TECO ENERGY, INC .
and
THE BANK OF NEW YORK
Rights Agent
AMENDED AND RESTATED
RENEWED RIGHTS AGREEMENT
Dated as of February 2, 2004
TABLE OF CONTENTS
Section 1. Certain Definitions.............................................2
Section 2. Appointment of Rights Agent.....................................8
Section 3. Issuance of Rights Certificates.................................8
Section 4. Form of Rights Certificates....................................11
Section 5. Countersignature and Registration..............................12
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates..................13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..14
Section 8. Cancellation and Destruction of Rights Certificates............17
Section 9. Reservation and Availability of Capital Stock..................17
Section 10. Record Date for Securities Issued Upon Exercise................19
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights. ...........................20
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....29
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power..................................................30
Section 14. Fractional Rights and Fractional Shares........................34
Section 15. Rights of Action...............................................35
Section 16. Agreement of Rights Holders....................................36
Section 17. Rights Certificate Holder Not Deemed a Shareholder.............37
Section 18. Concerning the Rights Agent....................................37
Section 19. Merger or Consolidation or Change of Name of Rights Agent......38
Section 20. Duties of Rights Agent.........................................39
Section 21. Change of Rights Agent.........................................41
Section 22. Issuance of New Rights Certificates............................42
Section 23. Redemption and Termination.....................................43
Section 24. Notice of Certain Events.......................................44
Section 25. Notices........................................................45
Section 26. Supplements and Amendments.....................................46
Section 27. Successors.....................................................47
Section 28. Determinations and Actions by the Board, etc...................47
Section 29. Benefits of this Agreement.....................................47
Section 30. Severability...................................................48
Section 31. Governing Law..................................................48
Section 32. Counterparts...................................................48
Section 33. Descriptive Headings...........................................48
Exhibit A - Form of Rights Certificate......................................A-1
AMENDED AND RESTATED
RENEWED RIGHTS AGREEMENT
This Amended and Restated Renewed Rights Agreement, dated as
of February 2, 2004, between TECO Energy, Inc., a Florida corporation (the "Com
pany"), and Bank of New York, a New York corporation (the "Rights Agent"),
amends and restates the Renewed Rights Agreement dated as of October 21, 1998,
between the Company and BankBoston, N.A., a national banking association (the
"1998 Agreement").
W I T N E S S E T H
WHEREAS, on April 27, 1989, the Board of Directors of the Com
pany (the "Board") adopted a shareholder rights plan (the "1989 Rights Plan")
and executed a Rights Agreement, dated as of April 27, 1989 between the Company
and the Rights Agent (the "1989 Agreement");
WHEREAS, the 1989 Rights Plan was scheduled to expire on May
7, 1999;
WHEREAS, on October 21, 1998, the Board determined it
desirable and in the best interests of the Company and its shareholders for the
Company to renew the 1989 Rights Plan upon its expiration and to implement such
renewal by executing the 1998 Agreement and declaring the dividend distribution
referred to in the fourth WHEREAS clause herein;
WHEREAS, on October 21, 1998 (the "Rights Dividend Declaration
Date"), the Board authorized and declared a dividend distribution of one Right
(as hereinafter defined) for each share of Common Stock (as hereinafter defined)
of the Company outstanding upon the "Expiration Date" under the 1989 Agreement
(the "Record Date") and authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of Section 11(i) hereof) for
each share of Common Stock of the Company issued between the Record Date
(whether originally issued or delivered from the Company's treasury) and the
Distribution Date (as hereinafter defined) and under certain circumstances
thereafter, each Right initially representing the right to purchase one share of
Common Stock of the Company, upon the terms and subject to the conditions
hereinafter set forth (each, a "Right"); and
WHEREAS, the Company desires to amend and restate the 1998
Rights Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement
as hereinafter defined, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Associates and Affiliates (as
hereinafter defined) of such Person, shall be the Beneficial Owner (as
hereinafter defined) of 10% or more of the shares of Common Stock of the Company
then outstanding, but shall not include an Exempt Person (as hereinafter
defined).
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act (as hereinafter defined).
(e) "Agreement" shall mean this Amended and Restated Renewed
Rights Agreement as originally executed or as it may from time to time be supple
mented, amended, renewed, restated or extended pursuant to the applicable provi
sions hereof.
(f) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Associates or Affiliates, directly or indirectly, owns or has the right
to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants, options or other
wise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities ten
dered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Associates or Affiliates until such
tendered securities are accepted for purchase or exchange, (B)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event (as hereinafter defined) or (C)
securities issuable upon exercise of Rights from and after the occur
rence of a Triggering Event which Rights are Original Rights (as
hereinafter defined) or securities issued pursuant to Section 11(i)
hereof in connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's
Associates or Affiliates, directly or indirectly, has the right to vote
or dispose of or has "beneficial ownership" of (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement or under
standing, whether or not in writing; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding (whether or not in writing) to
vote such security if such agreement, arrangement or understand ing:
(A) arises solely from a revocable proxy or consent given in response
to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act and (B) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor statement); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Associate or Affiliate thereof)
with which such Person (or any of such Person's Associates or Affili
ates) has any agreement, arrangement or understanding (whether or not
in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (A) of the pro
viso to subparagraph (ii) of this paragraph (f)) or disposing of any
voting securities of the Company;
provided, however, that nothing in this paragraph (f) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to be deemed to "beneficially own," any securities acquired, or which
that Person has the right to acquire, through such Person's participation in
good faith in a firm commit ment underwriting until the expiration of 40 days
after the date of such acquisition.
(g) "Board" shall have the meaning set forth in the first
"WHEREAS" clause at the beginning of this Agreement.
(h) "Business Day" shall mean any day other than a Saturday,
Sunday or day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(i) "Close of Business" on any given date shall mean 5:00
P.M., Eastern time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day
(j) "Common Stock" when used in reference to the Company shall
mean the common stock, par value $1.00 per share, of the Company or any other
shares of capital stock of the Company into which such stock shall be reclassi
fied or changed. "Common Stock" when used with reference to any Person other
than the Company organized in corporate form shall mean (i) the capital stock or
other equity interest in such Person with the greatest voting power, (ii) the
equity securities or other equity interest having power to control or direct the
management of such Person or (iii) if such Person is a Subsidiary (as
hereinafter defined) of another Person, the capital stock, equity securities of,
or other equity interest in, the Person or Persons which ultimately control such
first-mentioned Person and which has issued any such outstanding capital stock,
equity securities or equity interest. "Common Stock" when used with reference to
any Person not organized in corporate form shall mean units of beneficial
interest which (x) represent the right to partici xxxx generally in the profits
and losses of such Person (including without limitation any flow-through tax
benefits resulting from an ownership interest in such Person) and (y) are
entitled to exercise the greatest voting power of such Person or, in the case of
a limited partnership, have the power to remove the general partner or partners.
