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EXHIBIT 10.10
RIGHTS AGREEMENT
between
Group 1 Automotive, Inc.
and
ChaseMellon Shareholder Services, L.L.C.
as Rights Agent
Dated as of October 3, 1997
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TABLE OF CONTENTS
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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Section 5. Execution, Authentication and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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Section 6. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . 16
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Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . 17
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Section 9. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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Section 10. Reservation and Availability of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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Section 11. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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Section 12. Adjustment of Purchase Price, Number of Shares or Number of Rights . . . . . . . . . . . . . . . . . . . 21
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Section 13. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . . . 30
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Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . . . 31
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Section 15. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 16. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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Section 17. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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Section 18. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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Section 19. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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Section 21. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . 40
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Section 22. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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Section 23. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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Section 24. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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Section 25. Mandatory Redemption and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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Section 26. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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Section 27. Securities Laws Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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Section 28. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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Section 29. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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Section 30. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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Section 31. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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Section 32. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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Section 33. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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Section 34. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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Section 35. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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Exhibits
Exhibit A - Certificate of Designation of Preferred Shares
Exhibit B - Right Certificate
Exhibit C - Summary of Rights
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RIGHTS AGREEMENT
This Rights Agreement, dated as of October 3, 1997, is between Group 1
Automotive, Inc., a Delaware corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., a national banking association, as Rights Agent.
WHEREAS, the Board of Directors of the Company, having determined its
actions to be in the interests of the Company, has authorized the creation of
Rights, has authorized and directed the issuance to the Holders of record of
Common Shares of the Company outstanding on the date (the "Effective Date") of
closing of the acquisition by the Company (the "Acquisitions") of Xxxxxx
Pontiac-GMC, Inc., Xxx Xxxxxx Chevrolet, Inc., Xxx Xxxxxx Automotive-H, Inc.
Xxx Xxxxxx Motors, Inc., Xxx Xxxxxx Dodge, Inc., Southwest Toyota, Inc., SMC
Luxury Cars, Inc., Xxxx Xxxxx Autoplaza, Inc., Xxxxx, Xxx & Xxxx, Inc.,
Courtesy Nissan, Inc., Xxxxx, Liu & Xxxxxx, Inc., Round Rock Nissan, Inc. and
Foyt Motors, Inc., immediately after the Acquisitions of one Right with respect
to each Common Share of the Company outstanding on the Effective Date and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Effective Date and the
earlier of the Distribution Date, the Redemption Date and the Final Expiration
Date; and
WHEREAS, the Board of Directors of the Company has authorized and
directed that the terms and conditions under which the Rights are to be
distributed, including without limitation those affecting the exercise thereof,
the securities or other property to be acquired thereby and the purchase price
to be paid therefor, shall be set forth in a written agreement between the
Company and a rights agent made for the benefit of the holders of the Rights to
the extent so provided therein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
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Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 20% or more of the Voting Shares of the
Company then outstanding, but shall not include (i) the Company, (ii)
any Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company or trustee or fiduciary
with respect to any such plan when acting in such capacity, (iv) any
trustee of or fiduciary with respect to any such plan when acting in
such capacity, or (v) any Grandfathered Stockholder. Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as the
result of an acquisition of Voting Shares by the Company which, by
reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 20% or more of
the Voting Shares of the Company then outstanding; provided, however,
that, if a Person shall become the Beneficial Owner of 20% or more of
the Voting Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company and at a time when such Person is the Beneficial Owner of 20%
or more of the Voting Shares of the Company then outstanding, become
the Beneficial Owner of any additional Voting Shares of the Company,
then such Person shall be deemed to be an "Acquiring Person".
Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be
an "Acquiring Person", as defined pursuant to the foregoing provisions
of
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this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person,"
as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
"Agreement" shall mean this Rights Agreement as hereafter
amended from time to time.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "own beneficially" any securities which (without
duplication):
(i) such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, within the
meaning of either Section 13 or 16 of the Exchange Act;
(ii) 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; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; or
(iii) are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting or disposing of any securities of the Company; provided,
however, that, for purposes of each clause of this definition, a
Person shall not be deemed the Beneficial
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Owner of, or to own beneficially, 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; and provided, further, that,
for purposes of each clause of this definition, a Person shall not be
deemed the Beneficial Owner of, or to own beneficially, any security
as a result of any agreement, arrangement or understanding to vote
such security if such agreement, arrangement or understanding (1)
arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable or successor
report) and provided, further, that notwithstanding anything to the
foregoing to the contrary, a Person engaged in the business of
underwriting securities shall not be deemed the "Beneficial Owner" of,
or to "own beneficially", any securities acquired in good faith in a
firm commitment underwriting until the expiration of 40 days after the
date of such acquisition.
Notwithstanding anything in this definition to the contrary,
the phrase "then outstanding", when used with reference to a Person's
Beneficial Ownership of securities of the Company (or to the number of
such securities "beneficially owned"), shall mean the number of such
securities then issued and outstanding together with the number of
such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Texas or
the state wherein the principal office of the Rights Agent is located
are authorized or obligated by law or executive order to close.
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"Close of Business" on any given date shall mean 5:00 P.M.,
eastern time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., eastern time, on the next
succeeding Business Day.
"Closing Price", with respect to any security, shall mean the
last sale price, regular way, on a specific Trading Day or, in case no
such sale takes place on such Trading 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 such security is not then 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 such
security is listed or admitted to trading or, if such security is not
then listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotations System or such other system then in use, or, if
on any such Trading Day such security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Company. If such
security is not publicly held or so listed or traded, "Closing Price"
shall mean the fair value per unit of such security as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described and the Closing Price set forth in a
statement filed with the Rights Agent.
