EXHIBIT 4.2
XXXXX LIMITED
and
MELLON INVESTOR SERVICES LLC
Rights Agent
Rights Agreement
Dated as of July [ __ ], 2001
TABLE OF CONTENTS
PAGE
SECTION 1. Certain Definitions...............................................1
SECTION 2. Appointment of Rights Agent.......................................5
SECTION 3. Issue of Rights Certificates......................................5
SECTION 4. Form of Rights Certificates.......................................7
SECTION 5. Countersignature and Registration.................................8
SECTION 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates......................................................8
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.....9
SECTION 8. Cancellation and Destruction of Rights Certificates..............11
SECTION 9. Reservation and Availability of Capital Stock....................11
SECTION 10. Preferred Stock Record Date.....................................12
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights.............................................13
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares......21
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power...................................................21
SECTION 14. Fractional Rights and Fractional Shares.........................24
SECTION 15. Rights of Action................................................25
SECTION 16. Agreement of Rights Holders.....................................25
SECTION 17. Rights Certificate Holder Not Deemed a Stockholder..............26
SECTION 18. Concerning the Rights Agent.....................................26
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.......26
SECTION 20. Duties of Rights Agent..........................................27
SECTION 21. Change of Rights Agent..........................................29
SECTION 22. Issuance of New Rights Certificates.............................30
SECTION 23. Redemption and Termination......................................30
SECTION 24. Notice of Certain Events........................................31
SECTION 25. Notices.........................................................32
SECTION 26. Supplements and Amendments......................................32
SECTION 27. Successors......................................................33
SECTION 28. Determinations and Actions by the Board of Directors, Etc.......33
SECTION 29. Benefits of this Agreement......................................33
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SECTION 30. Severability....................................................34
SECTION 31. Governing Law...................................................34
SECTION 32. Counterparts....................................................34
SECTION 33. Descriptive Headings............................................34
SECTION 34. Exchange........................................................34
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of July [ __ ], 2001 (this "AGREEMENT"),
between Xxxxx Limited, a Bermuda company (the "COMPANY"), and Mellon Investor
Services LLC, a [ ] corporation (the "RIGHTS AGENT").
WHEREAS, effective July 12, 2001 (the "RIGHTS DIVIDEND DECLARATION
DATE"), the Board of Directors of the Company authorized and granted one Right
(each, a "RIGHT") for each common share, par value US$0.01 per share, of the
Company (the "COMPANY COMMON STOCK") outstanding at the Close of Business (as
defined below) on the date on which the Company issues shares of Company Common
Stock pursuant to its initial public offering (the "RECORD DATE"), and has
authorized the issuance of one Right (as such number may hereinafter be adjusted
pursuant hereto) for each share of Company Common Stock issued between the
Record Date and, except as otherwise provided in Section 22, the Distribution
Date, each Right initially representing the right to purchase upon the terms and
subject to the conditions hereinafter set forth one Unit (as defined below) of
Preferred Stock (as defined below);
WHEREAS, the Company desires to set forth certain terms and
conditions governing the Rights; and
WHEREAS, the Company desires to appoint the Rights Agent to act as
rights agent hereunder, in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the shares of Company Common Stock then
outstanding, but shall not include (i) the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting
in such capacity or (ii) any such Person who has become and is such a
Beneficial Owner solely because (A) of a change in the aggregate number of
shares of the Company Common Stock since the last date on which such
Person acquired Beneficial Ownership of any shares of the Company Common
Stock or (B) it acquired such Beneficial Ownership in the good faith
belief that such acquisition would not (1) cause such Beneficial Ownership
to be equal to or exceed 20% of the shares of the Company Common Stock
then outstanding and such Person relied in good faith in computing the
percentage of its Beneficial Ownership on publicly filed reports or
documents of the Company that are inaccurate or out-of-date or (2)
otherwise cause a Distribution Date or the adjustment provided for in
Section 11(a)(ii) to occur.
Notwithstanding clause (ii)(B) of the prior sentence, if any Person that
is not an Acquiring Person due to such clause (ii)(B) does not reduce its
percentage of Beneficial Ownership of the Company Common Stock to less
than 20% by the Close of Business on the fifth Business Day after notice
from the Company (the date on which such notice is first mailed or sent
being the first day) that such person's Beneficial Ownership of the
Company Common Stock is equal to or exceeds 20%, such Person shall, at the
end of such five Business Day period, become an Acquiring Person (and such
clause (ii)(B) shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good faith"
shall be conclusively determined by the Board of Directors of the Company,
acting by a vote of those directors of the Company whose approval would be
required to redeem the Rights under Section 23.
(b) "ADJUSTMENT SHARES" has the meaning set forth in Section
11(a)(ii).
(c) "ADJUSTMENT SPREAD" has the meaning set forth in Section
34(a)(ii).
(d) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the Exchange Act Regulations as in
effect on the date of this Agreement.
(e) "AGREEMENT" has the meaning set forth in the preamble to this
Agreement.
(f) A Person shall be deemed the "BENEFICIAL OWNER" of, and shall
be deemed to "BENEFICIALLY OWN", and shall be deemed to have "BENEFICIAL
OWNERSHIP" of, any securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3
of the Exchange Act Regulations as in effect on the date of this
Agreement; PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, any securities under this subparagraph
(i) as a result of an agreement, arrangement or understanding to (A)
sell such securities if such agreement, arrangement or understanding
arises in connection with a Demand Registration Request (as defined
in the Registration Rights Agreement) pursuant to the Registration
Rights Agreement or (B) vote such securities if such agreement,
arrangement or understanding (1) arises in connection with the
extension of the Final Expiration Date under this Agreement or the
adoption of any other rights agreement or similar device or
agreement or (2)(x) arises solely from a revocable proxy given in
response to a proxy or consent solicitation made in connection with
any annual meeting of members or special meeting of members and (y)
would not be reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time or upon the satisfaction of
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conditions) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise;
PROVIDED, HOWEVER, that under this paragraph (f) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, (A) securities tendered pursuant to a tender or
exchange offer made in accordance with Exchange Act Regulations by such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (B) securities
that may be issued upon exercise of Rights at any time prior to the
occurrence of a Triggering Event or (C) securities that may be issued upon
exercise of Rights from and after the occurrence of a Triggering Event,
which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(c) or Section 22 or pursuant to Section 11(i) in connection with
an adjustment made with respect to any such Rights.
(g) "BERMUDA ACT" has the meaning set forth in Section 9(c).
(h) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in Bermuda or in The City 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., New
York City time, on such date; PROVIDED, HOWEVER, that if such date is not
a Business Day it shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
(j) "COMMON STOCK" of any Person other than the Company shall mean
the capital stock of such Person with the greatest voting power, or, if
such Person shall have no capital stock, the equity securities or other
equity interest having power to control or direct the management of such
Person.
(k) "COMPANY" has the meaning set forth in the preamble to this
Agreement.
(l) "COMPANY COMMON STOCK" has the meaning set forth in the recitals
to this Agreement.
(m) "CURRENT VALUE" has the meaning set forth in Section 11(a)(iii).
(n) "DEPOSITARY AGENT" has the meaning set forth in Section 7(c).
(o) "DISTRIBUTION DATE" has the meaning set forth in Section 3(a).
(p) "EQUIVALENT PREFERRED STOCK" has the meaning set forth in
Section 11(b).
(q) "EXCHANGE ACT" shall mean the United States Securities Exchange
Act of 1934, as amended.
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(r) "EXCHANGE ACT REGULATIONS" shall mean the General Rules and
Regulations under the Exchange Act.
(s) "EXPIRATION DATE" has the meaning set forth in Section 7(a).
(t) "FINAL EXPIRATION DATE" has the meaning set forth in Section
7(a).
(u) "PERSON" shall mean any individual, partnership, limited
liability company, firm, corporation, joint venture, association, trust,
unincorporated organization or other entity, as well as any syndicate or
group deemed to be a person under Section 14(d)(2) of the Exchange Act.
(v) "PREFERRED STOCK" shall mean the Series A Preference Shares, par
value US$0.01 per share, of the Company having the voting powers,
designation, preferences and relative, participating, optional or other
special rights and qualifications, limitations and restrictions described
in the Certificate of Designation set forth as Exhibit C hereto.
(w) "PREFERRED STOCK EQUIVALENTS" has the meaning specified in
Section 11(a)(iii).
(x) "PRINCIPAL PARTY" has the meaning set forth in Section 13(b).
(y) "PURCHASE PRICE" has the meaning set forth in Section 7(b).
(z) "RECORD DATE" has the meaning set forth in the recitals to this
Agreement.
(aa) "REDEMPTION PRICE" has the meaning set forth in Section 23(a).
(bb) "REGISTERED COMMON STOCK" has the meaning set forth in Section
13(b)(ii).
(cc) "REGISTRATION DATE" has the meaning set forth in Section 9(c).
(dd) "REGISTRATION RIGHTS AGREEMENT" shall mean the Registration
Rights Agreement, dated as of July [ __ ], 2001, by and among the Company
and the parties listed on Annex A thereto.
(ee) "REGISTRATION STATEMENT" has the meaning set forth in Section
9(c).
(ff) "RIGHT" has the meaning set forth in the recitals to this
Agreement.
