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EXHIBIT 4.3
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TRENWICK GROUP LTD.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
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Rights Agreement
Dated as of August __, 2000
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Table of Contents
Section Page
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Section 1. Certain Definitions.........................................
1
Section 2. Appointment of Rights Agent.................................
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Section 3. Issue of Rights Certificates................................
4
Section 4. Form of Rights Certificates.................................
5
Section 5. Countersignature and Registration...........................
6
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights 6
Certificates................................................
Section Exercise of Rights; Purchase Price; Expiration Date of
7........ Rights......................................................
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Section 8. Cancellation and Destruction of Rights Certificates.........
8
Section 9. Reservation and Availability of Capital Shares..............
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Section 10. Series A Preferred Shares Record Date.......................
10
Section Adjustment of Purchase Price, Number and Kind of Shares or
11....... Number of Rights............................................
10
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares...................................................... 16
Section Consolidation, Amalgamation or Sale or Transfer of Assets or
13....... Earning Power...............................................
16
Section 14. Fractional Rights and Fractional Shares.....................
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Section 15. Rights of Action............................................
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Section 16. Agreement of Rights Holders.................................
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Section 17. Rights Certificate Holder Not Deemed a Shareholder..........
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Section 18. Concerning the Rights Agent.................................
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Section 19. Merger or Consolidation or Change of Name of Rights Agent...
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Section 20. Duties of Rights Agent......................................
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Section 21. Change of Rights Agent......................................
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Section 22. Issuance of New Rights Certificates.........................
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Section 23. Redemption and Termination..................................
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Section 24. Exchange....................................................
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Section 25. Notice of Proposed Actions..................................
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Section 26. Notices.....................................................
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Section 27. Supplements, Deletions and Amendments.......................
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Section 28. Successors..................................................
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Section 29. Determinations and Actions by the Board, etc................
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Section 30. Benefits of this Agreement..................................
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Section 31. Severability................................................
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Section 32. Governing Law...............................................
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Section 33. Counterparts................................................
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Section 34. Descriptive Headings........................................
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Exhibit A -- Certificate of Designation; Preferences and Rights of Series
A First Preference Shares
Exhibit B -- Form of Rights Certificate
Exhibit C -- Summary of Rights of Series A First Preference Shares
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TABLE OF DEFINED TERMS
TERM DEFINED SECTION
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Acquiring Person 1(a)
Act 1(b)
Adjustment Shares 11(a)(ii)
Affiliate 1(c)
Agreement Intro
Associate 1(c)
Beneficial Owner 1(d)
Board Intro
Business Day 1(e)
Close of Business 1(f)
Common Shares 1(g)
Common Share Equivalents 11(a)(iii)
Company (Trenwick Group Ltd.) Intro
Company (Following a sec. 13(a) Event) 13(a)
Current Market Price of the Common Shares 11(d)(i)
Current Market Price of the Series A Preferred Shares 11(d)(ii)
Current Value 11(a)(iii)
Distribution Date 3(a)
Equivalent Series A Preferred Shares 11(b)
Exchange Act 1(c)
Exchange Ratio 24(a)
Expiration Date 7(a)
Final Expiration Date 7(a)
Grandfathered Percentage 1(o)
Grandfathered Person 1(p)
NASDAQ 11(d)(i)
Original Rights 1(d)(i)
Person 1(q)
Series A Preferred Shares 1(aa)
Principal Party 13(b)
Purchase Price 4(a)
Purchase Price (after a sec. 11(a) Event) 11(a)(ii)
Purchase Price (after a sec. 13 Event) 13(a)
Record Date 1(t)
Redemption Price 23(a)
Rights Intro
Rights Agent Intro
Rights Certificates 3(a)
Rights Dividend Declaration Date Intro
Section 11(a)(ii) Event 1(y)
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TERM DEFINED SECTION
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Section 11(a)(ii) Trigger Date 1(z)
Section 13 Event 1(aa)
Spread 11(a)(iii)
Share Acquisition Date 1(dd)
Subsidiary 1(ee)
Substitution Period 11(a)(iii)
Summary of Rights 3(b)
Trading Day 11(d)(i)
Triggering Event 1(ii)
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of August __, 2000 (the "Agreement"), between
TRENWICK GROUP LTD., a company organized under the laws of Bermuda (the
"Company"), and FIRST CHICAGO TRUST COMPANY OF NEW YORK, a New York corporation
(the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on August , 2000 the Board of Directors of the Company (the
"Board") approved this Rights Agreement, and authorized and declared a dividend
distribution of one Right (a "Right") for each Common Share, $.10 par value per
share, of the Company (the "Common Shares") to be issued at the close of
business on the Record Date (as hereinafter defined) and has authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(p) hereof) for each Common Share issued between the
Record Date (whether originally issued or delivered from the Company's treasury)
and the Distribution Date (as hereinafter defined), each Right initially
representing the right to purchase one one-hundredth of a Series A First
Preference Share, $.10 par value per share, of the Company having the rights,
powers and preferences set forth in the Certificate of Designation, Preference
and Rights of Series A First Preference Shares attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set forth; and
WHEREAS, on August __, 2000 the sole shareholder of the Company approved
the Company's adoption of this Rights Agreement.
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, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
ten percent (10%) or more of the Common Shares then issued and outstanding:
provided, that Acquiring Person shall not include:
(i) the Company;
(ii) any Subsidiary of the Company;
(iii) any employee benefit plan of the Company or of any Subsidiary of
the Company;
(iv) any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan;
(v) any Grandfathered Person, unless such Grandfathered Person after
the Record Date becomes the Beneficial Owner of more than the Grandfathered
Percentage of the Common Shares then issued and outstanding. Any
Grandfathered Person who after the Record Date becomes the Beneficial Owner
of less than ten percent (10%) of the Common Shares then issued and
outstanding shall cease to be a Grandfathered Person.
(vi) any Person who becomes the Beneficial Owner of ten percent (10%)
or more of the Common Shares then outstanding as a result of a reduction in
the number of Common Shares outstanding due to the repurchase of Common
Shares by the Company unless and until such Person, after becoming aware
that such Person has become the Beneficial Owner of ten percent (10%) or
more of the then outstanding Common Shares, acquires beneficial ownership
of additional Common Shares representing one percent (1%) or more of the
Common Shares then outstanding; or
(vii) any such Person who has reported or is required to report such
ownership (but less than twenty percent (20%)) on Schedule 13G under the
Exchange Act (or any comparable or successor report) or on Schedule 13D
under the Exchange Act (or any comparable or successor report) which
Schedule 13D does not state any intention to or reserve the right to
control or influence the
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management or policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the disposition of the
Common Shares) and, within ten (10) Business Days of being requested by the
Company to advise it regarding the same, certifies to the Company that such
Person acquired Common Shares in excess of 9.9% inadvertently or without
knowledge of the terms of the Rights and who, together with all Affiliates
and Associates, thereafter does not acquire additional Common Shares while
the Beneficial Owner of ten percent (10%) or more of the Common Shares then
outstanding; provided, however, that if the Person requested to so certify
fails to do so within ten (10) Business Days, then such Person shall become
an Acquiring Person immediately after such ten (10) Business Day Period.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act of 1934, as amended and in effect on the date of this Agreement
(the "Exchange Act").