"Common Shares" when used with reference to the Company shall
mean shares of capital stock of the Company which have no preference
over any other class of stock with respect to dividends or assets,
which are not redeemable at the option of the Company and with
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respect to which no sinking, purchase or similar fund is provided and
shall initially mean the shares of Common Stock, par value $.01, of
the Company. "Common Shares" when used with reference to any Person
other than the Company shall, if used with reference to a corporation,
mean the capital stock (or equity interest) with the greatest voting
power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person and, if used with reference to any other
Person, mean the equity interest in such Person (or, if the net worth
determined in accordance with generally accepted accounting principles
of another Person (other than an individual) which controls such
first-mentioned Person is greater than such first-mentioned Person,
then such other Person) with the greatest voting power or managerial
power with respect to the business and affairs of such Person.
"Company" shall mean Group 1 Automotive, Inc., a Delaware
corporation, and its successors.
"Company Order" means a written request or order signed in the
name of the Company by its Chairman of the Board, its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Rights
Agent.
"Distribution Date" shall mean the earlier of (i) the tenth
Business Day after the Shares Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of commencement by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit
plan of the
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Company or of any Subsidiary of the Company, or any trustee of or
fiduciary with respect to any such plan when acting in such capacity)
of, or after the date of the first public announcement of the intent
of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the
Company, or any trustee of or fiduciary with respect to any such plan
when acting in such capacity) to commence, a tender or exchange offer
the consummation of which would result in any Person becoming the
Beneficial Owner of 20% or more of the then outstanding Voting Shares
of the Company; provided, however, that an occurrence described in
clause (ii) of this definition above shall not cause the occurrence of
the Distribution Date if the Board of Directors of the Company shall,
prior to such tenth Business Day (or such later date as described in
clause (ii) above), determine that such tender or exchange offer is
spurious, unless, thereafter, the Board of Directors of the Company
shall make a contrary determination, in which event the Distribution
Date shall occur on the later to occur of such tenth Business Day (or
such later date as described in clause (ii) above) and the date of
such latter determination.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute thereto.
"Final Expiration Date" shall mean the Close of Business on
the tenth anniversary of the Effective Date.
"Grandfathered Stockholders" shall mean at any time Xxxxxx X.
Xxxxxx, XX, provided, however, that Xxxxxx X. Xxxxxx, XX shall not be
a Grandfathered Stockholder if he makes an acquisition of Common
Shares that would increase his percentage ownership of the outstanding
Common Shares immediately after consummation of the Company's initial
public offering (the "Offering"), before taking into account any
acquisitions of Common Shares by Xxxxxx X. Xxxxxx, XX in the Offering,
by 2.0%.
"Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability company, trust or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
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"Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the
Company having the rights and preferences set forth in the form of
Certificate of Designation of Series A Junior Participating Preferred
Stock attached hereto as Exhibit A.
"Purchase Price" shall mean the initial price at which the
holder of a Right may, subject to the terms and conditions of this
Agreement, purchase one one-thousandth (1/1000) of a Preferred Share
(which initial price is set forth in Section 8(b) hereof), as such
price shall be adjusted pursuant to the terms of this Agreement.
"Redemption Date" shall mean the time at which the Rights are
redeemed pursuant to Section 24 herein or the time at which all of the
Rights are mandatorily redeemed and exchanged pursuant to Section 25
hereof.
"Redemption Price" shall have the meaning specified in Section
24(b) herein. "Right" shall mean one preferred share purchase
right which initially represents the right of the registered holder
thereof to purchase one one-thousandth (1/1000) of a Preferred Share
upon the terms and subject to the conditions herein set forth.
"Rights Agent" shall mean ChaseMellon Shareholder Services,
L.L.C., a national banking association, and any successor thereto
appointed in accordance with the terms hereof, in its capacity as
agent for the Company and the holders of the Rights pursuant to this
Agreement.
"Right Certificate" shall mean a certificate, in substantially
the form of Exhibit B attached to this Rights Agreement, evidencing
the Rights registered in the name of the holder thereof.
"Rights Register" and "Rights Registrar" shall have the
meanings specified in Section 6.
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"Shareholder Services" means the principal office of the
Rights Agent at which it administers shareholder services business,
which, in the case of ChaseMellon Shareholder Services, L.L.C. shall,
until hereafter changed, be its office at 0000 Xxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000.
"Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition shall include
without limitation a report filed pursuant to Section 13(d) or Section
16(a) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
"Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the outstanding capital stock or other
equity interests having ordinary voting power in the election of
directors or similar officials is owned, directly or indirectly, by
such Person.
"Summary of Rights" shall mean a Summary of Rights to Purchase
Preferred Shares in substantially the form attached as Exhibit C to
this Agreement.
"Trading Day" shall mean a day on which the principal national
securities exchange or the NASDAQ National Market on which any of the
Voting Shares of the Company are listed or admitted to trading is open
for the transaction of business or, if none of the Voting Shares of
the Company is listed or admitted to trading on any national stock
exchange or the NASDAQ National Market, a Business Day.
"Voting Shares" shall mean (i) the Common Shares of the
Company and (ii) any other shares of capital stock of the Company
entitled to vote generally in the election of directors or entitled to
vote together with the Common Shares in respect of any merger or
consolidation of the Company, any sale of all or substantially all of
the Company's assets or any liquidation, dissolution or winding up of
the Company. Whenever any provision of this Agreement requires a
determination of whether a number of Voting Shares comprising a
specified
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percentage of such Voting Shares is, was or will be beneficially owned
or has been voted, tendered, acquired, sold or otherwise disposed of
or a determination of whether a Person has offered or proposed to
acquire a number of Voting Shares comprising such specified
percentage, the number of Voting Shares comprising such specified
percentage of Voting Shares shall in every such case be deemed to be
the number of Voting Shares comprising the specified percentage of all
the Company's then outstanding Voting Shares.
