WILSHIRE ENTERPRISES, INC. and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Rights Agent QUALIFIED OFFER PLAN RIGHTS AGREEMENT Dated as of December 4, 2008
WILSHIRE
ENTERPRISES, INC.
and
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY, as Rights Agent
QUALIFIED
OFFER PLAN
Dated
as
of December 4, 2008
TABLE
OF CONTENTS
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Page
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Section
1.
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Certain
Definitions
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1
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Section
2.
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Appointment
of Rights Agent
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8
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Section
3.
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Issue
of Right Certificates
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8
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Section
4.
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Form
of Right Certificates
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10
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Section
5.
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Countersignature
and Registration.
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10
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Section
6.
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Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates
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10
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Section
7.
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Exercise
of Rights, Purchase Price; Expiration Date of Rights
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11
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Section
8.
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Cancellation
and Destruction of Right Certificates
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12
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Section
9.
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Availability
of Shares of Preferred Stock
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13
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Section
10.
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Preferred
Stock Record Date
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14
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Section
11.
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Adjustment
of Purchase Price, Number and Kind of Shares and Number of
Rights
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14
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Section
12.
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Certificate
of Adjusted Purchase Price or Number of Shares
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20
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Section
13.
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Consolidation,
Merger or Sale or Transfer of Assets or Earning Power
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20
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Section
14.
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Fractional
Rights and Fractional Shares
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24
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Section
15.
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Rights
of Action
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25
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Section
16.
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Agreement
of Right Holders
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25
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Section
17.
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Right
Certificate Holder Not Deemed a Stockholder
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25
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Section
18.
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Concerning
the Rights Agent
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26
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Section
19.
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Merger
or Consolidation or Change of Name of Rights Agent
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26
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Section
20.
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Duties
of Rights Agent
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27
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Section
21.
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Change
of Rights Agent
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29
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Section
22.
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Issuance
of New Right Certificates
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29
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Section
23.
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Redemption
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29
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Section
24.
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Exchange
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30
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Section
25.
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Notice
of Certain Events
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31
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Section
26.
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Notices
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32
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Section
27.
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Supplements
and Amendments
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32
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Section
28.
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Successors
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33
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Section
29.
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Benefits
of this Agreement
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33
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Section
30.
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Determinations
and Actions by the Board of Directors
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33
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Section
31.
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Severability
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34
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Section
32.
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Governing
Law
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34
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Counterparts
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34
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Section
34.
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Descriptive
Headings
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34
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-i-
QUALIFIED
OFFER PLAN
Qualified
Offer Plan Rights Agreement, dated as of December 4, 2008 (“Agreement”), between
Wilshire Enterprises, Inc., a Delaware corporation (the “Company”), and
Continental Stock Transfer & Trust Company, as Rights Agent (the “Rights
Agent”).
WITNESSETH:
WHEREAS,
the
Board of Directors of the Company has authorized and declared a dividend of
one
preferred share purchase right (a “Right”) for each share of Common Stock (as
hereinafter defined) of the Company outstanding as of the Close of Business
(as
hereinafter defined) on December 15, 2008 (the “Record Date”), each Right
representing the right to purchase one one-thousandth (subject to adjustment)
of
a share of Preferred Stock (as hereinafter defined), upon the terms and subject
to the conditions herein set forth, and has further authorized and directed
the
issuance of one Right (subject to adjustment as provided herein) with respect
to
each share of Common Stock that shall become outstanding between the Record
Date
and the earlier of the Distribution Date and the Expiration Date (as such terms
are hereinafter defined); provided, however, that Rights may be issued with
respect to shares of Common Stock 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 meaning indicated:
(a) “Acquiring
Person” shall mean any Person (as such term is hereinafter defined) who or which
shall be the Beneficial Owner (as such term is hereinafter defined) of 20%
or
more of the shares of Common Stock then outstanding, but shall not include
an
Exempt Person (as such term is hereinafter defined) or a Person who becomes
the
Beneficial Owner of 20% or more of the shares of Common Stock then outstanding
pursuant to a Qualified Offer (as such term is hereinafter defined); provided,
however, that (i) if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an “Acquiring Person” became the
Beneficial Owner of a number of shares of Common Stock such that the Person
would otherwise qualify as an “Acquiring Person” 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, then such Person
shall not be deemed to be or to have become an “Acquiring Person” for any
purposes of this Agreement unless and until such Person shall have failed to
divest itself, as soon as practicable (as determined, in good faith, by the
Board of Directors of the Company), of Beneficial Ownership of a sufficient
number of shares of Common Stock so that such Person would no longer otherwise
qualify as an “Acquiring Person”; (ii) if, as of the date hereof or prior to the
first public announcement of the adoption of this Agreement, any Person is
or
becomes the Beneficial Owner of 20% or more of the shares of Common Stock
outstanding, such Person shall not be deemed to be or to become an “Acquiring
Person” unless and until such time as such Person shall, after the first public
announcement of the adoption of this Agreement, become the Beneficial Owner
of
additional shares of Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding Common Stock or
pursuant to a split or subdivision of the outstanding Common Stock), unless,
upon becoming the Beneficial Owner of such additional shares of Common Stock,
such Person is not then the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding; and (iii) no Person shall become an “Acquiring
Person” as the result of an acquisition of shares of Common Stock by the Company
which, by reducing the number of shares outstanding, increases the proportionate
number of shares of Common Stock beneficially owned by such Person to 20% or
more of the shares of Common Stock then outstanding, provided, however, that
if
a Person shall become the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding by reason of such share acquisitions by the
Company and shall thereafter become the Beneficial Owner of any additional
shares of Common Stock (other than pursuant to a dividend or distribution paid
or made by the Company on the outstanding Common Stock or pursuant to a split
or
subdivision of the outstanding Common Stock), 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 20%
or
more of the shares of Common Stock then outstanding. For all purposes of this
Agreement, any calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which any Person is
the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date
hereof.
(b) “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 hereof.
(c) “AMEX”
shall mean the American Stock Exchange.
(d) A
Person
shall be deemed the “Beneficial Owner” of, shall be deemed to have “Beneficial
Ownership” of and shall be deemed to “beneficially own” any securities:
(i) which
such Person or any of such Person’s Affiliates or Associates is deemed to
beneficially own, directly or indirectly, within the meaning of Rule l3d-3
of
the General Rules and Regulations under the Exchange Act as in effect on the
date hereof;
(ii) which
such Person or any of such Person’s Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or upon
the
exercise of conversion rights, exchange rights, rights, warrants or options,
or
otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, (x) 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, (y) 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 or (z) 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(a) or Section 22 hereof
(“Original Rights”) or pursuant to Section 11(i) or Section 11(n) with respect
to an adjustment to Original Rights; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any security
by
reason of such agreement, arrangement or understanding 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 promulgated under the Exchange Act and (2) is not also
then reportable pursuant to Regulation 13D-G under the Exchange Act (or any
comparable or successor regulation); or
-2-
(iii) which
are
beneficially owned, directly or indirectly, by any other Person 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) for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to Section 1(d)(ii)(B)) or
disposing of such 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 l(d)), including, without limitation, in a fiduciary capacity,
by
an Exempt Person or by any other such officer, director or employee of an Exempt
Person, and provided further, that, notwithstanding any other language in this
Agreement, including without limitation the definition of Affiliates and
Associates, each of the children shall be deemed to Beneficially Own only one
third of the shares of Common Stock held in the ▇▇▇▇▇ ▇▇▇▇▇▇ Non-Exempt Marital
Trust and any successor trust.
(e) “Business
Day” shall mean any day other than a Saturday, a Sunday or a day on which
banking institutions in the State of New York or the city in which the principal
office of the Rights Agent is located are authorized or obligated by law or
executive order to close.
(f) “Close
of
Business” on any given date shall mean 5:00 P.M., New York City time, on such
date; provided, however, that if such date is not a Business Day it shall mean
5:00 P.M., New York City time, on the next succeeding Business Day.
(g) “Common
Stock” when used with reference to the Company shall mean the Common Stock,
presently par value $1.00 per share, of the Company. “Common Stock” when used
with reference to any Person other than the Company shall mean the common stock
(or, in the case of an unincorporated entity, the equivalent equity interest)
with the greatest voting power of such other Person or, if such other Person
is
a Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
-3-
(h) “Common
Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii)
hereof.
(i) “Current
Value” shall have the meaning set forth in Section 11(a)(iii) hereof.
(j) “Distribution
Date” shall have the meaning set forth in Section 3 hereof.
(k) “equivalent
preferred shares” shall have the meaning set forth in Section 11(b) hereof.
(l) “Exempt
Person” shall mean (i) the Company or any Subsidiary (as such term is
hereinafter defined) 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 Common Stock for
or
pursuant to the terms of any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of the Company or of
any
Subsidiary of the Company, and (ii) the ▇▇▇▇▇ ▇▇▇▇▇▇ Non-Exempt Marital Trust,
any successor trust and the trustees of such trusts (collectively, the “Trust
Parties”), for so long as the Trust Parties shall be the Beneficial Owners of
shares of stock of the Company representing, in the aggregate, 20% or more
of
the shares of the Common Stock then outstanding, but not more than 23% or more
of the shares of the Common Stock then outstanding; provided, however, that
the
foregoing shall cease to be an Exempt Person at such time when the Trust Parties
(1) shall become the Beneficial Owner of shares of stock of the Company
representing, in the aggregate, less than 20% of the shares of Common Stock
then
outstanding, or (2) shall become the Beneficial Owner of shares of stock of
the
Company representing, in the aggregate, more than 23% of the shares of the
Common Stock then outstanding.
