class of equity security is Beneficially Owned,
directly or indirectly, by such Person.
(w) "TRADING DAY," with respect to any security shall mean a day on which
the principal national securities exchange on which the security is listed or
admitted to trading is open for the transaction of business or, if the security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(x) "TRIGGERING EVENT" shall mean a Flip-In Event or a Flip-Over Event.
Any determination required by the definitions contained in this Section 1
shall be made by the Board of Directors of the Company in its good faith
judgment, which determination shall be final and binding on the Rights Agent.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 of this Agreement, shall prior to the Separation
Date also be the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
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Section 3. Issue of Rights Certificates.
(a) Until the Separation Date, (i) the Rights will be evidenced by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (ii) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company).
(b) As soon as practicable after the Separation Date, the Rights Agent
will send by first-class, postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Separation Date, at the address
of such holder shown on the records of the Company, a Rights certificate (the
"RIGHTS CERTIFICATE"), evidencing one Right (as adjusted from time to time prior
to the Separation Date pursuant to this Agreement) for each share of Common
Stock so held. As of and after the Separation Date, the Rights will be
evidenced solely by Rights Certificates.
(c) As soon as practicable after the Record Date, the Company will send a
copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit B (the "SUMMARY OF RIGHTS"), by first-class, postage prepaid mail to
each record holder of the Common Stock as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the Company.
(d) Certificates for the Common Stock issued after the Record Date, but
prior to the earlier of the Separation Date or the Expiration Date (as
hereinafter defined), shall be deemed also to be certificates for Rights, and
shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between APW Ltd. (the
"Company") and Firstar Bank N.A., dated as of _________, ____, as it may be
amended from time to time, (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at
the principal offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
Under certain circumstances, Rights beneficially owned by Acquiring Persons
(as defined in the Rights Agreement) become null and void and the holder of
such Rights (including any subsequent holder) shall not have any right to
exercise the Rights.
9
Rights shall not be exercisable in any jurisdiction if (i) such
exercise is not permitted under applicable law or (ii) a prospectus or
registration statement in respect of the Rights shall not have been filed
or declared effective in Bermuda.
(e) After the Separation Date, but prior to the Expiration Date, Rights
shall be issued in connection with the issuance of Common Stock upon the
exercise of stock options granted prior to the Separation Date or pursuant to
other benefits under any employee plan or arrangement established prior to the
Separation Date; provided, however, that if, pursuant to the terms of any option
or other benefit plan, the number of shares issuable thereunder is adjusted
after the Separation Date, the number of Rights issuable upon issuance of the
shares shall be equal only to the number of shares which would have been
issuable prior to the adjustment.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the form of election to purchase shares
and form of assignment) shall be in substantially the form attached hereto as
Exhibit A and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or to conform to
usage. Subject to the provisions of this Agreement, the Rights Certificates,
whenever issued, shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of shares of Common Stock
which shall be set forth therein at the Purchase Price set forth therein,
subject to adjustment as provided in this Agreement.
(b) Any Rights Certificate issued pursuant to Section 3(a) of this
Agreement that represents Rights beneficially owned by an Acquiring Person or
that represents any Rights owned on or after the Separation Date by any Person
who subsequently becomes an Acquiring Person and any Rights Certificate issued
at any time upon the transfer of any Rights to an Acquiring Person or to any
nominee of such Acquiring Person and any Rights Certificate issued pursuant to
Section 6 or Section 13 of this Agreement upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence, may
contain the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). This Rights Certificate and the Rights represented
hereby may become void in the circumstances specified in Section 7(e) of
the Rights Agreement.
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Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company by
the Chairman of its Board of Directors, its President, its Secretary, or any
Vice President, either manually or by facsimile signature and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. Each Rights Certificate shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before counter-
signature by the Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the Rights Agent, and
issued and delivered by the Company with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such officer of
the Company; and any Rights Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Separation Date, the Rights Agent will keep or cause to
be kept, at one of its offices, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced by each of the Rights Certificates, and the certificate number
and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 14 of this Agreement, at any time
after the Close of Business on the Separation Date, and at or prior to the Close
of Business on the Expiration Date, any Rights Certificate or Certificates may
be transferred, split up, combined or exchanged for another Rights Certificate
or Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock (or other securities, cash or other property, as the case
may be) as the Rights Certificate or Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Thereupon, the Rights Agent shall
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum
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sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Until the Separation Date, no Right may be exercised. Each Right shall
entitle (except as otherwise provided in this Agreement) the registered holder
thereof, upon the exercise thereof as provided in this Agreement, to purchase,
for the Purchase Price, at any time after the Separation Date and prior to the
earliest of the Expiration Date, the Exchange Date and the Redemption Date, one
share of Common Stock, subject to adjustment from time to time as provided in
Sections 11 and 13 of this Agreement, payable in lawful money of the United
States of America in accordance with Paragraph (c) below.
