EXHIBIT 4.1
STOCKHOLDER RIGHTS AGREEMENT
THE GREENBRIER COMPANIES, INC.
and
EQUISERVE TRUST COMPANY, N.A.
Rights Agent
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RIGHTS AGREEMENT
Dated as of July 13, 2004
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TABLE OF CONTENTS
Section Page
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Table of Defined Terms ............................................................................................... iii
1 Certain Definitions.......................................................................................... 1
2 Appointment of Rights Agent.................................................................................. 4
3 Issuance of Right Certificates............................................................................... 4
4 Form of Right Certificates................................................................................... 6
5 Countersignature and Registration ............................................................................ 6
6 Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates ...................................................... 7
7 Exercise of Rights; Purchase Price; Expiration Date of Rights................................................. 8
8 Cancellation and Destruction of Right Certificates ........................................................... 9
9 Reservation and Availability of Capital Shares ............................................................... 10
10 Preferred Shares Record Date.................................................................................. 11
11 Adjustment of Purchase Price, Number of Shares or Number of Rights............................................ 11
12 Certificate of Adjusted Purchase Price or Number of Shares.................................................... 17
13 Consolidation, Merger, Statutory Plan of Exchange or Sale or Transfer of Assets or
Earning Power ................................................................................................ 18
14 Fractional Rights and Fractional Shares....................................................................... 20
15 Rights of Action.............................................................................................. 21
16 Agreement of Right Holders ................................................................................... 22
17 Right Holders and Right Certificate Holders Not Deemed Stockholders........................................... 22
18 Concerning the Rights Agent................................................................................... 23
19 Merger or Consolidation or Change of Name of Rights Agent..................................................... 23
20 Duties of Rights Agent ....................................................................................... 24
21 Change of Rights Agent ....................................................................................... 26
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22 Issuance of New Right Certificates ........................................................................... 27
23 Redemption and Termination ................................................................................... 27
24 Exchange ..................................................................................................... 28
25 Notice of Certain Events ..................................................................................... 29
26 Notices....................................................................................................... 30
27 Supplements and Amendments ................................................................................... 30
28 Successors ................................................................................................... 31
29 Benefits of Agreement ........................................................................................ 31
30 Severability ................................................................................................. 31
31 Determinations and Actions by the Board of Directors, etc..................................................... 31
32 Governing Law ................................................................................................ 31
33 Counterparts ................................................................................................. 32
34 Descriptive Headings.......................................................................................... 32
35 Force Majeure................................................................................................. 32
Exhibit A -- Rights and Preferences of Series A Preferred Stock
Exhibit B -- Form of Right Certificate
Exhibit C -- Form of Summary of Rights
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TABLE OF DEFINED TERMS
Term Defined Section
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Acquiring Person 1(a)
Adjustment Shares 11(a)(ii)
Affiliate 1(b)
Agreement Intro
Associate 1(b)
Beneficial Owner; beneficially own 1(c)
Board of Directors Intro
Business Day 1(d)
Close of Business 1(e)
Common Shares 1(f)
common stock equivalents 11(a)(iii)
Company Intro
Company (Following a Section 13 event) 13(a)
current per share market price of the Common Shares 11(d)(i)
current per share market price of the Preferred Shares 11(d)(ii)
Distribution Date 3(a)
equivalent preferred shares 11(b)
Exchange Act 1(b)
Exchange Date 7(b)
Exchange Ratio 24(a)
Final Expiration Date 7(b)
Grandfathered Percentage 1(a)
Grandfathered Stockholders 1(a)
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NASDAQ 11(d)(i)
Person 1(g)
Plan (Employee Benefit Plan) 1(a)
Preferred Shares 1(h)
Principal Party 13(b)
Purchase Price 1(i)
Record Date Intro
Redemption Date 7(b)
Redemption Price 23(a)
Registered Common Shares 13(b)
Right Intro
Right Certificate 3(a)
Rights Agent Intro
Section 11(a)(ii) event 11(a)(ii)
Section 13 event 13(a)
Shares Acquisition Date 1(j)
Subsidiary 1(k)
Trading Day 11(d)(i)
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RIGHTS AGREEMENT
This Rights Agreement (the "Agreement") dated as of July 13, 2004,
between The Greenbrier Companies, Inc., a Delaware corporation (the "Company"),
and EquiServe Trust Company, N.A., a national banking association, organized
and existing under the laws of the United States (the "Rights Agent");
WITNESSETH:
WHEREAS, on July 13, 2004, the Board of Directors of the Company (the
"Board of Directors") authorized and declared a dividend distribution of certain
stock purchase rights to Company stockholders of record at the Close of Business
(as defined) on July 26, 2004 pursuant to a Rights Agreement dated as of July
13, 2004, between the Company and the Rights Agent (the "Rights Agreement");
WHEREAS the Board of Directors has authorized and declared a dividend
distribution of one right (a "Right") for each Common Share (as defined) of the
Company outstanding at the Close of Business on July 26, 2004 (the "Record
Date"), upon the terms and subject to the conditions herein set forth;
WHEREAS each such Right shall represent the right to purchase one
one-hundredth of a share of Series A Preferred Stock, $0.001 par value, of the
Company which shall have the rights and preferences set forth in attached
Exhibit A; and
WHEREAS the Board of Directors has further authorized the issuance of
one Right with respect to each Common Share that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are defined in
Sections 3 and 7);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as defined) who shall be the
Beneficial Owner (as defined) of 12 percent or more of the Common Shares of the
Company then outstanding; subject to the exceptions stated in this Section 1(a).
An Acquiring Person shall not include (i) the Company, any Subsidiary of the
Company, any employee benefit plan ("Plan") of the Company or of a Subsidiary of
the Company, or any Person holding Common Shares for or pursuant to the terms of
any such Plan or (ii) any Person who as of the Record Date is the Beneficial
Owner of 12 percent or more of the Common Shares then outstanding (such Persons
shall be hereinafter referred to individually as a "Grandfathered Stockholder"
and such Beneficial Ownership percentage of each Grandfathered Stockholder as of
the Record Date shall be referred to as such stockholder's "Grandfathered
Percentage"), unless and until such Person shall thereafter acquire Beneficial
Ownership of additional Common Shares (other than an acquisition of Common
Shares as a result of a stock dividend, stock split or similar transaction
effected by the Company in which all holders of Common Shares are treated
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equally), at which time such Person shall be deemed to be an Acquiring Person.
