EXHIBIT 4.1
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Cadiz Inc.
and
Continental Stock Transfer & Trust Company
as Rights Agent
Rights Agreement
Dated as of May 11, 1999
RIGHTS AGREEMENT
Rights Agreement, dated as of May 11, 1999, between Cadiz
Inc., a Delaware corporation (the "Company"), and Continental Stock
Transfer & Trust Company, a New York corporation, as Rights Agent (the
"Rights Agent").
RECITALS
WHEREAS, on May 10, 1999, the Board of Directors of the
Company adopted this Agreement, and has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each
Common Share (as defined in Section 1.6) of the Company outstanding at
the close of business on June 1, 1999 (the "Record Date") and has
authorized and directed the issuance of one Right (subject to adjustment
as provided herein) with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution
Date and the Expiration Date (as such terms are defined in Sections 3.1
and 7.1), each Right initially representing the right to purchase one
one-thousandth (subject to adjustment) of a share of Series A Junior
Participating Preferred Stock (the "Preferred Shares") of the Company
having the rights, powers and preferences set forth in the form of
Certificate of Designations attached hereto as Exhibit A, upon the terms
and subject to the conditions hereinafter set forth provided, however,
that Rights may be issued with respect to Common Shares that shall
become outstanding after the Distribution Date and prior to the
Expiration Date in accordance with Section 22.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
1.1 "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall
be the Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the Common Shares of the Company then outstanding but shall not
include (i) an Exempt Person (as such term is hereinafter defined) or
(ii) any person who, as of the date hereof, is the Beneficial Owner of
15% or more of the Common Shares outstanding (an "Existing Holder"), unless
and until such time as such Existing Holder shall become the Beneficial
Owner of one or more additional Common Shares of the Company (other than
pursuant to a dividend or distribution paid or made by the Company on
the outstanding Common Shares in Common Shares or pursuant to a split or
subdivision of the outstanding Common Shares), unless, upon becoming the
Beneficial Owner of such additional Common Shares, such Existing Holder
is not then the Beneficial Owner of 15% or more of the Common Shares
then outstanding. Notwithstanding the foregoing, no Person shall become
an "Acquiring Person" as the result of an acquisition of Common Shares
by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such
Person to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding solely by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial
Owner of one or more additional Common Shares of the Company (other than
pursuant to a dividend or distribution paid or made by the Company on
the outstanding Common Shares in Common Shares or pursuant to a split or
subdivision of the outstanding Common Shares), then such Person shall be
deemed to be an "Acquiring Person" unless upon becoming the Beneficial
Owner of such additional shares of Common Stock such Person does not
beneficially own 15% or more of the shares of Common Stock then
outstanding. Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise
be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this Section 1.1, has become such inadvertently
(including, without limitation, because (A) such Person was unaware that
it beneficially owned a percentage of Common Stock that would otherwise
cause such Person to be an "Acquiring Person" or (B) such Person was
aware of the extent of its Beneficial Ownership of Common Stock but had
no actual knowledge of the consequences of such Beneficial Ownership
under this Agreement), and without any intention of changing or
influencing control of the Company, 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 Section 1.1, then such Person shall not be
deemed to be or have become an "Acquiring Person" at any time for any
purposes of this Agreement. 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, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on
the date of this Agreement.
1.2 "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this
Agreement.
1.3 A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement);
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately, or only after the
passage of time, compliance with regulatory requirements, fulfillment of
a condition or otherwise) pursuant to any agreement, arrangement or
understanding, whether or not in writing (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, (w) 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,
(x) securities which such Person has a right to acquire upon the
exercise of Rights at any time prior to the time that any Person becomes
an Acquiring Person, (y) securities issuable upon the exercise of Rights
from and after the time that any Person becomes an Acquiring Person if
such Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3.1 or Section 22 ("Original Rights") or pursuant to
Section 11.9 or Section 11.15 with respect to an adjustment to Original
Rights or (z) securities which such Person or any of such Person's
Affiliates or Associates may acquire, does acquire or may be
deemed to acquire or may be deemed to have the right to acquire,
pursuant to any merger or other acquisition agreement between the
Company and such Person (or one or more of such Person's Affiliates or
Associates) if prior to such Person becoming an Acquiring Person the
Board of Directors of the Company has approved such agreement and
determined that such Person shall not be or be deemed to be the
beneficial owner of such securities within the meaning of this Section
1.3.; or (B) the right to vote pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security under this clause (B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is not also
then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
and with respect to which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities), whether or not in writing, for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy or consent as
described in the proviso to Section 1.3(ii)(B)) or disposing of any
securities of the Company; provided, however, that no Person who is an
officer, director or employee of an Exempt Person shall be deemed,
solely by reason of such Person's status or authority as such, to be the
"Beneficial Owner" of, to have "Beneficial Ownership" of or to
"beneficially own" any securities that are "beneficially owned" (as
defined in this Section 1.3), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer,
director or employee of an Exempt Person.
1.4 "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
1.5 "close of business" on any given date shall mean 5:00
p.m., New York time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m., New York time, on the
next succeeding Business Day.
1.6 "Common Shares" when used with reference to the Company
shall mean the shares of common stock, par value $.01 per share, of the
Company. "Common Shares" when used with reference to any Person other
than the Company shall mean the capital stock with the greatest voting
power, or the equity securities or other equity interest having power to
control or direct the management, of such other Person or, if such
Person is a Subsidiary (as such term is hereinafter defined) of another
Person, the Person or Persons which ultimately control such
first-mentioned Person, and which has or have issued and outstanding such
capital stock, equity securities or equity interest.
1.7 "Exempt Person" shall mean the Company, any Subsidiary of
the Company, in each case including, without limitation, in its fiduciary
capacity, or any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity or trustee holding shares of
capital stock of the Company for or pursuant to the terms of any such
plan, or for the purpose of funding other employee benefits for
employees of the Company or any Subsidiary of the Company.
1.8 "Person" shall mean any individual, partnership, joint
venture, limited liability company, firm, corporation, unincorporated
association, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
1.9 "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, the filing of a report pursuant to
Section 13(d) of the Exchange Act or pursuant to a comparable successor
statute) by the Company or an Acquiring Person that an Acquiring Person
has become such or that discloses information which reveals the
existence of an Acquiring Person or such earlier date as a majority of
the Board of Directors shall become aware of the existence of an
Acquiring Person.
1.10 "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting
equity securities or equity interests is owned, of record or
beneficially, directly or indirectly, by such Person.
1.11 A "Trigger Event" shall be deemed to have occurred upon
any Person becoming an Acquiring Person.
1.12 The following terms shall have the meanings defined for
such terms in the Sections set forth below:
Term Section
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Adjustment Shares 11.1.2
common stock equivalent 11.1.3
Company Preamble
current per share market price 11.4
Current Value 11.1.3
Distribution Date 3.1
equivalent preferred stock 11.2
Exchange Act 1.1
Exchange Consideration 27.1
Existing Holder 1.1
Expiration Date 7.1
Final Expiration Date 7.1
Nasdaq 9
Original Rights 1.3
Preferred Shares Recitals
Principal Party 13.2
Purchase Price 4
Record Date Recitals
Redemption Date 7.1
Redemption Price 23.1
Right Recitals
Right Certificate 3.1
Rights Agent Preamble
Securities Act 9
Security 11.4.1
Spread 11.1.3
Substitution Period 11.1.3
Summary of Rights 3.2
Trading Day 11.4.1
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company
hereby appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3, shall prior to
the Distribution Date also be the holders of the Common Shares) in
accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable. In
the event the Company appoints one or more co-Rights Agents, the
respective duties of the Rights Agent and any co-Rights Agent shall be
as the Company shall determine. Contemporaneously with such
appointment, if any, the Company shall notify the Rights Agent thereof.
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.