(d) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B) securities
issuable upon exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or Associates prior to
the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection with
an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security under this subparagraph (ii) as
a result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (A) arises solely
from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act, and
(B) is not then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (d)) or
disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (d) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of such acquisition.
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(e) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York or the Islands of
Bermuda are authorized or obligated by law or executive order to close.
(f) "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.
(g) "Common Shares" shall have the meaning set forth in the first WHEREAS
clause at the beginning of this Agreement, except that "Common Shares" when used
with reference to any Person other than the Company shall mean the capital
shares of such Person with the greatest voting power, or the equity securities
or other equity interest having power to control or direct the management, of
such Person.
(h) "Common Share Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
(i) "Current Market Price" shall have the meaning set forth in Section
11(d)(i) hereof.
(j) "Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(k) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(l) "Exchange Act" shall have the meaning set forth in Section 1(c) hereof.
(m) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(n) "Final Expiration Date" shall mean the close of business on August __,
2010.
(o) "Grandfathered Percentage" means, with respect to any Grandfathered
Person, the percentage of the Common Shares then in issue that such
Grandfathered Person, together with all Affiliates and Associates of such
Grandfathered Person, beneficially owns as of the Record Date; provided, that,
in the event that the percentage of Common Shares then in issue that a
Grandfathered Person beneficially owns shall decrease (whether due to the sale,
transfer or other disposition of Common Shares by the Grandfathered Person or
due to the dilution of the Grandfathered Person's interest in Common Shares as a
result of the issuance of additional Common Shares) after the Record Date, the
Grandfathered Percentage, with respect to such Grandfathered Person, shall mean,
subsequent to such sale, transfer, disposition or dilution, the percentage of
Common Shares then in issue that such Grandfathered Person, together with all
Affiliates and Associates of such Grandfathered Person, beneficially owns
immediately following such sale, transfer, disposition or dilution.
(p) "Grandfathered Person" means any Person who, together with all
Affiliates and Associates of such Person is, as of the Record Date, the
Beneficial Owner of ten percent (10%) or more of the Common Shares then in
issue.
(q) "Person" shall mean any individual, firm, corporation, partnership or
other entity.
(r) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(s) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(t) "Record Date" shall be the same date on which the Effective Time shall
occur of the Amended and Restated Agreement, Schemes of Arrangement and Plan of
Reorganization, dated as of March 20, 2000, by and among LaSalle Re Holdings
Limited ("LaSalle Holdings"), a company organized under the laws of Bermuda,
LaSalle Re Limited, a company organized under the laws of Bermuda and a
majority-owned subsidiary of LaSalle Holdings, Trenwick Group Inc., a Delaware
corporation, and Trenwick Group Ltd. (formerly known as ▇▇▇▇▇ Holdings
International Limited).
(u) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(v) "Rights" shall have the meaning set forth in the first WHEREAS clause
at the beginning of the Agreement.
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(w) "Rights Agent" shall have the meaning set forth in the parties clause
at the beginning of this Agreement.
(x) "Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.
(y) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii) hereof.
(z) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(aa) "Section 13 Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.
(bb) "Series A Preferred Shares" shall mean shares of Series A First
Preference Shares, $.10 par value per share, of the Company, and, to the extent
that there are not a sufficient number of shares of Series A First Preference
Shares authorized to permit the full exercise of the Rights, any other series of
preferred shares of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A First Preference Shares.
(cc) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(dd) "Share Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act or
any comparable or successor report) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(ee) "Subsidiary" shall mean, with reference to any Person, any corporation
of which an amount of voting securities sufficient to elect at least a majority
of the directors of such corporation is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(ff) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(gg) "Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
(hh) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
(ii) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as rights agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-rights agents as it may deem
necessary or desirable. If the Company appoints one or more Co-Rights Agents,
the respective duties of the Rights Agent and any Co-Rights Agents shall be as
the Company shall determine.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the tenth day after
the Share Acquisition Date, or (ii) the close of business on the tenth Business
Day (or such later date as the Board shall determine) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, or any employee benefit plan of the Company or of any Subsidiary
of the Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of ten percent (10%) or more of the Common Shares
then outstanding (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Shares registered in the names of the holders of the Common Shares (which
certificates for Common Shares 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 Common
Shares (including a transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class, insured, postage
prepaid mail, to each record holder of the Common Share as of the close of
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business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more right certificates, in substantially the
form of Exhibit B hereto (the "Rights Certificates"), evidencing one Right for
each Common Share so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per Common Share has been made
pursuant to Section 11(p) hereof, at the time of distribution of the Right
Certificates, the Company shall make, and notify the Rights Agent of, the
necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) The Company will make available a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
to any holder of Rights who may so request from time to time. With respect to
certificates for the Common Shares outstanding as of the Record Date or which
were issued subsequent to the Record Date, unless and until the Distribution
Date shall occur, the Rights will be evidenced by such certificates for the
Common Shares and the registered holders of the Common Shares shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as hereinafter defined), the transfer
of any certificates representing Common Shares in respect of which Rights have
been issued shall also constitute the transfer of the Rights associated with
such Common Shares.
(c) Rights shall be issued in respect of all Common Shares which are issued
(whether originally issued or from the Company's treasury) after the Record Date
but prior to the earlier of the Distribution Date or the Expiration Date.