"Wholly-Owned Subsidiary" of a Person shall mean any
corporation or other entity all the outstanding capital stock or other
equity interests of which having ordinary voting power in the election
of directors or similar officials (other than directors' qualifying
shares or similar interests) are owned, directly or indirectly, by
such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates. (a) From and after the
Effective Date until the Distribution Date, (i) outstanding Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for outstanding Common Shares of the Company and not by separate
Right Certificates, and (ii) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the Distribution Date, the Rights Agent
will send, by first-class, insured, postage-prepaid mail, to each record holder
of Common Shares of the Company as of the Close of Business on the Distribution
Date, at the address of such holder shown on the stock transfer records of the
Company, a Right Certificate evidencing one Right for each Common Share so
held. From and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
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(b) On the Effective Date, or as soon thereafter as
practicable, the Company will send a copy of a Summary of Rights, by
first-class, postage-prepaid mail, to each record holder of Common Shares of
the Company as of the Close of Business on the Effective Date, at the address
of such holder shown on the stock transfer records of the Company. With
respect to Common Shares outstanding on the Effective Date, the certificates
evidencing such Common Shares shall, together with copies of such Summary of
Rights, thereafter also evidence the outstanding Rights (as such Rights may be
amended or supplemented) distributed with respect thereto until the earlier of
the Distribution Date or the date of surrender thereof to the Company's
transfer agent for registration of transfer or exchange of Common Shares.
Until the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date), the surrender for registration of transfer or exchange of any
certificate for Common Shares outstanding as of the Close of Business on the
Effective Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the surrender for registration of transfer or
exchange of the outstanding Rights associated with the Common Shares
represented thereby.
(c) The Company agrees that, at any time after the
Effective Date and prior to the Distribution Date (or, if earlier, the
Redemption Date or Final Expiration Date) at which it issues any of its Common
Shares upon original issue or out of treasury, it will concurrently distribute
to the holder of such Common Shares one Right for each such Common Share, which
Right shall be subject to the terms and provisions of this Agreement and will
evidence the right to purchase the same number of one one-thousandths (1/1000)
of a Preferred Share at the same Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares issued after the
Effective Date but prior to the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date, whether upon registration of
transfer or exchange of Common Shares outstanding on the Effective Date or upon
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original issue or out of treasury thereafter, 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 Group 1
Automotive, Inc. and ChaseMellon Shareholder Services, L.L.C., dated
as of October 3, 1997 (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 Group 1 Automotive, Inc. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. Group 1 Automotive, Inc. will mail
to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to or acquired by any
Acquiring Person or any Affiliate or Associate thereof (each as
defined in the Rights Agreement) shall, under certain circumstances,
become null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender of any such certificate for registration of transfer or
exchange of the Common Shares evidenced thereby shall also constitute surrender
for registration of transfer or exchange of outstanding Rights (as such Rights
may be amended or supplemented) associated with the Common Shares represented
thereby.
(e) If the Company purchases or acquires any of its Common Shares
after the Effective Date, but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed cancelled and retired so
that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The form of Right
Certificates (and the forms of election to purchase Preferred Shares (or other
securities) and of assignment to be printed on the reverse thereof) shall in
form and substance be substantially the same as Exhibit B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, as may be required to
comply with any applicable law or with any rule or regulation made
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pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed or as may be necessary to conform to
usage. Subject to the provisions of Section 23 hereof, the Right Certificates,
whenever issued, shall be dated as of the date of authentication thereof, but,
regardless of any adjustments of the Purchase Price or the number of Preferred
Shares (or other securities) as to which a Right is exercisable (whether
pursuant to this Agreement or any future amendments or supplements to this
Agreement), or both, occurring after the Effective Date and prior to the date
of such authentication, such Right Certificates may, on their face, without
invalidating or otherwise affecting any such adjustment, expressly entitle the
holders thereof to purchase such number of Preferred Shares at the Purchase
Price per one one-thousandth (1/1000) of a Preferred Share as to which a Right
would be exercisable if the Distribution Date were the Effective Date; no
adjustment of the Purchase Price or the number of Preferred Shares (or other
securities) as to which a Right is exercisable, or both, effected subsequent to
the date of authentication of any Right Certificate shall be invalidated or
otherwise affected by the fact that such adjustment is not expressly reflected
on the face or in the provisions of such Right Certificate.
Pending the preparation of definitive Right Certificates, the Company
may execute, and upon Company Order the Rights Agent shall authenticate and
send, by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares of the Company as of the Close of Business on the Distribution
Date, temporary Right Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Right Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Right Certificates may determine, as evidenced by
their execution of such Right Certificates.
If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the
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temporary Right Certificates shall be exchangeable for definitive Right
Certificates, upon surrender of the temporary Right Certificates at the
Shareholder Services Office of the Rights Agent, without charge to the holder.
Upon surrender for cancellation of any one or more temporary Right
Certificates, the Company shall execute and the Rights Agent shall authenticate
and deliver in exchange therefor one or more definitive Right Certificates,
evidencing a like number of Rights. Until so exchanged, the temporary Right
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Right Certificates.
Section 5. Execution, Authentication and Delivery. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents, attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these officers on
the Right Certificates may be manual or facsimile.
Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as in
this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Right Certificate a certificate of authentication substantially in the
form provided for herein executed by the Rights Agent by manual signature, and
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such certificate upon any Right Certificate shall be conclusive evidence, and
the only evidence, that such Right Certificate has been duly authenticated and
delivered hereunder.
Section 6. Registration, Registration of Transfer and Exchange. From
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Shareholder Services Office of the Rights Agent a Rights Register (a "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Right Certificates
and of transfers of Rights. The Rights Agent is hereby appointed the registrar
and transfer agent (the "Rights Registrar") for the purpose of registering
Right Certificates and transfers of Rights as herein provided and the Rights
Agent agrees to maintain such Rights Register in accordance with such
regulations so long as it continues to be designated as Rights Registrar
hereunder.
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
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Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates.
If any mutilated Right Certificate is surrendered to the Rights Agent, the
Company shall execute and the Rights Agent shall authenticate and deliver in
exchange therefor a new Right Certificate of like tenor, for a like number of
Rights and bearing a registration number not contemporaneously outstanding.
If there shall be delivered to the Company and the Rights Agent (i)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (ii) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Rights Agent that such Right
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Right Certificate, a new Right
Certificate of like tenor, for a like number of Rights and bearing a
registration number not contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed
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in relation thereto and any other expenses (including the fees and expenses of
the Rights Agent) connected therewith.
Every new Right Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Right Certificates duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Right
Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at its Shareholder Services Office, together
with payment of the Purchase Price for each one one-thousandth (1/1000) of a
Preferred Share (or other securities) as to which the Rights are exercised, at
or prior to the earliest of (i) the Close of Business on the Final Expiration
Date, (ii) the time of redemption on the Redemption Date or (iii) the time at
which such Rights are mandatorily redeemed and exchanged as provided in Section
25 hereof.
(b) The Purchase Price for each one one-thousandth
(1/1000) of a Preferred Share pursuant to the exercise of a Right shall
initially be $65, shall be subject to adjustment from time to time as provided
in Sections 12 and 14 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
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(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the securities 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 10 in cash, or by
certified check or cashier's check payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Preferred Shares (or other securities) certificates for such
number of one one-thousandths of a Preferred Share (or other securities) as are
to be purchased and registered in such name or names as may be designated by
the registered holder of such Right Certificate or, if appropriate, in the name
of a depositary agent or its nominee, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, and (B)
requisition from a depositary agent appointed by the Company, if any,
depositary receipts representing such number of one one-thousandths of a
Preferred Share as are to be purchased and registered in such name or names as
may be designated by such holder (in which case certificates for the Preferred
Shares represented by such receipts shall be deposited by the transfer agent
with such depositary agent), and the Company hereby directs such depositary
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 15, (iii) promptly after receipt of such
certificates or depositary receipts registered in such name or names as may be
designated by such holder, cause the same to be delivered to or upon the order
of the registered holder of such Right Certificate and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of such holder.
(d) If the registered holder of the Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equal 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 15 hereof.
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Section 9. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer or
exchange shall, if surrendered to the Company or to any of its other agents, be
delivered to the Rights Agent for such purpose and for cancellation or, if
surrendered to the Rights Agent for such purpose, shall be cancelled by it. No
Right Certificates shall be authenticated in lieu of or in exchange for any
Right Certificates cancelled as provided in this Section except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation, and the Rights Agent shall so
cancel, any other Right Certificate purchased or acquired by the Company. The
Rights Agent shall deliver all cancelled Right Certificates to the Company, or
shall, pursuant to a Company Order, destroy such cancelled Right Certificates
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 10. Reservation and Availability of Shares. The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held in
its treasury, the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance with Section 8;
provided, however, that the Company will not be required to reserve and keep
available Common Shares or Preferred Shares sufficient to permit the exercise
in full of all outstanding Rights pursuant to the adjustments set forth in
Section 12(a)(ii) or Section 14 until such time as the Rights become
exercisable pursuant to such adjustments.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares or Common Shares of the
Company issued upon exercise of Rights shall (subject to payment of the
Purchase Price) be duly authorized, validly issued, fully paid and
nonassessable.
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
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of the Right Certificates or of any Preferred Shares (or depository receipts
therefor) or Common Shares of the Company 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 in respect of the issuance or delivery of certificates or
depositary receipts for the Preferred Shares or Common Shares of the Company
upon exercise of Rights evidenced by Right Certificates in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for transfer or exercise or to issue or deliver any certificates or
depositary receipts for Preferred Shares or Common Shares of the Company 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 thereof) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 11. Record Date. Each Person in whose name any certificate
for Preferred Shares or Common Shares of the Company is issued upon the
exercise of, or upon mandatory redemption and exchange of, Rights shall for all
purposes be deemed to have become the holder of record of the Preferred Shares
or Common Shares represented thereby on, and such certificate shall be dated,
(i) in the case of the exercise of Rights, 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, or (ii) in the
case of the mandatory redemption and exchange of Rights, the date of such
mandatory redemption and exchange; provided, however, that, if the date of such
surrender and payment or mandatory redemption and exchange is a date upon which
the transfer books of the Company for its Preferred Shares or Common Shares, as
the case may be, 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 such transfer books of the Company are open.
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Section 12. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number and kind of shares of capital stock
of the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a
dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into
a smaller number of Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 12(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised thereafter shall be entitled to receive, upon
payment of the Purchase Price for the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to such
date, the aggregate number and kind of shares of capital stock which, if such
Right had been duly exercised immediately prior to such date (at a time when
the Preferred Shares transfer books of the Company were open), such holder
would have acquired upon such exercise and been entitled to receive upon
payment or effectuation of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right. If an event occurs which would require an adjustment under both Section
12(a)(i) and Section 12(a)(ii), the adjustment provided for in this Section
12(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 12(a)(ii).