3.1 RIGHTS EVIDENCED BY SHARE CERTIFICATES. Until the
earlier of (i) the tenth day after the Shares Acquisition Date or
(ii) the tenth Business Day after the date of the commencement of, or
first public announcement of the intent of any Person (other than an
Exempt Person) to commence, a tender or exchange offer the consummation
of which would result in any Person (other than an Exempt Person)
becoming the Beneficial Owner of Common Shares aggregating 15% or more
of the then outstanding Common Shares of the Company (the earlier of (i)
and (ii) being herein referred to as the "Distribution Date"), (x) the
Rights (unless earlier expired, redeemed or terminated) will be
evidenced (subject to the provisions of Section 3.2) by the certificates
for Common Shares registered in the names of the holders thereof (which
certificates for Common Shares shall also be deemed to be Right
Certificates) and not by separate certificates, and (y) the Rights (and
the right to receive certificates therefor) will be transferable only in
connection with the transfer of the underlying Common Shares. The
preceding sentence notwithstanding, prior to the occurrence of a
Distribution Date specified as a result of an event described in clause
(ii) (or such later Distribution Date as the Board of Directors of the
Company may select pursuant to this sentence), the Board of Directors
may postpone, one or more times, the Distribution Date which would occur
as a result of an event described in clause (ii) beyond the date set
forth in such clause (ii). Nothing herein shall permit such a
postponement of a Distribution Date after a Person becomes an Acquiring
Person, except as a result of the operation of the third sentence of
Section 1.1. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign and
the Company (or, if requested, the Rights Agent) will send, by
first-class, postage-prepaid mail, to each record holder of Common
Shares as of the close of business on the Distribution Date (other than
any Acquiring Person or any Associate or Affiliate of an Acquiring
Person), at the address of such holder shown on the records of the
Company, one or more certificates for Rights, in substantially the form
of Exhibit B hereto (a "Right Certificate"), evidencing one Right
(subject to adjustment as provided herein) for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
3.2 SUMMARY OF RIGHTS. On the Record Date or as soon as
practicable thereafter, the Company will send or cause to be sent a copy
of a Summary of Rights to Purchase Preferred Shares, in substantially
the form attached hereto as Exhibit C (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common
Shares as of the close of business on the Record Date at the address of
such holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the close of business
on the Record Date, until the Distribution Date (or the earlier
Expiration Date), the Rights will be evidenced by such certificates for
Common Shares registered in the names of the holders thereof together
with a copy of the Summary of Rights and the registered holders of the
Common Shares shall also be registered holders of the associated Rights.
Until the Distribution Date (or the earlier Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding
at the close of business on the Record Date, with or without a copy of
the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
3.3 NEW CERTIFICATES AFTER RECORD DATE. Certificates for
Common Shares which become outstanding (whether upon issuance out of
authorized but unissued Common Shares, disposition out of treasury or
transfer or exchange of outstanding Common Shares) after the Record Date
but prior to the earliest of the Distribution Date or the Expiration
Date, shall have impressed, printed, stamped, written or otherwise
affixed onto them the following legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in an Agreement between Cadiz
Inc. (the "Company") and Continental Stock Transfer & Trust
Company, as Rights Agent, dated as of May 11, 1999, as the
same may be amended from time to time (the "Agreement"), the
terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices
of the Company. Under certain circumstances, as set forth in
the Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Agreement without charge after
receipt of a written request therefor. AS DESCRIBED IN THE
AGREEMENT, RIGHTS WHICH ARE OWNED BY, TRANSFERRED TO OR HAVE
BEEN OWNED BY ACQUIRING PERSONS OR ASSOCIATES OR AFFILIATES
THEREOF (AS DEFINED IN THE AGREEMENT) SHALL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.
With respect to such certificates containing the foregoing legend,
until the Distribution Date (or the earlier Expiration Date), the Rights
associated with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, and the surrender for transfer
of any such certificates, except as otherwise provided herein, shall
also constitute the transfer of the Rights associated with the Common
Shares represented thereby. In the event that the Company purchases or
acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares shall
be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no
longer outstanding.
Notwithstanding this Section 3.3, the omission of a legend
shall not affect the enforceability of any part of this Agreement or the
rights of any holder of the Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right
Certificates (and the forms of election to purchase shares,
certification and assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement, 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 trading system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the terms
and conditions hereof, the Right Certificates, whenever issued, shall be
dated as of the Record Date, and shall show the date of countersignature
by the Rights Agent, and on their face shall entitle the holders thereof
to purchase such number of one one-thousandths of a Preferred Share as
shall be set forth therein at the price per one one-thousandth of a
Preferred Share set forth therein (the "Purchase Price"), but the number
of such one one-thousandths of a Preferred Share and the Purchase Price
shall be subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by its Chairman
of the Board of Directors, the Chief Executive Officer, President or any
Vice President, either manually or by facsimile signature, and shall
have affixed thereto the Company's seal or a facsimile thereof which
shall be attested by the Secretary or any Assistant Secretary of the
Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned, either manually or by facsimile
signature, by an authorized signatory of the Rights Agent, but it shall
not be necessary for the same signatory to countersign all of the Right
Certificates hereunder. No Right Certificate shall be valid for any
purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and
delivered by the Company with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the
execution of this Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates, the certificate number of each of the Right
Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES. Subject to the provisions of Section 11.1.2 and
Section 14, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date,
any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to
Section 11.1.2 or that have been exchanged pursuant to Section 27) may
be transferred, split up or combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-thousandths of a Preferred Share as
the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer,
split up or combine or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender,
together with any required form of assignment and certificate duly
completed, the Right Certificate or Right Certificates to be
transferred, split up or combined or exchanged at the office of the
Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate or
Right Certificates until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Right Certificate or Right Certificates and shall
have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof
as the Company shall reasonably request. Thereupon the Rights Agent
shall countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment from the holders of Right Certificates
of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up or combination or
exchange of such Right Certificates.
Subject to the provisions of Section 11.1.2 , at any time
after the Distribution Date and prior to the Expiration Date, upon
receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to
the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS.
7.1 EXERCISE OF RIGHTS. Subject to Section 11.1.2 and except
as otherwise provided herein, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase and certification on
the reverse side thereof duly executed, to the Rights Agent at the
office of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price for the total number of one
one-thousandths of a Preferred Share (or other securities, cash or other
assets) as to which the Rights are exercised, at or prior to the time
(the "Expiration Date") that is the earliest of (i) the close of
business on June 1, 2009 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 (the "Redemption
Date"), (iii) the closing of any merger or other acquisition transaction
involving the Company pursuant to an agreement of the type described in
Section 13.3 at which time the Rights are deemed terminated, or (iv) the
time at which the Rights are exchanged as provided in Section 27.
7.2 PURCHASE . The Purchase Price for each one
one-thousandth of a Preferred Share pursuant to the exercise of a Right
shall be initially $35.00, shall be subject to adjustment from time to
time as provided in Sections 11, 13 and 26 and shall be payable in
lawful money of the United States of America in accordance with
Section 7.3.
7.3 PAYMENT PROCEDURES. Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase
and certification duly executed, accompanied by payment of the aggregate
Purchase Price for the total number of one one-thousandths of a
Preferred Share to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate
in accordance with Section 9, in cash or by certified or cashier's check
or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i)(A) requisition from any transfer agent of
the Preferred Shares (or make available, if the Rights Agent is the
transfer agent) certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Company shall have
elected to deposit the total number of Preferred Shares issuable upon
exercise of the Rights hereunder with a depository agent, requisition
from the depositary agent depositary receipts representing interests in
such number of one one-thousandths of a Preferred Share as are to be
purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company hereby directs the depositary
agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
the issuance of fractional shares in accordance with Section 14 or
otherwise in accordance with Section 11.1.3, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to
be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt, promptly deliver
such cash to or upon the order of the registered holder of such Right
Certificate. In the event that the Company is obligated to issue other
securities of the Company, pay cash and/or distribute other property
pursuant to Section 11.1.3, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate.
7.4 PARTIAL EXERCISE. In case the registered holder of any
Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be issued by the Rights Agent and
delivered to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.
7.5 FULL INFORMATION CONCERNING OWNERSHIP. Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a
registered holder of Rights upon the occurrence of any purported
exercise as set forth in this Section 7 unless the certificate contained
in the form of election to purchase set forth on the reverse side of the
Right Certificate surrendered for such exercise shall have been duly
completed and signed by the registered holder thereof and the Company
shall have been provided with such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the
Rights Agent for cancellation or in canceled form, or, if surrendered to
the Rights Agent, shall be canceled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company, or
shall, at the written request of the Company, destroy such canceled
Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK;
SECURITIES AND TAX LAW COMPLIANCE. The Company covenants and agrees that
from and after the Distribution Date it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares
(and, following the occurrence of a Trigger Event, out of its authorized
and unissued Common Shares or other securities or out of its shares held
in its treasury) the number of Preferred Shares (and, following the
occurrence of a Trigger Event, Common Shares and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.
