EXHIBIT 4.2
EXECUTION COPY
XXXXX LIMITED
and
MELLON INVESTOR SERVICES LLC
Rights Agent
Rights Agreement
Dated as of August 1, 2001
TABLE OF CONTENTS
PAGE
SECTION 1. Certain Definitions.................................................1
SECTION 2. Appointment of Rights Agent.........................................5
SECTION 3. Issue of Rights Certificates........................................5
SECTION 4. Form of Rights Certificates.........................................7
SECTION 5. Countersignature and Registration...................................8
SECTION 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates........................................................8
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......9
SECTION 8. Cancellation and Destruction of Rights Certificates................11
SECTION 9. Reservation and Availability of Capital Stock......................11
SECTION 10. Preferred Stock Record Date.......................................12
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights..................................................13
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares........21
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.....................................................21
SECTION 14. Fractional Rights and Fractional Shares...........................24
SECTION 15. Rights of Action..................................................25
SECTION 16. Agreement of Rights Holders.......................................25
SECTION 17. Rights Certificate Holder Not Deemed a Stockholder................26
SECTION 18. Concerning the Rights Agent.......................................26
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.........27
SECTION 20. Duties of Rights Agent............................................27
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SECTION 21. Change of Rights Agent............................................30
SECTION 22. Issuance of New Rights Certificates...............................31
SECTION 23. Redemption and Termination........................................31
SECTION 24. Notice of Certain Events..........................................32
SECTION 25. Notices...........................................................33
SECTION 26. Supplements and Amendments........................................33
SECTION 27. Successors........................................................34
SECTION 28. Determinations and Actions by the Board of Directors, Etc.........34
SECTION 29. Benefits of this Agreement........................................35
SECTION 30. Severability......................................................35
SECTION 31. Governing Law.....................................................35
SECTION 32. Counterparts......................................................35
SECTION 33. Descriptive Headings..............................................35
SECTION 34. Exchange..........................................................35
Exhibit A - Form of Rights Certificate
Exhibit B - Summary of Rights to Purchase Preferred Stock
Exhibit C - Certification of Designation
Schedule I - Schedule of Fees
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of August 1, 2001 (this
"AGREEMENT"), between Xxxxx Limited, a Bermuda company (the "COMPANY"), and
Mellon Investor Services LLC, a New Jersey limited liability company (the
"RIGHTS AGENT").
WHEREAS, effective July 11, 2001 (the "RIGHTS DIVIDEND
DECLARATION DATE"), the Board of Directors of the Company authorized and granted
one Right (each, a "RIGHT") for each common share, par value US$0.01 per share,
of the Company (the "COMPANY COMMON STOCK") outstanding at the Close of Business
(as defined below) on the date on which the Company issues shares of Company
Common Stock pursuant to its initial public offering (the "RECORD DATE"), and
has authorized the issuance of one Right (as such number may hereinafter be
adjusted pursuant hereto) for each share of Company Common Stock issued between
the Record Date and, except as otherwise provided in Section 22, the
Distribution Date, each Right initially representing the right to purchase upon
the terms and subject to the conditions hereinafter set forth one Unit (as
defined below) of Preferred Stock (as defined below);
WHEREAS, the Company desires to set forth certain terms and
conditions governing the Rights; and
WHEREAS, the Company desires to appoint the Rights Agent to
act as rights agent hereunder, in accordance with the terms and conditions
hereof;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which,
alone or together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 20% or more of the shares of Company
Common Stock then outstanding, but shall not include (i) the Company,
any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity or (ii) any such Person
who has become and is such a Beneficial Owner solely because (A) of a
change in the aggregate number of shares of the Company Common Stock
since the last date on which such Person acquired Beneficial Ownership
of any shares of the Company Common Stock or (B) it acquired such
Beneficial Ownership in the good faith belief that such acquisition
would not (1) cause such Beneficial Ownership to be equal to or exceed
20% of the shares of the Company Common Stock then outstanding and such
Person relied in good faith in computing the percentage of its
Beneficial Ownership on publicly filed reports or documents of the
Company that are inaccurate or out-of-date or (2) otherwise cause a
Distribution Date or the adjustment provided for in Section 11(a)(ii)
to occur. Notwithstanding clause (ii)(B) of the prior sentence, if any
Person that is not an
Acquiring Person due to such clause (ii)(B) does not reduce its
percentage of Beneficial Ownership of the Company Common Stock to less
than 20% by the Close of Business on the fifth Business Day after
notice from the Company (the date on which such notice is first mailed
or sent being the first day) that such person's Beneficial Ownership of
the Company Common Stock is equal to or exceeds 20%, such Person shall,
at the end of such five Business Day period, become an Acquiring Person
(and such clause (ii)(B) shall no longer apply to such Person). For
purposes of this definition, the determination whether any Person acted
in "good faith" shall be conclusively determined by the Board of
Directors of the Company, acting by a vote of those directors of the
Company whose approval would be required to redeem the Rights under
Section 23.
(b) "ADJUSTMENT SHARES" has the meaning set forth in Section
11(a)(ii).
(c) "ADJUSTMENT SPREAD" has the meaning set forth in Section
34(a)(ii).
(d) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the Exchange Act
Regulations as in effect on the date of this Agreement.
(e) "AGREEMENT" has the meaning set forth in the preamble to
this Agreement.
(f) A Person shall be deemed the "BENEFICIAL OWNER" of, and
shall be deemed to "BENEFICIALLY OWN", and shall be deemed to have
"BENEFICIAL OWNERSHIP" of, any securities:
(i) of which such Person or any of such Person's
Affiliates or Associates is considered to be a "beneficial
owner" under Rule 13d-3 of the Exchange Act Regulations as in
effect on the date of this Agreement; PROVIDED, HOWEVER, that
a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", or to have "Beneficial Ownership" of, any
securities under this subparagraph (i) as a result of an
agreement, arrangement or understanding to (A) sell such
securities if such agreement, arrangement or understanding
arises in connection with a Demand Registration Request (as
defined in the Registration Rights Agreement) pursuant to the
Registration Rights Agreement or (B) vote such securities if
such agreement, arrangement or understanding (1) arises in
connection with the extension of the Final Expiration Date
under this Agreement or the adoption of any other rights
agreement or similar device or agreement or (2)(x) arises
solely from a revocable proxy given in response to a proxy or
consent solicitation made in connection with any annual
meeting of members or special meeting of members and (y) would
not be reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the
satisfaction of conditions) pursuant to any agreement,
arrangement or understanding (whether or
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not in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
PROVIDED, HOWEVER, that under this paragraph (f) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, (A) securities tendered pursuant to a tender
or exchange offer made in accordance with Exchange Act Regulations by
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (B)
securities that may be issued upon exercise of Rights at any time prior
to the occurrence of a Triggering Event or (C) securities that may be
issued upon exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date
or pursuant to Section 3(c) or Section 22 or pursuant to Section 11(i)
in connection with an adjustment made with respect to any such Rights.
(g) "BERMUDA ACT" has the meaning set forth in Section 9(c).
(h) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in Bermuda or in The City
of New York are authorized or obligated by law or executive order to
close.
(i) "CLOSE OF BUSINESS" on any given date shall mean 5:00
p.m., New York City time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 p.m., New York City time,
on the next succeeding Business Day.