(b) Subject to Section 7(e), Section 23(a) and Section 24 of this
Agreement, the registered holder of any Rights Certificate may exercise the
Rights evidenced thereby in whole or in part at any time after the Separation
Date upon surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof including the certificate contained therein
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each share of Common Stock as to
which the Rights are exercised prior to the earliest of the Expiration Date, the
Exchange Date and the Redemption Date. The Purchase Price for each share of
Common Stock purchasable pursuant to the exercise of a Right shall initially be
$_____ (________ & 00/100 dollars), and shall be payable in lawful money of the
United States of America in accordance with Paragraph (c) below. The Purchase
Price and the number of shares of Common Stock to be acquired upon exercise of a
Right shall be subject to adjustment from time to time as provided in Section 13
of this Agreement.
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase including the certificate contained
therein duly executed, accompanied by payment of the Purchase Price for the
shares (or cash or other assets as the case may be) to be purchased and an
amount equal to any applicable transfer
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tax in cash, or by certified check or bank draft payable to the order of the
Company, the Rights Agent shall thereupon promptly:
(i)(A) requisition from any transfer agent of the Common Stock
certificates for the total number of shares of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) requisition from the depositary
agent depositary receipts representing such number of shares of Preferred
Shares as are to be purchased (in which case certificates for the shares of
Preferred Shares represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request;
(ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 of this
Agreement;
(iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be
designated by such holder; and
(iv) after receipt, deliver such cash, if any, to or upon the order of
the registered holder of such Rights Certificate.
In the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to this Agreement,
the Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of such Rights Certificate
or to his duly authorized assigns, subject to the provisions of Section 6 and
Section 14 of this Agreement.
(e) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of the earlier of (x) the date on which the Board of Directors of the
Company decides to exchange the Rights pursuant to Section 24 of this Agreement
and (y) a Triggering Event, any unexercised Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any Associate or Affiliate thereof) who
becomes a transferee after the Acquiring Person becomes such, (iii) a transferee
of an Acquiring Person (or of any Associate or Affiliate thereof) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a
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transfer (whether or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall immediately become permanently null and void without any further action,
and no holder of such Rights shall have any right whatsoever with respect to
such Rights under this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) of this Agreement are complied with, but shall have no liability to
any holder of Rights Certificates or to any other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of any Rights Certificate upon the occurrence of
any purported exercise thereof unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former or proposed Beneficial Owner) or Affiliates thereof
as the Company shall reasonably request.
(g) The existence of these Rights does not constitute an offer to, and may
not be exercised by, any Person unless and until a prospectus has been filed
with the appropriate government authority in Bermuda.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificates purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
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Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available at all times out of its authorized and unissued shares of
Preferred Shares (and/or other shares of capital stock or securities) or its
authorized and issued shares of Preferred Shares (and/or other shares of capital
stock or securities) held in its treasury, free from preemptive rights or any
right of first refusal, the number of shares of Preferred Shares (and/or other
shares of capital stock or securities) that will be sufficient to permit the
exercise in full of all Rights from time to time outstanding.
(b) So long as the shares of Preferred Shares (and/or other shares of
capital stock or securities) issuable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its reasonable
efforts to cause, from and after the time the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to:
(i) file, as soon as practicable following the earlier of the
Separation Date or as soon as is required by law, a registration statement
under the Securities Act of 1933 (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form;
(ii) cause such registration statement to become effective as soon as
practicable after the filing; and
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earliest of (A) the date as of which Rights are no longer exercisable for
such securities, (B) the Expiration Date and (C) the Redemption Date.