(m) “Exchange
Ratio” shall have the meaning set forth in Section 24 hereof.
(n) “Expiration
Date” shall have the meaning set forth in Section 7 hereof.
(o) “Final
Expiration Date” shall have the meaning set forth in Section 7 hereof.
(p) “Flip-In
Event” shall have the meaning set forth in Section 11(a)(ii)
hereof.
(q) “NASDAQ”
shall mean The Nasdaq Stock Market.
(r) “New
York
Stock Exchange” shall mean the New York Stock Exchange, Inc.
-4-
(s) “Person”
shall mean any individual, firm, corporation, partnership, limited liability
company, trust or other entity, and shall include any successor (by merger
or
otherwise) to such entity.
(t) “Preferred
Stock” shall mean the Series B Junior Participating Preferred Stock, par value
$1.00 per share, of the Company having the rights and preferences set forth
in
the Form of Certificate of Designation attached to this Agreement as Exhibit
A.
(u) “Qualified
Offer” shall mean an all-cash tender offer for all outstanding shares of Common
Stock which meets all of the following requirements:
(i) on
or
prior to the date such offer is commenced within the meaning of Rule 14d-2(a)
of
the General Rules and Regulations under the Exchange Act, such Person:
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(A)
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has
on hand cash or cash equivalents for the full amount necessary to
consummate such offer and has irrevocably committed in writing to
the
Company to utilize such cash or cash equivalents for purposes of
such
offer if consummated and to set apart and maintain available such
cash or
cash equivalents for such purposes until the offer is consummated
or
withdrawn; or
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(B)
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has
all financing in the full amount necessary to consummate such offer
and
has:
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(1) entered
into, and provided to the Company certified copies of, definitive financing
agreements (including exhibits and related documents) for funds for such offer
which, when added to the amount of cash and cash equivalents available,
committed in writing, set apart and maintained in the same manner as described
in clause (A) above, are in an amount not less than the full amount necessary
to
consummate such offer, which agreements are with one or more responsible
financial institutions or other entities having the necessary financial capacity
and ability to provide such funds, and are subject only to customary terms
and
conditions (which shall in no event include conditions requiring access by
such
financial institutions to non-public information to be provided by the Company,
conditions based on the accuracy of any information concerning the Company,
or
conditions requiring the Company to make any representations, warranties or
covenants in connection with such financing), and
(2) provided
to the Company copies of all written materials prepared by such Person for
such
financial institutions in connection with entering into such financing
agreements; provided that, “the full amount necessary to consummate such offer”
in either clause (A) or (B) above shall be an amount sufficient to pay for
all
shares of Common Stock outstanding on a fully diluted basis in cash pursuant
to
the offer and the second-step transaction required by clause (v) below and
all
related expenses;
-5-
(ii) after
the
consummation of such offer, such Person, alone or together with one or more
direct or indirect wholly-owned Subsidiaries of such Person, owns (in fact)
Common Stock representing eighty-five percent (85%) or more of the then
outstanding Common Stock, excluding for purposes of determining the then
outstanding Common Stock under this clause (ii) those shares of Common Stock
beneficially owned (x) by persons who are directors and also officers of the
Company and (y) employee stock plans of the Company in which employee
participants do not have the right to determine confidentially whether shares
of
Common Stock held subject to the plan will be tendered in a tender or exchange
offer;
(iii) such
offer remains open for at least 60 Business Days; provided, however, that (x)
if
there is any increase in the price of such offer, such offer must remain open
for at least an additional 20 Business Days after the last such increase, (y)
such offer must remain open for at least 20 Business Days after the date that
any bona fide alternative offer is made which, in the opinion of one or more
investment banking firms designated by the Company, provides for consideration
per share in excess of that provided for in such offer, and (z) such offer
must
remain open for at least 20 Business Days after the date, if any, on which
such
Person reduces the per share price offered in accordance with clause (v)(y)
below (provided, in the case of each of clauses (x), (y) and (z) above, in
no
event will such offer have been outstanding for less than 60 Business Days);
provided further, however, that such offer need not remain open, as a result
of
this clause (iii), beyond (1) the time which any other offer satisfying the
criteria for a Qualified Offer is then required to be kept open under this
clause (iii), or (2) the scheduled expiration date, as such date may be extended
by public announcement on or prior to the then scheduled expiration date, of
any
other tender or exchange offer for Common Stock with respect to which the Board
of Directors has agreed to redeem the Rights immediately prior to acceptance
for
payment of Common Stock thereunder (unless such other offer is terminated prior
to its expiration without any Common Stock having been purchased thereunder);
(iv) such
offer is accompanied by a written opinion, in customary form, of a nationally
recognized investment banking firm which is addressed to the Company and the
holders of Common Stock other than such Person and states that the price to
be
paid to holders pursuant to the offer is fair from a financial point of view
to
such holders and includes any written presentation of such firm showing the
analysis and range of values underlying such conclusions and such written
opinion and any such presentation is updated and provided to the Company within
two Business Days prior to the date such offer is consummated;
(v) prior
to
or on the date that such offer is commenced within the meaning of Rule 14d-2(a)
of the General Rules and Regulations under the Exchange Act, such Person makes
an irrevocable written commitment to the Company and, with respect to clause
(x)
to its stockholders, (x) to consummate a transaction or transactions promptly
upon the completion of such offer (and in no event later than five Business
Days
thereafter), whereby all Common Stock not purchased in such offer will be
acquired at the same cash price per share paid in such offer, subject only
to
the condition that the Board of Directors shall have granted any approvals
required to enable such Person to consummate such transaction or transactions
following consummation of such offer without obtaining the vote of any other
stockholder, (y) that such Person will not make any amendment to the original
offer which reduces the per share price offered (other than a reduction to
reflect any dividend declared by the Company, other than a regular quarterly
dividend, after the commencement of such offer or any material change in the
capital structure of the Company initiated by the Company after the commencement
of such offer, whether by way of reclassification, recapitalization,
reorganization, repurchase or otherwise), changes the form of consideration
offered, or reduces the number of shares being sought or which is in any other
respect materially adverse to the Company’s stockholders, and (z) that neither
such Person nor any of its Affiliates or Associates will make any offer for
or
purchase any equity securities of the Company for a period of one year after
the
commencement of the original offer if such original offer does not result in
the
tender of the number of shares of Common Stock required to be purchased pursuant
to clause (ii) above, unless another tender offer by another party for all
outstanding Common Stock is commenced that (a) constitutes a Qualified Offer
(in
which event, any new offer by such Person or of any Affiliates or Associates
must be at a price no less than that provided for in such original offer) or
(b)
is approved by the Board of Directors of the Company (in which event, any new
offer by such Person or of any of its Affiliates or Associates must be at a
price no less than that provided for in such approved offer); and
-6-
(vi) in
addition to each of the requirements set forth above, such offer is not subject
to any financing, funding or similar condition, nor any condition relating
to
completion of or satisfaction with any due diligence or similar investigation,
and, subject to the foregoing, otherwise provides for usual and customary terms
and conditions.
(v) “Principal
Party” shall have the meaning set forth in Section 13(b) hereof.
(w) “Redemption
Date” shall have the meaning set forth in Section 7 hereof.
(x) “Redemption
Price” shall have the meaning set forth in Section 23 hereof.
(y) “Right
Certificate” shall have the meaning set forth in Section 3 hereof.
(z) “Securities
Act” shall mean the Securities Act of 1933, as amended.
(aa) “Section
11(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii)
hereof.
(bb) “Spread”
shall have the meaning set forth in Section 11(a)(iii) hereof.
(cc) “Stock
Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such, or such earlier date as a
majority of the Board of Directors shall become aware of the existence of an
Acquiring Person.
(dd) “Subsidiary”
of any Person shall mean any corporation or other entity of which securities
or
other ownership interests having ordinary voting power sufficient to elect
a
majority of the board of directors or other persons performing similar functions
are beneficially owned, directly or indirectly, by such Person, and any
corporation or other entity that is otherwise controlled by such Person, and
a
“wholly-owned Subsidiary” of any Person shall mean any corporation or other
entity of which all the securities or other ownership interests are beneficially
owned by such Person.
-7-
(ee) “Substitution
Period” shall have the meaning set forth in Section 11(a)(iii) hereof.
(ff) “Summary
of Rights” shall have the meaning set forth in Section 3 hereof.
(gg) “Trading
Day” shall have the meaning set forth in Section 11(d)(i) hereof.
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 hereof, shall prior
to
the Distribution Date be the holders of Common Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as
it may deem necessary or desirable.
Section
3. Issue
of Right Certificates.
