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ORIENT-EXPRESS HOTELS LTD.
and
FLEET NATIONAL BANK
as Rights Agent
Rights Agreement
Dated as of June 1, 2000
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions ...............................................1
Section 2. Appointment of Rights Agent .......................................5
Section 3. Issue of Right Certificates .......................................5
Section 4. Form of Right Certificates ........................................7
Section 5. Countersignature and Registration .................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates ......................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights .....9
Section 8. Cancellation and Destruction of Right ............................10
Section 9. Reservation and Availability of Preferred Shares .................10
Section 10. Preferred Shares Record Date .....................................11
Section 11. Adjustment of Purchase Price, Redemption Price,
Number of Shares or Number of Rights .............................11
Section 12. Certificate of Adjusted Purchase Price or Number of Shares .......19
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power ....................................................20
Section 14. Fractional Rights and Fractional Shares ..........................21
Section 15. Rights of Action .................................................22
Section 16. Agreement of Right Holders .......................................22
Section 17. Right Certificate Holder Not Deemed a Shareholder ................23
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Section 18. Concerning the Rights Agent ......................................23
Section 19. Merger or Consolidation or Change of Name of Rights Agent ........23
Section 20. Duties of Rights Agent ...........................................24
Section 21. Change of Rights Agent ...........................................26
Section 22. Issuance of New Right Certificates ...............................27
Section 23. Redemption .......................................................28
Section 24. Exchange .........................................................29
Section 25. Notice of Certain Events .........................................30
Section 26. Notices ..........................................................31
Section 27. Supplements and Amendments .......................................31
Section 28. Successors .......................................................32
Section 29. Benefits of this Agreement .......................................32
Section 30. Severability .....................................................32
Section 31. Governing Law ....................................................32
Section 32. Counterparts .....................................................32
Section 33. Descriptive Headings .............................................32
Exhibit A - Form of Certificate of Designation of Terms of Series A
Junior Participating Preferred Shares
Exhibit B - Form of Right Certificate
ii
RIGHTS AGREEMENT
Agreement, dated as of June 1, 2000, between Orient-Express Hotels Ltd., a
Bermuda company (the "Company"), and Fleet National Bank, a national banking
association (the "Rights Agent").
The Board of Directors of the Company has authorized the distribution of
one preferred share purchase right (a "Right") for each common share, par value
$0.01 each, of the Company outstanding on the close of business of the closing
date of the Company's initial public offering of Class A Common Shares (the
"Record Date"), each Right representing the right to purchase one one-hundredth
of a Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and further authorized and directed the issuance of
one Right with respect to each such common share that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
In consideration of the premises and the mutual agreements herein set
forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "A Shares" shall mean the Class A Common Shares, par value $0.01
each, of the Company.
(b) "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, shall
be the Beneficial Owner (as such term is hereinafter defined) of shares
carrying 20% or more of the total voting rights which may be cast at any
general meeting of the Company, but shall not include the Company, SCL,
any Subsidiary (as such term is hereinafter defined) of the Company or SCL
or any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding shares of the Company for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, (i) no Person
shall be or have become an "Acquiring Person" if such Person, together
with all Affiliates and Associates of such Person, was on the Record Date
the Beneficial Owner of shares carrying 20% or more of the total voting
rights which may be cast at any general meeting of the Company; provided,
however, that if, after notice from the Company of the adoption of this
Agreement, such Person becomes the Beneficial Owner of any additional
shares entitling the holder thereof to vote at any general meeting of the
Company, then such Person shall be
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deemed an "Acquiring Person", and (ii) no Person shall become an
"Acquiring Person" as the result of an acquisition of the Company's shares
by the Company or a Subsidiary of the Company which, by reducing the
number of shares outstanding, increases the proportionate voting rights of
such Person to 20% or more of the total voting rights which may be cast at
any general meeting of the Company (or, in the case of a Person referred
to in clause (i), more than the percentage that was beneficially owned by
such Person at the time such Person received the notice referred to in
clause (i)); provided, however, that if a Person becomes the Beneficial
Owner of shares carrying 20% or more of the total voting rights which may
be cast at any general meeting of the Company (or, in the case of a Person
referred to in clause (i), more than the percentage that was beneficially
owned by such Person at the time such Person received the notice referred
to in clause (i)) by reason of share purchases by the Company or a
Subsidiary of the Company and shall, after such share purchases by the
Company or a Subsidiary of the Company, become the Beneficial Owner of any
additional shares entitling the holder thereof to vote at any general
meeting of the Company, then such Person shall be deemed to be an
"Acquiring Person."
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act as in effect on June 1, 2000.
(e) "B Shares" shall mean the Class B Common Shares, par value $0.01
each, of the Company.
(f) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
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Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; 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 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 of the
Exchange Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person 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(f)(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.
(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., New
York City time, on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(i) "Common Shares" when used with reference to any Person other
than the Company shall mean the capital stock (or other equity interest)
with the greatest voting power per share of such other Person or, if such
other Person is a Subsidiary of another Person, of the Person or Persons
which ultimately control such first-mentioned Person.
(j) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
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(k) "Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
(l) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(m) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(n) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Shares, par value $.01 per share, of the Company
having the rights and preferences set forth in the form of Certificate of
Designation of Terms attached to this Agreement as Exhibit A.