The Company will also take all action necessary to ensure compliance with
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file such registration statements and permit them to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite
15
qualification in that jurisdiction shall have been obtained and, if applicable,
until a registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Common Stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any shares of Common Stock (and/or other shares of capital stock of securities,
as the case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of any certificate for shares of Preferred Shares (and/or
other shares of capital stock of securities, as the case may be) in respect of a
name other than that of, the registered holder of the Rights Certificate
evidencing Rights surrendered for exercise or the issuance or delivery of any
certificates for shares of Preferred Shares (and/or other shares of capital
stock of securities, as the case may be), upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for shares of Preferred Shares (and/or other shares of capital stock
of securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the shares of
Preferred Shares (and/or other shares of capital stock of securities, as the
case may be) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Shares (and/or other shares of
capital stock of securities, as the case may be) transfer books of the Company
are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares (and/or other shares of capital stock of
securities, as the case may be) transfer books of the Company are open.
Section 11. The Flip-In. (a) In the event any Person shall become an
Acquiring Person, then, subject to the provisions of Section 24 of this
Agreement, each holder of a Right, except as provided below and in Section 7(e)
of this Agreement, shall
16
thereafter have a right to receive, upon exercise of the Right at the then
current Purchase Price, in accordance with the terms of this Agreement, in lieu
of one share of Common Stock per Right held, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of shares of Common Stock for
which a Right is then exercisable and dividing that product by (y) 50% of the
Current Market Price per share of the Common Stock on the date such Person first
becomes an Acquiring Person (such number of shares being herein referred to as
the "ADJUSTMENT SHARES").
(b) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (a), the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exercise of the Rights; provided, however, that
if the Company is unable to cause the authorization of a sufficient number of
additional shares of Common Stock, then, in the event the Rights become so
exercisable, the Company, with respect to each Right and to the extent necessary
and permitted by applicable law and any agreements or instruments in effect on
the date hereof to which the Company is a party, shall, upon the exercise of
such Rights,
(i) pay an amount in cash equal to the excess of (A) the product of
(1) the number of Adjustment Shares, multiplied by (2) the Current Market
Price of the Common Stock (such product being herein referred to as the
"CURRENT VALUE"), over (B) the Purchase Price, in lieu of issuing shares of
Common Stock and requiring payment therefor, or
(ii) issue debt or equity securities, or a combination thereof,
having a value equal to the Current Value, where the value of such
securities shall be determined by a recognized investment banking firm
selected by the Board of Directors of the Company, and require the payment
of the Purchase Price, or
(iii) deliver any combination of cash, property, Common Stock and/or
other securities having the requisite value, and require payment of all or
any requisite portion of the Purchase Price.
To the extent that the Company determines that some action need be taken
pursuant to clauses (i), (ii), or (iii) of the proviso of this Section 11(b), a
majority of the directors of the Company may suspend the exercisability of the
Rights for a period of up to 60 days following the date such Person first
becomes an Acquiring Person, in order to decide the appropriate form of
distribution to be made pursuant to the above proviso and to determine the value
thereof. In the event of any suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
17
temporarily suspended, as well as a public announcement at the time the
suspension is no longer in effect.
Section 12. The Flip-Over.
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly:
(w) the Company shall consolidate with, or merge with and into, any
other Person; or
(x) any Person shall consolidate with the Company, or merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part
of the shares of Common Stock shall be changed into or exchanged for stock
or other securities of any other Person or cash or any other property; or
(y) the Company shall effect a share exchange in which all or part of
the Common Stock of the Company shall be changed into (including, without
limitation, any conversion into or exchange for) securities of any other
Person, cash or any other property; or
(z) the Company shall sell, lease, exchange, mortgage, pledge or
otherwise transfer (or one or more of its Subsidiaries shall sell, lease,
exchange, mortgage, pledge or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons then, and in each such case, subject
to the provisions of Section 24 of this Agreement,
(i) each holder of a Right, except as provided in Section 7(e) of
this Agreement, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of shares of freely tradeable common
stock of the Principal Party, free and clear of any lien, encumbrance or
other adverse claim, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the then number of shares of
Common Stock for which a Right is then exercisable (or the number of shares
of Common Stock for which a Right was exercisable immediately prior to the
occurrence of the Flip-In Event if a Flip-In Event has previously occurred)
and dividing that product by (2) 50% of the Current Market Price per share
of the common stock of such Principal Party on the date of consummation of
the Flip-Over Event;
18
(ii) all common stock of any Person for which any Right may be
exercised after consummation of a business combination as provided in this
Section 12(a) shall, when issued upon exercise thereof in accordance with
this Agreement, be duly and validly authorized and issued and fully paid
and nonassessable;
(iii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of the Flip-Over Event, all the obligations and duties of
the Company pursuant to this Agreement;
(iv) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 13 hereof shall apply to such Principal Party; and
(v) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its common
stock) in connection with such consummation as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of common stock thereafter
deliverable upon the exercise of the Rights.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in (w), (x) or (y) of
the first sentence of Section 12(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
or exchanged in such merger, consolidation or other business combination,
and if no securities are so issued, the Person that is the other party to
the merger, consolidation or other business combination; and
(ii) in the case of any transaction described in (z) of the first
sentence in this Section 12(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (1) if the common stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under the Exchange Act, as then in effect, and such Person is
a direct or indirect Subsidiary of another Person the common stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the common stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the common stock having the greatest aggregate market value.