(gg) "RIGHTS AGENT" has the meaning set forth in the preamble to
this Agreement.
(hh) "RIGHTS CERTIFICATES" has the meaning set forth in Section
3(a).
(ii) "RIGHTS DIVIDEND DECLARATION DATE" has the meaning set forth in
the recitals to this Agreement.
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(jj) "SECTION 11(A)(II) EVENT" has the meaning set forth in Section
11(a)(ii).
(kk) "SECTION 11(A)(III) TRIGGER DATE" has the meaning set forth in
Section 11(a)(iii).
(ll) "SECTION 13 EVENT" has the meaning set forth in Section 13(a).
(mm) "SECTION 34(A)(I) EXCHANGE RATIO" has the meaning set forth in
Section 34(a)(i).
(nn) "SECTION 34(A)(II) EXCHANGE RATIO" has the meaning set forth in
Section 34(a)(ii).
(oo) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
(pp) "SPREAD" has the meaning set forth in Section 11(a)(iii).
(qq) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement (including, without limitation, the filing of any report
pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(rr) "SUBSIDIARY" of any Person shall mean any other Person of which
a majority of the voting securities or equity interests is beneficially
owned, directly or indirectly, by such Person, or which is otherwise
controlled by such Person.
(ss) "SUMMARY OF RIGHTS" has the meaning set forth in Section 3(b).
(tt) "TRADING DAY" has the meaning set forth in Section 11(d)(i).
(uu) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
(vv) "UNIT" has the meaning set forth in Section 7(b).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
With the consent of the Rights Agent, the Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earlier of
(i) the Close of Business on the tenth day after the Stock Acquisition Date and
(ii) the Close of Business on the tenth Business Day (or such later date as may
be determined by action of the Board of Directors of the Company prior to such
time as any Person becomes an Acquiring Person, and of which the Company will
give the Rights Agent prompt written notice) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or
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fiduciary with respect to such plan acting in such capacity) is commenced within
the meaning of Rule 14d-2 of the Exchange Act Regulations or any successor rule,
if upon consummation thereof such Person would be the Beneficial Owner of 20% or
more of the shares of Company Common Stock then outstanding (the earlier of (i)
and (ii) above being the "DISTRIBUTION Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for shares of Company Common Stock registered in the names of the
holders of shares of Company Common Stock as of and subsequent to the Record
Date (which certificates for shares of Company 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 Company Common Stock (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 shares
of Company Common Stock 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, in substantially the form of Exhibit A hereto (the "RIGHTS
CERTIFICATES"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Company Common Stock has been made pursuant
to Section 11(p), at the time of distribution of the Rights Certificates, the
Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a)) so that Rights Certificates evidencing 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) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
a form that may be appended to certificates that evidence shares of Company
Common Stock, in substantially the form attached hereto as Exhibit B (the
"SUMMARY OF RIGHTS"), by first-class, postage prepaid mail, to each record
holder of shares of Company Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company.
(c) Rights shall, without any further action, be issued in respect
of all shares of Company Common Stock that are issued after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date.
Certificates evidencing such shares of Company Common Stock issued after the
Record Date shall bear the following legend:
"This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement, dated as of July
[__], 2001 (the "Rights Agreement"), between Xxxxx Limited (the "Company")
and Mellon Investor Services LLC (the "Rights Agent"), the terms of which
are hereby incorporated herein by reference and a copy of which is on file
at the office of the Rights Agent designated for such purpose. 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 issued to, or held by, any Person who is, was or becomes an
Acquiring Person or
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any Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such Person
or by any subsequent holder, may become null and void."
With respect to certificates evidencing shares of Company Common
Stock (whether or not such certificates include the foregoing legend or have
appended to them the Summary of Rights), until the earlier of the Distribution
Date and the Expiration Date, the Rights associated with the shares of Company
Common Stock evidenced by such certificates shall be evidenced by such
certificates alone and registered holders of the shares of Company Common Stock
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 shares of Company Common Stock evidenced by such
certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES. (a) The Rights Certificates
(and the forms of election to purchase, assignment and certificate to be printed
on the reverse thereof) shall each be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or any rule or
regulation thereunder 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, 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 Units of Preferred
Stock as shall be set forth therein at the price set forth therein, but the
amount and type of securities, cash or other assets that may be acquired 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 hereto that evidences
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) that becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and that receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer that a majority of the Board of Directors of the Company has determined
to be part of a plan, arrangement or understanding that has as a primary purpose
or effect the avoidance of Section 7(e), shall, upon the written direction of a
majority of the Board of Directors of the Company, contain (to the extent
feasible) the following legend:
"The Rights evidenced by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined
in the Rights Agreement). Accordingly, this Rights Certificate and the
Rights evidenced
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hereby may become null and void in the circumstances specified in
Section 7(e) of such Agreement."
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, the President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any one or more of these officers on the Rights
Certificates may be manual or facsimile. Rights Certificates bearing the manual
or facsimile signatures of the individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
countersignature of such Rights Certificates or did not hold such offices at the
date of such Rights Certificates. No Rights Certificate shall be entitled to any
benefit under this Agreement or be valid for any purpose unless there appears on
such Rights Certificate a countersignature duly executed by the Rights Agent by
manual signature of an authorized signatory, and such countersignature upon any
Rights Certificate shall be conclusive evidence, and the only evidence, that
such Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated 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 name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES. (a)
Subject to the provisions of Sections 4(b), 7(e) and 14, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of Units
of Preferred Stock (or, following a Triggering Event, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the office 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 until the registered holder shall have completed and executed
the certificate set forth in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
evidenced by such Rights Certificate or Affiliates or Associates thereof as the
Company shall reasonably request; whereupon the Rights Agent shall, subject to
the provisions of Sections 4(b), 7(e) and 14, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the case
may be, as so requested. The Company may require payment of a sum 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.
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(b) If a Rights Certificate shall be mutilated, destroyed, lost or
stolen, upon request by the registered holder of the Rights evidenced thereby
and upon payment to the Company and the Rights Agent of all reasonable expenses
incident thereto, there shall be issued, in exchange for and upon cancellation
of the mutilated Rights Certificate, or in substitution for the lost, stolen or
destroyed Rights Certificate, a new Rights Certificate, in substantially the
form of the prior Rights Certificate, of like tenor and evidencing the
equivalent number of Rights, but, in the case of loss, theft or destruction,
only upon receipt of evidence satisfactory to the Company and the Rights Agent
of such loss, theft or destruction of such Rights Certificate and, if requested
by the Company or the Rights Agent, indemnity also satisfactory to it.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Prior to the earlier of (i) the Close of Business on the third
anniversary hereof (the "FINAL EXPIRATION DATE") and (ii) the time at which the
Rights are redeemed as provided in Section 23 (the earlier of (i) and (ii) being
the "EXPIRATION DATE"), the registered holder of any Rights Certificate may,
subject to the provisions of Sections 7(e) and 9(c), exercise the Rights
evidenced thereby 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 on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price (as hereinafter defined) for the
number of Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) for which such surrendered
Rights are then exercisable.
(b) The purchase price for each one one-thousandth of a share (each
such one one-thousandth of a share being a "UNIT") of Preferred Stock upon
exercise of Rights shall be US$29.02, subject to adjustment from time to time as
provided in Sections 11 and 13(a) (such purchase price, as so adjusted, being
the "PURCHASE PRICE"), and shall be payable in accordance with paragraph (c)
below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation in good standing
organized under the laws of the United States or any state of the United States,
that is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority (such institution being the "DEPOSITARY AGENT"), certificates
evidencing the shares of Preferred Stock that may be acquired upon exercise of
the Rights and shall cause such Depositary Agent to enter into an agreement
pursuant to which the Depositary Agent shall issue receipts evidencing interests
in the shares of Preferred Stock so deposited. Upon receipt of a Rights
Certificate evidencing exercisable Rights, with the form of election to purchase
and the certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price for the Units of Preferred Stock (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) to be purchased thereby as set forth below and an amount equal to
any applicable transfer tax or evidence satisfactory to the Company of payment
of such tax, the Rights Agent shall, subject to Section 20(k), thereupon
promptly (i) requisition from the Depositary Agent depositary receipts or
certificates evidencing such number of Units of Preferred Stock as are to be
purchased and the Company will direct the Depositary Agent to comply with such
request, (ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14, (iii) after
receipt of such depositary receipts or certificates, cause the same to be
delivered to or upon the
9
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. In the event that the Company is obligated to
issue Company Common Stock, other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a), the Company will make all
arrangements necessary so that such Company Common Stock, other securities, cash
and/or other property are available for distribution by the Rights Agent, if and
when appropriate. Subject to Section 34, the payment of the Purchase Price (as
such amount may be reduced pursuant to Section 11(a)(iii)) may be made in cash
or by certified or bank check payable to the order of the Company, or by wire
transfer of immediately available funds to the account of the Company (provided
that notice of such wire transfer shall be given by the holder of the related
Right to the Rights Agent).
