EX.1
NUCO2 INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
RIGHTS AGREEMENT
Dated as of March 27, 2003
RIGHTS AGREEMENT
Rights Agreement, dated as of March 27, 2003 (the "Agreement"),
between NuCo2 Inc., a Florida corporation (the "Company"), and Continental Stock
Transfer & Trust Company (the "Rights Agent").
PREAMBLE
The Board of Directors of the Company has authorized and declared a
dividend of one preference share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding on April 8, 2003 (the
"Record Date"), each Right representing the right to purchase one one-hundredth
of a Preference Share (as hereinafter defined), upon the terms and subject to
the conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earlier of the Distribution Date and
the Expiration Date (as such terms are hereinafter defined).
The Board of Directors of the Company has considered whether
approval of this Agreement and the distribution of the Rights are in the best
interests of the Company and its shareholders and has also considered the
effects upon the employees of the Company and its subsidiary and the communities
and society in which the Company and its subsidiary operate and all other
pertinent factors.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, and intending to be legally bound hereby, the
parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, after the date hereof,
shall become the Beneficial Owner (as such term is hereinafter defined) of 20%
or more of the Common Shares of the Company then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary (as such term is hereinafter
defined) of the Company, (iii) any employee benefit plan of the Company or of
any Subsidiary of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan, (iv) any Person who falls within the
definition of an Acquiring Person solely as a result of a reduction in the
number of Common Shares outstanding due to the repurchase of Common Shares by
the Company unless and until such Person, after becoming aware that such Person
has become an Acquiring Person as a result of such repurchase of Common Shares
by the Company, acquires beneficial ownership of any additional Common Shares,
and (v) any Person who qualifies as an Acquiring Person inadvertently, and who
divests as promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an Acquiring Person.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(e) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) that such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) that such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing and other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, (1) securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for payment, purchase or
exchange or (2) securities issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event, or (3) securities issuable 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(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
any security pursuant to this clause (B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
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(f) "Agreement" shall have the meaning set forth in the preamble
hereof.
(g) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(h) "Close of Business" on any given date shall mean 5:00 P.M.,
Eastern time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(i) "Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $.001 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.
(j) "Company" shall have the meaning set forth in the preamble
hereof.
(k) "Current Value" shall have the meaning set forth in Section
11(a)(ii) hereof.
(l) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(n) "Expiration Date" shall have the meaning set forth in Section 7
hereof.
(o) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(p) "Nasdaq" shall have the meaning set forth in Section 11(a)(i)
hereof.
(q) "Original Rights" shall have the meaning set forth in Section
1(e)(ii) hereof.
(r) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(s) "Preference Shares" shall mean shares of Series C Participating
Preference Stock, without par value, of the Company having the rights and
preferences set forth in the Form of Articles of Amendment attached to this
Agreement as Exhibit A.
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(t) "Purchase Price" shall have the meaning set forth in Section 4
hereof, as the same may be adjusted from time to time in accordance with the
terms of this Agreement.
(u) "Record Date" shall have the meaning set forth in the preamble
hereof.
(v) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(w) "Right" shall have the meaning set forth in the preamble hereof.
(x) "Rights Agent" shall have the meaning set forth in the preamble
hereof.
(y) "Rights Certificate" shall have the meaning set forth in Section
3 hereof.
(z) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(aa) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(bb) "Section 13 Event" shall have the meaning set forth in Section
13(d) hereof.
(cc) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(dd) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(ee) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(ff) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(gg) "Summary of Rights" shall have the meaning set forth in Section
3 hereof.
(hh) "Trading Day" shall have the meaning set forth in Section 11
hereof.
(ii) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Certain additional terms used wholly within a subsequent Section of
this Agreement shall have the meaning given to them in the relevant Section of
this Agreement for purposes of such Section.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
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Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issuance of Rights Certificates. (a) Until the earlier of
(i) the tenth Business Day after the Shares Acquisition Date or if the tenth day
after the Shares Acquisition Date occurs before the Record Date, the close of
business on the Record Date or (ii) the tenth Business Day (or such later date
as may be determined by action of the Board of Directors of the Company after
the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such plan)
to commence, a tender or exchange offer the consummation of which would result
in any Person becoming an Acquiring Person, in such instance, unless the Board
of Directors of the Company has made the determination referred to in Section
11(a)(2) (including any such date that is after the date of this Agreement and
prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof (which certificates
shall also be deemed to be Rights Certificates) and not by separate Rights
Certificates, and (y) the right to receive Rights Certificates will be
transferable only in connection with the transfer of the underlying Common
Shares. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Rights Certificate, in
substantially the form of Exhibit B hereto (a "Rights Certificate"), evidencing
one Right for each Common Share so held, subject to adjustment as provided
herein. In the event an adjustment in the number of Rights per Common Share has
been made pursuant to Section 11(q) hereof, at the time of distribution of the
Rights Certificate, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
(b) As soon as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preference Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, or issued subsequent to the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date, the Rights
will be evidenced by such certificates for the Common Shares and the registered
holders of the Common Shares shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration
Date, the transfer of any certificate for Common Shares in respect of which
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Rights have been issued, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) Rights shall be issued in respect of all Common Shares that are
issued (whether originally issued or delivered from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date. Certificates representing such Common Shares shall also be
deemed to be Certificates for the associated Rights and shall bear the following
legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights
Agreement between NuCo2 Inc. and Continental Stock
Transfer & Trust Company, dated as of March 27, 2003
(the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of NuCo2 Inc.
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. NuCo2 Inc. will mail to the holder of this
certificate a copy of the Rights Agreement as in effect on
the date of mailing without charge after receipt of a
written request therefor. Under certain circumstances, as
set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as defined
in the Rights Agreement), whether currently held by or
behalf of such Person or any subsequent holder may become
null and void. The Rights shall not be exercisable by a
holder in any jurisdiction where the requisite
qualification for the issuance to such holder of the
Rights in such jurisdiction shall not have been obtained
or obtainable.
(d) With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares that are no longer outstanding.