So long as the Preferred Shares (and, following the occurrence
of a Trigger Event, Common Shares and/or other securities) issuable upon
the exercise of Rights may be listed on any national securities exchange
or traded in the over-the-counter market and quoted on the National
Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") (including the National Market or Small Cap Market), the
Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to
be listed or admitted to trading on such exchange or quoted on Nasdaq
upon official notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (and,
following the occurrence of a Trigger Event, Common Shares and/or other
securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable shares.
From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the
issuance of Preferred Shares (or, following the occurrence of a Trigger
Event, Common Shares and/or other securities) upon the exercise of Rights,
to register and qualify such Preferred Shares (and following the occurrence
of a Trigger Event, Common Shares and/or other securities) under the
Securities Act of 1933, as amended (the "Securities Act"), and any
applicable state securities or "Blue Sky" laws (to the extent exemptions
therefrom are not available), cause such registration statement and
qualifications to become effective as soon as possible after the initial
filings and keep such registration and qualifications effective until the
earlier of the date as of which the Rights are no longer exercisable for
such securities and the Expiration Date. The Company may temporarily
suspend, for a period of time not to exceed 90 days, the exercisability
of the Rights in order to prepare and file a registration statement
under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction
unless the requisite qualification in such jurisdiction shall have been
obtained and until a registration statement under the Securities Act (if
required) shall have been declared effective.
The Company further covenants and agrees that it will pay when
due and payable any and all Federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of
certificates for the Preferred Shares (or Common Shares and/or other
securities, as the case may be) 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 for Preferred
Shares (or Common Shares and/or other securities, as the case may be) in
a name other than that of the registered holder upon the exercise of any
Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in
whose name any certificate for Preferred Shares (or Common Shares and/or
other securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Shares (or Common Shares and/or other
securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Shares (or Common Shares and/or other securities, as the case
may be) transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Shares (or Common Shares and/or
other securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder
of a Right Certificate shall not be entitled to any rights of a holder
of Preferred Shares for which the Rights shall be exercisable,
including, without limitation, the right to vote or to receive dividends
or other distributions, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number of Preferred Shares
or other securities or property purchasable 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.
11.1 POST-EXECUTION EVENTS.
11.1.1 CORPORATE DIVIDENDS, RECLASSIFICATIONS, ETC. In the
event the Company shall at any time after the date of this Agreement
(A) declare and pay a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares,
(C) combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11.1, the Purchase Price in effect at
the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after
such time shall be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Shares
transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in
no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both Section 11.1.1 and
Section 11.1.2, the adjustment provided for in this Section 11.1.1 shall
be in addition to, and shall be made prior to, the adjustment required
pursuant to, Section 11.1.2.
11.1.2 ACQUIRING PERSON EVENTS; TRIGGERING EVENTS. Subject
to Sections 23.1 and 27, in the event that a Trigger Event occurs, then,
from and after the first occurrence of such event, each holder of a
Right, except as provided below, shall thereafter have a right to
receive, upon exercise thereof at a price per Right equal to the then
current Purchase Price multiplied by the number of one one-thousandths
of a Preferred Share for which a Right is then exercisable (without
giving effect to this Section 11.1.2), in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common
Shares as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-thousandths of a
Preferred Share for which a Right is then exercisable (without giving
effect to this Section 11.1.2) and (y) dividing that product by 50% of
the current per share market price of the Common Shares (determined
pursuant to Section 11.4) on the earlier of the date of the occurrence
of, or the date of the first public announcement of, a Trigger Event
(the "Adjustment Shares"); provided that the Purchase Price and the
number of Adjustment Shares shall thereafter be subject to further
adjustment as appropriate in accordance with Section 11.6.
Notwithstanding the foregoing, upon the occurrence of a Trigger Event,
any Rights that are or were acquired or beneficially owned by (1) any
Acquiring Person or any Associate or Affiliate thereof, (2) a transferee
of any Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (3)
a transferee of any Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect avoidance of this Section 11.1.2,
and all subsequent transferees from such initial transferee, shall
become void without any further action, and any holder (whether or
not such holder is an Acquiring Person or an Associate or Affiliate
of an Acquiring Person) of such Rights shall thereafter have no right
to exercise such Rights under any provision of this Agreement or
otherwise. From and after the Trigger Event, no Right Certificate
shall be issued pursuant to Section 3 or Section 6 that represents
Rights that are or have become void pursuant to the provisions of
this paragraph, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become void pursuant
to the provisions of this paragraph shall be canceled.
The Company shall use all reasonable efforts to ensure that
the provisions of this Section 11.1.2 are complied with, but shall have
no liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to any
Acquiring Person or its Affiliates, Associates or transferees hereunder.
From and after the occurrence of an event specified in
Section 13.1, any Rights that theretofore have not been exercised
pursuant to this Section 11.1.2 shall thereafter be exercisable only in
accordance with Section 13 and not pursuant to this Section 11.1.2.
11.1.3 INSUFFICIENT SHARES. The Company may at its option
substitute for a Common Share issuable upon the exercise of Rights in
accordance with the foregoing Section 11.1.2 a number of Preferred
Shares or fraction thereof such that the current per share market price
of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share. In the event
that upon the occurrence of a Trigger Event there shall not be
sufficient Common Shares authorized but unissued, or held by the Company
as treasury shares, to permit the exercise in full of the Rights in
accordance with the foregoing Section 11.1.2, the Company shall take all
such action as may be necessary to authorize additional Common Shares
for issuance upon exercise of the Rights, provided, however, that if the
Company determines that it is unable to cause the authorization of a
sufficient number of additional Common Shares, then, in the event the
Rights become exercisable, the Company, with respect to each Right and
to the extent necessary and permitted by applicable law and any
agreements or instruments in effect on the date hereof to which it is a
party, shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value"), over (2) the Purchase Price (such excess, the "Spread") and
(B) with respect to each Right (other than Rights which have become void
pursuant to Section 11.1.2), make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) Preferred Shares or
other equity securities of the Company (including, without limitation,
shares, or fractions of shares, of preferred stock which, by virtue of
having dividend and liquidation rights substantially comparable to those
of the Common Shares, the Board of Directors of the Company has deemed
in good faith to have substantially the same value as Common Shares)
(each such share of preferred stock or fractions of shares of preferred
stock constituting a "common stock equivalent")), (4) debt securities of
the Company, (5) other assets or (6) any combination of the foregoing
having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the
Company based upon the advice of a nationally recognized investment
banking firm selected in good faith by the Board of Directors of the
Company; provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the occurrence of a Trigger Event, then the
Company shall be obligated to deliver, to the extent necessary and
permitted by applicable law and any agreements or instruments in effect
on the date hereof to which it is a party, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price,
Common Shares (to the extent available) and then, if necessary, such
number or fractions of Preferred Shares (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If the Board of Directors of the Company
shall determine in good faith that it is unlikely that sufficient
additional Common Shares could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth above may be
extended and re-extended to the extent necessary, but not more than
ninety (90) days following the occurrence of a Trigger Event, in order
that the Company may seek stockholder approval for the authorization of
such additional shares (such period as may be extended, the
"Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the second and/or third sentences
of this Section 11.1.3, the Company (x) shall provide that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
second sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended as
well as a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11.1.3, the value of a
Common Share shall be the current per share market price (as determined
pursuant to Section 11.4) on the date of the occurrence of a Trigger
Event and the value of any "common stock equivalent" shall be deemed to
have the same value as the Common Shares on such date. The Board of
Directors of the Company may, but shall not be required to, establish
procedures to allocate the right to receive Common Shares upon the
exercise of the Rights among holders of Rights pursuant to this
Section 11.1.3.