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing 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.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of any Section 11(a)(ii) Event or Section 13
Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) that becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and that receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, shares of Company Common Stock or the Company or (B) a transfer that a
majority of the Board of Directors of the Company has determined to be part of a
plan, arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall be 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) are complied with, but shall
have no liability to any holder of Rights or any other Person as a result of the
Company's failure to make any determination under this Section 7(e) or Section
4(b) with respect to an Acquiring Person or its Affiliates, Associates or
transferees.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise by such registered holder unless such
registered holder shall have (i) completed and executed the certificate
following the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise and (ii) provided such
additional evidence of the
10
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
evidenced by such Rights Certificate or Affiliates or Associates 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 surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a) The
Company shall at all times prior to the Expiration Date cause to be reserved and
kept available, out of its authorized and unissued shares of Preferred Stock,
the number of shares of Preferred Stock that, as provided in this Agreement,
will be sufficient to permit the exercise in full of all outstanding Rights.
Upon the occurrence of any events resulting in an increase in the aggregate
number of shares of Preferred Stock (or other equity securities of the Company)
issuable upon exercise of all outstanding Rights above the number then reserved,
the Company shall make appropriate increases in the number of shares so
reserved.
(b) If the shares of Preferred Stock to be issued and delivered upon
the exercise of the Rights may be listed on any national securities exchange,
the Company shall during the period from the Distribution Date through the
Expiration Date use its best efforts to cause all securities reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts (i) as soon as
practicable following the occurrence of a Section 11(a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) of the
consideration to be delivered by the Company upon exercise of the Rights or, if
so required by law, as soon as practicable following the Distribution Date (such
date being the "REGISTRATION DATE"), to file a registration statement on an
appropriate form under the Securities Act and, if appropriate, under the
Companies Xxx 0000 of Bermuda (the "BERMUDA ACT") with respect to the securities
that may be acquired upon exercise of the Rights (the "REGISTRATION STATEMENT"),
(ii) to cause the Registration Statement to become effective as soon as
practicable after such filing, (iii) to cause the Registration Statement to
continue to be effective (and to include a prospectus complying with the
requirements of the Securities Act and, if appropriate, the Bermuda Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
the securities covered by the Registration Statement and (B) the Expiration Date
and (iv) to take as soon as practicable following the Registration Date such
action as may be required to ensure that any acquisition of securities upon
exercise of the Rights complies with any applicable state securities or "blue
sky" laws. If the Registration Statement does not become effective prior to the
Close of Business on the 45th Business Day following the occurrence of a Section
11(a)(ii) Event, the Company shall, unless otherwise determined by a majority of
the
11
Board of Directors of the Company, on the 46th Business Day following the
occurrence of such Section 11(a)(ii) Event, be obligated to exercise the option
described in Section 34.
(d) The Company shall take such action as may be necessary to ensure
that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax
imposed in connection with the issuance or delivery of the Rights Certificates
or upon the exercise of Rights; PROVIDED, HOWEVER, that the Company shall not be
required to pay any such tax imposed in connection with the issuance or delivery
of Units of Preferred Stock, or any certificates or depositary receipts for such
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
any other securities, cash or assets, as the case may be) to any Person other
than the registered holder of the Rights Certificates evidencing the Rights
surrendered for exercise. The Company shall not be required to issue or deliver
any certificates or depositary receipts for Units of Preferred Stock (or,
following the occurrence of a Triggering Event, any other securities, cash or
assets, as the case may be) to, or in a name other than that of, the registered
holder of the Rights Certificate upon the exercise of any Rights evidenced
thereby until any such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in whose name
any certificate or depositary receipt for Units of Preferred Stock (or,
following the occurrence of a Triggering Event, other securities) is issued upon
the exercise of Rights shall be registered as the holder of record of the Units
of Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) evidenced thereby on, and such certificate or depositary receipt
shall be dated, the date upon which the Rights Certificate evidencing such
Rights is duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) is made; PROVIDED, however, that if the date of such surrender
and payment is a date upon which the Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) register of members is
closed, such Person shall be registered as the record holder of such securities
on, and such certificate or depositary receipt shall be dated, the next
succeeding Business Day on which the Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) register of members is open;
and FURTHER PROVIDED, HOWEVER, that if delivery of Units of Preferred Stock is
delayed as a result of a failure to register such Units of Preferred Stock
pursuant to Section 9(c), such Persons shall be registered as the record holders
of such Units of Preferred Stock only when such Units first become deliverable.
Prior to the registration in the register of members of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled to any rights
of a shareholder of the Company with respect to securities for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
12
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine or consolidate the outstanding Preferred Stock into a smaller
number of shares or (D) issue any shares in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation, amalgamation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision,
combination, consolidation or reclassification, and the number and kind of
shares of Preferred Stock or other class of shares, as the case may be,
issuable on such date upon exercise of the Rights, 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 Preferred Stock
or other class of shares, as the case may be, which, if such Right had
been exercised immediately prior to such date, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, consolidation or reclassification. If
an event occurs that would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall (1) merge into the Company or
amalgamate or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of such merger,
amalgamation or combination and Company Common Stock shall remain
outstanding and unchanged, (2) in one transaction or a series of
transactions, transfer any assets to the Company or to any of its
Subsidiaries in exchange (in whole or in part) for shares of Company
Common Stock, for other shares of the Company or any such
Subsidiary, or for securities exercisable for or convertible into
shares of the Company or any of its Subsidiaries (whether Company
Common Stock or otherwise) or otherwise obtain from the Company or
any of its Subsidiaries, with or without consideration, any
additional shares or securities exercisable for or convertible into
such shares (other than pursuant to a pro rata distribution to all
holders of Company Common Stock), (3) sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose
of, in one transaction or a series of transactions, to, from or with
the Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee
or fiduciary with respect to such plan acting in such capacity,
assets (including securities) on
13
terms and conditions less favorable to the Company or such
Subsidiary or plan than those that could have been obtained in
arm's-length negotiations with an unaffiliated third party, other
than pursuant to a transaction set forth in Section 13(a), (4) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of the Company's
Subsidiaries or any employee benefit plan maintained by the Company
or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity (other than transactions, if
any, consistent with those engaged in, as of the date hereof, by the
Company and such Acquiring Person or such Associate or Affiliate),
assets (including securities) having an aggregate fair market value
of more than US$5,000,000, other than pursuant to a transaction set
forth in Section 13(a), (5) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in
one transaction or a series of transactions, to, from or with the
Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee
or fiduciary with respect to such plan acting in such capacity, any
material trademark or material service xxxx, other than pursuant to
a transaction set forth in Section 13(a), (6) receive, or any
designee, agent or representative of such Acquiring Person or any
Affiliate or Associate of such Acquiring Person shall receive, any
compensation from the Company or any of its Subsidiaries other than
compensation for full-time employment as a regular employee at rates
in accordance with the Company's (or its Subsidiaries') past
practices, or (7) receive the benefit, directly or indirectly
(except proportionately as a holder of Company Common Stock or as
required by law or governmental regulation), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits
or other tax advantage provided by the Company or any of its
Subsidiaries or any employee benefit plan maintained by the Company
or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity; or
(B) any Person shall become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a
transaction set forth in Section 13(a); or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any
amalgamation, merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions
involving the Company or any of its Subsidiaries, other than a
transaction or transactions to which the provisions of Section 13(a)
apply (whether or not with or into or otherwise involving an
Acquiring Person), which has the effect, directly or indirectly, of
increasing by more than 1% the proportionate share of the
outstanding shares of any class of shares of the Company or any of
its Subsidiaries that is directly or indirectly beneficially owned
by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person;
14
THEN, immediately upon the date of the occurrence of an event
described in Section 11(a)(ii)(A), (B) or (C) (a "SECTION 11(A)(II)
EVENT"), proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e)) shall
thereafter have the right to receive, upon exercise thereof at the
then-current Purchase Price in accordance with the terms of this
Agreement, in lieu of the number of Units of Preferred Stock for
which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, such number of Units of
Preferred Stock as shall equal the result obtained by (x)
multiplying the then-current Purchase Price by the then number of
Units of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event (such product thereafter being, for all purposes of this
Agreement other than Section 13, the "PURCHASE PRICE"), and (y)
dividing that product by 50% of the then-current market price
(determined pursuant to Section 11(d)) per Unit of Preferred Stock
on the date of such first occurrence (such Units of Preferred Stock
being the "ADJUSTMENT SHARES").
(iii) In the event that the number of shares of Preferred
Stock that are authorized by the Company's Memorandum of Association
and Bye-laws but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the Company, by
the vote of a majority of the Board of Directors of the Company,
shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "CURRENT VALUE")
over (2) the Purchase Price (such excess being the "SPREAD"), and
(B) with respect to each Right, make adequate provision to
substitute for such Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Company Common Stock or other shares of the Company
(including, without limitation, preferred shares, or units of
preferred shares (such other shares being "PREFERRED STOCK
EQUIVALENTS")), (4) debt securities of the Company, (5) other assets
or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been
determined by a majority of the Board of Directors of the Company,
after receiving advice from a nationally recognized investment
banking firm; PROVIDED, HOWEVER, that if the Company shall not have
made adequate provision to deliver value pursuant to clause (B)
above within thirty 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) expires
(the later of (x) and (y) being referred to herein as the "SECTION
11(A)(III) 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, Units of Preferred Stock
(to the extent available) and then, if necessary, cash, which Units
of Preferred Stock and/or cash shall have an aggregate value equal
to the Spread. To the extent that the Company determines that some
action need be taken pursuant to the first sentence of this Section
11(a)(iii), the Company shall provide, subject to Section 7(e), that
such action shall apply uniformly to all outstanding Rights. For
purposes of this Section 11(a)(iii), the value of a Unit of
Preferred Stock shall be the current market price (as determined
pursuant to Section 11(d)) per Unit of Preferred Stock on the
Section 11(a)(iii) Trigger Date and the value of any preferred stock
equivalent shall be deemed to have the same value as the Preferred
Stock on such date.