Section 4. Form of Rights Certificates. (a) The Rights Certificates
(and the forms of election to purchase Preference Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or automated quotation system on which the Rights may from time to time
be traded, or to conform to usage. Subject to the provisions of Sections 11 and
22 hereof, the Rights Certificates shall entitle the holders thereof to purchase
such number of one one-hundredths of a Preference Share as shall be set forth
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therein at the price per one one-hundredth of a Preference Share set forth
therein (such exercise price per one-hundredth of a Preference Share, as
adjusted pursuant to this Agreement, the "Purchase Price"), but the amount and
type of securities, cash or other assets that may be acquired upon exercise of
each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights that are beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing oral or written plan, agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board of Directors
of the Company has determined is part of an oral or written plan, agreement,
arrangement or understanding that has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who 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 represented hereby may become null and
void in the circumstances specified in Section 7(e) of the Rights
Agreement.
The absence of the foregoing legend on any Rights Certificates shall in no way
affect any of the other provisions of this Agreement, including without
limitation the provisions of Section 7(e).
Section 5. Countersignature and Registration. (a) The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents,
or its Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
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(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Certificates
(other than Rights Certificates representing Rights that have become void
pursuant to Section 7(e) hereof or that have been exchanged pursuant to Section
24 hereof) may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder to
purchase (or receive) a like number of one one-hundredths of a Preference Share,
or other securities, cash or other assets, as the case may be, as the Rights
Certificate or Rights Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Rights Certificates shall make such request
in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Rights Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent. 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 signed the certificate contained 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) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Sections
4(b), 7(e) and 14 hereof, countersign and deliver to the person entitled thereto
a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment from the holder of the Right of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will make and deliver a new
Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Sections 9(d), 11(a)(iii) and 23(a) hereof) in whole
or in part at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the principal office
or offices of the Rights Agent designated for such purpose, together with
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payment of the aggregate Purchase Price (except as provided in Section 11(p)
hereof) with respect to the total number of one one-hundredths of a Preference
Share (or other securities, cash or other assets, as the case may be) as to
which such surrendered Right are then exercisable (except as provided in Section
11(p) hereof), at or prior to the earliest of (i) 5:00 P.M., New York time, on
March 27, 2008 (the "Final Expiration Date"), (ii) the consummation of a
transaction contemplated by Section 13(d) hereof, or (iii) the time at which the
Rights are redeemed or terminated as provided in Section 23 hereof (the earliest
of (i), (ii) and (iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a Preference
Share purchasable pursuant to the exercise of a Right shall initially be $40,
and shall be subject to adjustment from time to time as provided in Sections 11
or 13(a) hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per Common Share (or other securities, cash or other assets, as the case
may be) to be purchased as set forth below and an amount equal to any applicable
transfer tax, the Rights Agent shall, subject to Section 20(k) and Section 14(b)
hereof, thereupon promptly (i)(A) requisition from any transfer agent of the
Preference Shares (or make available, if the Rights Agent is the transfer agent
for the Preference Shares) certificates for the total number of Preference
Shares to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit some or all of the total number of Preference Shares
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of Preference Shares as are to be purchased (in which case certificates
for the Preference Shares represented by such receipts shall be deposited by the
transfer agent with the depositary agent and the Company will direct the
depositary agent to comply with such request), (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) after receipt thereof, deliver
such cash, if any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) may be made, at the election of the
holder of the Rights Certificate, (x) in cash or by certified bank check or
money order payable to the order of the Company or (y) by delivery of Rights if
and to the extent authorized by Section 11(p) hereof. In the event that the
Company is obligated to issue other securities of the Company (including one
one-hundredths of Preference Shares), pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all of the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
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holder of such Rights Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
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) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing oral or written plan, agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of an oral or
written plan, agreement, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Rights Certificates or any
other Person as a result of its failure to make any determinations with respect
to an Acquiring Person or any of its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) 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 to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preference Shares;
Registration of Securities. (a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and unissued
Preference Shares or any Preference Shares held in its treasury, the number of
Preference Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7. The Company covenants and
10
agrees that it will take all such action as may be necessary to ensure that all
Preference Shares (and/or other securities) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preference Shares or
other securities (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(b) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges that
may be payable in respect of the issuance or delivery of the Rights Certificates
or of any Preference Shares (or Common Shares and/or other securities as the
case may be) upon the exercise of Rights. The Company shall not, however, be
required (i) to pay any transfer tax that may be payable in respect of any
transfer or delivery of Rights Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preference
Shares in a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or (ii) to issue or to
deliver any certificates or depositary receipts for Preference Shares (or Common
Shares and/or other securities as the case may be) in a name other than that of
the registered holder upon the exercise of any Rights until 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 reasonable satisfaction that no such tax is due.
(c) The Company covenants and agrees that, so long as Preference
Shares or other securities issuable and deliverable upon the exercise of Rights
may be listed on any national securities exchange or automated quotation system,
it shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all securities reserved for issuance to be listed on such
exchange or automated quotation system upon official notice of issuance upon
such exercise.
(d) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, a registration statement under the Act, with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as possible after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until no longer
required to do so under the Act with respect to securities purchasable upon
exercise of the Rights. The Company will also take all such action as may be
required or is appropriate under the securities or blue sky laws of such
jurisdictions as may be necessary or appropriate with respect to the securities
purchasable upon the exercise of the Rights. The Company may temporarily suspend
for a period not to exceed 120 days after the date set forth in clause (i) of
the first sentence of this Section 9(d), following the Distribution Date, the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension of
exercisability of Rights referred to in this paragraph, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company shall determine
that a registration statement is required following the Distribution Date, the
11
Company may temporarily suspend the exercisability of the Rights until such time
as a registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
have not been obtained, the exercise thereof shall not be permitted under
applicable law, or a registration statement shall not have been declared
effective.
