EXHIBIT 4.3
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UCAR INTERNATIONAL INC.
and
THE BANK OF NEW YORK, as Rights Agent
AGREEMENT
Dated as of August 7, 1998
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TABLE OF CONTENTS
Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................7
Section 3. Issue of Right Certificates.......................................7
Section 4. Form of Right Certificates.......................................10
Section 5. Countersignature and Registration................................10
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates...............................................11
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights...........................................................12
Section 8. Cancellation of Right Certificates...............................14
Section 9. Availability of Preferred Shares.................................15
Section 10 Preferred Shares Record Date.....................................17
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
and Number of Rights.............................................17
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......30
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power....................................................31
Section 14. Fractional Rights and Fractional Shares..........................36
Section 15. Rights of Action.................................................38
Section 16. Agreement of Right Holders.......................................39
Section 17. Right Certificate Holder not Deemed a Stockholder................40
Section 18. Concerning the Rights Agent......................................40
Section 19. Merger or Consolidation or Change of Name of Rights Agent........41
Section 20. Duties of Rights Agent...........................................42
Section 21. Change of Rights Agent...........................................46
Section 22. Issuance of New Right Certificates...............................47
Section 23. Redemption.......................................................48
Section 24. Exchange.........................................................49
Section 25. Notice of Certain Events.........................................51
Section 26. Notices..........................................................52
Section 27. Supplements and Amendments.......................................53
Section 28. Successors.......................................................54
Section 29. Benefits of this Agreement.......................................54
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TABLE OF CONTENTS
(continued)
Section 30. Determinations and Actions by the Board of Directors.............54
Section 31. Severability.....................................................55
Section 32. Governing Law....................................................55
Section 33. Counterparts.....................................................55
Section 34. Descriptive Headings.............................................55
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of August 7, 1998, between UCAR International
Inc., a Delaware corporation (the "Company"), and The Bank of New York, a New
York banking corporation as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one Preferred Share Purchase Right (a "Right") for each Common Share
(as hereinafter defined) of the Company outstanding as of the Close of Business
(as hereinafter defined) on August 20, 1998 (the "Record Date"), each Right
representing the right to purchase (subject to adjustment as provided herein)
one one-thousandth of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions set forth herein, and has further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each Common Share that shall become outstanding between the
Record Date (as hereinafter defined) and the earliest of the Distribution Date
(as hereinafter defined) and the Expiration Date (as hereinafter defined);
PROVIDED, HOWEVER, that Rights may be issued with respect to Common Shares that
become outstanding after the Distribution Date and prior to the Expiration Date
in accordance with Section 22.
Accordingly, in consideration of the premises and the mutual agreements set
forth herein, 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 hereinafter defined)
who or which, together with all Affiliates and Associates (as hereinafter
defined) of such Person, shall be the Beneficial Owner (as hereinafter defined)
of 15% or more of the Common Shares then outstanding, but shall not include an
Exempt Person (as hereinafter defined). Notwithstanding the foregoing; (i) if
(based on reports filed with the Securities and Exchange Commission and
delivered to the Company prior to the date hereof) any Person would, but for
this sentence, be an "Acquiring Person," then such Person shall not be or become
an "Acquiring Person" unless and until such time as such Person together with
all Affiliates and Associates of such Person shall be or become the Beneficial
Owner of 22.5% or more of the outstanding Common Shares (other than pursuant to
a dividend or distribution in Common Shares paid or made by the Company on the
outstanding Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), PROVIDED, HOWEVER, that this clause (i) shall cease
to apply to such Person at and after such time as such Person together with its
Affiliates and Associates ceases to be the Beneficial Owner of 15% or more of
the Common Shares then outstanding; and (ii) no Person shall be or become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of Common Shares outstanding, increases
the proportionate number of Common Shares beneficially owned by such Person
together with its Affiliates and Associates to 15% or more of the Common Shares
then outstanding; PROVIDED, HOWEVER, that if a Person together with all
Affiliates and Associates of such Person shall be or become the Beneficial Owner
of 15% or more of the Common Shares then outstanding by reason of such an
acquisition and such Person or its Affiliates or Associates shall, after such an
acquisition, become the Beneficial Owner of any additional Common Shares (other
than pursuant to a dividend or distribution in Common Shares paid or made by the
Company on the outstanding Common Shares or pursuant to a split or subdivision
of the outstanding Common Shares), then such Person shall be deemed to be an
"Acquiring Person," unless, upon becoming the Beneficial Owner of such
additional Common Shares, such Person together with all Affiliates and
Associates of such Person is not the Beneficial Owner of 15% or more of the
Common Shares then outstanding. Notwithstanding the foregoing, if the Board of
Directors determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
Section 1(a), has become such inadvertently and without any intention of
changing or influencing control of the Company and if such Person divests itself
as promptly as practicable of Beneficial Ownership of a sufficient number of
Common Shares so that such Person would no longer be an Acquiring Person," as
defined pursuant to the foregoing provisions of this Section 1(a), then such
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Person shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement. For all purposes of this Agreement, any calculation of the number of
Common Shares outstanding at any particular time, including for purposes of
determining the particular percentage of outstanding Common Shares of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date hereof.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to have "Beneficial Ownership" of and shall be deemed to "beneficially
own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to beneficially own, directly or indirectly,
within the meaning of Rule 13d-3 of the General Rules and Regulations
under the Exchange Act as in effect on the date hereof;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
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the exercise of any 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,
(x) securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange, (y) securities which such Person has a right to acquire upon
the exercise of Rights at any time prior to the time that any Person
becomes an Acquiring Person or (z) securities issuable upon the
exercise of Rights from and after the time that any Person becomes an
Acquiring Person if such Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date
or pursuant to Section 3(a) or Section 22 ("Original Rights") or
pursuant to Section 11(i) or Section 11(n) with respect to an
adjustment to Original Rights; or (B) the right to vote pursuant to
any agreement, arrangement or understanding; PROVIDED, HOWEVER, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security by reason of such agreement, arrangement or
understanding if the agreement, arrangement or understanding to vote
such security (l) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person and with respect to which such Person or any of
such Person's Affiliates or Associates has any agreement, arrangement
or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section
1(c) (ii) (B)) or disposing of any securities of the Company;
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PROVIDED, HOWEVER, that no Person who is an officer, director or
employee of an Exempt Person shall be deemed, solely by reason of such
Person's status or authority as such, to be the "Beneficial Owner" of,
to have "Beneficial Ownership" of or to "beneficially own" any
securities that are "beneficially owned" (as defined in this Section
1(c)), including, without limitation, in a fiduciary capacity, by an
Exempt Person or by any other such officer, director or employee of an
Exempt Person.