15
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five
calendar days after such record date) shares of Preferred Stock (or shares
having substantially the same rights, privileges and preferences as shares
of Preferred Stock ("EQUIVALENT PREFERRED STOCK")) or securities
convertible into Preferred Stock or Equivalent Preferred Stock at a price
per share of Preferred Stock or per share of Equivalent Preferred Stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preferred Stock) less than the current
market price (as determined pursuant to Section 11(d)) per share of
Preferred Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the sum of the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of
shares of Preferred Stock and/or Equivalent Preferred Stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price,
and the denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of additional shares
of Preferred Stock and/or Equivalent Preferred Stock 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 a majority of the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the
Rights. Shares of Preferred Stock owned by or held for the account of the
Company or any Subsidiary shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price that 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 shares of Preferred Stock (including any such
distribution made in connection with a consolidation, amalgamation or
merger in which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of
the earnings or retained earnings of the Company), assets (other than a
dividend payable in shares of Preferred Stock, but including any dividend
payable in shares other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d)) per share of Preferred
Stock on such record date less the fair market value (as determined in
good faith by a majority of the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holder of the
Rights) of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants distributable in
respect of a share of Preferred Stock and
16
the denominator of which shall be such current market price (as determined
pursuant to Section 11(d)) per share of Preferred Stock. Such adjustments
shall be made successively whenever such a record date is fixed, and in
the event that such distribution is not so made, the Purchase Price shall
be adjusted to be the Purchase Price that would have been in effect if
such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
market price" per share of Company Common Stock or Common Stock on any
date shall be deemed to be the average of the daily closing prices per
share of such shares for the ten consecutive Trading Days immediately
prior to such date; PROVIDED, HOWEVER, that if prior to the expiration of
such requisite ten Trading Day period the issuer announces either (A) a
dividend or distribution on such shares payable in such shares or
securities convertible into such shares (other than the Rights) or (B) any
subdivision, combination or reclassification of such shares, then,
following the ex-dividend date for such dividend or the record date for
such subdivision, combinations or reclassifications, as the case may be,
the "current market price" shall be properly adjusted to take into account
such event. The closing price for each day shall be, if the shares are
listed and admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which such shares are listed or admitted to trading or, if such shares
are not listed or admitted to trading on any national securities exchange,
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 Consolidated Quotations Service or such other system
then in use, or, if on any such date such shares are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such shares
selected by a majority of the Board of Directors of the Company. If, on
any such date no market maker is making a market in such shares, the fair
value of such shares on such date as determined in good faith by a
majority of the Board of Directors of the Company shall be used. If such
shares are not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as determined in good
faith by a majority of the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. The term "TRADING DAY"
shall mean, if such shares are listed or admitted to trading on any
national securities exchange, a day on which the principal national
securities exchange on which such shares are listed or admitted to trading
is open for the transaction of business or, if such shares are not so
listed or admitted, a Business Day.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the same
manner as set forth above for Company Common Stock in clause (i) of this
Section 11(d) (other than the fourth sentence thereof). If the current
market price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section
11(d), the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1,000 (as such amount may be
appropriately adjusted for such events as share consolidations and
subdivisions, bonus issues, share splits, share dividends and
17
recapitalizations with respect to Company Common Stock occurring after the
date of this Agreement) multiplied by the current market price per share
of Company Common Stock. If neither Company Common Stock nor Preferred
Stock is publicly held or so listed or traded, "current market price" per
share of the Preferred Stock shall mean the fair value per share as
determined in good faith by a majority of the Board of Directors of the
Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. For all purposes of this Agreement, the "current market
price" of a Unit of Preferred Stock shall be equal to the "current market
price" of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one-hundredth of a
share of Company Common Stock or Common Stock or other share or
hundred-thousandth of a share of Preferred Stock, 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 that mandates such adjustment
and (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock
contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i), (j), (k),
(l) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of Units of
Preferred Stock (or other securities or amount of cash or combination
thereof) that may be acquired from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that
number of Units of Preferred Stock (calculated to the nearest one
hundred-thousandth of a Unit) obtained by (i) multiplying (x) the number
of Units of Preferred Stock covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
18
(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 Units of Preferred Stock that may be acquired
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
Units of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest hundred-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement 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 ten days later than the date of such 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, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or,
at the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates to be so 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 Units of Preferred Stock issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per Unit and the number of Units of
Preferred Stock that were expressed in the Initial Rights Certificates
issued hereunder without prejudice to any such adjustment or change.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then-par value of the number of Units of
Preferred Stock issuable upon exercise of the Rights, the Company shall
take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue such
fully paid and non-assessable number of Units of Preferred Stock 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 that number of Units of Preferred Stock and other shares or
securities of the
19
Company, if any, issuable upon such exercise over and above the number of
Units of Preferred Stock and other shares or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; PROVIDED, HOWEVER, that the Company shall
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares
(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 reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that in their good faith judgment a majority of the
Board of Directors of the Company shall determine to be advisable in order
that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less than the
current market price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities that by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or bonus
issues or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred
Stock, shall not be taxable to such holders or shall reduce the taxes
payable by such holders.
(n) The Company shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o)), (ii) merge or
amalgamate with or into any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o)), or (iii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), if (x) at the
time of or immediately after such consolidation, merger, amalgamation or
sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect that 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, amalgamation or sale, the Person that constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) shall have
distributed or otherwise transferred to its shareholders or other Persons
holding an equity interest in such Person Rights previously owned by such
Person or any of its Affiliates and Associates; PROVIDED, HOWEVER, that
this Section 11(n) shall not affect the ability of any Subsidiary of the
Company to consolidate with, merge or amalgamate with or into, or sell or
transfer assets or earning power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 26, 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.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend
on the outstanding shares of Company
20
Common Stock payable in shares of Company Common Stock, (ii) subdivide the
outstanding shares of Company Common Stock, (iii) combine or consolidate
the outstanding shares of Company Common Stock into a smaller number of
shares, or (iv) issue any shares in a reclassification of Company Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), the number of Rights associated with each share of
Company Common Stock then outstanding, or issued or delivered thereafter
but prior to the Distribution Date, shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of Company
Common Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Company
Common Stock immediately prior to such event by a fraction the numerator
of which shall be the total number of shares of Company Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Company Common
Stock outstanding immediately following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or Section 13,
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
Preferred Stock and the Company Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate evidencing
shares of Company Common Stock) in accordance with Section 25. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER, AMALGAMATION OR SALE OR TRANSFER
OF ASSETS OR EARNING POWER. (a) In the event that, following the Stock
Acquisition Date, directly or indirectly, either (x) the Company shall
consolidate with, or merge or amalgamate with and into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o)), and the Company shall not be the continuing or surviving corporation of
such consolidation, amalgamation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o))
shall consolidate with, or merge or amalgamate with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation, amalgamation or merger and, in connection with such
consolidation, amalgamation or merger, all or part of the outstanding shares of
Company Common Stock shall be converted into or exchanged for stock or other
securities of any other Person 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) to any 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)), in one or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries, taken as a whole (any such event described in clause (x), (y) or
(z) being a "SECTION 13 EVENT"), then, and in each such case, proper provision
shall be made so that: (i) each holder of a Right, except as provided in Section
7(e), shall thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price, such number of validly authorized and issued,
fully paid and non-assessable shares of Common
21
Stock of the Principal Party, which shares shall not be subject to any liens,
encumbrances, rights of first refusal, transfer restrictions or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of Units of Preferred Stock 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 Units for which
a Right would be exercisable hereunder but for the occurrence of such Section
11(a)(ii) Event by the Purchase Price that would be in effect hereunder but for
such first occurrence) and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be the "Purchase Price" for all purposes
of this Agreement) by 50% of the current market price (determined pursuant to
Section 11(d)) per share of the Common Stock of such Principal Party on the date
of consummation of such Section 13 Event; (ii) 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; (iii)
the term "Company" shall, for all purposes of this Agreement, thereafter be
deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the consummation of any
such transaction as may be necessary to ensure that the provisions of this
Agreement shall thereafter be applicable to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) shall be of no further 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), (A) the Person that is the issuer of
any securities into which shares of Company Common Stock are converted in
such merger, amalgamation or consolidation, or, if there is more than one
such issuer, the issuer of Common Stock that has the highest aggregate
current market price (determined pursuant to Section 11(d)) and (B) if no
securities are so issued, the Person that is the other party to such
merger, amalgamation or consolidation, or, if there is more than one such
Person, the Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d)); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving
the largest portion of the assets or earning power transferred pursuant to
such transaction or transactions, or, if each Person that is a party to
such transaction or transactions receives the same portion of the assets
or earning power transferred pursuant to such transaction or transactions
or if the Person receiving the largest portion of the assets or earning
power cannot be determined, whichever Person the Common Stock of which has
the highest aggregate current market price (determined pursuant to Section
11(d)); 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 twelve-month period registered under Section 12 of the Exchange
Act ("REGISTERED COMMON STOCK"), or such Person is not a corporation, and
such Person is a direct or indirect Subsidiary of another Person that has
Registered
22
Common Stock outstanding, "Principal Party" shall refer to such other
Person; (2) if the Common Stock of such Person is not Registered Common
Stock or such Person is not a corporation, and such Person is a direct or
indirect Subsidiary of another Person but is not a direct or indirect
Subsidiary of another Person that has Registered Common Stock outstanding,
"Principal Party" shall refer to the ultimate parent entity of such
first-mentioned Person; (3) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is directly or indirectly controlled by more than one Person, and
one or more of such other Persons has Registered Common Stock outstanding,
"Principal Party" shall refer to whichever of such other Persons is the
issuer of the Registered Common Stock having the highest aggregate current
market price (determined pursuant to Section 11(d)); and (4) if the Common
Stock of such Person is not Registered Common Stock or such Person is not
a corporation, and such Person is directly or indirectly controlled by
more than one Person, and none of such other Persons have Registered
Common Stock outstanding, "Principal Party" shall refer to whichever
ultimate parent entity is the corporation having the greatest
shareholders' equity or, if no such ultimate parent entity is a
corporation, shall refer to whichever ultimate parent entity is the entity
having the greatest net assets.
