Exhibit 4.a.1
GREEN MOUNTAIN POWER CORPORATION
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
RIGHTS AGENT
RIGHTS AGREEMENT
Dated as of June 17, 1998
TABLE OF CONTENTS
Section 1. Certain Definitions. . . . . . . . . . . . . . . . . . . .1
Section 2. Appointment of Rights Agent; Corporate Authority . . . . .3
Section 3. Issue of Right Certificates. . . . . . . . . . . . . . . .3
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . .4
Section 5. Countersignature and Registration. . . . . . . . . . . . .5
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost of Stolen
Right Certificates . . . . . . . . . . . . . . . . . . . .6
Section 7. Exercise of Rights; Purchase Price; Expiration Date
Of Rights. . . . . . . . . . . . . . . . . . . . . . . . .6
Section 8. Cancellation of Right Certificates . . . . . . . . . . . .8
Section 9. Reservation and Availability of Shares . . . . . . . . . .9
Section 10. Record Date for Shares . . . . . . . . . . . . . . . . . .9
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights . . . . . . . . . . . . . . . . . . . . .10
Section 12. Certificate of Adjusted Purchase Price or Number
Of Shares. . . . . . . . . . . . . . . . . . . . . . . . .16
Section 13. Consolidation, merger or Sale or Transfer of Assets or
Earning Power. . . . . . . . . . . . . . . . . . . . . . .16
Section 14. Fractional Rights and Fractional Shares. . . . . . . . . .17
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . .17
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . .18
Section 17. Right Certificate Holder Not Deemed a Shareholder. . . . .18
Section 18. Concerning the Rights Agent. . . . . . . . . . . . . . . .19
Section 19. Merger or Consolidation or change of Name of Rights
Agent. . . . . . . . . . . . . . . . . . . . . . . . . . .19
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . .20
Section 21. Change or Rights Agent . . . . . . . . . . . . . . . . . .22
Section 22. Issuance of New Right Certificates . . . . . . . . . . . .22
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . .22
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . .23
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . .24
Section 26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . .25
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . .25
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . .26
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . .26
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . .26
Section 31. Governing Law. . . . . . . . . . . . . . . . . . . . . . .26
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . .26
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . .27
Section 34. Determinations and Actions by the Board of Directors, etc.27
RIGHTS AGREEMENT
In accordance with the Vermont Business Corporation Law, the
Board of Directors of Green Mountain Power Corporation (the "Company")
has authorized and declared a dividend of one share purchase right (a
"Right") for each Share (as hereinafter defined) of the Company
outstanding on June 26, 1998 (the "Record Date"), each Right
representing the right to purchase one additional Share, upon the terms
and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to each
Share of the Company 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).
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall
be the Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the Shares then outstanding, but shall not include the Company,
any Subsidiary (as such term is hereinafter defined) of the Company or
any employee benefit plan of the Company or any Subsidiary of the
Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 (the "Exchange
Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(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 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 (or any Affiliate or Associate
thereof) with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
of securities) for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
a Sunday, or a day on which banking institutions in the State of Vermont
are authorized or obligated by law or executive order to close.
(e) "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.
(f) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(g) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(h) "Person" shall mean any individual, firm, partnership,
corporation or other entity, and shall include any successor (by merger
or otherwise) of such entity.
(i) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(j) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Shares" when used with reference to the Company shall
mean the shares of Common Stock, par value $3.33 1/3 per share, of the
Company. "Shares" when used with reference to any Person other than the
Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person, or the equity securities or
other equity interest having power to control or direct the management
of such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first-
mentioned Person.
(l) "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.
(m) "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.
(n) "Triggering Event" shall mean any event described in
Section 11(a)(ii)(A), (B) and (C) and Section 13 hereof.
Any determination required by the definitions contained in
this Section 1 shall be made by the Board of Directors of the Company in
its good faith judgment, which determination shall be binding on the
Rights Agent.
Section 2. Appointment of Rights Agent; Corporate Authority.
The Company hereby appoints ChaseMellon Shareholder Services,
L.L.C. (the "Rights Agent") to act as agent for the Company in
accordance with the terms and conditions hereof the Rights Agent, 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 provided that the respective duties of the Rights Agent and
any such co-Rights Agents are clearly set forth in a written agreement
signed by the Company, the Rights Agent and any such co-Rights Agent.
The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent.
The Company represents and warrants that the issuance of the
Rights, the execution of the Rights Agreement and the appointment of
ChaseMellon Shareholder Services, L.L.C., as Rights Agent have been
validly authorized by all necessary corporate action on the part of the
Company.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth day after the Shares Acquisition Date or (ii) the Close of
Business on the tenth day after the date of the commencement of, or
first public announcement of the intent to commence, a tender or
exchange offer by any Person (other than the Company, any Subsidiary of
the Company or any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such
plan) for 25% or more of the outstanding Shares (including any such date
which is after the date of this Agreement and prior to the issuance of
the Rights; the Close of Business on 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 Shares of the Company 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 such Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agents will, if requested, send at the Company's
expense) by first-class, postage-prepaid mail, to each record holder of
Shares of the Company as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the Company,
a Right Certificate, in substantially the form of Exhibit A hereto (a
"Right Certificate"), evidencing one Right for each Share so held. As
of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Shares,
in substantially the form of Exhibit B hereto (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of Shares of
the Company as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With
respect to certificates for Shares of the Company outstanding as of the
Record Date, until the Distribution Date (or, if earlier, the earlier of
the Redemption Date or Final Expiration Date), the Rights will be
evidenced by such certificates registered in the names of the holders
thereof together with a copy of the Summary of Rights attached thereto.