(k) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(l) "Company" shall have the meaning set forth in the first
para graph of this Agreement until a successor corporation or entity shall
have become such or until a Principal Party (as hereinafter defined) shall
assume, and thereafter be liable for, all obligations and duties of the
Company hereunder pursuant to the applicable provisions of this Agreement, and
thereafter, "Company" shall mean such successor or Principal Party,
respectively.
(m) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(n) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(o) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(p) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(q) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan or employee stock
plan of the Company or of any Subsidiary of the Company, (iv) any Person or
entity orga nized, appointed, established or holding Common Stock of the
Company by, for or pursuant to the terms of any employee benefit plan or
employee stock plan, (v) a Person who (A) is the Beneficial Owner of less than
15% of the Common Stock of the Company then outstanding and has reported such
ownership on Schedule 13G under the Exchange Act (or any successor or
comparable report) or on Schedule 13D under the Exchange Act (or any successor
or comparable report) which Schedule 13D does not state any intention to or
reserve the right to control or influence the management or policies of the
Company or engage in any of the actions specified in Item 4 of such Schedule
13D (other than the disposition of Common Stock of the Company), (B) within
ten Business Days (as hereinafter defined) of being requested by the Company
to advise the Company regarding its intentions, certifies to the Company that
such Person acquired shares of Common Stock of the Company in excess of 9.99%
inadvertently or without knowledge of the terms of the Rights, (C) the Company
determines acquired in excess of 9.99% inadvertently or without knowledge of
the terms of the Rights and (D) together with its Associates and Affiliates,
thereafter does not acquire additional shares of Common Stock of the Company
while the Beneficial Owner of 10% or more of the shares of the Common Stock of
the Company then outstanding or (vi) a Person who, together with its
Associates and Affiliates, becomes the Beneficial Owner of 10% or more of the
shares of Common Stock of the Company then outstanding solely as a result of a
reduction in the number of shares of Common Stock of the Company outstanding
due to the repurchase of shares of Common Stock of the Company by the Company,
unless and until such time as such Person shall purchase or otherwise become
(as a result of actions taken by such Person or its Associates or Affiliates)
the Beneficial Owner of additional shares of Common Stock of the Company
constituting 1% or more of the then outstanding shares of Common Stock of the
Company.
(r) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(s) "Final Expiration Date" shall mean the Close of Business
on May 7, 2009.
(t) "Original Rights" shall mean Rights acquired by a Person
or such Person's Associates or Affiliates prior to the Distribution Date or
issued pursuant to Section 3(a) or Section 22 hereof.
(u) "Outside Directors" shall mean the members of the Board
who are not employees of the Company or any of its Subsidiaries and who are not
Acquiring Persons or representatives, nominees, Associates or Affiliates of any
Acquiring Person.
(v) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity and includes without limitation an
unincorporated group of persons who, by formal or informal agreement or
arrangement (whether or not in writing), have embarked on a common purpose or
act.
(w) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(x) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(y) "Record Date" shall have the meaning set forth in the
fourth "WHEREAS" clause at the beginning of this Agreement.
(z) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(aa) "Rights" shall have the meaning set forth in the fourth
"WHEREAS" clause at the beginning of this Agreement.
(bb) "Rights Agent" shall mean the Person named as the "Rights
Agent" in the first paragraph of this Agreement until a successor Rights Agent
shall have become such pursuant to the applicable provisions hereof, and
thereafter "Rights Agent" shall mean such successor Rights Agent. If at any time
there is more than one Person appointed by the Company as Rights Agent pursuant
to the applica ble provisions of this Agreement, "Rights Agent" shall mean and
include each such Person.
(cc) "Rights Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(dd) "Rights Dividend Declaration Date" shall have the
meaning set forth in the fourth "WHEREAS" clause at the beginning of this
Agreement.
(ee) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(ff) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(gg) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(hh) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ii) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company that an Acquiring Person has become such.
(jj) "Subsidiary" shall mean, with reference to any Person,
any corporation or other entity of which securities or other ownership interest
having ordinary voting power sufficient, in the absence of contingencies, to
elect a majority of the board of directors or other persons performing similar
functions of such corpo ration or other entity are at the time directly or
indirectly beneficially owned or other wise controlled by such Person and any
Associate or Affiliate of such Person.
(kk) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ll) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(mm) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(nn) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
(oo) "1989 Agreement" shall have the meaning set forth in
the first "WHEREAS" clause at the beginning of this Agreement.
(pp) "1989 Rights Plan" shall have the meaning set forth in
the first "WHEREAS" clause hereof.
Section 2. Appointment of Rights Agent. The Company has
appointed the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of Common Stock of 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 days' prior
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such Co-Rights Agent. In the event that the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent and any Co-Rights
Agents shall be as the Company shall determine and any actions which may be
taken by the Rights Agent pursuant to the terms of this Agreement may be taken
by any such Co-Rights Agent.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth Business Day (or such specified or unspecified later date as may be
determined by the Board before the occurrence of a Distribution Date) after
the Stock Acquisition Date (or, if the tenth Business Day (or such later date)
after the Stock Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date) or (ii) the Close of Business on the tenth
Business Day (or such specified or unspecified later date as may be determined
by the Board before the occurrence of a Distribution Date) after the date that
a tender or exchange offer by any Person (other than an Exempt Person) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act if upon consummation
thereof such Person would be the Beneficial Owner of 10% or more of the shares
of Common Stock then outstanding (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraphs (b) and (c) of this Section 3) by the
certifi xxxxx for the Common Stock of the Company registered in the names of
the holders thereof (which certificates for Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates and (y) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock of the Company (including a transfer to the
Company). As soon as practicable after the Distribution Date, the Rights Agent
will send by first-class, insured, postage prepaid mail, to each record holder
of the Common Stock 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, one or more rights certificates, substantially in the form attached
hereto as Exhibit A (each, a "Rights Certificate"), evidencing one Right for
each share of Common Stock of the Company so held, subject to adjustment as
provided herein. In the event that an adjustment in the number of Rights per
share of Common Stock of the Company has been made pursuant to Section 11(i)
hereof, at the time of distribution of the Rights Certificates, the Company
shall not be required to issue Rights Certificates evidencing fractional
Rights, but may, in lieu thereof, make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) The Company sent a copy of a Summary of Rights, in
substan tially the form attached as Exhibit B to the 1989 Agreement (the
"Summary of Rights"), by first-class, postage prepaid mail, to each record
holder of the Common Stock of the Company as of the Close of Business on May
8, 1989, at the address of such holder then shown on the records of the
Company. With respect to certificates for the Common Stock of the Company
outstanding as of the Record Date, as set forth in paragraph (a) above, until
the earlier of the Distribution Date or the Expira tion Date, the Rights will
be evidenced by (i) such certificates for the Common Stock of the Company with
or without a copy of the Summary of Rights attached or (ii) certificates for
the Common Stock of the Company as legended pursuant to the terms of the 1989
Agreement or this Agreement, and the registered holders of the Common Stock of
the Company shall also be the registered holders of the associated Rights.