(d) "Board of Directors" shall mean the members of the Company's Board
of Directors at the relevant time.
(e) "Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in the State of New York or the city in
which the principal stock transfer office of the Rights Agent is located 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., City
of New York time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M. City of New York time, on the next
succeeding Business Day.
(g) "Common Shares" when used with reference to the Company shall mean
shares of common stock, par value $.01 per share, of the Company.
(h) "Common Stock" when used with reference to any Person other than
the Company shall mean the common stock (or other equity interest) with the
greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately controls or
control, respectively, such first-mentioned Person.
(i) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(j) "Distribution Date" shall have the meaning set forth in Section 3.
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(k) "equivalent preferred shares" shall have the meaning set forth in
Section 11(b).
(l) "Exempt Person" shall mean the Company or any Subsidiary (as is
hereinafter defined) of the Company, in each case including, without limitation
any such entity, in its fiduciary capacity, or any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity or trustee holding
Common Shares for or pursuant to the terms of any such plan or for the purpose
of funding any such plan or funding any other employee benefits for employees of
the Company or any Subsidiary of the Company.
(m) "Exchange Ratio" shall have the meaning set forth in Section 24.
(n) "Expiration Date" shall have the meaning set forth in Section 7.
(o) "Final Expiration Date" shall have the meaning set forth in
Section 7.
(p) "Flip-In Event" shall have the meaning set forth in Section 11.
(q) "New York Stock Exchange" shall mean New York Stock Exchange, Inc.
(r) "Person" shall mean any individual, firm, partnership, limited
liability company, business trust, corporation or other entity and shall include
any successor (by merger or otherwise) thereof.
(s) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
the rights and preferences set forth in the Form of Certificate of Designations
attached to this Agreement as EXHIBIT A.
(t) "Principal Party" shall have the meaning set forth in Section
13(b).
(u) "Purchase Price" shall have the meaning set forth in Section 4.
(v) "Redemption Date" shall have the meaning set forth in Section 7.
(w) "Redemption Price" shall have the meaning set forth in Section 23.
(x) "Rights Certificate" shall have the meaning set forth in Section
3.
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(y) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(z) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii).
(aa) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such or such
earlier date as a majority for the Board of Directors shall become aware of the
existence of an Acquiring Person.
(bb) "Spread" shall have the meaning set forth in Section 11(a)(iii).
(cc) "Subsidiary" of any Person shall mean any Person of which a
majority of the voting power of the voting equity securities or equity interest
is owned or controlled, directly or indirectly, by such Person.
(dd) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(ee) "Summary of Rights" shall have the meaning set forth in Section
3.
(ff) "Trading Day" shall have the meaning set forth in Section
11(d)(i).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. (a) ISSUE OF RIGHT CERTIFICATES. Until the Close of Business on
the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the
tenth Business 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)
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after the date of the commencement by any Person other than an Exempt Person, or
of the first public announcement of the intention of any Person (other than an
Exempt Person) to commence, a tender or exchange offer the consummation of which
would result in any Person (other than an Exempt Person) becoming the Beneficial
Owner of Common Shares aggregating 15% or more of the then outstanding Common
Shares (including any such date which is after the date of this Agreement and
prior to the issuance of the Rights; the earlier of such dates being herein
called the "Distribution Date"), (x) the Rights will be evidenced (subject to
the provisions of Section 3(b)) by the certificates for Common Shares registered
in the names of the holders thereof (which certificates shall also be deemed to
be Right Certificates) and not by separate Right Certificate, and (y) the Rights
will be transferable only in connection with the transfer of Common Shares. The
Company shall give the Rights Agent prompt written notice of the Distribution
Date. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign and the Company will send
or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the
address of such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right (subject to adjustment as provided herein) for each Common
Share so held. As of the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of EXHIBIT C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Record Date (other than any Acquiring Person or any
Associate or Affiliate of an Acquiring Person), at the address of such holder
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shown on the records of the Company. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights. Until the Distribution Date
(or, if earlier, the Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates issued for Common Shares (including, without
limitation, certificates issued upon transfer of outstanding Common Shares,
disposition of Common Shares out of treasury stock or issuance or reissuance of
Common Shares out of authorized but unissued Common Shares) after the Record
Date but prior to the earlier of the Distribution Date or the Expiration Date
shall have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Agreement between UCAR International Inc. (the
"Company") and The Bank of New York, as Rights Agent, dated as of August
7, 1998 as the same may be amended from time to time (the "Agreement"),
the terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the 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 Agreement without charge after receipt of a
written request therefor. As described in the Agreement, under certain
circumstances, Rights issued to any Person who becomes an Acquiring Person
(as defined in the Agreement) shall become null and void and will not be
transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
9
herein, shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby. In the event that the Company purchases or
otherwise acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares shall be deemed
cancelled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Shares which are no longer outstanding.