No Person shall become an Acquiring Person as the result of an acquisition of
Common Shares by the Company which, by reducing the number of Common Shares
outstanding, increases the proportionate number of Common Shares beneficially
owned by such Person to 12 percent or more of the Common Shares then outstanding
(or with respect to a Grandfathered Stockholder, more than such stockholder's
Grandfathered Percentage); provided, however, that if a Person shall become the
Beneficial Owner of 12 percent or more of the Common Shares then outstanding (or
with respect to a Grandfathered Stockholder in excess of such Person's
Grandfathered Percentage) by reason of such share acquisitions by the Company,
and thereafter such Person becomes the Beneficial Owner of any additional Common
Shares, then such Person shall be deemed to be an Acquiring Person unless upon
the consummation of the acquisition of such additional Common Shares such Person
does not own 12 percent or more of the Common Shares then outstanding (or with
respect to a Grandfathered Stockholder in excess of such Person's Grandfathered
Percentage). If the Board of Directors determines in good faith that a Person
who would otherwise be an Acquiring Person became such inadvertently (including,
without limitation, because (A) such Person was unaware that it beneficially
owned a percentage of the Common Shares that would otherwise cause such Person
to be an Acquiring Person or (B) such Person was aware of the extent of its
Beneficial Ownership of Common Shares but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without any
intention of changing or influencing control of the Company, and if such Person
as promptly as practicable divested or divests itself of Beneficial Ownership of
a sufficient number of Common Shares so that such Person would no longer be an
Acquiring Person, then such Person shall not be deemed to be or to have become
an Acquiring Person by reason of the acquisitions to which the Board's
determination applies, for any purposes of this Agreement. For purposes of this
Section 1(a), in determining the percentage of the outstanding Common Shares
with respect to which a Person is the Beneficial Owner (A) all shares as to
which such Person is deemed the Beneficial Owner shall be deemed outstanding and
(B) shares which are subject to issuance upon the exercise or conversion of
outstanding conversion rights, rights, warrants and options other than those
referred to in (A) shall not be deemed outstanding. Any determination made by
the Board of Directors as to whether any Person is or is not an Acquiring Person
shall be conclusive and binding upon all holders of Rights.
(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 Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date hereof; provided, however, that no Person who is an officer
or director of the Company shall be deemed an Affiliate or an Associate of any
other officer or director of the Company solely as a result of his or her
position as an officer or director of the Company.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Regulation 13D-G thereunder (or any
comparable or successor law or regulation), in each case as in effect on
the date hereof; or
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(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 or the fulfillment of a
condition or both) pursuant to any agreement, arrangement or understanding
(other than customary arrangements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote, alone or in concert with
others, 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 under this clause (B) if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy given to such Person or any of such Person's Affiliates or
Associates in response to a public proxy solicitation made pursuant to, and
in accordance with, the applicable rules and regulations of the Exchange
Act and (2) is not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate of such other Person) with
which such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than customary arrangements
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 (other than voting pursuant to a revocable proxy as
described in the proviso to Section l(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding the foregoing, for purposes of this Agreement, neither Xxxx
Xxxxx nor Xxxxxxx X. Xxxxxx shall be deemed to be the Beneficial Owner of any
Common Shares owned by the other solely by virtue of the restrictions on
transfer and buy-sell provisions contained in Section 5 of that certain
Stockholders' Agreement between Xxxx Xxxxx and Xxxxxxx X. Xxxxxx dated July 1,
1994 (as amended).
(d) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which the offices of the Rights Agent are scheduled to be closed.
(e) "Close of Business" on any given date shall mean 5 p.m., Portland,
Oregon time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5 p.m., Portland, Oregon time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the Company (or without
express reference to another Person) shall mean shares of Common Stock, $0.001
par value, of the Company or any other shares of capital stock of the Company
into which the Common Shares are reclassified or changed. "Common Shares" when
used with reference to any Person other than the Company shall mean shares of
the common stock of such Person (or other class of
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equity securities or equity interests) having power to control or direct the
management of such Person or, if such Person is a Subsidiary of another Person,
of the Person which ultimately controls such first-mentioned Person and which
has issued and outstanding such common stock (or such other class of equity
securities or equity interests).
(g) "Person" shall mean any individual, firm, partnership, corporation,
association, group (as such term is used in Rule 13d-5 under the Exchange Act)
or other entity, and shall include any successor (by merger or otherwise) of
such entity.
(h) "Preferred Shares" shall mean shares of Series A Preferred Stock,
$0.001 par value, of the Company.
(i) "Purchase Price" shall mean the price to be paid for each one
one-hundredth of a Preferred Share pursuant to the exercise of a Right, which
price is, as of the date hereof, as set forth in Section 7(c). The Purchase
Price is subject to adjustment from time to time as set forth in Sections 11 and
13.
(j) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for the purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(k) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which an amount of the voting securities
sufficient to elect at least a majority of the directors of such corporation or
the members of the governing body of such other entity, as the case may be, is
beneficially owned, directly or indirectly, by such Person or otherwise
controlled by such Person.
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 in no event be
liable for, the acts or omissions of any such co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of the Close of Business (i) on the tenth day
after the Shares Acquisition Date or (ii) on the tenth Business Day (or, with
respect to (i) or (ii), such later date as may be determined by the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any Plan of the Company or of any Subsidiary of the
Company, or any entity holding Common Shares of the Company for or pursuant to
the terms of any such Plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any Plan of the Company or of any Subsidiary of the Company, or any entity
holding Common Shares of the Company for or pursuant to the terms of any such
Plan) to commence, a tender or exchange offer the consummation of which would
result in any Person becoming an Acquiring Person, including any such date which
is after the
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date of this Agreement and prior to the issuance of the Rights (the earlier of
such dates described in clauses (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced by the certificates for
Common Shares of the Company (which certificates shall also be deemed to be
Right Certificates) or, as the case may be, certificates issued subsequent to
the Record Date and bearing the legend set forth in Section 3(c) (and, in
neither case, by separate Right Certificates) and the record holders of such
certificates for Common Shares shall be the record holders of the Rights
represented thereby and (y) the Rights and the right to receive Right
Certificates will be transferable only simultaneously with and together with the
transfer of Common Shares of the Company. Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), the surrender for
transfer of such certificates for Common Shares shall also constitute the
surrender for transfer of the Rights associated with the Common Shares
represented thereby. As soon as practicable after the Distribution Date, after
notification by the Company, the Rights Agent will send, by first-class,
postage-prepaid mail, to each record holder of Common Shares of the Company as
of the Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate, in substantially the
form of Exhibit B hereto, evidencing one Right for each Common Share so held. As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates and may be transferred by the transfer of the Right Certificates as
permitted hereby, separately and apart from any transfer of one or more Common
Shares, and the holders of such Right Certificates as listed in the records of
the Company or any transfer agent or registrar for the Rights shall be the
record holders thereof.
(b) The Company will make available a Summary of the Rights in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
to each record holder of Common Shares of the Company who may so request from
time to time.
(c) Rights shall be issued in respect of all Common Shares of the
Company which are issued after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date, the Exchange Date or the Final
Expiration Date. Certificates for such Common Shares shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between The Greenbrier Companies,
Inc. (the "Company"), and EquiServe Trust Company, N.A. (the "Rights
Agent"), dated as of July 13, 2004 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a copy
of the Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances, Rights beneficially owned by an
Acquiring Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement) and any subsequent holder of such Rights
may become null and void.
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(d) Certificates for Common Shares, if any, issued after the
Distribution Date but prior to the earlier of the Redemption Date or the Final
Expiration Date shall bear the following legend:
This certificate does not evidence any Right issued pursuant to the terms of a
Rights Agreement between The Greenbrier Companies, Inc. (the "Company"), and
EquiServe Trust Company, N.A. (the "Rights Agent"), dated as of July 13, 2004
(the "Rights Agreement").