11.2 DILUTIVE RIGHTS OFFERING. In case the Company shall fix
a record date for the issuance of rights, options or warrants to all
holders of Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase
Preferred Shares (or securities having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preferred stock")) or
securities convertible into Preferred Shares or equivalent preferred
stock at a price per Preferred Share or per share of equivalent
preferred stock (or having a conversion or exercise price per share, if
a security convertible into or exercisable for Preferred Shares or
equivalent preferred stock) less than the current per share market price
of the Preferred Shares (as determined pursuant to Section 11.4) on such
record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares and shares of equivalent
preferred stock outstanding on such record date plus the number of
Preferred Shares and shares of equivalent preferred stock which the
aggregate offering price of the total number of Preferred Shares and/or
shares of equivalent preferred stock 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 shall be the number of Preferred Shares and shares
of equivalent preferred stock outstanding on such record date plus the
number of additional Preferred Shares and/or shares of equivalent
preferred stock 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 of the Company
issuable upon exercise of one Right. In case such subscription price
may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the
Rights. Preferred Shares and shares of equivalent preferred stock owned
by or held for the account of the Company or any Subsidiary of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustments shall be made successively whenever such
a record date is fixed; and in the event that such rights or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not
been fixed.
11.3 DISTRIBUTIONS. In case the Company shall fix a record
date for the making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness, cash, securities or
assets (other than a regular periodic cash dividend at a rate not in
excess of 125% of the rate of the last regular periodic cash dividend
theretofore paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the average net
income per share of the Company for the four quarters ended immediately
prior to the payment of such dividend, or a dividend payable in
Preferred Shares (which dividend, for purposes of this Agreement, shall
be subject to the provisions of Section 11.1.1(A))) or convertible
securities, or subscription rights or warrants (excluding those referred
to in Section 11.2), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per share market price of the
Preferred Shares (as determined pursuant to Section 11.4) on such record
date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of
the cash, assets, securities or evidences of indebtedness so to be
distributed or of such convertible securities, subscription rights
or warrants applicable to one Preferred Share and the denominator
of which shall be such current per share market price of the Preferred
Shares (as determined pursuant to Section 11.4); provided, however,
that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
11.4 CURRENT PER SHARE MARKET PRICE.
11.4.1 GENERAL. For the purpose of any computation
hereunder, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11.4.1) on any date shall be
deemed to be the average of the daily closing prices per share of such
Security for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however,
that in the event that the current per share market price of the
Security is determined during any period following the announcement by
the issuer of such Security of (i) a dividend or distribution on such
Security payable in shares of such Security or securities convertible
into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of thirty
(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" shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security. The closing price
for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or admitted
to trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other electronic
inter-dealer quotation system then in use, or, if on any such date
the Security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in the Security selected by the Board of Directors
of the Company. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Security is listed
or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national
securities exchange, a Business Day. If the Security is not publicly
held or not so listed or traded, or if on any such date the Security
is not so quoted and no such market maker is making a market in the
Security, "current per share market price" shall mean the fair value
per share as determined in good faith by the Board of Directors of
the Company or, if at the time of such determination there is an Acquiring
Person, by a nationally recognized investment banking firm selected by
the Board of Directors, which shall have the duty to make such
determination in a reasonable and objective manner, whose determination
shall be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.
11.4.2 PREFERRED SHARES. Notwithstanding Section 11.4.1,
for the purpose of any computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in the same
manner as set forth above in Section 11.4.1 (other than the last
sentence thereof). If the current per share market price of the
Preferred Shares cannot be determined in the manner described in
Section 11.4.1, the "current per share market price" of the Preferred
Shares shall be conclusively deemed to be an amount equal to 1000 (as
such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common
Shares occurring after the date of this Agreement) multiplied by the
current per share market price of the Common Shares (as determined
pursuant to Section 11.4.1). If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or traded, or if on any
such date neither the Common Shares nor the Preferred Shares are so
quoted and no such market maker is making a market in either the Common
Shares or the Preferred Shares, "current per share market price" of the
Preferred Shares shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, or, if at the time
of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board of Directors of
the Company, which shall have the duty to make such determination in a
reasonable and objective manner, which determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for
all purposes. For purposes of this Agreement, the "current per share
market price" of one one-thousandth of a Preferred Share shall be equal
to the "current per share market price" of one Preferred Share divided
by 1000.
11.5 INSIGNIFICANT CHANGES. No adjustment in the Purchase
Price shall be required unless such adjustment would require an increase
or decrease of at least 1% in the Purchase Price. Any adjustments which
by reason of this Section 11.5 are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent
or to the nearest one-hundred thousandth of a Preferred Share or the
nearest one-thousandth of a Common Share or other share or security, as
the case may be.
11.6 SHARES OTHER THAN PREFERRED SHARES. If as a result of an
adjustment made pursuant to Section 11.1, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares, thereafter the
number of such other shares so receivable upon exercise of any Right
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect
to the Preferred Shares contained in Sections 11.1, 11.2, 11.3, 11.5,
11.8, 11.9 and 11.13, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Shares shall apply on like terms to any
such other shares.
11.7 RIGHTS ISSUED PRIOR TO ADJUSTMENT. All Rights originally
issued by the Company subsequent to any adjustment made to the Purchase
Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-thousandths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
11.8 EFFECT OF ADJUSTMENTS. Unless the Company shall have
exercised its election as provided in Section 11.9, upon each adjustment
of the Purchase Price as a result of the calculations made in Sections
11.2 and 11.3, each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-thousandths of a
Preferred Share (calculated to the nearest one-hundred thousandth of a
Preferred Share) obtained by (i) multiplying (x) the number of one
one-thousandths of a Preferred Share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
11.9 ADJUSTMENT IN NUMBER OF RIGHTS. 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-thousandths of a Preferred Share issuable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one
one-thousandths 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 shall become that number of
Rights (calculated to the nearest one-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if
the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant
to this Section 11.9, the Company may, as promptly as practicable, cause
to be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in
the public announcement.
11.10 RIGHT CERTIFICATES UNCHANGED. Irrespective of any
adjustment or change in the Purchase Price or the number of one
one-thousandths of a Preferred Share issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of one
one-thousandths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
11.11 PAR VALUE LIMITATIONS. Before taking any action
that would cause an adjustment reducing the Purchase Price below one
one-thousandth of the then par value, if any, of the Preferred Shares or
other shares of capital stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares or other such shares
at such adjusted Purchase Price.
11.12 DEFERRED ISSUANCE. In any case in which this
Section 11 shall require that an adjustment in the Purchase Price be
made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date of that number
of Preferred Shares and shares of other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the
Preferred Shares and shares of other capital stock or other securities,
assets or cash of the Company, if any, issuable upon such exercise on
the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due
▇▇▇▇ or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event
requiring such adjustment.
11.13 REDUCTION IN PURCHASE PRICE. Anything in this
Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares,
issuance wholly for cash of any of the Preferred Shares at less than the
current per share market price thereof, issuance wholly for cash of
Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in this Section 11, hereafter made
by the Company to holders of its Preferred Shares shall not be taxable
to such stockholders.
11.14 COMPANY NOT TO DIMINISH BENEFITS OF RIGHTS. The
Company covenants and agrees that after the earlier of the Shares
Acquisition Date or Distribution Date it will not, except as permitted
by Section 23, Section 26 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 substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
11.15 ADJUSTMENT OF RIGHTS ASSOCIATED WITH COMMON SHARES.
Notwithstanding anything contained in this Agreement to the contrary, in
the event that the Company shall at any time after the date hereof and
prior to the Distribution Date (i) declare or pay any dividend on the
outstanding Common Shares payable in Common Shares, (ii) outstanding
Common Shares (by reclassification or otherwise than by the payment
of dividends payable in Common Shares), or (iii) combine the
outstanding Common Shares into a lesser number of Common Shares, then
in any such case, the number of Rights associated with each Common
Share then outstanding, or issued or delivered thereafter but prior
to the Distribution Date or in accordance with Section 22 shall be
proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event shall
equal the result obtained by multiplying the number of Rights
associated with each Common Share immediately prior to such event
by a fraction, the numerator of which shall be the total number of
Common Shares outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of Common
Shares outstanding immediately following the occurrence of such event.
The adjustments provided for in this Section 11.15 shall be made
successively whenever such a dividend is declared or paid or such a
subdivision or combination is effected.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in
Sections 11 or 13, the Company shall (a) promptly prepare a certificate
setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent
and with each transfer agent for the Common Shares or the Preferred
Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25.