Section 10. Preference Shares Record Date. Each person in whose name
any certificate for Preference Shares (or other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Preference Shares (and/or other securities) represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preference Shares (and/or other securities) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preference Shares (and/or other securities) transfer books of the
Company are open. Prior to the exercise 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 shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of Preference
Shares 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 Preference Shares payable in
Preference Shares, (B) subdivide the outstanding Preference Shares, (C) combine
the outstanding Preference Shares into a smaller number of Preference Shares or
(D) issue any shares of its capital stock in a reclassification of the
Preference Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and Section
7(e) hereof, the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock issuable on
such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive upon payment of the
Purchase Price then in effect the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date and
at a time when the Preference Shares transfer books of the Company were open,
such holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
12
(ii) In the event any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan or employee stock plan of the Company
or of any Subsidiary of the Company, any dividend reinvestment plan of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) alone or together with
its Affiliates and Associates, shall, at any time after the date hereof, become
an Acquiring Person, unless the event causing the Person to become an Acquiring
Person is a Section 13 Event, or is an acquisition of Common Shares pursuant to
a tender offer or an exchange offer for all outstanding Common Shares at a price
and on terms determined by the Board of Directors of the Company, after
receiving advice from one or more investment banking firms, to be (a) at a price
which is fair to the shareholders and (b) otherwise in the best interests of the
Company after taking into account all other factors which the Board of Directors
deems relevant, then, promptly following the first occurrence of such event
(such event, 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)
hereof) 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 a number of Preference Shares, such number of Common Shares as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the number of one one-hundredths of a Preference Share for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (which, following such first occurrence,
shall thereafter be referred to as the "Purchase Price" for each Right and for
purposes of this Agreement) by 50% of the current per share market price
(determined pursuant to Section 11(d) hereof) per Common Share on the date of
such first occurrence (such number of Common Shares, the "Adjustment Shares").
(iii) In the event that the number of Common Shares that are
authorized 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 Section 11(a)(ii), 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, the "Spread"), and (B) with respect to
each Right, make adequate provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Shares or other equity securities of the Company
(including, without limitation, preferred shares or one one-hundredths of
Preference Shares, which the Board of Directors of the Company has deemed to
have the same value as Common Shares (such shares, "common share equivalents"),
(4) debt securities of the Company, (5) other assets, or (6) any combination of
the foregoing, having an aggregate value determined by the Board of Directors
equal to the Current Value; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If the Board of Directors of the Company determines in good
faith that it is likely that sufficient additional Common Shares could be
13
authorized for issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that action should be taken
pursuant to the first and/or second sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares, to take any action, to
obtain any required regulatory approval and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. The Company shall make a public announcement when the
exercisability of the Rights has been temporarily suspended, and again when such
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d) hereof) per Common Share on the Section
11(a)(ii) Trigger Date and the value of any common share equivalents shall be
deemed to have the same value as the Common Shares on such date.
(iv) If the rules of the national securities exchange, registered as
such pursuant to Section 6 of the Exchange Act, or of the national securities
association, registered as such pursuant to Section 15A of the Exchange Act, on
which the Common Shares are principally traded would prohibit such exchange or
association from listing or continuing to list, or from authorizing for or
continuing quotation and/or transaction reporting through an inter-dealer
quotation system, the Common Shares or other equity securities of the Company if
the Rights were to be exercised for Common Shares in accordance with
subparagraph (ii) of this Section 11(a) because such issuance would nullify,
restrict or disparately reduce the per share voting rights of holders of Common
Shares or for any other reason, the Company shall: (A) determine the Spread and
(B) with respect to each Right, make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2)
equity securities of the Company, including, without limitation, "common stock
equivalents", other than securities which would have the effect of nullifying,
restricting or disparately reducing the per share voting rights of holders of
Common Shares or otherwise cause the prohibition described above, (3) debt
securities of the Company, (4) other assets or (5) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the Company to
be equal to the Current Value; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the Section 11(a)(ii) Trigger Date, then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, cash having an aggregate value
equal to the Spread. To the extent that the Company determines that an action
needs to be taken pursuant to the first sentence of this Section 11(a)(iv), the
14
Company (x) shall provide, subject to Section 7(e), that such action shall apply
uniformly to all outstanding Rights and (y) may suspend the exercisability of
the Rights, but not longer than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. The Company
shall make a public announcement when the exercisability of the Rights has been
temporarily suspended, and again when such suspension is no longer in effect.
For purposes of this Section 11(a)(iv), the value of the Common Shares shall be
the current per share market price (as determined pursuant to Section 11(d)
hereof) per Common Share on the Section 11(a)(ii) Trigger Date and the value of
any "common share equivalent" shall be deemed to have the same value as the
Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preference
Shares entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preference Shares (or shares having
the same rights, privileges and preferences as the Preference Shares
("equivalent preference shares")) or securities convertible into Preference
Shares or equivalent preference shares at a price per Preference Share or
equivalent preference share (or having a conversion price per share, if a
security convertible into Preference Shares or equivalent preference shares)
less than the then current per share market price of the Preference Shares (as
defined in Section 11(d) hereof) 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 number of Preference Shares outstanding on such
record date plus the number of Preference Shares which the aggregate offering
price of the total number of Preference Shares and/or equivalent preference
shares so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of Preference Shares
outstanding on such record date, plus the number of additional Preference Shares
and/or equivalent preference shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Preference
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of the Preference Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, (other than a regular
quarterly cash dividend paid out of the earnings or retained earning of the
Company), assets (other than a dividend payable in Preference Shares, but
including any dividend payable in capital stock other than Preference Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date, by a fraction, the numerator of which shall be the current per
share market price of the Preference Shares (as determined pursuant to Section
11(d) hereof) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preference Share and the denominator of
which shall be such current per share market price of the Preference Shares (as
determined pursuant to Section 11(d) hereof); provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
15
than the aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current per share
market price" of any security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "current per share
market price" of such Security on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the ten (10) consecutive
Trading Days immediately following such date; provided, however, that in the
event that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such Security of (A)
a dividend or distribution on such Security payable in shares of such Security
or securities convertible into such shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such Security and prior to the
expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is 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 National Association of Securities Dealers, Inc. Automated
Quotations System ("Nasdaq") or such other system then in use, or, if on any
such date the Security is 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 Security selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in shares of
such Security, the fair value of such shares on such date is determined in good
faith by the Board of Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities exchange or automated
quotation system on which the Security is listed or admitted to trading is open
for the transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange or automated quotation system, a
Business Day. If shares of such Security are not publicly held or not so listed
or traded, "current per share market price" shall mean the fair value per share
17
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preference Shares shall be determined in accordance
with the method set forth above in Section 11(d)(i) (other than the last
sentence thereof). If the current per share market price Preference Shares
cannot be determined in accordance with the method above or if the Preference
Shares are not publicly held or listed or traded in a manner described in
Section 11(d)(i), the "current Preference Share market price" of Preference
Shares shall be conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to the Common Shares occurring after the date
of this Agreement) multiplied by the current per share market price of the
Common Shares. If neither the Common Stock nor the Preference Shares are
publicly held or so listed or traded, "current per share market price" of
Preference Shares shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes. For all purposes of this Agreement, the "current per share market
price" of one one-hundredths of a Preference Share shall be equal to the
"current per share market price" of one Preference Share divided by 100.