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(ii) Subject to action of the Board of Directors of the
Company pursuant to Section 25 of this Agreement, if any Person shall become an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable and dividing that product by (y) 50% of the
then current per share market price of the Company's Common Shares (determined
pursuant to Section 12(d)) on the date such Person became an Acquiring Person.
If any Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would eliminate or
diminish the benefits intended to be afforded by the Rights.
Notwithstanding any other provision of this Agreement, from and after
the time any Person shall become an Acquiring Person, any Rights that are or
were acquired or beneficially owned by any such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be null and void and any
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate shall be issued
pursuant to this Agreement that represents Rights beneficially owned by an
Acquiring Person whose Rights would be null and void pursuant to the preceding
sentence or by any Associate or Affiliate thereof; no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or to
any Associate or Affiliate thereof or to any nominee (acting in its capacity as
such) of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be null and void
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pursuant to the preceding sentence or to any Associate or Affiliate thereof or
to any nominee (acting in its capacity as such) of such Acquiring Person,
Associate or Affiliate shall be cancelled.
(iii) If on or after the Distribution Date there shall not be
sufficient Common Shares issued but not outstanding, or authorized but
unissued, to permit the exercise in full of all outstanding Rights in
accordance with the foregoing subparagraph (ii), the Company agrees to take all
such action as is within its power, including without limitation appropriate
action by its Board of Directors, as may be necessary to amend the Company's
charter to authorize additional Common Shares for issuance upon exercise of the
Rights. If, notwithstanding the foregoing, the stockholders shall not approve
an amendment to the Company's charter authorizing such additional Common
Shares, the adjustment prescribed in Section 12(a)(ii) shall not be made but,
in lieu thereof, each holder of a Right shall have the right to receive, upon
exercise thereof in accordance with the terms of this Agreement, such number of
one one-thousandths of Preferred Shares as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable and
dividing that product by (y) 50% of the then current per share market price of
one one-thousandth of a Preferred Share (determined pursuant to Section 12(d))
on the date such Person became an Acquiring Person.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into or exchangeable for Preferred Shares
or equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (together with any additional consideration required upon
conversion or exchange in the case of a security convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less than
the current per share market price of the Preferred Shares
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(determined pursuant to Section 12(d) on such record date), the Purchase Price
to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (together with the aggregate of any
additional consideration required upon conversion or exchange in the case of
any convertible or exchangeable securities so to be offered) would purchase at
such current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into or for which the convertible or exchangeable
securities so to be offered are initially convertible or exchangeable);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case all
or part of such subscription or purchase price may be paid 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. Preferred Shares owned by or held
for the account of the Company or any of its Subsidiaries shall not be deemed
outstanding for the purpose of any computation described in this Section 12(b).
The adjustment described in this Section 12(b) shall be made successively
whenever such a record date is fixed; and, if none of such rights, options or
warrants is so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness
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or assets (other than a regular quarterly cash dividend or a dividend payable
in Preferred Shares) or subscription rights or warrants (excluding those
referred to in Section 12(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred Shares
(determined pursuant to Section 12(d)) on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon the exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and, if such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, the "current per
share market price" of the Common Shares on any date shall be deemed to be the
average of the daily Closing Prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to such date; provided, however,
that, if the issuer of such Common Shares shall announce (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, shall occur during such period of 30 Trading Days, then,
and in each such case,
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the current per share market price of the Common Shares shall be appropriately
adjusted to reflect the current market price per Common Share equivalent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in paragraph (i) of this
Section 12(d). If the current per share market price of the Preferred Shares
cannot be determined in the manner provided above, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to be the
current per share market price of the Common Shares (determined in the manner
provided above) multiplied by one thousand.
(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 12(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
12 shall be made to the nearest cent or to the nearest ten-thousandth of a
Common Share or other share or one ten-millionth of a Preferred Share, as the
case may be, and references herein to the "number of one one-thousandths of a
Preferred Share" (or similar phrases) shall be construed to include fractions
of one one-thousandth of a Preferred Share. Notwithstanding the first sentence
of this Section 12(e), any adjustment required by this Section 12 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 thirtieth day preceding the Final
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
shares contained in this Section 12 and the provisions
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of this Agreement, including without limitation Sections 8, 10, 11 and 14, with
respect to the Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall, whether or not the Right
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thousandths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 12(i), upon each adjustment of the Purchase Price pursuant
to Section 12(b) or 12(c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price per one one-thousandth of a Preferred Share, that
number of one one-thousandths of a Preferred Share obtained by (i) multiplying
(x) the number of one-thousandths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights outstanding in lieu of any
adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make
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a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. Until such record date, however, any adjustment in
the number of one one-thousandths of a Preferred Share for which a Right shall
be exercisable made as required by this Agreement shall remain in effect. If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 12(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 15
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 authenticated in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the amount of
consideration per Preferred Share determined by the Board
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of Directors of the Company to be capital, or below one one-thousandth of the
par value, if any, per Preferred Share issuable upon exercise of the Rights,
the Company agrees to take such corporate action as is within its power,
including without limitation appropriate action by its Board of Directors, and
which is, in the opinion of its counsel, necessary in order that the Company
may validly and legally issue fully paid and nonassessable one one-thousandths
of Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Preferred Shares or other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares or 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 securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 12 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 12, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any combination or subdivision of the Preferred Shares, issuance
wholly for cash of any of the Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of
rights, options or warrants referred to in subsection (b) of this Section 12,
hereafter effected by the Company to holders of its Preferred Shares shall not
be taxable to such shareholders.