(o) "Principal Party" shall mean
(i) in the case of any transaction described in clause (a) or
(b) of the first sentence of Section 13, the Person that is the
issuer of any securities into which Voting Shares of the Company are
converted in such merger, amalgamation or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger, amalgamation or consolidation (including, if applicable, the
Company if it is on the surviving corporation); and
(ii) in the case of any transaction described in clause (c) of
the first sentence of Section 13, the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any of the foregoing cases, (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; (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 been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer
of the Common Shares having the greatest aggregate market value; and (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
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
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(p) "Purchase Price" shall have the meaning set forth in Sections 4
and 7(b) hereof.
(q) "Redemption Date" shall have the meaning set forth in Section
7(a) hereof.
(r) "Redemption Price" shall have the meaning set forth in Section
23(b) hereof.
(s) "Securities Act" shall mean the United States Securities Act of
1933, as amended.
(t) "SCL" shall mean Sea Containers Ltd., a Bermuda company
incorporated on June 3, 1974.
(u) "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.
(v) "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.
(w) "Voting Shares" shall mean the A Shares and the B Shares,
collectively.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Voting Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable upon 10 days prior written notice to the Rights Agent. The Rights
Agent shall have no liability for or duty to supervise any such co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth day (or such later date as may be
determined by the Board of Directors of the Company) after the date of the
commencement of, or of the first public announcement of the intention of
any Person (other than the Company, SCL, any Subsidiary of the Company or
SCL, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Voting 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 the Beneficial Owner of
shares carrying in the aggregate 30% or more of the total voting rights
which may be cast at any general meeting of the Company (including any
such date
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which 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 Voting Shares
registered in the names of the holders thereof (which certificates shall
also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Voting Shares. The
Company will give the Rights Agent prompt written notice of the
Distribution Date. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if
requested, at the Company's expense, send) by first-class, postage-prepaid
mail, to each record holder of Voting 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 Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right for each
Voting Share so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) With respect to certificates for Voting Shares outstanding as of
the Record Date and thereafter, until the Distribution Date, the Rights
will be evidenced by such certificates registered in the names of the
holders thereof. Until the Distribution Date (or the earlier of the
Redemption Date or Final Expiration Date), the surrender for transfer of
any certificate for Voting Shares outstanding on the Record Date shall
also constitute the transfer of the Rights associated with the Voting
Shares represented thereby. As soon as practicable after the Distribution
Date, and after notifying the Rights Agent that the Company will make the
mailing described in this sentence, the Company will send a summary
description of the Rights, by first-class, postage-prepaid mail, to each
record holder of Voting Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of
the Company.
(c) Certificates for Voting Shares which have and will become
outstanding (including, without limitation, reacquired Voting Shares
referred to in the last sentence of this paragraph (c)) after the Record
Date but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between
Orient-Express Hotels Ltd. and Fleet National Bank, dated as of June
1, 2000 (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 Orient-Express Hotels Ltd. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will
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be evidenced by separate certificates and will no longer be
evidenced by this certificate. Orient-Express Hotels Ltd. will mail
to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to Acquiring
Persons (as defined in the Rights Agreement) shall become null and
void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Voting 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 Voting Shares
represented thereby. In the event that the Company purchases or acquires
any Voting Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Voting Shares shall be deemed
cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Voting Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. The Right Certificates
shall be in machine printable format and in a form reasonably satisfactory to
the Rights Agent, and shall show the date of countersignature by the Rights
Agent. Subject to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one one-hundredths
of a Preferred Share as shall be set forth therein at the price per one
one-hundredth of a Preferred Share set forth therein (the "Purchase Price"), but
the number of such one one-hundredths of a Preferred Share and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Company by its President, any Vice President or a
director of the Company, either manually or by facsimile signature, shall have
affixed thereto the Company's common seal or a facsimile thereof, and shall be
attested by the Secretary or Assistant Secretary or a second director of the
Company, either manually or by facsimile signature. The Right Certificates shall
be manually or by facsimile signature countersigned by an authorized signatory
of the Rights Agent and shall not be valid for any purpose unless countersigned.
In case any officer or director of the Company who shall have signed any of the
Right Certificates shall cease to be such officer or director of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased to
be such officer or director of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer or director of
the Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer or
director. In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right
7
Certificates, nevertheless, may be issued and delivered by the Company with the
same force and effect as though the person who countersigned such Right
Certificates had not ceased to be such signatory; and any Right Certificate may
be countersigned on behalf of the Rights Agent by any person who, at the actual
date of the countersignature of such Right Certificate, shall be a proper
signatory of the Rights Agent to countersign such Right Certificate, although at
the date of the execution of this Rights Agreement any such person was not such
a signatory.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its shareholder services office, books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(iii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the designated office of the
Rights Agent or its office in New York, New York, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably require. Thereupon the Rights Agent shall countersign and deliver to
the person entitled hereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
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Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's or the Rights
Agent's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent,
along with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably require, and cancellation of the Right Certificate
if mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the designated office
of the Rights Agent, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably require, together
with payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or prior to the
earlier of (i) the close of business on June 1, 2010 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date"), or (iii) the time
at which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred
Share pursuant to the exercise of a Right shall be $142, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 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 Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied
by payment of the Purchase Price for the shares to be purchased and an
amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with Section 9 hereof by
certified check, cashier's check, bank draft or money order payable to the
order of the Company or the Rights Agent, the Rights Agent shall thereupon
promptly (i) requisition from any transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such
certificates, cause the same to be delivered to or upon the order of the
registered
9
holder of such Right Certificate, registered in such name or names as may
be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to issue
other securities (including Voting Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements, including determination of exchange ratios,
reasonably necessary so that such other securities, cash or other property
shall be available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder
of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Shares. The Company
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
If the Preferred Shares issuable upon the exercise of Rights are to be
listed on any national securities exchange, the Company covenants and agrees to
use its best efforts to cause, from and
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after such time as the Rights become exercisable, all Preferred Shares reserved
for such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax is
due.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares 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
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, 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, Redemption Price, Number of
Shares or Number of Rights. The Purchase Price, the Redemption Price, the number
of Preferred 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 Preferred
Shares payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares into
a smaller number of Preferred Shares or (D) issue any shares of its
capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a
consolidation, amalgamation or merger in which
11
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a
time when the Preferred Shares transfer books of the Company were
open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right.