(j) "COMMON STOCK" of any Person other than the Company shall
mean the capital stock of such Person with the greatest voting power,
or, if such Person shall have no capital stock, the equity securities
or other equity interest having power to control or direct the
management of such Person.
(k) "COMPANY" has the meaning set forth in the preamble to
this Agreement.
(l) "COMPANY COMMON STOCK" has the meaning set forth in the
recitals to this Agreement.
(m) "CURRENT VALUE" has the meaning set forth in Section
11(a)(iii).
(n) "DEPOSITARY AGENT" has the meaning set forth in Section
7(c).
(o) "DISTRIBUTION DATE" has the meaning set forth in Section
3(a).
(p) "EQUIVALENT PREFERRED STOCK" has the meaning set forth in
Section 11(b).
(q) "EXCHANGE ACT" shall mean the United States Securities
Exchange Act of 1934, as amended.
(r) "EXCHANGE ACT REGULATIONS" shall mean the General Rules
and Regulations under the Exchange Act.
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(s) "EXPIRATION DATE" has the meaning set forth in Section
7(a).
(t) "FINAL EXPIRATION DATE" has the meaning set forth in
Section 7(a).
(u) "FINAL ORDER" has the meaning set forth in Section 18(a).
(v) "NON THIRD PARTY PROCEEDING" has the meaning set forth in
Section 18(a).
(w) "PERSON" shall mean any individual, partnership, limited
liability company, firm, corporation, joint venture, association,
trust, unincorporated organization or other entity, as well as any
syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act.
(x) "PREFERRED STOCK" shall mean the Series A Preference
Shares, par value US$0.01 per share, of the Company having the voting
powers, designation, preferences and relative, participating, optional
or other special rights and qualifications, limitations and
restrictions described in the Certificate of Designation set forth as
Exhibit C hereto.
(y) "PREFERRED STOCK EQUIVALENTS" has the meaning specified in
Section 11(a)(iii).
(z) "PRINCIPAL PARTY" has the meaning set forth in Section
13(b).
(aa) "PURCHASE PRICE" has the meaning set forth in Section
7(b).
(bb) "RECORD DATE" has the meaning set forth in the recitals
to this Agreement.
(cc) "REDEMPTION PRICE" has the meaning set forth in Section
23(a).
(dd) "REGISTERED COMMON STOCK" has the meaning set forth in
Section 13(b)(ii).
(ee) "REGISTRATION DATE" has the meaning set forth in Section
9(c).
(ff) "REGISTRATION RIGHTS AGREEMENT" shall mean the
Registration Rights Agreement, dated as of June 25, 2001, by and among
the Company and the parties listed on Annex A thereto.
(gg) "REGISTRATION STATEMENT" has the meaning set forth in
Section 9(c).
(hh) "RIGHT" has the meaning set forth in the recitals to this
Agreement.
(ii) "RIGHTS AGENT" has the meaning set forth in the preamble
to this Agreement.
(jj) "RIGHTS CERTIFICATES" has the meaning set forth in
Section 3(a).
(kk) "RIGHTS DIVIDEND DECLARATION DATE" has the meaning set
forth in the recitals to this Agreement.
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(ll) "SECTION ii(A)(ii) EVENT" has the meaning set forth in
Section 11(a)(ii).
(mm) "SECTION 11(A)(iii) TRIGGER DATE" has the meaning set
forth in Section 11(a)(iii).
(nn) "SECTION 13 EVENT" has the meaning set forth in Section
13(a).
(oo) "SECTION 34(A)(i) EXCHANGE RATIO" has the meaning set
forth in Section 34(a)(i).
(pp) "SECTION 34(A)(ii) EXCHANGE RATIO" has the meaning set
forth in Section 34(a)(ii).
(qq) "SECURITIES ACT" shall mean the Securities Act of 1933,
as amended.
(rr) "SPREAD" has the meaning set forth in Section 11(a)(iii).
(ss) "STOCK ACQUISITION DATE" shall mean the first date of
public announcement (including, without limitation, the filing of any
report pursuant to Section 13(d) of the Exchange Act) by the Company or
an Acquiring Person that an Acquiring Person has become such.
(tt) "SUBSIDIARY" of any Person shall mean any other Person of
which a majority of the voting securities or equity interests is
beneficially owned, directly or indirectly, by such Person, or which is
otherwise controlled by such Person.
(uu) "SUMMARY OF RIGHTS" has the meaning set forth in Section
3(b).
(vv) "TRADING DAY" has the meaning set forth in Section
11(d)(i).
(ww) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
(xx) "UNIT" has the meaning set forth in Section 7(b).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. With the consent of the Rights Agent, the Company may from time to
time appoint such Co-Rights Agents as it may deem necessary or desirable. The
Rights Agent shall have no duty to supervise, and in no event be liable for, the
acts or omissions of any Co-Rights Agent. In the event that the Company appoints
one or more Co-Rights Agents, the respective duties of the Rights Agent and any
Co-Rights Agent shall be as the Company determines and shall not be inconsistent
with this Agreement.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earlier
of (i) the Close of Business on the tenth day after the Stock Acquisition Date
and (ii) the Close of Business on the tenth Business Day (or such later date as
may be determined by action of the Board of Directors of the Company prior to
such time as any Person becomes an Acquiring Person, and of which the
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Company will give the Rights Agent prompt written notice) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan maintained by the Company or any of
its Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity) is commenced within the meaning of Rule 14d-2 of the Exchange Act
Regulations or any successor rule, if upon consummation thereof such Person
would be the Beneficial Owner of 20% or more of the shares of Company Common
Stock then outstanding (the earlier of (i) and (ii) above being the
"DISTRIBUTION DATE"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for shares of
Company Common Stock registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which certificates for
shares of Company Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Company Common Stock (including a transfer to the Company). The Company shall
notify the Rights Agent in writing of the occurrence of a Distribution Date. As
soon as practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of shares of
Company Common Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit A hereto (the "RIGHTS
CERTIFICATES"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Company Common Stock has been made pursuant
to Section 11(p), at the time of distribution of the Rights Certificates, the
Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a)) so that Rights Certificates evidencing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
a form that may be appended to certificates that evidence shares of Company
Common Stock, in substantially the form attached hereto as Exhibit B (the
"SUMMARY OF RIGHTS"), by first-class, postage prepaid mail, to each record
holder of shares of Company Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company.
(c) Rights shall, without any further action, be issued in
respect of all shares of Company Common Stock that are issued after the Record
Date but prior to the earlier of the Distribution Date and the Expiration Date.
Certificates evidencing such shares of Company Common Stock issued after the
Record Date shall bear the following legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement (the
"Rights Agreement"), between Xxxxx Limited (the "Company") and Mellon
Investor Services LLC (the "Rights Agent"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the office of the Rights Agent designated for such purpose. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder of
this certificate a copy
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of the Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or becomes an Acquiring Person
or any Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void."