(e) Anything to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 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 one-millionth of a Preference Share or
one ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction that mandates such adjustment or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
Preference Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preference Shares contained in Section 11, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preference Shares shall apply
on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preference Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have made the election provided below
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
17
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
Preference Share (calculated to the nearest one one-millionth of a Preference
Share) obtained by (i) multiplying (x) the number of one one-hundredths of a
Preference Share covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of one one-hundredths of a Preference Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one one-hundredths of a
Preference Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth of a Preference Share) 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 (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be 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 of the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a Preference Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preference Share that were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the par value, if any, of the
Preference Shares 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 fully paid and
nonassessable Preference Shares at such adjusted Purchase Price.
18
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Preference Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Preference Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
additional 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 it in their good faith judgment of the Board of Directors of the
Company shall determine to be advisable in order that (i) any consolidation or
subdivision of the Preference Shares, (ii) issuance wholly for cash of any
Preference Shares at less than the current market price, (iii) issuance wholly
for cash of Preference Shares or securities that by their terms are convertible
into or exchangeable for Preference Shares, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preference Shares shall not be
taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger 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 or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) In the event that the Rights become exercisable following a
Section 11(a)(ii) Event, the Company, by action of the Board of Directors of the
Company, may permit the Rights, subject to Section 7(e) hereof, to be exercised
19
for 50% of the Common Shares (or cash or other securities or assets to be
substituted for the Adjustment Shares pursuant to Section 11(a)(iii)) that would
otherwise be purchasable under Section 11(a), in consideration of the surrender
to the Company of the Rights so exercised and without other payment of the
Purchase Price. Rights exercised under this Section 11(p) shall be deemed to
have been exercised in full and shall be canceled.
(q) Anything in this Agreement to the contrary notwithstanding, in
the event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) subdivide, combine or consolidate
the Common Shares (by reclassification or otherwise than by payment of dividends
in Common Shares) into a greater or lesser number of Common Shares, then in any
such case (A) the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event shall equal the
result obtained by multiplying the number of Rights associated with each Common
Share immediately prior to such event by a fraction, the numerator of which is
the number of Common Shares outstanding immediately prior to the occurrence of
such event and the denominator of which is the number of Common Shares
outstanding immediately following the occurrence of such event. The adjustments
provided for in this Section 11(q) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preference Shares a copy of such certificate and (c) if a
Distribution Date has occurred, mail a brief summary thereof to each holder of a
Rights Certificate (or, if prior to the Distribution Date, each holder of a
certificate representing Common Shares) in accordance with Section 26 hereof.
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Shares Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding Common Shares shall be
changed 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), in one
transaction or a series of related transactions, assets, or earning power
aggregating more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons (other
20
than the Company or any Subsidiary of the Company in one or more transactions
each of which complies with Section 11(o) hereof), then, and in each such case
and except as contemplated by Section 13(d), proper provision shall be made so
that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid, nonassessable and
freely tradable common stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one-one hundredths
of a Preference Share for which a Right is exercisable by such holder
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 Purchase Price in effect immediately prior to the
first occurrence of such Section 11(a)(ii) Event by the number of one
one-hundredths of a Preference Share for which a Right was exercisable
immediately prior to such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this Agreement) by
(2) 50% of the current per share market price (determined pursuant to Section
11(d)(i) hereof with respect to the Common Shares) per Common Share 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 thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares) in
connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such merger
or consolidation, and if no securities are so issued, the Person that is the
other party to such merger or consolidation; and
21
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets, cash flow or earning power transferred pursuant
to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person, and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have so registered, "Principal Party" shall refer to whichever of
Persons is the issuer of the Common Shares having the greatest aggregate market
value, or (3) in case such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in such joint
venture as if such party were a "subsidiary" of both or all of such joint
ventures and the Principal Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, 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, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in Section 13(a), the
Principal Party at its own expense will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Expiration Date; and
(ii) take all such other action as may be necessary to enable the
Principal Party to issue the securities purchasable upon exercise of the Rights,
including but not limited to the registration or qualification of such
securities under all requisite securities laws of jurisdictions of the various
states and the listing of such securities on such exchanges and trading markets
as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
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
22
Rights that have not theretofore been exercised shall thereafter become
exercisable solely in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section
13 (other than this Section 13(d)) shall not be applicable to, and the term
"Section 13 Event" shall not include, a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired Common Shares pursuant to a tender offer or
exchange offer for all outstanding Common Shares with respect to which the Board
of Directors made the determination referred to in Section 11(a)(ii) hereof (or
a wholly owned Subsidiary of any such Person or Persons), (ii) the price per
Common Share offered in such transaction is not less than the price per Common
Share paid to all holders of Common Shares whose shares were purchased pursuant
to such tender offer or exchange offer and (iii) the form of consideration being
offered to the remaining holders of Common Shares pursuant to such transaction
is the same as the form of consideration paid pursuant to such tender or
exchange offer. Upon consummation of such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
(e) In the event that the Rights become exercisable under Section 13(a)
(except as provided in Section 13(d)), the Company, by action of the Board of
Directors of the Company, may agree with the Principal Party that the Principal
Party shall permit the Rights to be exercised for 50% of the Common Shares of
the Principal Party that would otherwise be purchasable under Section 13(a), in
consideration of the surrender to the Principal Party, as the successor to the
Company under Section 13(a)(ii), of the Rights so exercised and without other
payment of the Purchase Price. Rights exercised under this Section 13(e) shall
be deemed to have been exercised in full and shall be canceled.