Notwithstanding this Section 3(c), the omission of a legend shall not affect the
enforceability of any part of this Agreement or the rights of any holder of the
Rights.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as EXHIBIT B hereto (in
a format that is machine printable and reasonably satisfactory to the Rights
Agent) 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 as may be
appropriate to conform to usage. Subject to the provisions of Sections 11, 13
and 22, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-thousandth of a Preferred Share as shall be set forth
therein at the price per one one-thousandth of a Preferred Share set forth
therein (the "Purchase Price"), but the number of such one one-thousandths of a
Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any of its Vice Presidents,
either manually or by facsimile signature, shall have affixed thereto the
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Company's seal or a facsimile thereof, and shall be attested by the Secretary or
the Treasurer of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery thereof by the Company, such Right Certificates may
nevertheless be countersigned by the Rights Agent and issued and delivered by
the Company with the same force and effect as though the signatory had not
ceased to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any individual who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to
sign such Right Certificate, although at the date of the execution of this
Agreement any such individual was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at an office or agency designated for such purposes, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATE; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii), 13 and 14,
at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Right Certificate or
Right Certificates (other than Right Certificates representing Rights that have
been exchanged pursuant to Section 24) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a
Preferred Share as the Right Certificate or Right Certificates surrendered then
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entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office or agency of the Rights Agent designated for
such purpose, along with a signature guarantee and other and further
documentation as the Rights Agent may reasonably request. Thereupon, the Rights
Agent shall countersign and deliver to the requested holder a Right Certificate
or Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax (which word shall be deemed
to include any other type of governmental charge) that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Subject to the provisions of Section 11(a)(ii), at any time after
the Distribution Date and prior to the Expiration Date, upon receipt by the
Company and the Rights Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
them, and, at the Company's request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the Company
will make and deliver a new Right Certificate of like tenor to the Rights Agent
for delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date and thereafter the registered holder of any
Right Certificate may, subject to Section 11(a)(iii) and except as otherwise
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provided herein, exercise the Rights evidenced thereby in whole or in part upon
surrender of the Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the office or agency
of the Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of one one-thousandths
of a share of Preferred Stock (or other securities, cash or assets, as the case
may be) as to which the Rights are exercised, at any time both subsequent to the
Distribution Date and prior to the time (the "Expiration Date") that is the
earliest of (i) the Close of Business on August 7, 2008 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
(the "Redemption Date") or (iii) the time at which such Rights are exchanged as
provided in Section 24.
(b) The Purchase Price for each one one-thousandth of a Preferred
Share purchasable upon exercise of a Right shall initially be $110. The Purchase
Price and the number of one one-thousandths of a share of Preferred Stock (or
other securities or property) to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections 11 and 13 and
shall be payable in lawful money of the United States of America in accordance
with this Section 7(b).
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for the
Preferred Shares to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in accordance
with Sections 6 and 9 hereof, in cash or by certified or cashier's check or
money order payable to the order of the Company, the Rights Agent shall
thereupon (i) promptly (A) requisition from any transfer agent of the Preferred
Shares certificates for the number of Preferred Shares to be purchased (and the
Company hereby irrevocably authorizes such transfer agent to comply with all
such requests) or (B) requisition from the depositary agent (if any, pursuant to
Section 14) depositary receipts representing interests in such number of one
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one-thousandths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by such transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14, (iii) promptly
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the registered holder
of any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Sections 6 and 14.
(e) 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 Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to Section 6 or this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or form of election to purchase
set forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company
shall reasonably request.
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Section 8. CANCELLATION OF RIGHTS CERTIFICATES. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
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 Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company.
Section 9. AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares or any
Preferred Shares held in its treasury, the number of Preferred Shares that will
be sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7.
(b) So long as the Preferred Shares issuable upon the exercise of
Rights may be listed or admitted to trading on the New York Stock Exchange or
any other national securities exchange, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable, all
Preferred Shares reserved for such issuance to be listed or admitted to trading
on such exchange upon official notice of issuance upon such exercise.
(c) From and after the Distribution Date, the Company shall use its
best efforts, if then necessary to permit the issuance of Preferred Shares upon
the exercise of Rights, to register and qualify Preferred Shares under the
Securities Act and any applicable state securities or "Blue Sky" laws (to the
extent exemptions therefrom are not available), cause such registration
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statement and qualifications to become effective as soon as possible after such
filing and keep such registration and qualifications effective until the earlier
of the date as of which the Rights are no longer exercisable for Preferred
Shares and the Expiration Date. The Company may temporarily suspend, for a
period of time not to exceed 90 days, the exercisability of the Rights to
prepare and file a registration statement under the Securities Act and permit it
to become effective. Upon any such suspension, the Company shall issue a public
announcement that the exercisability of the Rights has been temporarily
suspended as well as a public announcement at such time as the suspension is no
longer in effect, in each case with simultaneous written notice to the Rights
Agent. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective. The Rights Agent may assume that any Right exercised is
permitted to be exercised under applicable law and shall have no liability for
acting in reliance upon such assumption.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(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 Right Certificates or
of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
16
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes required to be
paid by the exercising holder of Rights) was made; PROVIDED, HOWEVER, that if
the date of such surrender and payment is a date upon which the transfer books
for Preferred Shares are closed, such Person shall be deemed to have become the
record holder of such Preferred Shares on, and such certificate shall be dated,
the next succeeding Business Day on which the transfer books Preferred Shares
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a holder of Preferred
Shares for which the Rights shall be exercisable, including, without limitation,
the right to vote or to receive dividends or other distributions or to exercise
any preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES AND
NUMBER. The Purchase Price, the number of Preferred Shares or other securities
or property purchasable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) If the Company shall at any time after the date hereof (A)
declare a dividend in Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
17
Preferred Shares into a smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
transfer books for Preferred Shares were open, the holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; PROVIDED, HOWEVER, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Section 24, if any Person becomes an Acquiring Person
(the first occurrence of such event being called the "Flip-In Event"), then (A)
the Purchase Price shall be adjusted to be the Purchase Price in effect
immediately prior to the Flip-In Event multiplied by the number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such Flip-In Event, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise provided in
this Section 11(a)(ii) and Section 11(a)(iii), shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then Purchase Price (as
so adjusted), in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares as shall equal the result
obtained by dividing the Purchase Price (as so adjusted) by 50% of the then
current per share market price of the Common Shares (determined pursuant to
Section 11(d)) on the date of such Flip-In Event; PROVIDED, HOWEVER, that the
18
Purchase Price (as so adjusted) and the number of Common Shares so receivable
upon exercise of a Right shall, following the Flip-In Event, be subject to
further adjustment as appropriate in accordance with this Section 11. If any
Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would eliminate or
diminish the benefits intended to be afforded by the Rights.