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase, assignment and certificate to be printed on the
reverse thereof), when, as and if issued, shall be substantially the same as
Exhibit B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate, which do not affect the duties or responsibilities of the Rights
Agent, and as are not inconsistent with the provisions of this Agreement, or as
may be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Common Shares of the Company or the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Right Certificates, whenever issued, which are issued in
respect of Common Shares which were issued and outstanding as of the Close of
Business on the Distribution Date, shall be dated as of the Close of Business on
the Distribution Date, and on their face shall entitle the holders thereof to
purchase such number of Preferred Shares (including fractional shares which are
integral multiples of one one-hundredth of a share) as shall be set forth
therein at the price per one one-hundredth of a Preferred Share set forth
therein, but the amount and type of securities purchasable upon exercise of each
Right 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 President, or any Vice President, either manually or by facsimile
signature, and have affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary, or an Assistant Secretary, of the
Company, either manually or by facsimile signature. The Right Certificates shall
be countersigned manually or by facsimile signature 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 by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such Person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent of
written notice and a list of record holders of Rights referred to in Section
3(a) hereof, the Rights Agent will keep or cause to be kept at its stockholder
services office designated pursuant to Section 26
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hereof, 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 Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(f) and 14 hereof, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates 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
Preferred Shares as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate 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 of the Rights Agent with the form of assignment on the reverse side
thereof (or with a written instrument of transfer in form satisfactory to the
Company and the Rights Agent enclosed with such Right Certificate), executed by
the registered holder thereof or the holder's attorney authorized in writing,
and with such signature guaranteed. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Right Certificate until the certificate set forth following
the form of assignment on the reverse side of such Right Certificate shall have
been completed and executed by the registered holder thereof or the holder's
attorney authorized in writing, and the Company shall have been provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Right Certificate or the
Affiliates or Associates of such Beneficial Owner (or former Beneficial Owner)
as the Company or the Rights Agent shall request. Upon receipt of such executed
form of assignment and certificate and of such additional evidence, if
requested, the Rights Agent shall countersign and deliver to the person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates. The Rights Agent shall
not be required to process any transaction unless and until it receives written
evidence that all taxes and governmental charges have been paid in full.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a 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 shall issue and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Until the Distribution Date, no Right may be exercised.
(b) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
and certificate thereon duly executed (with signatures duly guaranteed), to the
Rights Agent at the office or agency of the Rights Agent designated for such
purpose, together with payment of the Purchase Price with respect to each Right
exercised, at or prior to the earliest of (i) the Close of Business on July 26,
2014 (the "Final Expiration Date"), (ii) the consummation of a transaction
contemplated by Section 13, (iii) the time at which such Rights are exchanged
(the "Exchange Date") as provided in Section 24, or (iv) the time at which the
Rights are redeemed (the "Redemption Date") as provided in Section 23.
(c) The Purchase Price for each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $100, and shall be
payable in lawful money of the United States of America in accordance with
Section 7(d) hereof. The Purchase Price and the number of Preferred Shares to be
acquired upon exercise of a Right shall be subject to adjustment from time to
time as provided in Sections 11 and 13.
(d) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and form of certificate thereon
duly executed, accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable tax or governmental charge
required to be paid by the holder of such Right Certificate in accordance with
Section 9 in cash, or by bank certified check or bank draft payable to the order
of the Company, and such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) of the Rights represented by such Right
Certificate or the Affiliates or Associates thereof as the Company may
reasonably request, the Rights Agent shall thereupon promptly (i) requisition
from any transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, and/or, as provided in
Section 14, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths 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 the transfer agent with the depositary
agent) and the Company will direct 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 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.
Notwithstanding the foregoing provisions of this Section 7(d), the Company may
suspend the issuance of Preferred Shares (or, following the occurrence of a
Section 11(a)(ii) event, Common Shares and/or other securities) upon exercise of
Rights for a reasonable period, not in excess of 90 days, during which the
Company seeks to register under the Securities Act of 1933, as amended, and any
applicable securities law of any jurisdiction, the Preferred Shares (or,
following the occurrence of a Section 11(a)(ii) event,
8
Common Shares and/or other securities) to be issued pursuant to the Rights;
provided, however, that nothing contained in this Section 7(d) shall relieve the
Company of its obligations under Section 9(c).
(e) 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 the
holder's duly authorized assigns, subject to the provisions of Section 6 and
Section 14.
(f) Notwithstanding anything in this Agreement to the contrary, upon
the occurrence of any of the events described in Sections 11(a)(ii) and 13(a),
any Rights beneficially owned by (i) an Acquiring Person or any Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person or of
any Affiliate or Associate of such Acquiring Person who becomes a transferee
after the Acquiring Person becomes such (other than a transferee in a
transaction described in Section 23(b)) or (iii) a transferee who acquired such
Rights from an Acquiring Person or an Affiliate or Associate of an Acquiring
Person prior to or concurrently with the Acquiring Person becoming such in a
transaction which the Board of Directors has determined to be part of an
arrangement which has as a primary purpose or effect the avoidance of this
Section 7(f), shall become null and void, and any holder of such Rights (whether
or not such holder is an Acquiring Person or an Affiliate or Associate of an
Acquiring Person) shall thereafter have no right to exercise such Rights under
any provision of this Agreement or otherwise. Any Right Certificate issued
pursuant to Section 3 that represents Rights beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof and any Right Certificate issued at
any time upon the transfer of any Rights to an Acquiring Person or any Affiliate
or Associate thereof or to any nominee of such Acquiring Person, Affiliate or
Associate, and any Right Certificate issued pursuant to Sections 6 or 11 upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall or shall be deemed to contain the following
legend:
The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). This Right Certificate and the Rights represented hereby may
become void in the circumstances specified in the Rights Agreement.
The Company shall notify the Rights Agent when this Section 7(f)
applies and shall use all reasonable efforts to ensure that the provisions of
this Section 7(f) are complied with, but neither the Company nor the Rights
Agent shall have any liability to any holder of Rights or any other Person as a
result of the Company's failure to make any determination under this Section
7(f) with respect to an Acquiring Person or its Affiliates, Associates or
transferees.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of
9
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
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital 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 (and,
will use its best efforts, following the occurrence of a Section 11(a)(ii)
event, to cause to be reserved and kept available out of its authorized and
unissued Common Shares and/or other securities), the number of Preferred Shares
(and, following the occurrence of a Section 11(a)(ii) event, the number of
Common Shares and/or other securities) as will from time to time be sufficient
to permit the exercise in full of all outstanding Rights.
(b) So long as the Preferred Shares (and, following the occurrence of a
Section 11(a)(ii) event, Common Shares and/or other securities) issuable upon
the exercise of Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares issued or reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.
(c) If necessary to permit the issuance of shares and/or other
securities pursuant to the Rights, the Company will use its best efforts from
and after the time the Rights become exercisable to register such shares and/or
other securities under the Securities Act of 1933, as amended, and any
applicable U.S. state securities laws and to keep such registration effective
until the Final Expiration Date.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares (and, following the
occurrence of a Section 11(a)(ii) event, Common Shares and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares or other securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares (or Common Shares and/or other securities as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates for the Preferred Shares (or Common Shares and/or other
securities, as the case may be) in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or to
issue or deliver any certificates for Preferred Shares (or Common Shares and/or
other securities, as the case may be) 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
10
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) 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 taxes and governmental charges) was made; provided, however,
that if the date of such surrender and payment is a date upon which the transfer
books for the Preferred Shares (or Common Shares and/or other securities, as the
case may be) are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which such transfer books are open.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number and kind of shares which may be purchased
upon exercise of a Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement and prior to the Close of Business on the earliest
of the Redemption Date, the Exchange Date, or the Final Expiration Date (A)
declare or pay any dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), then and in each such event, the Purchase Price in effect at
the time of the record date for such dividend or on the effective date of
such subdivision, combination or reclassification, and the number and kind
of Preferred Shares or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number
and kind of Preferred Shares or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such date and at a
time when the Right was exercisable and the transfer books of the Company
were open, the holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24, in the event that any Person,
alone or together with its Affiliates and Associates, shall become an
Acquiring Person (except in a transaction to which the provisions of
Section 13(a) hereof apply), then, upon the occurrence of such event (a
"Section 11(a)(ii) event"), proper provision shall be made so that each
holder of a Right, except as provided in Section 7(f) hereof, shall
thereafter have a right to receive for each Right, upon exercise thereof in
accordance with the terms
11
of this Agreement and payment of the then-current Purchase Price, in lieu
of one one-hundredth of a Preferred Share, such number of Common Shares of
the Company as shall equal the result obtained by multiplying the
then-current Purchase Price by the then number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) event, and dividing that product by
50 percent of the current per share market price (determined pursuant to
Section 11(d)) for Common Shares on the date of such first occurrence (such
number of shares being hereinafter referred to as the "Adjustment Shares"),
provided that such provision shall not be effective until such time as the
Rights are no longer subject to redemption pursuant to Section 23(a).
(iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii), the Company may, if the Board of Directors determines
that such action is necessary or appropriate and not contrary to the
interest of holders of Rights, and, in the event that the number of Common
Shares which are authorized by the Company's Restated Certificate of
Incorporation (as the same may be amended from time to time prior to the
Final Expiration Date) but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to permit
the exercise in full of the Rights in accordance with Section 11(a)(ii),
the Company shall, with respect to each Right, make adequate provision to
substitute for all or a portion of the Adjustment Shares upon payment of
the applicable Purchase Price (A) cash, (B) other equity securities of the
Company (including, without limitation, shares of preferred stock or units
of preferred stock having the same value as Common Shares (such shares or
units of preferred stock, "common stock equivalents")), (C) debt securities
of the Company, (D) other assets or (E) any combination of the foregoing,
having an aggregate value equal to the Adjustment Shares for which
substitution is made. To the extent that the Company determines that some
action is to be taken pursuant to this Section 11(a)(iii), the Company
shall provide, subject to Section 7(f) hereof, that such action shall apply
uniformly to all outstanding Rights.
(b) In the event that the Company shall at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earliest
of the Redemption Date, the Exchange Date, or the Final Expiration Date fix a
record date prior to the Redemption Date, the Exchange Date, or the Final
Expiration Date for the issuance of rights, options or warrants to all holders
of Preferred Shares entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Preferred Shares (or
shares having the same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares, at a price per Preferred Share or per
share of equivalent preferred share (or having an effective price per share on a
converted basis in the case of a security convertible into Preferred Shares or
equivalent preferred shares) less than the current per share market price of the
Preferred Shares (as determined in accordance with Section 11(d)) on such record
date, 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 outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
price of the convertible securities so to be offered) would purchase
12
at such current market price, and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors, whose determination shall be set forth in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed;
and in the event that such rights, 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 the event that the Company shall at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earliest
of the Redemption Date, the Exchange Date, or the Final Expiration Date fix a
record date for the making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per share market price per one Preferred
Share (as determined in accordance with Section 11(d)) on such record date, less
the fair market value 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 per one Preferred Share. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the "current
per share market price" of the Common Shares on any date shall be deemed to
be the average of the daily closing prices per Common Share on each of the
20 consecutive Trading Days (as such term is hereinafter defined) through
and including the Trading Day immediately preceding such date; provided,
however, that in the event the current per share market price of the Common
Shares is determined during a period following the announcement by the
issuer of such Common Shares of (A) a dividend or distribution on such
Common Shares payable in such Common Shares or securities convertible into
such Common Shares or (B) any subdivision, combination or reclassification
of such Common Shares, and prior to the expiration of 20 Trading Days after
the ex-dividend date for such dividend, distribution, subdivision,
combination or reclassification, then, and in each such case, the current
market price shall be appropriately adjusted to take into account such
event. The closing price for each Trading Day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked
13
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange, Inc., or, if the
Common Shares are not listed or admitted to trading on the New York Stock
Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Common Shares are listed or
admitted to trading or, if the Common Shares are not listed or admitted to
trading on any national securities exchange, the last sale price reported
by the National Market Tier of The Nasdaq Stock Market ("NASDAQ") or such
other system then in use, or, if no last sale price is reported by any such
system, the average of the representative closing bid and asked prices as
quoted on NASDAQ or such other system then in use, or, if on any such date
the Common Shares are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in the Common Shares selected by the Board of
Directors. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the
Common Shares are not listed or admitted to trading on any national
securities exchange, a day on which NASDAQ or such other system is open.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in the same manner as set forth above for Common Shares in
clause (i) of this Section 11(d). If the current per share market price of
the Preferred Shares cannot be determined in the manner provided above, 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 (appropriately adjusted to reflect any stock split, stock dividend,
subdivision, combination, reclassification or similar transaction occurring
after the date hereof) multiplied by one hundred.
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 based upon
such appraisals or valuation reports of such independent experts as the Board of
Directors shall in good faith determine appropriate. Any such determination of
"current per share market price" 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 percent in the
Purchase Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a
Common Share or other share or one-millionth of a Preferred Share as the case
may be.
(f) If, as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Shares, the
number of such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred Shares
14
contained in this Section 11 and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) below, upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share (calculated to the nearest one one-millionth
of a Preferred Shared obtained by (i) multiplying (x) the number of one
one-hundredths of a Preferred Share covered by 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, to adjust the number of Rights instead of making any
adjustment in the number of Preferred Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price by the Purchase Price in effect immediately
after such adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten days after the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
15
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the exercise
of the Rights, as applicable, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-hundredth of a
Preferred Share and the number of shares which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the advice or opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a Preferred Share at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such further adjustments in the number of one
one-hundredths of a Preferred Share which may be acquired upon exercise of the
Rights, and such adjustments in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that the
Board of Directors in good faith shall determine to be advisable in order that
any (i) consolidation or subdivision of the Preferred Shares, (ii) issuance
wholly for cash of any Preferred Shares at less than the current market price,
(iii) issuance wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares, (iv) dividends
on Preferred Shares payable in Preferred Shares or (v) issuance of rights,
options or warrants referred to in Section 11(b), hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to such holders or shall
reduce the taxes payable by such holders.
(n) The Company shall not, at any time after the Distribution Date (i)
consolidate with, or merge with or into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o),
(ii) consummate a statutory plan of exchange with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of transactions, assets or earning power aggregating
more than 50 percent of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)), if at the time of or immediately after such
consolidation, merger, consummation of a statutory plan of exchange or sale
there are any
16
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; provided, however, this Section 11(n)
shall not affect the ability of any Subsidiary of the Company to consolidate
with, merge with or into, consummate a statutory plan of exchange with, or sell
or transfer assets or earning power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Sections 23, 24 and 27, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights, including, without limiting the
generality of the foregoing, any merger, consolidation, statutory exchange or
sale or transfer of assets or earning power.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the date of this Agreement and
prior to the Distribution Date (i) declare or pay a dividend on the outstanding
Common Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, (iii) combine the outstanding Common Shares into a smaller number of
shares, or (iv) issue any shares of its capital stock in a reclassification of
the outstanding Common Shares, the number of Rights associated with each Common
Share then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each Common Share following any such event
(including other Common Shares issued after the date of such event, but prior to
the Distribution Date) shall equal the result obtained by multiplying the number
of Rights associated with each Common Share immediately prior to such event by a
fraction the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of Common Shares outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief reasonably detailed statement of the facts, computations and methodology
of accounting giving rise to such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Preferred Shares and the Common
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing Common Shares, provided that no such
summary need be mailed to such holders with respect to adjustments made pursuant
to Section 11(p) prior to the Distribution Date) in accordance with Section 25
hereof. Notwithstanding the foregoing sentence, the failure of the Company to
make such certification or give such notice shall not affect the validity of or
the force or effect of the requirement for such adjustment. Any adjustment to be
made pursuant to Sections 11 and 13 shall be effective as of the date of the
event giving rise to such adjustment. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained.