(a) Until
the
Close of Business on the earlier of (i) the tenth day after the Stock
Acquisition Date or (ii) the tenth Business Day (or such later date as may
be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any Person
(other than an Exempt Person) of, or of the first public announcement of the
intention of such Person (other than an Exempt Person) to commence, a tender
or
exchange offer (other than a Qualified Offer) the consummation of which would
result in any Person (other than an Exempt Person) becoming the Beneficial
Owner
of shares of Common Stock aggregating 20% or more of the Common Stock then
outstanding (the earlier of such dates being herein referred to as the
“Distribution Date”, provided, however, that if either of such dates occurs
after the date of this Agreement and on or prior to the Record Date, then the
Distribution Date shall be the Record Date), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Stock registered in the names of the holders thereof and not by separate
Right Certificates, and (y) the Rights will be transferable only in connection
with the transfer of Common Stock. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Stock 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,
a
Right Certificate, in substantially the form of Exhibit B hereto (a “Right
Certificate”), evidencing one Right (subject to adjustment as provided herein)
for each share of Common Stock so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) On
the
Record Date, or as soon as practicable thereafter, the Company will send a
copy
of a Summary of Rights to Purchase Shares of Preferred Stock, in substantially
the form of Exhibit C hereto (the “Summary of Rights”), by first-class,
postage-prepaid mail, to each record holder of Common Stock as of the Close
of
Business on the Record Date (other than any Acquiring Person or any Associate
or
Affiliate of any Acquiring Person), at the address of such holder shown on
the
records of the Company. With respect to certificates for Common Stock
outstanding as of the Record Date (notwithstanding any reference or legend
on
such certificates relating to prior rights), until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights. Until the Distribution
Date
(or, if earlier, the Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding 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 Stock represented thereby.
-8-
(c) Rights
shall be issued in respect of all shares of Common Stock issued or disposed
of
(including, without limitation, upon disposition of Common Stock out of treasury
stock or issuance or reissuance of Common Stock out of authorized but unissued
shares) after the Record Date but prior to the earlier of the Distribution
Date
and the Expiration Date, or in certain circumstances provided in Section 22
hereof, after the Distribution Date. Certificates issued for Common Stock
(including, without limitation, upon transfer of outstanding Common Stock,
disposition of Common Stock out of treasury stock or issuance or reissuance
of
Common Stock out of authorized but unissued shares) after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date shall
have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
“This
certificate also evidences and entitles the holder hereof to certain rights
as
set forth in a Qualified Offer Plan Rights Agreement between Wilshire
Enterprises, Inc. (the “Company”) and Continental Stock Transfer & Trust
Company, as Rights Agent, dated as of December 4, 2008 and as amended from
time
to time (the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will
no
longer be evidenced by this certificate. The Company will mail to the holder
of
this certificate a copy of the Rights Agreement without charge after receipt
of
a written request therefor. Under certain circumstances, as set forth in the
Rights Agreement, Rights owned by or transferred to any Person who is or becomes
an Acquiring Person (as defined in the Rights Agreement) and certain transferees
thereof will become null and void and will no longer be
transferable.”
With
respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented
by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise
any
Rights associated with the Common Stock which are no longer outstanding.
-9-
Notwithstanding
this paragraph (c), 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 and of
assignment to be printed on the reverse thereof) shall be substantially in
the
form set forth in Exhibit B hereto and may have such marks of identification
or
designation and such legends, summaries or endorsements printed thereon as
the
Company may deem appropriate and as are not inconsistent with the provisions
of
this Agreement, or as may be required to comply with any applicable law or
with
any rule or regulation made pursuant thereto or with any rule or regulation
of
any stock exchange or interdealer quotation system on which the Rights may
from
time to time be listed or quoted, or to conform to usage. Subject to the
provisions of this Agreement, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-thousandths of a share of Preferred
Stock as shall be set forth therein at the price per one one-thousandth of
a
share of Preferred Stock set forth therein (the “Purchase Price”), but the
number of such one one-thousandths of a share of Preferred Stock and the
Purchase Price shall be subject to adjustment as provided herein.
Section
5. Countersignature
and Registration.
(a) The
Right
Certificates shall be executed on behalf of the Company by the Chairman of
the
Board and Chief Executive Officer of the Company, either manually or by
facsimile signature, shall have affixed thereto the Company’s seal or a
facsimile thereof and shall be attested by the Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
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.
(b) Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at an
office or agency designated for such purpose, 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 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.
(a) Subject
to the provisions of this Agreement, at any time after the Distribution Date
and
prior to the Expiration Date, any Right Certificate or Right Certificates may
be
transferred, split up, combined or exchanged for another Right Certificate
or
Right Certificates, entitling the registered holder to purchase a like number
of
one one-thousandths of a share of Preferred Stock as the Right Certificate
or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office
or
agency of the Rights Agent designated for such purpose. 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 of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
-10-
(b) Subject
to the provisions of this Agreement, 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 delivery
to the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section
7. Exercise
of Rights, Purchase Price; Expiration Date of Rights.
(a) Except
as
otherwise provided herein, the Rights shall become exercisable on the
Distribution Date, and thereafter the registered holder of any Right Certificate
may, subject to Section 11(a)(ii) hereof and except as otherwise provided
herein, exercise the Rights evidenced thereby in whole or in part upon surrender
of the Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the office or agency of
the
Rights Agent designated for such purpose, together with payment of the aggregate
Purchase Price with respect to the total number of one one-thousandths of a
share of Preferred Stock (or other securities, cash or other assets, as the
case
may be) as to which the Rights are exercised, at any time which is both after
the Distribution Date and prior to the time (the “Expiration Date”) that is the
earliest of (i) the Close of Business on December 4, 2018 (the “Final Expiration
Date”), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the “Redemption Date”) or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The
Purchase Price shall be initially $6.50 for each one one-thousandth of a share
of Preferred Stock purchasable upon the exercise of a Right. The Purchase Price
and the number of one one-thousandths of a share of Preferred Stock or other
securities or property to be acquired upon exercise of a Right shall be subject
to adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) of this Section 7.
(c) Except
as
otherwise provided herein, upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the aggregate Purchase Price for the shares of
Preferred Stock 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 hereof, in cash or by certified check, 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 Stock,
or
make available, if the Rights Agent is the transfer agent for the Preferred
Stock, certificates for the number of shares of Preferred Stock to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply
with
all such requests, or (B) requisition from a depositary agent appointed by
the
Company depositary receipts representing interests in such number of one
one-thousandths of a share of Preferred Stock as are to be purchased (in which
case certificates for the Preferred Stock represented by such receipts shall
be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs any such depositary agent to comply with such request, (ii)
when
appropriate, requisition from the Company the amount of cash to be paid in
lieu
of issuance of fractional shares in accordance with Section 14 hereof, (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.
-11-
(d) Except
as
otherwise provided herein, in case the registered holder of any Right
Certificate shall exercise less than all of the Rights evidenced thereby, a
new
Right Certificate evidencing Rights equivalent to the exercisable Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject
to
the provisions of Section 14 hereof.
(e) 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 transfer or exercise
of
Rights pursuant to Section 6 hereof or this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form
of assignment or form of election to purchase set forth on the reverse side
of
the Rights Certificate surrendered for such transfer or exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) 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.
-12-
Section
9. Availability
of Shares of Preferred Stock.
(a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock or any
shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So
long
as the shares of Preferred Stock issuable upon the exercise of Rights may be
listed or admitted to trading on any national securities exchange, or quoted
on
NASDAQ, 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.
(c) 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 shares of Preferred Stock
upon the exercise of Rights, to register and qualify such shares of Preferred
Stock under 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 such filing 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.
(d) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all shares of Preferred Stock delivered upon exercise
of Rights shall, at the time of delivery of the certificates therefor (subject
to payment of the Purchase Price), be duly and validly authorized and issued
and
fully paid and nonassessable shares.
(e) The
Company further covenants and agrees that it will pay when due and payable
any
and all federal and state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any shares
of Preferred Stock 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 or depositary receipts for the Preferred
Stock in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Stock upon the exercise
of
any Rights until any such tax shall have been paid (any such tax being payable
by that holder of such Right Certificate at the time of surrender) or until
it
has been established to the Company’s reasonable satisfaction that no such tax
is due.
-13-
Section
10. Preferred
Stock Record Date.
Each
Person in whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of
record of the shares of Preferred Stock 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 Stock transfer books
of
the Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock 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 Stock 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 and Kind of Shares and Number of
Rights.
The
Purchase Price, the number of shares of Preferred Stock 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.
(a) (i)
In
the event the Company shall at any time after the date of this Agreement (A)
declare and pay a dividend on the Preferred Stock payable in shares of Preferred
Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares of Preferred Stock
or (D) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and 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 Stock transfer books of the Company were
open, the holder 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.