Certificates representing such Common Shares shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between Trenwick Group Ltd. (the "Company") and the Rights Agent
thereunder (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is
on file at the principal offices of the Company. 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 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 such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Shares
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 Common Shares represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be substantially in
the form set forth in Exhibit B hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Rights Certificates, whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the
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holders thereof to purchase such number of one one-hundredths of a Series A
Preferred Share as shall be set forth therein at the price set forth therein
(such exercise price per one one-hundredth of a share, the "Purchase Price"),
but the amount and type of securities purchasable 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 to Section 3(a), Section 11(i)
or Section 22 hereof that represents 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) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified
in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President, either manually
or by facsimile signature, and shall have affixed thereto the Company's seal or
a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer of the Company, either
manually or by facsimile signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
of the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the appropriate place
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 names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the close of business on the Distribution Date, and at
or prior to the close of business on the Expiration Date, any Rights Certificate
or Certificates (other than Rights Certificates that may have been exchanged
pursuant to Section 24) may be transferred, split up, combined or exchanged for
another Rights Certificate or Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a
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Series A Preferred Share (or, following a Triggering Event, Common Shares, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitles such holder (or former holder in the
case of a transfer) 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 principal office or offices 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 completed and signed
the certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will execute and deliver a new Rights Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu
of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a) (iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agents
at the principal office or offices, of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-hundredths of a share (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) the close of business on August
__, 2010 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Sections 23 and 24 hereof (the earlier of (i) and (ii)
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a Series A Preferred
Share pursuant to the exercise of a Right shall initially be $________, and
shall be subject to adjustment from time to time as provided in Section 11 and
Section 13(a) hereof and shall be payable in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth of a Series A Preferred Share (or other shares,
securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i)(A) requisition
from any transfer agent of the Series A Preferred Shares (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the
total number of one one-hundredths of a Series A Preferred Share to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to deposit the total
number of Series A Preferred Shares issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one
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one-hundredths of a Series A Preferred Share as are to be purchased (in which
case certificates for the Series A Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii) after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the Purchase Price
(as such amount may be reduced pursuant to Section 11(a) hereof) shall be made
in cash or by certified bank check or bank draft payable to the order of the
Company. In the event that the Company is obligated to issue other securities
(including Common Shares) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights be exercised so that
only whole Series A Preferred Shares would be issued.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 6 and Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the
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exercise thereof. The Rights Agent shall deliver all canceled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Shares.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Series A Preferred Shares
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued Common Shares and/or other securities or out of its authorized and
issued shares held in its treasury), the number of Series A Preferred Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) that, as provided in this Agreement including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the Series A Preferred Shares (and, following the occurrence
of a Triggering Event, Common Shares and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares 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 to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)
(iii) hereof, a registration statement under the Act, with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the expiration of the
Rights. The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days after
the date set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof is not
permitted under applicable law or a registration statement has not been declared
effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all one one-hundredths of a Series A Preferred
Share (and, following the occurrence of a Triggering Event, Common Share and/or
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
non-assessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for a number of one one-hundredths of a Series A Preferred
Share (or Common Share and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of one one-hundredths of a Series A Preferred Share (or Common Share
and/or other securities, as the case may be) in respect of a name other than
that of, the registered holder of the Rights Certificates evidencing
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Rights surrendered for exercise or to issue or deliver any certificates for a
number of one one-hundredths of a Series A Preferred Share (or Common Share
and/or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until 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. Series A Preferred Shares Record Date. Each person in whose
name any certificate for a number of one one-hundredths of a Series A Preferred
Share (or Common Shares and/or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional Series A Preferred Shares (or Common Shares
and/or other securities, as the case may be) represented thereby on, and such
certificate shall be dated the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Shares (or Common
Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Series A Preferred Shares
(or Common Shares and/or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Series A Preferred Shares payable
in Series A Preferred Shares, (B) subdivide the outstanding Series A
Preferred Shares, (C) combine the outstanding Series A Preferred Shares
into a smaller number of shares, or (D) issue any of its capital shares in
a reclassification of the Series A Preferred Shares (including any such
reclassification in connection with a consolidation, amalgamation or
combination in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of Series A
Preferred Shares or capital shares, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of Series A
Preferred Shares or capital shares, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a time when
the Series A Preferred Shares transfer books of the Company were open, he
would have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person, alone or together with its Affiliates
and Associates, shall, at any time after the Record Date, becomes an
Acquiring Person, unless the event causing such Person to become an
Acquiring Person is a transaction set forth in Section 13(a) hereof, or is
an acquisition of shares of Common Shares pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Shares at a price and
on terms determined by at least a majority of the Board who are not
officers of the Company and who are not representatives, nominees,
Affiliates or Associates of an Acquiring Person, after receiving advice
from one or more investment banking firms, to be (A) at a
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price that is not inadequate (taking into account all factors which such
members of the Board deem relevant including, without limitation, prices
which could reasonably be achieved if the Company or its assets were sold
on an orderly basis designed to realize maximum value) and (B) otherwise in
the best interests of the Company and its shareholders, then, promptly
following the occurrence of such event, proper provision shall be made so
that each holder of a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of a Series A
Preferred Share, such number of Common Shares of the Company as shall equal
the result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-hundredths of a Series A Preferred Share for
which a Right was exercisable immediately prior to the first occurrence of
a Section 11(a)(ii) Event, and (y) dividing that product (which, following
such first occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by fifty
percent (50%) of the Current Market Price (determined pursuant to Section
11(d) hereof) per Common Share on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(iii) In the event that the number of Common Shares which are
authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights are not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall: (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value"), and (B) with
respect to each Right, make adequate provision to substitute for the
Adjustment Shares, upon the exercise of a Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) Common Shares or other equity securities of the Company (including,
without limitation, preferred shares, or units of preferred shares, such as
the Series A Preferred Shares, which the Board has deemed to have the same
value or economic rights as Common Shares (such preferred shares being
referred to as "Common Share Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value
has been determined by the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board; provided,
however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption pursuant
to Section 23(a) expires (the later of (x) and (y) being referred to herein
is the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Common Shares (to the
extent available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. For purposes of the preceding
sentence, the term "Spread" shall mean the excess of (i) the Current Market
Value over (ii) the Purchase Price. If the Board determines in good faith
that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek shareholder approval for the
authorization of such additional shares (such thirty (30) day period, as it
may be extended, is herein called the "Substitution Period"). To the extent
that action is to be taken pursuant to the first and/or third sentences of
this Section 11(a)(iii), the Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek such shareholder
approval for such authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence
and to determine the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of each Adjustment Share
shall be the Current Market Price per
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Common Share on the Section 11(a)(ii) Trigger Date and the per share or per
unit value of any Common Share Equivalent shall be deemed to equal the
Current Market Value per Common Share 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 Series A Preferred Shares entitling them
to subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Series A Preferred Shares (or shares
having the same rights, privileges and preferences as the Series A Preferred
Shares ("Equivalent Preferred Shares")) or securities convertible into Series A
Preferred Shares or Equivalent Preferred Shares at a price per Series A
Preferred Share or per Equivalent Preferred Share (or having a conversion price
per share, if a security convertible into Series A Preferred Shares or
Equivalent Preferred Shares) less than the Current Market Price (as determined
pursuant to Section 11(d) hereof) per Series A Preferred Share on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of Series