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(n) If at any time prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision or combination of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (i) the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision or combination shall be adjusted by
multiplying such Purchase Price by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (ii) the number of Rights outstanding immediately after
such event shall be adjusted, either through cancellation of outstanding Rights
or through distribution of additional Rights (but without duplication of the
Company's obligations under Section 3(c)), so that the certificate evidencing
each Common Share outstanding immediately after such event shall also evidence
the associated Right to purchase the same number of one one-thousandths of a
Preferred Share as to which a Right would have entitled the holder thereof to
purchase immediately prior to such event. The adjustment provided for in this
Section 12(n) shall be made successively whenever such a dividend is declared
or paid or such a subdivision or combination is effected. If an event occurs
which would require an adjustment under Section 12(a)(ii) and this Section
12(n), the adjustments provided for in this Section 12(n) shall be in addition
and prior to any adjustment required pursuant to Section 12(a)(ii).
Section 13. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 12 or 14 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Shares of the Company and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of record of a
Right Certificate in accordance with Section 28 hereof.
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Section 14. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. If, directly or indirectly, (a) the Company shall consolidate
with, or merge with and into, any other Person, (b) any Person shall merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with any such merger, all or part
of the Common Shares of the Company 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 a series
of two or more transactions, assets of the Company or its Subsidiaries which
constitute more than 50% of the assets or which produce more than 50% of the
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or any Affiliate or Associate of such Person other than the Company or
one or more of its Wholly-Owned Subsidiaries, then, and in each such case, the
Company agrees that, as a condition to engaging in any such transaction, it
will make or cause to be made 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 and in lieu of Preferred Shares, such number of Common Shares of such
other Person (including the Company as successor thereto or as the surviving
corporation) or, if such other Person is a Subsidiary of another Person, of the
Person or Persons (other than individuals) which ultimately control such
first-mentioned Person, as shall be equal to the result obtained by (X)
multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to Section
12(a)(ii)) and dividing that product by (Y) 50% of the current per share market
price of the Common Shares of such other Person (determined pursuant to Section
12(d)) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or
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transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company", as used herein, shall thereafter be deemed
to refer to such issuer; and (iv) such issuer shall take such steps (including
without limitation the reservation of a sufficient number of shares of its
Common Shares in accordance with Section 10) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not enter into any transaction of the kind referred to in this
Section 14 if at the time of such transaction there are outstanding any rights,
warrants, instruments or securities or any agreement or arrangements which, as
a result of the consummation of such transaction, would substantially diminish
or otherwise eliminate 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 an agreement supplemental to this Agreement
complying with the provisions of this Section 14. The provisions of this
Section 14 shall similarly apply to successive mergers or consolidations or
sales or other transfers. For the purposes of this Section 14, 50% of the
assets of the Company and its Subsidiaries shall be determined by reference to
the book value of such assets as set forth in the most recent consolidated
balance sheet of the Company and its Subsidiaries (which need not be audited)
and 50% of the earning power of the Company and its Subsidiaries shall be
determined by reference to the mathematical average of the operating income
resulting from the operations of the Company and its Subsidiaries for the two
most recent full fiscal years as set forth in the consolidated and
consolidating financial statements of the Company and its Subsidiaries for such
years; provided, however, that, if the Company has, during such period, engaged
in one or more transactions to which purchase accounting is applicable, such
determination shall be made by reference to the pro forma operating income of
the Company and its
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Subsidiaries giving effect to such transactions as if they had occurred at the
commencement of such two-year period.
Section 15. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to be paid
to such Person an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purpose of this Section 15(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.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares. If, on the Distribution Date or thereafter, as a result
of any adjustment effected hereunder in the number of one one-thousandths of a
Preferred Share as to which a Right has become exercisable, a Person would
otherwise be entitled to receive a fractional Preferred Share that is not an
integral multiple of one one-thousandth of a Preferred Share, the Company
shall, in lieu thereof, pay to such Person at the time such Right is exercised
as herein provided an amount in cash equal to the same fraction (which is not
an integral multiple of one
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one-thousandth of a Preferred Share) of the current market value of one
Preferred Share. For purposes of this Section 15(b), the current market value
of a Preferred Share shall be the Closing Price of a Preferred Share for the
Trading Day immediately prior to the date of such exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or any
mandatory redemption and exchange contemplated by Section 25 occur, the Company
shall not be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute certificates which evidence fractional Common Shares.
If after any such adjustment or mandatory redemption and exchange, a Person
would otherwise be entitled to receive a fractional Common Share of the Company
upon exercise of any Right Certificate or upon mandatory redemption and
exchange as contemplated by Section 25, the Company shall, in lieu thereof, pay
to such Person at the time such Right is exercised as herein provided or upon
such mandatory redemption and exchange an amount in cash equal to the same
fraction of the current market value of one Common Share. For purposes of this
Section 15(c), the current market value of a Common Share shall be the Closing
Price of a Common Share for the Trading Day immediately prior to the date of
such exercise or the date of such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
Section 16. Rights of Action. (a) All rights of action in respect of
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any
registered holder of any Rights may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding,
judicial or otherwise, against the Company to enforce, or otherwise to act in
respect of, such holder's right to exercise such Rights in the manner provided
in the Right Certificate evidencing such Rights and in this Agreement. Without
limiting the
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foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
(b) No right or remedy herein conferred upon or reserved to the
registered holder of Rights is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right
or remedy.