(ii) Subject to Sections 23(b) and 24 of this Rights
Agreement, in the event any Person shall become an Acquiring Person,
proper provision shall be made so that each holder of a Right,
except as provided in Section 11(a)(iii) hereof, shall thereafter
have a right to receive, upon exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of A Shares (in the case of a
Right which prior to the Distribution Date was evidenced by a
certificate for A Shares) or B Shares (in the case of a Right which
prior to the Distribution Date was evidenced by a certificate for B
Shares) as shall equal the result obtained by (A) multiplying the
then current Purchase Price by the then number of one one-hundredths
of a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share
market price of the A Shares or B Shares, as appropriate,
(determined pursuant to Section 11(d)) on the date such Person
became an Acquiring Person (such number of shares, the "Adjustment
Shares").
(iii) Notwithstanding the foregoing provisions of subparagraph
(ii), from and after the occurrence of such event, any Rights that
are or were acquired or beneficially owned by an Acquiring Person
(or any Associate or Affiliate of such Acquiring Person) shall be
void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents
Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person or any
Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate. Where a Right Certificate is to be
issued or is
12
delivered to the Rights Agent for transfer to such an Acquiring
Person and the Rights Agent has received notice from the Company
that the beneficial owner or transferee is an Acquiring Person, that
Right Certificate shall be cancelled or shall not be issued. The
Rights Agent shall have no liability for refusing to issue or
cancelling such Right Certificates.
(iv) In the event that there shall not be sufficient A Shares
or B Shares issued but not outstanding or authorized but not issued
(and unreserved) to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company shall
take all action as may be necessary to authorize additional A Shares
or B Shares for issuance upon exercise of the Rights. The Company
covenants and agrees to use its best efforts to (A) cause a
registration statement under the Securities Act on an appropriate
form, with respect to the A Shares and B Shares purchasable upon
exercise of the Rights, to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until the
Final Expiration Date; (B) qualify or register the A Shares and B
Shares purchasable upon exercise of the Rights under the blue sky
laws of such jurisdictions as may be necessary or appropriate; and
(C) list the A Shares and B Shares purchasable upon the exercise of
the Rights on each national securities exchange on which the A
Shares and B Shares are listed prior to the exercisability of the
Rights.
(v) In the event that the number of A Shares or B Shares which
are authorized for issuance but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company 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) A Shares or B Shares, as appropriate, or other
equity securities of the Company (including, without limitation,
preferred shares, or units of preferred shares, which the Board of
Directors of the Company has deemed to have the same value as A
Shares or B Shares (such preferred shares, "common stock
equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate
value equal to the Current Value, where such aggregate value has
been determined by the Board of Directors of the Company with the
advice of a nationally recognized investment banking firm selected
by the Board of Directors of the Company; provided, however, that if
the Company shall not have made adequate provision to deliver
Current Value pursuant to clause (B) above within thirty (30)
13
days following the later of (x) the first occurrence of an event
described in Section 11(a)(ii) and (y) the date on which the
Company's right of redemption pursuant to Section 23 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, A Shares or B 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 shall determine in good faith that
it is likely that sufficient additional A Shares or B Shares could
be 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 some action must be
taken pursuant to the first and/or second sentences of this Section
11(a)(v), the Company (x) shall provide, subject to Section
11(a)(iii) hereof, that such action shall apply uniformly to all
outstanding Rights to purchase Adjustment Shares which are A Shares
and to all outstanding Rights to purchase Adjustment Shares which
are B Shares, 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 and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and
to determine the aggregate value thereof. In the event of any such
suspension, the Company shall issue a public announcement and
simultaneously provide the Rights Agent with written notice stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement when the suspension is
no longer in effect. For purposes of this Section 11(a)(v), the
value of the A Shares and B Shares shall be the current market price
(as determined pursuant to Section 11(d) hereof) of an A Share and a
B Share on the Section 11(a)(ii) Trigger Date and the value of any
"common stock equivalent" shall be deemed to have the same value as
the A Shares on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred Share or
equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the Preferred Shares
(as defined in Section 11(d)) on such record date, the Purchase Price to
be in effect after such record date shall be
14
determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date plus the number
of Preferred Shares which the aggregate offering price of the total number
of Preferred Shares and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price
and the denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid 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 binding upon the Rights
Agent and the holders. Preferred Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share
market price of the Preferred Shares (as defined in Section 11(d)) 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 Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares. 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, 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
15
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to 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, or (B) any
subdivision, combination or reclassification of such Security and prior to
the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current
per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York Stock
Exchange, 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 sale price or, in case no such sale takes
place on such day, the average of the high bid and low asked prices in the
Nasdaq Stock Market or, if on any such date the Security is not quoted in
the Nasdaq Stock Market, 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. The term
"Trading Day" shall mean a day on which the principal national securities
exchange 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, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of
the Preferred Shares shall be conclusively deemed to be the current per
share market price of the A Shares or B Shares, as appropriate, as
determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the
date hereof), multiplied by one hundred. If neither the A Shares or B
Shares, as appropriate, nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean the fair
value per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed
with the Rights Agent and binding upon the Rights Agent and the holders.