A Preferred Shares outstanding on such record date, plus the number of Series A
Preferred Shares which the aggregate offering price of the total number of
Series A Preferred Shares and/or Equivalent Preferred Shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such Current Market Price, and the denominator
of which shall be the number of Series A Preferred Shares outstanding on such
record date, plus the number of additional Series A Preferred Shares and/or
Equivalent Preferred Shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid 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 the Board, 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. Series A Preferred Shares owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for a distribution to all
holders of Series A Preferred Shares (including any such distribution made in
connection with a consolidation, amalgamation or combination in which the
Company is the continuing or surviving 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 Series A Preferred Shares, but including any dividend payable in
shares other than Series A Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof, the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price (as determined pursuant to
Section 11(d) hereof) per Series A Preferred Share on such record date, less the
fair market value (as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a Series A Preferred Share and the
denominator of which shall be such Current Market Price (as determined pursuant
to Section 11(d) hereof) per Series A Preferred Share. 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 which would have been in effect if such record date had not been
fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per Common Share on any date shall be deemed to be the average of the
daily closing prices per share of such Common Shares for the thirty (30)
consecutive Trading Days (as hereinafter defined) immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per Common Share on any date shall be
deemed to be the average of the daily closing prices per share of
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such Common Shares for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the Current
Market Price per Common Share is determined during a period following the
announcement by the issuer of such Common Shares of (A) a dividend or
distribution on such Common Shares payable in such Common Shares or
securities convertible into such Common Shares (other than the Rights), or
(B) any subdivision, combination or reclassification of such Common Shares,
and the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification shall not have
occurred prior to the commencement of the requisite thirty (30) Trading Day
or ten (10) Trading Day period, as set forth above, then, and in each such
case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Common Shares are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the Common Shares
are listed or admitted to trading or, if the Common 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 National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
Common 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 the Common Shares selected by the Board. If on any such
date no market maker is making a market in the Common Shares, the fair
value of such shares on such date as determined in good faith by the Board
shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Common Shares are
listed or admitted to trading is open for the transaction of business or,
if the Common Shares are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Shares is 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 the Board, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current Market
Price per Series A Preferred Share shall be determined in the same manner
as set forth above for the Common Share in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the Current Market Price per
Series A Preferred Share cannot be determined in the manner provided above
or if the Series A Preferred Share 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 Series A Preferred Share shall be conclusively deemed to
be an amount equal to 100 (as such number may be appropriately adjusted for
such events as share splits, share dividends and recapitalizations with
respect to the Common Shares occurring after the date of this Agreement)
multiplied by the Current Market Price per Common Share. If neither the
Common Shares nor the Series A Preferred Shares is publicly held or so
listed or traded, Current Market Price per Series A Preferred Share shall
mean the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(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 one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a Common Share or other
share or one-millionth of a Series A Preferred Share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall
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be made no later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any share capital other than Series A Preferred Shares,
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 Series A Preferred Shares contained in Sections
11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Series A Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Series A Preferred Share purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
Series A Preferred Share (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-hundredths of a share covered by a
Right immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one one-hundredths of a Series A Preferred Share purchasable 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 one one-hundredth of a
Series A Preferred Share for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-hundredths of a Series A Preferred Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-hundredth of a
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share and the number of one one-hundredths of a share which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated value, if any, of the number of one
one-hundredths of a Series A Preferred Share issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and non-assessable such number of one one-hundredths of a
Series A Preferred Share at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the number
of one one-hundredths of a Series A Preferred Share and other share capital or
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-hundredths of a Series A Preferred Share and other share
capital 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 ▇▇▇▇ 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 the Board shall determine to be
advisable in order that any (i) consolidation or subdivision of the Series A
Preferred Shares, (ii) issuance wholly for cash of any Series A Preferred Shares
at less than the Current Market Price, (iii) issuance wholly for cash of Series
A Preferred Shares or securities which by their terms are convertible into or
exchangeable for Series A Preferred Shares, (iv) share dividends or (v) issuance
of rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Series A Preferred Shares shall not be taxable to
such shareholders.
(n) The Company covenants and agrees that it shall not, without shareholder
approval, at any time after the Distribution Date, (i) consolidate, amalgamate
or otherwise combine under any applicable law with any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or (ii) sell or otherwise transfer (and/or permit any of its
Subsidiaries to sell or otherwise transfer), in one transaction, or a series of
related transactions, assets or earning power aggregating more than fifty
percent (50%) of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or immediately after such
consolidation, amalgamation, combination or sale there are any rights, warrants
or other instruments or securities outstanding or agreements in effect which
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, amalgamation, combination or sale, the shareholders of the
Person who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23 or Section 27 hereof and to the
extent necessary with required shareholder approval, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Record Date (i) declare a
dividend on the outstanding Common Shares payable in Common Shares, (ii)
subdivide the outstanding Common Shares, or (iii) combine the outstanding
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Common Shares into a smaller number of shares, the number of Rights associated
with each Common Share then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each Common Share following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each Common Share immediately prior to such event by a fraction
the numerator of which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of Common Shares 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 and Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly deliver to the Rights Agent, the registrar of the Company and each
transfer agent for the Series A Preferred Shares and the Common Shares, 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 representing Common Shares) in the manner set forth in Section 26
thereof. 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 such adjustment unless and until it shall have actually
received such certificate.
Section 13. Consolidation, Amalgamation or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Share Acquisition Date, directly or
indirectly,
(x) the Company shall consolidate with, amalgamate, or otherwise
combine with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company
shall not be the continuing or surviving corporation of such consolidation,
amalgamation or combination,
(y) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall under any
applicable law amalgamate or otherwise combine with or into, the Company,
and the Company shall be the continuing or surviving corporation of such
amalgamation or combination and, in connection with such amalgamation or
combination, all or part of the outstanding Common Shares shall be changed
into or exchanged for shares or other securities of any other Person or
cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more
than fifty percent (50%) of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any Person or Persons (other than
the Company or any Subsidiary of the Company in one or more transactions
each of which complies with Section 11(o) hereof), then, and in each such
case (except as may be contemplated by Section 13(d) hereof), proper
provision shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable
Common Shares of the Principal Party (as such term is hereinafter defined),
not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of one one-hundredths of a
Series A Preferred Share 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 one one-hundredths of a share for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior
to such first occurrence), and dividing that product (which, following the
first occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by
(2) fifty percent (50%) of the Current Market Price (determined pursuant to
Section 11(d)(i)
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hereof) per Common Share of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares) in connection with the consummation
of any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to its Common Shares thereafter deliverable upon the exercise of
the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such
amalgamation or combination, and if no securities are so issued, the Person
that is the other party to such amalgamation or combination; 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
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person, the Common
Shares of which is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not, without shareholder approval, consummate any
such consolidation, amalgamation, combination, sale or transfer unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Shares which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation, amalgamation,
combination or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
amalgamations or combinations 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 which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is
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consummated with a Person or Persons who acquired Common Shares pursuant to a
tender offer or exchange offer for all outstanding Common Shares which complies
with the provisions of Section 11(a)(ii) hereof (or a wholly owned subsidiary of
any such Person or Persons), (ii) the price per Common Share offered in such
transaction is not less than the price per Common Share paid to all holders of
Common Shares whose shares were purchased pursuant to such tender offer or
exchange offer and (iii) the form of consideration being offered to the
remaining holders of Common Shares pursuant to such transaction is the same as
the form of consideration paid pursuant to such tender offer or exchange offer.