19
(c) The Company shall not consummate any Flip-Over Event unless prior
thereto the Company and each Principal Party and each other Person who may
become a Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 12 and further providing that, as soon as practicable after
the date of any Flip-Over Event, the Principal Party will:
(i) prepare and file at its own expense a registration statement
under the Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, will use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earliest of the Expiration
Date, the Exchange Date and the Redemption Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act.
The Principal Party shall temporarily suspend, for a period of time not to
exceed 90 days following the occurrence of a Flip-Over Event, the exercisability
of the Rights in order to prepare and file the registration statement referred
to in clause (i) above, and the Expiration Date shall be extended by the number
of days of such suspension. The provisions of this Section 12 shall similarly
apply to successive Flip-Over Events. In the event that a Flip-Over Event shall
occur at any time after the occurrence of a Flip-In Event, the Rights which have
not theretofore been exercised shall thereafter become exercisable in the manner
described in Section 12(a).
Section 13. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 13.
(a) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend or make a distribution on the Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding Common Stock
into a larger number of shares, (C) combine the outstanding Common Stock into a
smaller number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then in each such event, except as otherwise provided
in this Section 13(a), the Purchase Price in effect at the time of the record
date for such dividend or distribution, or of the effective date of
20
such subdivision, combination or reclassification, and the number and kind of
shares of Common Stock or capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Rights (except as provided in
Section 7(e) of this Agreement) exercised on or after such time shall be
entitled to receive upon payment of the Purchase Price in effect immediately
prior to such date, the aggregate number and kind of shares of Common Stock or
capital stock which, if such Rights had been exercised immediately prior to such
date and at a time when the Common Stock transfer books of the Company were
open, that holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, distribution, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both Section 11(a) of this Agreement and this Section 13(a), the adjustment
provided for in this Section 13(a) shall be in addition to, and shall be made
prior to any adjustment required pursuant to Section 11(a).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock entitling them to
subscribe for or purchase Common Stock or securities convertible into Common
Stock at a price per share of Common Stock(or having a conversion price per
share, if a security convertible into Common Stock) of less than the Current
Market Price per share of Common Stock on such record date, the Purchase Price
to be in effect after the record date shall be determined by multiplying the
Purchase Price in effect immediately prior to the record date by a fraction,
(1) the numerator of which shall be the number of shares of Common
Stock outstanding on the record date, plus the number of shares of Common
Stock which the aggregate exercise price of the total number of shares of
Common Stock which are obtainable upon the exercise of the rights, options
or warrants (and/or the aggregate initial conversion price of the
convertible securities so offered) would purchase at the Current Market
Price; and
(2) the denominator of which shall be the number of shares of Common
Stock outstanding on the record date, plus the number of additional shares
of Common Stock which may be obtained upon exercise of the rights, options
or warrants (or into which the convertible securities so offered are
initially convertible).
If the subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent. Shares of Common Stock owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that
21
rights, options or warrants are not issued following an adjustment, the Purchase
Price shall again be adjusted to be the Purchase Price which would be in effect
if the record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all
holders of Common Stock (including any such distribution made in connection with
a consolidation or merger in which the Company is the surviving corporation) of
evidences of indebtedness, cash (other than a regular periodic cash dividend out
of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Common Stock, but including any dividend payable in stock
other than Common Stock) or subscription rights or warrants (excluding those
referred to in Section 13(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction,
(1) the numerator of which shall be the Current Market Price per
share of Common Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to
one share of Common Stock; and
(2) the denominator of which shall be such Current Market Price per
share of Common Stock.
Such adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would be in effect
if such record date had not been fixed.