(ii) Subject
to Section 24 of this Agreement, in the event any Person becomes an Acquiring
Person (the first occurrence of such event being referred to hereinafter as
the
“Flip-In Event”), then (A) the Purchase Price shall be adjusted to be the
Purchase Price in effect immediately prior to the Flip-In Event multiplied
by
the number of one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such Flip-In Event, whether or not
such Right was then exercisable, and (B) each holder of a Right, except as
otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof,
shall thereafter have the right to receive, upon exercise thereof at a price
equal to the Purchase Price (as so adjusted), in accordance with the terms
of
this Agreement and in lieu of shares of Preferred Stock, such number of shares
of Common Stock as shall equal the result obtained by dividing the Purchase
Price (as so adjusted) by 50% of the current per share market price of the
Common Stock (determined pursuant to Section 11(d) hereof) on the date of such
Flip-In Event; provided, however, that the Purchase Price (as so adjusted)
and
the number of shares of Common Stock so receivable upon exercise of a Right
shall, following the Flip-In Event, be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof. Notwithstanding anything
in
this Agreement to the contrary, however, from and after the Flip-In Event,
any
Rights that are beneficially owned by (x) any Acquiring Person (or any Affiliate
or Associate of any Acquiring Person), (y) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who becomes a transferee after the Flip-In
Event or (z) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently with the Flip-In
Event pursuant to either (1) a transfer from the Acquiring Person to holders
of
its equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(2)
a transfer which the Board of Directors has determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding the
provisions of this paragraph, and subsequent transferees of such Persons, shall
be void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights under any
provision of this Agreement. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 11(a)(ii) 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 an Acquiring
Person or its Affiliates, Associates or transferees hereunder. From and after
the Flip-In Event, no Right Certificate shall be issued pursuant to Section
3 or
Section 6 hereof 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. From and after the occurrence
of
an event specified in Section 13(a) hereof, any Rights that theretofore have
not
been exercised pursuant to this Section 11(a)(ii) shall thereafter be
exercisable only in accordance with Section 13 and not pursuant to this Section
11(a)(ii).
-14-
(iii) The
Company may at its option substitute for a share of Common Stock issuable upon
the exercise of Rights in accordance with the foregoing subparagraph (ii) a
number of shares of Preferred Stock or fraction thereof such that the current
per share market price of one share of Preferred Stock multiplied by such number
or fraction is equal to the current per share market price of one share of
Common Stock. In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii), the Board of Directors shall, to the extent permitted by applicable law
and any material agreements then in effect to which the Company is a party
(A)
determine the excess (such excess, the “Spread”) of (1) the value of the shares
of Common Stock issuable upon the exercise of a Right in accordance with the
foregoing subparagraph (ii) (the “Current Value”) over (2) the Purchase Price
(as adjusted in accordance with the foregoing subparagraph (ii)), and (B) with
respect to each Right (other than Rights which have become void pursuant to
the
foregoing subparagraph (ii)), make adequate provision to substitute for the
shares of Common Stock issuable in accordance with the foregoing subparagraph
(ii) upon exercise of the Right and payment of the Purchase Price (as adjusted
in accordance therewith), (1) cash, (2) a reduction in such Purchase Price,
(3)
shares of Preferred Stock or other equity securities of the Company (including,
without limitation, shares or fractions of shares of preferred stock which,
by
virtue of having dividend, voting and liquidation rights substantially
comparable to those of the shares of Common Stock, are deemed in good faith
by
the Board of Directors to have substantially the same value as the shares of
Common Stock (such shares of Preferred Stock and shares or fractions of shares
of preferred stock are hereinafter referred to as “Common Stock Equivalents”)),
(4) debt securities of the Company, (5) other assets, or (6) any combination
of
the foregoing, having a value which, when added to the value of the shares
of
Common Stock issued upon exercise of such Right, shall have an aggregate value
equal to the Current Value (less the amount of any reduction in such Purchase
Price), where such aggregate value has been determined by the Board of Directors
upon the advice of a nationally recognized investment banking firm selected
in
good faith by the Board of Directors; provided, however, that if the Company
shall not make adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the Flip-In Event (the “Section 11(a) (ii)
Trigger Date”), then the Company shall be obligated to deliver, to the extent
permitted by applicable law and any material agreements then in effect to which
the Company is a party, upon the surrender for exercise of a Right and without
requiring payment of such Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If, upon the
occurrence of the Flip-In Event, the Board of Directors shall determine in
good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, then, if the
Board of Directors so elects, the thirty (30) day period set forth above may
be
extended to the extent necessary, but not more than ninety (90) days after
the
Section 11(a) (ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such thirty (30)
day
period, as it may be extended, is herein called the “Substitution Period”). To
the extent that the Company determines that some action need be taken pursuant
to the second and/or third sentence of this Section 11(a)(iii), the Company
(x)
shall provide, subject to Section 11(a)(ii) hereof and the last sentence of
this
Section 11(a)(iii) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek 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(a)(iii), the value of the shares of
Common Stock shall be the current per share market price (as determined pursuant
to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share
or
fractional value of any “Common Stock Equivalent” shall be deemed to equal the
current per share market price of the Common Stock. The Board of Directors
of
the Company may, but shall not be required to, establish procedures to allocate
the right to receive shares of Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii).
-15-
(b) In
case
the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Preferred Stock (or shares having the same rights, privileges and preferences
as
the Preferred Stock (“equivalent preferred shares”)) or securities convertible
into Preferred Stock or equivalent preferred shares at a price per share of
Preferred Stock or equivalent preferred shares (or having a conversion price
per
share, if a security convertible into shares of Preferred Stock or equivalent
preferred shares) less than the then current per share market price of the
Preferred Stock (determined pursuant to Section 11(d) hereof) 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 shares
of Preferred Stock and equivalent preferred shares outstanding on such record
date plus the number of shares of Preferred Stock and equivalent preferred
shares which the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred shares so to be offered (and/or
the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock and equivalent preferred
shares outstanding on such record date plus the number of additional shares
of
Preferred Stock and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock 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. Shares of Preferred Stock and equivalent preferred
shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall
be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In
case
the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Stock (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 or assets (other than
a
regular quarterly cash dividend or a dividend payable in Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such
record date by a fraction, the numerator of which shall be the then current
per
share market price of the Preferred Stock (determined pursuant to Section 11(d)
hereof) on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Preferred Stock, and the
denominator of which shall be such current per share market price (determined
pursuant to Section 11(d) hereof) of the Preferred Stock; 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.
-16-
(d) (i)
Except as otherwise provided herein, 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(d)(i)) on any date shall be deemed to be
the
average of the daily closing prices per share of such Security for the 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 a period following the
announcement by the issuer of such Security of (A) a dividend or distribution
on
such Security payable in shares of such Security or securities convertible
into
such shares, or (B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current per
share market price 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 by the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the AMEX
or,
if the Security is not listed or admitted to trading on the AMEX, 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 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.
(ii) For
the
purpose of any computation hereunder, if the Preferred Stock is publicly traded,
the “current per share market price” of the Preferred Stock shall be determined
in accordance with the method set forth in Section 11(d)(i). If the Preferred
Stock is not publicly traded but the Common Stock is publicly traded, the
“current per share market price” of the Preferred Stock shall be conclusively
deemed to be the current per share market price of the Common Stock as
determined pursuant to Section 11(d)(i) multiplied by the then applicable
Adjustment Number (as defined in and determined in accordance with the
Certificate of Designation for the Preferred Stock). If neither the Common
Stock
nor the Preferred Stock is publicly traded, “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, whose determination shall be described in a statement
filed with the Rights Agent.
(e) No
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made
to
the nearest cent or to the nearest one hundred-thousandth of a share of
Preferred Stock or one-hundredth of a share of Common Stock or other share
or
security as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which requires
such adjustment or (ii) the Expiration Date.
-17-
(f) If
as a
result of an adjustment made pursuant to Section 11(a) hereof, the holder of
any
Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than the Preferred Stock, thereafter the
Purchase Price and the number of such other shares so receivable upon exercise
of a 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 Stock contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h), 11(i)
and 11(m) hereof, as applicable, and the provisions of Sections 7, 9, 10, 13
and
14 hereof with respect to the Preferred Stock shall apply on like terms to
any
such other shares.
(g) All
Rights originally issued by the Company subsequent to any adjustment made to
the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-thousandths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless
the Company shall have exercised its election as provided in Section 11(i),
upon
each adjustment of the Purchase Price as a result of the calculations made
in
Sections 11(b) and 11(c), each Right outstanding immediately prior to the making
of such adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-thousandths of a share of
Preferred Stock (calculated to the nearest one hundred-thousandth of a share
of
Preferred Stock) obtained by (i) multiplying (x) the number of one
one-thousandths of a share purchasable upon the exercise of a Right immediately
prior to such adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment.
(i) The
Company may elect on or after the date of any adjustment of the Purchase Price
pursuant to Sections 11(b) or 11(c) hereof to adjust the number of Rights,
in
substitution for any adjustment in the number of one one-thousandths of a share
of Preferred Stock purchasable 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 share of Preferred Stock for which
a
Right was exercisable immediately prior to such adjustment. Each Right held
of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one-hundredth) 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. Such record date
may
be the date on which the Purchase Price is adjusted or any day thereafter,
but,
if the Right Certificates have been issued, shall be at least 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(i),
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 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
-18-
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of one
one-thousandths of a share of Preferred Stock issuable upon the exercise of
a
Right, the Right Certificates theretofore and thereafter issued may continue
to
express the Purchase Price and the number of one one-thousandths of a share
of
Preferred Stock which were expressed in the initial Right Certificates issued
hereunder.
(k) Before
taking any action that would cause an adjustment reducing the Purchase Price
below the then par value, if any, of the fraction of Preferred Stock or other
shares of capital stock issuable upon exercise of a Right, 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 shares of Preferred Stock or other such shares at such adjusted
Purchase Price.