17
Section 13. Consolidation, Merger, Statutory Plan of Exchange or Sale
or Transfer of Assets or Earning Power.
(a) In the event that, directly or indirectly, after the Distribution
Date, (i) the Company shall consolidate with, or merge with and into, any other
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(o)), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o))
shall consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with such consolidation or merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (iii) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o))
shall acquire all or a majority of the Common Shares of the Company pursuant to
a statutory plan of exchange, or (iv) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more transactions, assets or earning power aggregating more than 50
percent of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company or one
or more of its wholly owned Subsidiaries) (any event described in clauses (i),
(ii), (iii) or (iv) of this Section 13(a) being a "Section 13 event"), then, and
in each such case, proper provision shall be made so that (A) each holder of a
Right, except as provided in Section 7(f) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then-current Purchase Price
in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid and nonassessable Common Shares of the
Principal Party (as hereinafter defined) which Common Shares shall not be
subject to any liens, encumbrances, rights of first refusal, transfer
restrictions or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Section 13 event (or, if a
Section 11(a)(ii) event has occurred prior to the Section 13 event, multiplying
the number of such one one-hundredths of a share for which a Right was
exercisable immediately prior to the first occurrence of such Section 11(a)(ii)
event by the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product by (2) 50 percent of the current per
share market price (determined in accordance with Section 11(d)(i) hereof) of
the Common Shares of such Principal Party on the date of consummation of such
Section 13 event; (B) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, statutory plan of
exchange, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (C) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party after
the first occurrence of a Section 13 event; (D) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Shares in accordance with Section 9 hereof
applicable to the reservation of capital shares) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights; and (E)
the provisions of Section 11(a)(ii) shall be of no further effect following the
first occurrence of any Section 13 event.
18
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (i),
(ii) or (iii) of Section 13(a), (A) the Person that is the issuer of
any securities into which Common Shares of the Company are converted in
such merger or consolidation or for which they are exchanged in such
statutory plan of exchange, or, if there is more than one such issuer,
the issuer of Common Shares that has the highest aggregate current
market price (determined in accordance with Section 11(d)) and (B) if
no securities are so issued, the Person that is the other party to such
merger, consolidation or statutory plan of exchange, or, if there is
more than one such Person, the Person the Common Shares of which has
the highest aggregate current market price (determined in accordance
with Section 11(d)); and
(ii) in the case of any transaction described in clause (iv)
of Section 13(a), the Person that is the party receiving the largest
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 transferred pursuant to such transaction or transactions
or if the Person receiving the largest portion of the assets or earning
power cannot be determined, whichever Person the Common Shares of which
has the highest aggregate current market price (determined in
accordance with Section 11(d));
provided, however, that in any such case, (A) if the Common Shares of such
Person are not securities that at such time are and continuously over the
preceding twelve-month period have been registered under Section 12 of the
Exchange Act ("Registered Common Shares"), or such Person is not a corporation,
and such Person is a direct or indirect Subsidiary of another Person that has
Registered Common Shares outstanding, "Principal Party" shall refer to such
other Person; (B) if the Common Shares of such Person are not Registered Common
Shares or such Person is not a corporation, and such Person is a direct or
indirect Subsidiary of another Person but is not a direct or indirect Subsidiary
of another Person which has Registered Common Shares outstanding, "Principal
Party" shall refer to the ultimate parent entity of such first-mentioned Person;
(C) if the Common Shares of such Person are not Registered Common Shares or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and one or more of such other Persons has
Registered Common Shares outstanding, "Principal Party" shall refer to whichever
of such other Persons is the issuer of the Registered Common Shares having the
highest aggregate current market price (determined in accordance with Section
11(d)); and (D) if the Common Shares of such Person are not Registered Common
Shares or such Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and none of such other Persons
have Registered Common Shares outstanding, "Principal Party" shall refer to
whichever ultimate parent entity is the corporation having the greatest
stockholders' equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the
greatest net assets.
(c) The Company shall not consummate any such consolidation, merger,
statutory plan of exchange, sale or transfer unless prior thereto the Company
and Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement confirming that (i) such Principal Party shall, upon
consummation of such consolidation, merger, statutory plan
19
of exchange or sale or transfer of assets or earning power, assume this
Agreement in accordance with Sections 13(a) and (b), (ii) all rights of first
refusal or preemptive rights in respect of the issuance of Common Shares of such
Principal Party upon exercise of outstanding Rights have been waived, (iii) any
provision of the authorized securities of such Principal Party or of its
charter, bylaws or other instruments governing its corporate affairs which would
obligate such Principal Party to issue in connection with, or as a consequence
of, the consummation of a transaction referred to in Section 13(a), Common
Shares of such Principal Party at less than the then-current per share market
price (determined in accordance with Section 11(d)(i)) or securities exercisable
for, or convertible into, such Common Shares at less than such then-current per
share market price (other than to the holders of Rights pursuant to this Section
13) have been waived or canceled, and (iv) such transaction shall not result in
a default by such Principal Party under this Agreement and further providing
that, as soon as practicable after the date of any consolidation, merger,
statutory plan of exchange or sale or transfer of assets or earning power
referred to in Section 13(a), such Principal Party will:
(A) prepare and file a registration statement under the
Securities Act of 1933, as amended, 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 of 1933, as
amended) until the Final Expiration Date of the Rights, and similarly
comply with applicable state securities laws;
(B) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights or to
meet the eligibility requirements for quotation of the Rights and such
securities on the New York Stock Exchange or other system then in use; and
(C) deliver to holders of the 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.
In the event that at any time after the occurrence of a Section
11(a)(ii) event hereof some or all of the Rights shall not have been exercised
at the time of a Section 13 event, the Rights which have not theretofore been
exercised shall thereafter be exercisable in the manner described in Section
13(a) (without taking into account any prior adjustment required by Section
1l(a)(ii)).
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights (i. e., Rights
to acquire less than one one-hundredth of a Preferred Share). If the Company
shall determine not to issue such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which
20
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 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 Trading Day shall be determined in the same manner as set forth in
the second sentence of Section 11(d)(i) with respect to the closing price for
Common Shares.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights, or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth 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. With
respect to fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, if the Company does not issue fractional
shares or depositary receipts in lieu thereof, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one one-hundredth of a Preferred Share. For purposes of this
Section 14(b), the current market value of one one-hundredth of a Preferred
Share shall be one one-hundredth of the closing price of a Preferred Share (as
determined in the same manner as set forth in the second sentence of Section
11(d)(i) with respect to the closing price for Common Shares) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Section 11(a)(ii) event or a Section
13 event, the Company shall not be required to issue fractions of Common Shares
upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Company may
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this Section 14(c),
the current market value of one Common Share shall be the closing price of one
Common Share (as determined pursuant to the second sentence of Section 11(d)(i))
for the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right, by the acceptance of the Rights, expressly
waives the holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common
21
Shares), may in the holder's own behalf and for the holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, the holder's right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced by
the certificates for Common Shares registered in the name of the holders of the
Common Shares (which certificates for Common Shares shall also constitute
certificates for Rights) and each Right will be transferable only in connection
with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and certificates
duly executed; and
(c) subject to Sections 6(a) and 7(f), the Company and the Rights Agent
may deem and treat the person in whose name the Right Certificate (or, prior to
the Distribution Date, the associated Common Shares certificate) is registered
as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Common Shares certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary.
