Exhibit 4.2
RIGHTS AGREEMENT
dated as of [ ], 2002
between
MONDAY LTD
and
[RIGHTS AGENT]
as Rights Agent
Table of Contents
Section Page
------- ----
1. Certain Definitions......................................... 1
2. Appointment of Rights Agent................................. 10
3. Issue of Rights and Right Certificates...................... 10
4. Form of Right Certificates.................................. 13
5. Execution, Countersignature and Registration................ 13
6. Transfer, Split-Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates; Uncertificated
Rights.................................................. 14
7. Exercise of Rights; Expiration Date of Rights............... 15
8. Cancelation and Destruction of Right
Certificates............................................ 18
9. Reservation and Availability of Preferred
Shares.................................................. 18
10. Preferred Shares Record Date................................ 20
11. Adjustments in Rights After There Is an
Acquiring Person; Exchange of Rights for
Shares; Business Combinations........................... 20
12. Certain Adjustments......................................... 26
13. Certificate of Adjustment................................... 28
14. Additional Covenants........................................ 28
15. Fractional Rights and Fractional Shares..................... 29
16. Rights of Action............................................ 30
17. Transfer and Ownership of Rights and Right
Certificates............................................ 30
18. Right Certificate Holder Not Deemed a
Shareholder............................................. 31
19. Concerning the Rights Agent................................. 31
20. Merger or Consolidation or Change of Name of
Rights Agent............................................ 32
21. Duties of Rights Agent...................................... 32
22. Change of Rights Agent...................................... 35
23. Issuance of Additional Rights and Right
Certificates............................................ 37
24. Redemption and Termination.................................. 37
25. Notices..................................................... 38
26. Supplements and Amendments.................................. 39
27. Successors.................................................. 39
28. Benefits of Rights Agreement; Determinations
and Actions by the Board of Directors, etc.............. 40
29. Severability................................................ 40
30. Governing Law............................................... 41
31. Counterparts; Effectiveness................................. 41
32. Descriptive Headings........................................ 41
A Terms of Issue
B Form of Right Certificate
C Summary of Rights
RIGHTS AGREEMENT dated as of [ ], 2002, between Monday
Ltd, a company incorporated under the laws of Bermuda (the
"Company"), and [ ], a [ ] trust company, as Rights Agent (the
"Rights Agent").
The Board of Directors of the Company has authorized and declared
a distribution of one Right (as hereinafter defined) for each Common Share (as
hereinafter defined) of the Company outstanding at the Close of Business (as
hereinafter defined) on the Record Date (as hereinafter defined), and has
authorized the issuance of one Right (as such number may hereafter be adjusted
pursuant to the provisions of this Rights Agreement) with respect to each Common
Share that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date or the Expiration Date (as such terms
are hereinafter defined); provided, however, that Rights may be issued with
respect to Common Shares that shall become outstanding after the Distribution
Date and prior to the earlier of the Redemption Date or the Expiration Date in
accordance with the provisions of Section 23. Each Right shall initially
represent the right to purchase one one- thousandth (1/1000) of a Series A
Junior Preferred Share, par value $0.0001 per share, of the Company (the
"Preferred Shares"), having the powers, rights and preferences set forth in the
Terms of Issue attached as Exhibit A.
Accordingly, 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 Rights
Agreement, the following terms have the meanings indicated:
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"Acquiring Person" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 15% of the Common Shares then outstanding, but
shall not include (a) the Company, any Subsidiary of the Company, any employee
benefit or compensation plan of the Company or of any of its Subsidiaries or any
Person holding Common Shares for or pursuant to the terms of any such employee
benefit or compensation plan (each, a "Related Person") or (b) any such Person
who has become and is the Beneficial Owner of more than 15% of the Common Shares
at the time outstanding solely as the result of (i) a reduction in the aggregate
number of Common Shares outstanding since the last date on which such Person
acquired Beneficial Ownership of any Common Shares, (ii) the acquisition by such
Person or one or more of its Affiliates or Associates of Beneficial Ownership of
additional Common Shares if such acquisition was made without any intention of
changing or influencing control of the Company and in the good faith belief that
such acquisition would not (A) cause the Beneficial Ownership by such Person,
together with that of its Affiliates and Associates, to exceed 15% of the Common
Shares outstanding at the time of such acquisition and such good faith belief
was based on the good faith reliance on information contained in publicly filed
reports or documents of the Company that are inaccurate or out-of-date or (B)
otherwise cause a Distribution Date or the adjustment provided for in Section
11(a) to occur, or (iii) the acquisition by such Person or one or more of its
Affiliates or Associates of Beneficial Ownership of additional Common Shares if
the Board of Directors of the Company determines that such acquisition was made
without any intention of changing or influencing control of the Company and in
good faith without the knowledge by such Person or one or more of its Affiliates
or Associates that such Person would thereby become an Acquiring Person, which
determination of the Board of Directors of the Company shall be conclusive and
binding on such Person, the Rights Agent, the holders of the Rights and all
other Persons. Notwithstanding clause (b)(ii) or (b)(iii) of the prior sentence,
if any Person that is not an Acquiring Person due to such clause (b)(ii) or
(b)(iii) does not reduce its, or its Affiliates' or Associates' percentage of
Beneficial Ownership of Common Shares to 15% or less of the Common Shares then
outstanding by the Close of Business on the tenth calendar day after notice from
the Company (the date of notice being the first day) that such Person's
Beneficial Ownership of Common Shares would make it an Acquiring Person, such
Person shall, at the end of such ten
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calendar day period, become an Acquiring Person (and such clause (b)(ii) or
(b)(iii) shall no longer apply to such Person). For purposes of this definition,
the determination whether any Person acted in "good faith" shall be conclusively
determined by the Board of Directors of the Company.
"Affiliate" and "Associate", when used with reference to any
Person, shall have the respective meanings ascribed to such terms in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Rights Agreement.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", and shall be deemed to have "Beneficial Ownership"
of, any securities:
(a) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule
13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Rights Agreement;
(b) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly: (i) the right to acquire (whether
such right is exercisable immediately or only upon the occurrence of
certain events or after the passage of time or both) pursuant to any
agreement, arrangement or understanding (written or oral), or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed under this clause (i) to be the Beneficial
Owner of, or to beneficially own, or to have Beneficial Ownership of, any
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange
thereunder or cease to be subject to withdrawal by the tendering security
holder; or (ii) the right to vote pursuant to any agreement, arrangement
or understanding (written or oral); provided, however, that a Person shall
not be deemed under this clause (ii) to be the Beneficial Owner of, or to
beneficially own, any security if (A) the agreement, arrangement or
understanding (written or oral) to vote such security arises solely from a
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revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made generally to all holders of Common
Shares of the Company pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (B) the beneficial
ownership of such security is not also then reportable on Schedule 13D or
13G under the Exchange Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (written or
oral) for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to clause (b)(ii) of this
definition) or disposing of any securities of the Company.
Notwithstanding the foregoing, nothing contained in this definition shall cause
(i) a Person ordinarily engaged in business as an underwriter of securities to
be deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, any securities acquired in a bona fide firm
commitment underwriting pursuant to an underwriting agreement with the Company,
(ii) any Person (or any Affiliate or Associate of such Person) to be deemed the
"Beneficial Owner" of, or to "beneficially own", or to have "Beneficial
Ownership" of, any securities if such Person is the "Beneficial Owner" of, or
"beneficially owns" or has "Beneficial Ownership" of, such securities as a
result of any of one or more of the Shareholders Agreement, Voting Agreement or
the Transfer Rights Agreement (as such agreements are hereinafter defined) and
if such Person would not be the "Beneficial Owner" of, or "beneficially own" or
have "Beneficial Ownership" of, such securities if such agreements were not in
effect or (iii) any Person that is an officer, director or employee of a Related
Person to be deemed, solely by reason of such position, the "Beneficial Owner"
of, or to "beneficially own", or to have "Beneficial Ownership" of, any
securities that are "beneficially owned" by such Related Person.
"Bermuda Act" shall mean the Companies ▇▇▇ ▇▇▇▇ of Bermuda, as
amended from time to time.
"Book Value", when used with reference to Common Shares issued by
any Person, shall mean the amount of equity
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of such Person applicable to each Common Share, determined (a) in accordance
with generally accepted accounting principles in the United States in effect on
the date as of which such Book Value is to be determined, (b) using all the
consolidated assets and all the consolidated liabilities of such Person on the
date as of which such Book Value is to be determined, except that no value shall
be included in such assets for goodwill arising from consummation of a business
combination, and (c) after giving effect to (i) the exercise of all rights,
options and warrants to purchase such Common Shares (other than the Rights), and
the conversion of all securities convertible into such Common Shares, at an
exercise or conversion price, per Common Share, which is less than such Book
Value before giving effect to such exercise or conversion (whether or not
exercisability or convertibility is conditioned upon the occurrence of a future
event), (ii) all dividends and other distributions on the capital stock of such
Person declared prior to the date as of which such Book Value is to be
determined and to be paid or made after such date, and (iii) any other
agreement, arrangement or understanding (written or oral), or transaction or
other action contemplated prior to the date as of which such Book Value is to be
determined that would have the effect of thereafter reducing such Book Value.
"Business Combination" shall have the meaning set forth in Section
11(c)(i).
"Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which banking institutions in the
Borough of Manhattan, the City of New York, are authorized or obligated by law
or executive order to close.
"Class A Common Shares" shall mean the Class A common shares, par
value $0.0001, or any other shares in the share capital of the Company into
which the Class A Common Shares shall be reclassified or changed.
"Close of Business" on any given date shall mean 5:00 p.m.,
Eastern time, on such date; provided, however, that, if such date is not a
Business Day, "Close of Business" shall mean 5:00 p.m., Eastern time, on the
next Business Day.
"Common Shares", when used with reference to the Company prior to
a Business Combination, shall mean the Class A Common Shares and Class X common
shares, par value
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$0.0001, and any other common shares of the Company or any other shares in the
share capital of the Company into which the Common Shares shall be reclassified
or changed. "Common Shares", when used with reference to any Person (other than
the Company prior to a Business Combination), shall mean shares of the capital
stock of such Person with the greatest voting power of such Person, or the
equity securities or other equity interest having power to control or direct the
management of such Person, or any shares of capital stock or equity interests
into which the foregoing shall be reclassified or changed.