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 registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole Right.
For the purposes of this Section 14(a), the current 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 the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed 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 Nasdaq 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 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
the Board of Directors of the Company shall be used.
23
(b) The Company shall not be required to issue fractions of Preference
Shares (other than fractions that are integral multiples of one one-hundredth of
a Preference Share) upon exercise of the Rights or to distribute certificates
that evidence fractional Preference Shares (other than fractions that are
integral multiples of one one-hundredth of a Preference Share). Fractions of
Preference Shares in integral multiples of one one-hundredth of a Preference
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preference Shares
represented by such depositary receipts. In lieu of fractional Preference Shares
that are not integral multiples of one one-hundredth of a Preference Share, the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preference Share. For the purposes
of this Section 14(b), the current market value of one Preference Share shall be
the closing price of a Preference Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise, however, that if the closing price of the Preference
Shares cannot be so determined, the closing price of the Preference Shares for
such Trading Day shall be conclusively deemed to be an amount equal to the
closing price of the Common Shares (determined pursuant to the second sentence
of Section 11(d)(i) hereof) for such Trading Day multiplied by 100 (as such
number may be appropriately adjusted to reflect events such as stock splits,
stock dividends, recapitalizations or similar transactions relating to the
Common Shares occurring after the date of this Agreement.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of Common Shares upon exercise of the Rights
or to distribute certificates which evidence fractional Common Shares. In lieu
of fractional Common Shares, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
Common Share. For purposes of this Section 14(c), the current market value of
one Common Share shall be the closing price of a Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Sections
18 through 21 inclusive hereof, are vested in the respective registered holders
of the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of the Common Shares), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his 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
24
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the Rights
Agent may deem and treat the person in whose name the Rights Certificate (or,
prior to the Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court 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 shall use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a 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 Preference Shares or
any other securities of the Company that may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
25
Section 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability in
the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Rights
Certificate or certificate for the Preference Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
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 stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. 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 the 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
Rights Agent 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.
26
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 herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Treasurer or the Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except its countersignature on
such Certificates, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible 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 actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preference Shares to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Preference Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
27
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed 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.
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 (30) days' prior written notice mailed to the Company and to each
transfer agent of the Common Shares and Preference Shares by registered or
certified mail, and, if such resignation occurs after the Distribution Date, to
the holders of record of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent for any reason
upon thirty (30) days' prior written notice, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares and Preference Shares by registered or certified mail, and, if
such removal occurs after the Distribution Date, to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
28
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a legal business entity organized and
doing business under the laws of the United States or of the State of New York
or the State of Florida (or of any other state of the United States so long as
such entity is authorized to do business in the State of New York or the State
of Florida and is in good standing, has an office in the State of New York or
the State of Florida, is authorized under such laws to exercise corporate trust,
stock transfer or shareholder services powers and is subject to supervision or
examination by federal or state authority) and that has at the time of its
appointment as Rights Agent a combined capital and surplus adequate in the
judgment of the Board of Directors in the Company to assure the performance of
its duties hereunder and the protection of the interests of the Company and the
holders of Rights, or (b) an Affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares or Preference Shares, and mail by first-class mail notice
thereof in writing to the registered holders of the Rights Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance and sale by the Company of Common Shares following the
Distribution Date and prior to the Expiration Date, the Company (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise or
conversion of securities issued prior to the Distribution Date that are
exercisable for, or convertible into Common Shares, and (b) may, in any other
case, if deemed necessary, appropriate or desirable by the Board of Directors of
the Company, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment otherwise shall have
been made in lieu of the issuance thereof.
29
Section 23. Redemption. (a) The Board of Directors of the Company may,
at its option, at any time prior to 5:00 p.m, Eastern time, on the earlier of
(i) the tenth Business Day following the Shares Acquisition Date, subject to
extension by the Board of Directors for a period of time up to, but not
exceeding, ten additional days, or (ii) the Final Expiration Date, redeem all
but not less than all of the then outstanding Rights at a redemption price of
$.001 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price") and the Company may, at its option, pay the Redemption Price either in
Common Shares (based on the "current per share market price", as defined in
Section 11(d) hereof, of the Common Shares at the time of redemption), cash or
any other form of consideration deemed appropriate by the Board of Directors;
provided, however, if, following the occurrence of a Shares Acquisition Date and
following the expiration of the right of redemption hereunder but prior to any
Triggering Event, (i) an Acquiring Person shall have transferred or otherwise
disposed of a number of Common Shares in one transaction or a series of
transactions, not directly or indirectly involving the Company or any of its
Subsidiaries, which did not result in the occurrence of a Triggering Event or
the Company shall have issued additional equity securities, in either instance
such that such Person is thereafter a Beneficial Owner of 20% or less of the
outstanding Common Shares, and (ii) there is no other Acquiring Person
immediately following the occurrence of the event described in clause (i), then
the right of redemption shall be reinstated and thereafter be subject to the
provisions of this Section 23. The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Notwithstanding anything in this Agreement to the contrary, no Rights may be
exercised at any time that the Rights are subject to redemption in accordance
with the terms of this Agreement.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23, and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption.
Promptly after the action of the Board of Directors of the Company ordering the
redemption of the Rights, the Company shall mail a notice of redemption to all
of the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Shares. Any
notice 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
shall state the method by which the payment of the Redemption Price will be
made.