(c) The Company shall not consummate any such consolidation,
amalgamation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock that 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 providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement under
the Securities Act, and, if appropriate, the Bermuda Act with respect to
the Common Stock that may be acquired upon exercise of the Rights, (B)
cause such registration statement to remain effective (and to include a
prospectus complying with the requirements of the Securities Act) until
the Expiration Date, and (C) as soon as practicable following the
execution of such agreement take such action as may be required to ensure
that any acquisition of such Common Stock upon the exercise of the Rights
complies with any applicable state securities or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that comply
in all respects with the requirements for registration on Form 10 under
the Exchange Act.
(d) In case the Principal Party that is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then current
market price per share (determined pursuant to Section 11(d)) or securities
exercisable for, or convertible into, Common
23
Stock of such Principal Party at less than such then current market price (other
than to holders of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar provisions in connection with the issuance of
the Common Stock of such Principal Party pursuant to the provisions of this
Section 13, then, in such event, the Company shall not consummate any such
transaction unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have been
cancelled, waived or amended, or that the authorized securities shall be
redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations 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 that have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates that evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the 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 day shall be, if the
Rights are listed or admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last 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 Consolidated
Quotations Service or such other 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 a majority of the Board of Directors of the Company. If
on any such date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by a majority of
the Board of Directors of the Company shall be used and such determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions that are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence such fractional shares of Preferred Stock
(other than fractions that are integral multiples of one one-thousandth of a
share of Preferred Stock). In lieu of such fractional shares of Preferred Stock
that are not integral multiples of one one-thousandth of a share, 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 then current market price of a share of Preferred Stock on the day of
exercise, determined in accordance with Section 11(d).
24
(c) The holder of a Right by the acceptance of such Right expressly
waives his 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 pursuant
to Section 18, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates evidencing shares of Company Common Stock), and the Company hereby
unilaterally and irrevocably covenants in favor of such holders to perform all
obligations of the Company under this Agreement; and any registered holder of a
Rights Certificate (or, prior to the Distribution Date, of a certificate
evidencing shares of Company Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of a certificate evidencing shares of Company Common Stock),
may, on such registered holder's own behalf and for such registered holder's own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company or any other Person to enforce, or otherwise act in respect
of, such registered 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 Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office 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 duly executed;
(c) subject to Section 6(a) and Section 7(f), 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 Company
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Company
Common Stock certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e), shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or any
25
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, judgment or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; PROVIDED, HOWEVER,
that the Company must use its best efforts to have any such order, decree,
judgment or ruling lifted or otherwise overturned as promptly as
practicable.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. 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
Preferred Stock or any other securities of the Company that may at any time be
issuable on the exercise of the Rights evidenced 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 stockholder 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, except as provided in Section 24, to
receive notice of meetings or other actions affecting shareholders, or to
receive dividends or subscription rights, or otherwise.
SECTION 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses, including reasonable fees and disbursements of its counsel, incurred
in connection with the execution and administration of this Agreement and the
exercise and performance of its duties hereunder. The Company shall indemnify
the Rights Agent for, and hold it harmless against, any loss, liability, or
expense, incurred without 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 hereunder.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate or depositary receipt for Preferred Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to have been 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 corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services 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 document or any further act on
the part of any of the parties hereto; provided that such corporation would be
eligible for appointment as a
26
successor Rights Agent under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the 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 in case 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) In case 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 in
case 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 Agreement
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 determination 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 specified herein) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and 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
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights
27
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 have any responsibility for the
validity of this Agreement or the execution and delivery hereof (except
the due execution and delivery hereof by the Rights Agent) or for the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or failure by the Company to satisfy
conditions 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 or for the manner, method or amount of any
such adjustment or the ascertaining 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 by the Rights Agent of the
certificate describing any such adjustment contemplated by Section 12);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Preferred
Stock or any other securities to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Preferred Stock or
any other securities will, when so issued, be validly authorized and
issued, fully paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such
further acts, instruments and assurances as may reasonably be required by
the Rights Agent for the performance by the Rights Agent of its duties
under 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 Chairman 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 or omitted by
the Rights Agent under this Rights Agreement and the date on and/or after
which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be 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 any such officer
of the Company actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to
such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully
28
and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other Person.
(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.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties or in the exercise of its rights
hereunder if the Rights Agent shall have reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be,
has either not been completed, not signed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without
first consulting with the Company. If such certificate has been completed
and signed and shows a negative response to clauses 1 and 2 of such
certificate, unless previously instructed otherwise in writing by the
Company (which instructions may impose on the Rights Agent additional
ministerial responsibilities, but no discretionary responsibilities), the
Rights Agent may assume without further inquiry that the Rights
Certificate is not owned by a person described in Section 4(b) or Section
7(e) and shall not be charged with any knowledge to the contrary.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty days' prior notice in writing mailed to the Company, and
to each transfer agent of the Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates (or
certificates for the Company Common Stock prior to the Distribution Date) by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty days' prior notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates (or certificates for the
Company Common Stock prior to the Distribution Date) 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 thirty 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 or, prior to the Distribution Date, the
holder of a certificate for the Company Common Stock (who shall, with such
notice, submit such holder's Rights Certificate or certificate for Company
Common Stock, as the case may be, for inspection by the Company), then any
registered holder of any Rights Certificate or, prior to the Distribution Date,
the holder of a certificate for the Company Common Stock may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor
29
Rights Agent, whether 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 any state of the United States in good standing, shall be authorized to do
business as a banking institution in the State of New York, shall be authorized
under such laws to exercise corporate trust or stock transfer powers, shall be
subject to supervision or examination by federal or state authorities and shall
have at the time of its appointment as Rights Agent a combined capital and
surplus of at least US$100,000,000 or (b) an Affiliate of a corporation
described in clause (a). After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Preferred Stock and the Company Common Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates (or certificates
for the Company Common Stock prior to the Distribution Date). 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.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by a majority of the Board of Directors of the Company to
reflect any adjustment or change made in accordance with the provisions of this
Agreement in the Purchase Price or the number or kind or class of shares or
other securities or property that may be acquired upon exercise of the Rights.
In addition, in connection with the issuance or sale of shares of Company Common
Stock following the Distribution Date and prior to the Expiration Date, the
Company (a) shall, with respect to shares of Company Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by a majority of the Board of Directors of the Company,
issue Rights Certificates evidencing 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 adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION. (a) Subject to Section 28,
the Company may, at its option, by action of a majority of the Board of
Directors of the Company, at any time prior to the earlier of (i) the Close of
Business on the tenth Day following the Stock Acquisition Date or (ii) the Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of US$0.0001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, share consolidation or
subdivision, bonus issue, stock dividend or similar transaction occurring after
the date hereof (such redemption price being the "REDEMPTION PRICE"), and the
Company may, at its option, by action of a majority of the Board of Directors of
the Company, pay the Redemption Price either in shares of Company
30
Common Stock (based on the current market price, determined in accordance with
Section 11(d), of the shares of Company Common Stock at the time of redemption)
or cash. Subject to the foregoing, the redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors of the Company in its sole discretion may establish.
(b) Immediately upon the action of a majority of the Board of
Directors of the Company ordering the redemption of the Rights, evidence of
which shall be 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 a majority of the
Board of Directors of the Company ordering the redemption 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 all such holders at
each holder's last address as it appears upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the register of members of the
transfer agent for Company Common Stock. Any notice that 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 or
bonus issue payable in shares of any class to the holders of Preferred Stock or
to make any other distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend out of earnings or retained earnings of the
Company), (ii) to offer to the holders of Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock or shares
of any class or any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), (iv) to effect
any consolidation or merger or amalgamation into or with any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o)), or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)) 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 (or, prior to the Distribution Date, to each
holder of certificates for Company Common Stock), to the extent feasible and in
accordance with Section 25, 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,
merger, amalgamation, sale, transfer, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of the shares
of Preferred Stock, 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 Preferred
Stock 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 Preferred Stock,
whichever shall be the earlier; PROVIDED, HOWEVER, that no such notice shall be
required pursuant to this Section 24 if any Subsidiary of the Company effects a
consolidation or merger or
31
amalgamation with or into, or effects a sale or other transfer of assets or
earning power to, any other Subsidiary of the Company.