Notwithstanding anything in this Agreement to the contrary, however,
from and after the Flip-In Event, any Rights that are beneficially owned by (x)
any Acquiring Person (or any Affiliate or Associate of any Acquiring Person),
(y) a transferee of any Acquiring Person (or any such Affiliate or Associate)
who becomes a transferee after the Flip-In Event or (z) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who become a transferee
prior to or concurrently with the Flip-In Event pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (II) a transfer which the Board of Directors
has determined is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this Section 11, and subsequent
transferees of such Persons, shall be void without any further action and any
holder of such Rights shall thereafter have no rights whatsoever with respect to
such Rights under any provision of this Agreement. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are
complied with, but shall have no liability to any holder of Right Certificates
or other Persons as a result of its failure to make any determinations with
19
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. From and after the Flip-In Event, no Right Certificate shall be
issued pursuant to Section 3 or upon the transfer of any Rights that represents
Rights that are or have become void pursuant to the preceding sentence, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the preceding sentence shall be cancelled. From
and after the occurrence or an event specified in Section 13(a), any Rights that
theretofore have not been exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only in accordance with Section 13 and not pursuant to
this Section 11(a)(ii).
(iii) The Company may at its option substitute for a Common Share
issuable upon the exercise of Rights in accordance with Section 11(a)(ii), a
number of Preferred Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number or fraction is
equal to the current per share market price of one Common Share. If, after the
occurrence of a Flip-In Event, there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit the exercise in
full of the Rights in accordance with Section 11(a)(ii), the Company shall take
all such action as may be necessary to authorize additional Common Shares for
issuance upon exercise of the Rights. If the Company shall, after good faith
effort, be unable to take all such action as may be necessary to authorize such
additional Common Shares, the Board of Directors shall, to the extent permitted
any applicable law and any material agreements then in effect to which the
Company is a party, (A) determine the excess (such excess being called the
"Spread') of (1) the value of the Common Shares issuable upon the exercise of a
Right in accordance with Section 11(a)(ii) hereof (the "Current Value") over (2)
the Purchase Price (as adjusted) and (B) with respect to each Right (other than
Rights which have become void), make adequate provision to substitute for the
Common Shares issuable in accordance with Section 11(a)(ii), upon exercise of
the Right and payment of the Purchase Price (as adjusted), (1) cash, (2) a
20
reduction in such Purchase Price, (3) Preferred Shares or other equity
securities of the Company (including, without limitation, shares or fractions of
preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the Common Shares, are deemed in
good faith by the Board of Directors to have substantially the same value as the
Common Shares (such Preferred Shares and shares or fractions of shares of
preferred stock being called "Common Share Equivalents")), (4) debt securities
of the Company, (5) other assets or (6) any combination of the foregoing, having
a value which, when added to the value of the Common Shares issued upon exercise
of such Right, shall have an aggregate value equal to the Current Value (less
the amount of any reduction in such Purchase Price), where such aggregate value
has been determined by the Board of Directors upon the advice of a nationally
recognized investment banking firm selected in good faith by the Board of
Directors; PROVIDED, HOWEVER, that if the Company shall not make adequate
provision to deliver value pursuant to clause (B) above within 30 days following
the Flip-In Event (the "Section 11(a)(ii) Trigger Date"), then the Company shall
be obligated to deliver, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party, upon the
surrender for exercise of a Right and without requiring payment of such Purchase
Price, Common Shares (to the extent available) and then, if necessary, such
number or fractions of Preferred Shares (to the extent available) and then, if
necessary, cash, which Preferred Shares, Common Shares and/or cash have an
aggregate value equal to the Spread. If, upon the occurrence of the Flip-In
Event, the Board of Directors shall determine in good faith that it is likely
that sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights, then, if the Board of Directors so elects, the
period set forth above may be extended to the extent necessary, but not more
than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company
may seek stockholder approval for the authorization of such additional Shares.
21
Such period, as it may be extended, is herein called the "Substitution Period."