The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be
deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
13.1 CERTAIN TRANSACTIONS. In the event that, from and after
the first occurrence of a Trigger Event, directly or indirectly, (A) the
Company shall consolidate with, or merge with and into, any other Person
and the Company shall not be the continuing or surviving corporation,
(B) any Person shall consolidate with the Company, or merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or
part of the Common Shares of the Company shall be changed into or
exchanged for stock or other securities of the Company or any other
Person or cash or any other property, or (C) the Company shall sell,
exchange, mortgage or otherwise transfer (or one or more of its
Subsidiaries shall sell, exchange, mortgage or otherwise transfer),
in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or one or more wholly-owned Subsidiaries of
the Company in one or more transactions each of which complies with
Section 11.14), then, and in each such case, proper provision shall
be made so that (i) each holder of a Right (other than Rights which
have become void pursuant to Section 11.1.2) shall thereafter have the
right to receive, upon the exercise thereof at a price per Right equal
to the then current Purchase Price multiplied by the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Trigger Event (as
subsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8,
11.9 and 11.13), in accordance with the terms of this Agreement
and in lieu of Preferred Shares or Common Shares, such number of validly
authorized and issued, fully paid, non-assessable and freely tradable
Common Shares of the Principal Party (as such term is hereinafter
defined) not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall be equal to the result obtained by
(x) multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Trigger Event (as
subsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8,
11.9 and 11.13) and (y) dividing that product by 50% of the then current
per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11.4) on the date of consummation of
such consolidation, merger, sale or transfer; provided, that the price
per Right so payable and the number of Common Shares of such Principal
Party so receivable upon exercise of a Right shall thereafter be subject
to further adjustment as appropriate in accordance with Section 11.6 to
reflect any events covered thereby occurring in respect of the Common
Shares of such Principal Party after the occurrence of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party; and
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares
in accordance with Section 9) in connection with such consummation as
may be necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights; provided
that, upon the subsequent occurrence of any consolidation, merger, sale
or transfer of assets or other extraordinary transaction in respect of
such Principal Party, each holder of a Right shall thereupon be entitled
to receive, upon exercise of a Right and payment of the Purchase Price
as provided in this Section 13.1, such cash, shares, rights, warrants
and other property which such holder would have been entitled to receive
had such holder, at the time of such transaction, owned the Common
Shares of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13.1, and such Principal Party shall take such
steps (including, but not limited to, reservation of shares of stock) as
may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants
and other property. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement confirming that the requirements of this
Section 13.1 and Section 13.2 shall promptly be performed in accordance
with their terms and that such consolidation, merger, sale or transfer
of assets shall not result in a default by the Principal Party under
this Agreement as the same shall have been assumed by the Principal
Party pursuant to this Section 13.1 and Section 13.2 and providing that,
as soon as practicable after executing such supplemental agreement
pursuant to this Section 13, the Principal Party, at its own expense,
shall
(1) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date and similarly comply with
applicable state securities laws;
(2) use its best efforts, if the Common Shares of the
Principal Party shall be listed or admitted to trading on the New York
Stock Exchange or on another national securities exchange, to list or
admit to trading (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on the New York Stock
Exchange or such securities exchange, or, if the Common Shares of the
Principal Party shall not be listed or admitted to trading on the New
York Stock Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the Rights to be
authorized for quotation on Nasdaq or on such other electronic inter-
dealer quotation system then in use;
(3) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under
the Exchange Act; and
(4) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Shares of the Principal Party
subject to purchase upon exercise of outstanding Rights.
In case the Principal Party has provision in any of its
authorized securities or in its certificate or articles of incorporation
or by-laws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to
issue (other than to holders of Rights pursuant to this Section 13), in
connection with, or as a consequence of, the consummation of a
transaction referred to in this Section 13, Common Shares or common
stock equivalents of such Principal Party at less than the then current
per share market price thereof (determined pursuant to Section 11.4) or
securities exercisable for, or convertible into, Common Shares or common
stock equivalents of such Principal Party at less than such then current
per share market price (other than to holders of Rights pursuant to this
Section 13), or (ii) providing for any special payment, taxes or similar
provision in connection with the issuance of the Common Shares of such
Principal Party pursuant to the provisions of this Section 13, then, in
such event, the Company hereby agrees with each holder of Rights that it
shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to
the Rights Agent a supplemental agreement providing that the provision
in question of such Principal Party shall have been canceled, waived or
amended, or that the authorized securities shall be redeemed, so that
the applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
The Company covenants and agrees that it shall not, at any
time after the Trigger Event, enter into any transaction of the type
described in clauses (A) through (C) of this Section 13.1 if (i) at the
time of or immediately after such consolidation, merger, sale, transfer
or other transaction there are any rights, warrants or other instruments
or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to
be afforded by the Rights, (ii) prior to, simultaneously with or
immediately after such consolidation, merger, sale, transfer or other
transaction, the stockholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13.2 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
organization of the Principal Party would preclude or limit the
exercisability of the Rights. The provisions of this Section 13 shall
similarly apply to successive transactions of the type described in
clauses (A) through (C) of this Section 13.1.
13.2 PRINCIPAL PARTY. "Principal Party" shall mean:
(i) in the case of any transaction described in (A) or
(B) of the first sentence of Section 13.1: (i) the Person that is the
issuer of the securities into which the Common Shares of the Company are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer the Common Shares of which have the greatest
aggregate market value of shares outstanding, or (ii) if no securities
are so issued, (x) the Person that is the other party to the merger,
if such Person survives said merger, or, if there is more than one such
Person, the Person the Common Shares of which have the greatest aggregate
market value of shares outstanding or (y) if the Person that is the other
party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (z) the
Person resulting from the consolidation; and
(ii) in the case of any transaction described in (C) of
the first sentence of Section 13.1, the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons is the issuer of Common
Shares having the greatest aggregate market value of shares outstanding;
provided, however, that in any such case described in the foregoing
clause (i) or (ii) of this Section 13.2, if the Common Shares of such
Person are not at such time or have not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange
Act, then (1) if such Person is a direct or indirect Subsidiary of
another Person the Common Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person,
or (2) if such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Shares of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such
Persons is the issuer of Common Shares having the greatest aggregate
market value of shares outstanding, or (3) if such Person is owned,
directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the
rules set forth in clauses (1) and (2) above shall apply to each of the
owners having an interest in the venture as if the Person owned by the
joint venture was a Subsidiary of both or all of such joint venturers,
and the Principal Party in each such case shall bear the obligations set
forth in this Section 13 in the same ratio as its interest in such
Person bears to the total of such interests.
13.3 APPROVED ACQUISITIONS. Notwithstanding anything
contained herein to the contrary, upon the consummation of any merger or
other acquisition transaction of the type described in clause (A), (B)
or (C) of Section 13.1 involving the Company pursuant to a merger or
other acquisition agreement between the Company and any Person (or one
or more of such Person's Affiliates or Associates), which agreement has
been approved by the Board of Directors of the Company prior to any
Person becoming an Acquiring Person, this Agreement and the rights of
holders of Rights hereunder shall be terminated in accordance with
Section 7.1.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
14.1 CASH IN LIEU OF FRACTIONAL RIGHTS. The Company shall not
be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights (except prior to the
Distribution Date in accordance with Section 11.15). In lieu of such
fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purposes of this
Section 14.1, the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange
or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted
to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then
in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights, the current
market value of the Rights on such date shall be the fair value of the
Rights as determined in good faith by the Board of Directors of the
Company, or, if at the time of such determination there is an Acquiring
Person, by a nationally recognized investment banking firm selected by
the Board of Directors of the Company, which shall have the duty to make
such determination in a reasonable and objective manner, which
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
14.2 CASH IN LIEU OF FRACTIONAL PREFERRED SHARES. The Company
shall not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a
Preferred Share) upon exercise or exchange of the Rights or to
distribute certificates which evidence fractional Preferred Shares
(other than fractions which are integral multiples of one one-thousandth
of a Preferred Share). Interests in fractions of Preferred Shares in
integral multiples of one one-thousandth of a Preferred Share may, at
the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided, that such agreement shall provide
that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial
owners of the Preferred Shares represented by such depositary receipts.
In lieu of fractional Preferred Shares that are not integral multiples
of one one-thousandth of a Preferred Share, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are
exercised or exchanged as herein provided an amount in cash equal to the
same fraction of the current market value of a Preferred Share
(as determined in accordance with Section 14.1) for the Trading
Day immediately prior to the date of such exercise or exchange.
14.3 CASH IN LIEU OF FRACTIONAL COMMON SHARES. The Company
shall not be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional Common Shares upon the
exercise or exchange of Rights. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Common Share (as determined in
accordance with Section 14.1) for the Trading Day immediately prior to
the date of such exercise or exchange.