Upon consummation of any such transaction contemplated by this Section 13(d),
all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights, except
prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Rights Certificates which evidence fractional Rights. In lieu of any
such fractional Rights, the Company shall pay to the registered holders of the
Rights Certificates, with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading, or if the Rights
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board.
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 shall be as determined in good faith by
the Board. The Company shall promptly notify the Rights Agent of any such
determination of current market value.
(b) The Company shall not be required to issue fractions of Series A
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a share of Series A Preferred Shares upon exercise of the
Rights or to distribute certificates which evidence fractional Series A
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a share of Series A Preferred Shares). In lieu of fractional
Series A Preferred Shares, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
one-hundredth of a share of Series A Preferred Shares. For purposes of this
Section 14(b), the current market value of one one-hundredth of a Series A
Preferred Share shall be one one-hundredth of the closing price of a share of
Series A Preferred Share (as determined pursuant to Section 11(d)(ii) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not
be required to issue fractions of Common Shares upon exercise of the Rights or
to distribute certificates which evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one (1)
Common Share. For purposes of this Section 14(c), the current market value of
one Common Share shall be the closing price of one Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
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(d) The holder of a Right by the acceptance of the Rights 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 the
benefits of the Rights evidenced by this Agreement, except the rights of action
given to the Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of certificates representing the Common Shares);
and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of any certificate representing of the Common Shares), may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will 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 Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the record books of the Rights Agent if surrendered at the principal
office or offices 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 fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the Person in whose name a Rights Certificate
(or, prior to the Distribution Date, a certificate representing Common Shares)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or certificate representing Common Shares made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or of a beneficial interest in a Right other Person as a result of its inability
to perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. 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 one
one-hundredths of a Series A Preferred Share or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until
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the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the execution and/or administration of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without 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 or the exercise or performance of its duties hereunder, including the
costs and expenses of defending against any claim of liability. The indemnity
provided for herein shall survive the expiration of the Rights and the
termination of the Agreement.
(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 the
administration of this Agreement or the exercise or performance of its duties
hereunder in reliance upon any Rights Certificate or certificate for Common
Shares or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of 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
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
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(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 herein specifically
prescribed) 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 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 negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature thereof), but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of Common Shares or Series A Preferred Shares to be
issued pursuant to this Agreement or any Rights Certificate or as to whether any
Common Shares or Series A Preferred Shares will, when so issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
its obligations under the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from 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, and it 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.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided that reasonable care was exercised in the
selection and continued employment thereof.
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(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, the registrar of
the Company and to each transfer agent of the Common Shares and Series A
Preferred Shares, by registered or certified mail, and, subsequent to the
Distribution Date, to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent, as
the case may be, upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, the registrar of the
Company and to each transfer agent of the Common Shares and Series A Preferred
Shares, by registered or certified mail, and subsequent to the Distribution
Date, to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a legal business entity
organized and doing business under the laws of the United States or any State
thereof, in good standing, which 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 and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$25,000,000 or (b) an affiliate of a legal business entity described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent the registrar of the
Company and each transfer agent of the Common Shares and the Series A Preferred
Shares, and, subsequent to the Distribution Date, mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or
property issuable upon exercise of the Rights made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Shares following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of share options or
under any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board,
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issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Company may, at its option, at any time prior to the earlier of (i)
the close of business on the Share Acquisition Date, or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at
a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any share subdivision or consolidation, dividend of shares
or similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, Common Shares (based on
the Current Market Price, as defined in Section 11(d)(i) hereof, of the Common
Shares at the time of redemption) or any other form of consideration deemed
appropriate by the Board.
(b) In deciding whether or not to exercise the Company's right of
redemption hereunder, the Board shall act in good faith, in a manner they
reasonably believe to be in the best interests of the Company and with such
care, including reasonable inquiry, skill and diligence, as a person of ordinary
prudence would use under similar circumstances, and they may consider the
long-term and short-term effects of any action upon employees, customers and
creditors of the Company and upon communities in which offices or other
establishments of the Company are located, and all other pertinent factors.
(c) Immediately upon the action of the Board ordering the redemption of the
Rights, evidence of which shall have been 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
following such action of the Board ordering the redemption of the Rights, the
Company shall give 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 registry books of the transfer
agent for the Common Shares. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
(d) Notwithstanding the provisions of Section 23(a) hereof, in the event
that a majority of the Board is elected by shareholder action by written
consent, or is comprised of persons elected at a meeting of shareholders who
were not nominated by the Board in office immediately prior to such meeting,
then for a period of one hundred and eighty (180) days following the
effectiveness of such election the Rights shall not be redeemed if such
redemption is reasonably likely to have the purpose or effect of allowing any
Person to become an Acquiring Person or otherwise facilitating the occurrence of
a Triggering Event or a transaction with an Acquiring Person.
Section 24. Exchange.
(a) The Company may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any share split, share
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board shall not be empowered to effect such
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28
exchange at any time after any person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such Subsidiary, or
any entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of fifty percent (50%) or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board ordering the exchange of any
Rights pursuant to subsection (a) of this Section 24 and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Series A Preferred Shares (or Equivalent Preferred
Shares, as such term is defined in paragraph (b) of Section 11 hereof) for
Common Shares exchangeable for rights, at the initial rate of one one-hundredth
of a Series A Preferred Share (or Equivalent Preferred Shares) for each Common
Share, as appropriately adjusted to reflect share splits, share dividends and
other similar transactions after the date hereof.
(d) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company shall use its
best efforts to authorize additional Common Shares for issuance upon exchange of
the Rights.