(l) In
any
case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event issuing to the holder
of
any Right exercised after such record date the Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over
and
above the Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver
to
such holder a due ▇▇▇▇ or other appropriate instrument evidencing such holder’s
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such adjustments 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 Stock, issuance wholly for cash
of
any shares of Preferred Stock at less than the current market price, issuance
wholly for cash of Preferred Stock or securities which by their terms are
convertible into or exchangeable for Preferred Stock, dividends on Preferred
Stock payable in shares of Preferred Stock or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the Company
to holders of its Preferred Stock shall not be taxable to such stockholders.
(n) Anything
in this Agreement to the contrary notwithstanding, in the event that at any
time
after the date of this Agreement and prior to the Distribution Date, the Company
shall (i) declare and pay any dividend on the Common Stock payable in Common
Stock or (ii) effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of a dividend payable
in
Common Stock) into a greater or lesser number of shares of Common Stock, then,
in each such case, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights thereafter associated
with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
-19-
(o) The
Company agrees that, after the earlier of the Distribution Date or the Stock
Acquisition Date, it will not, except as permitted by Sections 23, 24 or 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
Section
12. Certificate
of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file
with
the Rights Agent and with each transfer agent for the Common Stock and the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof
(if
so required under Section 25 hereof). 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.
(a) In
the
event, directly or indirectly, at any time after the Flip-In Event (i) the
Company shall consolidate with or shall merge into any other Person, (ii) any
Person shall merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with
such
merger, all or part of the Common Stock shall be changed into or exchanged
for
stock or other securities of any other Person (or of the Company) or cash or
any
other property, or (iii) the Company shall sell or otherwise transfer (or one
or
more of its Subsidiaries shall sell 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 (other than the Company or one or more wholly-owned Subsidiaries
of
the Company), then upon the first occurrence of such event, proper provision
shall be made so that: (A) each holder of a Right (other than Rights which
have
become void pursuant to Section 11(a)(ii) hereof) shall thereafter have the
right to receive, upon the exercise thereof at the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof), in accordance
with the terms of this Agreement and in lieu of shares of Preferred Stock or
Common Stock of the Company, such number of validly authorized and issued,
fully
paid, non-assessable and freely tradeable shares of Common Stock 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 equal
the result obtained by dividing the Purchase Price (as theretofore adjusted
in
accordance with Section 11(a)(ii) hereof) by 50% of the current per share market
price of the Common Stock of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; provided, however, that the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof) and the number of shares
of Common Stock of such Principal Party so receivable upon exercise of a Right
shall be subject to further adjustment as appropriate in accordance with Section
11(f) hereof to reflect any events occurring in respect of the Common Stock
of
such Principal Party after the occurrence of such consolidation, merger, sale
or
transfer; (B) 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; (C) the term
“Company” shall thereafter be deemed to refer to such Principal Party; and (D)
such Principal Party shall take such steps (including, but not limited to,
the
reservation of a sufficient number of its shares of Common Stock in accordance
with Section 9 hereof) in connection with such consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of its Common Stock 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(a), 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 Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this Section 13(a), 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.
-20-
(b) “Principal
Party” shall mean:
(i) in
the
case of any transaction described in (i) or (ii) of the first sentence of
Section 13(a) hereof: (A) the Person that is the issuer of the securities into
which the shares of Common Stock are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer the shares of Common
Stock
of which have the greatest aggregate market value of shares outstanding, or
(B)
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 shares of Common Stock 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 (iii) of the first sentence of Section
13(a) hereof, 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 Stock having the greatest aggregate market value of shares outstanding;
-21-
provided,
however, that in any such case described in the foregoing clause (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time or has 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 Stock of which is and has 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 Stock
of
all of which is and has been so registered, the term “Principal Party” shall
refer to whichever of such Persons is the issuer of Common Stock 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.
(c) The
Company shall not consummate any consolidation, merger, sale or transfer
referred to in Section 13(a) hereof unless prior thereto the Company and the
Principal Party involved therein shall have executed and delivered to the Rights
Agent an agreement confirming that the requirements of Sections 13(a) and (b)
hereof 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 Sections 13(a) and (b) hereof and providing
that, as soon as practicable after executing such agreement pursuant to this
Section 13, the Principal Party will:
(i) 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;
(ii) use
its
best efforts, if the Common Stock of the Principal Party shall be listed or
admitted to trading on the AMEX, 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 AMEX, the New York Stock Exchange or such securities exchange,
or,
if the Common Stock of the Principal Party shall not be listed or admitted
to
trading on the AMEX, 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 system then
in
use;
(iii) 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
-22-
(iv) obtain
waivers of any rights of first refusal or preemptive rights in respect of the
Common Stock of the Principal Party subject to purchase upon exercise of
outstanding Rights.
(d) In
case
the Principal Party has provision in any of its authorized securities or in
its
certificate of incorporation or by-laws or other instrument governing its
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, shares of Common Stock or Common Stock
Equivalents of such Principal Party at less than the then current market price
per share thereof (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock or Common Stock Equivalents
of such Principal Party at less than such then current market price, or (ii)
providing for any special payment, tax or similar provision in connection with
the issuance of the Common Stock of such Principal Party pursuant to the
provisions of 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.
(e) The
Company covenants and agrees that it shall not, at any time after the Flip-In
Event, enter into any transaction of the type described in clauses (i) through
(iii) of Section 13(a) hereof 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(b) hereof 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.
(f) The
provisions of Sections 13(a), 13(b), 13(c), 13(d) and 13(e) hereof shall not
apply to a transaction which (i) is consummated following completion of a
Qualified Offer and (ii) complies with and is effected in accordance with clause
(v)(x) of Section 1(u) hereof.
-23-
Section
14. Fractional
Rights and Fractional Shares.
(a) 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(n) hereof). 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(a), the current
market value of a whole Right shall be the closing price of the Rights for
the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price 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 AMEX or, if the Rights are
not listed or admitted to trading on the AMEX, 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 fair value
of
the Rights on such date as determined in good faith by the Board of Directors
of
the Company shall be used.
(b) The
Company shall not be required to issue fractions of Preferred Stock (other
than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock) or to distribute certificates which evidence fractional shares
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon the exercise or exchange
of
Rights. Interests in fractions of Preferred Stock in integral multiples of
one
one-thousandth of a share of Preferred Stock 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 Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth of a share of Preferred Stock, 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 whole share of Preferred Stock (as
determined in accordance with Section 14(a) hereof) for the Trading Day
immediately prior to the date of such exercise or exchange.
(c) The
Company shall not be required to issue fractions of shares of Common Stock
or to
distribute certificates which evidence fractional shares of Common Stock upon
the exercise or exchange of Rights. In lieu of such fractional shares of Common
Stock, the Company shall pay to the registered holders of the Right Certificates
with regard to which such fractional shares of Common Stock would otherwise
be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock (as determined in accordance with Section
14(a) hereof) for the Trading Day immediately prior to the date of such exercise
or exchange.
(d) The
holder of a Right by the acceptance of the Right expressly waives his right
to
receive any fractional Rights or any fractional shares upon exercise or exchange
of a Right (except as provided above).
-24-
Section
15. Rights
of Action.
All
rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any registered holder
of
any Right Certificate (or, prior to the Distribution Date, of the Common Stock),
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 Stock), on his
own behalf and for his own benefit, may enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise
act
in respect of, his right to exercise the Rights evidenced by such Right
Certificate (or, prior to the Distribution Date, such Common Stock) in the
manner provided therein and in this Agreement. Without limiting the foregoing
or
any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to 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 Stock;
(b) after
the
Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office or agency of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer; 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 Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the
Right Certificates or the Common Stock certificate made by anyone other than
the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to Section 7(e) hereof, 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 Stock or
any
other securities of the Company which may at any time be issuable on the
exercise or exchange 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 this Agreement), or to
receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have been exercised or exchanged
in
accordance with the provisions hereof.
-25-
Section
18. Concerning
the Rights Agent.
(a) The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and 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 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.
(b) The
Rights Agent shall be protected and shall incur no liability for, or in respect
of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Stock or Common Stock or for other securities
of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section
19. Merger
or Consolidation or Change of Name of Rights Agent.
(a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer
or
corporate trust powers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto; provided, that such corporation would be eligible for appointment as
a
successor Rights Agent under the provisions of Section 21 hereof. 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.
(b) 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.
-26-
Section
20. Duties
of Rights Agent.
The
Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) The
Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact
or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board and Chief Executive Officer
and
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The
Rights Agent shall be liable hereunder to the Company and any other Person
only
for its own gross negligence, bad faith or willful misconduct.
(d) The
Rights Agent shall not be liable for or by reason of any of the statements
of
fact or recitals contained in this Agreement or in the Right Certificates
(except 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.
(e) The
Rights Agent shall not be under any responsibility in respect of the validity
of
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any
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(a)(ii) hereof) or any change or adjustment in the
terms of the Rights provided for in Sections 3, 11, 13, 23 and 24, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after receipt of a certificate furnished pursuant to Section 12,
describing 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 shares of Preferred Stock or other securities to be issued
pursuant to this Agreement or any Right Certificate or as to whether any shares
of Preferred Stock or other securities will, when issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The
Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and
other
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions
of this Agreement.