(d) Notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use
reasonable efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Holders and Right Certificate Holders Not Deemed
Stockholders. No holder, as such, of any Right or Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
the number of one one-hundredths of a Preferred Share or any other securities of
the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any
22
Right Certificate be construed to confer upon the holder of any Right or 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 in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, damage, judgment,
fine, penalty, claim, demand, settlement, cost or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
execution, acceptance and administration of this Agreement and the exercise and
performance hereunder of its duties, including without limitation the costs and
expenses of defending against any claim of liability. The indemnity provided
herein shall survive termination of this Agreement and the termination and
expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the possibility of such loss or damage. Any liability of the
Rights Agent under this Agreement will be limited to the amount of fees paid by
the Company to the Rights Agent hereunder.
(b) The Rights Agent shall be authorized and protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it in
connection with its acceptance and administration of this Agreement in reliance
upon any Right Certificate or certificate for the 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, certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained. The Rights Agent shall not be deemed to have any duty or notice
unless and until the Company has provided the Rights Agent with written notice.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation (which term shall for the purposes of this
Agreement include a national banking association) into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or
23
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.
(b) If 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 if 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:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (including, without limitation, the identity of
any Acquiring Person and the determination of "current per share market price")
may be deemed to be conclusively proved and established by a certificate signed
by any one of the President, any Vice President, the Treasurer, the Secretary or
any Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization and protection to the Rights Agent
and the Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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 authorization, execution and delivery 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
24
breach by the Company of any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void
pursuant to Section 7(f)) or any adjustment required under the provisions of
Sections 11 or 13 (including the manner, method or amount thereof) 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 receipt by the Rights Agent of the certificate describing any
such adjustment as contemplated by Section 12); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(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 President, any Vice President, the Secretary, any Assistant Secretary
or the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such instructions shall be final
authorization and protection to the Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or omitted to
be taken by it in good faith in accordance with written instructions of any such
officer. The Rights Agent may conclusively rely on the most recent written
instructions given by any such officer.
(h) The Rights Agent and any stockholder, affiliate, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become 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
the 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, absent gross negligence, bad faith or willful misconduct
in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of its rights hereunder if
the Rights Agent shall have reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
25
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate included with the form of
assignment or form of election to purchase, as the case may be, has either not
been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company. If such certificate has been completed and signed, the Rights Agent may
assume without further inquiry that the Right Certificate is not owned by a
person described in Section 7(f) and shall not be charged with any knowledge to
the contrary.
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, and
to the holders of the Right Certificates by first-class mail. In the event the
transfer agency relationship in effect between the Company and the Rights Agent
terminates, the Rights Agent will be deemed to resign automatically on the
effective date of such termination; and any required notice will be sent by the
Company. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares and
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit such holder's Right Certificate for
inspection by the Company), then the Company shall become the Rights Agent and
the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a Person organized and doing business under the laws of the United States or any
state, in good standing, which is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100 million, or (b) an
affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be. If, 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 if at that time
any of the Right Certificates shall not have been countersigned,
26
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.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by the Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares of the Company following the
Distribution Date and prior to the expiration, termination or redemption of the
Rights, the Company (a) shall, with respect to Common Shares of the Company so
issued or sold pursuant to the exercise of stock options or under any Plan, or
upon the exercise, conversion or exchange of securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors may, at its option, at any time prior to the
tenth day following the Shares Acquisition Date, redeem all, but not less than
all, of the then outstanding Rights at a redemption price of $.01 per Right, as
such amount may be appropriately adjusted to reflect any stock split, stock
dividend, or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"). The
redemption 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) In the event that if, following a Shares Acquisition Date and
following the expiration of the right of redemption under Section 23(a), but
prior to any Section 13 event, (i) a Person who is an Acquiring Person or an
Affiliate or Associate of such Person shall have transferred or otherwise
disposed of a number of Common Shares in one transaction, or a series of
transactions (not directly or indirectly involving a purchase by the Company or
any of its Subsidiaries), which did not result in the occurrence of a Section 13
event, such that such Person is thereafter a Beneficial Owner of 12 percent or
less of the outstanding Common Shares of the Company, (ii) there are no other
Persons, immediately following the transfer or other disposition described in
clause (i), who are Acquiring Persons, and (iii) the transfer or other
disposition described in clause (i) was other than pursuant to a transaction, or
series of transactions, which directly or indirectly involved the Company or any
of its Subsidiaries; then the right of redemption provided in Section 23(a)
shall be reinstated and thereafter all outstanding Rights shall again be subject
to the provisions of this Section 23.
27
Notwithstanding anything in this Agreement to the contrary, the Rights shall not
be exercisable while the Rights are subject to any right of redemption by the
Company under this Agreement.
(c) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights, or at such time and date thereafter as the Board of
Directors may specify, 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. Promptly after
the action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights in any manner other than that
specifically set forth in this Section 23, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange.
(a) The Company may, at its option, by action of the Board of
Directors, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the provisions of
Section 7(f)) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
herein referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the Company, any
Plan of the Company or of a Subsidiary of the Company, or any Person holding
Common Shares for or pursuant to the terms of any such Plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50
percent or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of the holders of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent and to the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be
28
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(f) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section 11(b)) for Common Shares exchangeable for Rights, at
the initial rate of one one-hundredth of a Preferred Share (or equivalent
preferred share) for each Common Share, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Shares pursuant to the terms
thereof, so that the fraction of a Preferred Share delivered in lieu of each
Common Share shall have at least the same voting rights as one Common Share.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the purposes of this Section
24(d), the current market value of a whole share shall be the closing price of a
Common Share determined in the manner set forth in the second sentence of
Section 11(d)(i) with respect to the closing price for Common Shares for the
Trading Day immediately prior to the date of action by the Board of Directors
ordering the exchange.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to declare or pay any dividend payable in stock of any
class to the holders of its Preferred Shares or to make any other distribution
to the holders of its Preferred Shares (other than a regular quarterly cash
dividend), or (ii) to offer to the holders of its Preferred Shares options,
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), or (iv) to effect any consolidation or merger into or with, to effect
any exchange of the Common Shares of the Company pursuant to a statutory plan of
exchange with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50 percent of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person or Persons
(other than the Company and/or any of its Subsidiaries in a transaction which
complies with Section 11(o)), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
the Rights Agent and to each holder of a Right Certificate, in accordance with
Section 26, 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,
statutory plan of exchange, sale, transfer, liquidation, dissolution or winding
up is to take place and the date of participation therein by the holders of
record of the Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least 20 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such other
action, at least 20 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Preferred Shares,
whichever shall
29
be the earlier. The failure to give notice required by this Section 25 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
(b) In case any Section 11(a)(ii) event shall occur, then (i) the
Company shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Sections 11(a)(ii), and (ii) all references in Section
25(a) to Preferred Shares shall be deemed thereafter to refer to Common Shares
and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
The Greenbrier Companies, Inc.