(e) The Company shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Common Shares. In lieu
of such fractional Common Shares, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional Common Shares
would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the purposes of this
subsection (e), the Current Market Value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Proposed Actions. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in share of any class to the holders of Series A Preferred Shares or to
make any other distribution to the holders of Series A Preferred Shares (other
than a regular quarterly cash dividend out of earnings or retained earnings of
the Company), or (ii) to offer to the holders of Series A Preferred Shares
rights or warrants to subscribe for or to purchase any additional Series A
Preferred Shares or shares of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Series A Preferred
Shares (other than a reclassification involving only the subdivision of
outstanding Series A Preferred Shares), or (iv) to effect under any applicable
law any consolidation or amalgamation into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or to effect and/or to permit one or more of its subsidiaries to effect
any sale or other transfer, in one transaction or a series of related
transactions, of more than fifty percent (50%) of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), 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
24
29
of a Rights Certificate, to the extent feasible and in accordance with Section
26 hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such share dividend, distribution of rights or warrants, or
the date on which such reclassification, consolidation, amalgamation, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Series A Preferred Shares, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining holders of the Series A Preferred Shares for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Series A Preferred Shares,
whichever shall be the earlier. The failure to give notice required by this
Section or any defect therein shall not affect the legality or validity of the
action taken by the Company or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date a public filing by the Company with the United States
Securities and Exchange Commission shall constitute sufficient notice to the
holders of securities of the Company, including the rights, for purposes of this
Agreement and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case, (i) 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 26 hereof,
and to the Rights Agent, 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) or 13, as the case may be, and (ii) all references in Section
25(a) to Series A Preferred Shares shall be deemed thereafter to refer to Common
Shares and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail (postage prepaid) to the following registered office of the Company or such
other address as the Company shall specify in writing to the Rights Agent:
Trenwick Group Ltd.
Continental ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail (postage prepaid) to the following address or such
other address as the Rights Agent shall specify in writing to the Company (until
another address is filed in writing with the Company) as follows:
First Chicago Trust Company of New York
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Tenders and Exchange Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
Common Shares) shall be sufficiently given or made if sent by first-class mail
(postage prepaid) to the address of such holder shown on the share register of
the Company.
Section 27. Supplements, Deletions and Amendments. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement, remove or amend any provision of this Agreement without the
approval of any holders of certificates representing Common Shares. From and
after the Distribution Date, the Company and the Rights Agent shall, if the
Company so directs, supplement, remove or amend this Agreement without the
approval of any holders of Rights
25
30
Certificates in order (i) to cure any ambiguity, (ii) to correct, remove or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change, remove or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable and which, in the
opinion of the Company shall not adversely affect the interests of the holders
of Rights Certificates (other then an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided that, from and after the
Distribution Date, this Agreement may not be supplemented or amended to lengthen
any time period hereunder, pursuant to clause (iii) of this sentence 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 which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares. Notwithstanding
anything contained herein to the contrary, this Agreement may not be amended at
a time when the rights are not redeemable.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board, etc. For all
purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding of Common Shares of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Shares).
Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board determines
in its good faith judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this Agreement, such
and if the right of redemption set forth in Section 23 hereof shall at that time
not be capable of exercise pursuant to the terms thereof, right of redemption
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board.
Section 32. 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, and the parties
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hereto consent to service and jurisdiction in the courts of Bermuda with respect
to any action arising out of or relating to the Agreement, a Right or a Rights
Certificate issued hereunder.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute one and the
same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are included for convenience of reference only, do
not constitute part of this Agreement and shall be ignored in the construction
and interpretation of any of the provisions hereof.
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32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: TRENWICK GROUP LTD.
By: By:
----------------------------------------------------- -----------------------------------------------------
Name: ▇▇▇▇ ▇. Del Col Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Corporate Secretary Title: Chairman, President and Chief
Executive Officer
Attest: FIRST CHICAGO TRUST COMPANY OF NEW YORK
By: By:
----------------------------------------------------- -----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director Title: Director
33
Exhibit A
CERTIFICATE OF DESIGNATION; PREFERENCES AND
RIGHTS OF SERIES A FIRST PREFERENCE SHARES
OF
TRENWICK GROUP LTD.
$.10 PAR VALUE PER SHARE
Pursuant to Section 44 of the Bye-laws of Trenwick Group Ltd.
We, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Chairman of the Board, and ▇▇▇▇ ▇. Del Col,
Corporate Secretary, of Trenwick Group Ltd., a company organized under the
Companies Act, 1981 of the Islands, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Bye-laws of the Company, the said Board of Directors on August __, 2000, adopted
the following resolution creating a series of ____________ Preferred Shares
designated as Series A First Preference Shares:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Company in accordance with the provisions of its Bye-laws, a series of
Preferred Shares of the Company be and it hereby is created, and that the
designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A First Preference Shares" and the number of shares
constituting such series shall be ____________.
Section 2. Dividends and Distributions.
(A) Holders of any Series A Preferred Shares shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first
business day of January, April, July and October of each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a Series A Preferred Share, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in Common Shares or a subdivision of the outstanding Common Shares (by
reclassification or otherwise), declared on the Common Shares, $.10 par value
per share, of the Company (the "Common Shares") since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A First Preference Shares. In the event the Company shall at any
time after __________, 2000 (the "Record Date") (i) declare any dividend on
Common Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, or (iii) combine the outstanding Common Shares into a smaller number of
shares, then in each such case the amount to which holders of shares of Series A
First Preference Shares were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the Series A
First Preference Shares as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Shares (other than a dividend
payable in Common Shares); provided that, in the event no dividend or
distribution shall have been declared on the Common Shares during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of
A-1
34
$1.00 per share on the Series A First Preference Shares shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A First Preference Shares from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A First Preference
Shares, unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A First
Preference Shares entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A First Preference Shares in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A First Preference Shares entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be no more than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A First
Preference Shares shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A First Preference Shares shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the shareholders of the Company.
In the event the Company shall at any time after the Record Date (i) declare any
dividend on Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding Common Shares into a
smaller number of shares, then in each such case the number of votes per share
to which holders of shares of Series A First Preference Shares were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares of
Series A First Preference Shares and the holders of Common Shares shall vote
together as one class on all matters submitted to a vote of shareholders of the
Company.