(b) In case any of the events set forth in Section 11(a)(ii) shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 25, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii).
SECTION 25. NOTICES. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing and mailed or
sent or delivered (including by facsimile transmission), if to the Company, at
its address at:
Xxxxx Limited
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Chief Financial Officer
and if to the Rights Agent, at its address at:
Mellon Investor Services LLC
______________________________
______________________________
Attention:____________________
Notices or demands authorized or required 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 certificates evidencing
shares of Company Common Stock) 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 Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Company
Common Stock.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
evidencing shares of Company Common Stock. 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 Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(a) to cure any ambiguity, (b) to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provisions herein,
(c) to shorten or lengthen any time period hereunder or (d) 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
32
the holders of Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); PROVIDED, HOWEVER, that, prior
to the Close of Business on the third anniversary hereof, this Agreement may not
be supplemented or amended to extend the Final Expiration Date except in
accordance with Section 35; and PROVIDED FURTHER, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (c) of this sentence,
(i) subject to Section 30, a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable or (ii) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company or, so
long as any Person is an Acquiring Person hereunder, from the majority of the
Board of Directors of the Company, that 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. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Company Common Stock.
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 OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of shares
of Company Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Company Common Stock of which any Person is the Beneficial Owner, shall be made
in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, the Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power (i) to interpret
the provisions of this Agreement and (ii) to make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors of the Company 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 of
Directors of the Company or any member thereof to any liability to the holders
of the Rights.
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 shares of Company Common Stock) any
legal or equitable right, remedy or claim under this Agreement. 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 shares of Company Common Stock).
33
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Board of Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement and the Rights shall not then be redeemable,
the right of redemption set forth in Section 23 shall be reinstated and shall
not expire until the Close of Business on the tenth Business Day following the
date of such determination by a majority of the Board of Directors of the
Company.
SECTION 31. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be governed by, and construed in
accordance with, the laws of Bermuda; PROVIDED, HOWEVER, that Sections 18, 19,
20 and 21 shall be governed by, and construed in accordance with, the laws of
the State of New York.
SECTION 32. COUNTERPARTS. This Agreement may be executed (including
by facsimile) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 33. DESCRIPTIVE HEADINGS. The headings contained in this
Agreement are for descriptive purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 34. EXCHANGE. (a) (i) The Company may, at its option, at any
time after any person becomes an Acquiring Person, upon resolution adopted by a
majority of the Board of Directors of the Company, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to Section 7(e)) for Units of Preferred Stock
at an exchange ratio of one Unit of Preferred Stock per Right, appropriately
adjusted to reflect any stock split, share consolidation or subdivision, bonus
issue, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "SECTION 34(A)(I)
EXCHANGE RATIO"). Notwithstanding the foregoing, the Company may not effect the
exchange described in this Section 34(a)(i) at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries, or any trustee or
fiduciary with respect to such plan acting in such capacity), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the shares of Company Common Stock then outstanding.
(ii) The Company may, at its option, at any time after any person
becomes an Acquiring Person, upon resolution adopted by a majority of the Board
of Directors of the Company, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to Section 7(e)) for Units of Preferred Stock at an exchange ratio
specified in the following sentence, as appropriately adjusted to
34
reflect any stock split, share consolidation or subdivision, bonus issue, stock
dividend or similar transaction occurring after the date hereof. Subject to such
adjustment, each Right may be exchanged for that number of Units of Preferred
Stock obtained by dividing the Adjustment Spread (as defined below) by the
then-current market price (determined pursuant to Section 11(d)) per Unit of
Preferred Stock on the earlier of (i) the date on which any Person becomes an
Acquiring Person and (ii) the date on which a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company or any of its Subsidiaries or any trustee
or fiduciary with respect to such plan acting in such capacity) is commenced
within the meaning of Rule 14d-2 of the Exchange Act Regulations or any
successor rule, if upon consummation thereof such Person would be the Beneficial
Owner of 20% or more of the shares of Company Common Stock then outstanding
(such exchange ratio being the "SECTION 34(A)(II) EXCHANGE RATIO"). The
"ADJUSTMENT SPREAD" shall equal (x) the aggregate market price on the date of
such event of the number of Adjustment Shares determined pursuant to Section
11(a)(ii), minus (y) the Purchase Price.
(b) Immediately upon the action of a majority of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to Section
34(a) and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Units of Preferred Stock equal
to the number of such Rights held by such holder multiplied by the Section
34(a)(i) Exchange Ratio or Section 34(a)(ii) Exchange Ratio, as the case may be.
The Company shall promptly give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
that is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange shall state the
method by which the exchange of Units of Preferred Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights that
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights that have become null and void pursuant to
Section 7(e)) held by each holder of Rights.
(c) In the event that the number of shares of Preferred Stock that
are authorized by the Company's Memorandum of Association and Bye-laws but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit any exchange of Rights as contemplated
in accordance with this Section 34, the Company shall take all such action as
may be necessary to authorize additional shares of Preferred Stock for issuance
upon exchange of the Rights or make adequate provision to substitute (1) cash,
(2) Company Common Stock or other equity securities of the Company, (3) debt
securities of the Company, (4) other assets or (5) any combination of the
foregoing, having an aggregate value equal to the Adjustment Spread, where such
aggregate value has been determined by a majority of the Board of Directors of
the Company.
(d) The Company shall not be required to issue fractions of Units of
Preferred Stock or to distribute certificates that evidence fractional Units. In
lieu of fractional Units, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are
35
exchanged as herein provided an amount in cash equal to the same fraction of the
current market price (determined pursuant to Section 11(d)) of one Unit of
Preferred Stock.
SECTION 35. RENEWAL. At least 180 days prior to the Close of
Business on the third anniversary hereof, the Chairman of the Board of Directors
of the Company or the Board of Directors of the Company may, in accordance with
the Company's Bye-laws, convene an annual general meeting or special general
meeting of the Company's shareholders for the purpose of considering an
amendment to Section 7(a)(i) of this Agreement, which amendment shall provide
for an extension of the Final Expiration Date (the "FINAL EXPIRATION DATE
AMENDMENT"). The Final Expiration Date Amendment shall become effective upon a
resolution of the members including the affirmative vote of not less than 66% of
votes cast on the resolution.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on their behalf as of the date first above written.
The Common Seal of the Company was affixed
hereto in the presence of:
By: ________________________________
Name:
Title:
MELLON INVESTOR SERVICES LLC
By: ________________________________
Name:
Title:
EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
Certificate No. ____ ____Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID.
RIGHTS CERTIFICATE
XXXXX LIMITED
This certifies that , or registered assigns, is the registered
holder of the number of Rights set forth above, each of which entitles the
registered holder thereof, subject to the terms and conditions of the Rights
Agreement dated as of July [ __ ], 2001 (the "RIGHTS AGREEMENT"; terms defined
therein are used herein with the same meaning unless otherwise defined herein)
between Xxxxx Limited, a Bermuda company (the "COMPANY"), and Mellon Investor
Services LLC, as Rights Agent (which term shall include any successor Rights
Agent under the Rights Agreement), to purchase from the Company at any time
after the Distribution Date and prior to the Expiration Date at the office of
the Rights Agent, one-thousandth of a fully paid and non-assessable Series A
Preference Share, par value US$0.01 per share (the "PREFERRED STOCK"), of the
Company at the Purchase Price initially of US$29.02 per one-thousandth share
(each such one-thousandth of a share being a "UNIT") of Preferred Stock, upon
presentation and surrender of this Rights Certificate with the Election to
Purchase and related Certificate (on the reverse side hereof) properly completed
and duly executed. The number of Rights evidenced by this Rights Certificate
(and the number of Units that may be purchased upon exercise thereof) set forth
above, and the Purchase Price per Unit set forth above shall be subject to
adjustment in certain events as provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event or a Section 13
Event, if the Rights evidenced by this Rights Certificate are beneficially owned
by an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
or, under certain circumstances described in the Rights Agreement, a transferee
of any such Acquiring Person, Associate or Affiliate, such Rights shall become
null and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event or such
Section 13 Event.
In certain circumstances described in the Rights Agreement, the
Rights evidenced hereby may entitle the registered holder thereof to purchase
capital stock of an entity other than the Company or to receive common stock,
cash or other assets, all as provided in the Rights Agreement.
4
This Rights Certificate is subject to all of the terms and
conditions of the Rights Agreement, which terms and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available from the Company upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company under certain
circumstances at its option at a redemption price of US$0.0001 per Right,
payable at the Company's option in cash or in common shares of the Company,
subject to adjustment in certain events as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions that are
integral multiples of one one-thousandth of a share of Preferred Stock), 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 Preferred
Stock or of any other securities that 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 Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement and such holder shall have been entered in the
register of members of the Company.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
5
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of July [ __ ] 2001.