14.4 WAIVER OF RIGHT TO RECEIVE FRACTIONAL RIGHTS OR SHARES.
The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise or exchange of a Right, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in
respect of this Agreement, except 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 Common Shares), may, in his own behalf and for his own benefit,
enforce this Agreement, and may institute and maintain any suit, action
or proceeding against the Company to enforce this Agreement, or
otherwise enforce or 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 shall be entitled to
specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any
Person (including, without limitation, the Company) contained in this
Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) as of and after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer with all required certifications
completed; and
(c) the Company and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Shares or any other securities of the Company
which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 24),
or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder in accordance with a fee schedule to
be mutually agreed upon and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by
it in connection with its administration of this Agreement in reliance
upon any Right Certificate or certificate for the Preferred Shares or
the Common Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, instruction, direction, consent, certificate, statement,
or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT. Any corporation or limited liability company into which
the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation or limited liability
company resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
or limited liability company succeeding to the corporate trust or stock
transfer business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation or limited
liability company would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the 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 in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name; and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be
bound:
20.1 LEGAL COUNSEL. The Rights Agent may consult with legal
counsel selected by it (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it
in good faith and in accordance with such opinion.
20.2 CERTIFICATES AS TO FACTS OR MATTERS. Whenever in the
performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the
Chairman of the Board of Directors, the Chief Executive Officer, the
President, the Chief Financial Officer, any Vice President, the
Treasurer, the Secretary or any Assistant Treasurer or Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
20.3 STANDARD OF CARE. The Rights Agent shall be liable
hereunder only for its own gross negligence, bad faith or willful
misconduct.
20.4 RELIANCE ON AGREEMENT AND RIGHT CERTIFICATES. The Rights
Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in the Right
Certificates (except as to its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.
20.5 NO RESPONSIBILITY AS TO CERTAIN MATTERS. The Rights
Agent shall not be under any responsibility in respect of the validity
of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 11.1.2) or any adjustment required under the
provisions of Sections 3, 11, 13, 23 or 27 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 change or adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Preferred Shares or other
securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when so issued,
be validly authorized and issued, fully paid and nonassessable.
20.6 FURTHER ASSURANCE BY COMPANY. The Company agrees that it
will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
20.7 AUTHORIZED COMPANY OFFICERS. The Rights Agent is hereby
authorized and directed to accept instructions with respect to the
performance of its duties hereunder from any one of the Chairman of the
Board of Directors, the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President, the Treasurer, the
Secretary or any Assistant Treasurer or Assistant Secretary of the
Company, and to apply to such officers for advice or instructions in
connection with its duties under this Agreement, and it shall not be
liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer or for any delay in
acting while waiting for these 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 with respect to its duties or
obligations 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 to the Company for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified therein (which date
shall not be less than three business days after the date any such
officer actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to
taking of any such action (or the effective date in the case of
omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or
omitted.
20.8 FREEDOM TO TRADE IN COMPANY SECURITIES. The Rights Agent
and any stockholder, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal
entity.
20.9 RELIANCE ON ATTORNEYS AND AGENTS. The Rights Agent may
execute and exercise any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable
for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any
such act, omission, default, neglect or misconduct, provided that
reasonable care was exercised in the selection and continued employment
thereof.
20.10 INCOMPLETE CERTIFICATE. If, with respect to any
Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate contained in the form of assignment or the
form of election to purchase set forth on the reverse thereof, as the
case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), the Rights
Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.
20.11 RIGHTS HOLDERS LIST. At any time and from time to
time after the Distribution Date, upon the request of the Company, the
Rights Agent shall promptly deliver to the Company a list, as of the
most recent practicable date (or as of such earlier date as may be
specified by the Company), of the holders of record of Rights.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing mailed to
the Company and to each transfer agent of the Common Shares and/or
Preferred Shares, as applicable, by registered or certified mail.
Following the Distribution Date, the Company shall promptly notify the
holders of the Right Certificates by first-class mail of any such
resignation. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares and/or Preferred Shares, as
applicable, by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the
resigning, removed, or incapacitated Rights Agent shall remit to the
Company, or to any successor Rights Agent designated by the Company, all
books, records, funds, certificates or other documents or instruments of
any kind then in its possession which were acquired by such resigning,
removed or incapacitated Rights Agent in connection with its services as
Rights Agent hereunder, and shall thereafter be discharged from all
duties and obligations hereunder. Following notice of such removal,
resignation or incapacity, the Company shall appoint a successor to such
Rights Agent. If the Company shall fail to make such appointment within
a period of thirty (30) days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then 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, shall
be a corporation or limited liability company organized and doing
business under the laws of the United States or of the State of New
York or the State of California (or any other state of the United
States so long as such corporation is authorized to do business as a
banking institution in the State of New York or California) in good
standing, having an office in the State of New York or the State of
California, which is authorized under such laws to exercise stock
transfer or corporate trust powers and is subject to supervision or
examination by Federal or state authority and which has at the time
of its appointment as Rights Agent a combined capital and surplus of
at least $10 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of
the Common Shares and/or Preferred Shares, as applicable, and,
following the Distribution Date, mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance
with the provisions of this Agreement. In addition, in connection with
the issuance or sale of Common Shares following the Distribution Date
and prior to the Expiration Date, the Company shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon exercise,
conversion or exchange of securities hereinafter issued by the Company,
in each case existing prior to the Distribution Date, issue Right
Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that
(i) no such Right Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued and
(ii) no such Right Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
SECTION 23. REDEMPTION.
23.1 RIGHT TO REDEEM. The Board of Directors of the
Company may, at its option, at any time prior to a Trigger Event, redeem
all but not less than all of the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend, recapitalization or similar transaction occurring
after the date hereof (such redemption price being hereinafter referred
to as the "Redemption Price"), and the Company may, at its option, pay
the Redemption Price in Common Shares (based on the "current per share
market price," determined pursuant to Section 11.4, of the Common Shares
at the time of redemption), cash or any other form of consideration
deemed appropriate by the Board of Directors. The redemption of the
Rights by the Board of Directors may be made effective at such time, on
such basis and subject to such conditions as the Board of Directors in
its sole discretion may establish.
23.2. REDEMPTION PROCEDURES. Immediately upon the
action of the Board of Directors of the Company ordering the redemption
of the Rights (or at such later time as the Board of Directors may
establish for the effectiveness of such redemption), and without any
further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. The
Company shall promptly give public notice of such redemption; provided,
however, that the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption. The Company shall
promptly give, or cause the Rights Agent to give, notice of such
redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Shares.
Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth
in this Section 23 or in Section 27, except in connection with the
purchase, acquisition or redemption of Common Shares prior to the
Distribution Date.
SECTION 24. NOTICE OF CERTAIN EVENTS. In case the Company
shall propose at any time after the earlier of the Shares Acquisition
Date and the Distribution Date (a) 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 at a rate not in excess of 125% of the rate of
the last regular periodic cash dividend theretofore paid or, in case
regular periodic cash dividends have not theretofore been paid, at a
rate not in excess of 50% of the average net income per share of the
Company for the four quarters ended immediately prior to the payment of
such dividends, or (b) to offer to the holders of Preferred Shares
rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification
of its Preferred Shares (other than a reclassification involving only
the subdivision of outstanding Preferred Shares), or (d) to effect
any consolidation or merger into or with, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person (other than
pursuant to a merger or other acquisition agreement of the type
described in Section 1.3(ii)(A)(z)), or (e) to effect the liquidation,
dissolution or winding up of the Company, or (f) to declare or pay any
dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
Shares), then, in each such case, the Company shall give to the Rights
Agent and to each holder of a Right Certificate, in accordance with
Section 25, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the
holders of the Preferred Shares and/or Common Shares, if any such date
is to be fixed, and such notice shall be so given in the case of any
action covered by clause (a) or (b) above at least ten (10) 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 ten (10) days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the
Preferred Shares and/or Common Shares, whichever shall be the earlier.
In case any event set forth in Section 11.1.2 or Section 13
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to the Rights Agent and to each holder of a
Right Certificate, in accordance with Section 25, a notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11.1.2 and
Section 13, and (ii) all references in this Section 24 to Preferred
Shares shall be deemed thereafter to refer to Common Shares and/or, if
appropriate, other securities.
Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to
the holders of securities of the Company, including the Rights, for
purposes of this Agreement and no other notice need be given.