Until the earlier of the Distribution Date or the Expiration Date, the
transfer of any certificates representing shares of Common Stock of the
Company in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common Stock of the
Company.
(c) Rights shall be issued in respect of all shares of Common
Stock of the Company which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date and, to the extent provided in Section
22 hereof, in respect of shares of Common Stock of the Company issued after the
Distribution Date and prior to the Expiration Date. Certificates representing
such shares of Common Stock of the Company shall also be deemed to be
certificates for Rights, and shall, as promptly as practicable following the
Record Date, bear the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the Amended
and Restated Renewed Rights Agreement between TECO Energy,
Inc. (the "Company") and the Rights Agent thereunder dated as
of February 2, 2004, as the same may be amended, restated,
renewed or extended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal
offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be evidenced by
this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights beneficially owned (as
such term is defined in the Rights Agreement) by any Person
who is, was or becomes an Acquiring Per son or any Associate
or Affiliate of an Acquiring Per son (as such terms are
defined in the Rights Agree ment), whether currently held by
or on behalf of such Person or by any subsequent holder, may
become null and void. The Rights shall not be exercisable, and
shall be void so long as held, by a holder in any juris
diction where the requisite qualification to the issuance
to such holder, or the exercise by such holder, of the Rights
in such jurisdiction shall not have been ob tained or be
obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock of the Company represented by such certificates
shall be evidenced by such certificates alone and registered holders of Common
Stock of the Company shall also be the registered holders of the associated
Rights, and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock of the Company
represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase, assignment and certificate contained therein to be printed on the
reverse thereof) shall each be substantially in the form attached hereto as
Exhibit A and may have such marks of identification or designation and such
legends, summaries or endorse ments printed thereon as the Company may deem
appropriate and as are not incon sistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22
hereof, the Rights Certificates, whenever distributed, shall be dated as of
the Record Date and on their face shall entitle the holders thereof to
purchase such number of shares of Common Stock of the Company as shall be set
forth therein at the exercise price set forth therein (such exercise price per
share of Common Stock of the Company, as adjusted from time to time hereunder,
the "Purchase Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person; (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such; or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concur rently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board, in its sole discretion, has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect avoidance
of the provisions of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who is, was or became an
Acquiring Person or an Associate or Affili ate of an Acquiring
Person (as such terms are defined in the Renewed Rights
Agreement). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the
circumstances speci fied in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed under seal on
behalf of the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and by the Secretary or
any Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by an
authorized signatory of the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Rights Certificates shall cease to be such officer of
the Company before countersignature by an authorized signatory of the Rights
Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by an authorized signatory of the Rights
Agent and issued and delivered by the Company with the same force and effect
as though the person who signed such Rights Certificates had not ceased to be
such officer of the Company; and any Rights Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution
of such Rights Certificate, shall be a proper officer of the Company to sign
such Rights Certificate, although at the date of the execution of this
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights evidenced
on its face by each of the Rights Certificates and the date of each of the
Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the Expiration
Date, any Rights Certifi cate or Rights Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or Rights
Certificates entitling the registered holder to purchase a like number of
shares of Common Stock of the Company (or, following the occurrence of a
Triggering Event, other securities, cash or other assets, as the case may be)
as the Rights Certificate or Rights Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Rights Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate or
Rights Certificates to be transferred, split up, combined or exchanged, with
the forms of assignment and certificate contained therein duly executed, at
the principal office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate or Rights Certificates until the registered holder shall
have completed and signed the certificate contained in the form of assignment
on the reverse side of such Rights Certificate or Rights Certificates and
shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Benefi cial Owner) or Associates or Affiliates thereof as the
Company shall reasonably request. Thereupon, the Rights Agent shall, subject
to Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver
to the Person entitled thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Company may require payment from the
holder of a Rights Certificate of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a valid Rights Certificate and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a
new Rights Certificate of like tenor to the Rights Agent for countersignature
and delivery to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate contained therein duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to the total
number of shares of Common Stock of the Company (or, following the occurrence of
a Triggering Event, other securities, cash or other assets, as the case may be)
as to which such surrendered Rights are then exercisable, at or prior to the
earliest of (i) the Final Expiration Date, (ii) the time at which the Rights are
re deemed as provided in Section 23 hereof and (iii) the time at which the
Rights expire pursuant to Section 13(d) hereof (the earliest of (i), (ii) and
(iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock of the
Company pursuant to the exercise of a Right shall initially be $90.00, shall be
subject to adjustment from time to time as provided in Sections 11 and 13(a)
hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
contained therein duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price, as such amount may be reduced
pursuant to Section 11(a)(iii) hereof, for each share of Common Stock of the
Company (or, following the occur rence of a Triggering Event, for other
securities, cash or other assets, as the case may be) to be purchased (as set
forth below) and an amount equal to any applicable transfer tax, the Rights
Agent shall, subject to Sections 7(f) and 20(k) hereof, thereupon promptly (i)
requisition from any transfer agent of the shares of Common Stock of the
Company (or make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of shares of Common Stock of the
Company to be purchased, and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates,
cause the same to be delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash,
if any, to, or upon the order of, the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified
check, cashier's check or bank draft payable to the order of the Company. In
the event that the Company is obligated to issue other securities, pay cash or
distribute other property pursuant to this Section 7(c) or Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash or other property are available for distribution by the
Rights Agent, if and when appropriate. In the event that, immediately prior to
the occurrence of a Distribution Date, the number of shares of Common Stock of
the Company which are authorized by the Company's articles of incorporation,
as amended and in effect at such time, but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not sufficient
to permit exercise in full of the Rights in accordance with their terms, the
Company, acting by resolution of the Board, shall follow the same procedures
and may take any of the same actions in connection with the exercise of Rights
under this Section 7(c) as are required or permitted to be followed or taken
pursuant to Section 11(a)(iii) hereof with respect to substitution of value in
connec tion with the exercise of Rights under Section 11(a)(ii) hereof. The
Company reserves the right to require, prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights be exercised so
