EXHIBIT 4.2
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RIGHTS AGREEMENT
Dated as of May 31, 2002
By and Between
ENPRO INDUSTRIES, INC.
and
THE BANK OF NEW YORK
as Rights Agent
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TABLE OF CONTENTS
PAGE
1. Certain Definitions.....................................................................................1
2. Appointment of Rights Agent.............................................................................5
3. Issue of Right Certificates.............................................................................5
4. Form of Right Certificates..............................................................................7
5. Countersignature and Registration.......................................................................7
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.......................................................................7
7. Exercise of Rights; Purchase Price; Expiration Date of Rights...........................................8
8. Cancellation of Right Certificates......................................................................9
9. Company Covenants Concerning Securities and Rights.....................................................10
10. Record Date............................................................................................11
11. Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights........................11
12. Certificate of Adjusted Purchase Price or Number of Securities.........................................19
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...................................19
14. Fractional Rights and Fractional Securities............................................................22
15. Rights of Action.......................................................................................23
16. Agreement of Rights Holders............................................................................24
17. Right Certificate Holder Not Deemed a Shareholder......................................................24
18. Concerning the Rights Agent............................................................................25
19. Merger or Consolidation or Change of Name of Rights Agent..............................................25
20. Duties of Rights Agent.................................................................................25
21. Change of Rights Agent.................................................................................27
22. Issuance of New Right Certificates.....................................................................28
23. Redemption.............................................................................................28
TABLE OF CONTENTS
(continued)
PAGE
24. Exchange...............................................................................................29
25. Notice of Certain Events...............................................................................30
26. Notices................................................................................................31
27. Supplements and Amendments.............................................................................31
28. Successors; Certain Covenants..........................................................................32
29. Benefits of This Agreement.............................................................................32
30. Governing Law..........................................................................................32
31. Severability...........................................................................................32
32. Descriptive Headings, Etc..............................................................................32
33. Determinations and Actions by the Directors............................................................32
34. Counterparts...........................................................................................33
EXHIBIT A......................................................................................................A-1
EXHIBIT B......................................................................................................B-1
EXHIBIT C......................................................................................................C-1
-ii-
RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of May 31, 2002 (this "AGREEMENT"), is
made and entered into by and between EnPro Industries, Inc., a North Carolina
corporation (the "COMPANY"), and The Bank of New York, a New York banking
corporation (the "RIGHTS AGENT").
RECITALS
WHEREAS, on May 22, 2002, the Directors of the Company authorized and
declared a dividend distribution of one right (a "RIGHT") for each share of
common stock, par value $0.01 per share, of the Company (each, a "COMMON
SHARE") outstanding as of the Rights Dividend Effective Time (as defined in
Section 1(aa)) on the date upon which the Separation (as defined in Section
1(cc)) occurs (the "RECORD DATE"), each Right initially representing the right
to purchase one one-hundredth of a Preferred Share (as defined in Section 1(s))
on the terms and subject to the conditions herein set forth, and further
authorized and directed the issuance of one Right (subject to adjustment as
provided herein) with respect to each Common Share issued or delivered by the
Company (whether originally issued or delivered from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date (as
defined in Section 1(i)) and the Expiration Date (as defined in Section 1(k))
or as provided in Section 22.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" means any Person (other than the Company
or any Related Person) that, together with all Affiliates and Associates of
such Person, is the Beneficial Owner of 15% or more of the then-outstanding
Common Shares; provided, however, that a Person will not be deemed to have
become an Acquiring Person solely as a result of a reduction in the number of
Common Shares outstanding unless and until such time as (i) such Person or any
Affiliate or Associate of such Person thereafter becomes the Beneficial Owner
of additional Common Shares representing 1% or more of the then-outstanding
Common Shares, other than as a result of a stock dividend, stock split or
similar transaction effected by the Company in which all holders of Common
Shares are treated equally, or (ii) any other Person that is the Beneficial
Owner of Common Shares representing 1% or more of the then-outstanding Common
Shares thereafter becomes an Affiliate or Associate of such Person.
Notwithstanding the foregoing, (x) if the Directors of the Company determine in
good faith that a Person who would otherwise be an "ACQUIRING PERSON" as
defined pursuant to the foregoing provisions of this paragraph (a), has become
such inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
"ACQUIRING PERSON" as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an "ACQUIRING PERSON"
for any purposes of this Agreement, and (y) ▇▇▇▇▇▇▇▇ shall
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not be deemed to be an "ACQUIRING PERSON" at any time prior to the
effectiveness of the Separation.
(b) "AFFILIATE" and "ASSOCIATE" will have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement, provided however,
that a Person will not be deemed to be the Affiliate or Associate of another
Person solely because either or both Persons are or were Directors of the
Company.
(c) A Person will be deemed the "BENEFICIAL OWNER" of, and to
"BENEFICIALLY OWN," any securities:
(i) the beneficial ownership of 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, warrants, options or other rights
(in each case, other than upon exercise or exchange of the Rights);
provided, however, that a Person will not be deemed the Beneficial
Owner of, or to Beneficially Own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has or shares the right to vote
or dispose of, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner,
if such Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (whether or not in
writing) with such other Person (or any of such other Person's
Affiliates or Associates) with respect to acquiring, holding, voting
or disposing of any securities of the Company;
provided, however, that a Person will not be deemed the Beneficial Owner of, or
to Beneficially Own, any security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (1) arises solely from a revocable proxy given to such Person
in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership arises
solely as a result of such Person's status as a "clearing agency," as defined
in Section 3(a)(23) of the Exchange Act; provided further, however, that
nothing in this paragraph (c) will 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 an underwriting syndicate until the expiration of 40 calendar days after the
date of such acquisition, or such later date as the Directors of the Company
may determine in any specific case.
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(d) "BUSINESS DAY" means any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York (or such other
state in which the principal office of the Rights Agent is located) are
authorized or obligated by law or executive order to close.
(e) "CLOSE OF BUSINESS" on any given date means 5:00 P.M.,
Eastern time, on that date; provided, however, that if such date is not a
Business Day it means 5:00 P.M., Eastern time, on the next succeeding Business
Day.
(f) "COMMON SHARES" when used with reference to the Company means
the shares of common stock, par value $0.01 per share, of the Company;
provided, however, that, if the Company is the continuing or surviving
corporation in a transaction described in Section 13(a)(ii), "COMMON SHARES"
when used with reference to the Company means shares of the capital stock or
units of the equity interests with the greatest aggregate voting power of the
Company. "COMMON SHARES" when used with reference to any corporation or other
legal entity other than the Company, including an Issuer, means shares of the
capital stock or units of the equity interests with the greatest aggregate
voting power of such corporation or other legal entity.
(g) "COMPANY" means EnPro Industries, Inc., a North Carolina
corporation.
(h) "DISTRIBUTION AGREEMENT" means the Distribution Agreement, by
and between ▇▇▇▇▇▇▇▇ and the Company, dated as of __________, 2002.
(i) "DISTRIBUTION DATE" means the earlier of: (i) the Close of
Business on the tenth calendar day following the Share Acquisition Date, or
(ii) the Close of Business on the tenth Business Day (or, unless the
Distribution Date shall have previously occurred, such later date as may be
specified by the Directors of the Company) after the commencement of a tender
or exchange offer by any Person (other than the Company or any Related Person),
if upon the consummation thereof such Person would be the Beneficial Owner of
15% or more of the then-outstanding Common Shares.
(j) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(k) "EXPIRATION DATE" means the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which the Rights are
redeemed as provided in Section 23, and (iii) the time at which all exercisable
Rights are exchanged as provided in Section 24.
(l) "FINAL EXPIRATION DATE" means the tenth anniversary of the
Record Date.
(m) "FLIP-IN EVENT" means any Person, alone or together with its
Affiliates and Associates, becoming an Acquiring Person.
(n) "FLIP-OVER EVENT" means any event described in clauses (i),
(ii) or (iii) of Section 13(a).
(o) "▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇ Corporation, a New York
corporation.
(p) "ISSUER" has the meaning set forth in Section 13(b).
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(q) "NASDAQ" means The NASDAQ Stock Market.
(r) "PERSON" means any individual, firm, corporation or other
legal entity, and includes any successor (by merger or otherwise) of such
entity.
(s) "PREFERRED SHARES" means shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company having
the rights and preferences set forth in the form of Articles of Amendment
attached as Exhibit A.
(t) "PURCHASE PRICE" means initially $65.00 per one
one-hundredth of a Preferred Share, subject to adjustment from time to time as
provided in this Agreement.
(u) "RECORD DATE" has the meaning set forth in the Recitals to
this Agreement.
(v) "REDEMPTION PRICE" means $0.01 per Right, subject to
adjustment by resolution of the Directors of the Company to reflect any stock
split, stock dividend or similar transaction occurring after the Record Date.
(w) "RELATED PERSON" means (i) any Subsidiary of the Company or
(ii) any employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan.
(x) "RIGHT" has the meaning set forth in the Recitals to this
Agreement.