SECTION 25. NOTICES. Notices or demands required or
authorized by this Agreement to be given or made by the Rights Agent
or by the holder of any Right Certificate to or on the Company shall
be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Cadiz Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Subject to the provisions of Section 21 and Section 24, any notice or
demand required or authorized by this Agreement to be given or made by
the Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
Continental Stock Transfer & Trust Company
▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Compliance Department
Notices or demands required or authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of any Right
Certificate (or, prior to the Distribution Date, to the holder of any
certificate representing Common Shares) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of
the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. For so long as the
Rights are then redeemable, the Company may in its sole and absolute
discretion, and the Rights Agent shall, 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 that the Rights are no longer redeemable, the Company
may, and the Rights Agent shall, if the Company so directs, from time to
time supplement or amend this Agreement without the approval of any
holders of Rights (i) to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent
with any other provisions herein or (ii) to make any other changes or
provisions in regard to matters or questions arising hereunder which the
Company may deem necessary or desirable, including but not limited to
extending the Final Expiration Date; provided, however, that no such
supplement or amendment shall adversely affect 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 may cause the Rights again to become redeemable or cause
this Agreement again to become amendable other than in accordance with
this sentence; provided further, that the right of the Board of
Directors to extend the Distribution Date shall not require any
amendment or supplement hereunder. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or amendment.
SECTION 27. EXCHANGE.
27.1 EXCHANGE OF COMMON SHARES FOR RIGHTS. The Board of
Directors of the Company may, at its option, at any time after the
occurrence of a Trigger Event, exchange Common Shares for all or part of
the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 11.1.2) by exchanging at an exchange ratio of that number of
Common Shares having an aggregate value equal to the Spread (with such
value being based on the current per share market price (as determined
pursuant to Section 11.4) on the date of the occurrence of a Trigger
Event) per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof
(such amount per Right being hereinafter referred to as the "Exchange
Consideration"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any
Acquiring Person shall have become the Beneficial Owner of 50% or more
of the Common Shares then outstanding. From and after the occurrence of
an event specified in Section 13.1, any Rights that theretofore have not
been exchanged pursuant to this Section 27.1 shall thereafter be
exercisable only in accordance with Section 13 and may not be exchanged
pursuant to this Section 27.1. The exchange of the Rights by the Board
of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may
establish.
27.2 EXCHANGE PROCEDURES. Immediately upon the action of the
Board of Directors of the Company ordering the exchange for any Rights
pursuant to Section 27.1 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive the
Exchange Consideration. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange shall
state the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than the Rights
that have become void pursuant to the provisions of Section 11.1.2) held
by each holder of Rights.
27.3 INSUFFICIENT SHARES. The Company may at its option
substitute, and, in the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit
an exchange of Rights for Common Shares as contemplated in accordance
with this Section 27, the Company shall substitute to the extent of such
insufficiency, for each Common Share that would otherwise be issuable
upon exchange of a Right, a number of Preferred Shares or fraction
thereof (or equivalent preferred stock, as such term is defined in
Section 11.2) such that the current per share market price (determined
pursuant to Section 11.4) of one Preferred Share (or equivalent
preferred share) multiplied by such number or fraction is equal to the
current per share market price of one Common Share (determined pursuant
to Section 11.4) as of the date of such exchange.
SECTION 28. SUCCESSORS. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors
and assigns hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person or corporation 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; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common
Shares).
SECTION 30. DETERMINATION AND ACTIONS BY THE BOARD OF
DIRECTORS. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise the rights and powers specifically granted to the Board of
Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including, without limitation,
a determination to redeem or not redeem the Rights or amend this
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) that are done or made by the
Board of Directors of the Company in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of
the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights.
SECTION 31. SEVERABILITY. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated.
SECTION 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of California and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such
State.
SECTION 33. COUNTERPARTS. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADING. Descriptive headings of
the several Sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of
the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above
written.
Cadiz Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Oficer & Corporate Secretary
Continental Stock Transfer & Trust Company
By -----------------------------
Name:
Title:
EXHIBIT A
----------
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
Cadiz Inc.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
_____________________________
Cadiz Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly called and
held on May 10, 1999.
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the
"Board of Directors" or the "Board") in accordance with the provisions
of the Certificate of Incorporation of this Corporation, the Board of
Directors hereby creates a series of Preferred Stock, par value $.01 per
share (the "Preferred Stock"), of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights, powers
and preferences, and qualifications, limitations and restrictions
thereof as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such
series shall be designated as "Series A Junior Participating Preferred
Stock" (the "Series A Preferred Stock") and the number of shares
constituting the Series A Preferred Stock shall initially be 40,259.
Such number of shares may be increased or decreased by resolution of the
Board of Directors; provided, that no decrease shall reduce the number
of shares of Series A Preferred Stock 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 Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders
of any shares of any class or series of stock of this Corporation
ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of Common Stock, par value $.01
per share (the "Common Stock"), of the Corporation, and of any
other stock ranking junior to the Series A Preferred Stock, shall
be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the
greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 1000 times the aggregate per share amount of
all cash dividends, and 1000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions,
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 Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount to which holders
of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of 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 shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of
this Section 2 immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock
in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series
A Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 1000 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of
votes per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of
which is the number of 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 any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid
in full, the Corporation shall 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 Series A Preferred Stock;
(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 Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock 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 or 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 Series A Preferred Stock, provided 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 (both as to dividends and
upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any 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 Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued 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
Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock
or as otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation, dissolution or winding up of the Corporation,
voluntary or otherwise, no distribution shall be made (1) to the holders
of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock
shall have received an amount per share (the "Series A Liquidation
Preference") equal to $1000 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 that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 1000 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (2) to the holders of
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock
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 shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision, combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into
a greater or lesser number of shares of Common Stock, then in each such
case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the
proviso in clause (1) of the preceding sentence shall 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 are outstanding immediately prior to such event.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all other
classes and series of stock of the Corporation, if any, that rank
on a parity with the Series A Preferred Stock in respect thereof,
then the assets available for such distribution shall be
distributed ratably to the holders of the Series A Preferred Stock
and the holders of such parity stock in proportion to their
respective liquidation preferences.
(C) Neither the merger or consolidation of the Corporation
into or with another corporation nor the merger or consolidation of
any other corporation into or with the Corporation shall be deemed
to be a liquidation, dissolution or winding up of the Corporation
within the meaning of this Section 6.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the
Corporation shall enter 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 any such case each share of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an amount
per share, subject to the provision for adjustment hereinafter set
forth, equal to 1000 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 shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision, combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of
shares of Series A Preferred Stock shall 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.
SECTION 8. NO REDEMPTION. The shares of Series A
Preferred Stock shall not be redeemable by the Company.
SECTION 9. RANK. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of assets
upon liquidation, dissolution or winding up, junior to all series of any
other class of the Corporation's Preferred Stock, except to the extent
that any such other series specifically provides that it shall rank on a
parity with or junior to the Series A Preferred Stock.
SECTION 10. AMENDMENT. At any time any shares of Series A
Preferred Stock are outstanding, the Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series
A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of
Series A Preferred Stock, voting separately as a single class.
SECTION 11. FRACTIONAL SHARES. Series A Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series A Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation this 11th day of May, 1999.
______________________________
President & Chief Executive Officer
EXHIBIT B
---------
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER JUNE 1, 2009 OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR
ACQUIRED PURSUANT TO AN AGREEMENT OF THE TYPE DESCRIBED IN
SECTION 1.3(ii)(A)(z) OF THE AGREEMENT. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT, AND TO EXCHANGE ON
THE TERMS SET FORTH IN THE AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN SECTION 11.1.2 OF THE AGREEMENT), RIGHTS BENEFICIALLY
OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED IN THE
AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WILL BECOME
NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
Cadiz 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 11,
1999, as the same may be amended from time to time (the "Agreement"),
between Cadiz Inc., a Delaware corporation (the "Company"), and
Continental Stock Transfer & Trust Company, a New York corporation, as
Rights Agent (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date and prior to 5:00 P.M. (New York City
time) on June 1, 2009, at the offices of the Rights Agent, or its
successors as Rights Agent, designated for such purpose, one
one-thousandth of a fully paid, nonassessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $35.00 per one
one-thousandth of a Preferred Share, subject to adjustment (the
"Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and certification duly
executed. The number of Rights evidenced by this Right Certificate (and
the number of one one-thousandths 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 June 1, 1999,
based on the Preferred Shares as constituted at such date. Capitalized
terms used in this Right Certificate without definition shall have the
meanings ascribed to them in the Agreement. As provided in the
Agreement, the Purchase Price and the number of Preferred Shares which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties
and immunities hereunder of the Rights Agent, the Company and the
holders of the Right Certificates. Copies of the Agreement are on file
at the principal offices of the Company and the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the offices of the Rights Agent
designated for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of one
one-thousandths of a Preferred Share as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Agreement, the Board of
Directors of the Company may, at its option, (i) redeem the Rights
evidenced by this Right Certificate at a redemption price of $.01
per Right or (ii) exchange Common Shares for the Rights evidenced by
this Certificate, in whole or in part.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions
of Preferred Shares which are integral multiples of one one-thousandth
of a Preferred Share, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a cash payment
will be made, as provided in the Agreement.