that only whole shares of Common Stock of the Company would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all of the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights benefi cially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person which the Board, in its sole discretion,
determines is or was involved in or caused or facilitated, directly or
indirectly (including through any change in the Board), such Section 11(a)(ii)
Event, (ii) a transferee of any such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after such Acquir ing Person
becomes such or (iii) a transferee of any such Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with such Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from such Acquiring
Person to holders of equity interests in such Acquiring Person or to any
Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and void without any
further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other Person
as a result of its failure to make any determinations with respect to an
Acquiring Person or any of their Associates, Affiliates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Rights
Certificate upon the occurrence of any purported assignment or exercise as set
forth in this Section 7 unless such registered holder shall have (i) completed
and signed the certificate contained in the form of assignment or election to
purchase set forth on the reverse side of the Rights Certificate surrendered
for such assignment or exercise and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or
Associates or Affiliates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surren dered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certifi cate purchased or acquired by the Company otherwise than upon the
exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certifi xxxxx and, in such case, shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that, from and after
the Distribution Date, it will cause to be reserved and kept available out of
its authorized and unissued shares of Common Stock of the Company (and,
following the occur rence of a Triggering Event, other securities) or out of
its authorized and issued shares of Common Stock of the Company held in its
treasury, the number of shares of Common Stock of the Company (and, following
the occurrence of a Triggering Event, the amount of other securities) that, as
provided in this Agreement (including Section 11(a)(iii) hereof) will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock of the Company
(and, following the occurrence of a Triggering Event, other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange, the Company shall use all reasonable efforts to
cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
(c) The Company shall use all reasonable efforts to (i)
file, as soon as practicable following the earliest date after the first
occurrence of a Trigger ing Event in which the consideration to be delivered
by the Company upon exercise of the Rights has been determined in accordance
with this Agreement, or as soon as required by law following the Distribution
Date, as the case may be, a registration statement under the Act on an
appropriate form with respect to the Common Stock of the Company or other
securities purchasable upon exercise of the Rights, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospec tus at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable for
such securities and (B) the Expiration Date. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or "Blue Sky" laws of the various states and other jurisdictions in
connection with the exercisability of the Rights. The Company may, acting by
resolution of the Board, temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended
and shall issue a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall determine that a
registration statement is required in other circumstances following the
Distribution Date, the Company may similarly tempo rarily suspend the
exercisability of the Rights until such time as a registration statement has
been declared effective. Notwithstanding any provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained or
the exercise thereof shall not otherwise be permitted under applicable law or
a registra tion statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Common Stock of
the Com pany (and, following the occurrence of a Triggering Event, other
securities) delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that, except as
set forth in Section 6(a) hereof and this Section 9(e), it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Rights Certificates
and of any certificates for shares of Common Stock of the Company (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 Rights Certificates to a Person other
than, or the issuance or delivery of a number of shares of Common Stock of the
Company (or other securities, as the case may be) in respect of a name other
than that of, the registered holder of the Rights Certificates evidenc ing
Rights surrendered for exercise, nor shall the Company be required to issue or
deliver any certificates for a number of shares of Common Stock of the Company
(or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Record Date for Securities Issued Upon Exercise.
Each Person in whose name any certificate for a number of shares of Common
Stock of the Company (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 such shares of Common Stock of the Company (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the transfer books for the
Common Stock of the Company (or other securities, as the case may be) are
closed, such Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall be dated, the
next succeeding Business Day on which the transfer books for the Common Stock
of the Company (or other securities, as the case may be) are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a shareholder of
the Company (or the Principal Party) with respect to shares for which the
Rights shall be exercisable, including without limitation the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company (or the Principal Party), except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares,
or fractions thereof, purchasable upon exercise of each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided
in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the out
standing shares of Common Stock of the Company payable in shares of
Common Stock of the Company, (B) subdivide or split the out standing
shares of the Common Stock of the Company, (C) combine or consolidate
the outstanding shares of Common Stock of the Com pany into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Common Stock of the Com pany (including any
such reclassification in connection with a consol idation or merger
in which the Company is the continuing or surviv ing corporation),
except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivi sion,
split, combination, consolidation or reclassification, and the number
and kind of shares of Common Stock of the Company (or other
securities, 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, upon payment of the
Purchase Price then in effect, the aggregate number and kind of
shares of Common Stock or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such date,
whether or not such Right was then exercisable, and at a time when
the transfer books for the Common Stock (or other capital stock, as
the case may be) of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, split, combination, consolidation or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, 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) hereof.
(ii) In the event (a "Section 11(a)(ii) Event")
that any Person (other than an Exempt Person), alone or together with
its Associates and Affiliates, shall, at any time after the Rights
Divi dend Declaration Date, become the Beneficial Owner of 10% or
more of the shares of the Common Stock of the Company then
outstanding, unless the event causing such 10% threshold to be
crossed is (A) a Section 13 Event or (B) is an acquisition of shares
of Common Stock of the Company pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock of the
Company at a price and on terms determined by at least a majority of
the Outside Directors, after receiving advice from one or more
investment banking firms, to be (1) at a price that is fair to
shareholders (taking into account all factors which such Outside
Directors deem relevant, including with out limitation prices which
could reasonably be achieved if the Com pany or its assets were sold
on an orderly basis designed to realize maximum value) and (2)
otherwise in the best interests of the Com pany and its shareholders,
then proper provision shall be made so that promptly after the date
of occurrence of an Section 11(a)(ii) Event, each holder of a Right
(except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at the
then current Purchase Price (but in no event less than the par value
per share) in accordance with the terms of this Agreement, such
number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by
the then number of shares of Common Stock of the Company for which a
Right was exercisable immediately prior to the first occur rence of a
Section 11(a)(ii) Event (whether or not such Right was then
exercisable) and (y) dividing that product (which following such
first occurrence shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50%
of the Current Market Price per share of Common Stock of the Company
on the date of such first occurrence (such number of shares being re
ferred to as the "Adjustment Shares").