(y) "RIGHT CERTIFICATES" means certificates evidencing the
Rights, in substantially the form attached as Exhibit B.
(z) "RIGHTS AGENT" means The Bank of New York, unless and until a
successor Rights Agent has become such pursuant to the terms of this Agreement,
and thereafter, "Rights Agent" means such successor Rights Agent.
(aa) "RIGHTS DIVIDEND EFFECTIVE TIME" means the time immediately
prior to the time at which the Separation becomes effective.
(bb) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
(cc) "SEPARATION" means the distribution of Common Shares to
holders of common stock of ▇▇▇▇▇▇▇▇, as contemplated by and described in the
Distribution Agreement.
(dd) "SHARE ACQUISITION DATE" means the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the Securities and Exchange Commission or otherwise) that an
Acquiring Person has become such.
(ee) "SUBSIDIARY" when used with reference to any Person means any
corporation or other legal entity of which a majority of the voting power of
the voting equity securities or equity interests is owned, directly or
indirectly, by such Person; provided, however, that for purposes of Section
13(b), "SUBSIDIARY" when used with reference to any Person means any
corporation or
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other legal entity of which at least 20% of the voting power of the voting
equity securities or equity interests is owned, directly or indirectly, by such
Person.
(ff) "TRADING DAY" means any 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.
(gg) "TRIGGERING EVENT" means any Flip-in Event or Flip-over
Event.
2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment and
hereby certifies that it complies with the requirements of the New York Stock
Exchange governing transfer agents and registrars. The Company may from time to
time act as Co-Rights Agent or appoint such Co-Rights Agents as it may deem
necessary or desirable upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such Co-Rights Agent. Any actions
which may be taken by the Rights Agent pursuant to the terms of this Agreement
may be taken by any such Co-Rights Agent. To the extent that any Co-Rights
Agent takes any action pursuant to this Agreement, such Co-Rights Agent will be
entitled to all of the rights and protections of, and subject to all of the
applicable duties and obligations imposed upon, the Rights Agent pursuant to
the terms of this Agreement.
3. Issue of Right Certificates. (a) Until the Distribution Date,
(i) the Rights will be evidenced by the certificates representing Common Shares
registered in the names of the record holders thereof (which certificates
representing Common Shares will also be deemed to be Right Certificates), (ii)
the Rights will be transferable only in connection with the transfer of the
underlying Common Shares, and (iii) the surrender for transfer of any
certificates evidencing Common Shares in respect of which Rights have been
issued will also constitute the transfer of the Rights associated with the
Common Shares evidenced by such certificates.
(b) Rights will be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or exchange of any
Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares will have stamped on, impressed on, printed on,
written on, or otherwise affixed to them the following legend or such similar
legend as the Company may deem appropriate and as is 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 or transaction reporting system on
which the Common Shares may from time to time be listed or quoted, or to
conform to usage:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement, dated as of May
31, 2002, Agreement between EnPro Industries, Inc. (the "COMPANY") and
The Bank of New York, as Rights Agent, as it may from time to time be
supplemented or amended pursuant to its terms (the "RIGHTS
AGREEMENT"), the terms of which are hereby incorporated herein by
reference and a copy
5
of which is on file at the principal offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may expire, or may 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 without charge within ten business days after receipt
of a written request therefor. Under certain circumstances, as 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.
(c) Any Right Certificate issued pursuant to this Section 3 that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Right Certificate issued at any time upon the
transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate and
any Right Certificate issued pursuant to Section 6 or 11 hereof upon transfer,
exchange, replacement or adjustment of any other Right Certificate referred to
in this sentence, shall be subject to and contain the following legend or such
similar legend as the Company may deem appropriate and as is not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right Certificate and the
Rights represented hereby may become null and void in the
circumstances specified in Section 11(a)(ii) or Section 13 of the
Rights Agreement.
The Company shall instruct the Rights Agent in writing of the Right
Certificates which should be so legended and shall supply the Rights Agent with
such legended Right Certificates.
(d) The Company shall give the Rights Agent prompt written notice
of the Distribution Date. As promptly as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign
and the Company will send or cause to be sent (and the Rights Agent will, if
requested and at the expense of the Company, send), by first class, insured,
postage prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one Right for each
Common Share so held, subject to adjustment as provided herein. As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(e) In the event that the Company purchases or otherwise acquires
any Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares will be deemed canceled and retired
so that the Company will not be entitled to exercise any Rights associated with
the Common Shares so purchased or acquired.
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4. Form of Right Certificates. The Right Certificates (and the
form of election to purchase and the form of assignment to be printed on the
reverse thereof) will be substantially in the form attached as Exhibit B with
such changes and 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 or
transaction reporting system on which the Rights may from time to time be
listed or quoted, or to conform to usage. The Right Certificates shall be in a
machine printable format and in a form reasonably satisfactory to the Rights
Agent. Subject to the provisions of Section 22, the Right Certificates,
whenever issued, shall show the date of countersignature, and on their face
will entitle the holders thereof to purchase such number of one one-hundredths
of a Preferred Share as are set forth therein at the Purchase Price set forth
therein, but the Purchase Price, the number and kind of securities issuable
upon exercise of each Right and the number of Rights outstanding will be
subject to adjustment as provided herein.
5. Countersignature and Registration. (a) The Right Certificates
will be executed on behalf of the Company by its Chairman, its President or any
Vice President, either manually or by facsimile signature, and will have
affixed thereto the Company's seal or a facsimile thereof which will be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates will be manually
countersigned by the Rights Agent and will not be valid for any purpose unless
so countersigned. In case any officer of the Company who signed any of the
Right Certificates ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect
as though the person who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of such
Right Certificate, is a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at the principal office of the Rights Agent designated for
such purpose and at such other offices 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 or any transaction reporting system on
which the Rights may from time to time be listed or quoted, books for
registration and transfer of the Right Certificates issued hereunder. Such
books will show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Sections 7(d), 14 and 24, at any time after the
Close of Business on the Distribution Date and prior to the Expiration Date,
any Right Certificate or Right Certificates representing exercisable Rights may
be transferred, split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like
number of one one-hundredths of a
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Preferred Share (or other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled 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 such Right Certificate
or Right Certificates must make such request in a writing delivered to the
Rights Agent and must surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Thereupon or as promptly as
practicable thereafter, subject to the provisions of Sections 7(d), 14 and 24,
the Company will prepare, execute and deliver to the Rights Agent, and the
Rights Agent will countersign and deliver, a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment by the holders of Rights of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
(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 Right Certificate and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will prepare, execute and
deliver a new Right Certificate of like tenor to the Rights Agent and the
Rights Agent will countersign and deliver such new Right Certificate to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date and prior to the Expiration Date,
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with payment
in cash, in lawful money of the United States of America by certified check or
bank draft payable to the order of the Company, equal to the sum of (i) the
aggregate Purchase Price for the total number of one one-hundredths of a
Preferred Share as to which such surrendered Rights are exercised and (ii) an
amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with the provisions of Section 9(d).
(b) Upon receipt of a Right Certificate representing exercisable
Rights with the form of election to purchase duly executed, accompanied by
payment as described above, the Rights Agent will promptly (i) requisition from
any transfer agent of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent) certificates representing the number of one
one-hundredths of a Preferred Share to be purchased (and the Company hereby
irrevocably authorizes and directs its transfer agent to comply with all such
requests), or, if the Company elects to deposit 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
one-hundredths of a Preferred Share as are to be purchased (and the Company
hereby irrevocably authorizes and directs such depositary agent to comply with
all such requests), (ii) after receipt of such certificates (or depositary
receipts, as the case may be), cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate,
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registered in such name or names as may be designated by such holder, (iii)
when appropriate, requisition from the Company or any transfer agent therefor
(or make available, if the Rights Agent is the transfer agent) certificates
representing the number of equivalent common shares to be issued in lieu of the
issuance of Common Shares in accordance with the provisions of Section
11(a)(iii), (iv) when appropriate, after receipt of such certificates, cause
the same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by
such holder, (v) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of the issuance of fractional shares in accordance with
the provisions of Section 14 or in lieu of the issuance of Common Shares in
accordance with the provisions of Section 11(a)(iii), (vi) when appropriate,
after receipt, deliver such cash to or upon the order of the registered holder
of such Right Certificate, and (vii) when appropriate, deliver any due ▇▇▇▇ or
other instrument provided to the Rights Agent by the Company for delivery to
the registered holder of such Right Certificate as provided by Section 11(l).
(c) In case the registered holder of any Right Certificate
exercises less than all the Rights evidenced thereby, the Company will prepare,
execute and deliver a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised and the Rights Agent will countersign and deliver
such new Right Certificate to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will be obligated to undertake any
action with respect to any purported transfer, split up, combination or
exchange of any Right Certificate pursuant to Section 6 or exercise of a Right
Certificate as set forth in this Section 7 unless the registered holder of such
Right Certificate has (i) completed and signed the certificate following the
form of assignment or the form of election to purchase, as applicable, set
forth on the reverse side of the Right Certificate surrendered for such
transfer, split up, combination, exchange or 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 may
reasonably request. The Rights Agent will endeavor to comply with the
provisions hereof to the extent it has received instructions from the Company
concerning such matters.