Until the Distribution Date (or, if earlier, the earlier of the
Redemption Date or Final Expiration Date), the surrender for transfer of
any certificate for Shares of the Company outstanding on the Record
Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the
Shares represented thereby.
(c) Certificates for Shares of the Company which become
outstanding (including, without limitation, reacquired 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
Green Mountain Power Corporation and ChaseMellon Shareholder
Services, L.L.C., dated as of June 17, 1998 (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 Green Mountain Power Corporation. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. Green
Mountain Power Corporation will mail to the holder of this
certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or becomes an Acquiring
Person, including Affiliates or Associates thereof (as such
terms are defined in the Rights Agreement), whether currently
held by or on behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the 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 Shares represented
thereby. In the event that the Company purchases or acquires any of its
Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights
associated with the Shares which are no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the form of election to
purchase Shares and the form of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of
Section 22 hereof and the other conditions set forth herein, including
without limitation, the receipt of all governmental consents or
approvals, if any (including, if required, the Vermont Public Service
Board), the Right Certificates shall entitle the holders thereof to
purchase such number of Shares as shall be set forth therein at the
price per Share set forth therein (the "Purchase Price"), but the number
of such Shares and the Purchase Price shall be subject to adjustment as
provided herein.
(b) (1) Any Right Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by: (i)
an Acquiring Person or any Affiliate or Associate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Affiliate or Associate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of
any such Affiliate or Associate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and (2) any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or an Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement).
Accordingly, this Right Certificate and the Rights represented
hereby may become null and void in the circumstances specified
in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
The Right Certificates shall be executed on behalf of the
Company by its President, Chief Financial Officer, an Executive Vice
President or a Senior Vice President, either manually or by facsimile
signature, shall have affixed thereto the Company's seal or a facsimile
thereof, and shall be attested by its Secretary or Assistant Secretary,
either manually or by facsimile signature. The Right Certificates shall
be countersigned, either manually or by facsimile signature, by the
Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed
any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its designated 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 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of Shares as
the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate 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, at ChaseMellon Shareholder Services, L.L.C.,
Overpeck Centre, 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000.
Thereupon the Rights Agent shall countersign and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer, split up, combination or exchange of
Right Certificates. In no event shall the Rights Agent be responsible
for the payment of any such tax or charge.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate
if mutilated, the Company will make and deliver a new Right Certificate
of like tenor to the Rights Agent for 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, except as such right of exercise may be suspended pursuant to
Section 9(b) and 11(a)(iii) hereof, the Rights evidenced thereby (except
as otherwise provided therein) in whole or in part at any time after the
Distribution Date and after the issuance of such shares shall have
received all required governmental approvals and consents, including
that of the Vermont Public Service Board, if any, 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, at ChaseMellon Shareholder Services, L.L.C.,
Overpeck Centre, 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000,
together with payment of the Purchase Price for each Share as to which
the Rights are exercised, at or prior to the earliest of (i) the close
of business on June 17, 2008 (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 the Rights are
exchanged as provided in Section 24 hereof.
(b) Exercise of a Right shall initially be $45.00, 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 certificate from an appropriate officer
of the Company stating that the Company has received all necessary
regulatory approvals (including, if applicable, the approval or consent
of the Vermont Public Service Board), upon receipt of a Right
Certificate representing exercisable Rights, with the form of election
to purchase duly executed, accompanied by payment of the aggregate
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 in cash, or by certified
check or cashier's check payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) requisition from any transfer agent
(or from the Company, if the Company is acting as its own transfer
agent) the Shares certificates for the number of 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) when
appropriate, requisition from the Company the amount of cash, property
or securities to be paid in lieu of Shares in accordance with Section
11(a)(iii) hereof, (iv), after receipt of such certificates, cause the
same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be
designated by such holder, and (v) when appropriate, after receipt,
deliver such cash, property or securities to or upon the order of the
registered holder of such Right Certificate. The payment of the
Purchase Price may be made (x) in cash or by certified bank check or
bank draft payable to the order of the Company, or (y) by delivery of a
certificate or certificates (with appropriate stock powers executed in
blank attached thereto) evidencing a number of Shares of the Company
equal to the then Purchase Price divided by the closing price (as
determined pursuant to Section 11(d) hereof) per share of Shares at the
Close of Business on the Business Day immediately preceding the date of
such exercise. In the event that the Company is obligated to issue
other securities (including Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a)(iii) hereof, the
Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by
the Rights Agent, if and when appropriate.
(d) In case the registered holder of any 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.