(iii) In lieu of issuing shares of Common Stock of
the Company in accordance with Section 11(a)(ii) hereof, the Company,
acting by resolution of the Board, may, and in the event that the
number of shares of Common Stock of the Company which are authorized
by the Company's articles of incorporation but not out standing or
reserved for issuance for purposes other than upon exer cise of the
Rights is not sufficient to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii) of this Sec tion
11(a), the Company, acting by resolution of the Board, shall: (A)
determine the excess of (1) the value of the Adjustment Shares issu
able upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price attributable to each Right (such excess being referred
to as the "Spread") and (B) with respect to all or a portion of each
Right (subject to Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price (but
in no event shall the Purchase Price be less than the par value per
share), (3) equity securities, if any, of the Company other than
Common Stock of the Company (including without limitation shares, or
units of shares, which the Board has deemed to have the same value as
shares of Common Stock of the Company (such shares being referred to
herein as "Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets or (6) any combination of the foregoing,
which, when added to any shares of Common Stock of the Company issued
upon such exercise, has an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board
based upon the advice of a nationally recognized investment banking
firm selected by the Board; provided, however, that if the Company
shall not have made adequate provision to deliver value pursuant to
clause (B) above within 30 days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) hereof, as
such date may be extended pursuant to Section 23(a) hereof or amended
pursuant to Section 26 hereof, expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock of the Company (to the extent avail
able) and then, if necessary, cash, which shares and cash have an
aggregate value equal to the Spread. If the Board shall determine in
good faith that it is likely that sufficient additional shares of
Common Stock of the Company could be authorized for issuance upon
exercise in full of the Rights, the 30-day period set forth above may
be ex tended to the extent necessary, but not more than 90 days after
the Section 11(a)(ii) Trigger Date, in order that the Company may
seek shareholder approval for the authorization of such additional
shares (such period, as it may be extended, being referred to herein
as the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first or
second sen tences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares or to
decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended and a public announcement at such time as the suspension is
no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Com mon Stock of the Company shall be the Current Market
Price per share of the Common Stock of the Company on the Section
11(a)(ii) Trigger Date, and the value of any Common Stock Equivalent
shall be deemed to be equal to the value of the Common Stock of the
Com pany on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock of the
Company entitling them to subscribe for or purchase (for a period expiring
within 45 calendar days after such record date) Common Stock of the Company or
securities convertible into Common Stock of the Company or Common Stock
Equivalents at a price per share of Common Stock of the Company or per share
of Common Stock Equivalents (or having a conversion price per share, if a
security convertible into Common Stock of the Company or Common Stock
Equivalents) less than the Current Market Price per share of Common Stock of
the Company on such record date, except as otherwise provided in Section 11(a)
and Section 7(e) hereof, 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 sum of (i) the number of shares of Common Stock of the Company or
Common Stock Equivalents outstanding on such record date, (ii) the number of
shares of Common Stock of the Company or Common Stock Equivalents underlying
securities outstanding on such record date which are convertible into Common
Stock of the Company or Common Stock Equivalents and (iii) the number of
shares of Common Stock of the Company which the aggregate subscription price
of the total number of shares of Common Stock of the Company or Common Stock
Equivalents so to be of fered (or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such Current
Market Price, and the denominator of which shall be the sum of (i) the number
of shares of Common Stock of the Company out standing on such record date,
(ii) the number of shares of Common Stock of the Company or Common Stock
Equivalents underlying securities outstanding on such record date which are
convertible into Common Stock of the Company or Common Stock Equivalents and
(iii) the number of additional shares of Common Stock of the Company or Common
Stock Equivalents 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, which determination shall
be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. Shares of Common Stock of the Company 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 case the Company shall fix a record date for a
distribution to all holders of Common Stock of the Company (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend out of the
earnings or retained earnings of the Com pany), assets (other than a dividend
payable in Common Stock of the Company, but including any dividend payable in
stock other than Common Stock of the Company) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), except as
otherwise provided in Section 11(a) and Section 7(e) hereof, the Purchase
Price to be in effect after such record date shall be determined by multiply
ing the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Price per share
of Common Stock of the Company on such record date, less the fair market value
(as determined in good faith by the Board, which determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscrip tion rights or warrants
applicable to a share of Common Stock of the Company and the denominator of
which shall be such Current Market Price per share of Common Stock of the
Company. 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 be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 10
consecutive Trading Days immediately following such date; provided, however,
that in the event that the Current Market Price per share of the Common Stock
is determined during a period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such
Common Stock (other than the Rights) or (B) any subdivision, combination,
consolidation, reverse stock split or reclassification of such Common Stock,
and prior to the expiration of the requisite 30-Trading Day or 10-Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination,
consolidation, reverse stock split, or reclassification, then, and in each
such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transac tion reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system or as quoted by the Nasdaq National
Market with respect to securities listed or admitted to trading on another
national securities exchange or quoted by the Nasdaq National Market,
respectively, or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or quoted by the Nasdaq National
Market, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by The
Nasdaq Stock Market or such other quotation system then in use or, if on any
such date the shares of Common Stock 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 Stock selected by the Board. If on
any such date the Common Stock is not publicly held or not so listed, admitted
to trading or quoted, and no market maker is making a market in such Common
Stock, Current Market Price shall mean the fair value of such shares on such
date as determined in good faith by the Board, which determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business or, if
the shares of Com mon Stock are not listed or admitted to trading on any
national securities exchange, a Business Day.
(e) Anything herein to the contrary notwithstanding, no adjust
ment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one 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 share of Common Stock
of the Company, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which
mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than Common
Stock of the Company, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof (or the number of
Rights) shall be subject to adjustment from time to time in a manner and on
terms as nearly equiva lent as practicable to the provisions with respect to the
Common Stock of the Company contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k), (l) and (m) hereof, and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the Common Stock of the Company shall apply on
like terms to any such other shares; provided, however, that the Company shall
not be liable for its inability to reserve and keep available for issuance upon
exercise of the Rights pursuant to Section 11(a)(ii) hereof a number of shares
of Common Stock of the Company greater than the number then authorized by the
Company's articles of incorporation, but not out standing or reserved for any
other purpose.
(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 shares of Common Stock
of the Company 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) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, each Right
outstand ing immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock of the Company (calculated to the nearest ten-thousandth
of a share) obtained by (i) multiplying (x) the number of shares of Common Stock
of the Company covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of shares of Common Stock of the Company
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
shares of Common Stock of the Company 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-thousandth of a Right) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Rights Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment
or, at the option of the Company, shall cause to be distrib uted to such
holders of record in substitution and replacement for the Rights Certifi xxxxx
held by such holders prior to the date of adjustment and upon surrender
thereof, if required by the Company, new Rights Certificates evidencing all
the Rights to which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock of the Company issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share of Common Stock of
the Company and the number of shares of Common Stock of the Company which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value, if any, of the number of
shares of Common Stock of the Company issuable upon exercise of the Rights,
the Company shall use all reasonable efforts to take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue, fully paid and nonassessable, such
number of shares of Common Stock of the Company 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
of the number of shares of Common Stock of the Company or other capital stock
or securities of the Company, if any, issuable upon such exercise over and
above the number of shares of Common Stock of the Company or other capital
stock or securities of the Com pany, 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 (fractional or otherwise) or securities upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such adjustments in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Stock of the Com pany, (ii) issuance wholly for cash
of any shares of Common Stock of the Company at less than the Current Market
Price, (iii) issuance wholly for cash of shares of Common Stock of the Company
or securities which by their terms are convertible into or exchangeable for
shares of Common Stock of the Company, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Common Stock shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof) or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof) if (x) at the time of or immediately after
such consolidation, merger, sale or transfer there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale or transfer, the shareholders of the Person who
consti tutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Associates and Affiliates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section
26 hereof, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Common Stock of the Company, a copy of such certificate and (c)
mail a brief summary thereof to each record holder of a Rights Certificate
(or, if prior to the Distribution Date, to each record holder of a certificate
representing shares of Common Stock of the Company) in accordance with Section
24 hereof. Notwithstanding the foregoing sentence, the failure of the Company
to prepare such certificate or statement or make such filings or mailings
shall not affect the validity of, or the force or effect of, the requirement