"Company" shall have the meaning set forth in the heading of this
Rights Agreement; provided, however, that if there is a Business Combination,
"Company" shall have the meaning set forth in Section 11(c)(iii).
The term "control" with respect to any Person shall mean the power
to direct the management and policies of such Person, directly or indirectly, by
or through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding
(written or oral) with one or more other Persons by or through stock ownership,
agency or otherwise; and the terms "controlling" and "controlled" shall have
meanings correlative to the foregoing.
"Distribution Date" shall have the meaning set forth in Section
3(b).
"Dollars" or "$" means United States dollars.
"Exchange Act" shall mean the U.S. Securities Exchange Act of
1934, as in effect on the date in question, unless otherwise specifically
provided.
"Exchange Consideration" shall have the meaning set forth in
Section 11(b)(i).
"Expiration Date" shall have the meaning set forth in Section
7(a).
"Formula Number" shall have the meaning set forth in the Terms of
Issue.
"IPO Date" shall mean the date of the initial public offering of
the Class A Common Shares of the Company.
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"Major Part", when used with reference to the assets of the
Company and its Subsidiaries as of any date, shall mean assets (a) having a fair
market value aggregating 50% or more of the total fair market value of all the
assets of the Company and its Subsidiaries (taken as a whole) as of the date in
question, (b) accounting for 50% or more of the total value (net of depreciation
and amortization) of all the assets of the Company and its Subsidiaries (taken
as a whole) as would be shown on a consolidated or combined balance sheet of the
Company and its Subsidiaries as of the date in question, prepared in accordance
with generally accepted accounting principles then in effect in the United
States, or (c) accounting for 50% or more of the total amount of earnings before
interest, taxes, depreciation and amortization or of the revenues of the Company
and its Subsidiaries (taken as a whole) as would be shown on, or derived from, a
consolidated or combined statement of income or net earnings of the Company and
its Subsidiaries for the period of 12 months ending on the last day of the
Company's monthly accounting period immediately prior to the date in question,
prepared in accordance with generally accepted accounting principles then in
effect.
"Market Value", when used with reference to Common Shares or
Preferred Shares on any date, shall mean the average of the daily closing
prices, per share, of such Common Shares or Preferred Shares, as applicable, for
the period which is the shorter of (a) 30 consecutive Trading Days ending on the
Trading Day immediately prior to the date in question or (b) the number of
consecutive Trading Days beginning on the Trading Day immediately after the date
of the first public announcement of the event requiring a determination of the
Market Value of Common Shares or Preferred Shares, as applicable, and ending on
the Trading Day immediately prior to the record date of such event; provided,
however, that, in the event that the Market Value of such Common Shares or
Preferred Shares, as applicable, is to be determined in whole or in part during
a period following the announcement by the issuer of such Common Shares or
Preferred Shares, as applicable, of any action of the type described in Section
12(a) that would require an adjustment thereunder, then, and in each such case,
the Market Value of such Common Shares or Preferred Shares, as applicable, shall
be appropriately adjusted to reflect the effect of such action on the market
price of such Common Shares or Preferred Shares, as applicable. The closing
price for each Trading Day shall be the closing price quoted
8
on the composite tape for securities listed on the New York Stock Exchange, or,
if such securities are not quoted on such composite tape or if such securities
are not listed on such exchange, on the principal United States securities
exchange registered under the Exchange Act (or any recognized foreign stock
exchange) on which such securities are listed, or, if such securities are not
listed on any such exchange, the closing price quoted on The NASDAQ Stock Market
or, if such securities are not so quoted, the average of the closing bid and
asked quotations with respect to such securities on any National Association of
Securities Dealers, Inc. quotations system or such other system then in use, or
if no such quotations are available, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in such
securities selected by the Board of Directors of the Company, or if on any such
Trading Day no market maker is making a market in such securities, the closing
price of such securities on such Trading Day shall be deemed to be the fair
value of such securities as determined in good faith by the Board of Directors
of the Company (whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent, the holders of Rights
and all other Persons); provided, however, that for the purpose of determining
the closing price of the Preferred Shares for any Trading Day on which there is
no such market maker for the Preferred Shares the closing price on such Trading
Day shall be deemed to be the Formula Number multiplied by the closing price of
the Common Shares of the Company on such Trading Day.
"Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized fraction
of a Preferred Share, unless the context otherwise requires.
"Principal Party" shall mean the Surviving Person in a Business
Combination; provided, however, that, (i) if such Surviving Person is a direct
or indirect Subsidiary of any other Person, "Principal Party" shall mean the
Person which is the ultimate parent of such Surviving
9
Person and which is not itself a Subsidiary of another Person, and (ii) in the
event ultimate control of such Surviving Person is shared by two or more
Persons, "Principal Party" shall mean that Person that is immediately controlled
by such two or more Persons.
"Purchase Price" with respect to each Right shall mean $[100.00],
as such amount may from time to time be adjusted as provided herein, and shall
be payable in Dollars. All references herein to the Purchase Price shall mean
the Purchase Price as in effect at the time in question.
"Record Date" shall mean the date on which the initial public
offering of Class A Common Shares is consummated.
"Redemption Date" shall have the meaning set forth in Section
24(a).
"Redemption Price" with respect to each Right shall mean $0.01, as
such amount may from time to time be adjusted in accordance with Section 12. All
references herein to the Redemption Price shall mean the Redemption Price as in
effect at the time in question.
"Registered Common Shares" shall mean Common Shares that are, as
of the date of consummation of a Business Combination, and have continuously
been for the 12 months immediately preceding such date, registered under Section
12 of the Exchange Act.
"Related Person" shall have the meaning set forth under the
definition of "Acquiring Person".
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form attached as Exhibit B.
"Rights" shall mean the rights to purchase Preferred Shares (or
other securities) as provided in this Rights Agreement.
"Rights Agent" shall have the meaning set forth in the heading of
this Rights Agreement.
"Securities Act" shall mean the U.S. Securities Act of 1933, as in
effect on the date in question, unless otherwise specifically provided.
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"Shareholders Agreement" shall mean the agreement dated on or
about the Record Date between, among others, the Company, Monday SCA, a
Luxembourg partnership limited by shares, PricewaterhouseCoopers International
Limited and certain firms in the PricewaterhouseCoopers network of firms that
receive or have the right to receive shares in the Company or Monday SCA
(collectively, the "Shareholders") whereby, amongst other things, the
Shareholders agree to certain share transfer restrictions and mandatory
disposals of shares.
"Subsidiary" shall mean a Person of which at least a majority of
the total outstanding voting power (being the power under ordinary circumstances
(and not merely upon the happening of a contingency) to vote in the election of
directors of such Person (if such Person is a corporation) or to participate in
the management and control of such Person (if such Person is not a corporation))
is owned, directly or indirectly, by another Person or by one or more other
Subsidiaries of such other Person or by such other Person and one or more other
Subsidiaries of such other Person.
"Surviving Person" shall mean (a) the Person which is the
continuing or surviving Person in a consolidation, amalgamation or merger
specified in Section 11(c)(i)(A) or 11(c)(i)(B) or (b) the Person to which the
Major Part of the assets of the Company and its Subsidiaries is sold, leased,
exchanged or otherwise transferred or disposed of in a transaction specified in
Section 11(c)(i)(C); provided, however, that, if the Major Part of the assets of
the Company and its Subsidiaries is sold, leased, exchanged or otherwise
transferred or disposed of in one or more related transactions specified in
Section 11(c)(i)(C) to more than one Person, the "Surviving Person" in such case
shall mean the Person that acquired assets of the Company and/or its
Subsidiaries with the greatest fair market value in such transaction or
transactions.
"Terms of Issue" shall mean the terms of issue of Series A Junior
Preferred Shares setting forth the powers, preferences, rights, qualifications,
limitations and restrictions of such series of Preferred Shares of the Company,
a copy of which is attached as Exhibit A.
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"Trading Day" shall mean a day on which the principal national
securities exchange (or principal recognized foreign stock exchange, as the case
may be), on which any securities or Rights, as the case may be, are listed or
admitted to trading, is open for the transaction of business or, if the
securities or Rights in question are not listed or admitted to trading on any
national securities exchange (or recognized foreign stock exchange, as the case
may be), a Business Day.
"Transfer Rights Agreement" shall mean the agreement dated on or
about the Record Date between Monday SCA, a Luxembourg partnership limited by
shares, and certain Covered Persons (as defined therein) whereby the Covered
Persons address certain relationships among themselves with respect to the
disposition of their common shares in Monday SCA and various other matters and
give to the Partners Committee (as defined therein) the power to enforce their
agreements with respect thereto and on their behalf.
"Voting Agreement" shall mean the agreement dated on or about the
Record Date between the Company and certain Covered Persons (as defined therein)
whereby the Covered Persons address certain relationships among themselves with
respect to the voting and disposition of their Common Shares in the Company and
various other matters and give to the Partners Committee (as defined therein)
the power to enforce their agreements with respect thereto and on their behalf.
SECTION 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co-Rights Agents). In
the event the Company appoints one or more co-Rights Agents, the respective
duties of the Rights Agent and any co-Rights Agents shall be as the Company
shall determine.
SECTION 3. Issue of Rights and Right Certificates. (a) One Right
shall be associated with each
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Common Share outstanding on the Record Date, each additional Common Share that
shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Expiration Date and each
additional Common Share with which Rights are issued after the Distribution Date
but prior to the earlier of the Redemption Date or the Expiration Date as
provided in Section 23; provided, however, that, if the number of outstanding
Rights is adjusted pursuant to Section 12(a), the appropriate fractional Right
determined pursuant to such Section shall thereafter be associated with each
such Common Share.
(b) Until the earlier of (i) such time as the Company learns that
a Person has become an Acquiring Person and (ii) the Close of Business ten days
(or such later date, if any, as may be designated by the Board of Directors of
the Company) following the commencement of, or first public disclosure of an
intent to commence, a tender or exchange offer by any Person (other than a
Related Person) for outstanding Common Shares, if upon consummation of such
tender or exchange offer such Person could be the Beneficial Owner of more than
15% of the outstanding Common Shares (the Close of Business on the earlier of
such dates being the "Distribution Date"), (x) the Rights shall, except as
otherwise provided in Section 3(c), be evidenced by the certificates for Common
Shares registered in the names of the holders thereof and not by separate Right
Certificates, and (y) the Rights, including the right to receive Right
Certificates, shall be transferable only in connection with the transfer of
Common Shares.