To the extent that the Company determines that some action need be taken
pursuant to the third and/or fourth sentence of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 11(a)(ii) and the last sentence of
this Section 11(a)(iii), that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period to seek any authorization of
additional Shares and/or to decide the appropriate form of distribution to be
made pursuant to such third sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended as
well as a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common Shares
shall be the current per share market price (as determined pursuant to Section
11(d)(i) on the Section 11(a)(ii) Trigger Date) and the per share or fractional
value of any Common Share Equivalents shall be deemed to equal the current per
share market price of the Common Shares. The Board of Directors may, but shall
not be required to, establish procedures to allocate the right to receive Common
Shares upon the exercise of the Rights among holders of the Rights pursuant to
this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Shares (or shares having the same rights, privileges and
preferences as Preferred Shares ("equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion price per
share, if it is a security convertible into Preferred Shares or equivalent
preferred shares) less than the then current per share market price of the
Preferred Shares (determined pursuant to Section 11(d)) on such record date,
22
then the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares and equivalent preferred shares outstanding on such record date
plus the number of Preferred Shares and equivalent preferred shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
Preferred Shares and equivalent preferred shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); PROVIDED, HOWEVER, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. Preferred Shares and equivalent preferred
shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. In case such subscription
or purchase 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, whose determination shall be
described in a statement filed with the Rights Agent. Such adjustment to the
Purchase Price shall be made successively whenever such a record date is fixed.
If such rights, options or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to holders of Preferred Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
23
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend payable in Preferred
Shares) or subscription rights or warrants (excluding those described in Section
11(b)), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then current per
share market price (determined pursuant to Section 11(d)) of Preferred Shares on
such record date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to
one Preferred Share and the denominator of which shall be such current per share
market price of Preferred Shares; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments to the Purchase Price shall be made
successively whenever such a record date is fixed. If such distribution is not
so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) (i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed
to be the average of the daily closing prices per share of such Security for the
thirty (30) consecutive Trading Days (as hereinafter defined) immediately prior
to such date; PROVIDED, HOWEVER, that if the current per share market price of
such Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
24
payable in shares of such Security or securities convertible into such shares or
(B) any subdivision, combination or reclassification of such Security, and prior
to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported by the principal consolidated transaction reporting system with to the
principal national securities exchange or over-the-counter market on which such
Security is listed or admitted to trading or, if such Security is not listed or
admitted, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date such
Security is not quoted or any such system, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in such
Security selected by the Board of Directors. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which such Security
is listed or admitted to trading is open for the transaction of business or, if
such Security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder, if the Preferred
Shares are publicly traded, the "current per share market price" of the
Preferred Shares shall be determined in accordance with the method set forth in
Section 11(d)(i). If Common Shares are publicly traded at a time when the
Preferred Shares are not publicly traded, the "current per share market price"
of the Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11(d)(i)
25
multiplied by then applicable Adjustment Number (as defined in and determined in
accordance with the Certificate of Designation for the Preferred Shares). If
neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; PROVIDED, HOWEVER, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one-hundred thousandth of a
Preferred Share or one-hundredth of a Common Share or of any other share or
security, as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which requires
such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Shares,
thereafter the Purchase Price and the number of such other shares so receivable
upon exercise of a Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in Sections 11(a), 11(b), 11(c),
11(e), 11(h), 11(i), 11(m), 11(n) and the provisions of Sections 7, 9, 10, 13
and 14 with respect to the Preferred Shares shall apply on like terms to any
such other shares.
26
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and 11(c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one
one-thousandths of a Preferred Share (calculated to the nearest one
one-hundred-thousandth of a Preferred Share) obtained by (i) multiplying (x) the
number of one one-thousandths of a Preferred Share purchasable upon exercise of
a Right immediately prior to such adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price pursuant to Section 11(b) or 11(c) to adjust the number of
Rights, in substitution for any adjustment in the number of one one-thousandths
of a Preferred Share purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-thousandths of a Preferred Share for which
a Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one hundredth) 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. Such record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
27
if the Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company may, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14, the additional Rights to which such holders shall be
entitled as a result of such adjustment or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a Preferred Share issuable upon the
exercise of a Right, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-thousandths
of a Preferred Share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the fraction of the
Common Shares or Preferred Shares issuable upon exercise of a Right, the Company
28
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 Common Shares or Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (until the occurrence of such
event) issuing to the holder of any Right exercised after such record date the
Common Shares, Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Common Shares,
Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's right
to receive such additional Common Shares, Preferred Shares and other capital
stock or securities of the Company upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of Preferred Shares, issuance wholly
for cash of any preferred stock at less than the current market price, issuance
wholly for cash of preferred stock or other securities which by their terms are
convertible into or exchangeable for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of rights, options or warrants
referred to in Section 11(b), hereafter made by the Company to holders of
Preferred Shares shall not be taxable to such holders.
29
(n) Anything in this Agreement to the contrary notwithstanding, if, at
any time after the date of this Agreement and prior to the Distribution Date,
the Company shall (i) declare and pay any dividend on Common Shares payable in
Common Shares or (ii) effect a subdivision, combination or consolidation of
Common Shares (by reclassification or otherwise than by payment of a dividend
payable in Common Shares) into a greater or lesser number of Common Shares, then
in each such case (A) the number of one one-thousandths of a Preferred Share
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-thousandths of a Preferred Share
so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding
immediately after such event and (B) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided in this Section 11(n) shall be made
successively whenever such a dividend is declared and paid or such a
subdivision, combination or consolidation is effected.