With respect to certificates evidencing shares of Company
Common Stock (whether or not such certificates include the foregoing legend or
have appended to them the Summary of Rights), until the earlier of the
Distribution Date and the Expiration Date, the Rights associated with the shares
of Company Common Stock evidenced by such certificates shall be evidenced by
such certificates alone and registered holders of the shares of Company Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with the shares of Company Common Stock evidenced by such
certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES. (a) The Rights
Certificates (and the forms of election to purchase, assignment and certificate
to be printed on the reverse thereof) shall each be substantially in the form
set forth in Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or any
rule or regulation thereunder or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or to conform to
usage. Subject to the provisions of Section 11 and Section 22, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase such number of Units of
Preferred Stock as shall be set forth therein at the price set forth therein,
but the amount and type of securities, cash or other assets that may be acquired
upon the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
evidences Rights beneficially owned by: (i) an Acquiring Person or any Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) that becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and that receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer that a majority of the Board of Directors of the Company has determined
to be part of a plan, agreement, arrangement or understanding that has as a
primary purpose or effect the avoidance of Section 7(e) hereof, shall, upon the
written direction of a majority of the Board of Directors of the Company (which
direction shall be conveyed in writing to the Rights Agent), contain (to the
extent feasible) the following legend:
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"The Rights evidenced by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights evidenced hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement."
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, the President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any one or more of these officers on the Rights
Certificates may be manual or facsimile. Rights Certificates bearing the manual
or facsimile signatures of the individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
countersignature of such Rights Certificates or did not hold such offices at the
date of such Rights Certificates. No Rights Certificate shall be entitled to any
benefit under this Agreement or be valid for any purpose unless there appears on
such Rights Certificate a countersignature duly executed by the Rights Agent by
manual signature of an authorized signatory, and such countersignature upon any
Rights Certificate shall be conclusive evidence, and the only evidence, that
such Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for surrender of Rights
Certificates upon exercise or transfer, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the name and
address of each holder of the Rights Certificates, the number of Rights
evidenced on its face by each Rights Certificate and the date of each Rights
Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14, at any time after
the Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of Units
of Preferred Stock (or, following a Triggering Event, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the office of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have properly completed and
duly executed the certificate set forth in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) of the
Rights evidenced by such Rights Certificate or Affiliates or Associates thereof
as the Company shall reasonably request; whereupon the Rights Agent shall,
subject to the provisions of Sections 4(b), 7(e) and 14,
8
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) If a Rights Certificate shall be mutilated, destroyed,
lost or stolen, upon request by the registered holder of the Rights evidenced
thereby and upon payment to the Company and the Rights Agent of all reasonable
expenses incident thereto, there shall be issued, in exchange for and upon
cancellation of the mutilated Rights Certificate, or in substitution for the
lost, stolen or destroyed Rights Certificate, a new Rights Certificate, in
substantially the form of the prior Rights Certificate, of like tenor and
evidencing the equivalent number of Rights, but, in the case of loss, theft or
destruction, only upon receipt of evidence satisfactory to the Company and the
Rights Agent of such loss, theft or destruction of such Rights Certificate and,
if requested by the Company or the Rights Agent, indemnity also satisfactory to
it.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS. (a) Prior to the earlier of (i) the Close of Business on the third
anniversary hereof (the "FINAL EXPIRATION DATE") and (ii) the time at which the
Rights are redeemed as provided in Section 23 (the earlier of (i) and (ii) being
the "EXPIRATION DATE"), the registered holder of any Rights Certificate may,
subject to the provisions of Sections 7(e) and 9(c), exercise the Rights
evidenced thereby in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price (as hereinafter defined) for the
number of Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) for which such surrendered
Rights are then exercisable.
(b) The purchase price for each one one-thousandth of a share
(each such one one-thousandth of a share being a "Unit") of Preferred Stock upon
exercise of Rights shall be US$29.02, subject to adjustment from time to time as
provided in Sections 11 and 13(a) (such purchase price, as so adjusted, being
the "PURCHASE PRICE"), and shall be payable in accordance with paragraph (c)
below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation in good standing
organized under the laws of the United States or any state of the United States,
that is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority (such institution being the "DEPOSITARY AGENT"), certificates
evidencing the shares of Preferred Stock that may be acquired upon exercise of
the Rights and shall cause such Depositary Agent to enter into an agreement
pursuant to which the Depositary Agent shall issue receipts evidencing interests
in the shares of Preferred Stock so deposited. Upon receipt of a Rights
Certificate evidencing exercisable Rights, with the form of election to purchase
and the certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price for the Units of Preferred Stock (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) to be purchased thereby as set forth below and an amount equal to
any applicable tax or governmental charge or evidence satisfactory to the
Company of payment of such tax or charge, the Rights Agent shall, subject to
Section 20(k),
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thereupon promptly (i) requisition from the Depositary Agent depositary receipts
or certificates evidencing such number of Units of Preferred Stock as are to be
purchased and the Company will direct the Depositary Agent to comply with such
request, (ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14, (iii) after
receipt of such depositary receipts or certificates, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. In the event that
the Company is obligated to issue Company Common Stock, other securities of the
Company, pay cash and/or distribute other property pursuant to Section 11(a),
the Company will make all arrangements necessary so that such Company Common
Stock, other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate. Subject to Section
34, the payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii)) may be made in cash or by certified or bank check payable to
the order of the Company, or by wire transfer of immediately available funds to
the account of the Company (provided that notice of such wire transfer shall be
given by the holder of the related Right to the Rights Agent).
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of any Section 11(a)(ii) Event or
Section 13 Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) that becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and that receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, shares of Company Common Stock or the Company or (B) a transfer that a
majority of the Board of Directors of the Company has determined to be part of a
plan, agreement, arrangement or understanding that has as a primary purpose or
effect the avoidance of this Section 7(e), shall be null and void without any
further action, and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but neither
the Company nor the Rights Agent shall have any liability to any holder of
Rights or any other Person as a result of the Company's failure to make any
determination under this Section 7(e) or Section 4(b) with respect to an
Acquiring Person or its Affiliates, Associates or transferees.
10
(f) Notwithstanding anything in this Agreement or any Rights
Certificate to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise by such registered holder unless such
registered holder shall have (i) properly completed and duly executed the
certificate following the form of election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights evidenced by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificates acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a)
The Company shall at all times prior to the Expiration Date cause to be reserved
and kept available, out of its authorized and unissued shares of Preferred
Stock, the number of shares of Preferred Stock that, as provided in this
Agreement, will be sufficient to permit the exercise in full of all outstanding
Rights. Upon the occurrence of any events resulting in an increase in the
aggregate number of shares of Preferred Stock (or other equity securities of the
Company) issuable upon exercise of all outstanding Rights above the number then
reserved, the Company shall make appropriate increases in the number of shares
so reserved.
(b) If the shares of Preferred Stock to be issued and
delivered upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall during the period from the Distribution
Date through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as
practicable following the occurrence of a Section 11(a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) of the
consideration to be delivered by the Company upon exercise of the Rights or, if
so required by law, as soon as practicable following the Distribution Date (such
date being the "REGISTRATION DATE"), to file a registration statement on an
appropriate form under the Securities Act and, if appropriate, under the
Companies Xxx 0000 of Bermuda (the "BERMUDA ACT") with respect to the securities
that may be acquired upon exercise of the Rights (the "REGISTRATION STATEMENT"),
(ii) to cause the Registration Statement to become effective as soon as
practicable after such filing, (iii) to cause the Registration Statement to
continue to be effective (and to include a prospectus complying with the
requirements of the Securities Act and, if
11
appropriate, the Bermuda Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for the securities covered by the Registration
Statement and (B) the Expiration Date and (iv) to take as soon as practicable
following the Registration Date such action as may be required to ensure that
any acquisition of securities upon exercise of the Rights complies with any
applicable state securities or "blue sky" laws. If the Registration Statement
does not become effective prior to the Close of Business on the 45th Business
Day following the occurrence of a Section 11(a)(ii) Event, the Company shall,
unless otherwise determined by a majority of the Board of Directors of the
Company, on the 46th Business Day following the occurrence of such Section
11(a)(ii) Event, be obligated to exercise the option described in Section 34.