(c) As soon as practicable, and in any event no later than 30
days, after the Record Date, the Company will send a copy of a Summary of Rights
to Purchase Preferred Shares, in substantially the form attached hereto as
Exhibit C (the "Summary of Rights"), by first-class, postage-prepaid mail, to
each record holder of Common Shares as of the Close of Business on the Record
Date at the address of such holder shown on the records of the Company. With
respect to any certificate for Common Shares outstanding as of the Record Date,
until the earliest of the Distribution Date, the Redemption Date or the
Expiration Date, (i) the Rights associated with the Common Shares represented by
any such certificate shall be evidenced by such certificates for the Common
Shares with a copy of the Summary of Rights attached thereto and the registered
holders of the Common Shares shall also be the registered holders of the
associated Rights and (ii) the surrender for transfer of any such
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certificate, even without a copy of the Summary of Rights attached thereto,
shall also constitute the surrender for transfer of the Rights associated with
the Common Shares represented thereby.
(d) Certificates issued for Common Shares after the Record Date
(including upon transfer or exchange of outstanding Common Shares), but prior to
the earliest of the Distribution Date, the Redemption Date or the Expiration
Date, shall have 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 Rights Agreement dated as of [ ], 2002
(as it may be amended from time to time (the "Rights Agreement")), between
Monday Ltd (the "Company") and [RIGHTS AGENT], as Rights Agent (the
"Rights Agent"), the terms of which (including restrictions on the
transfer of such Rights) 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 shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. The Company shall mail
to the holder of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.
Notwithstanding this Section 3(d), neither the omission of a legend nor the
inclusion of a legend that makes reference to a rights agreement other than the
Rights Agreement shall affect the enforceability of any part of this Rights
Agreement or the rights of any holder of Rights.
(e) In the event the Company redeems, purchases or otherwise
acquires any Common Shares after the Record Date but prior to the earliest of
the Distribution Date, the Redemption Date or the Expiration Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so that
no Person shall be entitled to exercise any Rights associated with the Common
Shares which are no longer outstanding.
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(f) The Company shall notify the Rights Agent as promptly as
practicable that the Distribution Date has occurred. As soon as practicable
after the Distribution Date, the Rights Agent shall send, by first-class,
postage- prepaid mail, to each record holder of Common Shares as of the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate evidencing one whole Right for each Common Share
(or for the number of Common Shares with which one whole Right is then
associated if the number of Rights per Common Share held by such record holder
has been adjusted in accordance with the proviso in Section 3(a)). If the number
of Rights associated with each Common Share has been adjusted in accordance with
the proviso in Section 3(a), at the time of distribution of the Right
Certificates the Company may make any necessary and appropriate rounding
adjustments so that Right Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Right in accordance
with Section 15(a). The Company shall notify the Rights Agent as promptly as
practicable of any such adjustments. As of and after the Distribution Date, the
Rights shall be evidenced solely by such Right Certificates.
SECTION 4. Form of Right Certificates. The Right Certificates (and
the form of election to purchase and form of assignment to be printed on the
reverse side thereof) shall be in substantially the form set forth as Exhibit B
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 Rights Agreement, or as
may be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 7, 11 and 23, the Right Certificates,
whenever issued, shall be dated as of the Record Date, and on their face shall
entitle the holders thereof to purchase such number of Preferred Shares as shall
be set forth therein for the Purchase Price set forth therein, subject to
adjustment from time to time as herein provided.
SECTION 5. Execution, Countersignature and Registration. (a) The
Right Certificates shall be executed on behalf of the Company by the Chairman of
the Board, any Deputy Chairman of the Board, the Chief Executive Officer,
15
the Chief Financial Officer, the President, the Chief Operating Officer, a Vice
President (whether preceded by any additional title) the Treasurer or the
Secretary of the Company, either manually or by facsimile signature, and have
affixed thereto the Company's seal or a facsimile thereof, which shall be
attested by the Secretary, an Assistant Secretary or a Vice President (whether
preceded by any additional title, provided that such Vice President shall not
have also executed the Right Certificates) 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 or obligatory for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such an officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may nevertheless 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 an
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 execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of execution of this Rights Agreement any such
person was not such an officer of the Company.
(b) Following the Distribution Date, the Rights Agent shall keep
or cause to be kept, at its [principal office in New York, New York], 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 by each of the Right Certificates,
the certificate number of each of the Right Certificates and the date of each of
the Right Certificates.
SECTION 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates;
Uncertificated Rights. (a) Subject to Sections 7(e) and 15, at any time after
the Distribution Date, and at or prior to the Close of Business on the earlier
of the Redemption Date or the Expiration Date, any Right Certificate or Right
Certificates (other than those that have become void) may be transferred, split-
up, combined or exchanged for another Right Certificate or Right Certificates
representing, in the aggregate, the same
16
number of Rights as the Right Certificate or Right Certificates surrendered then
represented. Any registered holder desiring to transfer, split-up, combine or
exchange any Right Certificate 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 principal office of
the Rights Agent; provided, however, that neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any Right Certificate surrendered for transfer until the registered
holder shall have completed and signed the certification contained in the form
of assignment on the reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request. Thereupon the Rights Agent shall,
subject to Sections 7(e) and 15, 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.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a valid 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
cancelation of the Right Certificate if mutilated, the Company shall make a new
Right Certificate of like tenor and deliver such new Right Certificate to the
Rights Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company and
the Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.
SECTION 7. Exercise of Rights; Expiration Date of Rights. (a)
Subject to Section 7(e) and except as otherwise provided herein (including
Section 11), each Right
17
shall entitle the registered holder thereof, upon exercise thereof as provided
herein, to purchase for the Purchase Price, at any time after the Distribution
Date and at or prior to the earlier of (i) the Close of Business on the 10th
anniversary of the date of this Rights Agreement (the Close of Business on such
date being the "Expiration Date") and (ii) the Redemption Date, one
one-thousandth (1/1,000) of a Preferred Share, subject to adjustment from time
to time as provided in Sections 11 and 12.
(b) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date, 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 principal office of the Rights Agent
in New York, New York], together with payment of the Purchase Price for each one
one-thousandth (1/1,000) of a Preferred Share as to which the Rights are
exercised, at or prior to the earlier of (i) the Expiration Date and (ii) the
Redemption Date.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares to be purchased together
with an amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in Dollars, in cash or by certified check or
money order payable to the order of the Company, the Rights Agent shall
thereupon (i) either (A) promptly requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests or (B) if the Company shall have elected to deposit the Preferred
Shares with a depositary agent under a depositary arrangement, promptly
requisition from the depositary agent depositary receipts representing the
number of one one-thousandths (1/1,000s) of a Preferred Share to be purchased
(in which case certificates for the Preferred Shares to be represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company shall direct the depositary agent to comply with all such requests,
(ii) when appropriate, promptly requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
15, (iii) promptly after
18
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.
(d) In case the registered holder of any Right Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined (which determination shall be conclusive) is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void and nontransferable
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Rights Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) are complied with, but shall
have no liability to any holder of any Right Certificate or any other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliate or Associate, or any transferee thereof, hereunder.
19
(f) Notwithstanding anything in this Rights 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 any Right
Certificates upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
(g) The Company may temporarily suspend, for a period of time not
to exceed 90 calendar days after the Distribution Date, the exercisability of
the Rights in order to prepare and file a registration statement under the
Securities Act, on an appropriate form, and, if appropriate, a prospectus under
the Bermuda Act, with respect to the Preferred Shares purchasable upon exercise
of the Rights and permit such registration statement to become effective;
provided, however, that no such suspension shall remain effective after, and the
Rights shall without any further action by the Company or any other Person
become exercisable immediately upon, the effectiveness of such registration
statement. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended and shall issue a further public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision herein to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification under the blue sky or securities laws of such
jurisdiction shall not have been obtained or the exercise of the Rights shall
not be permitted under applicable law.
SECTION 8. Cancelation and Destruction of Right Certificates. All
Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Right Certificate
representing Rights that have become null and void and nontransferable pursuant
to Section 7(e) surrendered or presented for any purpose shall, if surrendered
or presented to the Company or to any of its agents, be delivered to the Rights
Agent for cancelation or in canceled form, or, if surrendered or presented to
the Rights Agent, shall be canceled by it, and no Right Certificates shall be
issued in
20
lieu thereof except as expressly permitted by this Rights Agreement. The Company
shall deliver to the Rights Agent for cancelation and retirement, and the Rights
Agent shall so cancel and retire, any Right Certificate purchased or acquired by
the Company. The Rights Agent shall deliver all canceled Right Certificates to
the Company, or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. Reservation and Availability of Preferred Shares. (a)
The Company shall cause to be reserved and kept available out of its authorized
and unissued Preferred Shares free from preemptive rights or any right of first
refusal, a number of Preferred Shares sufficient to permit the exercise in full
of all outstanding Rights.
(b) If there are not sufficient Preferred Shares authorized but
unissued to permit the exercise or exchange of Rights in accordance with Section
11, the Company shall take all such action as may be necessary to authorize
additional Preferred Shares for issuance upon the exercise or exchange of Rights
pursuant to Section 11; provided, however, that if the Company is unable to
cause the authorization of additional Preferred Shares, then the Company shall,
or (if action by the Company's shareholders is necessary to cause such
authorization) in lieu of seeking any such authorization, the Company may, to
the extent necessary and permitted by applicable law and any agreements or
instruments in effect prior to the Distribution Date to which it is a party, (i)
upon surrender of a Right, pay cash equal to the Purchase Price in lieu of
issuing Preferred Shares and requiring payment therefor, (ii) upon due exercise
of a Right and payment of the Purchase Price for each Preferred Share as to
which such Right is exercised, issue Class A Common Shares or other equity
securities having a value equal to the value of the Preferred Shares that
otherwise would have been issuable pursuant to Section 11, which value shall be
21
determined by a nationally recognized investment banking firm selected by the
Board of Directors of the Company, or (iii) upon due exercise of a Right and
payment of the Purchase Price for each Preferred Share as to which such Right is
exercised, distribute a combination of Preferred Shares, cash and/or, other
equity and/or debt securities having an aggregate value equal to the value of
the Preferred Shares that otherwise would have been issuable pursuant to Section
11, which value shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors of the Company. To the extent
that any legal or contractual restrictions (pursuant to agreements or
instruments in effect prior to the Distribution Date to which it is party)
prevent the Company from paying the full amount payable in accordance with the
foregoing sentence, the Company shall pay to holders of the Rights as to which
such payments are being made all amounts that are not then restricted on a pro
rata basis as such payments become permissible under such legal or contractual
restrictions until such payments have been paid in full.