(C) (i) If at any time dividends on any Series A First Preference Shares
shall be in arrears in an amount equal to six (6) quarterly dividends thereon,
the occurrence of such contingency shall ▇▇▇▇ the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A First Preference
Shares then outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred Shares (including
holders of the Series A First Preference Shares) with dividends in arrears in an
amount equal to six (6) quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the holders of
Series A First Preference Shares may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(C) or at any annual
meeting of shareholders, and thereafter at annual meetings of shareholders,
provided that such voting right shall not be exercised unless the holders of ten
percent (10%) in number of Preferred Shares outstanding shall be present in
person or by proxy. The absence of a quorum of the holders of Common Shares
shall not affect the exercise by the holders of Preferred Shares of such voting
right. At any meeting at which the holders of Preferred Shares shall exercise
such voting right initially during an existing default period, they shall have
the right, voting as a class, to elect Directors to fill such vacancies, if any,
in the Board of Directors as may then exist up to two (2) Directors or, if such
right is
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35
exercised at an annual meeting, to elect two (2) Directors. If the number which
may be so elected at any special meeting does not amount to the required number,
the holders of the Preferred Shares shall have the right to make such increase
in the number of Directors as shall be necessary to permit the election by them
of the required number. After the holders of the Preferred Shares shall have
exercised their right to elect Directors in any default period and during the
continuance of such period, the number of Directors shall not be increased or
decreased except by vote of the holders of Preferred Shares as herein provided
or pursuant to the rights of any equity securities ranking senior to or pari
passu with the Series A First Preference Shares.
(iii) Unless the holders of Preferred Shares shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any shareholder or shareholders owning in the
aggregate not less than ten percent (10%) of the total number of Preferred
Shares outstanding, irrespective of series, may request, the calling of special
meeting of the holders of Preferred Shares, which meeting shall thereupon be
called by the President, a Vice-President or the Secretary of the Company.
Notice of such meeting and of any annual meeting at which holders of Preferred
Stock are entitled to vote pursuant to this Paragraph (C)(iii) shall be given to
each holder of record of Preferred Shares by mailing a copy of such notice to
him at his last address as the same appears on the books of the Company. Such
meeting shall be called for a time not earlier than twenty (20) days and not
later than sixty (60) days after such order or request or in default of the
calling of such meeting within sixty (60) days after such order or request, such
meeting may be called on similar notice by any shareholder or shareholders
owning in the aggregate not less than ten percent (10)% of the total number of
Preferred Shares outstanding. Notwithstanding the provisions of this Paragraph
(C)(iii), no such special meeting shall be called during the period within sixty
(60) days immediately preceding the date fixed for the next annual meeting of
the shareholders.
(iv) In any default period, the holders of Common Shares, and other
shares of the Company if applicable, shall continue to be entitled to elect the
whole number of Directors until the holders of Preferred Shares shall have
exercised their right to elect two (2) Directors voting as a class, after the
exercise of which right (x) the Directors so elected by the holders of Preferred
Shares shall continue in office until their successors shall have been elected
by such holders or until the expiration of the default period, and (y) any
vacancy in the Board of Directors may (except as provided in Paragraph (C)(ii)
of this Section 3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of shares which elected the
Director whose office shall have become vacant. References in this Paragraph (C)
to Directors elected by the holders of a particular class of shares shall
include Directors elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Preferred Shares as a class to elect Directors shall cease,
(y) the term of any Directors elected by the holders of Preferred Shares as a
class shall terminate, and (z) the number of Directors shall be such number as
may be provided for in the certificate of incorporation or by-laws irrespective
of any increase made pursuant to the provisions of Paragraph (C)(ii) of this
Section 3 (such number being subject, however, to change thereafter in any
manner provided by law or in the memorandum of association or bye-laws). Any
vacancies in the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of the remaining
Directors.
(D) Except as set forth herein, holders of Series A First Preference Shares
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Shares as
set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A First Preference Shares as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid
A-3
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dividends and distributions, whether or not declared, on shares of Series A
First Preference Shares outstanding shall have been paid in full, the Company
shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A First Preference Shares;
(ii) declare or pay dividends on or make any other distributions on
any shares ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A First Preference Shares,
except dividends paid ratably on the Series A First Preference Shares and
all such parity shares on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A First Preference
Shares, provided that the Company may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for any
shares of the Company ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A First Preference
Shares;
(iv) purchase or otherwise acquire for consideration any shares of
Series A First Preference Shares, or any shares of stock ranking on a
parity with the Series A First Preference Shares, except in accordance with
a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of the Company unless the
Company could, under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A First Preference
Shares purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued Preferred
Shares and may be reissued as part of a new series of Preferred Shares to be
created by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Subject to the prior
and superior rights of holders of any shares of any series of Preferred Shares
ranking prior and superior to the shares of Series A First Preference Shares
with respect to liquidation, dissolution or winding up rights, upon any
liquidation (voluntary or otherwise), dissolution or winding up of the Company,
no distribution shall be made to the holders of shares ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A
First Preference Shares unless, prior thereto, the holders of shares of Series A
First Preference Shares shall have received $100 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation Preference,
no additional distributions shall be made to the holders of shares of Series A
First Preference Shares unless, prior thereto, the holders of Common Shares
shall have received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference by (ii)
100 (as appropriately adjusted as set forth in sub paragraph (C) below to
reflect such events as share splits, share dividends and recapitalizations with
respect to the Common Shares) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the Series A Liquidation
Preference and the Common Adjustment in respect of all outstanding shares of
Series A First Preference Shares and Common Shares, respectively, holders of
Series A First Preference Shares and holders of Common Shares shall receive
their ratable and proportionate share of the remaining
A-4
37
assets to be distributed in the ratio of the Adjustment Number to 1 with respect
to such Preferred Shares and Common Shares, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of preferred shares, if any, which
rank on a parity with the Series A First Preference Shares, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Shares.
(C) In the event the Company shall at any time after the Record Date (i)
declare any dividend on Common Shares payable in Common Shares, (ii) subdivide
the outstanding Common Shares, or (iii) combine the outstanding Common Shares
into a smaller number of shares, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of Common
Shares outstanding immediately after such event and the denominator of which is
the number of Common Shares that were outstanding immediately prior to such
event.
Section 7. Consolidation, Amalgamation, etc. In case the Company shall
enter into any consolidation, amalgamation, combination or other transaction in
which the Common Shares are exchanged for or changed into other shares or
securities, cash and/or any other property, then in any such case the Series A
First Preference Shares shall at the same time be similarly exchanged or changed
in an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each Common Share is changed or exchanged. In the event the Company shall
at any time after the Record Date (i) declare any dividend on Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common Shares, or (iii)
combine the outstanding Common Shares into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of Series A First Preference Shares shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A First Preference Shares
shall not be redeemable.
Section 9. Ranking. The Series A First Preference Shares shall rank junior
to all other series of the Company's Preferred Shares as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment. The Bye-laws of the Company shall not be amended in
any manner which would materially alter or change the powers, preferences or
special rights of the Series A First Preference Shares so as to affect them
adversely without the affirmative vote of the holders of a majority or more of
the outstanding shares of Series A First Preference Shares, voting separately as
a class.