16
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to
the nearest one millionth of a Preferred 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 years from the date
of the transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in Section 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10 and 13
with respect to the Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment
as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-hundredths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i)
multiplying (x) the number of one one-hundredths of a 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 substitution for any
adjustment in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
17
number of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to 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 and simultaneously provide the Rights Agent with written
notice of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter but, if the Right
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for
herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any,
of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully
paid and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock or securities
18
of the Company, if any, issuable upon such exercise over and above the
Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment and shall provide the
Rights Agent with prompt written notice of any such election.
(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 its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred
Shares or issuance of rights, options or warrants referred to hereinabove
in Section 11(b), hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such shareholders.
(n) 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 Voting Shares payable in Voting Shares or (ii) effect
a subdivision, combination or consolidation of the Voting Shares (by
reclassification or otherwise than by payment of dividends in Voting
Shares) into a greater or lesser number of Voting Shares, then in any such
case (i) the number of one one-hundredths of a Preferred Share purchasable
after such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the numerator
of which is the number of Voting Shares outstanding immediately before
such event and the denominator of which is the number of Voting Shares
outstanding immediately after such event, (ii) each Voting Share
outstanding immediately after such event shall have issued with respect to
it that number of Rights which each Voting Share outstanding immediately
prior to such event had issued with respect to it and (iii) the Redemption
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or consolidation shall be
adjusted so that the holder of any Right redeemed after such time shall be
entitled to receive the aggregate payment which, if such Right had been
redeemed immediately prior to such date, he would have received upon such
redemption. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
19
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 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 Voting Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent may rely, and shall incur no liability for relying upon, the most
recent such certificate which it has received.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. In the event that following the Distribution Date, directly or
indirectly, (a) the Company shall consolidate with, amalgamate with or merge
with and into, any other Person, (b) any Person shall consolidate or amalgamate
with the Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Voting Shares shall be changed into or exchanged
for stock or other securities of any other Person (or the Company) or cash or
any other property, or (c) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement, such number of Common Shares of the
Principal Party (including the Company as successor thereto or as the surviving
corporation, in which event the term "Common Shares" as used in this Section 13
shall mean A Shares (in the case of a Right which prior to the Distribution Date
was evidenced by a certificate for A Shares) and B Shares (in the case of a
Right which prior to the Distribution Date was evidenced by a certificate for B
Shares)) as shall be equal to the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (y) 50% of
the then current per share market price of the Common Shares of such Principal
Party (determined pursuant to Section 11(d)) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
amalgamation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" herein shall
thereafter be deemed to refer to such Principal Party; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares) in connection with such consummation as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common Shares
thereafter deliverable upon the exercise of the Rights. The Company shall not
enter into any transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any
20
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The Company shall not consummate any such consolidation, amalgamation,
merger, sale or transfer unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement so providing. The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations, amalgamations or sales or other
transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional
Rights would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Right. For the purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange
or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated 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 sale price or, in case no such sale
takes place on such day, the average of the high bid and low asked prices
in the Nasdaq Stock Market or, if on any such date the Rights are not
quoted in the Nasdaq Stock Market, 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.
(b) The Company shall not be required to issue fractions of
Preferred Shares upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares. In lieu of fractional
Preferred Shares, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one Preferred Share. For purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price
21
of a Preferred 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 or exchange.
(c) 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.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Voting Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Voting Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Voting 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 or a Principal Party to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Voting Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal offices of the Rights Agent or at its office in New York,
New York, duly endorsed or accompanied by a proper instrument of transfer,
along with a signature guarantee and such other and further documentation
as the Rights Agent may reasonably require; and
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificates (or, prior to the Distribution Date,
the associated Voting Shares certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the
associated Voting Shares certificate made by anyone other than the Company
or the Rights
22
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
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 Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. 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 and
including reasonable counsel fees and expenses.
The Rights Agent shall be protected and shall incur no liability for, or
in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Voting Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, instructions 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. 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 party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights
23
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 Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificate shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of
the President, any Executive Vice President or Senior Vice President or
Vice President, the Treasurer, the Secretary, or any Assistant Treasurer
or Assistant Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
24
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section
3, 11, 13, 23 or 24, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice
that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant
to this Agreement or any Right Certificate or as to whether any Preferred
Shares will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the
President, any Executive Vice President or Senior Vice President or Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and is authorized to apply to such
officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with such instructions of any such officer. An
application by the Rights Agent for instructions may set forth in writing
any action proposed to be taken or omitted by the Rights Agent with
respect to its duties and obligations under this Agreement and the date on
and/or after which such action shall be taken, and the Rights Agent shall
not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified
therein (which
25
date shall not be less than two Business Days after the Company receives
such application) without the consent of the Company unless prior to
taking or omitting such action, the Rights Agent has received written
instructions in response to such application specifying the actions to be
taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) 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 the repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action
taken or omitted by it in connection with its administration of this
Agreement in reliance upon (i) the proper execution of the certification
concerning beneficial ownership appended to the Form of Assignment and the
Form of Election to Purchase included as part of Exhibit B hereto (the
"Certification"), unless the Rights Agent shall have actual knowledge
that, as executed, the Certification is untrue or (ii) the non-execution
or failure to complete the Certification including, without limitation,
any refusal to honor any otherwise permissible assignment or election by
reason of such non-execution or failure.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and, at the Company's
expense, to each transfer agent of the Voting Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30
26
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Voting Shares or Preferred
Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the Company shall become the Rights Agent and the registered
holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the State of New
York (or of any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of New York), in
good standing, having an office in the State of New York, which is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Voting Shares
or Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind of class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Voting Shares following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
Voting Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that (i) no
27
such Right Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Rights may be redeemed by action of the Board of Directors
pursuant to subsection (b) of this Section 23 and shall not be redeemed in
any other manner.