Xxx Xxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage-prepaid, addressed (until another address
is filed in writing with the Company) to the principal office of the Rights
Agent as follows:
EquiServe Trust Company, N.A.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate (or, if
prior to the Distribution Date, to or on the holder of certificates representing
Common Shares of the Company) shall be sufficiently given or made if sent by
first-class mail, postage-prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. The Company may from time to
time, by action of the Board of Directors, supplement or amend this Agreement
without the approval of any holders of Rights or Common Shares in order to cure
any ambiguity, to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions with respect to the Rights which the Board of Directors may
deem necessary or desirable; provided, however, that, from and after a
Distribution Date, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights (excluding the interests
of any Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that
30
the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment;
provided, however, that the Rights Agent may, but shall not be obligated to,
enter into any such supplement or amendment which affects its own rights, duties
or immunities under this Agreement.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares of the Company) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares
of the Company).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 shall be
reinstated and shall not expire until the Close of Business on the tenth day
following the date of such determination by the Board of Directors.
Section 31. Determinations and Actions by the Board of Directors, etc.
Except as otherwise specifically provided herein, the Board of Directors shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors or
to the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power (a) to
interpret the provisions of this Agreement and (b) to make all determinations
deemed necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (ii) below, all omissions with respect to the foregoing)
which are done or made by the Board of Directors in good faith shall (i) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (ii) not subject the Board of Directors or
any member thereof to any liability to the holders of the Rights.
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 such state applicable to contracts to be made and
performed entirely within such state.
31
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.
Section 35. Force Majeure. Notwithstanding anything to the contrary
contained herein, Rights Agent shall not be liable for any delays or failures in
performance resulting from acts beyond its reasonable control including, without
limitation, acts of God, terrorist acts, shortage of supply, breakdowns or
malfunctions, interruptions or malfunction of computer facilities, or loss of
data due to power failures or mechanical difficulties with information storage
or retrieval systems, labor difficulties, war, or civil unrest.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
THE GREENBRIER COMPANIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
________________________________________
Title: President and Chief Executive Officer
_____________________________________
EQUISERVE TRUST COMPANY, N.A.
By: /s/ Xxxxxx X. Ferrari
________________________________________
Title: Senior Managing Director
_____________________________________
32
Exhibit A
RIGHTS AND PREFERENCES OF
SERIES A PREFERRED STOCK
Section 1. Designation and Amount. There shall be a series of Preferred
Stock of the corporation which shall be designated as "Series A Participating
Preferred Stock, $0.001 par value" (the "Series A Preferred Stock"), and the
number of shares constituting such series shall be 200,000. Such number of
shares may be increased or decreased by the Board of Directors without
stockholder action; provided, however, that no decrease shall reduce the number
of shares of Series A Preferred Stock to a number less than the shares
outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued
by the corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the Series
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of shares of Common Stock, $0.001
par value ("Common Stock") of the corporation and of any other junior stock
which may be outstanding, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose, (i)
quarterly dividends payable in cash on the last day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 per share ($.01 per one one-hundredth of a
share), or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock, and
(ii) subject to the provision for adjustment hereinafter set forth, quarterly
distributions (payable in kind) on each Quarterly Dividend Payment Date in an
amount per share equal to 100 times the aggregate per share amount of all
noncash dividends or other distributions (other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock, by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or with respect to the
first Quarterly Dividend Payment Date since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the corporation
shall at any time after July 26, 2004 (the "Rights Declaration Date"), declare
or pay any dividend on Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of Series A Preferred Stock are entitled under clauses (i)(b) or (ii) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
A-1
(B) The corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(A) immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share ($.01 per one one-hundredth
of a share) on the Series A Preferred Stock shall nevertheless be payable, out
of funds legally available for such purpose, on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue and be cumulative from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall cumulate but shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100 votes
(and each one one-hundredth of a share of Series A Preferred Stock shall entitle
the holder thereof to one vote) on all matters submitted to a vote of the
stockholders of the corporation. In the event the corporation shall at any time
after the Rights Declaration Date declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided in the Certificate of Incorporation or
in this amendment thereof or by law, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of the stockholders of the corporation.
A-2
(C) Except as otherwise provided in the Certificate of Incorporation or
in this amendment thereof or by law, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be required for taking
any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the corporation shall not:
(i) declare or pay dividends on, make any other
distributions on any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, provided that the corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any share of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The corporation shall not permit any subsidiary of the corporation
to purchase or otherwise acquire for consideration any shares of stock of the
corporation unless the corporation could, under Section 4(A), purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. The
corporation shall take all such action as is necessary so that all such shares
shall after their cancellation become authorized but unissued shares of
Preferred Stock, without designation as to series, and may be reissued as part
of a new series of
A-3
Preferred Stock to be created by Articles of Amendment adopted by the Board of
Directors without stockholder action, subject to the conditions and restrictions
on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the corporation, no distribution shall
be made (A) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the higher of (i) $1.00 per share ($.01 per
one one-hundredth of a share), plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (ii) an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of Common Stock; nor shall any distribution
be made (B) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up. In the event the corporation shall at any time after the Rights Declaration
Date declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock are
entitled under clause (A)(ii) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, or otherwise changed, then in any
such case the shares of Series A Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the corporation shall at any time after the Rights
Declaration Date declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable. Notwithstanding the foregoing, the corporation may acquire
shares of Series A
A-4
Preferred Stock in any other manner permitted by law, the Certificate of
Incorporation or this amendment thereof.
Section 9. Rank. Unless otherwise provided in the Certificate of
Incorporation or an amendment thereof relating to a subsequent series of
Preferred Stock of the corporation, the Series A Preferred Stock shall rank
junior to all other series of the corporation's Preferred Stock as to the
payment of dividends and the distribution of assets on liquidation, dissolution
or winding up, and senior to the Common Stock of the corporation.
Section 10. Amendment. The Certificate of Incorporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least a
majority of the outstanding shares of Series A Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued
in one-hundredths of a share or other fractions of a share which shall entitle
the holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Preferred Stock.
A-5
Exhibit B
[Form of Right Certificate]
Certificate No. R ______Rights
NOT EXERCISABLE AFTER JULY 26, 2014, OR EARLIER IF REDEEMED. THE RIGHTS ARE
SUBJECT TO REDEMPTION ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN THE
RIGHTS AGREEMENT.](1)
Right Certificate
THE GREENBRIER COMPANIES, INC.
This certifies that _____________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the registered owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of July 13, 2004 (the "Rights
Agreement"), between The Greenbrier Companies, Inc., a Delaware corporation (the
"Company"), and EquiServe Trust Company, N.A., a national banking association,
organized and existing under the laws of the United States (the "Rights Agent,"
which term shall include every successor Rights Agent under the Rights
Agreement), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5 p.m. (Portland,
Oregon time) on July 26, 2014, at the office or agency of the Rights Agent or
its successor designated for such purpose, one one-hundredth of a fully paid
nonassessable share of Series A Participating Preferred Stock, $0.001 par value
(the "Preferred Shares"), of the Company, at a purchase price initially of $100
per one one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and related certificate duly executed. As provided in the Rights
Agreement, the Purchase Price and the number of Preferred Shares which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
-------------------------
(1) That portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
B-1
This Right Certificate is subject to all of the terms, covenants and
restrictions of the Rights Agreement, which terms, covenants and restrictions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and are available from the Rights Agent or the Company upon written
request.