ATTEST: XXXXX LIMITED
By:___________________________ By:___________________________
Name: Name:
Title: Title:
Countersigned:
MELLON INVESTOR SERVICES LLC, as Rights Agent
By:____________________________
Name:
Title:
6
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Rights.)
FOR VALUE RECEIVED _______________________________________________ hereby sells,
assigns and transfers unto __________________________________________ (Please
print name and address of transferee) __________________________________________
the Rights represented by this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint ,
Attorney, to transfer the said Rights on the books of the within-named Company,
with full power of substitution.
Dated: ____________ __, 200_
---------------------------
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 sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _____________ __, 200 ___________________________
Signature
Signature Guaranteed:
--------------------------------------------------------------
NOTICE
The signature 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.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
i
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: Xxxxx Limited
The undersigned hereby irrevocably elects to exercise [ ] Rights
represented by this Rights Certificate to purchase the Units of Preferred Stock
issuable upon the exercise of such Rights (or such other securities of the
Company or of any other person or other property that may be issuable upon the
exercise of such Rights) and requests that certificates for such Units be issued
in the name of and delivered to:
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(Please print name and address)
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Please insert social security
or other identifying number: _______________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
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(Please print name and address)
----------------------------------------------------
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Please insert social security
or other identifying number: _____________________________
Dated: __________ __, 200_
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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 beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as 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 subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated: __________ __, 200 ___________________________
Signature
Signature Guaranteed:
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NOTICE
The signature in the foregoing Election to Purchase and Certificate
must conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On July 12, 2001 the Board of Directors of Xxxxx Limited (the
"COMPANY") authorized and granted one Right for each outstanding common share,
par value US$0.01 per share, of the Company (the "COMPANY COMMON STOCK") to
members of record at the close of business on the date on which the Company
issues shares of Company Common Stock pursuant to its initial public offering
(the "RECORD DATE") and for each share of Company Common Stock issued by the
Company thereafter and prior to the Distribution Date. Each Right entitles the
registered holder, subject to the terms of the Rights Agreement (as defined
below), to purchase from the Company one one-thousandth (a "UNIT") of a Series A
Preference Share, par value US$0.01 per share (the "PREFERRED STOCK"), at a
purchase price of US$29.02 per Unit, subject to adjustment (the "PURCHASE
PRICE"). The Purchase Price is payable in cash or by certified or bank check
payable to the order of the Company or by wire transfer to the account of the
Company (provided a notice of such wire transfer is given by the holder of the
related Right to the Rights Agent). The description and terms of the Rights are
set forth in a Rights Agreement between the Company and Mellon Investor Services
LLC as Rights Agent (the "RIGHTS AGREEMENT").
Copies of the Rights Agreement and the Certificate of Designation
for the Preferred Stock have been filed with the Securities and Exchange
Commission as exhibits to a Registration Statement on Form 8-A. Copies of the
Rights Agreement and the Certificate of Designation are available free of charge
from the Company. This summary description of the Rights and the Preferred Stock
does not purport to be complete and is qualified in its entirety by reference to
all the provisions of the Rights Agreement and the Certificate of Designation,
including the definitions therein of certain terms, which Rights Agreement and
Certificate of Designation are incorporated herein by reference.
THE RIGHTS AGREEMENT
Initially, the Rights will be attached to all outstanding shares of
Company Common Stock and no separate Rights Certificates will be distributed.
The Rights will separate from the Company Common Stock and the "DISTRIBUTION
DATE" will occur upon the earlier of (i) 10 days following a public announcement
(the date of such announcement being the "STOCK ACQUISITION DATE") that a person
or group of affiliated or associated persons (other than the Company, any
subsidiary of the Company or any employee benefit plan of the Company or such
subsidiary) (an "ACQUIRING PERSON") has acquired, obtained the right to acquire,
or otherwise obtained beneficial ownership of 20% or more of the then
outstanding shares of Company Common Stock, and (ii) 10 business days (or such
later date as may be determined by action of the Board of Directors prior to
such time as any person becomes an Acquiring Person) following the commencement
of a tender offer or exchange offer that would result in a person or group
i
beneficially owning 20% or more of the then outstanding shares of Company Common
Stock. Until the Distribution Date, (i) the Rights will be evidenced by Company
Common Stock and will be transferred with and only with the underlying shares of
Company Common Stock, (ii) new Company Common Stock certificates issued after
the Record Date will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any Company Common Stock will
also constitute the transfer of the Rights associated with the Company Common
Stock.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on the third anniversary of the Rights Agreement
(the "FINAL EXPIRATION Date") unless earlier redeemed by the Company as
described below. The Final Expiration Date can be extended by the affirmative
vote of at least 66% of the shares voting on the resolution to do so.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Company Common Stock as of
the close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving or continuing
corporation in a merger or amalgamation with an Acquiring Person and shares of
Company Common Stock shall remain outstanding, (ii) a Person becomes an
Acquiring Person, (iii) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights Agreement, or (iv) during
such time as there is an Acquiring Person, an event occurs that results in such
Acquiring Person's ownership interest being increased by more than 1% (e.g., by
means of a recapitalization) (each such event being a "SECTION 11(A)(II)
EVENT"), then, in each such case, each holder of a Right will thereafter have
the right to receive, upon exercise, Units of Preferred Stock (or, in certain
circumstances, Company Common Stock, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right. The
exercise price is the Purchase Price multiplied by the number of Units of
Preferred Stock issuable upon exercise of a Right prior to the events described
in this paragraph. Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or amalgamation (other than a merger or
amalgamation described in the preceding paragraph) or other business combination
transaction and the Company is not the surviving or continuing corporation, (ii)
any Person consolidates, amalgamates or merges with the Company and all or part
of the Company Common Stock is converted or exchanged for securities, cash or
property of any other Person or (iii) 50% or more of the Company's assets or
earning power is sold or transferred, then each holder of a Right (except Rights
which previously have been voided as described above) shall thereafter have the
right to receive, upon exercise, common stock of the ultimate parent of the
Acquiring Person having a value equal to two times the exercise price of the
Right.
The Purchase Price payable, and the number of Units of Preferred
Stock issuable, upon exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in
the event of a bonus issue on, or a subdivision, combination or reclassification
of, the Preferred Stock, (ii) if holders of the Preferred Stock are granted
certain rights or warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of the Preferred Stock, or
(iii) upon the distribution to the holders of the Preferred Stock of evidences
of indebtedness, cash or assets (excluding regular quarterly cash dividends) or
of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
At any time prior to the earlier of (i) ten business days following
the Stock Acquisition Date or (ii) the expiration of the Rights, a majority of
the Company's Board of Directors may redeem the Rights in whole, but not in
part, at a price of US$0.0001 per Right (subject to adjustment in certain
events) (the "REDEMPTION PRICE"), payable, at the election of such majority of
the Company's Board of Directors, in cash or shares of Company Common Stock.
Immediately upon the action of a majority of the Company's Board of Directors
ordering the redemption of the Rights, the Rights will terminate and the only
remaining right of the holders of Rights will be to receive the Redemption
Price.
The Board of Directors, at its option, may, at anytime after a
person becomes an Acquiring Person, exchange each Right for (i) one Unit of
Preferred Stock or (ii) such number of Units of Preferred Stock as will equal
(x) the difference between the aggregate market price of the number of Units of
Preferred Stock to be received upon a Section 11(a)(ii) Event and the purchase
price set forth in the Rights Agreement, divided by (y) the market price per
Unit of Preferred Stock upon a Section 11(a)(ii) Event.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Any of the provisions of the Rights Agreement may be amended without
the approval of the holders of Company Common Stock at any time prior to the
Distribution Date, except that any reduction of the 20% thresholds described
above or any extension of the Final Expiration Date requires the affirmative
vote of at least 66% of the shares voting on a resolution to do so. After the
Distribution Date, the provisions of the Rights Agreement may be amended in
order to cure any ambiguity, defect or inconsistency, to make changes that do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement, except that any extension of the Final Expiration Date
requires the affirmative vote of at least 66% of the shares voting on a
resolution to do so and no amendment to adjust the time period governing
redemption can be made at such time as the Rights are not redeemable.
DESCRIPTION OF PREFERRED STOCK
The Units of Preferred Stock that may be acquired upon exercise of
the Rights will be nonredeemable and subordinate to any other preferred shares
that may be issued by the Company.
Each Unit of Preferred Stock will have a minimum preferential
quarterly dividend of US$0.01 per Unit or any higher per share dividend declared
on the Company Common Stock.
In the event of liquidation, the holder of a Unit of Preferred Stock
will receive a preferred liquidation payment equal to the greater of US$0.01 per
Unit and the per share amount paid in respect of a share of Company Common
Stock.
Each Unit of Preferred Stock will have one vote, voting together
with the Company Common Stock.
In the event of any merger, amalgamation or consolidation or other
transaction in which shares of Company Common Stock are exchanged, each Unit of
Preferred Stock will be entitled to receive the per share amount paid in respect
of each share of Company Common Stock.
The rights of holders of the Preferred Stock to dividends,
liquidation and voting, and in the event of mergers, amalgamations and
consolidations, are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right is expected to approximate the economic
value of one share of Company Common Stock.