(d) The Company shall take such action as may be necessary to
ensure that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer
tax imposed in connection with the issuance or delivery of the Rights
Certificates or upon the exercise of Rights; PROVIDED, HOWEVER, that the Company
shall not be required to pay any such tax imposed in connection with the
issuance or delivery of Units of Preferred Stock, or any certificates or
depositary receipts for such Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or assets, as the
case may be) to any Person other than the registered holder of the Rights
Certificates evidencing the Rights surrendered for exercise. The Company shall
not be required to issue or deliver any certificates or depositary receipts for
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
any other securities, cash or assets, as the case may be) to, or in a name other
than that of, the registered holder of the Rights Certificate upon the exercise
of any Rights evidenced thereby until any such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in whose
name any certificate or depositary receipt for Units of Preferred Stock (or,
following the occurrence of a Triggering Event, other securities) is issued upon
the exercise of Rights shall be registered as the holder of record of the Units
of Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) evidenced thereby on, and such certificate or depositary receipt
shall be dated, the date upon which the Rights Certificate evidencing such
Rights is duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) is made; PROVIDED, HOWEVER, that if the date of such surrender
and payment is a date upon which the Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) register of members is
closed, such Person shall be registered as the record holder of such securities
on, and such certificate or depositary receipt shall be dated, the next
succeeding Business Day on which the Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) register of members is open;
and FURTHER PROVIDED, HOWEVER, that if delivery of Units of Preferred Stock is
delayed as a result of a failure to register such Units of Preferred Stock
pursuant to Section 9(c), such Persons shall be registered as the record holders
of such Units of Preferred Stock only when such Units first become deliverable.
Prior to the registration in the register of members of the Rights
12
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a shareholder of the Company with respect to securities for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine or consolidate the outstanding Preferred
Stock into a smaller number of shares or (D) issue any shares in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation, amalgamation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination,
consolidation or reclassification, and the number and kind of shares of
Preferred Stock or other class of shares, as the case may be, issuable
on such date upon exercise of the Rights, shall be proportionately
adjusted so that the holder of any Right exercised after such time
shall be entitled to receive, upon payment of the Purchase Price then
in effect, the aggregate number and kind of shares of Preferred Stock
or other class of shares, as the case may be, which, if such Right had
been exercised immediately prior to such date, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, consolidation or reclassification.
If an event occurs that would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date
of this Agreement, directly or indirectly, shall (1) merge
into the Company or amalgamate or otherwise combine with the
Company and the Company shall be the continuing or surviving
corporation of such merger, amalgamation or combination and
Company Common Stock shall remain outstanding and unchanged,
(2) in one transaction or a series of transactions, transfer
any assets to the Company or to any of its Subsidiaries in
exchange (in whole or in part) for shares of Company Common
Stock, for other shares of the Company or any such Subsidiary,
or for securities exercisable for or convertible into shares
of the Company or any of its Subsidiaries (whether Company
Common Stock or otherwise) or otherwise obtain from the
Company or any of its Subsidiaries, with or without
consideration, any additional shares or securities exercisable
for or convertible into such shares
13
(other than pursuant to a pro rata distribution to all holders
of Company Common Stock), (3) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of,
in one transaction or a series of transactions, to, from or
with the Company or any of its Subsidiaries or any employee
benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such
plan acting in such capacity, assets (including securities) on
terms and conditions less favorable to the Company or such
Subsidiary or plan than those that could have been obtained in
arm's-length negotiations with an unaffiliated third party,
other than pursuant to a transaction set forth in Section
13(a), (4) sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with the
Company or any of the Company's Subsidiaries or any employee
benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such
plan acting in such capacity (other than transactions, if any,
consistent with those engaged in, as of the date hereof, by
the Company and such Acquiring Person or such Associate or
Affiliate), assets (including securities) having an aggregate
fair market value of more than US$5,000,000, other than
pursuant to a transaction set forth in Section 13(a), (5)
sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with the Company or any of
its Subsidiaries or any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity,
any material trademark or material service xxxx, other than
pursuant to a transaction set forth in Section 13(a), (6)
receive, or any designee, agent or representative of such
Acquiring Person or any Affiliate or Associate of such
Acquiring Person shall receive, any compensation from the
Company or any of its Subsidiaries other than compensation for
full-time employment as a regular employee at rates in
accordance with the Company's (or its Subsidiaries') past
practices, or (7) receive the benefit, directly or indirectly
(except proportionately as a holder of Company Common Stock or
as required by law or governmental regulation), of any loans,
advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantage provided by the Company
or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such
capacity; or
(B) any Person shall become an Acquiring Person,
unless the event causing such Person to become an Acquiring
Person is a transaction set forth in Section 13(a); or
(C) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including
any reverse stock split), or recapitalization of the Company,
or any amalgamation, merger or consolidation of the Company
with any of its Subsidiaries or any other transaction or
series of transactions involving the Company or any of its
Subsidiaries, other than a transaction or transactions to
which the provisions of Section 13(a) apply (whether or not
with or into or otherwise involving an Acquiring Person),
which has the effect, directly
14
or indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of shares of the
Company or any of its Subsidiaries that is directly or
indirectly beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person;
THEN, immediately upon the date of the occurrence of an event described
in Section 11(a)(ii)(A), (B) or (C) (a "SECTION 11(A)(II) EVENT"),
proper provision shall be made so that each holder of a Right (except
as provided below and in Section 7(e)) shall thereafter have the right
to receive, upon exercise thereof at the then-current Purchase Price in
accordance with the terms of this Agreement, in lieu of the number of
Units of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, such number
of Units of Preferred Stock as shall equal the result obtained by (x)
multiplying the then-current Purchase Price by the then number of Units
of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event (such product
thereafter being, for all purposes of this Agreement other than Section
13, the "PURCHASE PRICE"), and (y) dividing that product by 50% of the
then-current market price (determined pursuant to Section 11(d)) per
Unit of Preferred Stock on the date of such first occurrence (such
Units of Preferred Stock being the "ADJUSTMENT SHARES").