(c) The Company shall take all such action as may be necessary to
ensure that all Preferred Shares delivered upon exercise or exchange of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights are to be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable or exchangeable, all Preferred Shares reserved for
such issuance to be listed on such securities exchange upon official notice of
issuance upon such exercise or exchange.
(e) The Company shall 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 Right Certificates or of any Preferred Shares or Common
Shares or other securities upon the exercise or exchange of the 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 in respect of the issuance or delivery of certificates or
depositary receipts for Preferred Shares or Common Shares or other securities,
as the case may be, in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or exchange or to
issue or deliver any certificates or depositary receipts for Preferred Shares or
Common Shares or other securities, as the case may be, upon the exercise or
exchange of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right
22
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
SECTION 10. Preferred Shares Record Date. Each Person in whose
name any certificate for Preferred Shares or Common Shares or other securities
is issued upon the exercise or exchange of Rights shall be registered as the
holder of record of the Preferred Shares or Common Shares or other securities,
as the case may be, represented thereby on, and such certificate shall be dated,
the date on which the Right Certificate evidencing such Rights was duly
surrendered and payment of any 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 transfer books of the Company for the Preferred
Shares or Common Shares or other securities, as the case may be, are closed,
such Person shall be registered as the record holder of such Preferred Shares or
Common Shares or other securities, as the case may be, on, and such certificate
shall be dated, the next Business Day on which the transfer books of the Company
for the Preferred Shares or Common Shares or other securities, as the case may
be, are open.
SECTION 11. Adjustments in Rights After There Is an Acquiring
Person; Exchange of Rights for Shares; Business Combinations. (a) Upon a Person
becoming an Acquiring Person, each holder of a Right, except as provided in
Section 7(e), shall thereafter have a right to receive, upon exercise thereof
for the Purchase Price in accordance with the terms of this Rights Agreement,
such number of one one-thousandths (1/1,000s) of a Preferred Share (or, at the
option of the Board of Directors of the Company, such number of duly authorized,
validly issued, fully paid and nonassessable Class A Common Shares) as shall
equal the result obtained by multiplying the Purchase Price by a fraction, the
numerator of which is the number of one one- thousandths (1/1,000s) of a
Preferred Share for which such Right is then exercisable and the denominator of
which is 50% of the Market Value of the Class A Common Shares on the date on
which such Person became an Acquiring Person. As soon as practicable after a
Person becomes an Acquiring Person (provided the Company shall not have elected
to make the exchange permitted by Section 11(b)(i) for all outstanding Rights),
the Company shall use its best efforts to:
23
(i) prepare and file a registration statement under the Securities
Act, on an appropriate form, and, if appropriate, a prospectus under the
Bermuda Act, with respect to the Preferred Shares (or, if the Board of
Directors chooses to issue Class A Common Shares pursuant to this Section
11(a), with respect to the Class A Common Shares) purchasable upon
exercise of the Rights;
(ii) cause such registration statement to become
effective as soon as practicable after such filing;
(iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Securities Act
and, if appropriate, the Bermuda Act) until the Expiration Date; and
(iv) qualify or register the Preferred Shares (or, if the Board of
Directors chooses to issue Class A Common Shares pursuant to this Section
11(a), with respect to the Class A Common Shares) purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.
(b)(i) The Board of Directors of the Company may, at its option,
at any time after a Person becomes an Acquiring Person, mandatorily exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that shall have become null and void and nontransferable pursuant to
Section 7(e)) for consideration per Right consisting of either (A) one-half of
the securities that would be issuable at such time upon the exercise of one
Right in accordance with Section 11(a) or, if applicable, Section 9(b)(ii) or
9(b)(iii) or (B) if applicable, the cash consideration specified in Section
9(b)(i) (the consideration issuable per Right pursuant to this Section 11(b)(i)
being the "Exchange Consideration"). The Board of Directors of the Company may,
at its option, issue a number of Class A Common Shares in lieu of each Preferred
Share equal to the Formula Number (as defined in the Terms of Issue) if there
are sufficient Class A Common Shares authorized but unissued. If the Board of
Directors of the Company elects to exchange all the Rights for Exchange
Consideration pursuant to this Section 11(b)(i) prior to the physical
distribution of the Right Certificates, the Company may distribute the Exchange
Consideration in lieu of distributing Rights Certificates,
24
in which case for purposes of this Rights Agreement holders of Rights shall be
deemed to have simultaneously received and surrendered for exchange Rights
Certificates on the date of such distribution. Notwithstanding the foregoing,
the Board of Directors of the Company may not effect such exchange at any time
after any Person (other than a Related Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of more than 50% of the
Common Shares then outstanding.
(ii) Any action of the Board of Directors of the Company ordering
the exchange of any Rights pursuant to Section 11(b)(i) shall be irrevocable
and, immediately upon the taking of such action and without any further action
and without any notice, the right to exercise any such Right so exchanged
pursuant to Section 11(b)(i) shall terminate and the only right thereafter of a
holder of such Right shall be to receive the Exchange Consideration in exchange
for each such Right held by such holder or, if the Exchange Consideration shall
not have been paid or issued, to exercise any such Right pursuant to Section
11(c)(i). The Company shall promptly issue a public announcement of any such
exchange; provided, however, that the failure to give, or any defect in, such
announcement shall not affect the validity of such exchange. The Company shall
promptly send a notice of any such exchange to each holder of Rights to be
exchanged at the address of such holder shown on the records of the Company (or
after Right Certificates have been issued the records of the Rights Agent) by
first-class, postage- prepaid mail. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange shall state the method by which the
exchange of the Rights for the Exchange Consideration 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 shall have become null and void and nontransferable
pursuant to the provisions of Section 7(e)) held by each holder of Rights.
25
(c)(i) In the event that, directly or indirectly, any transactions
specified in the following clause (A), (B) or (C) of this Section 11(c)(i) (each
such transaction being a "Business Combination") shall be consummated:
(A) the Company shall consolidate with, amalgamate, merge with and
into or otherwise combine with, any Acquiring Person or any Affiliate or
Associate of an Acquiring Person;
(B) any Acquiring Person or any Affiliate or Associate of an
Acquiring Person shall amalgamate, merge with and into or otherwise
combine with the Company and, in connection with such amalgamation merger
or combination, all or part of the outstanding Common Shares shall be
changed into or exchanged for shares, capital stock or other securities of
the Company or of any Acquiring Person or Affiliate or Associate of an
Acquiring Person or cash or any other property; or
(C) the Company shall sell, lease, exchange or otherwise transfer
or dispose of (or one or more of its Subsidiaries shall sell, lease,
exchange or otherwise transfer or dispose of), in one or more
transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to any Acquiring Person or any Affiliate
or Associate of an Acquiring Person,
26
then, in each such case, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, the securities specified below (or, at such
holder's option, the securities specified in Section 11(a) if the Company is the
Surviving Person in such Business Combination):
(1) if the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, such number
of Registered Common Shares of such Principal Party, free and clear of all
liens, encumbrances or other adverse claims, as shall equal the result
obtained by multiplying the Purchase Price by a fraction, the numerator of
which is the number of one one-thousandths (1/1000s) of a Preferred Share
for which such right was exercisable immediately prior to the time when a
Person became an Acquiring Person and the denominator of which is 50% of
the Market Value (as of the time of exercise thereof) of such Registered
Common Shares;
(2) if the Principal Party involved in such Business Combination
does not have Registered Common Shares outstanding, each Right shall
thereafter represent the right to receive, upon the exercise thereof for
the Purchase Price in accordance with the terms of this Rights Agreement,
at the election of the holder of such Right at the time of the exercise
thereof, any of:
(x) such number of Common Shares of the Surviving Person in
such Business Combination as shall equal the result obtained by
multiplying the Purchase Price by a fraction, the numerator of
which is the number of one one-thousandths (1/1000s) of a
Preferred Share for which such right was exercisable immediately
prior to the time when a Person became an Acquiring Person and the
denominator of which is 50% of the Book Value (immediately after
giving effect to such Business Combination) of such Common Shares;
27
(y) such number of Common Shares of the Principal Party in
such Business Combination (if the Principal Party is not also the
Surviving Person in such Business Combination) as shall equal the
result obtained by multiplying the Purchase Price by a fraction,
the numerator of which is the number of one one-thousandths
(1/1000s) of a Preferred Share for which such right was
exercisable immediately prior to the time when a Person became an
Acquiring Person and the denominator of which is 50% of the Book
Value (immediately after giving effect to such Business
Combination) of such Common Shares; or
(z) if the Principal Party in such Business Combination is an
Affiliate of one or more Persons that has Registered Common Shares
outstanding, such number of Registered Common Shares of whichever
of such Affiliates of the Principal Party has Registered Common
Shares with the greatest aggregate Market Value on the date of
consummation of such Business Combination as shall equal the
result obtained by multiplying the Purchase Price by a fraction,
the numerator of which is the number of one one- thousandths
(1/1000s) of a Preferred Share for which such right was
exercisable immediately prior to the time when a Person became an
Acquiring Person and the denominator of which is 50% of the Market
Value (as of the time of exercise thereof) of such Registered
Common Shares.