(d) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 13(d)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 13 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share as the case may be. Notwithstanding the first sentence of this
Section 13(d), any adjustment required by this Section 13 shall be made no later
than the earlier of (i) three years from the date of the transaction which
mandates the adjustment or (ii) the earliest of the Expiration Date, the
Exchange Date and the Redemption Date.
(e) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Rights thereafter exercised shall become entitled to receive any
securities of the
22
Company other than shares of Common Stock, thereafter the number of such other
securities so receivable upon exercise of any Rights shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares contained in Section
13(a) through (c), inclusive, and the provisions of Sections 7, 9, 10, 12 and 14
of this Agreement with respect to the Common Stock shall apply on like terms to
any such other securities.
(f) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided in this Agreement.
(g) Unless the Company shall have exercised its election as provided in
Section 13(h), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 13(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by
(i) multiplying (x) the number of shares of Common Stock covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(h) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 13(h), the Company shall, as
promptly as
23
practicable, cause to be distributed to holders of record of Rights Certificates
on such record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(i) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Common Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of shares which were expressed in
the initial Rights Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment reducing the
Purchase Price below the par value of the shares of Common Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock at
such adjusted Purchase Price.
(k) In any case in which this Section 13 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Rights exercised after such record date the shares
of Common Stock and other capital stock or securities, cash or property of the
Company, if any, issuable upon such exercise over and above the shares of Common
Stock and other capital stock or securities, cash or property of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares and other capital stock or securities,
cash or property upon the occurrence of the event requiring such adjustment.
(l) Anything in this Section 13 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 13, as and to
the extent that in its sole discretion the Company shall determine to be
advisable in order that any (i)
24
consolidation or subdivision of the Common Stock, (ii) issuance wholly for cash
of any shares of Common Stock at less than the Current Market Price, (iii)
issuance wholly for cash of shares of Common Stock or securities which by their
terms are convertible into or exchangeable or exercisable for shares of Common
Stock, (iv) stock dividends, or (v) issuance of rights, options or warrants
referred to in this Section 13, hereafter made by the Company to holders of its
Common Stock shall, if practicable, not be taxable to such shareholders.
(m) The Company covenants and agrees that it shall not (i) consolidate
with, (ii) merge with or into, or (iii) directly or indirectly sell, lease or
otherwise transfer or dispose of, in one or more transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries taken as a whole, to any other Person, if at the time of or
immediately after such consolidation, merger, sale, lease, transfer or
disposition there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(n) The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Sections 23, 24 or 27 of this
Agreement, take any action the purpose or effect of which is to diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time prior to the Separation Date (i)
declare a dividend or distribution on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Separation Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to the event by a
fraction, (1) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the event and
(2) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of the event.
(p) Whenever an adjustment is made as provided in Sections 11, 12 and 13 of
this Agreement, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for the
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Common Stock and the Common Stock a copy of the certificate and (c) mail
a brief summary thereof to each holder of a Rights Certificate in accordance
with Section 26 of this Agreement.
25
The Rights Agent shall be fully protected in relying on the certificate and on
any adjustment therein contained.
Section 14. Fractional Rights and Fractional Shares.
(a) In no case shall the Company be required to issue fractional Rights or
to distribute Rights Certificates which evidence fractional Rights. In lieu of
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the Current Market Price of a
whole Right as of the date on which fractional Rights would have been otherwise
issuable.
(b) The Company shall not be required to issue fractions of shares of
Preferred Shares or Common Stock, as the case may be, upon exercise of the
Rights or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Preferred Shares or Common Stock, as the
case may be, the Company may pay to the registered holders of Rights
Certificates, at the time such Rights are exercised as herein provided, an
amount in cash equal to the same fraction of the Current Market Price of one
share of Common Stock as of the date of such exercise.
(c) The holder of a Right by its acceptance thereof expressly waives any
right to receive any fractional Rights or any fractional shares upon exercise of
a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Separation Date, the registered holders of the
Common Stock); and any registered holder of a Rights Certificate (or, prior to
the Separation Date, of the Common Stock) without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Separation Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his rights
pursuant to this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
26
(a) prior to the Separation Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
(b) after the Separation Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
corporate trust office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in whose
name a Rights Certificate (or, prior to the Separation Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court or by a governmental, regulatory
or administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority prohibiting
or otherwise restraining performance of such obligation; provided, however, the
Company must use its best efforts to have any order, decree or ruling lifted or
otherwise overturned.