(c) No delay or omission of any registered holder of Rights to
exercise any right or remedy accruing hereunder shall impair any such right or
remedy or constitute a waiver of any default hereunder or an acquiescence
therein. Every right and remedy given hereunder or by law to such holders may
be exercised from time to time, and as often as may be deemed expedient, by
such holders.
Section 17. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares
of the Company;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the Shareholder Services Office of the Rights Agent
duly endorsed or accompanied by a proper instrument of transfer; and
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(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 Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes,
and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Shares, Common Shares of the Company or any
other securities of the Company which may at any time be issuable on the
exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such, any of the rights of a
stockholder of the Company, including without limitation any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 26) or to receive dividends or subscription rights until
the Right or Rights evidenced by such Right Certificate shall have been
exercised (or mandatorily redeemed and exchanged) in accordance with the
provisions hereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless
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against, any loss, liability or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
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 Preferred Shares, Common Shares of the Company
or other securities of the Company, Company Order, 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 executed and, where necessary, verified or acknowledged,
by the proper person or persons, or otherwise upon the advice of its counsel as
set forth in Section 20 hereof.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound.
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the President, any Vice President, the
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Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company or
any other Person only for its own negligence, bad faith or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost profits),
even if the Rights Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its authentication thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not have any responsibility with
respect to the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or with respect to the
validity or execution of any Right Certificate (except its authentication
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
(including the Rights becoming void pursuant to Section 12(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 12, 14, 24 and 25, or the
ascertainment of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of
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any Preferred Shares or Common Shares to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Preferred Shares or Common Shares
will, when issued, be duly authorized, validly issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(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.
(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 of the Company resulting from any such act,
default, neglect or misconduct provided reasonable care was exercised in the
selection and continued employment thereof.
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Section 21. 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 the
corporate trust business or shareholder services business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any 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 22. If at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Right Certificates shall have been
authenticated but not delivered, any such successor Rights Agent may adopt the
authentication of the predecessor Rights Agent and deliver such Right
Certificates so authenticated, and, if at that time any of the Right
Certificates shall not have been authenticated, any successor Rights Agent may
authenticate 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. If at any time the name of the
Rights Agent shall be changed and at such time any of the Right Certificates
shall have been authenticated but not delivered, the Rights Agent may adopt the
authentication under its prior name and deliver Right Certificates so
authenticated; and, in case at that time any of the Right Certificates shall
not have been authenticated, the Rights Agent may authenticate 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 22. 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 for the Common Shares of the Company and the Preferred
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Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent for the Common Shares of the Company and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the registered holder of a Right Certificate
(or, prior to the Distribution Date, of Common Shares), then any registered
holder of a Right Certificate (or, prior to the Distribution Date, of Common
Shares) 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 either (A) a corporation organized and
doing business under the laws of the United States or of any state of the
United States, which is authorized under such laws to exercise corporate trust
or shareholder services 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 of such a corporation. 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 for the Common Shares of the Company and the Preferred Shares, and mail a
notice thereof in writing to the
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registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 22, 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 23. 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 Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the number or kind or
class of shares or other securities purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.
Section 24. Redemption. (a) The Rights may be redeemed by action of
the Board of Directors of the Company pursuant to paragraph (b) of this Section
24, or may be redeemed and exchanged by action of the Board of Directors of the
Company pursuant to Section 25 herein, but shall not be redeemed in any other
manner.
(b) The Board of Directors of the Company may, at its option, at
any time prior to the time any Person becomes an Acquiring Person redeem all
but not less than all the then outstanding Rights at a redemption price of one
cent ($0.01) per Right then outstanding, appropriately adjusted to reflect any
adjustment in the number of Rights outstanding pursuant to Section 12(i) herein
(such redemption price being hereinafter referred to as the "Redemption
Price"). Any such redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.
(c) The right of the registered holders of Right Certificates to
exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption
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by the Board of Directors of the Company of a resolution authorizing and
directing the redemption of the Rights pursuant to paragraph (b) of this
Section 24 (or, alternatively, if the Board of Directors qualified such action
as to time, basis or conditions, then at such time, on such basis and with such
conditions as the Board of Directors may have established pursuant to such
paragraph (b)); thereafter, the only right of the holders of Rights shall be to
receive the Redemption Price. The Company shall promptly give public notice of
any redemption resolution pursuant to paragraph (b) of this Section 24;
provided, however, that the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption. Within 10 days after the
adoption of any redemption resolution pursuant to paragraph (b) of this Section
24, 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 agents for the
Common 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 shall state the method by which the payment of the
Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or Associates
may acquire (other than, in the case of such Affiliates and Associates, in
their capacity as holders of Common Shares of the Company), redeem or purchase
for value any Rights at any time in any manner other than as specifically set
forth in this Section 24 or in Section 25 herein, and other than in connection
with the purchase of Common Shares prior to the Distribution Date.
Section 25. Mandatory Redemption and Exchange. (a) The Board of
Directors of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, issue Common Shares of the Company in mandatory
redemption of, and in exchange for, all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 12(a)(ii) hereof) at an exchange
ratio of one Common Share for
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each Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof. Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
redemption and exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or of
any such Subsidiary, or any trustee of or fiduciary with respect to any such
plan when acting in such capacity), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the Voting
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the mandatory redemption and exchange of any Rights pursuant
to subsection (a) of this Section 25 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 such number of
Common Shares as is provided in paragraph (a) of this Section 25. The Company
shall promptly give public notice of any such redemption and exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such redemption and exchange. The Company
promptly shall mail a notice of any such redemption and exchange to all the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of mandatory redemption and exchange shall state the method by
which the redemption and exchange of the Common Shares for Rights will be
effected and, in the event of any partial redemption and exchange, the number
of Rights which will be redeemed and exchanged. Any partial redemption and
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
12(a)(ii) hereof) held by each holder of Rights.
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(c) In any mandatory redemption and exchange pursuant to this
Section 25, the Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term is defined in Section 12(b) hereof)
for Common Shares, at the initial rate of one one-thousandth of a Preferred
Share (or equivalent preferred share) for each Common Share, as appropriately
adjusted.
Section 26. Notice of Certain Events. If the Company shall, on or
after the Distribution Date, propose (a) to pay any dividend or other
distribution payable in stock of any class of the Company or any Subsidiary of
the Company to the holders of its Preferred Shares, (b) to distribute to the
holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (c) to make any other distribution to the
holders of its Preferred Shares (other than a regular quarterly cash dividend),
(d) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) 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 more than
50% of the assets or earning power of the Company and its Subsidiaries
(determined as provided in Section 14 herein) to, any other Person (other than
the Company or a Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries), (f) to
effect the liquidation, dissolution or winding up of the Company or (g) if the
Rights have theretofore become exercisable with respect to Common Shares
pursuant to Section 12(a)(ii) herein, to declare or pay any dividend or other
distribution on the Common Shares payable in Common Shares or in stock of any
other class of the Company or any Subsidiary of the Company or to effect a
subdivision or combination of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) then, in each such
case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 28 hereof, notice of such proposed action, which shall
specify the date of authorization by the Board of Directors of the Company of,
and record date for, such stock dividend
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or such distribution of rights or warrants or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, winding up, subdivision or combination is to take place and the
date of participation therein by the holders of the Common Shares of the
Company or the Preferred Shares, or both, if any such date is to be fixed.
Such notice shall be so given in the case of any action covered by clause (a),
(b) or (g) above at least 20 days prior to the record date for determining
holders of the Preferred Shares or of the Common Shares of the Company, as the
case may be, 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 Preferred
Shares or Common Shares of the Company, as the case may be, whichever shall be
the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 28 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 12(a)(ii) hereof.
Section 27. Securities Laws Registrations. To the extent legally
required, the Company agrees that it will prepare and file, no later than the
Distribution Date, and will use its best efforts to cause to be declared
effective, a registration statement under the Securities Act of 1933, as
amended, registering the offering, sale and delivery of the Preferred Shares
issuable upon exercise of the Rights, and the Company will, thereafter, use its
best efforts to maintain such registration statement (or another) continuously
in effect so long as any Rights remain outstanding and exercisable with respect
to Preferred Shares. Should the Rights become exercisable with respect to
securities of the Company or one of its Subsidiaries other than Preferred
Shares, the Company agrees that it will, to the extent legally required,
promptly thereafter prepare and file, or cause to be prepared and filed, and
will use its best efforts to cause to be declared effective, a registration
statement under such Act registering the
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offering, sale and delivery of such other securities and the Company will,
thereafter, use its best efforts to maintain such registration statement (or
another) continuously in effect so long as any outstanding Rights are
exercisable with respect to such securities. The Company further agrees to use
its best efforts, from and after the Distribution Date, to qualify or register
for sale the Preferred Shares or other securities of the Company or one of its
Subsidiaries issuable upon exercise of the Rights under the securities or "blue
sky" laws (to the extent legally required thereunder) of all jurisdictions in
which registered holders of Right Certificates reside determined by reference
to the Rights Register.
Section 28. 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:
Group 1 Automotive, Inc.
000 Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Secretary
Subject to the provisions of Section 22 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.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Shareholder Services Division
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 Rights
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Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of 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, to make any other provisions
in regard to matters or questions arising hereunder, or to add, delete, modify
or otherwise amend any provision, which the Company may deem necessary or
desirable, including without limitation extending the Final Expiration Date
and, provided that at the time of such amendment or supplement the Distribution
Date has not occurred, the period during which the Rights may be redeemed;
provided, however, that, from and after such time as any Person becomes an
Acquiring Person, any such amendment or supplement shall not materially and
adversely affect the interests of the holders of Right Certificates. Without
limiting the foregoing, the Board of Directors of the Company may by resolution
adopted at any time prior to such time as any Person becomes an Acquiring
Person amend this Agreement to lower the thresholds set forth in the
definitions of Acquiring Person and Distribution Date herein from 20% to a
percentage not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Voting Shares then known to the Company to be
beneficially owned by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any trustee of or fiduciary with respect to any such plan when
acting in such capacity), and (ii) 10%.
Section 30. 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.
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Section 31. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Rights (and,
prior to the Distribution Date, the Common Shares).
Section 32. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 33. GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT CERTIFICATE
(AND, PRIOR TO THE DISTRIBUTION DATE, THE RIGHTS REPRESENTED BY CERTIFICATES
FOR COMMON SHARES) ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF DELAWARE 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.
Section 34. 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 35. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
GROUP 1 AUTOMOTIVE, INC.
Attest:
By /s/ Xxxx X. Xxxxxx By /s/ X. X. Xxxxxxxxxxxxx, Xx.
------------------------------------ -----------------------------------
Name: Xxxx X. Xxxxxx Name: X. X. Xxxxxxxxxxxxx, Xx.
Title: Secretary Title: Chairman, President and
Officer Chief Executive Officer
ChaseMellon Shareholder Services, L.L.C.
As Rights Agent
Attest:
By /s/ Xxxxxxxx X. Xxxxx By /s/ Xxxxxxx X. Xxxxxxx
------------------------------------ -----------------------------------
Name: Xxxxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Officer Title: Authorized Officer
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