(ii) The Company shall not consummate any Business Combination
unless each issuer of Common Shares for which Rights may be exercised, as set
forth in this Section 11(c), shall have sufficient authorized Common Shares that
have not been issued or reserved for issuance (and which shall, when issued upon
exercise of Rights for the Purchase Price in accordance with this Rights
Agreement, be validly issued, fully paid and nonassessable and free of
preemptive rights, rights of first refusal or any other restrictions or
limitations on the transfer or ownership thereof) to permit the exercise in full
of the Rights in accordance with this Section 11(c) and unless prior thereto:
(A) a registration statement under the Securities Act, on an
appropriate form, and, if
28
appropriate, a prospectus under the Bermuda Act, with respect to the
Rights and the Common Shares of such issuer purchasable upon exercise of
the Rights, shall be effective under the Securities Act and, if
appropriate, the Bermuda Act; and
(B) the Company and each such issuer shall have:
(1) executed and delivered to the Rights Agent a supplemental
agreement providing for the assumption by such issuer of the
obligations set forth in this Section 11(c) (including the
obligation of such issuer to issue Common Shares upon the exercise
of Rights in accordance with the terms set forth in Sections
11(c)(i) and 11(c)(iii)) and further providing that such issuer,
at its own expense, shall use its best efforts to:
(x) cause a registration statement under the Securities
Act, on an appropriate form, and, if appropriate, the Bermuda
Act, with respect to the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights, to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act and, if appropriate, the
Bermuda Act) until the Expiration Date;
(y) qualify or register the Rights and the Common Shares
of such issuer purchasable upon exercise of the Rights under
the blue sky or securities laws of such jurisdictions as may
be necessary or appropriate; and
(z) list the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights on each national
securities exchange on which the Common Shares of the issuer
were listed prior to the consummation of the Business
Combination or, if the Common Shares of the issuer were not
listed on a national securities exchange prior to the
consummation of the Business Combination, on a national
securities exchange;
29
(2) furnished to the Rights Agent a written opinion of
independent counsel stating that such supplemental agreement is a
valid, binding and enforceable agreement of such issuer; and
(3) filed with the Rights Agent a certificate of a nationally
recognized firm of independent accountants setting forth the
number of Common Shares of such issuer that may be purchased upon
the exercise of each Right after the consummation of such Business
Combination.
(iii) After consummation of any Business Combination and subject
to the provisions of Section 11(c)(ii), (A) each issuer of Common Shares for
which Rights may be exercised as set forth in this Section 11(c) shall be liable
for, and shall assume, by virtue of such Business Combination, all the
obligations and duties of the Company pursuant to this Rights Agreement, (B) the
term "Company" shall thereafter be deemed to refer to such issuer, (C) each such
issuer shall take such steps in connection with such consummation as may be
necessary to assure that the provisions hereof (including the provisions of
Sections 11(a) and 11(c)) shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights, and (D) the number of Common Shares of each such
issuer thereafter receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions of Sections 11 and 12 and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such Common Shares.
SECTION 12. Certain Adjustments. (a) To preserve the actual or
potential economic value of the Rights, if at any time after the date of this
Rights Agreement there shall be any change in the Common Shares or the Preferred
Shares, whether by reason of bonus issues, share dividends, share splits,
subdivisions, reclassifications, recapitalizations, mergers, amalgamations,
consolidations, combinations or exchanges of securities, split-ups, split-offs,
spin-offs, liquidations, other similar changes in capitalization, any
distribution or issuance of cash, assets, evidences of indebtedness or
subscription rights, options or warrants to holders of Common Shares or
Preferred Shares, or otherwise, as the case
30
may be (other than distribution of the Rights or regular quarterly cash
dividends), then, in each such event the Board of Directors of the Company shall
make such appropriate adjustments in the number of Preferred Shares (or the
number and kind of other securities) issuable upon exercise of each Right, the
Purchase Price and Redemption Price in effect at such time and the number of
Rights outstanding at such time (including the number of Rights or fractional
Rights associated with each Common Share) such that following such adjustment
such event shall not have had the effect of reducing or limiting the benefits
the holders of the Rights would have had absent such event.
(b) If, as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any securities other than Preferred Shares, thereafter the number of
such securities so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions of Sections 11 and 12 and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such other securities.
(c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities relating
to a Right shall evidence the right to purchase, for the Purchase Price, the
adjusted number and kind of securities purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(d) Irrespective of any adjustment or change in the Purchase Price
or the number of Preferred Shares or number or kind of other securities issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms that were expressed in the
initial Right Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section 12(a)
requires that an adjustment be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preferred Shares and/or other securities, if any, issuable upon such
exercise over and
31
above the Preferred Shares and/or other securities, if any, issuable before
giving effect 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 securities upon the occurrence of
the event requiring such adjustment.
SECTION 13. Certificate of Adjustment. Whenever an adjustment is
made as provided in Section 11 or 12, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Preferred Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate (or, prior to
the Distribution Date, of Common Shares) in accordance with Section 25, provided
that the failure to prepare, file or mail such certificate or summary shall not
affect the validity of such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
SECTION 14. Additional Covenants. (a) Except as permitted by
Section 26, no adjustment to the number of Preferred Shares (or fractions of a
share) or other securities for which a Right is exercisable or the number of
Rights outstanding or associated with each Common Share or any similar or other
adjustment shall be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of the Rights would have
had absent such adjustment, including the benefits under Sections 11 and 12,
unless the terms of this Rights Agreement are amended so as to preserve such
benefits.
(b) The Company covenants and agrees that, after the Distribution
Date, except as permitted by Section 26, it shall not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably foreseeable that such action will reduce or
otherwise limit the benefits the holders of the Rights would have had absent
such action, including the benefits under Sections 11 and 12. Any action taken
by the Company during any period after any Person becomes an Acquiring Person
but prior to the Distribution Date shall be null and void unless such action
could be taken under this Section 14(b) from and after the Distribution Date.
The Company shall not consummate any Business Combination if any issuer of
Common Shares for
32
which Rights may be exercised after such Business Combination in accordance with
Section 11(c) shall have taken any action that reduces or otherwise limits the
benefits the holders of the Rights would have had absent such action, including
the benefits under Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional Shares. (a) The
Company may, but shall not be required to, issue fractions of Rights or
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company may pay 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 purposes of this Section 15(a), the current market
value of a whole Right shall be the closing price of the Rights (as determined
pursuant to the second sentence of the definition of Market Value contained in
Section 1) for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.
(b) The Company may, but shall not be required to, issue fractions
of Preferred Shares upon exercise or exchange of the Rights or distribute
certificates that evidence fractional Preferred Shares. In lieu of fractional
Preferred Shares, the Company may elect to (i) utilize a depositary arrangement
as provided by the terms of the Preferred Shares or (ii) in the case of a
fraction of a Preferred Share (other than one one-thousandths (1/1,000s) of a
Preferred Share or any integral multiple thereof), pay to the registered holders
of Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one
Preferred Share, if any are outstanding and publicly traded (or the same
fraction of the current market value of one Common Share times the Formula
Number if the Preferred Shares are not outstanding and publicly traded). For
purposes of this Section 15(b), the current market value of a Preferred Share
(or Common Share) shall be the closing price of a Preferred Share (or Common
Share) (as determined pursuant to the second sentence of the definition of
Market Value contained in Section 1) for the Trading Day immediately prior to
the date of such exercise. If, as a result of an adjustment made pursuant to
Section 12(a), the holder of any Right thereafter exercised shall become
entitled to receive any securities other than Preferred
33
Shares, the provisions of this Section 15(b) shall apply, as nearly as
reasonably may be, on like terms to such other securities.
(c) The Company may, but shall not be required to, issue fractions
of Class A Common Shares upon exchange of Rights pursuant to Section 11(a) or
(b), or to distribute certificates that evidence fractional Class A Common
Shares. In lieu of such fractional Class A Common Shares, the Company may pay to
the registered holders of the Right Certificates with regard to which such
fractional Class A Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current Market Value of one Class A Common
Share as of the date on which a Person became an Acquiring Person.
(d) Each holder of Rights by the acceptance of such Rights
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise or exchange of a Right except as provided in
this Section 15.
SECTION 16. Rights of Action. (a) All rights of action in respect
of this Rights Agreement are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares) may, in such holder's own behalf
and for such holder's own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this Rights
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 Rights Agreement
and shall be entitled to specific performance of the obligations of any Person
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement
34
shall be entitled to recover the reasonable costs and expenses, including
attorneys' fees, incurred in such action.
SECTION 17. Transfer and Ownership of Rights and Right
Certificates. (a) Prior to the Distribution Date, the Rights shall be
transferable only in connection with the transfer of the Common Shares and the
Right associated with each Common Share shall be automatically transferred upon
the transfer of each Common Share.
(b) After the Distribution Date, the Right Certificates shall be
transferable, subject to Section 7(e), only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer.
(c) The Company and the Rights Agent may deem and treat the Person
in whose name a Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated certificate for
Common Shares made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
SECTION 18. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote or receive
dividends or other distributions or be deemed, for any purpose, the holder of
the Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise 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
shareholder of the Company, including any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders, or to receive dividends or
other distributions or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
35
SECTION 19. Concerning the Rights Agent. (a) The Company agrees to
pay to the Rights Agent reason able 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 Rights Agreement and the exercise and performance of its
duties hereunder, including any taxes or governmental charges imposed as a
result of the action taken by it hereunder (other than any taxes on the fees
payable to it).
(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 Rights Agreement in reliance upon any
Right Certificate or certificate for the Common Shares 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.
SECTION 20. 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 business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Rights
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 22. In case, at the time such successor Rights Agent shall
succeed to the agency created by this Rights 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
36
shall have the full force provided in the Right Certificates and in this Rights
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 counter
signed; 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 Rights Agreement.
SECTION 21. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Rights Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates (or, prior to the Distribution Date, of the Common Shares), 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, suffered or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including the identity of any Acquiring Person) be proved or established
by the Company prior to taking, refraining from taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, any
Deputy Chairman of the Board, the Chief Executive Officer, the President, the
Chief Operating Officer, the Chief Financial Officer, a Vice President (whether
preceded by any additional title), the Treasurer or 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 Rights Agreement in reliance upon such
certificate.