-27-
(g) The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any person reasonably
believed by the Rights Agent to be one of the Chairman of the Board and Chief
Executive Officer or the Secretary of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not
be
liable for any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or
such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the
date
any officer of the Company actually receives such application unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission),
the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The
Rights Agent and any stockholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable for
any
act, default, neglect or misconduct of any such attorneys or agents or for
any
loss to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.
(j) 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) or a transferee thereof, the Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
-28-
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 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Stock or Preferred Stock by
registered or certified mail, and, following the Distribution Date, to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to
each transfer agent of the Common Stock or Preferred Stock by registered or
certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or
be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal
or
after it has been notified in writing of such resignation or incapacity by
the
resigning or incapacitated Rights Agent or by the 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 organized and doing business under the laws of the United
States or the laws of any state of the United States or the District of
Columbia, in good standing, having an office in the State of Connecticut, the
State of New York or the State of New Jersey, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent 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 Stock or Preferred Stock, 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 forms 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 Stock following
the
Distribution Date and prior to the Expiration Date, the Company may with respect
to shares of Common Stock so issued or sold pursuant to (i) the exercise of
stock options, (ii) under any employee plan or arrangement, (iii) upon the
exercise, conversion or exchange of securities, notes or debentures issued
by
the Company or (iv) a contractual obligation of the Company, in each case
existing prior to the Distribution Date, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale.
Section
23. Redemption.
(a) The
Board
of Directors of the Company may, at any time prior to the Flip-In Event, redeem
all but not less than all the then outstanding Rights at a redemption price
of
$.01 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring in respect of the Common Stock after
the date hereof (the redemption price being hereinafter referred to as the
“Redemption Price”). 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. The Redemption Price shall be payable, at the
option of the Company, in cash, shares of Common Stock, or such other form
of
consideration as the Board of Directors shall determine.
-29-
(b) Immediately
upon the action of the Board of Directors ordering the redemption of the Rights
pursuant to paragraph (a) of this Section 23 (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. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give,
or
any defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors ordering the
redemption of the Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the Company shall mail
a
notice of redemption to all the holders of the then outstanding Rights 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 Stock. 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.
Section
24. Exchange.
(a) The
Board
of Directors of the Company may, at its option, at any time after the Flip-In
Event, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provisions
of Section 11(a)(ii) hereof) for Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring in respect of the Common Stock
after the date hereof (such amount per Right being hereinafter referred to
as
the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after an Acquiring
Person shall have become the Beneficial Owner of shares of Common Stock
aggregating 50% or more of the shares of Common Stock then outstanding. From
and
after the occurrence of an event specified in Section 13(a) hereof, any Rights
that theretofore have not been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a). 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.
(b) Immediately
upon the effectiveness of the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section
24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of the Rights so exchanged at their
last addresses as they appear upon the registry books of the Rights Agent.
Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will
state the method by which the exchange of the shares of Common Stock for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant
to
the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
-30-
(c) The
Company may at its option substitute, and, in the event that there shall not
be
sufficient shares of Common Stock issued but not outstanding or authorized
but
unissued to permit an exchange of Rights for Common Stock as contemplated in
accordance with this Section 24, the Company shall substitute to the extent
of
such insufficiency, for each share of Common Stock that would otherwise be
issuable upon exchange of a Right, a number of shares of Preferred Stock or
fraction thereof (or equivalent preferred shares, as such term is defined in
Section 11(b)) such that the current per share market price (determined pursuant
to Section 11(d) hereof) of one share of Preferred Stock (or equivalent
preferred share) multiplied by such number or fraction is equal to the current
per share market price of one share of Common Stock (determined pursuant to
Section 11(d) hereof) as of the date of such exchange.
Section
25. Notice
of Certain Events.
(a) In
case
the Company shall at any time after the earlier of the Distribution Date or
the
Stock Acquisition Date propose (i) to pay any dividend payable in stock of
any
class to the holders of its Preferred Stock or to make any other distribution
to
the holders of its Preferred Stock (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Stock (other
than
a reclassification involving only the subdivision or combination of outstanding
Preferred Stock), (iv) to effect the liquidation, dissolution or winding up
of
the Company, or (v) to pay any dividend on the Common Stock payable in Common
Stock or to effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of dividends in Common
Stock), then, in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
dividend, or distribution or offering of rights or warrants, or the date on
which such liquidation, dissolution, winding up, reclassification, subdivision,
combination or consolidation is to take place and the date of participation
therein by the holders of the Common Stock and/or Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Stock for purposes of such action,
and
in the case of any such other action, at least 10 days prior to the date of
the
taking of such proposed action or the date of participation therein by the
holders of the Common Stock and/or Preferred Stock, whichever shall be the
earlier.
-31-
(b) In
case
any event described in Section 11(a)(ii) or Section 13 shall occur then the
Company shall as soon as practicable thereafter give to each holder of a Right
Certificate (or if occurring prior to the Distribution Date, the holders of
the
Common Stock) in accordance with Section 26 hereof, a notice of the occurrence
of such event, which notice shall describe such event and the consequences
of
such event to holders of Rights under Section 11(a)(ii) and Section 13 hereof.
Section
26. Notices.
Notices
or demands authorized by this Agreement to be given or made by the Rights Agent
or by the holder of any 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:
Wilshire
Enterprises, Inc.
▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
S. ▇▇▇▇▇▇ ▇▇▇▇
with
a
copy to:
▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ PC
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Subject
to the provisions of Section 21 hereof, any notice or demand authorized by
this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent 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:
Chairman of the Board
Notices
or demands authorized by this Agreement to be given or made by the Company
or
the Rights Agent to the holder of any Right Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company.
Section
27. Supplements
and Amendments.
Except
as provided in the penultimate sentence of this Section 27, 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 the Rights. At any time when the Rights are no longer redeemable, except
as
provided in the penultimate sentence of this Section 27, the Company may, and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights, provided that no such
supplement or amendment may (a) 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), (b) cause this Agreement again to become amendable other
than in accordance with this sentence or (c) cause the Rights again to become
redeemable. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which changes the Redemption
Price. Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment, provided that any supplement or amendment that does
not
amend Sections 18, 19, 20 or 21 hereof or this Section 27 in a manner adverse
to
the Rights Agent shall become effective immediately upon execution by the
Company, whether or not also executed by the Rights Agent.
-32-
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 other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock) 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 Stock).
Section
30. Determinations
and Actions by the Board of Directors.
(a) 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
whether: to exchange the outstanding Rights for Common Stock pursuant to Section
24; an offer is a Qualified Offer; to redeem or not redeem the Rights; or to
amend or not to amend this Agreement). All such actions, calculations,
interpretations and determinations that are done or made by the Board of
Directors of the Company in good faith, shall be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights, as such, and all
other parties.
(b) Nothing
contained in this Agreement shall be deemed to be in derogation of the
obligation of the Board of Directors of the Company to exercise its fiduciary
duty. Without limiting the foregoing, nothing contained herein shall be
construed to suggest or imply that the Board of Directors shall not be entitled
to reject any Qualified Offer or any other tender offer or other acquisition
proposal, or to recommend that holders of Common Stock reject any Qualified
Offer or any other tender offer or other acquisition proposal, or to take any
other action (including, without limitation, the commencement, prosecution,
defense or settlement of any litigation and the submission of additional or
alternative offers or other proposals) with respect to any Qualified Offer
or
any other tender offer or other acquisition proposal that the Board of Directors
believes is necessary or appropriate in the exercise of such fiduciary duty.
-33-
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 Delaware and for all purposes
shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.
Section
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
Headings.
Descriptive headings of the several Sections of this Agreement are inserted
for
convenience only and shall not control or affect the meaning or construction
of
any of the provisions hereof.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
|
WILSHIRE
ENTERPRISES, INC.
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||
|
By:
|
/s/
▇. ▇▇▇▇▇▇ ▇▇▇▇
|
|
|
▇.
▇▇▇▇▇▇ ▇▇▇▇
|
||
|
Chairman
of the Board and
|
||
|
Chief
Executive Officer
|
||
|
CONTINENTAL
STOCK TRANSFER &
|
||
|
TRUST
COMPANY,
as Rights Agent
|
||
|
By:
|
/s/
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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Vice
President
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-34-
Exhibit
A
FORM
OF
CERTIFICATE
OF DESIGNATION
of
SERIES
B JUNIOR PARTICIPATING PREFERRED STOCK
of
WILSHIRE
ENTERPRISES, INC.
Pursuant
to Section 151 of the General Corporation Law
of
the State of Delaware
WILSHIRE
ENTERPRISES, INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions
of
Section 103 thereof, DOES HEREBY CERTIFY:
That
pursuant to the authority vested in the Board of Directors in accordance with
the provisions of the Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on December 3, 2008 adopted the
following resolution creating a series of 50,000 shares of Preferred Stock
designated as “Series B Junior Participating Preferred Stock”:
RESOLVED,
that
pursuant to the authority vested in the Board of Directors of this Corporation
in accordance with the provisions of the Restated Certificate of Incorporation,
a series of Preferred Stock, par value $1.00 per share, of the Corporation
be
and hereby is created, and that the designation and number of shares thereof
and
the voting and other powers, preferences and relative, participating, optional
or other rights of the shares of such series and the qualifications, limitations
and restrictions thereof are as follows:
SERIES
B JUNIOR PARTICIPATING PREFERRED STOCK
1. Designation
and Amount.