(b) The Board of Directors of the Company may, at its option, at any
time prior to the close of business on the 10th day following such time as
any Person becomes an Acquiring Person, redeem all but not less than all
the then outstanding Rights at a redemption price of $.05 per Right,
appropriately adjusted as provided in Section 11(n) 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"). Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable after the first
occurrence of an event described in Section 11(a)(ii) until such time as
the Company's right of redemption hereunder has expired. The Company may,
at its option, pay the Redemption Price in cash, A Shares (based on the
"current market price," as defined in Section 11(d)(i) hereof, of the A
Shares at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to subsection (b)
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. Within 10 days after such action of the Board of Directors ordering
the redemption of the Rights pursuant to subsection (b), the Company shall
give written notice of redemption to the Rights Agent and shall give
notice of redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the
Voting Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of
the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights 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 Voting Shares prior to the Distribution Date.
28
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 void pursuant to the provisions of Section
11(a)(iii) hereof) (i) for A Shares at an exchange ratio of one A Share per
Right (in the case of Rights which prior to the Distribution Date were evidenced
by certificates for A Shares), and (ii) for B Shares at a ratio of one B Share
per Right (in the case of Rights which prior to the Distribution Date were
evidenced by certificates for B Shares), appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the Record
Date (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, SCL, any Subsidiary of the Company or SCL, any employee benefit plan of
the Company or any Subsidiary of the Company, or any entity holding Voting
Shares for or pursuant to the terms of any such a plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of shares
carrying 50% or more of the total voting rights which may be cast at any general
meeting of the Company.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (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 A Shares or B 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 shall promptly 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
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the A Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
11(a)(iii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient A Shares or B 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 A Shares or B
Shares for issuance upon exchange of the Rights.
29
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to
make any other distribution to the holders of its Preferred Shares (other
than a regular quarterly cash dividend), or (ii) to offer to the holders
of its Preferred Shares rights or warrants to subscribe for or to purchase
any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), or (iv)
to effect any consolidation, amalgamation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, or (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi)
to declare or pay any dividend on the Voting Shares payable in Voting
Shares or to effect a subdivision, combination or consolidation of the
Voting Shares (by reclassification or otherwise than by payment of
dividends in Voting Shares), then, in each such case, the Company shall
give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 26 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, amalgamation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Voting Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (i) or (ii) above at least 20
days prior to the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any such other
action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Voting
Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as soon
as practicable thereafter give to the Rights Agent and to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.
30
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Orient-Express Hotels Ltd.
00 Xxxxx Xxxxxx
P.O. Box HM 1179
Xxxxxxxx XX EX, Bermuda
Attention: Secretary
with a copy to:
Orient-Express Hotels Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Fleet National Bank
c/o EquiServe L.P.
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein
31
which may be defective or inconsistent with any other provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and the Rights Agent may deem necessary or desirable and which
shall be consistent with, and for the purpose of fulfilling, the objectives of
the Board of Directors in adopting this Agreement; provided, however, the Rights
Agent shall not be required to consent to any amendment which is adverse to its
own interests; and provided, further, however, that from and after such time as
any Person becomes an Acquiring Person, this Agreement shall not be amended in
any manner which would adversely affect the interests of the holders of Rights.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Voting 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 Right Certificates (and, prior to the Distribution Date, the Voting Shares).
Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
Islands of Bermuda and for all purposes shall be governed by and construed in
accordance with such laws, except that the rights, duties and obligations of the
Rights Agent shall be governed by and construed in accordance with the laws of
the State of New York.
Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ORIENT-EXPRESS HOTELS LTD.
Attest:
By: /s/ Xxxxx X. Xxxxxxxxxxxx By: /s/ Xxxxxx X. X'Xxxxxxxx
----------------------------------- ----------------------------------------
Name: Xxxxx X. Xxxxxxxxxxxx Name: Xxxxxx X. X'Xxxxxxxx
Title: Secretary Title: Director
FLEET NATIONAL BANK
Attest:
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxxxxx X. Xxxxxxxx
----------------------------------- ----------------------------------------
Name: Xxxx X. Xxxx Name: Xxxxxxxxx X. Xxxxxxxx
Title: Senior Account Manager Title: Managing Director
33
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATION OF TERMS
of
SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
(Par Value $.01 Per Share)
of
ORIENT-EXPRESS HOTELS LTD.