37
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or wilful 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 Rights Agreement or in
the Right Certificates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights 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 Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 12 or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Preferred Shares or Common Shares
to be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any Preferred Shares or Common Shares will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it shall 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 per forming by the Rights
Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, any Vice Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, a Vice President
38
(whether preceded by any additional title), the Treasurer or the Secretary of
the Company, in connection with its duties and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(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 or its Subsidiaries may be interested, or contract with or
lend money to the Company or its Subsidiaries or otherwise act as fully and
freely as though it were not the Rights Agent under this Rights 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) The Company shall indemnify and hold the Rights Agent harmless
against any loss, liability, damage or expense (including reasonable fees and
expenses of legal counsel) which the Rights Agent may incur resulting from its
actions as Rights Agent pursuant to this Rights Agreement; provided, however,
that the Rights Agent shall not be indemnified or held harmless with respect to
any such loss, liability, damage or expense incurred by the Rights Agent as a
result of, or arising out of, its own negligence, bad faith or wilful
misconduct. In no case shall the Company be liable with respect to any action,
proceeding, suit or claim against the Rights Agent unless the Rights Agent shall
have notified the Company, by letter or by facsimile confirmed by
letter, of the assertion of any action, proceeding, suit or claim against the
Rights Agent, promptly after the Rights Agent shall have notice of any such
assertion of an action, proceeding, suit or claim or have been served with the
summons or other first legal process giving information as to the nature and
basis of the action, proceeding, suit or claim. The Company shall be entitled to
participate at its
39
own expense in the defense of any such action, proceeding, suit or claim, and,
if the Company so elects, the Company shall assume the defense of any such
action, proceeding, suit or claim. In the event that the Company assumes such
defense, the Company shall not thereafter be liable for the fees and expenses of
any additional counsel retained by the Rights Agent, so long as the Company
shall retain counsel satisfactory to the Rights Agent, in the exercise of its
reasonable judgment, to defend such action, proceeding, suit or claim. The
Rights Agent agrees not to settle any litigation in connection with any action,
proceeding, suit or claim with respect to which it may seek indemnification from
the Company without the prior written consent of the Company.
SECTION 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares and the Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates (or, prior to
the Distribution Date, of the Common Shares) 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 Shares and the Preferred Shares
by registered or certified mail, and to the holders of the Right Certificates
(or, prior to the Distribution Date, of the Common Shares) 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 (or, prior to the Distribution Date, of
the Common Shares) (who shall, with such notice, submit such holder's Right
Certificate or, prior to the Distribution Date, the certificate representing
such holder's Common Shares, for inspection by the Company), then the registered
holder of any Right Certificate (or, prior to the Distribution Date, of the
Common Shares) 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 of the State
40
of New York (or of any other state of the United States so long as such
corporation is authorized to conduct a stock transfer or corporate trust
business in the State of New York), in good standing, having a [principal office
in the State of New York], which is authorized under such laws to exercise stock
transfer or corporate trust powers and is subject to supervision or examination
by Federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000; provided,
however, that the principal transfer agent for the Common Shares shall in any
event be qualified to be the Rights Agent. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and the Preferred Shares, and mail
a notice thereof in writing to the registered holders of the Right Certificates
(or, prior to the Distribution Date, of the Common Shares). Failure to give any
notice provided for in this Section 22, 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 23. Issuance of Additional Rights and Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change made in accordance with the provisions of this
Rights Agreement. In addition, in connection with the issuance or sale of Common
Shares following the Distribution Date and prior to the earlier of the
Redemption Date and the Expiration Date, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of share options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Right Certificates representing the
41
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right Certificate shall be issued if, and to
the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued, (ii) no
such Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof and
(iii) no such Right Certificate shall be issued to an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
SECTION 24. Redemption and Termination. (a) The Board of Directors
of the Company may, at its option, at any time prior to the earlier of (i) such
time as a Person becomes an Acquiring Person and (ii) the Expiration Date, order
the redemption of all, but not fewer than all, the then outstanding Rights at
the Redemption Price (the date of such redemption being the "Redemption Date"),
and the Company may, at its option, pay the Redemption Price either in cash or
Common Shares or other securities of the Company deemed by the Board of
Directors of the Company, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, 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. Within 10 Business Days after the action of the Board of
Directors of the Company ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Each such notice of redemption shall state the method by which
payment of the Redemption Price will be made. The notice, if mailed in the
manner herein provided, shall be conclusively presumed to have been duly given,
whether or not the holder of Rights receives such notice. In any case, failure
to give such notice by mail, or any defect in the notice, to any particular
holder of Rights shall not affect the sufficiency of the notice to other holders
of Rights. Neither the
42
Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner except as specifically set forth
in this Section or in Section 11(b) or in connection with the redemption,
acquisition or purchase of Common Shares prior to the Distribution Date.
SECTION 25. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) to or on
the Company shall be sufficiently given or made if sent by first-class,
postage-prepaid mail, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Monday Ltd
Clarendon ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Monday Ltd
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Subject to the provisions of Section 22, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) to or on
the Rights Agent shall be sufficiently given or made if sent by first-class,
postage prepaid mail, addressed (until another address is filed in writing with
the Company) as follows:
[RIGHTS AGENT]
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate (or, prior
to the Distribution Date, of the Common Shares) shall be sufficiently given or
made if sent by first-class, postage-prepaid mail, addressed to such holder at
the address of such holder as shown on the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares. Notwithstanding anything to
43
the contrary above, notice shall be sufficiently given or made to holders of
Rights if filed with and made publicly available by the U.S. Securities and
Exchange Commission.
SECTION 26. Supplements and Amendments. At any time prior to the
time any person becomes an Acquiring Person, and subject to the last sentence of
this Section 26, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Rights Agreement in any
manner which the Company may deem necessary or desirable (including the date on
which the Expiration Date or the Distribution Date shall occur, the amount of
the Purchase Price, the definition of "Acquiring Person" or the time during
which the Rights may be redeemed pursuant to Section 24) without the approval of
any holder of the Rights. From and after the time any Person becomes an
Acquiring Person, and subject to applicable law, the Company may, and the Rights
Agent shall if the Company so directs, amend this Rights Agreement without the
approval of any holders of Right Certificates (a) to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision of this Rights Agreement or (b) to
otherwise change or supplement any other provisions in this Agreement in any
manner which the Company may deem necessary or desirable and which in each such
case shall not (i) adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person), (ii) cause this Rights Agreement to become amendable other
than in accordance with this sentence or (iii) cause the Rights again to become
redeemable. Any supplement or amendment adopted during any period after any
Person has become an Acquiring Person but prior to the Distribution Date shall
be null and void unless such supplement or amendment could have been adopted
under the prior sentence from and after the Distribution Date. Any supplement or
amendment to this Rights Agreement duly approved by the Company that does not
amend Section 19, 20, 21 or 22 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. In addition, notwithstanding anything to the
contrary contained in this Rights Agreement, no supplement or amendment to this
Rights Agreement shall be made which reduces the Redemption Price (except as
required by Section 12(a)).
SECTION 27. Successors. All the covenants and provisions of this
Rights Agreement by or for the benefit of
44
the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 28. Benefits of Rights Agreement; Determinations and
Actions by the Board of Directors, etc. (a) Nothing in this Rights 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, of the Common Shares) any legal or equitable right, remedy or
claim under this Rights Agreement; but this Rights 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, of the
Common Shares).
(b) Except as explicitly otherwise provided in this Rights
Agreement, the Board of Directors of the Company shall have the exclusive power
and authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including the right and power to (i) interpret the provisions
of this Rights Agreement and (ii) make all determinations deemed necessary or
advisable for the administration of this Rights Agreement (including a
determination to redeem or not redeem the Rights or to amend this Rights
Agreement and a determination of whether there is an Acquiring Person).
(c) Nothing contained in this Rights 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 tender offer or other acquisition proposal, or to
recommend that holders of Common Shares reject any tender offer, or to take any
other action (including the commencement, prosecution, defense or settlement of
any litigation and the submission of additional or alternative offers or other
proposals) with respect to any tender offer or other acquisition proposal that
the Board of Directors believes is necessary or appropriate in the exercise of
such fiduciary duty.
SECTION 29. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is
45
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 Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
SECTION 30. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the law
of the State of Delaware and for all purposes shall be governed by and construed
in accordance with the law of such State applicable to contracts to be made and
performed entirely within such State.
SECTION 31. Counterparts; Effectiveness. This Rights 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. This Rights Agreement shall
be effective as of the Close of Business on the date hereof.
SECTION 32. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Rights Agreement.
46
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
THE COMMON SEAL ) MONDAY LTD,
was affixed to this )
deed in the presence of) by
------------------------------------------
Name:
Title: Director
by
------------------------------------------
Name:
Title: Director
[RIGHTS AGENT],
by
------------------------------------------
Name:
Title:
EXHIBIT A
APPENDIX A TO BYE-LAWS OF MONDAY LTD
TERMS OF ISSUE
of
SERIES A JUNIOR PREFERRED SHARES
of
MONDAY LTD
IT IS HEREBY CERTIFIED that the following constitutes an extract
from the minutes of a meeting of the Board of Directors of Monday Ltd, held on [
], 2002, and annexed as an appendix to the Bye-laws of Monday Ltd:
RESOLVED, that, subject to the powers of the Board of Directors of
the Company to revoke this resolution or in any way amend the rights and
restrictions of the shares created hereunder at any time before allotment, and
pursuant to the authority vested in the Board of Directors of the Company in
accordance with the provisions of the Bye-laws, as amended, a series of
preferred shares, par value US$0.0001 per share, of the Company is hereby
authorized, and the designation and number of shares thereof, and the voting
powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations or restrictions thereof, shall be as
follows:
SECTION 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series A Junior Preferred Shares" (the "Series A
Preferred Shares"). The number of shares initially constituting the Series A
Preferred Shares shall be [ ]; provided, however, that, if more than a total of
[ ] Series A Preferred Shares shall be issuable upon the exercise of Rights (the
"Rights") issued pursuant to the Rights Agreement dated as of [ ], 2002, between
the Company and [RIGHTS AGENT], a [ ] trust company, as Rights Agent (the
"Rights Agreement"), the Board of Directors of the Company shall direct by
resolution or resolutions that the total number of shares of Series A Preferred
Shares authorized to be issued to be increased (to the extent that the
Memorandum of Association and Bye-laws then permit) to the largest number of
whole shares (rounded up to the nearest whole number) issuable upon exercise of
such Rights.