(e) Notwithstanding anything in this Agreement to the
contrary, any Rights that are or were at any time on or after the
earlier of the Distribution Date and the Shares Acquisition Date (i)
beneficially owned by an Acquiring Person or an Affiliate or Associate
of an Acquiring Person, (ii) transferred by an Acquiring Person (or any
such Affiliate or Associate) after the Acquiring Person becomes such, or
(iii) transferred by an Acquiring Person (or any such Affiliate or
Associate) prior to or concurrently with the Acquiring Person becoming
such and if the transferee receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a
plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall, from and after the
first occurrence of any event described in Section 11(a)(ii)(A), (B) or
(C) or the first sentence of Section 13, become null and void without
any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section
4(b) hereof are complied with, but neither the Company nor the Rights
Agent shall have any liability to any holder of Right Certificates or
any other Person as a result of its failure to make any determinations
with respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of a Right
Certificate upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i) completed
and signed the certificate contained in the form of election to purchase
set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
(g) Notwithstanding anything in this Agreement to the
contrary, Rights, including Rights evidenced by certificates for Common
Stock, shall not at any time be transferable, directly or indirectly,
(i) to any Person who is an Acquiring Person, or (ii) to any Person in
connection with a transaction in which such Person becomes an Acquiring
Person or (iii) to any Affiliate or Associate of a Person referred to in
either of the foregoing clauses (i) or (ii). Any attempt to transfer
Rights in violation of the foregoing provisions shall be null and void
as of the date of the purported transfer. Any Right that has been the
subject of any such purported transfer shall be null and void without
any further action, and thereafter may not be exercised by any Person
(including any subsequent transferee) for shares of Common Stock or
other assets pursuant to any provision hereof and shall no longer confer
any rights upon any Person. The Company may require (or cause the
Rights Agent or any transfer agent of the Company to require) any Person
who submits a Rights Certificate (or a certificate representing shares
of Common Stock that evidences, or but for the provisions of this
Section 7(g), Section 11(a)(ii), Section 13 or Section 24 would evidence
Rights) for transfer on the registry books or to exercise the Rights
represented thereby to establish to the reasonable satisfaction of the
Company that such Rights have not been the subject of any purported
transfer in violation of the provisions of this Section 7(g). The
Company shall use all reasonable efforts to ensure that the provisions
of this Section 7(g), Section 11(a)(ii), Section 13 and Section 24 are
complied with, but shall have no liability to any holder of Rights
Certificates or any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliate or
Associate hereunder.
Section 8. Cancellation of Right Certificates.
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the
Rights Agent for cancellation or in canceled form, or, if surrendered to
the Rights Agent, shall be canceled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by 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 canceled Right Certificates to the Company.
Section 9. Reservation and Availability of Shares.
(a) The Company covenants and agrees that, as soon as
practicable following the first occurrence of an event referred to in
Section 11(a)(ii)(A), (B) and (C) and in the first sentence of Section
13, (i) it will take all such action as may be necessary (except as
otherwise provided in Section 11(a)(iii) hereof) to cause to be reserved
and kept available out of its authorized and unissued Shares or any
Shares held in its treasury, the number of Shares that will be
sufficient to permit the exercise in full of all outstanding Rights, and
(ii) it will take all such action as may be necessary to obtain any
regulatory approvals for the issuance of the Shares including, if
required, approval from the Vermont Public Service Board.
(b) The Company shall use its best efforts, as soon as
practicable following the first occurrence of an event referred to in
Section 11(a)(ii)(A), (B) and (C) and in the first sentence of Section
13, to (i) file a registration statement under the Securities Act of
1933 (the "Act"), with respect to the Rights and the Shares purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of the Redemption Date or the Final
Expiration Date. The Company will also use its best efforts to take
such action as may be appropriate under the blue sky laws of the various
states. The Company may temporarily suspend, for a period of time not
to exceed ninety (90) days, the exercisability of the Rights in order to
prepare and file such registration statement. Upon any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates
for such Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable Shares,
except as otherwise provided in Section 11(a)(iii).
(d) 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 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 for the Shares in a name other than that of, the registered
holder of the Right Certificate surrendered for exercise or to issue or
to deliver any certificates for 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. Record Date for Shares.
Each person in whose name any certificate for Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the 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 stock 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 stock 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 Shares
for which the Rights shall be exercisable, including, without
limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights.
The Purchase Price, the number of 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 Shares of the
Company payable in Shares, (B) subdivide its outstanding Shares,
(C) combine its outstanding Shares into a smaller number of Shares
or (D) issue any shares of its capital stock in a reclassification
of the Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided
in this Section 11(a), the Company shall proportionally adjust 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, 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 stock 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. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to any adjustment required
pursuant to, Section 11(a)(ii).