There
shall be a series of Preferred Stock that shall be designated as “Series B
Junior Participating Preferred Stock,” and the number of shares constituting
such series shall be 50,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, however, that no decrease
shall reduce the number of shares of Series B Junior Participating Preferred
Stock to less than the number of shares then issued and outstanding plus the
number of shares issuable upon exercise of outstanding rights, options or
warrants or upon conversion of outstanding securities issued by the Corporation.
A-1
2. Dividends
and Distribution.
(A) Subject
to the prior and superior rights of the holders of any shares of any class
or
series of stock of the Corporation ranking prior and superior to the shares
of
Series B Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series B Junior Participating Preferred Stock, in
preference to the holders of shares of any class or series of stock of the
Corporation ranking junior to the Series B Junior Participating Preferred Stock
in respect thereof, 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 January, April, July and October,
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 B Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10.00 or (b) the Adjustment Number (as
defined below) times the aggregate per share amount of all cash dividends,
and
the Adjustment Number 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, par
value $1.00 per share, of the Corporation (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 B Junior Participating Preferred Stock. The
“Adjustment Number” shall initially be 1,000. In the event the Corporation shall
at any time after December 15, 2008 (i) declare and pay any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect immediately
prior
to such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of 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 B Junior
Participating Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than
a
dividend payable in shares of Common Stock).
(C) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series B Junior
Participating Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series B Junior Participating
Preferred Stock, 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 B Junior
Participating 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 B Junior Participating 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 B Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days prior to
the
date fixed for the payment thereof.
A-2
3. Voting
Rights.
The
holders of shares of Series B Junior Participating Preferred Stock shall have
the following voting rights:
(A) Each
share of Series B Junior Participating Preferred Stock shall entitle the holder
thereof to a number of votes equal to the Adjustment Number on all matters
submitted to a vote of the stockholders of the Corporation.
(B) Except
as
otherwise provided herein, in any other Certificate of Designation creating
a
series of Preferred Stock or any similar stock, or by law, the holders of shares
of Series B Junior Participating 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) If,
at
the time of any annual meeting of stockholders for the election of directors,
the equivalent of six quarterly dividends (whether or not consecutive) payable
on any share or shares of Series B Junior Participating Preferred Stock are
in
default, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting together with
the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series B Junior Participating Preferred Stock,
voting separately as a class to the exclusion of the holders of Common Stock,
shall be entitled at said meeting of stockholders (and at each subsequent annual
meeting of stockholders), unless all dividends in arrears have been paid or
declared and set apart for payment prior thereto, to vote for the election
of
two additional directors of the Corporation, the holders of any Series B Junior
Participating Preferred Stock being entitled to cast that number of votes per
share of Series B Junior Participating Preferred Stock as specified in clause
(A) of this Section 3. Each such additional director shall not be a member
of
Class I, Class II or Class III of the Board of Directors of the Corporation,
but
shall serve until the next annual meeting of stockholders for the election
of
directors, or until his successor shall be elected and shall qualify, or until
his right to hold such office terminates pursuant to the provisions of this
Section 3(C). Until the default in payments of all dividends which permitted
the
election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time without cause only by the affirmative vote of the holders of the shares
of
Series B Junior Participating Preferred Stock at the time entitled to cast
a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series B Junior Participating
Preferred Stock shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent like default
in
payments of dividends. Upon the termination of the foregoing special voting
rights, the terms of office of all persons who may have been elected directors
pursuant to said special voting rights shall forthwith terminate, and the number
of directors constituting the Board of Directors shall be reduced by two. The
voting rights granted by this Section 3(C) shall be in addition to any other
voting rights granted to the holders of the Series B Junior Participating
Preferred Stock in this Section 3.
(D) Except
as
required by law, by Section 3(C) and by Section 10 hereof, holders of Series
B
Junior Participating 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.
A-3
4. Certain
Restrictions.
(A) Whenever
quarterly dividends or other dividends or distributions payable on the Series
B
Junior Participating 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 B Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare
or pay dividends on, make any other distributions on, or redeem or purchase
or
otherwise acquire for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series
B
Junior Participating Preferred Stock;
(ii) declare
or pay dividends on 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 B Junior Participating Preferred Stock, except
dividends paid ratably on the Series B Junior Participating 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;
or
(iii) purchase
or otherwise acquire for consideration any shares of Series B Junior
Participating Preferred Stock, or any shares of stock ranking on a parity with
the Series B Junior Participating 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 Series B Junior Participating Preferred Stock,
or
to such holders and holders of any such shares ranking on a parity therewith,
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.
5. Reacquired
Shares.
Any
shares of Series B Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired promptly
after the acquisition thereof. All such shares shall upon their retirement
become authorized but unissued shares of Preferred Stock and may be reissued
as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to any conditions and
restrictions on issuance set forth herein.
A-4
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 to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series B Junior Participating Preferred Stock
shall have received an amount per share (the “Series B Liquidation Preference”)
equal to the greater of (i) $1.00 plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (ii) the Adjustment Number times the per share amount of all
cash and other property to be distributed in respect of the Common Stock upon
such liquidation, dissolution or winding up of the Corporation.
(B) In
the
event, however, that there are not sufficient assets available to permit payment
in full of the Series B 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 B Junior Participating Preferred Stock in respect
thereof, then the assets available for such distribution shall be distributed
ratably to the holders of the Series B Junior Participating Preferred Stock
and
the holders of such parity shares in proportion to their respective liquidation
preferences.
(C) Neither
the merger or consolidation of the Corporation into or with another entity
nor
the merger or consolidation of any other entity 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.
7. Consolidation,
Merger, Etc.
In case
the Corporation shall enter into any consolidation, merger, combination or
other
transaction in which the outstanding 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 B Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed in an amount per share equal
to the Adjustment Number 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.
8. No
Redemption.
Shares
of Series B Junior Participating Preferred Stock shall not be subject to
redemption by the Company.
9. Ranking.
The
Series B Junior Participating Preferred Stock shall rank junior to all other
series of the Preferred Stock as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, unless
the
terms of any such series shall provide otherwise, and shall rank senior to
the
Common Stock as to such matters.
10. Amendment.
At any
time that any shares of Series B Junior Participating Preferred Stock are
outstanding, the Restated Certificate of Incorporation of the Corporation shall
not be amended, by merger, consolidation or otherwise, in any manner which
would
materially alter or change the powers, preferences or special rights of the
Series B Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds of the outstanding
shares of Series B Junior Participating Preferred Stock, voting separately
as a
class.
A-5
11. Fractional
Shares.
Series
B Junior Participating 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 B Junior
Participating Preferred Stock.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate this 4th day
of
December, 2008.
|
WILSHIRE
ENTERPRISES, INC.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
A-6
Exhibit
B
Form
of Right Certificate
|
Certificate
No. R-______
|
_________
Rights
|
NOT
EXERCISABLE AFTER December 4, 2018 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT (AS DEFINED BELOW), RIGHTS OWNED BY OR TRANSFERRED
TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL
NO
LONGER BE TRANSFERABLE.
RIGHT
CERTIFICATE
WILSHIRE
ENTERPRISES, 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
Qualified Offer Plan Rights Agreement, dated as of December 4, 2008, as the
same
may be amended from time to time (the “Rights Agreement”), between Wilshire
Enterprises, Inc., a Delaware corporation (the “Company”), and Continental Stock
Transfer & Trust Company, as Rights Agent (the “Rights Agent”), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York City time,
on
December 4, 2018 at the office or agency of the Rights Agent designated for
such purpose, or of its successor as Rights Agent, one one-thousandth of a
fully
paid non-assessable share of Series B Junior Participating Preferred Stock,
par
value $1.00 per share (the “Preferred Stock”), of the Company at a purchase
price of $6.50 per one one-thousandth of a share of Preferred Stock (the
“Purchase Price”), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one one-thousandths
of a
share of Preferred Stock which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase
Price
as of December 4, 2008, based on the Preferred Stock as constituted at such
date. As provided in the Rights Agreement, the Purchase Price, the number of
one
one-thousandths of a share of Preferred Stock (or other securities or property)
which may be purchased upon the exercise of the Rights and the number of Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
B-1
This
Right Certificate is subject to all of the terms, provisions and conditions
of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a 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 Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
This
Right Certificate, with or without other Right Certificates, upon surrender
at
the office or agency 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 shares of Preferred Stock 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 Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $.01
per
Right or (ii) may be exchanged in whole or in part for shares of the Company’s
Common Stock, par value $1.00 per share, or shares of Preferred Stock.
No
fractional shares of Preferred Stock or Common Stock will be issued upon the
exercise or exchange of any Right or Rights evidenced hereby (other than
fractions of Preferred Stock which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depository receipts), but in lieu thereof a cash payment will
be
made, as provided in the Rights 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 Stock or
of
any other securities of the Company which may at any time be issuable on the
exercise or exchange hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any
of the rights of a 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 Rights Agreement) or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised or exchanged as provided in the Rights
Agreement.
This
Right Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
B-2
WITNESS
the facsimile signature of the Chairman of the Board and Chief Executive Officer
and the Secretary of the Company and its corporate seal.
Dated
as
of _______________.
|
WILSHIRE
ENTERPRISES, INC.