No holder of this Right Certificate, as such, shall 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 on the exercise hereof, nor shall
anything contained in the Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in
the Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in the Agreement.
If any term, provision, covenant or restriction of the
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 the Agreement shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated.
This Right Certificate shall not be valid or binding for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated June 1, 1999.
Attest: Cadiz Inc.
By ______________________ By _________________________________
Title: Title:
Countersigned on __________________, 1999:
Continental Stock Transfer & Trust Company, as Rights Agent
By_____________________________
Authorized Officer
[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_______________________________
_______________________________________________________________________
_______________________________________________________________________
(Please print name and address
of transferee)
Rights evidenced by 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:
-----------------------------------
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person
or an Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by
this Right Certificate from any person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate thereof.
Dated: __________________________
---------------------------------
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: Cadiz Inc.
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to
purchase the Preferred Shares issuable upon the exercise of such Rights
(or such other securities or property of the Company or of any other
Person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of:
____________________________________________________________
(Please print name and address)
____________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
____________________________________________________________
Dated: __________________
_________________________
Signature
Signature Guaranteed:
_______________________________
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person
or an Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by
this Right Certificate from any person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate thereof.
Dated:_______________
----------------------------------
Signature
NOTICE
The signature in the foregoing Form of Assignment and Form of
Election to Purchase must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or Form of Election to Purchase is not completed, the Company
will deem the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or Associate
hereof, and such Assignment or Election to Purchase will not be honored.
EXHIBIT C
----------
AS DESCRIBED IN THE RIGHTS AGREEMENT, RIGHTS WHICH ARE
HELD BY OR HAVE BEEN HELD BY AN ACQUIRING PERSON OR ASSOCIATES
OR AFFILIATES THEREOF (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF SHALL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On May 10, 1999, the Board of Directors of Cadiz Inc. (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each share of common stock, $.01 par value per share (the
"Common Shares"), of the Company outstanding at the close of business
on June 1, 1999 (the "Record Date"). As long as the Rights are attached
to the Common Shares, the Company will issue one Right (subject to
adjustment) with each new Common Share so that all such shares will
have attached Rights. When exercisable, each Right will entitle the
registered holder to purchase from the Company one one-thousandth of a
share of Series A Junior Participating Preferred Stock (the "Preferred
Shares") at a price of $35.00 per one one-thousandth of a Preferred
Share, subject to adjustment (the "Purchase Price"). The description
and terms of the Rights are set forth in a Rights Agreement, dated as
of May 11, 1999, as the same may be amended from time to time (the
"Agreement"), between the Company and Continental Stock Transfer &
Trust Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten (10) days following a
public announcement that a person or group of affiliated or associated
persons has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the Common Shares (an "Acquiring Person") or
(ii) ten (10) business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person or
group of affiliated or associated persons becomes an Acquiring Person)
following the commencement or announcement of an intention to make a
tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 15% or more of the
Common Shares (the earlier of (i) and (ii) being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common
Share certificates outstanding as of the Record Date, by such Common
Share certificate together with a copy of this Summary of Rights.
The Agreement provides that until the Distribution Date (or
earlier redemption, exchange, termination, or expiration of the Rights),
the Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption, exchange, termination,
or expiration of the Rights), new Common Share certificates issued after
the close of business on the Record Date upon transfer or new issuance
of the Common Shares will contain a notation incorporating the Agreement
by reference. Until the Distribution Date (or earlier redemption,
exchange, termination, or expiration of the Rights), the surrender for
transfer of any certificates for Common Shares, with or without such
notation or a copy of this Summary of Rights, will also constitute the
transfer of the Rights associated with the Common Shares represented by
such certificates. As soon as practicable following the Distribution Date,
separate certificates evidencing the rights ("Right Certificates") will
be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on June 1, 2009, subject to the Company's right
to extend such date (the "Final Expiration Date"), unless earlier
redeemed or exchanged by the Company or terminated.
Each Preferred Share purchasable upon exercise of the Rights
will be entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 1000 times the dividend, if any, declared per
Common Share. In the event of liquidation, dissolution or winding up of
the Company, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $1000 per share (plus any
accrued but unpaid dividends) but will be entitled to an aggregate
payment of 1000 times the payment made per Common Share. Each Preferred
Share will have 1000 votes and will vote together with the Common
Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 1000 times the amount received per Common
Share. Preferred Shares will not be redeemable. These rights are
protected by customary antidilution provisions. Because of the nature
of the Preferred Share's dividend, liquidation and voting rights, the
value of one one-thousandth of a Preferred Share purchasable upon
exercise of each Right should approximate the value of one Common Share.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, and (ii) upon the grant to holders
of the Preferred Shares of certain rights or warrants to subscribe for
or purchase Preferred Shares or convertible securities at less than the
current market price of the Preferred Shares and (iii) upon the
distribution to holders of the Preferred Shares of evidences of
indebtedness, cash, securities or assets (excluding regular periodic
cash dividends at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or, in case regular
periodic cash dividends have not theretofore been paid, at a rate not in
excess of 50% of the average net income per share of the Company for the
four quarters ended immediately prior to the payment of such dividend,
or dividends payable in Preferred Shares (which dividends will be
subject to the adjustment described in clause (i) above)) or of
subscription rights or warrants (other than those referred to above).
In the event that a person becomes an Acquiring Person or if
the Company were the surviving corporation in a merger with an Acquiring
Person or any affiliate or associate of an Acquiring Person and the
Common Shares were not changed or exchanged, each holder of a Right,
other than Rights that are or were acquired or beneficially owned by the
Acquiring Person (which Rights will thereafter be void), will thereafter
have the right to receive upon exercise and payment of the then current
Purchase Price of a Right, that number of Common Shares
having a market value of two times the then current Purchase Price of
the Right. In the event that, after a person has become an Acquiring
Person, the Company were acquired in a merger or other business
combination transaction or more than 50% of its assets or earning power
were sold, proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price of the Right, that number of shares of
common stock of the acquiring company which at the time of such
transaction would have a market value of two times the then current
Purchase Price of the Right.
At any time after a person becomes an Acquiring Person and
prior to the earlier of one of the events described in the last sentence
of the previous paragraph or the acquisition by such Acquiring Person of
50% or more of the outstanding Common Shares, the Board of Directors may
cause the Company to exchange the Rights (other than Rights owned by an
Acquiring Person which will have become void), in whole or in part, for
Common Shares at an exchange rate of that number of Common Shares per
Right (subject to adjustment) resulting from dividing the then current
Purchase Price of the Right by the market value of a Common Share.
No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional Preferred Shares or Common Shares will be
issued (other than fractions of Preferred Shares which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts), and in
lieu thereof, a payment in cash will be made based on the market price
of the Preferred Shares or Common Shares on the last trading date prior
to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a
price (subject to adjustment) of $.01 per Right (the "Redemption Price")
by the Board of Directors at any time prior to the time that an
Acquiring Person has become such. The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company beyond those as an
existing stockholder, including, without limitation, the right to vote
or to receive dividends.
Any of the provisions of the Agreement may be amended by the
Board of Directors of the Company for so long as the Rights are then
redeemable, and after the Rights are no longer redeemable, the Company
may amend or supplement the Agreement in any manner that does not
adversely affect the interests of the holders of the Rights (other than
an Acquiring Person or an affiliate or associate of an Acquiring
Person).
A copy of the Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K. A
copy of the Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Agreement, which is
incorporated herein by reference.