8. Cancellation of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange will, if surrendered to the Company or to any of its stock transfer
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, will be canceled by it, and no Right
Certificates will be issued in lieu thereof except as expressly permitted by
the provisions of this Agreement. The Company will deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent will so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent will deliver all
canceled Right Certificates to the Company.
9. Company Covenants Concerning Securities and Rights. The
Company covenants and agrees that:
(a) It will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, a number of Preferred Shares that
9
will be sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7.
(b) So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities)
issuable upon the exercise of the Rights may be listed on a national securities
exchange, or quoted on Nasdaq, it will endeavor to cause, from and after such
time as the Rights become exercisable, all securities reserved for issuance
upon the exercise of Rights to be listed on such exchange, or quoted on Nasdaq,
upon official notice of issuance upon such exercise.
(c) It will take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) delivered upon exercise of Rights, at
the time of delivery of the certificates for such securities, will be (subject
to payment of the Purchase Price) duly authorized, validly issued, fully paid
and nonassessable securities.
(d) It will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates and of any certificates representing
securities issued upon the exercise of Rights; provided, however, that the
Company will not be required to pay any transfer tax or charge which may be
payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or depositary
receipts representing securities issued upon the exercise of Rights in a name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise, or to issue or deliver any certificates or
depositary receipts representing securities issued upon the exercise of any
Rights until any such tax or charge has been paid (any such tax or charge being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax is due.
(e) It will use its best efforts (i) to file on an appropriate
form, as soon as practicable following the later of the Share Acquisition Date
and the Distribution Date, a registration statement under the Securities Act
with respect to the securities issuable upon exercise of the Rights, (ii) to
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the Expiration Date. 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 after the date set forth in clause (i) of the first sentence
of this Section 9(e), the exercisability of the Rights in order to prepare and
file such registration statement and to permit it to become effective. Upon any
such suspension, the Company will 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
each case with simultaneous written notice to the Rights Agent. In addition, if
the Company determines that a registration statement should be filed under the
Securities Act or any state securities laws following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights in each
relevant jurisdiction until such time
10
as a registration statement has been declared effective and, upon any such
suspension, the Company will 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.
Notwithstanding anything in this Agreement to the contrary, the Rights will not
be exercisable in any jurisdiction if the requisite registration or
qualification in such jurisdiction has not been effected or the exercise of the
Rights is not permitted under applicable law. The Rights Agent may assume,
unless notified in writing to the contrary by the Company, that any Right
exercised is permitted to be exercised under applicable law and shall have no
liability for acting in reliance upon such assumption.
(f) Notwithstanding anything in this Agreement to the contrary,
after the later of the Share Acquisition Date and the Distribution Date it will
not 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 eliminate or
otherwise diminish the benefits intended to be afforded by the Rights.
(g) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Section 11, 13, 14 or 24
it will make all arrangements necessary so that such other securities and/or
cash are available for distribution by the Rights Agent, if and when
appropriate.
10. Record Date. Each Person in whose name any certificate
representing Preferred Shares (or Common Shares and/or other securities, as the
case may be) is issued upon the exercise of Rights will for all purposes be
deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and
such certificate will be dated, the date upon which the Right 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 transfer books of
the Company for the Preferred Shares (or Common Shares and/or other securities,
as the case may be) are closed, such Person will be deemed to have become the
record holder of such securities on, and such certificate will be dated, the
next succeeding Business Day on which the transfer books of the Company for the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
are open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Right Certificate will not be entitled to any rights of a holder of any
security for which the Rights are or may become exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions, or
to exercise any preemptive rights, and will not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
11. Adjustment of Purchase Price, Number and Kind of Securities
or Number of Rights. The Purchase Price, the number and kind of securities
issuable upon exercise of 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 that the Company at any time after the
Record Date (A) declares a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivides the outstanding Preferred Shares, (C) combines
the outstanding Preferred Shares into a smaller number of Preferred Shares, or
(D) issues any shares of its capital stock in a reclassification of
11
the Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification and/or the
number and/or kind of shares of capital stock issuable on such date upon
exercise of a Right, will be proportionately adjusted so that the holder of any
Right exercised after such time is entitled to receive upon payment of the
Purchase Price then in effect the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the transfer books of the Company for the Preferred
Shares were open, the holder of such Right would have owned upon such exercise
(and, in the case of a reclassification, would have retained after giving
effect to such reclassification) and would have been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) or Section 13, the adjustment provided for in this Section 11(a)(i)
will be in addition to, and will be made prior to, any adjustment required
pursuant to Section 11(a)(ii) or Section 13.
(ii) Subject to the provisions of Section 24, if a
Flip-in Event occurs, then, from and after the latest of the
Distribution Date, the Share Acquisition Date and the date of the
occurrence of such Flip-in Event, proper provision will be made so
that each holder of a Right, except as provided below, will thereafter
have the right to receive, upon exercise thereof in accordance with
the terms of this Agreement at an exercise price per Right equal to
the product of the then-current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a Right
was exercisable immediately prior to the date of the occurrence of
such Flip-in Event (or, if any other Flip-in Event shall have
previously occurred, the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to the date of the
first occurrence of a Flip-in Event), in lieu of Preferred Shares,
such number of Common Shares as equals the result obtained by (x)
multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the date of the occurrence of such Flip-in Event
(or, if any other Flip-in Event shall have previously occurred,
multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the date of the first occurrence of a Flip-in
Event), and dividing that product by (y) 50% of the current per share
market price of the Common Shares (determined pursuant to Section
11(d)) on the date of the occurrence of such Flip- in Event.
Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Flip-in Event, any Rights that are
Beneficially Owned by (A) any Acquiring Person (or any Affiliate or
Associate of any Acquiring Person), (B) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who becomes a transferee
after the occurrence of a Flip-in Event, or (C) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became a
transferee prior to or concurrently with the occurrence of a Flip-in
Event pursuant to either (1) a transfer from an Acquiring Person to
holders of its equity securities or to any Person with whom it has any
continuing agreement,
12
arrangement or understanding regarding the transferred Rights or (2) a
transfer which the Directors of the Company have determined is part of
a plan, arrangement or understanding which has the purpose or effect
of avoiding the provisions of this Section 11(a)(ii), and subsequent
transferees of any of such Persons, will be void without any further
action and any holder of such Rights will thereafter have no rights
whatsoever with respect to such Rights under any provision of this
Agreement. The Company will use all reasonable efforts to ensure that
the provisions of this Section 11(a)(ii) are complied with, but will
have no liability to any holder of Right Certificates or any other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder. Upon the occurrence of a Flip-in Event, no
Right Certificate that represents Rights that are or have become void
pursuant to the provisions of this Section 11(a)(ii) will thereafter
be issued pursuant to Section 3 or Section 6, and any Right
Certificate delivered to the Rights Agent that represents Rights that
are or have become void pursuant to the provisions of this Section
11(a)(ii) will be canceled. Upon the occurrence of a Flip-over Event,
any Rights that shall not have been previously exercised pursuant to
this Section 11(a)(ii) shall thereafter be exercisable only pursuant
to Section 13 and not pursuant to this Section 11(a)(ii).
(iii) Upon the occurrence of a Flip-in Event, if there are
not sufficient Common Shares authorized but unissued or issued but not
outstanding to permit the issuance of all the Common Shares issuable
in accordance with Section 11(a)(ii) upon the exercise of a Right, the
Directors of the Company will use their best efforts promptly to
authorize and, subject to the provisions of Section 9(e), make
available for issuance additional Common Shares or other equity
securities of the Company having equivalent voting rights and an
equivalent value (as determined in good faith by the Directors of the
Company) to the Common Shares (for purposes of this Section
11(a)(iii), "EQUIVALENT COMMON SHARES"). In the event that equivalent
common shares are so authorized, upon the exercise of a Right in
accordance with the provisions of Section 7, the registered holder
will be entitled to receive (A) Common Shares, to the extent any are
available, and (B) a number of equivalent common shares, which the
Directors of the Company have determined in good faith to have a value
equivalent to the excess of (x) the aggregate current per share market
value on the date of the occurrence of the most recent Flip-in Event
of all the Common Shares issuable in accordance with Section 11(a)(ii)
upon the exercise of a Right (the "EXERCISE VALUE") over (y) the
aggregate current per share market value on the date of the occurrence
of the most recent Flip-in Event of any Common Shares available for
issuance upon the exercise of such Right; provided, however, that if
at any time after 90 calendar days after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence
of the most recent Flip-in Event, there are not sufficient Common
Shares and/or equivalent common shares available for issuance upon the
exercise of a Right, then the Company will be obligated to deliver,
upon the surrender of such Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available), equivalent
common shares (to the extent available) and then cash (to the extent
permitted by applicable law and any agreements or instruments to which
the Company is a party in effect immediately prior to the Share
Acquisition Date), which securities and cash have an aggregate value
equal to the excess of (1) the Exercise Value over (2) the product of
the then-current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right
13
was exercisable immediately prior to the date of the occurrence of the
most recent Flip-in Event (or, if any other Flip-in Event shall have
previously occurred, the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share
for which a Right would have been exercisable immediately prior to the
date of the occurrence of such Flip-in Event if no other Flip-in Event
had previously occurred). To the extent that any legal or contractual
restrictions prevent the Company from paying the full amount of cash
payable in accordance with the foregoing sentence, the Company will
pay to holders of the Rights as to which such payments are being made
all amounts which are not then restricted on a pro rata basis and will
continue to make payments on a pro rata basis as promptly as funds
become available until the full amount due to each such Rights holder
has been paid.