2
SECTION 2. Dividends or Distributions. (a) Subject to the superior
rights of the holders of shares of any other series of Preferred Shares or other
class of shares of the Company ranking superior to the Series A Preferred Shares
with respect to dividends, the holders of the Series A Preferred Shares shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
the assets of the Company legally available therefor, (1) quarterly dividends
payable in cash on the last day of each fiscal quarter in each fiscal year of
the Company, or such other dates as the Board of Directors of the Company shall
approve (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 Series A Preferred Share or a fraction of a Series A
Preferred Share, in the amount of US$1.00 per whole share (rounded to the
nearest cent) less the amount of all cash dividends declared on the Series A
Preferred Shares pursuant to the following clause (2) since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any Series A
Preferred Share or fraction of a Series A Preferred Share, provided, however,
that in no event shall any quarterly dividend payable on a Series A Preferred
Share be less than zero and (2) dividends payable in cash on the payment date
for each cash dividend declared on the Class A Common Shares (as defined in the
Rights Agreement) in an amount per whole Series A Preferred Share (rounded to
the nearest cent) equal to the Formula Number (as hereinafter defined) then in
effect times the cash dividends then to be paid on each Class A Common Share. In
addition, if the Company shall pay any dividend or make any distribution on the
Class A Common Shares payable in assets, securities or other forms of noncash
consideration (other than dividends or distributions solely of Common Shares (as
defined in the Rights Agreement)), then, in each such case, the Company shall
simultaneously pay or make on each outstanding whole Series A Preferred Share a
dividend or distribution in like kind equal to the Formula Number (as
hereinafter defined) then in effect times such dividend or distribution on each
Class A Common Share. As used herein, the "Formula Number" shall be 1,000;
provided, however, that, if at any time after the Record Date (as defined in the
Rights Agreement), the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or make any distribution on the Common
Shares in Common Shares, (ii) subdivide the outstanding Common Shares into a
larger number of Common Shares or (iii) combine the outstanding Common Shares
into a smaller number of Common Shares, then in
3
each such event the Formula Number shall be adjusted to a number determined by
multiplying the Formula Number in effect immediately prior to such event by a
fraction, the numerator of which is the number of Common Shares that are
outstanding immediately after such event and the denominator of which is the
number of Common Shares that are outstanding immediately prior to such event
(and rounding the result to the nearest whole number); and provided further
that, if at any time after the Record Date, the Company shall issue any shares
of its capital stock in a merger, amalgamation, reclassification, or change of
the outstanding shares of Common Shares, then in each such event the Formula
Number shall be appropriately adjusted to reflect such merger, amalgamation,
reclassification or change so that each Preferred Share continues to be the
economic equivalent of a Formula Number of Common Shares prior to such merger,
reclassification or change.
(b) The Company shall declare a dividend or distribution on the
Series A Preferred Shares as provided in Section 2(a) immediately prior to or at
the same time it declares a dividend or distribution on the Class A Common
Shares (other than a dividend or distribution solely of Common Shares);
provided, however, that, in the event no dividend or distribution (other than a
dividend or distribution of Common Shares) shall have been declared on the Class
A Common Shares during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of US$1.00
per Series A Preferred Share shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date. The Board of Directors may fix a record date
for the determination of holders of Series A Preferred Shares entitled to
receive a dividend or distribution declared thereon, which record date shall, if
applicable, be the same as the record date for any corresponding dividend or
distribution on the Common Shares.
(c) Dividends shall begin to accrue and be cumulative on
outstanding Series A Preferred Shares from and after the Quarterly Dividend
Payment Date immediately preceding the date of original issue of such Series A
Preferred Shares; provided, however, that dividends on such shares which are
originally issued after the record date for the determination of holders of
Series A Preferred Shares entitled to receive a quarterly dividend and on or
prior to the next succeeding Quarterly Dividend Payment Date shall begin to
accrue and be cumulative from and after such Quarterly Dividend Payment Date.
Notwithstanding the
4
foregoing, dividends on Series A Preferred Shares which are originally issued
prior to the record date for the determination of holders of Series A Preferred
Shares entitled to receive a quarterly dividend on the first Quarterly Dividend
Payment Date shall be calculated as if cumulative from and after the last day of
the fiscal quarter next preceding the date of original issuance of such shares.
Accrued but unpaid dividends shall not bear interest. Dividends paid on Series A
Preferred Shares in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
(d) So long as any Series A Preferred Shares are outstanding, no
dividends or other distributions shall be declared, paid or distributed, or set
aside for payment or distribution, on the Common Shares unless, in each case,
the dividend required by this Section 2 to be declared on the Series A Preferred
Shares shall have been declared.
(e) The holders of Series A Preferred Shares shall not be entitled
to receive any dividends or other distributions except as provided herein.
SECTION 3. Voting Rights. The holders of Series A
Preferred Shares shall have the following voting rights:
(a) Each holder of Series A Preferred Shares shall be entitled to
a number of votes equal to the Formula Number then in effect, for each Series A
Preferred Share held of record on each matter on which holders of the Common
Shares or shareholders generally are entitled to vote, multiplied by the maximum
number of votes per share which any holder of the Common Share or shareholders
generally then have with respect to such matter (assuming any holding period or
other requirement to vote a greater number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of Series A Preferred Shares and the holders of Common Shares shall vote
together as one class for the election of directors of the Company and on all
other matters submitted to a vote of shareholders of the Company.
(c) If, at the time of any annual general meeting of shareholders
for the election of directors, the equivalent of six quarterly dividends
(whether or not consecutive) payable on any Series A Preferred Share are in
default, the
5
number of directors constituting the Board of Directors of the Company shall be
increased by two. In addition to voting together with the holders of Common
Shares for the election of other directors of the Company, the holders of record
of the Series A Preferred Shares, voting separately as a class to the exclusion
of the holders of Common Shares, shall be entitled at said meeting of
shareholders (and at each subsequent annual general meeting of shareholders),
unless all dividends in arrears have been paid or declared and set apart for
payment prior thereto, to vote for the election of two directors of the Company,
the holders of any Series A Preferred Share being entitled to cast a number of
votes per Series A Preferred Share equal to the Formula Number. 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 Series A Preferred
Shares 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 A Preferred Shares 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 A
Preferred Shares in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable law,
holders of Series A Preferred Shares shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Shares as set forth herein) for authorizing or
taking any corporate action.
SECTION 4. Certain Restrictions. (a) Whenever quarterly dividends
or other dividends or distributions payable on the Series A Preferred Shares as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared,
6
on Series A Preferred Shares outstanding shall have been paid in full, the
Company shall not
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Shares;
(ii) declare or pay dividends on or make any other distributions
on any shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Shares, except dividends paid ratably on the Series A Preferred Shares and
all such parity shares on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
any shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Shares; provided, however, that the Company may at any time redeem,
purchase or otherwise acquire shares in exchange for shares of the Company
ranking junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Shares; or
(iv) purchase or otherwise acquire for consideration any Series A
Preferred Shares, or any shares ranking on a parity with the Series A
Preferred Shares, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(b) The Company shall not permit any Subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of the Company unless
the Company could, under Section 4(a), purchase or otherwise acquire such
shares at such time and in such manner.
SECTION 5. Liquidation Rights. Upon the liquidation, dissolution
or winding up of the Company, whether
7
voluntary or involuntary, no distribution shall be made (1) to the holders of
any shares ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Shares unless, prior
thereto, the holders of Series A Preferred Shares shall have received an amount
equal to the accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment, plus an amount equal to the greater
of (x) $1,000 per whole share or (y) an aggregate amount per share equal to the
Formula Number then in effect times the aggregate amount to be distributed per
share to holders of Class A Common Shares or (2) to the holders of any shares
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Shares, except distributions made
ratably on the Series A Preferred Shares and all other such parity shares in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
SECTION 6. Consolidation, Merger, etc. In case the Company shall
enter into any consolidation, merger, amalgamation, combination or other
transaction in which the Common Shares are exchanged for or changed into other
shares or securities, cash or any other property, then in any such case the then
outstanding Series A Preferred Shares shall at the same time be similarly
exchanged or changed into an amount per share equal to the Formula Number then
in effect times the aggregate amount of shares, stock, securities, cash or any
other property (payable in kind), as the case may be, into which or for which
each Common Share is exchanged or changed. In the event both this Section 6 and
Section 2 appear to apply to a transaction, this Section 6 will prevail.
SECTION 7. No Redemption; No Sinking Fund. (a) Series A Preferred
Shares shall not be subject to redemption by the Company or at the option of any
holder of Series A Preferred Shares; provided, however, that, subject to Section
4(a)(iv), the Company may purchase or otherwise acquire outstanding Series A
Preferred Shares in the open market or by offer to any holder or holders of
Series A Preferred Shares.
(b) Series A Preferred Shares shall not be subject to or entitled
to the operation of a retirement or sinking fund.
SECTION 8. Ranking. Series A Preferred Shares shall rank junior to
all other series of Preferred Shares of
8
the Company (as to dividends and upon liquidation, dissolution or winding up)
unless the Board of Directors shall specifically determine otherwise in fixing
the powers, preferences and relative, participating, optional and other special
rights of the shares of such series and the qualifications, limitations and
restrictions thereof.
SECTION 9. Fractional Shares. Series A Preferred Shares shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-thousandth of a share
or any integral multiple of such fraction which shall entitle the holder, in
proportion to such holder's fractional shares, to receive dividends, exercise
voting rights, participate in distributions and to have the benefit of all other
rights of holders of Series A Preferred Shares. In lieu of fractional shares,
the Company, prior to the first issuance of a share or a fraction of a Series A
Preferred Share, may elect (a) to make a cash payment as provided in the Rights
Agreement for fractions of a share other than one one-thousandths of a share or
any integral multiple thereof or (b) to issue depositary receipts evidencing
such authorized fraction of a Series A Preferred Share pursuant to an
appropriate agreement between the Company and a depositary selected by the
Company; provided, however, 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 holders of the Series A Preferred
Shares.
SECTION 10. Reacquired Shares. Any shares of Series A Preferred
Shares purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancelation become authorized but unissued shares of
Preferred Shares, without designation as to series until such shares are once
more designated as part of a particular series by the Board of Directors
pursuant to the provisions of the Bye-Laws.
SECTION 11. Amendment. None of the powers, preferences and
relative, participating, optional and other special rights of the Series A
Preferred Shares as provided herein shall be amended in any manner (including by
way of amalgamation, merger or consolidation of the Company) which would alter
or change the powers, preferences, rights or privileges of the holders of Series
A Preferred Shares so as to affect them adversely without the affirmative vote
of the
9
holders of at least 66-2/3% of the outstanding Series A Preferred Shares, voting
as a separate class.
EXHIBIT B
[Form of Right Certificate]
Certificate No. [R]-
___________ Rights
NOT EXERCISABLE AFTER [ ], 2012, OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT US$0.01 PER RIGHT, AND TO EXCHANGE,
BOTH OF WHICH MUST BE MADE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.