(Pursuant to Section 42 of
The Companies Act 1981 of Bermuda)
We, the undersigned, _______________________ and _____________________,
being respectively the __________________ and the Secretary of ORIENT-EXPRESS
HOTELS LTD., a company organized and existing under laws of the Islands of
Bermuda (hereinafter called the "Company"), DO HEREBY CERTIFY:
FIRST: That, the Board of Directors of the Company at a meeting thereof
held and convened on ___________, at which a quorum was present and acting
throughout has duly adopted resolutions providing for the issuance of a series
of preferred shares of the Company and that there is set forth below a copy of
said resolutions:
RESOLVED that the Board of Directors hereby authorizes the issue of
a series of preferred shares of the Company and hereby fixes the
designation, preferences and the relative, participating, optional and
other special rights and qualifications, limitations and restrictions
thereof as follows:
1. Number and Designation. The number of shares to constitute this
series of the total authorized amount of preferred shares of the Company
shall be 500,000
A-1
shares and the designation of such shares shall be "Series A Junior
Participating Preferred Shares," par value $.01 per share (hereinafter
called "this Series"). All shares of this Series shall be identical with
each other in all respects.
2. Dividends and Distributions. (a) Subject to the prior and
superior rights of the holders of shares of any other series of preferred
shares or other class of shares not by its terms ranking on a parity with,
or junior to, this Series with respect to dividends, the holders of shares
of this Series shall be entitled to receive, when, as and if declared by
the Board of Directors, 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 of this Series in an amount per share (rounded to the
nearest cent) equal to the greater of (i) $1.00 or (ii) an amount per
share equal to the Formula Number (as hereinafter defined) then in effect
times the aggregate per share amount of all cash dividends declared on the
A Shares 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 of this Series. In addition, if the Company
shall pay any dividend or make any distribution on the A Shares payable in
assets, securities or other forms of noncash consideration (other than
dividends or distributions solely in A Shares) then, in each such case,
the Company shall simultaneously pay or make on each outstanding share of
this Series a dividend or distribution in like kind of the Formula Number
then in effect times such dividend or distribution on each A Share. As
used herein, the "Formula Number" shall be 100; provided, however, that if
at any time the Company shall (i) declare or pay any dividend on the
Voting Shares payable in Voting Shares or make any distribution on the
Voting Shares in Voting Shares, (ii) subdivide (by a stock split or
otherwise) the outstanding Voting Shares into a larger number of Voting
Shares or (iii) combine (by a reverse stock split or otherwise) the
outstanding Voting Shares into a smaller number of Voting Shares, then in
each such event the Formula Number shall be adjusted to a number
determined by multiplying the Formula Number in effect immediately prior
to such event by a fraction, the numerator of which is the aggregate
number of Voting Shares that are outstanding immediately after such event
and the denominator of which is the aggregate number of Voting Shares that
are outstanding immediately prior to such event (and rounding the result
to the nearest whole number); and provided further, that if at any time
the Company shall issue any shares of its capital stock in a
reclassification or change of the outstanding Voting Shares (including any
such reclassification or change in connection with a merger in which the
Company is the surviving corporation), then in each such event the Formula
Number shall be appropriately adjusted to reflect such reclassification or
change.
A-2
(b) The Company shall declare a dividend or distribution on the
shares of this Series as provided in paragraph (a) above immediately prior
to or at the same time it declares a dividend or distribution on the A
Shares (other than a dividend or distribution in A Shares), provided,
however, that, in the event no dividend or distribution (other than a
dividend or distribution in A Shares) shall have been declared on the A
Shares 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 this Series shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date. The Board of Directors may fix a record
date for the determination of holders of shares of this Series entitled to
receive a dividend or distribution declared thereon, which record date
shall be the same as the record date for any corresponding dividend or
distribution on the A Shares.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of this Series from and after the Quarterly Dividend Payment Date
next preceding the date of original issue of such shares of this Series;
provided, however, that dividends on such shares which are originally
issued after the record date for the determination of holders of shares of
this Series entitled to receive a quarterly dividend and on or prior to
the next succeeding Quarterly Dividend Payment Date shall begin to accrue
and be cumulative from and after such Quarterly Dividend Payment Date.
Notwithstanding the foregoing, dividends on shares of this Series which
are originally issued prior to the record date for the first Quarterly
Dividend Payment shall be calculated as if cumulative from and after the
March 1, June 1, September 1 or December 1, as the case may be, next
preceding the date of original issuance of such shares. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of this
Series in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
(d) The holders of the shares of this Series shall not be entitled
to receive any dividends or other distributions except as provided herein.
3. Voting Rights. The holders of shares of this Series shall have
the following voting rights:
(a) Each holder of this Series shall be entitled to a number of
votes equal to the Formula Number then in effect, for each share of this
Series held of record on each matter on which holders of the Voting Shares
generally are entitled to vote, multiplied by the number of votes per
share which the holders of the A Shares then have with respect to such
matter.
A-3
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of this Series and the holders of Voting Shares shall
vote together as one class for the election of directors of the Company
and on all other matters submitted to a vote of shareholders of the
Company.
(c) Without the consent of the holders of at least two-thirds of the
number of shares of this Series at the time outstanding, given in person
or by proxy, by vote at a meeting called for that purpose at which the
holders of this Series shall vote as a separate class, there shall be no:
(i) amendment, alteration or repeal of any of the preferences,
rights or powers of this Series, as set forth in this Certificate of
Designation of Terms; or
(ii) authorization or creation of, or increase in the
authorized amount of, any shares of any class or any security
convertible into shares of any class, ranking prior to this Series.