for such adjustment. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained and shall not be
deemed to have knowledge of any such adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event (a "Section 13 Event") that, on or after
the Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate or otherwise combine with, or merge with or into, any other Person
or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) and the Company shall not be the
continuing or surviving corporation of such consolidation, combination or
merger, (y) any Person or Persons (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall consolidate or
otherwise combine with, or merge with or into, the Company and the Company
shall be the continuing or surviving corporation of such consolidation,
combination or merger and, in connection with such consolidation, combination
or merger, all or part of the outstanding shares of Common Stock of the
Company shall be changed into or exchanged for stock or other securities of
any other Person or Persons or cash or any other property or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggre gating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole and
calculated on the basis of the Company's most recent regularly prepared
financial statements) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o) hereof); provided, however, that this clause (z) of Section
13(a) hereof shall not apply to the pro rata distribution by the Company of
assets (including securities) of the Company or any of its Subsidiaries to all
holders of Common Stock of the Company; then, and in each such case (except as
may be contemplated by Section 13(d) hereof), proper provision shall be made
so that: (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall, on or after the later of (A) the date of the first occurrence
of any such Section 13 Event or (B) the date of the expiration of the period
within which the Rights may be redeemed pursuant to Section 23 hereof (as the
same may be extended pursuant to Section 23(a) hereof or amended pursuant to
Section 26 hereof), 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,
nonassessable and freely tradeable shares of Common Stock of the Principal
Party, not subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of shares of Common
Stock of the Company for which a Right is 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 first occurrence of a Section 13 Event, multiplying the
number of such shares of Common Stock of the Company for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence), and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of the Current
Market Price per share of the Common Stock of such Principal Party on the date
of consummation of such Section 13 Event; (ii) the shares of Common Stock of
such Principal Party received by each holder of a Right upon exercise of that
Right shall be fully paid and nonassessable; (iii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iv) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (v) such Principal Party shall take such
steps (including without limitation the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (vi) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a) hereof, (A)
the Person that is the issuer of any securities into which shares of
Com mon Stock of the Company are converted, changed or exchanged in
such merger, consolidation or combination (or, if there is more than
one such issuer, the issuer the Common Stock of which has the greatest
market value) or (B) if no securities are so issued, the Person that is
the other party to such merger (and survives the merger), consolidation
or combination (or, if there is more than one such Person, the Person
the Common Stock of which has the greatest mar ket value), or if the
other party to the merger does not survive the merger, the Person that
does survive the merger (including the Com pany, if it survives); and
(ii) in the case of any transaction described
in clause (z) of the first sentence of Section 13(a) hereof, the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions
or, if each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so transferred
or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons is the
issuer of Common Stock having the greatest market value;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common Stock
of which is and has been so registered, "Principal Party" shall refer to such
other Person; (2) if the Common Stock of such Person is not and has not been
so registered and such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of two or more of which are and have been
so registered, "Principal Party" shall refer to whichever of such Persons is
the issuer of the Common Stock having the greatest aggregate market value; and
(3) if the Common Stock of such Person is not and has not been so registered
and such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a Subsidiary of both or all of such joint venturers, and the Principal
Parties in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement confirming that the
requirements of Section 13(a) and Section 13(b) hereof shall promptly be
performed in accordance with their terms and that such Section 13 Event shall
not result in a default by the Principal Party under this Agreement as the same
shall have been assumed by the Principal Party pursuant to Section 13(a),
Section 13(b) hereof and further providing that, as soon as practicable after
the date of any such Section 13 Event, the Principal Party will:
(i) prepare and file a registration statement
under the Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use its
best efforts to cause such registration statement to (A) become effec
tive as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Expiration Date and to similarly comply with applicable state
securities laws;
(ii) use its best efforts to list or obtain
quotation of (or continue the listing or quotation of) the Rights and
the securities purchasable upon exercise of the Rights on a national
securities exchange or by an automated quotation service;
(iii) deliver to holders of the Rights
historical financial statements for the Principal Party and each of
its Affiliates which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the Exchange
Act; and
(iv) use its best efforts to obtain waivers
of any rights of first refusal or preemptive rights in respect of the
shares of Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive mergers,
consolidations, combinations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 hereof shall not be applicable to a transaction described
in subparagraph (x) or subparagraph (y) of Section 13(a) hereof if (i) such
transaction is consum mated with a Person or Persons (or a wholly owned
Subsidiary of any such Person or Persons) who acquired shares of Common Stock of
the Company pursuant to a tender offer or exchange offer for all outstanding
shares of Common Stock of the Company which complies with the exception provided
for in Section 11(a) (ii) hereof, (ii) the price per share of Common Stock of
the Company offered in such transaction is not less than the price per share of
Common Stock of the Company paid to all holders of shares of Common Stock of the
Company whose shares were purchased pursuant to such tender offer or exchange
offer and (iii) the form of consideration being offered to the remaining holders
of shares of Common Stock of the Company pursuant to such transaction is the
same as the form of consideration paid pursuant to such tender offer or exchange
offer. Upon consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(i)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of any such fractional Rights, there shall be paid to the registered
holders of the Rights Certifi xxxxx with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For 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
of the Rights for any 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 prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transac tion reporting system or the Nasdaq
National Market with respect to securities listed on another principal
national securities exchange or quoted by the Nasdaq National Market,
respectively, or if the Rights are not listed or admitted to trading on any
national securities exchange or quoted by the Nasdaq National Market, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by The Nasdaq Stock Market
or such other quotation system then in use or, if on any such date the Rights
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 Rights selected by the Board. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board, shall be used.
(b) The Company shall not be required to issue fractions of
shares of Common Stock of the Company upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock of the
Company. In lieu of fractional shares of Common Stock of the Company, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one share of Common Stock of the
Company. For purposes of this Section 14(b), the current market value of one
share of Common Stock of the Company shall be the closing price of one share of
Common Stock of the Company, or if unavail able, the appropriate alternative
price (in each case, as determined pursuant to Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of that Right ex
pressly waives such 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, other than rights of action vested in the Rights
Agent in Section 18 hereof, are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock of the Company); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the Common Stock of
the Company), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common
Stock of the Company), 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 Rights Certificate in
the manner provided in such Rights 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 shall be entitled
to specific performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock of
the Company;
(b) after the Distribution Date, the Rights Certificates are
transfer able only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates contained therein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
certificate for Common Stock of the Company) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificate or the associated
certificate for Common Stock of the Company made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a govern mental, regulatory or administrative
agency or commission, or by reason of any statute, rule, regulation or
executive order promulgated or enacted by any govern mental authority,
prohibiting or otherwise restraining performance of such obliga tion;
provided, however, that the Company must use its reasonable efforts to have
any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Rights Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
number of shares of Common Stock of the Company or any other securities of the
Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate,
as such, any of the rights of a shareholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights 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, reimbursement for its reasonable expenses and
counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereun der. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability
in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
good faith in connection with its administration of this Agreement in reliance
upon any Rights Certificate or certificate for Common Stock of the Company or
for other securities of the Company or upon any instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document
reasonably believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corpora tion 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 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,
however, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. If at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature
of a predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and if at that time any of the Rights Certificates shall not
have been countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in the name of
the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and if at that time any of the Rights Certificates shall not
have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights 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 opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agree ment the Rights Agent shall deem it necessary or desirable that any fact
or matter (including without limitation the identity of any Acquiring Person
and the determina tion of Current Market Price) be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclu sively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct; provided, however, that
the Rights Agent shall not be liable for any indirect, special, punitive or
consequential damages in any given year in excess of the total gross revenue
actually received in such year by the Rights Agent for the services performed by
the Rights Agent for the Company.