Section 11. Fractional Shares. Series A First Preference Shares may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holders fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A First Preference Shares.
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IN WITNESS WHEREOF, we have executed and subscribed this Extract from the
Minutes of the Meeting of the Board of Directors of Trenwick Group Ltd. creating
the Series A First Preference Shares and do affirm the foregoing as true under
the penalties of perjury this ____ day of ____________ , 2000.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Chairman of the Board, President and
Chief Executive Officer
Attest:
▇▇▇▇ ▇. Del Col
Corporate Secretary
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Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________Rights
NOT EXERCISABLE AFTER THE EARLIER OF AUGUST __, 2010 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED BY THE COMPANY AS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.](1)
Rights Certificate
TRENWICK GROUP LTD.
This certifies that ________________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of August __, 2000 (the "Rights Agreement"), between
Trenwick Group Ltd., a company organized under the laws of Bermuda (the
"Company"), and First Chicago Trust Company of New York, a New York corporation
(the "Rights Agent"), to purchase from the Company at any time prior to 5:00
P.M. (New York City time) on August __, 2010 at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a fully paid, non-assessable share of Series A First Preference
Shares (the "Series A Preferred Shares") of the Company, at a purchase price of
$____ per one one-hundredth of a share (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of August __, 2000, based on the
Series A Preferred Shares as constituted at such date. The Company reserves the
right to require prior to the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement) that a number of Rights be exercised so that
only whole Series A Preferred Shares will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of Series A Preferred Shares or other securities, which may be purchased
upon the exercise of the Rights evidenced by
---------------
(1) The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
B-1
40
this Rights Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths of a share of Series A
Preferred Shares as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time prior to the earlier of the close of
business on (i) the tenth day following the Share Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and (ii) the Final
Expiration Date. The foregoing notwithstanding, the Rights generally may not be
redeemed for one hundred eighty (180) days following a change in a majority of
the Board as a result of a proxy contest.
No fractional Series A Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than, except that the possible
requirement that prior to the occurrence of a Triggering Event only whole Series
A Preferred Shares be issued, fractions which are integral multiples of one
one-hundredth of a Series A Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement. No holder of this
Rights Certificate shall be entitled to vote or receive dividends or be deemed
for any purpose the holder of Series A Preferred Shares or of any other
securities of the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
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41
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of ____________, 20__
ATTEST: TRENWICK GROUP LTD.
By: ----------------------------------------------------
Title:
Secretary
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By:
-----------------------------------
Authorized Signature
B-3
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[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
--------------------------------------------------------------------------------
hereby sells, assigns and transfers unto
------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: , 20__
Signature
Signature Guaranteed:
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43
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did
[ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: , 20__
Signature
Signature Guaranteed:
B-5
44
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: TRENWICK GROUP LTD.:
The undersigned hereby irrevocably elects to exercise ______ Rights
represented by this Rights Certificate to purchase the Series A Preferred Shares
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate a new Rights Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ____________, 20__
Signature
Signature Guaranteed:
B-7
46
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated: ____________, 20__
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-8
47
Exhibit C
SUMMARY OF RIGHTS TO
PURCHASE SERIES A PREFERRED SHARES
On August __, 2000 the board of Directors of Trenwick Group Ltd. (the
"Company") approved the Rights Agreement and authorized and declared a dividend
distribution of one Right for each Common Share, $.10 par value per share, of
the Company to be issued at the close of business on August __, 2000 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A First Preference Shares, par
value $.10 per share (the "Preferred Shares"), at a Purchase Price of $______,
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and First
Chicago Trust Company of New York, as Rights Agent.
Initially, the Rights will be attached to all Common Share certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Shares and a
Distribution Date will occur upon the earlier of (i) ten (10) days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of ten percent (10%) or more of the outstanding Common
Shares (the "Share Acquisition Date"), other than as a result of repurchases of
shares by the Company or certain inadvertent actions by institutional or certain
other shareholders, or (ii) ten (10) business days (or such later date as the
Board shall determine) following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning ten percent
(10%) or more of such outstanding Common Shares. Until the Distribution Date,
(i) the Rights will be evidenced by the Common Share certificates and will be
transferred with and only with such Common Share certificates, (ii) new Common
Share certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Shares outstanding will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate. Pursuant to the Rights Agreement, the Company reserves the right to
require prior to the occurrence of a Triggering Event (as defined below) that,
upon any exercise of Rights, a number of Rights be exercised so that only whole
Preferred shares will be issued.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on August __, 2010, unless earlier redeemed by the
Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board, only Common Shares issued prior to the Distribution Date will be
issued with Rights.
In the event that a Person becomes an Acquiring Person (except pursuant to
an offer for all outstanding Common Shares which the independent directors
determine not to be inadequate to and otherwise in the best interests of the
Company and its shareholders), each holder of a Right will thereafter have the
right to receive, upon exercise, Common Shares (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the exercise price of the Right. Notwithstanding any of the foregoing,
following the occurrence of the event set forth in this paragraph, all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of the event set forth above
until such time as the Rights are no longer redeemable by the Company as set
forth below.
For example, at an exercise price of $____ per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following an event set
forth in the preceding paragraph would entitle its holder to purchase $____
worth of Common Shares (or other consideration, as noted above) for $____.
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48
Assuming that the Common Shares had a per share value of $36.50 at such time,
the holder of each valid Right would be entitled to purchase approximately 6.8
Common Shares for $________.
In the event that, at any time following the Share Acquisition Date, (i)
the Company is acquired in a consolidation, amalgamation or other business
combination transaction in which the Company is not the surviving corporation
(other than a consolidation, amalgamation or combination which follows an offer
described in the second preceding paragraph), or (ii) fifty percent (50%) or
more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, common shares
of the acquiring company having a value equal to two times the exercise price of
the Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person or group of fifty percent (50%) or more of the
outstanding Common Shares, the Board may exchange the Rights (other than Rights
owned by such person or group which have become void), in whole or in part, at
an exchange ratio of one Common Share, or one one-hundredth of a Preferred Share
(or of a share of a class of series of the Company's preferred shares having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
Generally, at any time until ten (10) days following the Share Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (payable in cash, Common Shares or other consideration deemed
appropriate by the Board). Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 redemption price. The foregoing
notwithstanding, the Rights generally may not be redeemed for one hundred eighty
(180) days following a change in a majority of the Board as a result of a proxy
contest.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Shares (or other consideration) of the Company or for
common shares of the acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the Board
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board in order to cure any ambiguity,
to make changes which do not adversely affect the interests of holders of
Rights, or to shorten or lengthen any time period under the Rights Agreement;
provided, however, that no amendment may be made at such time as the Rights are
not redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated herein
by reference.
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