(d) Without the consent of the holders of at least a majority of the
number of shares of this Series at the time outstanding, given in person
or by proxy, by vote at a meeting called for that purpose at which the
holders of this Series shall vote as a separate class, there shall be no:
(i) increase in the authorized amount of this Series, or the
authorization or creation of, or increase in the authorized amount
of, any shares of any class or any security convertible into shares
of any class, ranking equal to or on a parity with this Series
unless the consolidated amounts available under Bermuda law for
payment of dividends during a period of 12 consecutive calendar
months out of the immediately preceding 18 calendar months are at
least two times the annual pro forma dividend requirements on all
shares (including this Series) ranking prior to or on a parity with
this Series which would be outstanding thereafter; provided,
however, that notwithstanding anything to the contrary contained in
this clause, the Company may issue up to 10,000,000 additional
shares without any authorization or vote by the holders of this
Series if such shares rank on a parity with this Series; or
(ii) consolidation or merger of the Company with another
corporation, unless the preferences, rights or powers of the shares
of this
A-4
Series outstanding immediately prior to the effective date of the
consolidation or merger are not adversely affected.
For the purposes hereof, annual dividend requirements of any
outstanding shares ranking prior to or on a parity with this Series shall
be computed by multiplying the annual dividend requirements of such shares
by the ratio that consolidated pre-tax income bears to consolidated net
income (after taxes) before deduction of such annual dividend requirements
of such shares.
(e) Except as provided herein, or by applicable law, holders of this
Series 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
Voting Shares as set forth herein) for authorizing or taking any corporate
action.
4. Certain Restrictions. (a) Whenever quarterly dividends or other
dividends or distributions payable on this Series as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of this Series
outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to this Series;
(ii) declare or pay dividends on or make any other
distributions on any shares ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with this
Series except dividends paid ratably on this Series and all such
parity shares on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration any shares ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with this Series
provided that the Company may at any time redeem, purchase or
otherwise acquire shares of any such parity shares in exchange for
shares of the Company ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to this Series; or
A-5
(iv) purchase or otherwise acquire for consideration any
shares of this Series, or any shares ranking on a parity with this
Series, except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(b) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of the Company
unless the Company could, under subsection (a) of this Section 4, purchase
or otherwise acquire such shares at such time and in such manner.
5. Liquidation, Dissolution or Winding Up. Upon the liquidation,
dissolution or winding up of the Company, whether voluntary or
involuntary, no distribution shall be made (i) to the holders of shares
ranking junior (either as to dividends or upon liquidation, dissolution,
or winding up) to this Series unless, prior thereto, the holders of shares
of this Series shall have received an amount equal to the accrued and
unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment, plus an amount equal to the greater of (x) $100
per share or (y) an aggregate amount per share equal to the Formula Number
then in effect times the aggregate amount to be distributed per share to
holders of Voting Shares, or (ii) to the holders of shares ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding
up) with this Series, except distributions made ratably on this Series and
all other such parity shares in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
6. Consolidation, Merger, etc. In case the Company shall enter into
any consolidation, merger, combination or other transaction in which the
Voting Shares are exchanged for or changed into other shares or
securities, cash or any other property, then in any such case the then
outstanding shares of this Series shall at the same time be similarly
exchanged or changed in an amount per share equal to the Formula Number
then in effect times the aggregate amount of shares, securities, cash or
any other property (payable in kind), as the case may be, into which or
for which each Voting Share is exchanged or changed.
7. Redemption. The shares of this Series shall not be redeemable.
A-6
8. Ranking. The shares of this Series shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all
series of any other preferred shares of the Company issued either before
or after the issuance of this Series, unless such other preferred shares
shall specifically provide otherwise.
9. Reacquired Shares. Any shares of this Series purchased or
otherwise acquired by the Company 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
preferred shares, without designation as to series until such shares are
once more designated as part of a particular series by resolution of the
Board of Directors of the Company.
10. Miscellaneous.
(a) For the purposes hereof:
(i) the term "outstanding," when used in reference to shares,
shall mean issued shares, excluding shares held by the Company, SCL
or a subsidiary of the Company or SCL;
(ii) "SCL" shall mean Sea Containers Ltd., a Bermuda company
incorporated on June 3, 1974.
(iii) the term "subsidiary" shall mean any company a majority
of whose outstanding voting capital stock (other than directors'
qualifying shares), at the time as of which any determination is
being made, shall be owned by the parent of such company either
directly or through other subsidiaries;
(iv) the term "A Shares" shall mean the Class A Common Shares,
par value $0.01 each, of the Company;
(v) the term "B Shares" shall mean the Class B Common Shares,
par value $0.01 each, of the Company;
(vi) the term "Voting Shares" shall mean the A Shares and the
B Shares, collectively.
(vii) the amount of dividends "accrued" on any share of this
Series or on any share of the Company of any other series as at any
dividend date shall
A-7
be deemed to be the amount of any unpaid dividends accumulated
thereon to and including such dividend date, whether or not earned
or declared, and the amount of dividends "accrued" on any share of
this Series or of any such other series as at any date other than a
dividend date shall be calculated as the amount of any unpaid
dividends accumulated thereon to and including the last preceding
dividend date, whether or not earned or declared, plus an amount
calculated on the basis of the annual dividend rate fixed for the
shares of such series for the period after such last preceding
dividend date to and including the date as of which the calculation
is made, based on a 360-day year of twelve 30-day months; and
(vii) any series or class of shares of the Company shall be
deemed to rank:
(A) prior to this Series, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share
thereof be different from those of this Series, if the holders of
such series or class shall be entitled to receipt from the Company
of dividends or of amounts distributable upon liquidation,
dissolution or winding up, in preference or priority to the holders
of this Series, as the case may be;
(B) on a parity with or equal to this Series, whether or not
the dividend rates, dividend payment dates or redemption or
liquidation prices per share thereof be different from those of this
Series, if the holders of such series or class shall be entitled to
the receipt from the Company of dividends or of amounts
distributable upon liquidation, dissolution or winding up, in
proportion to their respective dividend rates or liquidation prices,
without preference or priority one over the other as between the
holders of such series or class and the holders of this Series; and
(C) junior to this Series, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share
thereof be different from those of this Series, if the rights of the
holders of such series or class shall be subordinate to the rights
of the holders of this Series in respect of the receipt from the
Company of dividends and of amounts distributable upon liquidation,
dissolution or winding up, including, without limitation, the A
Shares and the B Shares.