(b) In the event that the Company fixes a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or securities having
equivalent rights, privileges and preferences as the Preferred Shares (for
purposes of this Section 11(b), "EQUIVALENT PREFERRED SHARES")) or securities
convertible into Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion price per
share, if a security convertible into Preferred Shares or equivalent preferred
shares) less than the current per share market price of the Preferred Shares
(determined pursuant to Section 11(d)) on such record date, the Purchase Price
to be in effect after such record date will be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which is the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current per
share market price and the denominator of which is the number of Preferred
Shares outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock issuable upon exercise of
one Right. In case such subscription price may be paid in a consideration part
or all of which is in a form other than cash, the value of such consideration
will be as determined in good faith by the Directors of the Company, whose
determination will be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the Company will not be
deemed outstanding for the purpose of any such computation. Such adjustment
will be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the Purchase
Price will be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In the event that the Company fixes a record date for the
making of a distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b)), the
Purchase Price to be in effect after such record
14
date will be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which is the current
per share market price of the Preferred Shares (as determined pursuant to
Section 11(d)) on such record date or, if earlier, the date on which Preferred
Shares begin to trade on an ex-dividend or when issued basis for such
distribution, less the fair market value (as determined in good faith by the
Directors of the Company, whose determination will be described in a statement
filed with the Rights Agent) of the portion of the evidences of indebtedness,
cash, assets or stock so to be distributed or of such subscription rights,
options or warrants applicable to one Preferred Share, and the denominator of
which is such current per share market price of the Preferred Shares; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital
stock issuable upon exercise of one Right. Such adjustments will be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price will again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"CURRENT PER SHARE MARKET PRICE" of Common Shares on any date will be
deemed to be the average of the daily closing prices per share of such
Common Shares for the 30 consecutive Trading Days immediately prior to
such date; provided, however, that in the event that the current per
share market price of the Common Shares 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 prior to the expiration of
30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share
market price will be appropriately adjusted to take into account
ex-dividend trading or to reflect the current per share market price
per Common Share equivalent. The closing price for each day will 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 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 Directors
of the Company. If the Common Shares are not publicly held or not so
listed or traded, or are not the subject of available bid and asked
quotes, "CURRENT PER SHARE MARKET PRICE" will mean the fair value per
share as determined in good faith by the Directors of the Company,
whose determination will be described in a statement filed with the
Rights Agent.
15
(ii) For the purpose of any computation hereunder, the
"CURRENT PER SHARE MARKET PRICE" of the Preferred Shares will be
determined in the same manner as set forth above for Common Shares in
Section 11(d)(i), other than the last sentence thereof. If the current
per share market price of the Preferred Shares cannot be determined in
the manner provided above, the "CURRENT PER SHARE MARKET PRICE" of the
Preferred Shares will be conclusively deemed to be an amount equal to
the current per share market price of the Common Shares multiplied by
one hundred (as such number may be appropriately adjusted to reflect
events such as stock splits, stock dividends, recapitalizations or
similar transactions relating to the Common Shares occurring after the
date of this Agreement). If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or traded, or the
subject of available bid and asked quotes, "CURRENT PER SHARE MARKET
PRICE" of the Preferred Shares will mean the fair value per share as
determined in good faith by the Directors of the Company, whose
determination will be described in a statement filed with the Rights
Agent. For all purposes of this Agreement, the current per share
market price of one one-hundredth of a Preferred Share will be equal
to the current per share market price of one Preferred Share divided
by one hundred.
(e) Except as set forth below, no adjustment in the Purchase
Price will be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made will be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 will be made to the nearest cent or to the
nearest one one-millionth of a Preferred Share or one ten-thousandth of a
Common Share or other security, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 will
be made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised becomes entitled to receive
any securities of the Company other than Preferred Shares, thereafter the
number and/or kind of such other securities so receivable upon exercise of any
Right (and/or the Purchase Price in respect thereof) will be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares (and the
Purchase Price in respect thereof) contained in this Section 11, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares
(and the Purchase Price in respect thereof) will apply on like terms to any
such other securities (and the Purchase Price in respect thereof).
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder will evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share issuable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company has exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price pursuant to Section
11(b) or Section 11(c), each Right outstanding immediately prior to the making
of such adjustment will thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i)
16
multiplying (x) the number of one one-hundredths of a Preferred Share issuable
upon exercise of a Right immediately prior to such adjustment of the Purchase
Price by (y) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any adjustment
of the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share issuable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights will be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights will 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 will make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. Such record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, will be at least 10 calendar
days later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company will, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to the provisions of Section 14, the
additional Rights to which such holders are entitled as a result of such
adjustment, or, at the option of the Company, will cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof if required by the Company, new Right Certificates evidencing
all the Rights to which such holders are entitled after such adjustment. Right
Certificates so to be distributed will 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 will be registered in the names of the holders
of record of Right Certificates on the record date specified in the public
announcement.
(j) Without respect to any adjustment or change in the Purchase
Price and/or the number and/or kind of securities issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number and kind of securities
which were expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares or below the then par value, if any, of any other
securities of the Company issuable upon exercise of the Rights, the Company
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable Preferred Shares or such other securities, as the case may
be, at such adjusted Purchase Price.
(l) In any case in which this Section 11 otherwise requires 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 Preferred Shares or other securities of the Company, if any,
issuable upon such exercise over and above the number of Preferred Shares or
other securities of the Company, if any,
17
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company delivers to such holder
a due ▇▇▇▇ or other appropriate instrument evidencing such holder's right to
receive such additional Preferred Shares or other securities upon the
occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Agreement to the contrary,
the Company will 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 its good faith judgment the Directors of the Company
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at less
than the current per share market price therefor, (iii) issuance wholly for
cash of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, (iv) stock dividends, or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Shares is not taxable
to such shareholders.
(n) The Company covenants and agrees that it will not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o)), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)), or (iii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one transaction,
or a series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)), if at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27, 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) Notwithstanding anything in this Agreement to the contrary,
in the event that the Company at any time after the Record Date prior to the
Distribution Date (i) pays a dividend on the outstanding Common Shares payable
in Common Shares, (ii) subdivides the outstanding Common Shares, (iii) combines
the outstanding Common Shares into a smaller number of shares, or (iv) issues
any shares of its capital stock in a reclassification of the outstanding Common
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each Common Share then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, will be
proportionately adjusted so that the number of Rights thereafter associated
with each Common Share following any such event equals 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 is the total number of
Common Shares outstanding immediately prior to the occurrence of the event and
the denominator of which is the total
18
number of Common Shares outstanding immediately following the occurrence of
such event. The adjustments provided for in this Section 11(p) will be made
successively whenever such a dividend is paid or such a subdivision,
combination or reclassification is effected.
12. Certificate of Adjusted Purchase Price or Number of
Securities. Whenever an adjustment is made as provided in Section 11 or Section
13, the Company will promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Preferred
Shares and the Common Shares a copy of such certificate, and (c) if such
adjustment is made after the Distribution Date, mail a brief summary of such
adjustment to each holder of a Right Certificate in accordance with Section 26.
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 received such
certificate.