(ii) Subject to Section 24 hereof, in the event (A) any
Acquiring Person or any Affiliate or Associate of any Acquiring
Person, at any time after the date of this Agreement, directly or
indirectly, (1) shall merge into the Company or otherwise combine
with the Company or any of its Subsidiaries, and the Company or
such Subsidiary shall be the continuing or surviving corporation of
such merger or consolidation, and the Shares of the Company shall
remain outstanding and unchanged, or (2) shall, in one or more
transactions, transfer any assets to the Company in exchange (in
whole or in part) for Shares or for securities exercisable for or
convertible into Shares of the Company or otherwise obtain from the
Company, with or without consideration, any additional Shares of
the Company or other securities exercisable for or convertible into
Shares of the Company (other than as a part of a pro rata
distribution to all holders of such securities), or (3) shall sell,
purchase, lease, exchange, acquire, mortgage, pledge, transfer or
otherwise dispose of (in one transaction or a series of
transactions), to, from or with the Company or any of the Company's
Subsidiaries, other than incidental to the lines of business
currently engaged in as of the date hereof between the Company and
its Subsidiaries taken as a whole and such Acquiring Person or
Affiliate or Associate, assets, or an interest therein, having an
aggregate fair market value of more than $1 million, or (4) shall
sell, purchase, lease, exchange, mortgage, acquire, pledge,
transfer or otherwise dispose of (in one transaction or a series of
transactions), to, from or with the Company or any of the Company's
Subsidiaries, assets or an interest therein on terms and conditions
less favorable to the Company than the Company would be able to
obtain through arm's-length negotiation with an unaffiliated third
party, or (5) shall receive any compensation from the Company or
any of the Company's Subsidiaries other than compensation for full-
time employment as a regular employee at rates in accordance with
the Company's (or its Subsidiaries') past practices, or (6) shall
receive the benefit, directly or indirectly (except proportionately
as a shareholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries, or
(B) during such time as there is an Acquiring Person, there shall
be any reclassification of securities (including any reverse stock
split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any
other transaction or series of transactions (whether or not with or
into or otherwise involving an Acquiring Person) which has the
effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of
equity or convertible securities of the Company or any of its
Subsidiaries which is directly or indirectly owned by any Acquiring
Person or any Affiliate or Associate of any Acquiring Person, or
(C) any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any entity or Person organized,
appointed or established pursuant to the terms of any such plan),
alone or together with its Affiliates and Associates, shall at any
time after the date of this Agreement be the Beneficial Owner of
25% or more of the Shares of the Company then outstanding, other
than pursuant to any transaction set forth in Section 13 hereof, or
an acquisition of Shares of the Company pursuant to a tender offer
or exchange offer for all outstanding Shares of the Company at a
price and on terms determined by at least a majority of the members
of the Board of Directors who are not officers of the Company and
who are not nominees or representatives of, or otherwise affiliated
with, an Acquiring Person, after receiving advice from one or more
investment banking firms, to be (a) at a price which is fair to
stockholders (taking into account all factors which such members of
the Board deem relevant including, without limitation, prices which
could reasonably be achieved if the Company or its assets were sold
on an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company, its stockholders
and the economy of the State of Vermont and the United States of
America and not adverse to the interests of the Company's
employees, suppliers, creditors or customers or to that of the
community or society in general, then, and in each such case, the
Company shall make proper provision so that each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have
the right to receive (subject to Section 11(a)(iii) hereof), upon
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of Shares of the
Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of Shares and dividing
that product by (y) 50% of the current per share market price of
the Shares (determined pursuant to Section 11(d)) on the date of
the occurrence of any one of the events listed above in this
subparagraph (ii).
(iii) In the event that there shall not be sufficient
authorized but unissued Shares and authorized and issued Shares
held in the treasury and not reserved for other purposes to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be
necessary to authorize additional Shares for issuance upon exercise
of the Rights including obtaining all regulatory approvals
(including, if required, that of the Vermont Public Service Board);
provided, however, that if the Company is unable to, or for any
reason does not promptly, cause the authorization of a sufficient
number of additional Shares, or is unable for any reason to issue
Shares upon the exercise of the Rights, then, in the event the
Rights become exercisable as provided in Section 7(a), the Company,
with respect to each Right and to the extent necessary under and
permitted by applicable law and any agreements or instruments in
effect on the Distribution Date to which it is a party, shall make
adequate provision to substitute for that number of the Shares as
to which additional Shares have not been authorized for issuance or
as to which it is constrained from issuing: (A) an amount in cash
equal to the excess of (1) the product of (x) the number of Shares,
multiplied by (y) the current market price (determined pursuant to
Section 11(d)) per Share on the date on which the applicable event
set forth in Section 11(a)(ii)(A), (B), or (C) occurs (such product
being hereinafter referred to as the "Current Value"), over (2) the
Purchase Price, in lieu of issuing Shares and requiring payment
therefor, (B) debt or equity securities (other than Shares) having
a value equal to the Current Value, where the value of such
securities shall be determined by a nationally recognized
investment banking firm selected by the Board of Directors of the
Company, and requiring the payment of the Purchase Price, or (C)
any combination of cash, property, common share equivalents
(securities having the same value as the Shares) and/or other
securities having the requisite value pursuant to Section 11 as
determined by a nationally recognized investment banking firm
selected by the Board of Directors of the Company and requiring the
payment of all or any requisite portion of the Purchase Price;
provided further, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (A), (B) or
(C) above within 60 days following the date of the occurrence of
the applicable event listed in Section 11(a)(ii)(A), (B) or (C),
then the Company, as liquidated damages and in complete
satisfaction of all claims and liabilities that may arise in favor
of the holders of the Rights as a result of not having made such
adequate provision, shall be obligated to deliver cash in
accordance with clause (A) above. To the extent that the Company
determines that some action need be taken pursuant to clause (A),
(B) or (C) of the first proviso to the first sentence of this
Section 11(a)(iii), the Company may suspend the exercisability of
the Rights for a period of up to 60 days following the date of the
occurrence of the applicable event listed in Section 11(a)(ii)(A),
(B) or (C), in order to decide the appropriate form of distribution
to be made pursuant to such first proviso and to determine the
value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of its Shares
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Shares or securities
convertible into Shares at a price per Share (or having a conversion
price per share, if a security convertible into Shares) less than the
then current per share market price of the Shares of the Company (as
defined in Section 11(d)) on such record date, the Company shall
determine the Purchase Price to be in effect after such record date 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
Shares of the Company outstanding on such record date plus the number of
Shares which the aggregate offering price of the total number of 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 Shares
of the Company outstanding on such record date plus the number of
additional 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. 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 Company shall adjust the
Purchase Price to be the Purchase Price which would have been 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 its 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 in an amount not exceeding 125 percent of the next previous
regular quarterly cash dividend or a dividend payable in Shares) or
subscription rights or warrants (excluding those referred to in Section
11(b)), the Company shall determine the Purchase Price to be in effect
after such record date 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 Shares of the Company (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 Share and the
denominator of which shall be such current per share market price of the
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 Company shall adjust the Purchase Price again to be the
Purchase Price which would have been in effect if such record date had
not been fixed.