(o) The Company agrees that, after the earlier of the Distribution
Date or the Shares Acquisition Date, it will not, except as permitted by
Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or eliminate the benefits intended to be
afforded by the Rights.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13, the Company
shall promptly (a) prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) file with the
30
Rights Agent and with the transfer agents for each of the Common Shares and the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of such
adjustment unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) If directly or indirectly, at any time after a Flip-In Event, (x)
the Company shall consolidate with, or merge with and into, any other Person,
(y) any Person shall 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 Common Shares shall be changed into or exchanged
for stock or other securities of any other Person (or of the Company) or cash or
any other property or (z) the Company (or one or more of its Subsidiaries) shall
sell or otherwise transfer, in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company or
one or more wholly-owned Subsidiaries of the Company), then, and in each such
case, proper provision shall be made so that (i) each holder of a Right (other
than Rights which have become void pursuant to Section 11(a)(ii)) shall
thereafter have the right to receive, upon the exercise thereof at the Purchase
Price (as theretofore adjusted in accordance with Section 11(a)(ii)), in
accordance with the terms of this Agreement and in lieu of Preferred Shares or
Common Shares, such number of validly authorized and issued, fully paid,
non-assessable and freely tradable shares of Common Stock of the Principal Party
not subject to liens, encumbrances, rights of first refusal or other adverse
claims, as shall equal the result obtained by dividing the Purchase Price (as
31
adjusted pursuant to Section 11(a)(ii)) by 50% of the then current per share
market price of the Common Stock of such Principal Party (determined pursuant to
Section 11(d)) on the date of consummation of such consolidation, merger, sale
or transfer; PROVIDED, HOWEVER, that the Purchase Price (as theretofore adjusted
in accordance with Section 11(a)(ii) hereof) and the number of shares of Common
Stock of such Principal Party so receivable upon exercise of a right shall be
subject to further adjustment as appropriate in accordance with this Section 13
to reflect any events occurring in respect of the Common Stock of such Principal
Party after the occurrence of such consolidation, merger, sale or transfer; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party; and (iv) 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 accordance with Section 9) in
connection with such consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
practicable, in relation to the Common Stock of such Principal Party thereafter
deliverable upon the exercise of the Rights; PROVIDED, that, upon the subsequent
occurrence of any consolidation, merger, sale or transfer of assets or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price as provided in this Section 13(a), such cash,
shares, rights, warrants and other property which such holder would have been
entitled to receive had such holder, at the time of such transaction, owned the
Common Stock of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other property.
32
(b) "Principal Party shall mean: (i) in the case of any transaction
described in clause (x) or (y) of the first sentence of Section 13(a): (A) the
Person that is the issuer of the securities into which the Common Shares are
converted in such merger or consolidation, or, if there is more than one such
issuer, the issuer of the shares of Common Stock which have the greatest
aggregate market value of shares outstanding or (B) if no securities are so
issued, (x) the Person that is the other party to the merger, if such Person
survives such merger or, if there is more than one such Person, the Person the
shares of Common Stock of which have the greatest aggregate market value of
shares outstanding or (y) if the Person that is the other party to the merger
does not survive such merger, the Person that does survive such merger
(including the Company, if it survives) or (z) the Person resulting from such
consolidation; and (ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons is the
issuer of Common Stock having the greatest aggregate market value of shares
outstanding; PROVIDED, HOWEVER, that in any case described in the foregoing
clause (b)(i) or (b)(ii), if the Common Stock of such Persons is not at such
time or has not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, then (1) if such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is and has been
33
so registered, the term "Principal Party" shall refer to such other Person, or
(2) if such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stock of all of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value of shares outstanding or
(3) if such Person is owned, directly or indirectly, by a joint venture formed
by two or more Persons that are not owned, directly or indirectly, by the same
Person, the provisions set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the Person owned by
the joint venture was a Subsidiary of both or all of such joint venturers and
the Principal Party in each case shall bear the obligations set forth in this
Section 13 in the same ratio as its interest in such Person bears to the total
of such interests.
(c) The Company shall not consummate any consolidation, merger, sale
or transfer described to in Section 13(a) unless prior thereto the Company and
the Principal Party involved therein shall have executed and delivered to the
Rights Agent an agreement confirming that the requirements of Sections 13(a) and
13(b) shall promptly be performed in accordance with their terms and that such
consolidation, merger, sale or transfer of assets shall not result in a default
by the Principal Party under this Agreement as the same shall have been assumed
by the Principal Party pursuant to Sections 13(a) and 13(b) and that, as soon as
practicable after executing such agreement pursuant to this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under such Securities
Act, if necessary, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, use its best efforts to
cause such registration statement to become effective as soon as practicable
after such filing and use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date and similarly comply with
applicable state securities laws;
34
(ii) use its best efforts, if the Common Stock of such Principal Party
shall be listed or admitted to trading on the New York Stock Exchange or on
another national securities exchange, to list or admit to trading (or continue
the listing of) the Rights and the securities purchasable upon exercise of the
Rights on the New York Stock Exchange or such other national securities exchange
or, if the Common Stock of such Principal Party shall not be listed or admitted
to trading on the New York Stock Exchange or a national securities exchange, to
cause the Rights and the securities receivable upon exercise of the Rights to be
authorized for quotation on NASDAQ or some other similar system then in use;
(iii) deliver to holders of Rights historical financial statements for
such Principal Party which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of such Principal Party subject to
purchase upon exercise of outstanding Rights;
(d) In case such Principal Party has a provision in any of its
authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its corporate affairs which would have the effect of (i)
causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with or as a consequence of, the consummation
of a transaction described to in this Section 13, shares of Common Stock of such
Principal Party or other equity securities of such Principal Party (including,
without limitation, shares or fractions of preferred stock, which by virtue of
having dividend, voting or liquidation rights substantially comparable to those
of the Common Stock of such Principal Party are deemed in good faith by the
Board of Directors to have substantially the same value as the Common Stock of
such Principal Party) at less than such then current market price or (ii)
providing for any special payment, tax or similar provision in connection with
35
the issuance of the Common Stock of such Principal Party pursuant to the
provisions of this Section 13, then the Company hereby agrees with each holder
of Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that such provision shall have
been cancelled, waived or amended, or that the authorized securities shall be
redeemed, so that such provision will have no effect in connection with or as a
consequence of the consummation of the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time
after the Flip-In Event, enter into any transaction of the type described in
clauses (x), (y) and (z) of Section 13(a) if (i) at the time of or immediately
after such consolidation, merger, sale, transfer or other transaction, 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, (ii) prior to,
simultaneously with or immediately after such consolidation, merger, sale,
transfer or other transaction, the stockholders of the Person who constitutes or
would constitute such Principal Party for purposes of Section 13(b) shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (iii) the form or nature of organization of such
Principal Party would preclude or limit the exercisability of the Rights.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights except prior
to the Distribution Date in accordance with Section 11(n). In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
36
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the principal national securities
exchange or over-the-counter market on which the Rights are listed or admitted
to trading or, if the Rights are not so listed or admitted to trading, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market as reported by NASDAQ or some other
similar system then in use or, if on any such date the Rights are not quoted on
any such system, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Rights selected by the Board
of Directors. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-thousandth
of a Preferred Share) upon exercise or exchange of Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-thousandth of a Preferred Share).