(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
Rights Certificates, nor shall it be required to verify the same (except as to
its countersigna ture on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execu tion of any Rights Certificate (except its
countersignature thereon); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascer taining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after receipt of a
certificate describing any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock of the Company to be issued pursuant
to this Agreement or any Rights Certificate or as to whether any shares of
Common Stock of the Company will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowl
edge 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
the Chair man of the Board, the President, any Vice President, the Secretary,
any Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer. Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken by, or omission of, the Rights Agent under this Agreement
and the date on or after which such action shall be taken or such omission shall
be effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date the Company actually receives
such application, unless the Company shall have consented in writing to an
earlier date) unless, prior to taking any such action (or prior to the effective
date in the case of an omission), the Rights Agent shall have received written
instructions in re sponse to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company, become pecuniarily interested in any
transaction in which the Company may be interested, contract with or lend
money to the Company or otherwise act as fully and freely as though the Rights
Agent were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct; provided, however, reasonable
care was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (other than
internal costs incurred by the Rights Agent in providing services to the
Company in the ordinary course of its business as Rights Agent) or in the
exercise of its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the form
of assign ment or form of election to purchase, as the case may be, has either
not been com pleted or indicates an affirmative response to clause 1 or clause 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.
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 Stock of the Company, by registered or certified
mail and to the holders of the Rights Certificates, if any, by first-class
mail. The Com pany may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock of
the Company, by registered or certified mail and to the holders of the Rights
Certificates, if any, by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. If no successor Rights Agent shall have
been appointed within 30 days from the effectiveness of such removal,
resignation or incapacity and no registered holder of any Rights Certificate
has applied pursuant to this Agreement for the appointment of a new Rights
Agent, the Company automatically shall be desig nated as successor Rights
Agent. Any successor Rights Agent appointed by the Company or by such a court
shall be (a) a corporation organized and doing business under the laws of the
United States or of any state of the United States, in good standing, which is
authorized to do business as a banking institution in such state, is
authorized under such laws to exercise corporate trust powers, is subject to
supervi sion or examination by federal or state authority and has at the time
of its appoint ment as Rights Agent a combined capital and surplus of at least
$100,000,000 or (b) an Affiliate of a corporation described in clause (a) of
this sentence. After appoint ment, 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 shall execute and
deliver, if applicable, any further assurance, conveyance, act or deed
necessary for that 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 Stock of the
Company and shall mail a notice thereof in writing to the registered holders
of the Rights Certificates, if any. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
Certificates to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of shares of Common Stock
of the Company following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock of the Company so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement or upon the exercise,
conversion or exchange of securities hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board, issue
Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Rights 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
Rights Certificate would be issued and (ii) no such Rights Certificate shall
be issued if and to the extent that appropriate adjust ment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day (or such
specified or unspecified later date as may be determined by the Board before the
Rights cease being redeem able) following the Stock Acquisition Date (or, if the
Stock Acquisition Date shall have occurred prior to the Record Date, the Close
of Business on the tenth Business Day following the Record Date) or (ii) the
Final Expiration Date, direct the Company to, and if directed, the Company
shall, 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 Company may, at its option, pay the Redemption
Price in shares of Common Stock of the Company (based on the Current Market
Price of the Common Stock of the Company at the time of redemption), cash or any
other form of consideration deemed appropriate by the Board. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercis able after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board directing the
Company to make the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate, and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. Promptly after the action of the Board directing
the Company to make the redemp tion of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to each record holder of the Common
Stock of the Company at the address of such holder shown on the records of the
Company. 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.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Common Stock of the Company or to make any other distribution
to the holders of Common Stock of the Company (other than a regular periodic
cash dividend out of earnings or retained earnings of the Company), (ii) to
offer to the holders of Common Stock of the Company rights or warrants to
subscribe for or to purchase any additional shares of Common Stock of the
Company or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of the Common Stock of the
Company (other than a reclassification involving only the subdivision or split
of outstanding shares of Common Stock of the Company), (iv) to effect any
consolida tion, combination or merger into or with any other Person or Persons
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to permit
one or more of its Subsid iaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof) or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of
a Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of such proposed action which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, combination,
merger, sale, transfer, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of the shares of
Common Stock of the Company, 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
shares of Common Stock of the Company 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 shares of Common Stock of the Company, whichever shall be the
earlier.
(b) In case a Section 11(a)(ii) Event shall occur, then (i)
the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible in accordance with Section 25
hereof, a notice of the occurrence of such event which notice shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Common
Stock of the Company shall be deemed thereaf ter to refer, if appropriate, to
other securities.
(c) The failure of the Company to give any notice provided for
in this Section 24, or any defect therein, shall not (i) relieve the Company of
any of its other obligations under this Agreement or (ii) affect the legality or
validity of the action for which notice was hereby required.
Section 25. Notices. Notices or demands authorized by this
Agree ment to be given or made by the Rights Agent or by the holder of any
Rights Certifi cate 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:
TECO Energy, Inc.
000 X. Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: President
Copies to:
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Xx., Esq.
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
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
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
The Bank of New York
(a NY Trust Company)
000 Xxxxxxx Xxxxxx (00X)
Xxx Xxxx, XX 00000
Attention: Tenders and Exchange Administration
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of any certificate
representing shares of Common Stock 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 26. Supplements and Amendments. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Board so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock of
the Company. From and after the Distribution Date and subject to the
penultimate sentence of this Section 26, the Company and the Rights Agent
shall, if the Board so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Associate or
Affiliate of an Acquiring Person); provided, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed or to
modify the ability (or inability) of the Board to redeem the Rights, in either
case at such time as the Rights are not then redeemable or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, or the benefits to, the holders of Rights (other
than an Acquiring Person or an Associate or Affiliate of an Acquiring Person).
Upon the delivery of a certificate from an appropriate officer of the Com pany
which states that the proposed supplement or amendment is in compliance with
the terms of this Section 26, the Rights Agent shall execute such supplement
or amendment. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which changes the
redemption price or the number of shares of Common Stock of the Company for
which a right is exercis able. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock of the Com pany.
Section 27. 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 28. Determinations and Actions by the Board, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock of the Company outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares
of Common Stock of the Company of which any Person is the Beneficial Owner,
shall be made in accor dance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regula tions under the Exchange Act. The Board shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifi cally granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including without limitation the right and power to (a) interpret
the provisions of this Agreement and (b) make all determinations deemed
necessary or advisable for the administration of this Agreement (including
without limitation a determination to redeem or not redeem the Rights or to
amend this Agreement). All such actions, calculations, interpretations and
determinations (including without limitation for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the
Board, the Company or the Outside Directors in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties and (y) not subject the Board or the Outside
Directors to any liability to the holders of the Rights or otherwise.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock 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 Rights Certificates (and,
prior to the Distribution Date, registered holders of the Common Stock of the
Company).