(c) At any time following the Shares Acquisition Date, the Board of
Directors of the Company may relinquish the right to redeem the Rights under
this Section 23 by duly adopting a resolution to that effect. Immediately upon
adoption of such resolution, the rights of the Board of Directors of the Company
to redeem the Rights shall terminate without further action and without any
notice. Promptly after adoption of such a resolution, the Company shall publicly
announce such action; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of the action of the Board of
Directors of the Company. Neither the Company nor any of its Affiliates or
30
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
(d) In deciding whether or not to exercise the Company's right of
redemption hereunder, the directors of the Company shall act in good faith, in a
manner they reasonably believe to be in the best interests of the Company and
with such care, including reasonable inquiry, skill and diligence, as a person
of ordinary prudence would use under similar circumstances.
Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the provisions of
Section 7(e) hereof) for Common Shares at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. 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 the Common Shares 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 the provisions of Section 7(e)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights or make adequate provision to substitute
(i) cash, (ii) other equity securities of the Company, (iii) debt securities of
the Company, (iv) other assets or (v) any combination of the foregoing, having
31
an aggregate value equal to such insufficiency where such aggregate value has
been determined by a majority of the Company's Board of Directors.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates that evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Rights Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of its Preference Shares or to make
any other distribution to the holders of its Preference Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preference
Shares rights or warrants to subscribe for or to purchase any additional
Preference Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preference Shares
(other than a reclassification involving only the subdivision of outstanding
Preference Shares), (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), 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 50% or more of the assets, cash flow 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) hereof), or (v)
to effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Rights Certificate,
in accordance with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Shares and/or Preference Shares, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least 20 days prior to the record date for determining holders of
the Preference Shares for purposes of such action, and in the case of any such
other action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common Shares
and/or Preference Shares, whichever shall be the earlier.
(b) Upon the occurrence of a Section 11(a)(ii) Event, (i) the Company
shall as soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of the Section 11(a)(ii) Event to holders of Rights, and
(ii) all references in the preceding paragraph to Preference Shares shall be
deemed thereafter to refer to Preference Shares and/or, if appropriate, other
securities.
32
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
NuCo2 Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Compliance Department
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date to the holder of certificates representing Common
Shares) shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. (a) Prior to the Distribution
Date, 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, 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 (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein that may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon delivery of a certificate from an
appropriate officer of the Company that states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment; provided, however, that the failure
or refusal of the Rights Agent to execute such supplement or amendment shall not
affect the validity of any supplement or amendment adopted by the Company, any
33
of which shall be effective in accordance with the terms thereof.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment that materially adversely effects the rights or duties
of the Rights Agent under this Agreement shall be effective without the consent
of the Rights Agent. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interest of the holders of
the Company's Common Stock.
(b) In deciding whether or not to supplement or amend this Agreement,
the directors of the Company shall act in good faith, in a manner they
reasonably believe to be in the best interests of the Company and with such
care, including reasonable inquiry, skill and diligence, as a person of ordinary
prudence would use under similar circumstances, and they may consider the
effects of any action upon employees, suppliers and customers of the Company and
upon communities in which offices or other establishments of the Company are
located, and all other pertinent factors.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
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 or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend or supplement the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that are done or
made by the Board of Directors in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Directors or any members of the
Board of Directors to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common
Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, for any purpose or under
any set of circumstances or as applied to any Person, such invalid, void or
34
unenforceable term, provision, covenant or restriction shall continue in effect
to the maximum extent possible for all other purposes, under all other
circumstances and as applied to all other Persons; the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines it is good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Florida and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State, except that Section 18, 19, 20
and 21 relating to the rights, duties and obligations of the Rights Agent shall
be governed by the laws of the State of New York without giving effect to the
conflicts of laws rules thereof to the extent that the application of the law of
another jurisdiction would be required thereby.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 35. Administration. The Board of Directors of the Company shall
have the exclusive power and authority to administer and interpret the
provisions of 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. All such
actions, calculations, determinations and interpretations that are done or made
by the Board of Directors of the Company in good faith shall be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties and shall not subject the Board of Directors of the
Company to any liability to the holders of the Rights.
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
NUCO2 INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: General Counsel
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
36
Exhibit A
FORM OF
ARTICLES OF AMENDMENT RELATING TO
SERIES C PARTICIPATING PREFERENCE STOCK OF
NUCO2 INC.
Pursuant to the provisions of Sections 607.0602 and 607.1006 of the
Florida Business Corporation Act (the "Act"), the undersigned, on behalf of
NuCo2 Inc. (the "Corporation"), hereby submits the following information:
1. The name of the Corporation is NUCO2 INC.
2. Pursuant to Sections 607.0602 and 607.1006 of the Act, the
Articles of Incorporation of the Corporation are hereby amended to authorize and
create a new series of preferred stock, without par value. The designation and
amount thereof and the powers, designations, preferences and relative,
participating, optional and other special rights of the shares of such new
series of preferred stock and the qualifications, limitations or restrictions
thereof are as follows:
Series C Participating Preference Stock:
Section 1. Designation, Amount and Par Value. The series of
Preference Stock shall be designated as "Series C Participating Preferred Stock"
(the "Series C Preference Stock"), and the number of shares so designated shall
be ______________. The Series C Preference Stock shall be without par value.