(d) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the
purpose of this Section 11(d)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the
30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; 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 Company shall adjust the current per share market price
appropriately 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 quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations
Systems ("NASDAQ") or such other similar system as may then be in use,
or, if on any such date the Security is not quoted by any such system,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by
the Board of Directors of the Company. If no such market maker is
making a market in the Security, "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. 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.
(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 ten-thousand of a Share or 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 Final Expiration
Date.
(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 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 Shares contained in Section 11(a) through
(c), (h) and (i), and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the 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 Shares
or other capital stock or securities 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 Section 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 Shares (calculated to the nearest one ten-thousand
of a Share) obtained by (i) multiplying (x) the number of Shares 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 Shares purchasable upon
the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number
of Shares 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-thousand) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment
to be made. Such 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 specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Shares 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 Shares which were expressed
in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
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 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 Shares and other capital stock
or securities of the Company, if any, issuable upon such exercise over
and above the 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 or other capital stock or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any
consolidation or subdivision of the Shares, issuance wholly for cash of
any Shares at less than the current market price, issuance wholly for
cash of Shares or securities which by their terms are convertible into
or exchangeable for Shares, dividends on Shares payable in Shares or
issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Shares
shall not be taxable to such holders.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 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 Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate (or, if prior to
the Distribution Date, to each holder of Shares of the Company) in
accordance with Section 26 hereof. The Rights Agent shall be fully
protected in relying on any certificate prepared by Company pursuant to
Sections 11, 12 and 13 hereof and on any adjustment described therein.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
In the event, following the Shares Acquisition Date, directly
or indirectly, (a) the Company shall consolidate with, or merge with and
into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection
with such merger, all or part of the 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, the Company or such other Person, as the
case may be, shall make proper provision so that (i) each holder of a
Right (except as otherwise provided herein) shall thereafter have the
right to receive, upon the exercise thereof in accordance with the terms
of this Agreement, such number of Shares of such other Person (including
the Company as successor thereto or as the surviving corporation) as
shall be equal to the result obtained by (x) multiplying the then
current Purchase Price by the number of Shares of the Company for which
a Right is then exercisable and dividing that product by (y) 50% of the
then current per share market price of the Shares of such other Person
(determined pursuant to Section 11(d)) on the date of consummation of
such consolidation, merger, sale or transfer (such number of shares to
be appropriately adjusted in a manner analogous to the applicable
adjustment to the Purchase Price provided for in Section 11 in the event
that during the two-year period after such date of consummation or
occurrence an event of a type analogous to any of the events described
in Section 11 hereof shall have occurred with respect to such Shares);
(ii) the issuer of such Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Shares in
accordance with Section 9 hereof) 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 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 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, merger, sale or transfer unless prior thereto the Company
and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the requirements of this Section
13 shall be promptly performed in accordance with their terms and that
such consolidation, merger, sale or transfer shall not result in a
default by the Company or such issuer under this Rights Agreement as the
same shall have been assumed by such issuer pursuant to this Section 13.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. 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 quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the- counter market, as reported by NASDAQ
or such other similar system as may then be in use or, if on any such
date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in the Rights selected by the Board of Directors
of the Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall
be used.
(b) The Company shall not be required to issue fractions of
Shares upon exercise of the Rights or to distribute certificates which
evidence fractional Shares. In lieu of fractional 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 Share. For
purposes of this Section 14(b), the current market value of a Share
shall be the closing price of a Share (as determined pursuant to the
second sentence of Section 11(d) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of 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 Shares of the Company); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the Shares of
the Company), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of
the Shares of the Company), may, in his own behalf and for his own
benefit, enforce, institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such 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, 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 Shares;
(b) after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent if
surrendered at the designated office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated 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 Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice
to the contrary; and
(d) notwithstanding anything in this Rights Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or to any other Person as a result of
its inability to perform any of its obligations under this Rights
Agreement by reason of any preliminary or permanent injunction or by
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or
otherwise restraining performance of such obligation.