Interests in fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts pursuant to an appropriate agreement between
the Company and a depositary selected by it; PROVIDED, that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as Beneficial Owners of
the Preferred Shares represented by such depositary receipts. In lieu of
37
fractional Preferred Shares that are not integral multiples of one
one-thousandth of a Preferred Share, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Preferred
Shares would otherwise be issuable at the time such Rights are exercised or
exchanged as herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes of this Section
14(b), the current market value of a Preferred Share shall be the closing price
of a Preferred Share (as determined pursuant to Section 11(d)(i)) for the
Trading Day immediately prior to the date of such exercise.
(c) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares
upon the exercise or exchange of Rights. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional Common Shares would otherwise
be issuable at the time such Rights are exercised or exchanged as herein
provided an amount in cash equal to the same fraction of the current market
value of a Common Share (as determined in accordance with Section 14(a)) for the
Trading Day immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as otherwise provided in this Section 14).
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18, are vested in the respective registered holders of Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of any Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
38
Distribution Date, of any other Common Shares), on his own behalf and for his
own benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, such
holder's right to exercise the Rights evidenced by such Right Certificate (or
prior to the Distribution Date, such Common Shares), in the manner provided in
such Right Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to holders of Rights, it is specifically acknowledged
that holders of Rights would not have an adequate remedy at law for any breach
of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, Rights will be transferable only
in connection with the transfer of Common Shares;
(b) after the Distribution Date, Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office or
agency of the Rights Agent designated for such purpose, 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 Right Certificate (or, prior to the Distribution Date, a
certificate for Common Shares) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on such Right Certificates or such certificate for Common Shares 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
39
(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 preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission or of any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; PROVIDED, that the Company shall use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder,
as such, of any Right Certificate shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of the Preferred Shares, Common Shares
or other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised or exchanged in accordance with the
provisions hereof.
40
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent such compensation as
shall be agreed in writing between the Company and the Rights Agent for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and its reasonable counsel fees and
counsel disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim
(whether asserted by the Company, a holder of a Right Certificate or any other
Person) of liability arising therefrom, directly or indirectly. The provisions
of this Section 18(a) shall survive the expiration of the Rights and the
termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for Preferred Shares or Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent, opinion,
certificate, statement or other paper or document believed by it to be genuine
and to be signed by the proper Person or Persons, and, where necessary, to be
verified or acknowledged or otherwise upon the advice of counsel as set forth in
Section 20.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) 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
all or substantially all of the stock transfer or corporate trust powers of the
41
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; PROVIDED, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations expressly imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
42
(a) The Rights Agent may consult with legal counsel of its own
selection (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof), nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate, nor shall it
43
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii)) or any adjustment in the
terms of the Rights provided in Sections 3, 11, 13, 23 and 24 or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after the Rights Agent's actual receipt of a certificate furnished
pursuant to Section 12, describing such change or adjustment) nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or other securities to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or other securities will, when issued, be validly authorized
and issued, fully paid and nonassessable, nor shall the Rights Agent be
responsible for the legality of the terms hereof in its capacity as an
administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the 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 by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action shall
be taken or such omission shall be effective. The Rights Agent shall not be
44
liable for any action taken by, or omission of, the Rights Agent in accordance
with a proposal included in such application on or after the date specified in
such application (which date shall not be less than three Business Days after
the date any officer of the Company actually receives such application, unless
any such officer shall have consented in writing to any earlier date) unless
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, 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) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), the Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
45
(k) No implied duties or obligations shall be read into this Agreement
against the Rights Agent. No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(l) In addition to the foregoing, the Rights Agent shall be protected
and shall incur no liability for, or in respect of, any action taken or omitted
by it in connection with its administration of this Agreement if such acts or
omissions are in reliance upon (i) the proper execution of the certification
concerning beneficial ownership appended to the form of assignment and the form
of election to purchase attached hereto unless the Rights Agent shall have
actual knowledge that, as executed, such certification is untrue or (ii) the
non-execution of such certification is including, without limitation, any
refusal to honor any otherwise permissible assignment or election by reason of
such non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice
of any event or ownership known to it which would prohibit the exercise or
transfer of the right Certificates.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares and Preferred Shares by registered or certified mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
46
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 Shares and Preferred
Shares by registered or certified mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the Rights Agent or the registered holder of any Right
Certificate may, at the expense of the Company, apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
any state of the United States or the District of Columbia, in good standing,
having an office in the State of New York, authorized under such laws to
exercise corporate trust or stock transfer powers and subject to supervision or
examination by federal or state authority, and having at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preferred Shares, and following the Distribution Date mail a notice thereof
in writing to the registered holders of Right Certificates. Failure to give any
notice provided 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.