Such number of shares may be increased or decreased by resolution of the Board
of Directors; provided, that no decrease shall reduce the number of shares of
Series C Preference Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series C
Preference Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preference Stock (or any similar stock) ranking prior and superior
to the Series C Preference Stock with respect to dividends, the holders of
shares of Series C Preference Stock, in preference to the holders of Common
Stock, par value $.001 per share (the "Common Stock"), of the Corporation, and
of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series C Preference Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
A-1
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series C Preference Stock. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or subdivide, combine or consolidate the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which holders of shares of
Series C Preference Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series C Preference Stock as provided in paragraph (A) of
this Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series C Preference Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Preference Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issuance of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issuance of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series C Preference Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series C Preference Stock in
an amount less than the aggregate amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series C Preference
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series C
Preference Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series C Preference Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the shareholders of
the Corporation. In the event the Corporation shall at any time declare or pay
A-2
any dividend on the Common Stock payable in shares of Common Stock, or
subdivide, combine or consolidate the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series C
Preference Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Articles of Amendment creating a series of Preference Stock or any similar
stock, or by law, the holders of shares of Series C Preference Stock and the
holders of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
(C) Except as set forth in the Articles of Incorporation
or herein, or as otherwise provided by law, holders of Series C Preference Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
Section 4. Reacquired Shares. Any shares of Series C Preference
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preference Stock and may be reissued as part of a new series
of Preference Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 5. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of
the Corporation, no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Preference Stock unless, prior thereto, the holders
of shares of Series C Preference Stock shall have received, subject to
adjustment as hereinafter provided in Section 5(B) below, the greater of either
(a) $100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, or
(b) 100 times the aggregate amount per share to be distributed to holders of
shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series C Preference Stock, unless simultaneously therewith
distributions are made ratably on the Series C Preference Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up.
(B) In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or subdivide, combine or consolidate the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
A-3
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series C
Preference Stock were entitled immediately prior to such event under the proviso
in clause (1)(b) of Section 5(A) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 6. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series C Preference Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or subdivide, combine or consolidate the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series C Preference Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. No Redemption. The shares of Series C Preference Stock
shall not be redeemable.
Section 8. Rank. The Series C Preference Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.
Section 9. Amendment. The Articles of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series C Preference
Stock so as to affect them adversely without the affirmative vote of the holders
of at least two-thirds of the outstanding shares of Series C Preference Stock,
voting together as a single class.
These amendments were duly adopted by the Board of Directors of the
Corporation on March 12, 2003 pursuant to Section 607.0602 of the Act and
shareholder action is not required with respect to the amendments set forth
herein.
The effective time and date of these Articles of Amendment shall be
5:00 p.m., Eastern time, on March ___, 2003.
[SIGNATURE PAGE FOLLOWS]
A-4
IN WITNESS WHEREOF, NUCO2 INC. has caused its duly authorized
officer to execute these Articles of Amendment this ___ day of ______, 2003.
NUCO2 INC.
By:___________________________________
Name:
Title:
A-5
Exhibit B
FORM OF RIGHTS CERTIFICATE
Certificate No. R-
NOT EXERCISABLE AFTER MARCH 27, 2008 OR AFTER EARLIER
REDEMPTION BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001
PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH
TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO 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 REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
Rights Certificate
NUCO2 INC.
This certifies that ___________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of March 27, 2003 (the "Rights Agreement"), between NuCo2
Inc., a Florida corporation (the "Company"), and Continental Stock Transfer
& Trust Company (the "Rights Agent"), to purchase from the Company at any
time prior to 5:00 P.M., Eastern time, on March 27, 2008 (or such later date as
the Board of Directors of the Company may designate by amendment of the Rights
Agreement) at the principal office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series C Participating Preference Stock, without par value (the
"Preference Shares"), of the Company, at a purchase price of $40 per one
one-hundredth of a Preference Share (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and Certificate duly executed. Except as provided in Sections 11(p) and 13(e) of
the Rights Agreement, the Purchase Price shall be paid cash. The number of
Rights evidenced by this Rights Certificate (and the number of one
B-1
--------
* The bracketed portion of the legend shall be inserted only if applicable and
shall replace the preceding sentence.
one-hundredths of a Preference Share that may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of March 28, 2003, based on the Preference Shares as
constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the
number of one one-hundredths of a Preference Share that may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
Except as otherwise provided in the Rights Agreement, upon the
occurrence of any Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Rights Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, 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 any such Section 11(a)(ii) Event.
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitation of rights include the temporary suspension of the exercisability of
such Rights under certain circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preference Shares as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at a redemption
price of $.001 per Right at any time prior to the close of business on the tenth
day following the Shares Acquisition Date.
No fractional Preference Shares shall be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-hundredth of a Preference Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
B-2
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preference
Shares or of any other securities of the Company 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 a meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate shall
have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated: _____________, _________
ATTEST: NUCO2 INC.
By________________________________
Countersigned:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By__________________________
Authorized Officer
B-4
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 Certificate)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and
transfers unto _________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _______________________
------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(2) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(3) 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 became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _______________
-----------------------------
Signature
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
B-5
Form of Reverse Side of Rights Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: NUCO2 INC.
The undersigned hereby irrevocably elects to exercise ________
Rights represented by this Rights Certificate to purchase the Preference Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preference Shares be issued in the name of delivered to:
(Please insert social security
or other identifying number)
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
(Please insert social security
or other identifying number)
(Please print name and address)
Dated: _______________________
---------------------------------
Signature
B-6
Form of Reverse Side of Rights Certificate -- continued
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, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _________________
------------------------------
Signature
NOTICE
The signature in the Form of Election to Purchase and Certificate,
as the case may be, 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.
B-7
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERENCE SHARES
On March 27, 2003, the Board of Directors of NuCo2 Inc. (the
"Company") approved the issuance of one preference share purchase right (a
"Right") for each outstanding common share, par value $.001 per share (the
"Common Shares"), of the Company. Shareholders of record on April 8, 2003 (the
"Record Date") will receive the Rights. Each Right entitles the registered
holder, upon the occurrence of certain events, to purchase from the Company one
one-hundredth of a share of Series C Participating Preference Stock, without par
value (the "Preference Shares"), of the Company at a price of $40.00 per one
one-hundredth of a Preference Share, subject to adjustment under certain
circumstances (the "Purchase Price"). The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement"), dated as of March
27, 2003, between the Company and Continental Stock Transfer & Trust Company, as
Rights Agent (the "Rights Agent").