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that:
(i) at any time after a Person has become an Acquiring
Person, the Company consolidates with, or merges with or into, any
other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o)) and the Company is not the
continuing or surviving corporation of such consolidation or merger;
or
(ii) at any time after a Person has become an Acquiring
Person, any Person consolidates with the Company, or merges with or
into the Company, and the Company is the continuing or surviving
corporation of such merger or consolidation and, in connection with
such merger or consolidation, all or part of the Common Shares is
changed into or exchanged for stock or other securities of any other
Person or cash or any other property; or
(iii) at any time after a Person has become an Acquiring
Person, the Company, directly or indirectly, sells or otherwise
transfers (or one or more of its Subsidiaries sells or otherwise
transfers), in one or more transactions, assets or earning power
(including without limitation securities creating any obligation on
the part of the Company and/or any of its Subsidiaries) representing
in the aggregate more than 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 one or more of its wholly owned
Subsidiaries;
then, and in each such case, proper provision will be made so that from and
after the latest of the Share Acquisition Date, the Distribution Date and the
date of the occurrence of such Flip-over Event (A) each holder of a Right
(except as otherwise provided herein) thereafter has the right to receive, upon
the exercise thereof in accordance with the terms of this Agreement at an
exercise price per Right equal to the product of the then-current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to the Share Acquisition Date,
such number of duly authorized, validly issued, fully paid, nonassessable and
freely tradeable Common Shares of the Issuer, free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of call or
first refusal, as equals the result obtained by (x) multiplying the
then-current Purchase Price by the number of
19
one one-hundredths of a Preferred Share for which a Right is exercisable
immediately prior to the Share Acquisition Date and dividing that product by
(y) 50% of the current per share market price of the Common Shares of the
Issuer (determined pursuant to Section 11(d)), on the date of the occurrence of
such Flip-over Event; (B) the Issuer will thereafter be liable for, and will
assume, by virtue of the occurrence of such Flip-over Event, all the
obligations and duties of the Company pursuant to this Agreement; (C) the term
"COMPANY" will thereafter be deemed to refer to the Issuer; and (D) the Issuer
will take such steps (including without limitation the reservation of a
sufficient number of its Common Shares to permit the exercise of all
outstanding Rights) in connection with such consummation as may be necessary to
assure that the provisions hereof are thereafter applicable, as nearly as
reasonably may be possible, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) For purposes of this Section 13, "ISSUER" means (i) in the
case of any Flip-over Event described in Sections 13(a)(i) or (ii) above, the
Person that is the continuing, surviving, resulting or acquiring Person
(including the Company as the continuing or surviving corporation of a
transaction described in Section 13(a)(ii) above), and (ii) in the case of any
Flip-over Event described in Section 13(a)(iii) above, the Person that is the
party receiving the greatest portion of the assets or earning power (including
without limitation securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) transferred pursuant to such
transaction or transactions; provided, however, that, in any such case, (A) if
(1) no class of equity security of such Person is, at the time of such merger,
consolidation or transaction and has been continuously over the preceding
12-month period, registered pursuant to Section 12 of the Exchange Act, and (2)
such Person is a Subsidiary, directly or indirectly, of another Person, a class
of equity security of which is and has been so registered, the term "ISSUER"
means such other Person; and (B) in case such Person is a Subsidiary, directly
or indirectly, of more than one Person, a class of equity security of two or
more of which are and have been so registered, the term "ISSUER" means
whichever of such Persons is the issuer of the equity security having the
greatest aggregate market value. Notwithstanding the foregoing, if the Issuer
in any of the Flip-over Events listed above is not a corporation or other legal
entity having outstanding equity securities, then, and in each such case, (x)
if the Issuer is directly or indirectly wholly owned by a corporation or other
legal entity having outstanding equity securities, then all references to
Common Shares of the Issuer will be deemed to be references to the Common
Shares of the corporation or other legal entity having outstanding equity
securities which ultimately controls the Issuer, and (y) if there is no such
corporation or other legal entity having outstanding equity securities, (I)
proper provision will be made so that the Issuer creates or otherwise makes
available for purposes of the exercise of the Rights in accordance with the
terms of this Agreement, a kind or kinds of security or securities having a
fair market value at least equal to the economic value of the Common Shares
which each holder of a Right would have been entitled to receive if the Issuer
had been a corporation or other legal entity having outstanding equity
securities; and (II) all other provisions of this Agreement will apply to the
issuer of such securities as if such securities were Common Shares.
(c) The Company will not consummate any Flip-over Event if, (i)
at the time of or immediately after such Flip-over Event, there are or would be
any rights, warrants, instruments or securities outstanding or any agreements
or arrangements in effect which would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior to, simultaneously
with or immediately after such Flip-over Event, the shareholders of the Person
20
who constitutes, or would constitute, the Issuer for purposes of Section 13(a)
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates or Associates, or (iii) the form or nature of the
organization of the Issuer would preclude or limit the exercisability of the
Rights. In addition, the Company will not consummate any Flip-over Event unless
the Issuer has a sufficient number of authorized Common Shares (or other
securities as contemplated in Section 13(b) above) 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 to such consummation the
Company and the Issuer have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in subsections (a) and
(b) of this Section 13 and further providing that as promptly as practicable
after the consummation of any Flip-over Event, the Issuer will:
(A) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities issuable
upon exercise of the Rights on an appropriate form, and use its best
efforts to cause such registration statement to (1) become effective
as soon as practicable after such filing and (2) remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date;
(B) take all 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;
and
(C) deliver to holders of the Rights historical
financial statements for the Issuer and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) The provisions of this Section 13 will similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, except for Rights that have become void pursuant to Section 11(a)(ii),
Rights that shall not have been previously exercised will cease to be
exercisable in the manner provided in Section 11(a)(ii) and will thereafter be
exercisable in the manner provided in Section 13(a).
14. Fractional Rights and Fractional Securities. (a) The Company
will not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company will pay as promptly as practicable to the registered
holders of the Right Certificates with regard to which such fractional Rights
otherwise would be issuable, an amount in cash equal to the same fraction of
the current market value of one Right. For the purposes of this Section 14(a),
the current market value of one Right is the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional Rights
otherwise would have been issuable. The closing price for any day is 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
21
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
Directors of the Company. If the Rights are not publicly held or are not so
listed or traded, or are not the subject of available bid and asked quotes, the
current market value of one Right will mean the fair value thereof as
determined in good faith by the Directors of the Company, whose determination
will be described in a statement filed with the Rights Agent.
(b) The Company will not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement
provides that the holders of such depositary receipts have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company may pay to any Person to whom
or which such fractional Preferred Shares would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of one Preferred
Share. For purposes of this Section 14(b), the current market value of one
Preferred Share is the closing price of the Preferred Shares (as determined in
the same manner as set forth for Common Shares in the second sentence of
Section 11(d)(i)) for the Trading Day immediately prior to the date of such
exercise; provided, however, that if the closing price of the Preferred Shares
cannot be so determined, the closing price of the Preferred Shares for such
Trading Day will be conclusively deemed to be an amount equal to the closing
price of the Common Shares (determined pursuant to the second sentence of
Section 11(d)(i)) for such Trading Day multiplied by one hundred (as such
number may be appropriately adjusted to reflect events such as stock splits,
stock dividends, recapitalizations or similar transactions relating to the
Common Shares occurring after the date of this Agreement); provided further,
however, that if neither the Common Shares nor the Preferred Shares are
publicly held or listed or admitted to trading on any national securities
exchange, or the subject of available bid and asked quotes, the current market
value of one Preferred Share will mean the fair value thereof as determined in
good faith by the Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent.
(c) Following the occurrence of a Triggering Event, the Company
will not be required to issue fractions of Common Shares or other securities
issuable upon exercise or exchange of the Rights or to distribute certificates
which evidence any such fractional securities. In lieu of issuing any such
fractional securities, the Company may pay to any Person to whom or which such
fractional securities would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of one such security. For
purposes of this Section 14(c), the current market value of one Common Share or
other security issuable upon the exercise or exchange of Rights is the closing
price thereof (as determined in the same manner as set forth for
22
Common Shares in the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise or exchange; provided, however,
that if neither the Common Shares nor any such other securities are publicly
held or listed or admitted to trading on any national securities exchange, or
the subject of available bid and asked quotes, the current market value of one
Common Share or such other security will mean the fair value thereof as
determined in good faith by the Directors of the Company, whose determination
will mean the fair value thereof as will be described in a statement filed with
the Rights Agent.
15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right 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 Right Certificate (or, prior to
the Distribution Date, of the holder of any 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 Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under this
Agreement, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to this Agreement.
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 are transferable
only in connection with the transfer of the Common Shares;
(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Share
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent will be
affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14; and
23
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent will have any liability to any holder
of a Right or 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, that the Company will use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
17. Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate will be entitled to vote, receive dividends,
or be deemed for any purpose the holder of Preferred Shares or any other
securities of the Company which may at any time be issuable upon the exercise
of the Rights represented thereby, nor will anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of Directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
of this Agreement or exchanged pursuant to the provisions of Section 24.
18. Concerning the Rights Agent. (a) The Company will pay to the
Rights Agent such compensation as shall be agreed to in writing between the
Company and the Rights Agent for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company will also indemnify the Rights Agent for, and hold it
harmless against, any loss, liability, suit, action, proceeding or expense,
incurred without gross negligence, bad faith, or willful misconduct on the part
of the Rights Agent, for anything done or omitted to be done by the Rights
Agent in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim (whether
asserted by the Company, a holder of Rights, or any other Person) of liability
arising therefrom, directly or indirectly. The provisions of this Section 18(a)
shall survive the expiration of the Rights and the termination of this
Agreement.
(b) The Rights Agent will be protected and will incur no
liability for or in respect of any action taken, suffered, or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate evidencing Preferred Shares or Common Shares or
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 and executed by the proper Person or Persons.
(c) Notwithstanding anything in this Agreement to the contrary,
in no event shall the Rights Agent be liable for special, indirect, punitive or
consequential loss or damage of any kind
24
whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of the loss or damage and regardless
of the form of the action.