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 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 such
compensation as shall be agreed in writing between the Company and the
Rights Agent for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses, 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 shall indemnify the
Rights Agent for, and hold it harmless against, any loss, liability,
claim or expense ("Loss") arising out of or in connection with its
duties under this Agreement, including the costs and expenses of
defending itself against any Loss, unless such Loss shall have been
determined by a court of competent jurisdiction to be a result of the
Rights Agent's gross negligence, bad faith or willful misconduct.
The obligations of the Company under this section shall
survive the termination of this Agreement.
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 Shares of the Company
or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
The Rights Agent undertakes to perform such duties and only
such duties as are specifically set forth in this Rights Agreement, and
no implied covenants or obligations shall be read into this Rights
Agreement against the Rights Agent.
The provisions of this Section shall survive the termination
of this Agreement.
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 a party, or any
corporation succeeding to all or substantially all the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section
21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the counter-signature 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 Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent.
The Rights Agent undertakes the duties and obligations 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 of its
selection (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, including, without limitation, any
calculations required to be made 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, the Executive Vice President, any
Senior Vice President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or
willful misconduct. In no case will the Rights Agent be liable for
special, indirect, incidental or consequential loss or damages of any
kind whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the possibility of such damages. Any
liability of the Rights Agent will be limited to the amount of fees paid
by the Company hereunder.
(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 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 receipt of written notice from the Company 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 Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any 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, instrument and assurances
as may reasonably be required by the Rights Agent for the carrying out
or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President, any
Executive Vice President, any Senior Vice President, any Vice President,
the Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it in good
faith in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, 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 of such attorney
or agent.
(j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in
the form of assignment or the form of election to purchase set forth on
the reverse thereof, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 or 2 thereof, the
Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the
Company.
(k) No provisions of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon 30 days' notice
in writing mailed to the Company and to each transfer agent of the
Shares by registered or certified mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Shares by registered or
certified 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 Rights Agent
or registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a corporation, organized and doing business under
the law of the United States or of any state of the United States, 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 or (b) an Affiliate
controlled by a corporation described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute
and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment
the Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the 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 forms may be approved by
its Board of Directors to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
at any time prior to 5:00 P.M., South Burlington, Vermont time, on the
earlier of (i) the Close of Business on the tenth day following the
Shares Acquisition Date (or such later date as the Board of Directors
then in office may determine), or (ii) the Final Expiration Date, redeem
all but not less than all of the then outstanding Rights at a redemption
price of $.001 per Right, as such amount may be appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, that if,
following the occurrence of a Shares Acquisition Date and following the
expiration of the right of redemption hereunder but prior to any event
referred to in Section 11(a)(ii)(A), (B) or (C) or in the first sentence
of Section 13, each of the following shall have occurred and remain in
effect: (i) a Person who is an Acquiring Person shall have transferred
or otherwise disposed of a number of Shares in a transaction, or series
of transactions, which did not result in the occurrence of an event
referred to in Section 11(a)(ii)(A), (B) or (C) or in the first sentence
of Section 13, such that such Person is thereafter a Beneficial Owner of
less than 15% of the Shares, (ii) there are no other Persons,
immediately following the occurrence of the event described in clause
(i), who are Acquiring Persons, and (iii) the transfer or other
disposition described in clause (i) above was other than pursuant to a
transaction, or series of transactions, which directly or indirectly
involved the Company or any of its Subsidiaries; then the right of
redemption shall be reinstated and thereafter be subject to the
provisions of this Section 23. Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the Company's
right of redemption hereunder. In calculating the Redemption Price
payable to any particular holder of the Rights being redeemed, the
Company shall round the total amount payable to such holder pursuant to
the provisions of the first sentence of this Section 23(a) up to the
nearest $.01. Anything to the contrary herein contained
notwithstanding, no payment shall be made to any holder of Rights being
redeemed if such payment would be less than $1.00 unless such holder
expressly requests such payment. The failure to make any such payment
of less than $1.00 in the absence of a request therefor shall not affect
the redemption of the Rights involved.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, 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 the
action of the Board of Directors ordering the redemption of the Rights,
the Company shall give notice of such redemption to the holders of the
then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the 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,
and other than in connection with the purchase of Shares prior to the
Distribution Date.
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 7(e) hereof) for Shares at an exchange ratio of one Share per
Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Shares
for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such person, becomes the Beneficial Owner
of 50% or more of the Shares then outstanding.
(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 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 such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent or prior to the
Distribution Date on the registry books of the transfer agent for the
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 exchange will state the method by which the exchange of
the 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
7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient 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 use its best efforts to take all such action as may be
necessary to authorize additional Shares for issuance upon exchange of
the Rights.
(d) The Company shall not be required to issue fractions of
Shares or to distribute certificates which evidence fractional Shares.