Section 30. Severability. If any term, provision, covenant
or restric tion 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 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 hereof shall be reinstated and shall not expire until the Close of
Business on the tenth Business Day following the date of such determination by
the Board. Without limiting the foregoing, if any provision of this Agreement
requiring that a determination be made by the Board or by the Outside
Directors is held by a court of competent jurisdiction or other authority to
be invalid, void or unenforceable, such determination shall then be made by
the entire Board in accordance with applicable law and the articles of
incorporation and bylaws of the Company, each as then in effect.
Section 31. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a contract made
under seal under the laws of the State of Florida, and for all purposes this
Agreement shall be governed by and construed in accordance with the laws of
the State of Florida applicable to contracts made and to be performed entirely
within the State of Florida; provided however, that the rights, obligations
and duties of the Rights Agent hereun der shall be governed by and construed
in accordance with the laws of the State of New York. Each of the parties
hereto also irrevocably waives all right to trial by jury in any action,
proceeding or counter claim arising out of this Agreement or the transactions
contemplated hereby.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts, and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agree ment to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
[SEAL]
Attest: TECO ENERGY, INC.
By /s/ X. X. Xxxxxxxx By /s/ X. X. Xxxxxxxx
---------------------- ----------------------
Name: X. X. Xxxxxxxx Name: X. X. Xxxxxxxx
Title: Assistant Secretary Title: Vice President and Corporate
Secretary
[SEAL]
Attest: THE BANK OF NEW YORK,
as Rights Agent
By /s/ Xxxx X. Xxxxxxxxx By /s/ Xxxx X. Drtiz
---------------------- ----------------------
Name: Xxxx X. Xxxxxxxxx Name: /s/ Xxxx X. Xxxxx
Title: Vice President Title: Vice President
Exhibit A
---------
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER MAY 7, 2009, SUBJECT TO EARLIER REDEMP TION OR
EXPIRATION PURSUANT TO THE AMENDED AND RESTATED RENEWED RIGHTS AGREEMENT. THE
RIGHTS ARE SUBJECT TO RE DEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE AMENDED AND RESTATED RENEWED RIGHTS
AGREEMENT. THE RIGHTS EVIDENCED BY THIS CERTIFICATE SHALL NOT BE EXERCISABLE,
AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE
REQUISITE QUALIFI CATION FOR THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY
SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED
OR BE OBTAINABLE. UNDER CERTAIN CIRCUM STANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE AMENDED AND RESTATED RENEWED RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO IS, WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE AMENDED AND RESTATED
RENEWED RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(E) OF SUCH AGREEMENT.]*
--------
* The portion of the legend in brackets shall be inserted only if
applicable, shall be modified to apply to an Acquiring Person, as
applicable, and shall replace the preceding sentence.
RIGHTS CERTIFICATE
TECO ENERGY, INC.
This certifies that , or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Amended and Restated Renewed Rights Agreement, dated as of _________,
2004, as amended, restated, renewed or extended from time to time (the "Rights
Agreement"), between TECO Energy, Inc., a Florida corporation (the "Company"),
and The Bank of New York, a New York corporation (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 P.M., Tampa, Florida time,
on May 7, 2009 at the office or offices of the Rights Agent, or its successors
as Rights Agent, designated for such purpose, one fully paid, nonassessable
share of common stock, par value $1.00 per share, of the Company (the "Common
Stock"), at a purchase price of $90.00 per share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and included Certificate duly completed and executed. The
number of Rights evidenced by this Rights Certificate (and the number of
shares of Common Stock which may be purchased upon exercise thereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase
Price as of _________, ______, based on the Common Stock as constituted at
such date. The Company reserves the right to require prior to the occurrence
of a Trigger ing Event (as such term is defined in the Rights Agreement) that
a number of Rights be exercised so that only whole shares of Common Stock will
be issued. The holder of the Right evidenced hereby consents and agrees that,
subject to the terms of the Rights Agreement, the Company and the Rights Agent
may deem and treat the person in whose name this Rights Certificate is
registered as the absolute owner hereof and of the Rights evidenced hereby
(notwithstanding any notations of owner ship or writing on this Rights
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
required to be affected by any notice to the contrary.
As more fully set forth in the Rights Agreement, from and
after the first occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person (as such terms are defined in the Rights
Agreement), which is determined to have been involved in or caused or
facilitated, directly or indirectly, such Section 11(a)(ii) Event, (ii) a
transferee of such Acquiring Person (or of any such Associate or Affiliate),
or (iii) under certain circumstances specified in the Rights Agreement, a
transferee of such Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee prior to or concurrently with such Acquiring Person
becoming such, such Rights shall become null and void without any further
action, and no holder hereof shall have any right with respect to such Rights
whether under the Rights Agreement or otherwise.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Common Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events (as defined in the Rights
Agreement).
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Com pany and the holders of the Rights
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement. Reference is also made to the Rights Agreement for
definitions of capitalized terms used and not defined herein. Copies of the
Rights Agreement are on file at the principal office of the Rights Agent and
are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate
or Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of shares of Common Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evi denced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day following the
Stock Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement) and (ii) the Final Expiration Date (as defined in the Rights
Agreement).
If the Company so determines, no fractional shares of Common
Stock will be issued upon the exercise of any Right or Rights evidenced
hereby, but in lieu thereof, a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of shares of Common Stock or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of____________, ____
[SEAL]
ATTEST: TECO ENERGY, INC.
By
------------------------------ ------------------------------
Secretary Title:
Countersigned:
THE BANK OF NEW YORK,
as Rights Agent
------------------------------
By
Authorized Signature
[Form of Reverse Side of Rights Certificate]
ASSIGNMENT
----------
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED______________________________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest herein, and
does hereby irrevocably constitute and appoint _______ Attorney, to transfer the
within Rights Certificate on the books of the within-named Company, with full
power of substitution.
Dated: _________, ______
___________________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person, or an Associate or Affiliate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or subsequently became
an Acquiring Person or an Associate or Affiliate of an Acquiring Person.
Dated: ___________, _______ ________________________________
Signature
Signature Guaranteed:
NOTICE
------
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: TECO Energy, Inc.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the shares of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other Person which may be issuable or such other assets
which may be deliverable upon the exercise of the Rights) and requests that
certificates for any such shares or securities be issued in the name of and
delivered to:
Please insert social security
or other identifying number____________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the balance
of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number____________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ___________, ______
________________________________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Associate or Affiliate 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 Rights Certificate from any Person who is, was or became an Acquiring
Person or an Associate or Affiliate of an Acquiring Person.
Dated: ______, ____
________________________________
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement or
any change whatsoever.