Upon the occurrence of certain events specified in Section 7(f) of the
Rights Agreement, if the Rights evidenced by this Right Certificate are or were
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement) or, under
certain circumstances, a transferee of any such Acquiring Person, Affiliate or
Associate, such Rights shall become null and void and any holder thereof
(whether or not such holder is an Acquiring Person or an Affiliate or Associate
of an Acquiring Person) shall thereafter have no right to exercise such Rights.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the holder hereof to purchase capital stock of an
entity other than the Company or receive cash or other assets, all as prescribed
in the Rights Agreement.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights equal to the aggregate number of Rights
evidenced by the Right Certificate or Right Certificates surrendered. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Right Certificate may, but are not required to, be redeemed by the
Company at a redemption price of $.01 per Right or exchanged by the Company at
the rate of one Common Share per Right.
Fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby only in fractions which are integral multiples
of one one-hundredth of a Preferred Share (which may, at the election of the
Company, be evidenced by depositary receipts). In lieu of the issuance of
fractional shares other than in integral multiples of one one-hundredth of a
Preferred Share, a cash payment will be made as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a 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, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting stockholders (except
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as provided in the Rights Agreement), or to receive dividends or other
subscription rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ______________________.
ATTEST: THE GREENBRIER COMPANIES, INC.
Secretary President
Countersigned:
________________________________
By
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________ hereby sells, assigns and
transfers unto _____________________ (Please print name and address of
transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:
Signature
Signature Guaranteed:
Certificate
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The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:
Signature
NOTICE
The signatures in the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
[Form of Reverse Side of Right Certificate-continued]
The signatures in the foregoing Assignment must be guaranteed by an
eligible guarantor institution (banks, stock brokers, savings and loan
institutions, and credit unions) with membership in an approved signature
guarantee medallion program pursuant to SEC Rule 17Ad-15.
In the event the certification set forth above is not completed, the
Company may deem the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) and, in the case of an
assignment, may affix a legend to that effect on any Right Certificates issued
in exchange for this Right Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right Certificate.)
To: The Greenbrier Companies, Inc.
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
(Please print name and address)
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Please insert social security or other identifying number:
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
(Please print name and address)
Dated
Signature
Signature Guaranteed:
[Form of Reverse Side of Right Certificate-continued]
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:
Signature
NOTICE
The signatures in the foregoing Form of Election to Purchase and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
The signatures in the foregoing Form of Election to Purchase must be
guaranteed by an eligible guarantor institution (banks, stock brokers, savings
and loan institutions, and credit
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unions) with membership in an approved signature guarantee medallion program
pursuant to SEC Rule 17Ad-15.
In the event the certification set forth above is not completed, the
Company may deem the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) and, in the case of an
assignment, may affix a legend to that effect on any Right Certificates issued
in exchange for this Right Certificate.
B-6
Exhibit C
THE GREENBRIER COMPANIES, INC.
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On July 13, 2004, the Board of Directors of The Greenbrier Companies,
Inc. (the "Company") declared a dividend distribution of one Right for each
outstanding share of common stock, $0.001 par value (the "Common Stock"), of the
Company to the stockholders of record at the close of business on July 26, 2004
(the "Record Date"). Each Right entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series A Participating Preferred
Stock, $0.001 par value (the "Preferred Shares"), at a price of $100 per share
(the "Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of July 13, 2004 (the
"Rights Agreement"), between the Company and EquiServe Trust Company, N.A. (the
"Rights Agent").
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate certificates evidencing
Rights (the "Right Certificates") will be distributed. Until the earlier to
occur of (i) 10 days following a public announcement that a person or group of
affiliated or associated persons (other than (x) the Company, a subsidiary, an
employee benefit plan of the Company or a subsidiary, or a person holding shares
for or under the terms of such a plan or (y) any person who as of the Record
Date is the beneficial owner of 12% or more of the Common Stock, unless and
until such person thereafter becomes the beneficial owner of any additional
Common Stock other than as a result of certain stock dividends, stock splits or
similar transactions effected by the Company or an acquisition of Common Stock
by the Company) (an "Acquiring Person"), acquired, or obtained the right to
acquire, beneficial ownership of 12% or more of the outstanding shares of Common
Stock (the date of such first public announcement being the "Shares Acquisition
Date") and (ii) 10 business days (or, with respect to (i) or (ii), such later
date as may be determined by action of the Board of Directors) following the
commencement of (or the announcement of an intention to make) a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 12% or more of the outstanding shares of
Common Stock, the Rights will be evidenced, with respect to any of the Common
Stock certificates outstanding as of the Record Date, by such Common Stock
certificate. The earlier of the dates described in clauses (i) and (ii) above is
referred to as the "Distribution Date."
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Stock. As long as the
Rights are attached to the Common Stock, the Company will issue one Right with
each share of Common Stock that becomes outstanding so that all outstanding
shares will have attached Rights. Until the Distribution Date (or earlier
redemption or expiration of the Rights), (i) Common Stock certificates issued
after the Record Date upon transfer or new issuance of Common Stock will contain
a notation incorporating the Rights Agreement by reference and (ii) the
surrender for transfer of any certificates evidencing Common Stock will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, Right Certificates will be mailed to holders of record
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of the Common Stock as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the earliest of (i) the close of business on July 26, 2014, or
(ii) redemption or exchange by the Company as described below.
In the event that any person becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right (except as provided
below) will thereafter have the right to receive upon exercise that number of
shares of Common Stock of the Company having a market value of two times the
exercise price of the Right.
In the event that, at any time following the Distribution Date, the
Company is acquired in a merger or other business combination transaction, or
more than 50 percent of its assets or earning power is sold, proper provision
shall be made so that each holder of a Right (except as provided below) will
thereafter have the right to receive, upon the exercise at the then-current
exercise price of the Right, that number of shares of common stock of the
acquiring or surviving company having a market value of two times the exercise
price of the Right.
Following the occurrence of any of the events described in the
preceding two paragraphs, any Rights that are or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person shall immediately become null and void.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution.
No fractional Preferred Shares other than fractions in multiples of one
one-hundredth of a share will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Shares on the last
trading date prior to the date of exercise.
At any time prior to the tenth day following the Shares Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). Subject to certain conditions, the
Company's right of redemption may be reinstated after the expiration of such
right if each Acquiring Person reduces its beneficial ownership to 12 percent or
less of the outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company. Immediately upon the action of the Board
of Directors ordering the redemption of the Rights (or at such time and date
thereafter as the Board of Directors may specify), the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
At any time after a person becomes an Acquiring Person and prior to the
time any Person, together with all Affiliates and Associates of such Person,
becomes the beneficial owner of 50 percent or more of the Common Stock then
outstanding, the Company may exchange the then outstanding and exercisable
Rights (other than Rights beneficially owned by such Acquiring Person which
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became null and void), in whole or in part, for Common Stock at the exchange
ratio of one share of Common Stock per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The provisions of the Rights Agreement may be amended in any manner
prior to the Distribution Date. After such date, the provisions of the Rights
Agreement may not be amended in a manner which would adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person).
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