In lieu of such fractional Shares, the Company shall pay to the
registered holders of the Right Certificates, with regard to which such
fractional Shares would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Share. For
the purposes of this subsection (e), the current market value of a whole
Share shall be the closing price of a Share (as determined pursuant to
the second sentence of Section 11(d) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
In case the Company shall propose (a) to pay any dividend
payable in stock of any class to the holders of the Shares or to make
any other distribution to the holders of the Shares (other than a
regular quarterly cash dividend in an amount not exceeding 125 percent
of the next previous regular quarterly cash dividend) or (b) to offer to
the holders of the Shares rights or warrants to subscribe for or to
purchase any additional Shares or shares of stock of any class or any
other securities, rights or options, or (c) to effect any
reclassification of the Shares (other than a reclassification involving
only the subdivision of outstanding Shares), or (d) to effect any
consolidation 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 (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the
Company shall give to each holder of a 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, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the 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 (a) or (b) above at least 20 days prior to the record
date for determining holders of the 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 Shares, whichever shall be the earlier.
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:
Green Mountain Power Corporation
00 Xxxxx Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company
or by the holder of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
Overpeck Centre
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
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 Shares or Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein 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, including but not limited to the extension of the redemption
period referred to in Section 23 (provided that such period may not be
extended after it has expired), and provided that after the Distribution
Date any such amendment shall not otherwise adversely affect the
interests of the holders of Right Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person) and provided
further that no such supplement or amendment shall be effective unless
made in writing and signed by the Company and the Rights Agent. The
Rights Agent shall not execute any proposed amendment or supplement
until it has received a certificate from an appropriate officer of the
Company stating that such proposed amendment or supplement is in
compliance with this Section 27. Notwithstanding any other provision
hereof, the Rights Agent's consent must be obtained regarding any
amendment or supplement pursuant to this Section 27 which alters the
Rights Agents rights or duties.
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 other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date,
the Shares of the Company) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date,
the Shares of the Company).
Section 30. Severability.
If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language
from this Agreement would adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof shall
be reinstated and shall not expire until the Close of Business on the
tenth day following the date of such determination by the Board of
Directors.
Section 31. Governing Law.
This Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the law of the State of
Vermont and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be
made and performed entirely within such State provided that the rights
and obligations of the Rights Agent shall be governed by the laws of the
State of New York (or state of incorporation of any successor Rights
Agent).
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.
Section 34. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the
number of Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding
Shares of the Company of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule 13d-3(d)(l)(i) of
the General Rules and Regulations under the Exchange Act. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power (i) to interpret the
provisions of this Agreement, and (ii) to make all determinations deemed
necessary or advisable for the administration of this Agreement
(including a determination to redeem or not to redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the
Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board to any liability to the holders
of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above
written.
GREEN MOUNTAIN POWER CORPORATION
By:/s/ X. X. Xxxxxx
Name: Xxxxxxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By:/s/ X. X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Assistant Vice President
Exhibit A
Form of Right Certificate
Green Mountain Power Corporation
Certificate No. R-___ Rights
NOT EXERCISABLE AFTER THE EARLIEST OF (1) JUNE 17, 2008, (2) REDEMPTION
AND (3) EXCHANGE. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT
Right Certificate
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 17, 1998 (the
"Rights Agreement"), between Green Mountain Power Corporation, a Vermont
corporation (the "Company"), and ChaseMellon Shareholder Services,
L.L.C. (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights
Agreement), subject to receipt by the Company of all regulatory
approvals required, and prior to 5:00 P.M., New York City time, on June
17, 2008 at the designated office of the Rights Agent, or at the office
of its successor as Rights Agent, one fully paid, nonassessable share of
Common Stock, par value $3.33 1/3 per share (a "Share"), of the Company,
at a purchase price of $45.00 per Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed. The number of Rights evidenced by
this Right Certificate (and the number of Shares 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 26, 1998, based on
the Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of Shares which may be
purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the
happening of certain events.
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 the 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.
Subject to the restrictions on transfer set forth in Section
7(e) of the Rights Agreement, this Right Certificate, with or without
other Right Certificates, upon surrender at the designated office of the
Rights Agent, at ChaseMellon Sharehholder Services, L.L.C., Overpeck
Centre, 00 Xxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000, 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 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 required to be exchanged for Shares
on a one for one basis, as adjusted pursuant to the provisions of the
Rights Agreement, or may, but are not required to, be redeemed by the
Company at a redemption price of $.001 per Right. The amount so payable
shall be rounded up to the nearest $.01 but no payment of less than
$1.00 shall be sent unless expressly requested by the holder hereof.
No fractional 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
Shares which may at any time be issuable on the exercise hereof, 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 of 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.
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: _______________, ____ .
ATTEST: GREEN MOUNTAIN POWER CORPORATION
______________________________ By: ___________________________
Name:
Title:
Countersigned:
By: ___________________________
Name:
Title:
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 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
Form of Reverse Side of Right Certificate continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the rights represented by
the Right Certificate.)
To Green Mountain Power Corporation:
The undersigned hereby irrevocably elects to exercise
_________________________________ Rights represented by this Right
Certificate to purchase the Shares issuable upon the exercise of such
Rights and requests that certificates for such 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
Form of Reverse Side of Right Certificate continued
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.
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate _________
are _________ are not being exercised by or on behalf of a Person who is
or was an Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it _________ did _________ did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: ______________, ____
____________________________
Signature
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE SHARES
On June 17, 1998, Green Mountain Power Corporation (the
"Company") authorized assignment of one share purchase right (a "Right")
for each outstanding share of Common Stock, par value $3.33 1/3 per
share (the "Shares"), of the Company. The Rights will be assigned on
June 26, 1998 (the "Record Date") to the shareholders of record on that
date. Each Right entitles the registered holder to purchase from the
Company one Share at a price of $45.00 per Share (the "Purchase Price"),
when the Rights become exercisable. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and ChaseMellon Shareholder Services, L.L.C., as
rights agent (the "Rights Agent").