(iii) In the event that the number of shares of Preferred
Stock that are authorized by the Company's Memorandum of Association
and Bye-laws but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, by the vote of a
majority of the Board of Directors of the Company, shall: (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "CURRENT VALUE") over (2) the Purchase Price
(such excess being the "SPREAD"), and (B) with respect to each Right,
make adequate provision to substitute for such Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Company Common Stock or other shares of the
Company (including, without limitation, preferred shares, or units of
preferred shares (such other shares being "PREFERRED STOCK
EQUIVALENTS")), (4) debt securities of the Company, (5) other assets or
(6) any combination of the foregoing, having an aggregate value equal
to the Current Value, where such aggregate value has been determined by
a majority of the Board of Directors of the Company, after receiving
advice from a nationally recognized investment banking firm; PROVIDED,
HOWEVER, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty days following
the later of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "SECTION 11(A)(III) TRIGGER Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Units of
Preferred Stock (to the extent available) and then, if necessary, cash,
which Units of Preferred Stock and/or cash shall have an aggregate
value equal to the Spread. To the extent that the Company determines
that some action need be taken pursuant to the first sentence of this
Section 11(a)(iii), the Company shall provide, subject to Section 7(e),
that such action shall apply uniformly to
15
all outstanding Rights. For purposes of this Section 11(a)(iii), the
value of a Unit of Preferred Stock shall be the current market price
(as determined pursuant to Section 11(d)) per Unit of Preferred Stock
on the Section 11(a)(iii) Trigger Date and the value of any preferred
stock equivalent shall be deemed to have the same value as the
Preferred Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five calendar days after such record date) shares
of Preferred Stock (or shares having substantially the same rights,
privileges and preferences as shares of Preferred Stock ("EQUIVALENT
PREFERRED STOCK")) or securities convertible into Preferred Stock or
Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price
per share, if a security convertible into Preferred Stock or Equivalent
Preferred Stock) less than the current market price (as determined
pursuant to Section 11(d)) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the sum of the number of shares of Preferred Stock outstanding on
such record date plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred
Stock and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current market price, and the
denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the convertible securities so
to be offered are initially convertible). In case such subscription
price may be paid by delivery of consideration part or all of which may
be in a form other than cash, the value of such consideration shall be
as determined in good faith by a majority of the Board of Directors of
the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Preferred Stock owned by or
held for the account of the Company or any Subsidiary shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is
fixed, and in the event that such rights or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of shares of Preferred Stock (including any
such distribution made in connection with a consolidation, amalgamation
or merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly cash
dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in shares of Preferred Stock, but
including any dividend payable in shares other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the current market price (as
16
determined pursuant to Section 11(d)) per share of Preferred Stock on
such record date less the fair market value (as determined in good
faith by a majority of the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holder of the
Rights) of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants distributable in
respect of a share of Preferred Stock and the denominator of which
shall be such current market price (as determined pursuant to Section
11(d)) per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price that would have been in effect if
such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" per share of Company Common Stock or Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such shares for the ten consecutive Trading
Days immediately prior to (but not including) such date; PROVIDED,
however, that if prior to the expiration of such requisite ten Trading
Day period the issuer announces either (A) a dividend or distribution
on such shares payable in such shares or securities convertible into
such shares (other than the Rights) or (B) any subdivision, combination
or reclassification of such shares, then, following the ex-dividend
date for such dividend or the record date for such subdivision,
combinations or reclassifications, as the case may be, the "current
market price" shall be properly adjusted to take into account such
event. The closing price for each day shall be, if the shares are
listed and admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which such shares are listed or admitted to trading or, if
such shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by The Nasdaq Stock Market Consolidated Quotations
Service or such other system then in use, or, if on any such date such
shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in such shares selected by a majority of the
Board of Directors of the Company. If, on any such date no market maker
is making a market in such shares, the fair value of such shares on
such date as determined in good faith by a majority of the Board of
Directors of the Company shall be used. If such shares are not publicly
held or not so listed or traded, "current market price" per share shall
mean the fair value per share as determined in good faith by a majority
of the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "TRADING DAY" shall mean, if such
shares are listed or admitted to trading on any national securities
exchange, a day on which the principal national securities exchange on
which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or
admitted, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined
in the same manner as set forth above for Company Common Stock in
clause (i) of this Section 11(d) (other than the fourth
17
sentence thereof). If the current market price per share of Preferred
Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner
described in clause (i) of this Section 11(d), the "current market
price" per share of Preferred Stock shall be conclusively deemed to be
an amount equal to 1,000 (as such amount may be appropriately adjusted
for such events as share consolidations and subdivisions, bonus issues,
share splits, share dividends and recapitalizations with respect to
Company Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of Company Common
Stock. If neither Company Common Stock nor Preferred Stock is publicly
held or so listed or traded, "current market price" per share of the
Preferred Stock shall mean the fair value per share as determined in
good faith by a majority of the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. For all purposes of this Agreement, the "current market
price" of a Unit of Preferred Stock shall be equal to the "current
market price" of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or
to the nearest one-hundredth of a share of Company Common Stock or
Common Stock or other share or hundred-thousandth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of
the transaction that mandates such adjustment and (ii) the Expiration
Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise
of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (d), (e), (g),
(h), (i), (j), (k), (l) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Units
of Preferred Stock (or other securities or amount of cash or
combination thereof) that may be acquired from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
18
Purchase Price, that number of Units of Preferred Stock (calculated to
the nearest one hundred-thousandth of a Unit) obtained by (i)
multiplying (x) the number of Units of Preferred Stock covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of Units of Preferred Stock that
may be acquired upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of Units of Preferred Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest
hundred-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or
any day thereafter, but, if the Rights Certificates have been issued,
shall be at least ten days later than the date of such public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14, the additional Rights
to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates to be so
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Units of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per Unit
and the number of Units of Preferred Stock that were expressed in the
Initial Rights Certificates issued hereunder without prejudice to any
such adjustment or change.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then-par value of the number of
Units of Preferred Stock issuable upon exercise of the Rights, the
Company shall take any corporate action that may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally
issue such fully paid and non-assessable number of Units of Preferred
Stock at such adjusted Purchase Price.
19
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date of that number of Units of Preferred
Stock and other shares or securities of the Company, if any, issuable
upon such exercise over and above the number of Units of Preferred
Stock and other shares or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver
to such holder a due xxxx or other appropriate instrument evidencing
such holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their good
faith judgment a majority of the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of
any shares of Preferred Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Preferred Stock or
securities that by their terms are convertible into or exchangeable for
shares of Preferred Stock, (iv) stock dividends or bonus issues or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock, shall
not be taxable to such holders or shall reduce the taxes payable by
such holders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(o)), (ii)
merge or amalgamate with or into any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section
11(o)), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of transactions, assets or
earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with
Section 11(o)), if (x) at the time of or immediately after such
consolidation, merger, amalgamation or sale there are any rights,
warrants or other instruments or securities outstanding or agreements
in effect that would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger,
amalgamation or sale, the Person that constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a) shall have
distributed or otherwise transferred to its shareholders or other
Persons holding an equity interest in such Person Rights previously
owned by such Person or any of its Affiliates and Associates; PROVIDED,
HOWEVER, that this Section 11(n) shall not affect the ability of any
Subsidiary of the Company to consolidate with, merge or amalgamate with
or into, or sell or transfer assets or earning power to, any other
Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except
as permitted by Section 23 or Section 26, take (or permit any
Subsidiary to take) any action if at the time
20
such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution Date
(i) declare a dividend on the outstanding shares of Company Common
Stock payable in shares of Company Common Stock, (ii) subdivide the
outstanding shares of Company Common Stock, (iii) combine or
consolidate the outstanding shares of Company Common Stock into a
smaller number of shares, or (iv) issue any shares in a
reclassification of Company Common Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), the number of
Rights associated with each share of Company Common Stock then
outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number