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 is a party, or any corporation succeeding to all or
substantially all the corporate trust or agency business of the Rights Agent or
any successor Rights Agent, will be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions of
Section 21. If at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates will have the full force provided in the Right
Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent changes and at
such time any of the Right Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates have not been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates will have the full force
provided in the Right Certificates and in this Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, upon the following terms and conditions, by all of which the Company and
the holders of Right Certificates, by their acceptance thereof, will 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 will be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman, the President,
any Vice President, the Secretary or the Treasurer of the Company and delivered
to the Rights Agent, and such certificate will be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
25
(c) The Rights Agent will be liable hereunder only for its own
gross negligence, bad faith or willful misconduct; provided, however, that the
Rights Agent shall not be liable for any indirect, special, consequential or
punitive damages.
(d) The Rights Agent will not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant contained in this Agreement or in any Right
Certificate; nor will it be responsible for any adjustment required under the
provisions of Sections 11 or 13 (including any adjustment which results in
Rights becoming void) 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 Right Certificates after actual notice of any such adjustment);
nor will it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of stock or other
securities to be issued pursuant to this Agreement or any Right Certificate or
as to whether any shares of stock or other securities will, when issued, be
duly authorized, validly issued, fully paid and nonassessable, nor shall the
Rights Agent be responsible for the legality of the terms hereof in its
capacity as an administrative agent.
(f) The Company will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
and other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman, the President, any Vice President, the Secretary or the
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than three Business Days after the date any
officer of the Company actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
26
(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 will preclude the Rights
Agent from acting in any other capacity for the Company or for any other
Person.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent will not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof. The Rights Agent will not be under
any duty or responsibility to ensure compliance with any applicable federal or
state securities laws in connection with the issuance, transfer or exchange of
Right Certificates.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange, either
(i) 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 or 2 thereof, or (ii) any other actual or
suspected irregularity exists, the Rights Agent will not take any further
action with respect to such requested exercise, transfer, split up, combination
or exchange without first consulting with the Company, and will thereafter take
further action with respect thereto only in accordance with the Company's
written instructions.
(k) 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.
(l) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if
such acts or omissions are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the form of
assignment and the form of election to purchase attached hereto unless the
Rights Agent shall have actual knowledge that, as executed, such certification
is untrue, or (ii) the non-execution of such certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or transfer
of the Right Certificates.
21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 calendar days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Shares or the Common Shares by registered or
certified mail. The Company may remove the Rights Agent or any
27
successor Rights Agent upon 30 calendar days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Right Certificates by first class
mail. If the Rights Agent resigns or is removed or otherwise becomes incapable
of acting, the Company will appoint a successor to the Rights Agent. If the
Company fails to make such appointment within a period of 30 calendar days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who will, with such notice, submit his
Right Certificate for inspection by the Company), then the Rights Agent, at the
expense of the Company, or the registered holder of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, will be a corporation or other legal entity organized and
doing business under the laws of the United States or of the State of New York
(or of any other state of the United States), 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 $50 million. After appointment, the successor Rights Agent
will 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 will 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 will file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Preferred Shares or the Common Shares, and mail a notice thereof
in writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
will 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.
22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Directors to reflect any adjustment or change in the
Purchase Price per share and the number or kind of securities issuable upon
exercise of the Rights made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale by the Company
of Common Shares following the Distribution Date and prior to the Expiration
Date, the Company (a) will, with respect to Common Shares so issued or sold
pursuant to the exercise, exchange or conversion of securities (other than
Rights) issued prior to the Distribution Date which are exercisable or
exchangeable for, or convertible into Common Shares, and (b) may, in any other
case, if deemed necessary, appropriate or desirable by the Directors of the
Company, issue Right Certificates representing an equivalent number of Rights
as would have been issued in respect of such Common Shares if they had been
issued or sold prior to the Distribution Date, as appropriately adjusted as
provided herein as if they had been so issued or sold; provided, however, that
(i) no such Right Certificate will be issued if, and to the extent that, in its
good faith judgment the Directors of the Company determine that the issuance of
such Right Certificate could have a material adverse tax consequence to the
Company or to the Person to whom or which such Right Certificate otherwise
would be issued and (ii) no such Right
28
Certificate will be issued if, and to the extent that, appropriate adjustment
otherwise has been made in lieu of the issuance thereof.
23. Redemption. (a) Prior to the Expiration Date, the Directors
of the Company may, at their option, redeem all but not less than all of the
then-outstanding Rights at the Redemption Price at any time prior to the Close
of Business on the later of (i) the Distribution Date and (ii) Share
Acquisition Date. Any such redemption will be effective immediately upon the
action of the Directors of the Company ordering the same, unless such action of
the Directors of the Company expressly provides that such redemption will be
effective at a subsequent time or upon the occurrence or nonoccurrence of one
or more specified events (in which case such redemption will be effective in
accordance with the provisions of such action of the Directors of the Company).
(b) Immediately upon the effectiveness of the redemption of the
Rights as provided in Section 23(a), 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 will be to receive the Redemption Price,
without interest thereon. Promptly after the effectiveness of the redemption of
the Rights as provided in Section 23(a), the Company will publicly announce
such redemption and, within 10 calendar days thereafter, will 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 their last addresses as
they appear upon the registry books of the Company; provided, however, that the
failure to give, or any defect in, any such notice will not affect the validity
of the redemption of the Rights. Any notice that is mailed in the manner herein
provided will be deemed given, whether or not the holder receives the notice.
The notice of redemption mailed to the holders of Rights will state the method
by which the payment of the Redemption Price will be made. The Company may, at
its option, pay the Redemption Price in cash, Common Shares (based upon the
current per share market price of the Common Shares (determined pursuant to
Section 11(d)) at the time of redemption), or any other form of consideration
deemed appropriate by the Directors of the Company (based upon the fair market
value of such other consideration, determined by the Directors of the Company
in good faith) or any combination thereof. The Company may, at its option,
combine the payment of the Redemption Price with any other payment being made
concurrently to holders of Common Shares and, to the extent that any such other
payment is discretionary, may reduce the amount thereof on account of the
concurrent payment of the Redemption Price. If legal or contractual
restrictions prevent the Company from paying the Redemption Price (in the form
of consideration deemed appropriate by the Directors) at the time of
redemption, the Company will pay the Redemption Price, without interest,
promptly after such time as the Company ceases to be so prevented from paying
the Redemption Price.
24. Exchange. (a) The Directors of the Company may, at their
option, at any time after the Share Acquisition Date, exchange all or part of
the then-outstanding and exercisable Rights (which will not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii)) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the Record Date (such exchange ratio being hereinafter referred
to as the "EXCHANGE RATIO"). Any such exchange will be effective immediately
upon the action of the Directors of the Company ordering the same, unless such
action of the Directors of the Company expressly provides that such exchange
will be effective at a subsequent time or upon the occurrence or
29
nonoccurrence of one or more specified events (in which case such exchange will
be effective in accordance with the provisions of such action of the Directors
of the Company). Notwithstanding the foregoing, the Directors of the Company
will not be empowered to effect such exchange at any time after any Person
(other than the Company or any Related Person), who or which, together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the then-outstanding Common Shares.
(b) Immediately upon the effectiveness of the exchange of any
Rights as provided in Section 24(a), and without any further action and without
any notice, the right to exercise such Rights will terminate and the only right
with respect to such Rights thereafter of the holder of such Rights will be to
receive that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. Promptly after the effectiveness
of the exchange of any Rights as provided in Section 24(a), the Company will
publicly announce such exchange and, within 10 calendar days thereafter, will
give notice of 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; provided,
however, that the failure to give, or any defect in, such notice will not
affect the validity of such exchange. Any notice that is mailed in the manner
herein provided will 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 will be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii))
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute for any Common Share exchangeable for a Right (i)
equivalent common shares (as such term is used in Section 11(a)(iii)), (ii)
cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value, as
determined in good faith by the Directors of the Company (whose determination
will be described in a statement filed with the Rights Agent), equal to the
current market value of one Common Share (determined pursuant to Section 11(d))
on the Trading Day immediately preceding the date of the effectiveness of the
exchange pursuant to this Section 24.
25. Notice of Certain Events. (a) If, after the Distribution
Date, the Company proposes (i) to pay any dividend payable in stock of any
class to the holders of Preferred Shares or to make any other distribution to
the holders of Preferred Shares (other than a regular periodic cash dividend),
(ii) to offer to the holders of Preferred Shares rights, options or warrants to
subscribe for or to purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), (iv) to effect
any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of assets or earning power
(including, without limitation, securities creating any obligation on the part
of the Company and/or any of its Subsidiaries) representing more than 50% of
the assets and earning power of the Company and its Subsidiaries, taken as a
whole, in either case to any other Person or Persons (other than the Company or
one or more of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) above), (v)
30
to effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or reclassification of the Common Shares
then, in each such case, the Company will give to each holder of a Right
Certificate and the Rights Agent, to the extent feasible and in accordance with
Section 26, a notice of such proposed action, which specifies the record date
for the purposes of such stock dividend, distribution or offering of rights,
options or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up is to take place
and the date of participation therein by the holders of the Common Shares
and/or Preferred Shares, if any such date is to be fixed, and such notice will
be so given, in the case of any action covered by clause (i) or (ii) above, at
least 10 calendar days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and, in the case of any such
other action, at least 10 calendar days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever is the earlier.