Rights initially not separable from Common Stock: The Rights
will be evidenced, with respect to any of the Share certificates
outstanding as of the Record Date, by such Share certificate until the
earlier of (i) 10 days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15%
or more of the outstanding Shares (the date of such public announcement
being called the "Share Acquisition Date") or (ii) 10 days following the
commencement or announcement of an intention to make a tender offer or
exchange offer by a person other than the Company if, upon consummation
of the offer, such person, together with persons affiliated or
associated with it, would be the beneficial owner of 25% or more of the
outstanding Shares (the earlier of such days being called the
"Distribution Date"). The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the
Shares. Until the Distribution Date (or earlier redemption, termination
or expiration of the Rights), new Share certificates issued after the
Record Date, upon transfer or new issuance of Shares, will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption, termination or expiration of
the Rights), the surrender for transfer of any certificates for Shares,
outstanding as of the Record Date, even without such notation, will also
constitute the transfer of the Rights associated with the Shares
represented by such certificate.
Separation of Rights from Common Stock: As soon as
practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders
of record of the Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will thereafter evidence
the Rights.
Exercise of Rights: The Rights are not exercisable until the
Distribution Date and until the Company has received all required
regulatory approvals for the issuance of the Shares. The Rights will
expire June 17, 2008 unless such date is extended or unless the Rights
are earlier redeemed by the Company or exchanged for Shares, in each
case as described below.
Rights may not be transferred, directly or indirectly, (i) to
any person who is, or, as a result of the transfer would be, the
beneficial owner of 15% or more of the Rights (including Rights that are
null and void as described below), or (ii) to any affiliate or associate
of any such person. Any Right that is the subject of any such purported
transfer shall be null and void without any further action, and
thereafter may not be exercised by any person (including any subsequent
transferee) for Shares or other assets pursuant to any provision of the
Rights Agreement and shall no longer confer any rights upon any person.
The Purchase Price payable, and the number of Shares or other
securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification
of, the Shares, (ii) upon the grant to holders of the Shares of certain
rights or warrants to subscribe for or purchase Shares at a price, or
securities convertible into Shares with a conversion price, less than
the then current market price of the Shares or (iii) upon the
distribution to holders of the Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings
or retained earnings or dividends payable in Shares) or of subscription
rights or warrants (other than those referred to above).
In the event that (i) the Company merges with or is involved
in another business combination transaction with an Acquiring Person,
(ii) 50% or more of its consolidated assets or earning power are sold to
an Acquiring Person, (iii) an Acquiring Person acquires 25% or more of
the Shares, or (iv) an Acquiring Person engages in one or more self-
dealing transactions with the Company, then, proper provision will be
made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of
the Right, that number of shares of common stock of the Company or of
the acquiring company, as the case may be, which at the time of such
transaction will have a value double the amount of the Purchase Price.
Any Rights that are or were beneficially owned at any time on
or after the Distribution Date by an Acquiring Person shall become null
and void upon the occurrence of any event described in the preceding
paragraph and no holder of such Rights shall have any right with respect
to such Rights from and after the occurrence of any such event.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of
at least 1% in such Purchase Price. No fractional Shares will be issued
and in lieu thereof, an adjustment in cash will be made based on the
market price of the Shares on the last trading day prior to the date of
exercise.
Redemption of the Rights: At any time prior to the 10th day
following the Shares Acquisition Date (unless extended by the Company),
the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.001 per Right (the "Redemption Price").
In that connection, the amount payable to any holder of the Rights will
be rounded up to the nearest $.01. Payments of less than $1.00 will be
sent to holders of the Rights only if the particular holder entitled to
the payment specifically requests that the payment be sent. Immediately
upon the action of the Company ordering redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Exchange of Rights: After the Distribution Date and prior to
the time an Acquiring Person has acquired 50% or more of the then
outstanding Shares, the Company may require that some or all of the
Rights be exchanged on a one for one basis (subject to adjustment for
stock splits, stock dividends and other similar transactions) for
Shares. To the extent that Rights are required to be exchanged for
Shares, the right to exercise those Rights will terminate and the only
right of the holder thereof will be to exchange those Rights for Shares.
Amendments: The terms of the Rights may be amended by the
Company without the consent of the holders of the Rights, including an
amendment to extend the period during which the rights may be redeemed,
except, that after the Distribution Date no such amendment may otherwise
adversely affect the interests of the holders of the Rights. In the
event an Acquiring Person, after triggering the redemption option of the
Company, reduces its shareholdings to less than 15% then the redemption
rights are reinstated.
No Rights as a Shareholder: Until a Right is exercised, the
holder thereof, as such, will have no rights as a shareholder of the
Company, including, without limitation, the right to vote or to receive
dividends.
* * *
A copy of the Rights Agreement will be filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on
Form 8-K dated June 19, 1998. A copy of the Rights Agreement is
available free of charge from the Company. This summary description of
the Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