(b) So long as any shares of this Series are outstanding, in the
event of any conflict between the provisions of this resolution and the
Bye-laws or any other
A-8
corporate document of the Company (both as presently existing or hereafter
amended and supplemented) the provisions of this resolution, as the same may be
amended or supplemented pursuant to its provisions, shall be and remain
controlling.
(c) The holders of the shares of this Series shall have no
preemptive rights.
(d) All references herein to "$" mean United States dollars.
11. Service of Process. The Company hereby irrevocably submits
itself to the jurisdiction of the Supreme Court of the State of New York,
New York County, of the United States of America, and to the jurisdiction
of the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding brought by any
holder of shares of this Series, or by his successors or assigns, arising
out of, or relating to, the enforcement of any designation, preferences or
other special rights set forth in these resolutions. The Company shall
irrevocably designate and appoint a corporation, with offices in the State
of New York, United States of America (hereinafter called the "Agent For
Service"), as its attorney-in-fact, to receive service of process in any
action, suit or proceeding with respect to any matter as to which it
submits to jurisdiction as set forth above, and shall, upon request,
furnish any holder of shares of this Series with the name and address of
the Agent For Service. The Company hereby agrees that service upon the
Agent for Service shall constitute valid service upon the Company or its
successors or assigns. The Company agrees that: (a) the sole
responsibilities of the Agent For Service shall be (i) to receive such
process, (ii) to send a copy of such process so received to the Company,
by registered airmail, return receipt requested, at its offices at 00
Xxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxx XX XX, Xxxxxxx, Xxxxxxxxx:
Secretary, or at the last address filed in writing by the Company with the
Agent For Service, and (iii) to give prompt telegraphic notice of receipt
thereof to the Company at such address; and (b) the Agent For Service
shall have no responsibility for the receipt or nonreceipt by the Company
of such process, nor for any performance or nonperformance by the Company,
its successors or assigns.
SECOND: That said determination of the designation, preferences and the
relative participating, optional and other special rights and qualifications,
limitations and restrictions thereof relating to said Series A Junior
Participating Preferred Shares was duly made by the Board of Directors of the
Company, in accordance with the provisions of Section 42 of The Companies Act
1981 of Bermuda.
A-9
IN WITNESS WHEREOF, this Certificate of Designation of Terms has been
signed by the ____________________ and the Secretary of ORIENT-EXPRESS HOTELS
LTD., and said company has caused its corporate seal to be hereunto affixed, all
as of the day of , 2000.
ORIENT-EXPRESS HOTELS LTD.
By: ____________________________________
Title:
[Corporate Seal]
Attest:
___________________________________
Secretary
A-10
EXHIBIT B
Form of Right Certificate
Certificate No. R-[A][B] _______ Rights
NOT EXERCISABLE AFTER JUNE 1, 2010, OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.05 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
ORIENT-EXPRESS HOTELS LTD.
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 June 1, 2000, (the "Rights Agreement"), between
Orient-Express Hotels Ltd., a Bermuda company (the "Company"), and Fleet
National Bank (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on June 1, 2010 at the designated
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 A Junior
Participating Preferred Shares, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $142 per one one-hundredth of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed along with
a signature guarantee and such other and further documentation as the Rights
Agent may reasonably require. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of June 1, 2000, based on the
Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which
B-1
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
PRIOR TO THE DISTRIBUTION DATE (AS DEFINED IN THE RIGHTS AGREEMENT), THE
RIGHTS EVIDENCED BY THIS CERTIFICATE WERE EVIDENCED BY ONE OR MORE CERTIFICATES
FOR THE CLASS [A][B] COMMON SHARES OF THE COMPANY.
This Right 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 Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably require, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preferred Shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at a redemption price of $.05
per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
B-2
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ___________, ____.
ATTEST: ORIENT-EXPRESS HOTELS LTD.
_____________________________________ By: ____________________________________
Countersigned:
FLEET NATIONAL BANK
By: __________________________________
Authorized Signature
Date:
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED, _________________________________ hereby sells,
assigns and transfers unto _____________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ______________________, ____
________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in the Security Transfer
Agents Medallion Program or the Stock Exchange Medallion Program (generally, a
member firm of a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States).
--------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
________________________________________
Signature
B-4
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires
to exercise the Right Certificate.)
To: ORIENT EXPRESS HOTELS LTD.
The undersigned hereby irrevocably elects to exercise ___________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please 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 Right
Certificate, a new Right 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
Signature Guaranteed:
Signatures must be guaranteed by a participant in the Security Transfer
Agents Medallion Program or the Stock Exchange Medallion Program (generally, a
member firm of a
B-5
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States).
B-6
Form of Reverse Side of Right Certificate - continued
________________________________________________________________________________
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
________________________________________
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
B-7