47
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such forms as
may be approved by the Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable upon exercise of the Rights made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Shares following the Distribution Date and prior to the
Expiration Date, the Company may with respect to Common Shares so issued or sold
pursuant to (i) the exercise of stock options, (ii) under any employee plan or
arrangement, (iii) upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Company or (iv) a contractual obligation of
the Company, in each case existing prior to the Distribution Date, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale.
Section 23. REDEMPTION.
(a) The Board of Directors may, at any time prior to the Flip-In
Event, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(the redemption price being called the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish. The
Redemption Price shall be payable, at the option of the Company, in cash, Common
Shares or such other form of consideration as the Board of Directors shall
determine.
48
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to this Section 23 (or at such later time as
the Board of Directors may establish for the effectiveness of such redemption),
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. The Company shall promptly give public
notice, with simultaneous written notice to the Rights Agent, of any such
redemption; PROVIDED, HOWEVER, that the failure to give, or any defect in, any
such notice shall not effect the validity of such redemption. Within 10 days
after the action of the Board of Directors ordering the redemption of the Rights
(or such later time as the Board of Directors may establish for the
effectiveness of such redemption), the Company shall mail a notice of redemption
to all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided shall be deemed
to have been duly given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 24 or other than in connection with the purchase of Common Shares prior
to the Distribution Date.
Section 24. EXCHANGE.
(a) The Board of Directors may, at its option, at any time after the
Flip-In Event, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares or Common Stock
Equivalents at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock divided or similar transaction
49
occurring after the date hereof (such amount per Right being called the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after an Acquiring Person
shall have become the Beneficial Owner of Common Shares aggregating 50% or more
of the Common Shares then outstanding. From and after the occurrence of an event
specified in Section 13(a), any Rights that theretofore have not been exchanged
pursuant to this Section 24(a) shall thereafter be exercisable only in
accordance with Section 13 and may not be exchanged pursuant to this Section
24(a). The exchange of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board of
Directors ordering the exchange of any Rights pursuant to this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of Rights shall
be to receive that number of Common Shares or Common Share Equivalents equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice, with simultaneous written notice
to the Rights Agent, of any such exchange; PROVIDED, HOWEVER, that the failure
to give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall promptly mail a notice of any such exchange to all
of the holders of the Rights so exchanged at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed to have been duly given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares or Common Share Equivalents
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of
Rights.
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(c) If there shall not be sufficient Common Shares issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights. If the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such additional
Common Shares, the Company shall substitute, to the extent of the insufficiency,
for each Common Share that would otherwise be issuable upon exchange of a Right,
a number of Preferred Shares or fraction thereof (or equivalent preferred
shares, as such term is defined in Section 11(b)) such that the current per
share market price (determined pursuant to Section 11(a)) of one Preferred Share
or equivalent preferred share multiplied by such number or fraction is equal to
the current per share market price (determined pursuant to Section 11(a)) of one
Common Share as of the date of such exchange.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Shares Acquisition Date propose (i) to pay any dividend
payable in stock of any class to the holders of Preferred Shares or to make any
other distribution to the holders of Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of Preferred Shares (other than a
reclassification involving only the subdivision or combination of outstanding
Preferred Shares), (iv) to effect the liquidation, dissolution or winding up of
51
the Company or (v) to pay any dividend on Common Shares payable in Common Shares
or to effect a subdivision, combination or consolidation of Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend or
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of Common
Shares and/or Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least 10 days prior to the record date for determining holders of Common
Shares and/or Preferred Shares for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of Common
Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or Section 13
shall occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate (or, if occurring prior to the Distribution
Date, each holder of Common Shares), in accordance with Section 26, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences to holders of Rights of such event under Section 11(a)(ii) and
Section 13.
Section 26. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
52
UCAR International Inc.
00 Xxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to the Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx
Floor 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Stock Transfer Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the relevant
registry books.
Section 27. SUPPLEMENTS AND AMENDMENTS. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole discretion, and the Rights Agent shall
if the Company so directs, supplement or amend any provision of this Agreement
in any respect without the approval of any holders of the Rights. At any time
when the Rights are no longer redeemable, except as provided in the penultimate
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 Rights to (i) cure any ambiguity, (ii) correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision herein, (iii) shorten or lengthen any time period hereunder or (iv)
change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable; PROVIDED, that, no such supplement or amendment
53
shall adversely affect the interests of the holders of Rights, as such (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
and no such amendment may cause the Rights again to become redeemable or cause
this Agreement again to become amendable other than in accordance with this
sentence. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made which changes the Redemption Price.
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 any other provision hereof, the Rights Agent's
consent must be obtained regarding any amendment or supplement pursuant to this
Section 27 which alters the Rights Agent's rights or duties.
Section 28. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns.
Section 29. 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 Right Certificates (and, prior to the Distribution Date,
Common Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of Right Certificates (and,
prior to the Distribution Date, Common Shares).
Section 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. The Board
of Directors shall have the exclusive power and authority to administer this
Agreement and to exercise the rights and powers specifically granted to the
Board of Directors or to the Company, or as may be necessary or advisable in the
54
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations 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 (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of Rights, as such, and all other parties
and (y) not subject the Board of Directors to any liability to the holders of
Rights.
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 and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts made and to be
performed entirely within the State of Delaware, provided, however, that the
rights and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York.
Section 33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
UCAR INTERNATIONAL INC.
By /S/ XXXXX X. XXXXXXX
-----------------------------------
Title: Vice President
THE BANK OF NEW YORK,
as Rights Agent
By /S/ XXXXXX XXXXX
-----------------------------------
Title: Vice President
57