EXHIBIT C
CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
SERIES A PREFERENCE SHARES
Set out below are the voting powers, designation, relative,
participating, optional and other special rights, preferences and
qualifications, limitations and restrictions of the series of preference shares
of Xxxxx Limited (the "COMPANY"), par value US $0.01 per share, designated as
Series A Preference Shares (the "SERIES A PREFERENCE SHARES") approved by a
resolution of the board of directors of the Company (the "BOARD OF DIRECTORS")
on July 12, 2001:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Preference Shares" and the number of shares
constituting such series shall be 240,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS. (A) Subject to the prior and
superior rights of the holders of any shares of any other series of preference
shares ("PREFERENCE Shares") or any other class of shares of the Company ranking
prior and superior to the Series A Preference Shares with respect to dividends,
each holder of one one-thousandth (1/1,000) of a Series A Preference Share (a
"UNIT") shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, (i) quarterly
dividends payable in cash on the last day of March, June, September and December
in each year (each such date being a "QUARTERLY DIVIDEND PAYMENT DATE"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of such Unit, in an amount per Unit (rounded to the nearest cent) equal to the
greater of (a) US$0.01 or (b) subject to the provision for adjustment
hereinafter set forth, the aggregate per share amount of all cash dividends
declared on the common shares of the Company, par value US$0.01 per share (the
"COMMON SHARES"), since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of a Unit, and (ii) subject to the provision for adjustment
hereinafter set forth, quarterly distributions (payable in kind) on each
Quarterly Dividend Payment Date in an amount per Unit equal to the aggregate per
share amount of all non-cash dividends, bonus issues or other distributions
(other than a dividend or bonus issue payable in Common Shares or a subdivision
of the outstanding Common Shares, by reclassification or otherwise) declared on
the Common Shares since the immediately preceding Quarterly Dividend Payment
Date, or with respect to the first Quarterly Dividend Payment Date, since the
first issuance of a Unit. In the event that the Company shall at any time after
July 12, 2001 (the "RIGHTS DECLARATION DATE") (i) declare any dividend or bonus
issue on outstanding Common Shares payable in Common Shares, (ii) subdivide
outstanding Common Shares or (iii) combine or consolidate outstanding Common
Shares into a smaller number of shares, then in each such case the amount to
which the holder of a Unit was entitled immediately prior to such event
pursuant to the preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which shall be the number of Common Shares that
are outstanding immediately after such event and the denominator of which shall
be the number of Common Shares that were outstanding immediately prior to such
event.
(B) The Company shall declare a dividend or distribution on Units as
provided in paragraph (A) above immediately after it declares a dividend or
distribution on the Common Shares (other than a dividend or bonus issue payable
in Common Shares); PROVIDED, HOWEVER, that, in the event no dividend or
distribution shall have been declared on the Common Shares during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of US$0.01 per Unit shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding Unit from the Quarterly Dividend Payment Date next preceding the
date of issuance of such Unit, unless the date of issuance of such Unit is prior
to the record date for the first Quarterly Dividend Payment Date, in which case,
dividends on such Unit shall begin to accrue from the date of issuance of such
Unit, or unless the date of issuance is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of Units entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on Units in an amount less than the aggregate
amount of all such dividends at the time accrued and payable on such Units shall
be allocated pro rata on a Unit-by-Unit basis among all Units at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of Units entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of Units shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each Unit shall entitle the holder thereof to one vote on all matters submitted
to a vote of the shareholders of the Company. In the event the Company shall at
any time after the Rights Declaration Date (i) declare any dividend or bonus
issue on outstanding Common Shares payable in Common Shares, (ii) subdivide
outstanding Common Shares or (iii) combine or consolidate the outstanding Common
Shares into a smaller number of shares, then in each such case the number of
votes per Unit to which holders of Units were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction the numerator
of which shall be the number of Common Shares outstanding immediately after such
event and the denominator of which shall be the number of Common Shares that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
Units and the holders of Common Shares shall vote together as one class on all
matters submitted to a vote of shareholders of the Company.
(C) Except as set forth herein or as required by law, holders of
Units shall have no special voting rights and their consents shall not be
required (except to the extent they are entitled to vote with holders of Common
Shares as set forth herein) for taking any corporate action.
Section 4. CERTAIN RESTRICTIONS. (A) Whenever quarterly dividends or
other dividends or distributions payable on Units as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding Units shall have been
paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or repurchase or otherwise acquire for consideration any junior
shares;
(ii) declare or pay dividends on or make any other distributions on
any parity shares, except dividends paid ratably on Units and all such
parity shares on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of such Units and all such
shares are then entitled;
(iii) redeem or repurchase or otherwise acquire for consideration
any parity shares; PROVIDED, HOWEVER, that the Company may at any time
redeem, repurchase or otherwise acquire any such parity shares in exchange
for any junior shares; or
(iv) repurchase or otherwise acquire for consideration any Units,
except in accordance with a repurchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such Units.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of the Company unless
the Company could, under paragraph (A) of this Xxxxxxx 0, xxxxxxxxxx or
otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any Units repurchased or otherwise
acquired by the Company in any manner whatsoever shall be cancelled upon the
acquisition thereof. All such Units shall, upon their cancellation, become
authorized but unissued Units and may be reissued as part of a new series of
Preference Shares to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
no distribution shall be made (i) to the holders of junior shares unless the
holders of Units shall have received, subject to adjustment as hereinafter
provided in paragraph (B), the greater of either (a) US$0.01 per Unit plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not earned or declared, to the date of such payment, or (b) the amount equal
to the aggregate per share amount to be distributed to holders of Common Shares,
or (ii) to the holders of parity shares, unless simultaneously therewith
distributions are made ratably on Units and all other such parity shares in
proportion to the total amounts to which the holders of Units are entitled under
clause (i)(a) of this sentence and to which the holders of such parity shares
are entitled, in each case upon such liquidation, dissolution or winding up.
(B) In the event the Company shall, at any time after the Rights
Declaration Date, (i) declare any dividend or bonus issue on outstanding Common
Shares payable in Common Shares, (ii) subdivide outstanding Common Shares, or
(iii) combine or consolidate outstanding Common Shares into a smaller number of
shares, then in each such case the aggregate amount to which holders of Units
were entitled immediately prior to such event pursuant to clause (i)(b) of
paragraph (A) of this Section 6 shall be adjusted by multiplying such amount by
a fraction the numerator of which shall be the number of Common Shares that are
outstanding immediately after such event and the denominator of which shall be
the number of Common Shares that were outstanding immediately prior to such
event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Company shall
enter into any consolidation, merger, amalgamation, combination or other
transaction in which the Common Shares are exchanged for or converted into other
shares, cash and/or any other property, then in any such case Units shall at the
same time be similarly exchanged for or converted into an amount per Unit
(subject to the provision for adjustment hereinafter set forth) equal to the
aggregate amount of shares, cash and/or any other property (payable in kind), as
the case may be, into which or for which each Common Share is converted or
exchanged. In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend or bonus issue on outstanding Common
Shares payable in Common Shares, (ii) subdivide outstanding Common Shares, or
(iii) combine or consolidate outstanding Common Shares into a smaller number of
shares, then in each such case the amount set forth in the immediately preceding
sentence with respect to the exchange or conversion of Units shall be adjusted
by multiplying such amount by a fraction the numerator of which shall be the
number of Common Shares that are outstanding immediately after such event and
the denominator of which shall be the number of Common Shares that were
outstanding immediately prior to such event.
Section 8. REDEMPTION. The Units shall not be redeemable.
Section 9. RANKING. The Units shall rank junior to all other series
of the Preference Shares and to any other class of preference shares that
hereafter may be issued by the Company as to the payment of dividends and the
distribution of assets, unless the terms of any such series or class shall
provide otherwise.
Section 10. AMENDMENT. The rights of the Series A Preference Shares
shall not hereafter be amended, either directly or indirectly, or through
merger, consolidation or amalgamation with any other company or companies
without the affirmative vote of the holders of a majority or more of the
outstanding Units, voting separately as a class.
Section 11. FRACTIONAL SHARES. The Series A Preference Shares may be
issued in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preference Shares.
Section 12. CERTAIN DEFINITIONS. As used herein with respect to the
Series A Preference Shares, the following terms shall have the following
meanings:
(A) The term "COMMON SHARES" shall mean the class of shares
designated as common shares, par value US $0.01 per share, of the Company at the
date of the creation of the Series A Preference Shares by resolution of the
Board of Directors or any other class of shares resulting from successive
changes or reclassification of such common shares.
(B) The term "JUNIOR SHARES" (i) as used in Section 4, shall mean
the Common Shares and any other class or series of shares of the Company
hereafter authorized or issued over which the Series A Preference Shares have
preference or priority as to the payment of dividends and (ii) as used in
Section 6, shall mean the Common Shares and any other class or series of shares
of the Company over which the Series A Preference Shares have preference or
priority in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
(C) The term "PARITY SHARES" (i) as used in Section 4, shall mean
any class or series of shares of the Company hereafter authorized or issued
ranking PARI PASSU with the Series A Preference Shares as to the payment of
dividends and (ii) as used in Section 6, shall mean any class or series of
shares ranking PARI PASSU with the Series A Preference Shares in the
distribution of assets on any liquidation, dissolution or winding up of the
Company.