Section 17. Rights Holder Not Deemed a Shareholder. Except as otherwise
expressly provided in this Agreement, no holder of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any purpose the holder
of the shares of Preferred Shares or Common Stock or any other securities of the
Company, as the case may be, which may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate any of the rights of a shareholder of the Company or any right to
vote for the election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting shareholders, or to
receive dividends or subscription rights, or otherwise, until and only to the
extent that the Right or Rights evidenced by the Rights Certificate shall have
been exercised in accordance with the provisions of this Agreement.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in the
administration and
27
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, or willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises. The indemnification provided for
hereunder shall survive the expiration of the rights and the termination of this
Agreement. The costs and expenses of enforcing this right of indemnification
shall be paid by the Company.
The Rights Agent may conclusively rely upon, and shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in
reliance upon, any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that the corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 of this Agreement. In case at
the time the successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, the successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver the Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign the Rights
Certificates either in the name of the predecessor or in its name as successor
Rights Agent; and in all such cases the Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
that time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign the Rights
28
Certificates either in its prior name or in its changed name; and those Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, it may consult
with legal counsel (who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with the opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) be proved
or established by the Company prior to taking or suffering any action hereunder,
the fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and the
certificate shall be full authorization to the Rights Agent, for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance thereon.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of facts or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except its countersignature),
but all statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under Sections 11 or 13 of this
Agreement or responsible for the manner, method or amount of any adjustment or
the ascertaining of the existence of facts that would
29
require an adjustment (except with respect to the exercise of Rights evidenced
by Rights Certificates after actual notice of an adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or any Rights Certificate or as to whether any shares of
Common Stock will, when so issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of funds or
adequate indemnification against the risk or liability is not reasonably assured
to it.
(k) The Rights Agent shall not be required to take notice or be deemed to
have notice of any fact event or determination (including, without limitation,
any dates or
30
events defined in this Agreement or the designation of any Person as an
Acquiring Person, Affiliate or Associate thereof) under the Rights Agreement
unless and until the Rights Agent shall be specifically notified in writing by
the Company of the fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company, and at the expense of the
Company, to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by the court, shall be a corporation organized and doing
business under the laws of the United States or of the State of Wisconsin (or of
any other state of the United States so long as such corporation is authorized
to do business as a banking institution in the State of Wisconsin), in good
standing or in active status, as the case may be, which is authorized under the
laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of the appointment, the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common Stock and
mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
31
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price per share and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provision of this Agreement.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any time
prior to 5:00 P.M., Central Standard time, on the earlier of (i) the tenth day
following the Stock Acquisition Date, subject to extension by the Board of
Directors for a period of time, or (ii) the Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $0.0001 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "REDEMPTION PRICE"). Notwithstanding anything in
this Agreement to the contrary, no Rights may be exercised at any time that the
Rights are subject to redemption in accordance with the terms of this Agreement.
(b) Immediately upon the action of the Board of Directors of the Company
extending the redemption period pursuant to Section 23(a)(i), evidence of which
shall have been filed with the Rights Agent, the Company shall issue a press
release indicating the date to which the Board of Directors has extended its
right to redeem the Rights.
(c) Notwithstanding anything in this Agreement to the contrary, no
redemption of the Rights shall be permitted after 5:00 P.M., Central Standard
time, on the earlier of (i) the tenth day following the Stock Acquisition Date,
subject to extension by the Board of Directors for a period of time up to, but
not exceeding, ten additional days, or (ii) the Expiration Date.
(d) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, evidence of which shall have been filed
with the Rights Agent, and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. Within 10 days
after the action of the Board of Directors ordering the redemption of the
Rights, the Company shall mail notice of the redemption to the Rights Agent and
the holders of the then outstanding Rights to all holders at their last
addresses as they appear upon the registry books of the Rights Agent or prior to
the Separation Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each notice of
32
redemption will state the method by which the payment of the Redemption Price
will be made. In any case, failure to give notice to any particular holder of
Rights shall not affect the sufficiency of the notice to other holders of
Rights. Neither the Company nor any of its Affiliates or Associates may redeem
for value any Rights at any time, in any manner, other than that specifically
set forth in this Section 23, and neither the Company nor any of its Affiliates
or Associates may acquire or purchase for value any Rights at any time, in any
manner, other than in connection with the purchase of shares of associated
Common Stock prior to the Separation Date.