Initially, ownership of the Rights will be evidenced by the Common
Share certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. In certain circumstances, the Rights will
separate from the Common Shares on a Distribution Date that will occur at the
close of business on the date that is the earlier of the tenth business day
following (i) a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of
20% or more of the outstanding Common Shares (the "Shares Acquisition Date"), or
(ii) the commencement of a tender offer or exchange offer that would result in a
person or group beneficially owning 20% or more of the outstanding Common
Shares, unless the transaction is a tender offer or exchange offer for all
Common Shares of the Company and the Board of Directors has determined that the
price is fair to the shareholders of the Company and the transaction is
otherwise in the best interest of the Company. Until the Distribution Date, (a)
the Rights will be evidenced by the Common Share certificates and will be
transferred with and only with such Common Share certificates, (b) new Common
Share certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference and (c) the surrender for
transfer of any certificate for Common Shares outstanding will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on March 27, 2008, unless (i) the Rights
Agreement is extended by the Board by the amendment of the Rights Agreement,
(ii) the Rights are earlier redeemed by the Company as described below or (iii)
a transaction under Section 13(d) of the Rights Agreement (relating to
consolidation, merger or sale or transfer of assets or earning power) shall have
occurred.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Rights may be issued after the
Distribution Date and prior to their redemption or expiration only in cases
approved by the Board or in connection with the exercise of stock options, stock
C-1
appreciation rights, grants or awards that are outstanding on the Distribution
Date under any benefit plan or arrangement for employees or directors.
Except in the circumstances described below, after the Distribution
Date each Right will be exercisable for one one-hundredth of a Preference Share.
Each one one-hundredth of a Preference Share carries voting rights that are
intended to approximate the equivalent of one Common Share. The voting and
dividend rights of the Preference Shares are subject to adjustment in the event
of dividends, subdivisions and combinations with respect to the Common Shares of
the Company. In lieu of issuing certificates for fractional Preference Shares
that are not integral multiples of one one-hundredth of a Preference Share
(e.g., three one-hundredths of a Preference Share), the Company shall pay cash
representing the current market value of the same fraction of a Preference
Share.
Subject to certain conditions, upon the occurrence of a person
becoming an Acquiring Person, the Rights of the Acquiring Person and certain
transferees of the Acquiring Person will be void. In addition, each other holder
of a Right (with certain exceptions) will have the right to receive, upon
exercise thereof at the current Purchase Price in accordance with the terms of
the Rights Agreement, in lieu of a number of Preference Shares, such number of
Common Shares as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preference Share
for which a Right was exercisable immediately prior to the first occurrence of
such event, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price" for each
Right) by 50% of the current per share market price per Common Share on the date
of such first occurrence. Notwithstanding any of the foregoing, the Rights will
be exercisable following the Shares Acquisition Date only when the Rights are no
longer redeemable by the Company as discussed below.
At any time after a Person becomes an Acquiring Person and prior to
the acquisition by such person or group of fifty percent (50%) or more of the
outstanding Common Shares, the Board may exchange all or part of the Rights
(other than Rights held by such Person or group which may have become void), in
whole or in part, for Common Shares at an exchange ratio of one Common Share per
Right.
At any time during the ten days following the Shares Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$.001 per Right. That ten-day redemption period may be extended by the Board of
Directors so long as the Rights are still redeemable. Immediately upon the
action of the Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will be to receive
the $.001 redemption price.
In the event that, at any time following the Shares Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than a
merger with a subsidiary of the Company in circumstances where the benefits of
the Rights will not be substantially diminished), or (ii) 50% or more of the
Company's assets, cash flow or earning power is sold or transferred, each holder
of a valid Right shall thereafter have the right to receive, upon exercise,
common shares of the acquiring company having a value equal to twice the
exercise price of the Right based on average market price of such shares during
C-2
the 30 trading days prior to the consummation of the merger or sale (that is, at
a price per share equal to one-half of their average market price during such 30
prior trading days). Again, provision is made to permit surrender of the Rights
in exchange for one-half of the value otherwise purchasable.
The Purchase Price payable and the number of one one-hundredths of a
Preference Share or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (ii) if holders of the Common Shares are
granted certain rights or warrants to subscribe for Common Shares or convertible
securities at less than the current market price of the Common Shares, or (iii)
upon the distribution to holders of the Common Shares of evidences of
indebtedness or assets (excluding regular quarterly 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.
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 by the
Board of Directors of the Company so long as the rights are redeemable by the
Board except to reduce the redemption price. After such time, the provisions of
the Rights Agreement may be amended by the Board in order to cure any ambiguity,
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.
While the distribution of the Rights will not be taxable to
shareholders or to the Company, shareholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Shares (or other consideration) of the Company or for
common shares of the acquiring company as set forth above.
A copy of the Rights Agreement is being filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, the full text of
which is incorporated herein by reference.
C-3
TABLE OF CONTENTS
Page
Section 1. Certain Definitions................................................1
Section 2. Appointment of Rights Agent........................................4
Section 3. Issuance of Rights Certificates....................................5
Section 4. Form of Rights Certificates........................................6
Section 5. Countersignature and Registration..................................7
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......8
Section 8. Cancellation and Destruction of Rights Certificates...............10
Section 9. Reservation and Availability of Preference Shares;
Registration of Securities........................................10
Section 10. Preference Shares Record Date....................................12
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights....................................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......20
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power..............................20
Section 14. Fractional Rights and Fractional Shares..........................23
Section 15. Rights of Action.................................................24
Section 16. Agreement of Right Holders.......................................25
Section 17. Rights Certificate Holder Not Deemed a Stockholder...............25
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...........................................28
Section 22. Issuance of New Rights Certificates..............................29
Section 23. Redemption.......................................................30
Section 24. Exchange.........................................................31
Section 25. Notice of Certain Events.........................................32
Section 26. Notices..........................................................33
Section 27. Supplements and Amendments.......................................33
Section 28. Successors.......................................................34
Section 29. Determinations and Actions by the Board of Directors, etc........34
Section 30. Benefits of this Agreement.......................................34
Section 31. Severability.....................................................34
Section 32. Governing Law....................................................35
Section 33. Counterparts.....................................................35
Section 34. Descriptive Headings.............................................35
Section 35. Administration...................................................35
i