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
ATTEST:
|
Secretary
|
Countersigned:
CONTINENTAL
STOCK TRANSFER
&
TRUST COMPANY, as Rights Agent
|
By:
|
|
|
Its
|
B-3
Form
of Reverse Side of Right Certificate
FORM
OF ASSIGNMENT
(To
be
executed by the registered holder if such
holder
desires to transfer the Right Certificate)
FOR
VALUE
RECEIVED __________________________ hereby sells, assigns and transfers unto
______________________________________________________ (Please print name and
address of transferee) _______ Rights represented by this Right Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ___________________________ Attorney, to transfer said
Rights on the books of the within-named Company, with full power of
substitution.
Dated:
____________________________
Signature
Signature
Guaranteed:
Signatures
must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature guarantee medallion program.
(To
be
completed)
The
undersigned hereby certifies that the Rights evidenced by this Right Certificate
are not beneficially owned by, were not acquired by the undersigned from, and
are not being assigned to an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
Signature
B-4
Form
of Reverse Side of Right Certificate - continued
FORM
OF ELECTION TO PURCHASE
(To
be
executed if holder desires to exercise Rights represented by the Rights
Certificate)
The
undersigned hereby irrevocably elects to exercise ________ Rights represented
by
this Right Certificate to purchase the shares of Preferred Stock (or other
securities or property) issuable upon the exercise of such Rights and requests
that certificates for such shares of Preferred Stock (or such other securities)
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
must conform to holder specified on Right Certificate)
Signature
Guaranteed:
Signature
must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature guarantee medallion program.
B-5
Form
of
Reverse Side of Right Certificate - continued
(To
be
completed)
The
undersigned certifies that the Rights evidenced by this Right Certificate are
not beneficially owned by, and were not acquired by the undersigned from, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
Signature
NOTICE
The
signature in the Form of Assignment or Form of Election to Purchase, as the
case
may be, 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 the Form
of
Election to Purchase, as the case may be, is not completed, such Assignment
or
Election to Purchase will not be honored.
B-6
Exhibit
C
UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT (AS DEFINED BELOW),
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY
OF RIGHTS TO PURCHASE
SHARES
OF PREFERRED STOCK OF
WILSHIRE
ENTERPRISES, INC.
On
December 3, 2008, the Board of Directors of Wilshire Enterprises, Inc. (the
“Company”) declared a dividend of one preferred share purchase right (a “Right”)
for each outstanding share of common stock, par value $1.00 per share, of the
Company (the “Common Stock”). The dividend is payable on December 15, 2008 (the
“Record Date”) to the stockholders of record on that date. Each Right entitles
the registered holder to purchase from the Company one one-thousandth of a
share
of Series B Junior Participating Preferred Stock, par value $1.00 per share,
of
the Company (the “Preferred Stock”) at a price of $6.50 per one one-thousandth
of a share of Preferred Stock (the “Purchase Price”), subject to adjustment. The
description and terms of the Rights are set forth in a Qualified Offer Plan
Rights Agreement dated as of December 4, 2008, as the same may be amended from
time to time (the “Rights Agreement”), between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent (the “Rights Agent”). The Rights
will expire on December 4, 2018 (the “Final Expiration Date”), unless the Final
Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company, in either case as described below.
In
connection with the adoption of the Rights Agreement, the Board of Directors
also adopted an annual independent director evaluation mechanism. Under this
mechanism, an independent Board committee will review, on an ongoing basis,
the
Rights Agreement and developments in rights plans generally, and, if it deems
appropriate, recommend modification or termination of the Rights Agreement.
This
independent committee will report to Wilshire Enterprises, Inc.’s Board at least
once a year as to whether the Rights Agreement continues to be in the best
interests of Wilshire Enterprises, Inc.’s stockholders.
The
Rights are not exercisable until the “Distribution Date.” Under the Rights
Agreement, a “Distribution Date” occurs upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons has become an “Acquiring Person” or (ii) 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 of, 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 20% or more
of
the outstanding shares of Common Stock. Except in certain situations, a person
or group of affiliated or associated persons becomes an “Acquiring Person” upon
acquiring beneficial ownership of 20% or more of the outstanding shares of
Common Stock. Subject to certain exceptions, any person or group of affiliated
or associated persons owning 20% or more of such shares at the time of the
first
public announcement of the Rights Agreement shall not be deemed an Acquiring
Person unless and until such time as such person or group shall, after the
time
of such announcement, become the beneficial owner of any additional shares
of
Common Stock. Until the Distribution Date, the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate together with a copy of this Summary
of
Rights.
C-1
The
Rights will not become exercisable in connection with a “Qualified Offer,” which
is an all-cash tender offer for all outstanding Common Stock that is fully
financed, remains open for a period of at least 60 business days, results in
the
offeror owning at least 85% of the Common Stock after consummation of the offer,
assures a prompt second-step acquisition of shares not purchased in the initial
offer at the same price as the initial offer and meets certain other
requirements.
The
Rights Agreement provides that, until the Distribution Date (or earlier
expiration of the Rights), the Rights will be transferred with and only with
the
Common Stock. Until the Distribution Date (or earlier expiration of the Rights),
new Common Stock certificates issued after the Record Date upon transfer or
new
issuances of Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier expiration
of
the Rights), the surrender for transfer of any certificates for shares of Common
Stock outstanding as of the Record Date, even without such notation or a copy
of
this Summary of Rights, will also constitute the transfer of the Rights
associated with the shares of Common Stock represented by such certificate.
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 Stock as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The
Purchase Price payable, and the number of shares of Preferred Stock or other
securities or property issuable, upon exercise of the Rights is 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
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for or purchase Preferred Stock at a price, or
securities convertible into Preferred Stock with a conversion price, less than
the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness
or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The
number of outstanding Rights is subject to adjustment in the event of a stock
dividend on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
C-2
Shares
of
Preferred Stock purchasable upon exercise of the Rights will not be redeemable.
Each share of Preferred Stock will be entitled, when, as and if declared, to
a
minimum preferential quarterly dividend payment of $10.00 per share but will
be
entitled to an aggregate dividend of 1,000 times the dividend declared per
share
of Common Stock. In the event of liquidation, dissolution or winding up of
the
Company, the holders of the Preferred Stock will be entitled to a minimum
preferential payment of $1.00 per share (plus any accrued but unpaid dividends)
but will be entitled to an aggregate payment of 1,000 times the payment made
per
share of Common Stock. Each share of Preferred Stock will have 1,000 votes,
voting together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which outstanding shares of Common Stock
are converted or exchanged, each share of Preferred Stock will be entitled
to
receive 1,000 times the amount received per share of Common Stock. These rights
are protected by customary antidilution provisions.
Because
of the nature of the Preferred Stock’s dividend, liquidation and voting rights,
the value of the one one-thousandth interest in a share of Preferred Stock
purchasable upon exercise of each Right should approximate the value of one
share of Common Stock.
In
the
event that any person or group of affiliated or associated persons becomes
an
Acquiring Person, each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereupon become void), will thereafter
have
the right to receive upon exercise of a Right that number of shares of Common
Stock having a market value of two times the exercise price of the Right.
In
the
event that, after a person or group has become an Acquiring Person, the Company
is acquired in a merger or other business combination transaction or 50% or
more
of its consolidated assets or earning power are sold, proper provisions will
be
made so that each holder of a Right (other than Rights beneficially owned by
an
Acquiring Person which will have become void) will thereafter have the right
to
receive upon the exercise of a Right that number of shares of common stock
of
the person with whom the Company has engaged in the foregoing transaction (or
its parent) that at the time of such transaction have a market value of two
times the exercise price of the Right.
At
any
time after any person or group becomes an Acquiring Person and prior to the
earlier of one of the events described in the previous paragraph or the
acquisition by such Acquiring Person of 50% or more of the outstanding shares
of
Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such Acquiring Person which will have become void),
in whole or in part, for shares of Common Stock or Preferred Stock (or a series
of the Company’s preferred stock having equivalent rights, preferences and
privileges), at an exchange ratio of one share of Common Stock, or a fractional
share of Preferred Stock (or other preferred stock) equivalent in value thereto,
per Right.
With
certain exceptions, 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 shares of Preferred Stock or Common Stock will be issued
(other than fractions of Preferred Stock which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election of
the
Company, be evidenced by depositary receipts), and in lieu thereof an adjustment
in cash will be made based on the current market price of the Preferred Stock
or
the Common Stock.
C-3
At
any
time prior to the time an Acquiring Person becomes such, the Board of Directors
of the Company may redeem the Rights in whole, but not in part, at a price
of
$.01 per Right (the “Redemption Price”) payable, at the option of the Company,
in cash, shares of Common Stock or such other form of consideration as the
Board
of Directors of the Company shall determine. 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.
For
so
long as the Rights are then redeemable, the Company may, except with respect
to
the Redemption Price, amend the Rights Agreement in any manner. After the Rights
are no longer redeemable, the Company may, except with respect to the Redemption
Price, amend the Rights Agreement in any manner that does not adversely affect
the interests of holders of the Rights.
Until
a
Right is exercised or exchanged, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right
to vote or to receive dividends.
A
copy of
the Rights Agreement is being filed with the Securities and Exchange Commission
as an Exhibit to a Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Company. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, as the same may be amended from time
to
time, which is hereby incorporated herein by reference.
C-4