Section 24. Exchange.
(a) The Company may, at its option, but subject to receipt of any required
regulatory approvals, by action of the Board of Directors, at any time after any
Person becomes an Acquiring Person, exchange all or any part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e)) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being herein referred to as
the "EXCHANGE RATIO"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect an exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee plan of the
Company or of a Subsidiary of the Company or any Person holding Common Stock for
or pursuant to the terms of any employee plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50 percent or more of
the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of Rights shall be to
receive that number of shares of Common Stock equal to the number of such Rights
held by the holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of the exchange. The
Company promptly shall mail a notice of any exchange to all of the holders of
Rights at their last addresses as they appear upon the registry books of Rights
Agent. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each notice of exchange
will state the method by which the exchange of the Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e)) held by each holder of Rights.
33
(c) The Company shall not be required to issue fractions of shares of
Preferred Shares or Common Stock, as the case may be, or to distribute
certificates which evidence fractional Preferred Shares or Common Stock. In lieu
of fractional shares, the Company shall pay to the registered holders of the
Right Certificates with regard to which fractional shares would otherwise be
issuable an amount in cash equal to the same fraction of the Current Market
Value of a whole share of Common Stock.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock, or (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase any additional
shares of Common Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Common Stock,
or (iv) to effect any Flip-Over Event, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each case, the Company shall
give to each holder of a Rights Certificate, in accordance with Section 26, a
notice of the proposed action, which shall specify the record date for the
purposes of the stock dividend, distribution of rights or warrants, or the date
on which the reclassification, Flip-Over Event, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders
of the shares of Common Stock, if any date is to be fixed, and the notice shall
be so given in the case of any action covered by clause (i) or (ii) above at
least 20 days prior to the record date for determining holders of the shares of
Common Stock for purposes of such action, and in the case of any other action,
at least 20 days prior to the date of the taking of the proposed action or the
date of participation therein by the holders of the shares of Common Stock
whichever shall be the earlier.
(b) Upon the occurrence of a Flip-In Event or a Flip-Over Event, the
Company or Principal Party, as the case may be, shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26, a notice of the occurrence of the event and
the consequences thereof to holders of Rights under Sections 11 or 12 of this
Agreement, as the case may be.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sent by registered or certified mail and shall be
deemed given upon receipt and addressed (until another address is filed in
writing with the Rights Agent) as follows:
APW Ltd.
N22 X00000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
34
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
delivered by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Firstar Bank N.A.
0000 Xxxxx Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: ______________
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the holder's address as shown on the registry books
of the Company. The Company shall deliver a copy of any notice or demand it
delivers to the holder of any Rights Certificate to the Rights Agent and the
Rights Agent shall deliver to the Company a copy of any notice or demand it
delivers to the holder of any Rights Certificate.
Section 27. Supplements and Amendments. For as long as the Rights are then
redeemable and except as provided in the last sentence of this Section 27, the
Company may in its sole and absolute discretion, and the Rights Agent shall if
the company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of the Rights. At any time when the Rights
are not then redeemable and except as provided in the last sentence of this
Section 27, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Right Certificates (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein or (iii) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable,
provided, that no such supplement or amendment pursuant to this clause (iii)
shall materially adversely affect the interest of the holders of Right
Certificates. Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price. Notwithstanding the other provisions of this
Section 27, the Board shall retain the right to amend the Purchase Price for a
period of six (6) months from the date hereof.
35
Section 28. Determination and Actions by the Board of Directors. The Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Company or as may be necessary or advisable in the administration
of this Agreement, including without limitation the right and power to (a)
interpret the provisions of this Agreement and (b) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including without limitation a determination to redeem or not to redeem the
Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations which are done by the Board of Directors of
the Company in good faith shall be final, conclusive and binding on the Company,
the Rights Agent and holders of the Rights and all other interested parties and
shall not subject the Board of Directors of the Company to any liability to the
holders of the Rights.
Section 29. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Separation
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Separation Date, the Common Stock).
Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Country of Bermuda and for all purposes shall be governed by and
construed in accordance with the laws of Bermuda applicable to contracts made
and to be performed entirely within Bermuda.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of which shall for all purposes be deemed to be an
original, and all counterparts shall together constitute but one and the same
instrument.
36
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
* * * *
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
FIRSTAR BANK N.A. APW LTD.