Right Certificate
MONDAY LTD
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Agreement
dated as of [ ], 2002 as it may be amended from time to time (the "Rights
Agreement"), between Monday Ltd, a company incorporated under the laws of
Bermuda (the "Company"), and [RIGHTS AGENT], as Rights Agent (the "Rights
Agent"), unless the Rights evidenced hereby shall have been previously redeemed
or exchanged by the Company, to purchase from the Company at any time after the
Distribution Date (as defined in the Rights Agreement) and prior to 5:00 p.m.,
New York City time, on the 10th anniversary of the date of the Rights Agreement
(the "Expiration Date"), at the principal office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one one-
thousandth (1/1,000th) of a fully paid, Series A Junior Preferred Share,
US$0.0001 par value, of the Company (the "Preferred Shares"), at a purchase
price per one one- thousandth (1/1,000th) of a share equal to US$100.00 (the
"Purchase Price") payable in cash, upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed.
The Purchase Price and the number and kind of shares which may be
purchased upon exercise of each Right evidenced by this Right Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be so purchased as of the Record Date (as defined in the Rights Agreement).
As provided in the Rights Agreement, the Purchase Price and the number and kind
of shares which may be purchased upon the exercise of each Right evidenced by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Right Certificate is subject to all 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
reference to the Rights Agreement 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 offices of the Rights Agent. Copies of the Rights Agreement are
also available from the Company upon written request.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal stock transfer or corporate trust office of the
Rights Agent, 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 and kind of shares 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 Right Certificate may be redeemed by the Company at its option
at a redemption price (in cash or
3
Common Shares or other securities of the Company deemed by the Board of
Directors to be at least equivalent in value) of US$0.01 per Right (which amount
shall be subject to adjustment as provided in the Rights Agreement) at any time
prior to the earlier of (i) such time as a Person becomes an Acquiring Person
and (ii) the Expiration Date.
The Company may, but shall not be required to, issue fractions of
Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional shares, the Company may elect to make a cash payment
as provided in the Rights Agreement for fractions of a share other than one
one-thousandth (1/1,000th) of a share or any integral multiple thereof or to
issue certificates or utilize a depositary arrangement as provided in the terms
of the Rights Agreement and the Preferred Shares.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company, including, without limitation,
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or other distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have been exercised as
provided in accordance with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been counter signed by an authorized signatory of
the Rights Agent.
4
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of:
THE COMMON SEAL ) by
was affixed to this )
deed in the presence of) ------------------------------------------
Name:
Title: Director
by
------------------------------------------
Name:
Title: Director
Date of countersignature:
Countersigned:
[RIGHTS AGENT],
as Rights Agent,
by
---------------------
Authorized Signatory
5
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Preferred Shares (or other
shares) issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of: Please insert social security or other
identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to: Please insert
social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated:_____________,_____
____________________________________________
Signature
Signature Guaranteed:
6
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)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ____________, ____
________________________________
Signature
Signature Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced by
this Right Certificate are not being sold, assigned or transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), (2) this
Rights Certificate is not being sold, assigned or transferred to or on behalf of
any such Acquiring Person, Affiliate or Associate and (3) after inquiry and to
the best knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Right Certificate from any Person who is or was any
such Acquiring Person or an Affiliate or Associate thereof.
________________________________
Signature
7
NOTICE
The signature on the foregoing Form of Election to Purchase or
Form of Assignment must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
EXHIBIT C
RIGHTS BENEFICIALLY OWNED BY ANY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND
NONTRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PREFERRED SHARES
OF MONDAY LTD
On [ ], 2002, the Board of Directors of Monday Ltd (the "Company")
declared a distribution of one Right for each outstanding share of Class A
common shares, par value US$0.0001 per share ("Class A Common Shares") and Class
X common shares, par value US$0.0001 per share, of the Company (together, the
"Common Shares"). The Rights will be issued to the holders of record of Common
Shares outstanding at the close of business on the date on which the initial
public offering of Class A Common Shares is consummated (the "Record Date") and
with respect to Common Shares issued thereafter until the Distribution Date (as
defined below). Each Right, when it becomes exercisable as described below, will
entitle the registered holder to purchase from the Company one one- thousandth
(1/1,000th) of a Series A Junior Preferred Share, par value US$0.0001 per share,
of the Company (the "Preferred Shares") at a price of US$100.00 (the "Purchase
Price"). The description and terms of the Rights are set forth in a Rights
Agreement dated as of [ ], 2002 as it may be amended from time to time (the
"Rights Agreement"), between the Company and [ ], as Rights Agent (the "Rights
Agent").
Until the earlier of (i) such time as the Company learns that a
person or group (including any affiliate or associate of such person or group)
has acquired, or obtained the right to acquire, beneficial ownership of more
than 15% of the outstanding Common Shares (such person or group being called an
"Acquiring Person"), and (ii) ten days (or such later date, if any, as may be
designated by the Board of Directors of the Company) following the commencement
of, or first public disclosure of an intention to commence, a tender or exchange
offer for outstanding Common Shares which could result in such person or group
becoming the beneficial owner of more than 15% of the outstanding Common Shares
(subject to certain exceptions), (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced by certificates for Common
Shares registered in the names of the holders thereof, which certificates for
Common Shares shall also be deemed to be Right Certificates (as defined below)
and not by separate Right Certificates. With respect to any certificate for
Common Shares outstanding as of the Record Date, until the Distribution Date,
the Rights associated with
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the Common Shares represented by such certificates shall be evidenced by such
certificates along with a copy of this Summary of Rights, and the surrender for
transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby.
Therefore, until the Distribution Date, the Rights will be transferred with and
only with the Common Shares.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at [ ], 2012 (the "Expiration Date"), unless earlier redeemed or
exchanged by the Company as described below.
The number of Preferred Shares or other securities issuable upon
exercise of the Rights is subject to adjustment by the Board of Directors of the
Company in the event of any change in the Common Shares or Preferred Shares,
whether by reason of bonus issues, share dividends, share splits, subdivisions,
recapitalizations, reclassifications, mergers, amalgamations, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred Shares or
otherwise. The Purchase Price and the number of Preferred Shares or other
securities issuable upon exercise of the Rights are subject to adjustment from
time to time in the event of the declaration of a stock dividend on the Common
Shares payable in Common Shares or a subdivision or combination of the Common
Shares prior to the Distribution Date.
The Preferred Shares are authorized to be issued in fractions
which are an integral multiple of one one-thousandth (1/1,000th) of a Preferred
Share. The Company may, but is not required to, issue fractions of shares upon
the exercise of Rights, and in lieu of fractional shares, the Company may make a
cash payment based on the market price of such shares on the trading date
immediately prior to the date of exercise or utilize a depositary arrangement as
provided by the terms of the Preferred Shares.
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Subject to the right of the Board of Directors of the Company to
redeem or exchange the Rights as described below, at such time as there is an
Acquiring Person, the holder of each Right will thereafter have the right to
receive, upon exercise thereof, for the Purchase Price, that number of one
one-thousandths of a Preferred Share (or, at the option of the Board of
Directors of the Company, such number of duly authorized, validly issued, fully
paid and nonassessable Class A Common Shares) equal to the number of Class A
Common Shares which at the time of such transaction would have a market value of
twice the Purchase Price. Any Rights that are or were beneficially owned by an
Acquiring Person on or after the Distribution Date will become null and void and
will not be subject to the "flip-in" provision.
In the event the Company is acquired in a merger, amalgamation or
other business combination by an Acquiring Person that is a publicly traded
corporation or 50% or more of the Company's assets or assets representing 50% or
more of the Company's earning power are sold, leased, exchanged or otherwise
transferred (in one or more transactions) to an Acquiring Person that is a
publicly traded corporation, proper provision must be made so that each Right
will entitle its holder to purchase, for the Purchase Price, that number of
common shares of such corporation which at the time of the transaction would
have a market value of twice the Purchase Price. In the event the Company is
acquired in a merger, amalgamation or other business combination by an Acquiring
Person that is not a publicly traded entity or 50% or more of the Company's
assets or assets representing 50% or more of the earning power of the Company
are sold, leased, exchanged or otherwise transferred (in one or more
transactions) to an Acquiring Person that is not a publicly traded entity,
proper provision must be made so that each Right will entitle its holder to
purchase, for the Purchase Price, at such holder's option, (i) that number of
shares of the surviving corporation in the transaction with such entity (or, at
such holder's option, of the surviving corporation in such acquisition, which
could be the Company) which at the time of the transaction would have a book
value of twice the Purchase Price or (ii) that number of shares of such entity
which at the time of the transaction would have a book value of twice the
Purchase Price or (iii) if such entity has an affiliate which has publicly
traded common shares, that number of common shares of such affiliate which at
the time of the transaction would have a market value of twice the Purchase
Price. The
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"flip-over" provision only applies to a merger, amalgamation or similar business
combination with an Acquiring Person.
ANY RIGHTS THAT ARE OR WERE, AT ANY TIME ON OR AFTER THE DATE AN
ACQUIRING PERSON BECOMES SUCH, BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (OR A TRANSFEREE THEREOF) WILL
BECOME NULL AND VOID AND ANY HOLDER OF ANY SUCH RIGHT (INCLUDING ANY SUBSEQUENT
HOLDER) WILL BE UNABLE TO EXERCISE ANY SUCH RIGHT.
The Rights are redeemable by the Board of Directors at a
redemption price of US$0.01 per Right (the "Redemption Price") any time prior to
the earlier of (i) such time as there is an Acquiring Person and (ii) the
Expiration Date. Immediately upon the action of the Board electing to redeem the
Rights, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
After there is an Acquiring Person the Board of Directors may
elect to exchange each Right (other than Rights owned by an Acquiring Person)
for consideration per Right consisting of one-half of the securities that would
be issuable at such time upon the exercise of one Right pursuant to the terms of
the Rights Agreement. Notwithstanding the foregoing, the Board of Directors of
the Company shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
At any time prior to such time as there shall be an Acquiring
Person, the Company may, without the approval of any holder of the Rights,
supplement or amend any provision of the Rights Agreement (including the date on
which the Expiration Date or the Distribution Date shall occur, the amount of
the Purchase Price or the definition of "Acquiring Person"), except that no
supplement or amendment shall be made that reduces the Redemption Price of the
Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
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A copy of the Rights Agreement, including the terms of the
Preferred Shares, will be filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form S-1 (Registration No. 333-87408).
A copy of the Rights Agreement is available free of charge from the Company upon
written request. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.