(b) In case any Triggering Event occurs, then, in any such case,
the Company will as soon as practicable thereafter give to the Rights Agent and
each holder of a Right Certificate, in accordance with Section 26, a notice of
the occurrence of such event, which specifies the event and the consequences of
the event to holders of Rights.
26. Notices. (a) Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company will be sufficiently given or made if sent by
first class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
EnPro Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(b) Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by
the holder of any Right Certificate to or on the Rights Agent will be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
The Bank of New York
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10016
Attention: ▇▇▇▇ ▇▇▇▇▇▇
(c) Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of any Right
Certificate (or, if prior the Distribution Date, to the holder of any
certificate evidencing Common Shares) will be sufficiently given or made if
sent by first class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
31
27. Supplements and Amendments. Prior to the time at which the
Rights cease to be redeemable pursuant to Section 23, and subject to the last
sentence of this Section 27, the Company may in its sole and absolute
discretion, and the Rights Agent will if the Company so directs, supplement or
amend any provision of this Agreement in any respect without the approval of
any holders of Rights or Common Shares. From and after the time at which the
Rights cease to be redeemable pursuant to Section 23, and subject to the last
sentence of this Section 27, the Company may, and the Rights Agent will if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights or Common Shares in order (i) to cure any ambiguity, (ii)
to correct 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 supplement or amend the provisions
hereunder in any manner which the Company may deem desirable; provided that no
such supplement or amendment shall adversely affect the Rights Agent or the
interests of the holders of Rights as such (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person), and no such supplement or
amendment shall cause the Rights again to become redeemable or cause this
Agreement again to become supplementable or amendable otherwise than in
accordance with the provisions of this sentence. Without limiting the
generality or effect of the foregoing, this Agreement may be supplemented or
amended to provide for such voting powers for the Rights and such procedures
for the exercise thereof, if any, as the Directors of the Company may determine
to be appropriate. Upon the delivery of a certificate from an 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 will execute such
supplement or amendment; provided, however, that the failure or refusal of the
Rights Agent to execute such supplement or amendment will not affect the
validity of any supplement or amendment adopted by the Directors of the
Company, any of which will be effective in accordance with the terms thereof.
Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment may be made which decreases the stated Redemption Price to an amount
less than $.01 per Right.
28. Successors; Certain Covenants. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Rights
Agent will be binding on and inure to the benefit of their respective
successors and assigns hereunder.
29. Benefits of This Agreement. Nothing in this Agreement will be
construed to give to any Person other than the Company, the Rights Agent, and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement. This Agreement will be for the sole and exclusive
benefit of the Company, the Rights Agent, and the registered holders of the
Right Certificates (or prior to the Distribution Date, the Common Shares).
30. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder will be deemed to be a contract made under the
internal substantive laws of the State of North Carolina and for all purposes
will be governed by and construed in accordance with the internal substantive
laws of such State applicable to contracts to be made and performed entirely
within such State, provided, however, that the rights and obligations of the
Rights Agent shall be governed by and construed in accordance with the laws of
the State of New York. The parties hereby submit to the nonexclusive
jurisdiction of the courts of the borough of Manhattan, New York City, New
York, and acknowledge that such courts are a convenient forum.
32
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 will remain in full
force and effect and will in no way be affected, impaired or invalidated;
provided, however, that nothing contained in this Section 31 will affect the
ability of the Company under the provisions of Section 27 to supplement or
amend this Agreement to replace such invalid, void or unenforceable term,
provision, covenant or restriction with a legal, valid and enforceable term,
provision, covenant or restriction.
32. Descriptive Headings, Etc. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and will
not control or affect the meaning or construction of any of the provisions
hereof. Unless otherwise expressly provided, references herein to Articles,
Sections and Exhibits are to Articles, Sections and Exhibits of or to this
Agreement.
33. Determinations and Actions by the Directors. 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 Common Shares of which any Person is the
Beneficial Owner, will 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
Directors of the Company will have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including
without limitation the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including any determination as to whether
particular Rights shall have become void). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, any omission with respect to any of the foregoing) which are done or
made by the Directors of the Company in good faith will (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 Directors of the Company
to any liability to any Person, including without limitation the Rights Agent
and the holders of the Rights.
34. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts will for all purposes be deemed to
be an original, and all such counterparts will together constitute but one and
the same instrument.
[Signatures appear on following page]
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
ENPRO INDUSTRIES, INC.
By:
----------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Rights Agent
By:
----------------------------------------
Name:
Title:
34
EXHIBIT A
FORM OF ARTICLES OF AMENDMENT
OF
ENPRO INDUSTRIES, INC.
Pursuant to Section 55-10-06 of the General Statutes of North
Carolina, the undersigned corporation (the "Corporation") hereby submits these
Articles of Amendment for the purpose of amending its Restated Articles of
Incorporation to create a series of Preferred Stock designated as Series A
Junior Participating Preferred Stock:
1. The name of the Corporation is EnPro Industries, Inc.
2. The following resolution relating to the fixing of the
designations, preferences, limitations and relative rights of the Series A
Junior Participating Preferred Stock, $0.01 par value per share, of the
Corporation was duly adopted by the Board of Directors of the Corporation at a
meeting held on May 22, 2002, without shareholder approval, which was not
required because the Restated Articles of Incorporation of the Corporation
provide that the Board of Directors may determine the designations,
preferences, limitations and relative rights of that class:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Corporation by the Restated Articles of Incorporation, the
Board of Directors hereby creates a series of Preferred Stock designated as
Series A Junior Participating Preferred Stock, $0.01 par value per share, of
the Corporation and hereby states the designation and number of shares, and
fixes the preferences, limitations and relative rights thereof, as follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
I. Designation and Amount
The shares of such series will be designated as Series A Junior
Participating Preferred Stock (the "SERIES A PREFERRED") and the number of
shares constituting the Series A Preferred is ________. Such number of shares
may be increased or decreased by resolution of the Board of Directors;
provided, however, that no decrease will reduce the number of shares of Series
A Preferred to a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into Series A Preferred.
A-1
II. Dividends and Distributions
(a) Subject to the rights of the holders of any shares of any
series of Preferred Stock ranking prior to the Series A Preferred with respect
to dividends, the holders of shares of Series A Preferred, in preference to the
holders of Common Stock, par value $0.01 per share (the "COMMON STOCK"), of the
Corporation, and of any other junior stock, will be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
the purpose, dividends payable in cash (except as otherwise provided below) on
such dates as are from time to time established for the payment of dividends on
the Common Stock (each such date being referred to herein as a "DIVIDEND
PAYMENT DATE"), commencing on the first Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred (the "FIRST
DIVIDEND PAYMENT DATE"), in an amount per share (rounded to the nearest cent)
equal to the greater of (i) $1.00 or (ii) subject to the provision for
adjustment hereinafter set forth, one hundred times the aggregate per share
amount of all cash dividends, and one hundred times the aggregate per share
amount (payable in kind) of all non-cash dividends, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Dividend Payment Date or, with respect to the
First Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series A Preferred. In the event that the Corporation at any time
(i) declares a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivides the outstanding shares of Common Stock,
(iii) combines the outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues any shares of its capital stock in a reclassification of
the outstanding shares of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Corporation is the
continuing or surviving corporation), then, in each such case and regardless of
whether any shares of Series A Preferred are then issued or outstanding, the
amount to which holders of shares of Series A Preferred would otherwise be
entitled immediately prior to such event under clause (ii) of the preceding
sentence will be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) The Corporation will declare a dividend on the Series A
Preferred as provided in the immediately preceding paragraph immediately after
it declares a dividend on the Common Stock (other than a dividend payable in
shares of Common Stock). Each such dividend on the Series A Preferred will be
payable immediately prior to the time at which the related dividend on the
Common Stock is payable.
(c) Dividends will accrue on outstanding shares of Series A
Preferred from the Dividend Payment Date next preceding the date of issue of
such shares, unless (i) the date of issue of such shares is prior to the record
date for the First Dividend Payment Date, in which case dividends on such
shares will accrue from the date of the first issuance of a share of Series A
Preferred or (ii) the date of issue is a Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series A
Preferred entitled to receive a dividend and before such Dividend Payment Date,
in either of which events such dividends will accrue from such Dividend Payment
Date. Accrued but unpaid dividends will cumulate from the applicable Dividend
Payment Date but will not bear interest. Dividends paid on the shares of Series
A
A-2
Preferred in an amount less than the total amount of such dividends at the time
accrued and payable on such shares will 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 Preferred entitled to receive payment of a dividend or distribution
declared thereon, which record date will be not more than 60 calendar days
prior to the date fixed for the payment thereof.