By: By:
----------------------------- ---------------------------------
Name: Name:
--------------------------- -------------------------------
Title: Vice President Title: President and Chief Executive
Officer
Attest: Attest:
By: By:
----------------------------- ---------------------------------
Name: Name:
-------------------------- -------------------------------
Title: Assistant Secretary Title: Assistant Secretary
38
Exhibit A
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER ________, 2010 OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS THE TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF THE RIGHTS AGREEMENT.
RIGHTS CERTIFICATE
APW LTD.
This certifies that or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of ______, ____ (the "RIGHTS AGREEMENT") between APW Ltd., a
Bermuda corporation (the "COMPANY"), and Firstar Bank N.A. (the "RIGHTS AGENT"),
unless notice of redemption shall have been previously given by the Company, to
purchase from the Company at any time after the Separation Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M. (Central Standard time)
on _________________ at the principal corporate trust office of the Rights
Agent, or at the office of its successor as Rights Agent, one one-ten thousandth
fully paid nonassessable share of the Preferred Share, par value $.01 per share,
of the Company (the "PREFERRED STOCK"), at a purchase price of $______ per share
(the "PURCHASE PRICE") upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase duly executed. The Purchase
Price may be paid by certified bank check or money order payable to the order of
the Company.
39
The number of Rights evidenced by this Rights Certificate (and the number
of shares of Common Stock which may be purchased upon exercise thereof) and the
Purchase Price set forth above have been determined as of ________, ____, based
on the Common Stock of the Company as constituted at that date. As provided in
the Rights Agreement, the Purchase Price and the number of shares of Preferred
Shares or Common Stock or other securities, cash or other property which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events.
If the Rights evidenced by this Rights Certificate are or were formerly
beneficially owned, on or after the earlier of the Separation Date and the Stock
Acquisition Date, by an Acquiring Person or an Affiliate, Associate or direct or
indirect transferee of an Acquiring Person, the Rights may become null and void
and the holder of the Right (including any subsequent holder) shall not have any
right with respect to the Right.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates.
Capitalized terms used in this Rights Certificate have the same meanings as such
terms are defined in the Rights Agreement. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the office of the
Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal corporate trust office of the Rights Agent, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Preferred Shares or Common Stock or other property as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
entitled the holder to purchase. If this Rights Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.0001 per Right at any time prior to the earlier of (i) the close of
business on the tenth day following the time it becomes public that an Acquiring
Person has become such (with the possibility of an extension for an additional
ten days) and (ii) the Expiration Date.
40
No fractional shares of Preferred Shares or Common Stock will be issued
upon the exercise of any Right or Rights evidenced hereby, but in lieu thereof
the Company will make a cash payment, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
to receive dividends or shall be deemed, for any purpose, the holder of
Preferred Shares or Common Stock or of any other securities, cash or property
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or this Rights Certificate be construed to
confer upon the holder hereof, as such, any of the rights of a shareholder of
the Company, including, without limitation, any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or to
institute, as a holder of Common Stock or other securities issuable on the
exercise of the Rights represented by this Certificate, any derivative action,
or otherwise, until and only to the extent the Right or Rights evidenced by this
Rights Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of __________, ____.
APW LTD.
By:
-------------------------------------
Title: President and Chief Executive
Officer
ATTEST:
-------------------------------
, Secretary
Countersigned:
By:
---------------------------
Firstar Bank N.A.
41
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if the holder desires to transfer
the Rights Certificates.)
FOR VALUE RECEIVED, _________________________________ hereby sells, assigns
and transfers ____________________________ (Please print name and address of
transferee) this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ____________________
Attorney to transfer this Rights Certificate on the books of the Company, with
full power of substitution.
Dated: _________________ , ____
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: ________________ , ____ Signature
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Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment is
not completed, the Company will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificate issued
in exchange for this Rights Certificate.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights represented by
this Rights Certificate)
To: APW Ltd.
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock or other securities, cash or other property issuable upon the exercise of
the Rights and requests that certificates for the shares or other securities be
issued in the name of, and such cash or other property be paid to:
Please insert social security or other identifying number
(Please print name and address)
If the number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the remaining balance of the Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
(Please print name and address)
Dated: , ____
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Rights Certificate)
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Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [_] is [_] is not being exercised by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [_]
did [_] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: , ____ Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
NOTICE
The signature on the foregoing Form of Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Election is
not completed, the Company will deem the beneficial owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificate issued
in exchange for this Rights Certificate.
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