of Rights thereafter associated with each share of Company Common Stock
following any such event shall equal the result obtained by multiplying
the number of Rights associated with each share of Company Common Stock
immediately prior to such event by a fraction the numerator of which
shall be the total number of shares of Company Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of
which shall be the total number of shares of Company Common Stock
outstanding immediately following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11 or Section
13, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Company Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate evidencing
shares of Company Common Stock) in accordance with Section 25. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER, AMALGAMATION OR SALE OR
TRANSFER OF ASSETS OR EARNING POWER. (a) In the event that, following the Stock
Acquisition Date, directly or indirectly, either (x) the Company shall
consolidate with, or merge or amalgamate with and into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o)), and the Company shall not be the continuing or surviving corporation of
such consolidation, amalgamation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o))
shall consolidate with, or merge or amalgamate with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation, amalgamation or merger and, in connection with such
consolidation, amalgamation or merger, all or part of the outstanding shares of
Company Common Stock shall be converted into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer) to any Person or Persons (other than the Company or any
of its Subsidiaries in one or more transactions each of which complies with
Section 11(o)),
21
in one or more transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries, taken as a
whole (any such event described in clause (x), (y) or (z) being a "SECTION 13
EVENT"), then, and in each such case, proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e), shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price, such number of validly authorized and issued, fully paid and
non-assessable shares of Common Stock of the Principal Party, which shares shall
not be subject to any liens, encumbrances, rights of first refusal, transfer
restrictions or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of Units of
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
such Units for which a Right would be exercisable hereunder but for the
occurrence of such Section 11(a)(ii) Event by the Purchase Price that would be
in effect hereunder but for such first occurrence) and (2) dividing that product
(which, following the first occurrence of a Section 13 Event, shall be the
"Purchase Price" for all purposes of this Agreement) by 50% of the current
market price (determined pursuant to Section 11(d)) per share of the Common
Stock of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall, for all
purposes of this Agreement, thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to ensure that the provisions of this Agreement shall thereafter be
applicable to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) shall be of
no further effect following the first occurrence of any Section 13 Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), (A) the Person that is the
issuer of any securities into which shares of Company Common Stock are
converted in such merger, amalgamation or consolidation, or, if there
is more than one such issuer, the issuer of Common Stock that has the
highest aggregate current market price (determined pursuant to Section
11(d)) and (B) if no securities are so issued, the Person that is the
other party to such merger, amalgamation or consolidation, or, if there
is more than one such Person, the Person the Common Stock of which has
the highest aggregate current market price (determined pursuant to
Section 11(d)); and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the largest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power transferred pursuant to
such transaction or transactions or if the Person receiving the largest
portion of the assets or earning power cannot be determined,
22
whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d)); PROVIDED,
HOWEVER, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act
("REGISTERED COMMON STOCK"), or such Person is not a corporation, and
such Person is a direct or indirect Subsidiary of another Person that
has Registered Common Stock outstanding, "Principal Party" shall refer
to such other Person; (2) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person but is not
a direct or indirect Subsidiary of another Person that has Registered
Common Stock outstanding, "Principal Party" shall refer to the ultimate
parent entity of such first-mentioned Person; (3) if the Common Stock
of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by
more than one Person, and one or more of such other Persons has
Registered Common Stock outstanding, "Principal Party" shall refer to
whichever of such other Persons is the issuer of the Registered Common
Stock having the highest aggregate current market price (determined
pursuant to Section 11(d)); and (4) if the Common Stock of such Person
is not Registered Common Stock or such Person is not a corporation, and
such Person is directly or indirectly controlled by more than one
Person, and none of such other Persons have Registered Common Stock
outstanding, "Principal Party" shall refer to whichever ultimate parent
entity is the corporation having the greatest shareholders' equity or,
if no such ultimate parent entity is a corporation, shall refer to
whichever ultimate parent entity is the entity having the greatest net
assets.
(c) The Company shall not consummate any such consolidation,
amalgamation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock that have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement
under the Securities Act, and, if appropriate, the Bermuda Act with
respect to the Common Stock that may be acquired upon exercise of the
Rights, (B) cause such registration statement to remain effective (and
to include a prospectus complying with the requirements of the
Securities Act) until the Expiration Date, and (C) as soon as
practicable following the execution of such agreement take such action
as may be required to ensure that any acquisition of such Common Stock
upon the exercise of the Rights complies with any applicable state
securities or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
23
(d) In case the Principal Party that is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then current
market price per share (determined pursuant to Section 11(d)) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then current market price (other than to holders of Rights
pursuant to this Section 13) or (ii) providing for any special payment, tax or
similar provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of this Section 13, then, in such
event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been cancelled, waived or amended,
or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates that evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market Consolidated
Quotations Service or such other system then in use or, if on any such date the
Rights are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Rights selected by a majority of the Board of Directors of the Company. If
on any such date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by a majority of
the Board of Directors of the Company shall be used and such determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions that are integral multiples of
one one-thousandth of a share
24
of Preferred Stock) upon exercise of the Rights or to distribute certificates
that evidence such fractional shares of Preferred Stock (other than fractions
that are integral multiples of one one-thousandth of a share of Preferred
Stock). In lieu of such fractional shares of Preferred Stock that are not
integral multiples of one one-thousandth of a share, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the then
current market price of a share of Preferred Stock on the day of exercise,
determined in accordance with Section 11(d).
(c) The holder of a Right by the acceptance of such Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, other than rights of action vested in the Rights Agent
pursuant to Section 18, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered holders
of certificates evidencing shares of Company Common Stock), and the Company
hereby unilaterally and irrevocably covenants in favor of such holders to
perform all obligations of the Company under this Agreement; and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate evidencing shares of Company Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of a certificate evidencing shares of Company Common
Stock), may, on such registered holder's own behalf and for such registered
holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company or any other Person to enforce, or otherwise
act in respect of, such registered holder's right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Company Common
Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f), the Company and
the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Company
Common Stock certificate) is registered as the
25
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Company Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e), shall be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or any other Person as a result of
its inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree, judgment or ruling issued by a court of competent jurisdiction
or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; PROVIDED,
HOWEVER, that the Company must use its best efforts to have any such
order, decree, judgment or ruling lifted or otherwise overturned as
promptly as practicable.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
shares of Preferred Stock or any other securities of the Company that may at any
time be issuable on the exercise of the Rights evidenced thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, except as provided in Section 24,
to receive notice of meetings or other actions affecting shareholders, or to
receive dividends or subscription rights, or otherwise.
SECTION 18. CONCERNING THE RIGHTS AGENT. (a) The Company
agrees to pay to the Rights Agent the fees set forth in Schedule I hereto for
all services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses, including reasonable fees and
disbursements of its counsel, incurred in connection with the preparation,
execution, delivery and administration of this Agreement, the exercise and
performance of its duties hereunder or any amendment or supplement hereof. The
Company shall indemnify the Rights Agent for, and hold it harmless against, any
loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including, without limitation, the costs and expenses of defending
against any claim of liability hereunder. The determination of gross negligence,
bad faith or willful misconduct hereunder shall be pursuant to a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction (a "FINAL ORDER"); PROVIDED, HOWEVEr, that, in the case of any
action, suit or proceeding that is threatened or brought by one party to this
Agreement against the other party to this Agreement (a "NON-THIRD PARTY
PROCEEDING"), no payment otherwise required to be made by the Company to the
Rights Agent under this Section 18 in respect of such Non-Third Party Proceeding
shall be required to be made by the Company until receipt of a Final Order;
PROVIDED FURTHER, that the foregoing shall not prevent or delay any request for,
or payment of,
26
reasonable expenses or indemnification pursuant to and in accordance with this
Section 18 that is unrelated in all respects to a Non-Third Party Proceeding.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate or depositary receipt for Preferred Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to have been signed, executed and, where necessary, verified or acknowledged
by the proper Person or Persons. The Rights Agent shall not be deemed to have
knowledge of any event for which it is required to receive notice under this
Agreement and the Rights Agent shall be fully protected and shall incur no
liability for failing to take any action in connection therewith unless and
until it has received such notice in writing.
(c) This Section 18 shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation or
removal of the Rights Agent.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT. (a)Any corporation, limited liability company or association into
which the Rights Agent or any successor Rights Agent may be merged or with which
it may be consolidated, or any corporation, limited liability company or
association resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation, limited
liability company or association succeeding to the corporate trust or
shareholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any document or any further act on the part of any of the
parties hereto; provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations expressly imposed by this Agreement (and
no implied duties or obligations)
27
upon the following terms and conditions, by all of which the Company and the
holders of Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be
proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless
other evidence in respect thereof be specified herein) may be deemed to
be conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any
action taken, suffered or omitted to be taken in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct. The
determination of gross negligence, bad faith or willful misconduct
hereunder shall be pursuant to a Final Order; PROVIDED, HOWEVEr, that,
in the case of any Non-Third Party Proceeding, no payment otherwise
required to be made by the Company to the Rights Agent under Section 18
in respect of such Non-Third Party Proceeding shall be required to be
made by the Company until receipt of a Final Order; PROVIDED FURTHER,
that the foregoing shall not prevent or delay any request for, or
payment of, reasonable expenses or indemnification pursuant to and in
accordance with Section 18 that is unrelated in all respects to a
Non-Third Party Proceeding.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates or be required to verify the same (except
as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not have any responsibility or
liability for the validity of this Agreement or the execution and
delivery hereof (except the due execution and delivery hereof by the
Rights Agent) or for the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or failure by
the Company to satisfy conditions contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any determination
to nullify or void the Rights of any holder thereof pursuant to Section
7(e) of this Agreement; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or Section 13 or for the
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such
28
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt by the Rights Agent of the
certificate describing any such adjustment contemplated by Section 12);
nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of
Preferred Stock or any other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock or any other securities will, when so issued, be
validly authorized and issued, fully paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further acts, instruments and assurances as may reasonably be
required by the Rights Agent for the performance by the Rights Agent of
its duties under this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties. Such instructions
shall be full authorization and protection of the Rights Agent and the
Rights Agent shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith in accordance with instructions
of any such officer or for any delay in acting while awaiting such
instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Rights Agreement and the date on and/or after
which such action shall be taken or such omission shall be effective.
The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application
(which date shall not be less than five Business Days after the date
any such officer of the Company actually receives such application,
unless any such officer shall have consented in writing to an earlier
date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to
be taken or omitted.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorney or agent or for any loss to
the Company resulting from any such act, default, neglect or
misconduct; provided that reasonable care was exercised in the
selection and continued employment thereof.
29
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the exercise of
its rights hereunder if the Rights Agent reasonably believes that
repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed, not signed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent
shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company. If such
certificate has been completed and signed and shows a negative response
to clauses 1 and 2 of such certificate, unless previously instructed
otherwise in writing by the Company (which instructions may impose on
the Rights Agent additional ministerial responsibilities, but no
discretionary responsibilities), the Rights Agent may assume without
further inquiry that the Rights Certificate is not owned by a person
described in Section 4(b) or Section 7(e) and shall not be charged with
any knowledge to the contrary.
(l) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for
special, indirect or consequential damages of any kind whatsoever.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty days' prior notice in writing mailed to the Company, and
to each transfer agent of the Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates (or
certificates for the Company Common Stock prior to the Distribution Date) by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty days' prior notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates (or certificates for the
Company Common Stock prior to the Distribution Date) by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate or, prior to the Distribution Date, the
holder of a certificate for the Company Common Stock (who shall, with such
notice, submit such holder's Rights Certificate or certificate for Company
Common Stock, as the case may be, for inspection by the Company), then any
registered holder of any Rights Certificate or, prior to the Distribution Date,
the holder of a certificate for the Company Common Stock may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation, limited liability company or association organized
and doing business under the laws of the United States or any state of the
United States in good standing, shall be authorized to do business as a banking
institution in the State of New York, shall be authorized under such laws to
30
exercise corporate trust or stock transfer powers, shall be subject to
supervision or examination by federal or state authorities and shall have at the
time of its appointment as Rights Agent a combined capital and surplus of at
least US$100,000,000 or (b) an Affiliate of a corporation, limited liability
company or association described in clause (a). After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Preferred Stock and the Company Common Stock, and
mail a notice thereof in writing to the registered holders of the Rights
Certificates (or certificates for the Company Common Stock prior to the
Distribution Date). Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by a majority of the Board of
Directors of the Company to reflect any adjustment or change made in accordance
with the provisions of this Agreement in the Purchase Price or the number or
kind or class of shares or other securities or property that may be acquired
upon exercise of the Rights. In addition, in connection with the issuance or
sale of shares of Company Common Stock following the Distribution Date and prior
to the Expiration Date, the Company (a) shall, with respect to shares of Company
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by a majority of the Board of
Directors of the Company, issue Rights Certificates evidencing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION. (a) Subject to Section
28, the Company may, at its option, by action of a majority of the Board of
Directors of the Company, at any time prior to the earlier of (i) the Close of
Business on the tenth Day following the Stock Acquisition Date or (ii) the Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of US$0.0001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, share consolidation or
subdivision, bonus issue, stock dividend or similar transaction occurring after
the date hereof (such redemption price being the "REDEMPTION PRICE"), and the
Company may, at its option, by action of a majority of the Board of Directors of
the Company, pay the Redemption Price either in shares of Company Common Stock
(based on the current market price, determined in accordance with Section 11(d),
of the shares of Company Common Stock at the time of redemption) or cash.
Subject to the foregoing, the redemption of the Rights may be made effective at
such time, on such basis and
31
with such conditions as the Board of Directors of the Company in its sole
discretion may establish.
(b) Immediately upon the action of a majority of the Board of
Directors of the Company ordering the redemption of the Rights, evidence of
which shall be filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. Promptly after the action of a majority of the
Board of Directors of the Company ordering the redemption of the Rights, the
Company shall give written notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the register of members
of the transfer agent for Company Common Stock. Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
SECTION 24. NOTICE OF CERTAIN EVENTS. (a) In case the Company
shall propose, at any time after the Distribution Date, (i) to pay any dividend
or bonus issue payable in shares of any class to the holders of Preferred Stock
or to make any other distribution to the holders of Preferred Stock (other than
a regular quarterly cash dividend out of earnings or retained earnings of the
Company), (ii) to offer to the holders of Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock or shares
of any class or any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), (iv) to effect
any consolidation or merger or amalgamation into or with any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o)), or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)) or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate (or, prior to the Distribution Date, to each
holder of certificates for Company Common Stock), to the extent feasible and in
accordance with Section 25, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, amalgamation, sale, transfer, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of the shares
of Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 20
days prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier; PROVIDED, HOWEVER, that no such notice shall be
required pursuant to this Section 24 if any Subsidiary of the Company effects a
consolidation or merger or amalgamation with or into, or effects a sale or other
transfer of assets or earning power to, any other Subsidiary of the Company.
32
(b) In case any of the events set forth in Section 11(a)(ii)
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 25, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii).
SECTION 25. NOTICES. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing and
mailed or sent or delivered (including by facsimile transmission), if to the
Company, at its address at:
Xxxxx Limited
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Chief Financial Officer
and if to the Rights Agent, at its address at:
Mellon Investor Services LLC
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Relationship Manager
Facsimile No.: (000) 000-0000
with a copy to:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000.
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Rights Certificate (or,
if prior to the Distribution Date, to the holder of certificates evidencing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Company
Common Stock.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates evidencing shares of Company Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 26,
the
33
Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates
in order (a) to cure any ambiguity, (b) to correct or supplement any provision
contained herein that may be defective or inconsistent with any other provisions
herein, (c) to shorten or lengthen any time period hereunder or (d) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); PROVIDED, HOWEVER, that, prior to the
Close of Business on the third anniversary hereof, this Agreement may not be
supplemented or amended to extend the Final Expiration Date except in accordance
with Section 35; and PROVIDED FURTHER, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (c) of this sentence,
(i) subject to Section 30, a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable or (ii) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company or, so
long as any Person is an Acquiring Person hereunder, from the majority of the
Board of Directors of the Company, that states that the proposed supplement or
amendment is in compliance with the terms of this Section 26 and provided that
such supplement or amendment does not adversely change (as reasonably determined
in good faith by the Rights Agent) or increase the rights, duties or obligations
of the Rights Agent, the Rights Agent shall execute such supplement or
amendment; provided that any supplement or amendment that does not adversely
change (as reasonably determined in good faith by the Rights Agent) or increase
the rights, duties or obligations of the Rights Agent shall become effective
immediately upon execution by the Company, whether or not executed by the Rights
Agent. Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Company Common
Stock.
SECTION 27. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any calculation of the
number of shares of Company Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Company Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the Exchange Act Regulations as in effect on the date hereof. Except as
otherwise specifically provided herein, the Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors of
the Company or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power (i) to interpret the provisions of this Agreement and (ii) to make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) that are done or made by the Board of Directors of the Company in
good faith shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y) not subject
34
the Board of Directors of the Company or any member thereof to any liability to
the holders of the Rights.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of shares of Company Common Stock)
any legal or equitable right, remedy or claim under this Agreement. This
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Board of Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement and the Rights shall not then be redeemable,
the right of redemption set forth in Section 23 shall be reinstated (with the
Company giving the Rights Agent prompt written notice of such reinstatement) and
shall not expire until the Close of Business on the tenth Business Day following
the date of such determination by a majority of the Board of Directors of the
Company.
SECTION 31. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be governed by, and construed in
accordance with, the laws of Bermuda; PROVIDED, HOWEVER, that the rights, duties
and obligations of the Rights Agent shall be governed by, and construed in
accordance with, the laws of the State of New York.
SECTION 32. COUNTERPARTS. This Agreement may be executed
(including by facsimile) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. The headings contained in
this Agreement are for descriptive purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 34. EXCHANGE. (a) (i) The Company may, at its option,
at any time after any person becomes an Acquiring Person, upon resolution
adopted by a majority of the Board of Directors of the Company, exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to Section 7(e)) for Units of
Preferred Stock at an exchange ratio of one Unit of Preferred Stock per Right,
appropriately adjusted to reflect any stock split, share consolidation or
subdivision, bonus issue, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"SECTION 34(A)(I) EXCHANGE Ratio"). Notwithstanding the foregoing,
35
the Company may not effect the exchange described in this Section 34(a)(i) at
any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries, or any trustee or fiduciary with respect to such plan acting in
such capacity), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the shares of Company Common
Stock then outstanding.
(ii) The Company may, at its option, at any time after any
person becomes an Acquiring Person, upon resolution adopted by a majority of the
Board of Directors of the Company, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become null and
void pursuant to Section 7(e)) for Units of Preferred Stock at an exchange ratio
specified in the following sentence, as appropriately adjusted to reflect any
stock split, share consolidation or subdivision, bonus issue, stock dividend or
similar transaction occurring after the date hereof. Subject to such adjustment,
each Right may be exchanged for that number of Units of Preferred Stock obtained
by dividing the Adjustment Spread (as defined below) by the then-current market
price (determined pursuant to Section 11(d)) per Unit of Preferred Stock on the
earlier of (i) the date on which any Person becomes an Acquiring Person and (ii)
the date on which a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) is commenced within the meaning of Rule
14d-2 of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 20% or more of
the shares of Company Common Stock then outstanding (such exchange ratio being
the "SECTION 34(A)(II) EXCHANGE RATIO"). The "ADJUSTMENT Spread" shall equal (x)
the aggregate market price on the date of such event of the number of Adjustment
Shares determined pursuant to Section 11(a)(ii), minus (y) the Purchase Price.
(b) Immediately upon the action of a majority of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to Section
34(a) and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Units of Preferred Stock equal
to the number of such Rights held by such holder multiplied by the Section
34(a)(i) Exchange Ratio or Section 34(a)(ii) Exchange Ratio, as the case may be.
The Company shall promptly give public notice (and prompt written notice to the
Rights Agent) of any such exchange; PROVIDED, HOWEVER, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice that is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange shall state the method by which the exchange of
Units of Preferred Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights that will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights that have become null and void pursuant to Section 7(e)) held by each
holder of Rights.
36
(c) In the event that the number of shares of Preferred Stock
that are authorized by the Company's Memorandum of Association and Bye-laws but
not outstanding or reserved for issuance for purposes other than upon exercise
of the Rights are not sufficient to permit any exchange of Rights as
contemplated in accordance with this Section 34, the Company shall take all such
action as may be necessary to authorize additional shares of Preferred Stock for
issuance upon exchange of the Rights or make adequate provision to substitute
(1) cash, (2) Company Common Stock or other equity securities of the Company,
(3) debt securities of the Company, (4) other assets or (5) any combination of
the foregoing, having an aggregate value equal to the Adjustment Spread, where
such aggregate value has been determined by a majority of the Board of Directors
of the Company.
(d) The Company shall not be required to issue fractions of
Units of Preferred Stock or to distribute certificates that evidence fractional
Units. In lieu of fractional Units, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exchanged as herein
provided an amount in cash equal to the same fraction of the current market
price (determined pursuant to Section 11(d)) of one Unit of Preferred Stock.
SECTION 35. RENEWAL. At least 180 days prior to the Close of
Business on the third anniversary hereof, the Chairman of the Board of Directors
of the Company or the Board of Directors of the Company may, in accordance with
the Company's Bye-laws, convene an annual general meeting or special general
meeting of the Company's shareholders for the purpose of considering an
amendment to Section 7(a)(i) of this Agreement, which amendment shall provide
for an extension of the Final Expiration Date (the "FINAL EXPIRATION DATE
AMENDMENT"). The Final Expiration Date Amendment shall become effective upon a
resolution of the members including the affirmative vote of not less than 66% of
votes cast on the resolution.
[SIGNATURE PAGE FOLLOWS]
37
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on their behalf as of the date first above
written.
The Common Seal of the Company was
affixed hereto in the presence of:
By: /s/ XXXXXXX XXXXXXX
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chairman & CEO
MELLON INVESTOR SERVICES LLC
By: /s/ XXXXX XXXXXX
------------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Vice President
SCHEDULE I
FEE SCHEDULE
1.) One time acceptance fee: $2,500.00
2.) Annual Agency fee: $2,500.00
3.) Issuance of Rights Certificates: By Appraisal
4.) Special Services: By Appraisal
5.) Legal Out of Pocket Expenses:
(a) Minimum Fee for reviewing the Agreement $1,500.00
(b) Minimum Fee for reviewing an Amendment $ 750.00