III. Voting Rights
The holders of shares of Series A Preferred will have the following
voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred will entitle the holder thereof to one
hundred votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation at any time (i) declares a dividend
on the outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivides the outstanding shares of Common Stock, (iii) combines the
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issues any shares of its capital stock in a reclassification of the outstanding
shares of Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Corporation is the continuing or
surviving corporation), then, in each such case and regardless of whether any
shares of Series A Preferred are then issued or outstanding, the number of
votes per share to which holders of shares of Series A Preferred would
otherwise be entitled immediately prior to such event will be adjusted by
multiplying such number by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in the Restated Articles
of Incorporation, in any other Preferred Stock Designation creating a series of
Preferred Stock or any similar stock, or by law, the holders of shares of
Series A Preferred and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights will vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
(c) Except as set forth in the Restated Articles of Incorporation
or herein, or as otherwise provided by law, holders of shares of Series A
Preferred will have no voting rights.
IV. Certain Restrictions
(a) Whenever regular dividends or other dividends or
distributions payable on the Series A Preferred are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred outstanding have been paid in full,
the Corporation will not:
(i) Declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
shares of Series A Preferred;
A-3
(ii) Declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
shares of Series A Preferred, except dividends paid ratably on the
shares of Series A Preferred and all such parity stock 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, purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
shares of Series A Preferred; provided, however, that the Corporation
may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the shares of Series A
Preferred; or
(iv) Redeem, purchase or otherwise acquire for
consideration any shares of Series A Preferred, or any shares of stock
ranking on a parity with the shares of Series A Preferred, 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, may determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation will not permit any majority-owned subsidiary
of the Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (a) of this Article IV, purchase or otherwise acquire such shares at
such time and in such manner.
V. Reacquired Shares
Any shares of Series A Preferred purchased or otherwise acquired by
the Corporation in any manner whatsoever will be retired and canceled promptly
after the acquisition thereof. All such shares will upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Restated Articles of
Incorporation of the Corporation, or in any other Preferred Stock Designation
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
VI. Liquidation, Dissolution or Winding Up
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution will be made (a) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
shares of Series A Preferred unless, prior thereto, the holders of shares of
Series A Preferred 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; provided, however, that the holders of
shares of Series A Preferred will be entitled to receive an aggregate amount
per share, subject to the provision for adjustment
A-4
hereinafter set forth, equal to one hundred times the aggregate amount to be
distributed per share to holders of shares of Common Stock or (b) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the shares of Series A Preferred,
except distributions made ratably on the shares of Series A Preferred and all
such parity stock in proportion to the total amounts to which the holders of
all such shares are entitled upon such liquidation, dissolution or winding up.
In the event the Corporation at any time (i) declares a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivides the outstanding shares of Common Stock, (iii) combines the
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issues any shares of its capital stock in a reclassification of the outstanding
shares of Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Corporation is the continuing or
surviving corporation), then, in each such case and regardless of whether any
shares of Series A Preferred are then issued or outstanding, the aggregate
amount to which each holder of shares of Series A Preferred would otherwise be
entitled immediately prior to such event under the proviso in clause (a) of the
preceding sentence will be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
VII. Consolidation, Merger, Etc.
In the event that the Corporation enters into any consolidation,
merger, combination or other transaction in which the shares of Common Stock
are exchanged for or changed into other stock or securities, cash and/or any
other property, then, in each such case, each share of Series A Preferred will
at the same time be similarly exchanged for or changed into an amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
one hundred 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 share of Common Stock is changed or exchanged. In the event the
Corporation at any time (a) declares a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (b) subdivides the outstanding
shares of Common Stock, (c) combines the outstanding shares of Common Stock in
a smaller number of shares, or (d) issues any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation), then, in each such
case and regardless of whether any shares of Series A Preferred are then issued
or outstanding, the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred will be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
VIII. Redemption
The shares of Series A Preferred are not redeemable.
A-5
IX. Rank
The Series A Preferred rank, with respect to the payment of dividends
and the distribution of assets, junior to all other series of the Corporation's
Preferred Stock, unless the terms of any such series shall provide otherwise.
X. Amendment
Notwithstanding anything contained in the Restated Articles of
Incorporation of the Corporation to the contrary and in addition to any other
vote required by applicable law, the Restated Articles of Incorporation of the
Corporation may not be amended in any manner that would materially alter or
change the powers, preferences or special rights of the Series A Preferred so
as to affect them adversely without the affirmative vote of the holders of at
least 66-2/3% of the outstanding shares of Series A Preferred, voting together
as a single series.
This 31st day of May, 2002.
ENPRO INDUSTRIES, INC.
By:
----------------------------------------
[NAME]
[TITLE]
A-6
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R-_________ ___________ Rights
NOT EXERCISABLE AFTER MAY 31, 2012 OR EARLIER IF REDEEMED, EXCHANGED
OR AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR
WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
TRANSFEREE THEREOF MAY BECOME NULL AND VOID.
Right Certificate
ENPRO INDUSTRIES, INC.
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 May 31, 2002 (the "RIGHTS AGREEMENT"),
between EnPro Industries, Inc., a North Carolina corporation (the "COMPANY"),
and The Bank of New York, a New York banking corporation (the "RIGHTS AGENT"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (Eastern time)
on the Expiration Date (as such term is defined in the Rights Agreement) at the
principal office or offices of the Rights Agent designated for such purpose,
one one-hundredth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the "PREFERRED
SHARES"), of the Company, at a purchase price of $________ per one
one-hundredth of a Preferred Share (the "PURCHASE PRICE"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
and related Certificate duly executed. If this Right Certificate is exercised
in part, the holder will be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of the date of the Rights Agreement, based on
the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and/or the
number and/or kind of securities issuable upon the exercise of the Rights
evidenced by this Right Certificate are subject to adjustment upon the
occurrence of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a
B-1
full description of the rights, limitations of rights, obligations, duties and
immunities of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of the Rights under the circumstances specified in the
Rights Agreement. Copies of the Rights Agreement are on file at the above-
mentioned office of the Rights Agent and can be obtained from the Company
without charge upon written request therefor. Terms used herein with initial
capital letters and not defined herein are used herein with the meanings
ascribed thereto in the Rights Agreement.
Pursuant to the Rights Agreement, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-in Event pursuant to
either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (b) a transfer
which the Directors of the Company have determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding
certain provisions of the Rights Agreement, and subsequent transferees of any
of such Persons, will be void without any further action and any holder of such
Rights will thereafter have no rights whatsoever with respect to such Rights
under any provision of the Rights Agreement. From and after the occurrence of a
Flip-in Event, no Right Certificate will be issued that represents Rights that
are or have become void pursuant to the provisions of the Rights Agreement, and
any Right Certificate delivered to the Rights Agent that represents Rights that
are or have become void pursuant to the provisions of the Rights Agreement will
be canceled.
This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate
or Right Certificates entitling the holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case may be)
as the Right Certificate or Right Certificates surrendered entitled such holder
(or former holder in the case of a transfer) to purchase, upon presentation and
surrender hereof at the principal office of the Rights Agent designated for
such purpose, with the Form of Assignment (if appropriate) and the related
Certificate duly executed.
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 or may be exchanged in whole or in part. The
Rights Agreement may be supplemented and amended by the Company, as provided
therein.
The Company is not required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the option of the Company, be evidenced by
depositary receipts) or other securities issuable upon the exercise of any
Right or Rights evidenced hereby. In lieu of issuing such fractional Preferred
Shares or other securities, the Company may make a cash payment, as provided in
the Rights Agreement.
B-2
No holder of this Right Certificate, as such, will be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable upon the exercise of the Right or Rights represented hereby, nor will
anything contained herein or in the Rights Agreement be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate have been exercised in accordance
with the provisions of the Rights Agreement.
This Right Certificate will not be valid or obligatory for any purpose
until it has been countersigned by an authorized signatory of the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ________, ____.
[SEAL]
ATTEST: __________________ ENPRO INDUSTRIES, INC.
By:
-------------------------------
Name:
Title:
Countersigned:
THE BANK OF NEW YORK
By:
------------------------------
Authorized Signatory
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _______________ hereby sells, assigns and transfers unto
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(Please print name and address of transferee)
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this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: __________, ____
----------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
1. the Rights evidenced by this Right Certificate [ ] are [ ]
are not being sold, assigned, transferred, split up, combined or exchanged by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in 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 Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, ____
----------------------------------
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To EnPro Industries, Inc.:
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Right Certificate to purchase the one one-hundredths
of a Preferred Share or other securities issuable upon the exercise of such
Rights and requests that certificates for such securities 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 is not all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
will be registered in the name of and delivered to:
Please insert social security
or other identifying number:
---------------------------------------------------
-------------------------------------------------------------------------------
(Please print name and address)
Dated: __________, ____
----------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
1. the Rights evidenced by this Right 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 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 Right
Certificate from any Person who is, was, or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, ____
----------------------------------
Signature
NOTICE
SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF ELECTION TO
PURCHASE AND IN THE RELATED CERTIFICATES MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS RIGHT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved medallion signature program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended.