Exhibit 1
RIGHTS AGREEMENT
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This agreement ("Rights Agreement"), dated as of October 15,
1999, between Safety-Kleen Corp., a Delaware corporation (the "Company"), and
Equiserve Trust Company, N.A. (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company on October 5,
1999 (i) authorized the issuance and declared a dividend of one right (a
"Right") for each share of the common stock, par value $1.00 per share ("Common
Stock"), of the Company outstanding as of the close of business on October 25,
1999 (the "Record Date"), each Right representing the right to purchase one
share (subject to adjustment) of Common Stock of the Company upon the terms and
subject to the conditions hereinafter set forth, and (ii) further authorized the
issuance of one Right (subject to adjustment) with respect to each share of
Common Stock of the Company that shall become outstanding (whether originally
issued or delivered from the Company's treasury) between the Record Date and the
Distribution Date (as defined herein);
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner (as such term
is hereinafter defined) of 15% or more of the outstanding Common Stock;
provided, however, that an Acquiring Person shall not include an Exempt Person
(as such term is hereinafter defined). Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as a result of an acquisition of shares of
Common Stock by the Company which, by reducing the number of such shares then
outstanding, increases the proportionate number of shares beneficially owned by
such person to 15% or more of the outstanding Common Stock; provided that if a
Person (other than an Exempt Person) becomes the Beneficial Owner of 15% or more
of the outstanding Common Stock by reason of share purchases by the Company and,
after such share purchases by the Company, becomes the Beneficial Owner of any
additional shares of Common Stock, such Person shall be deemed to be an
"Acquiring Person." The word "outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then issued and outstanding which such Person would be
deemed to own beneficially hereunder. Notwithstanding
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the foregoing, neither Xxxxxxx Inc., a Canadian corporation, nor any Affiliate
thereof, shall be deemed to be an Acquiring Person.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Rights Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding, whether or not
in writing, or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", (x) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase
or exchange or (y) securities which such Person has a right to acquire
on the exercise of Rights at any time prior to the occurrence of a
Section 11(a)(ii) Event or a Section 13 Event or (z) securities
issuable upon exercise of Rights from and after the occurrence of a
Section 11(a)(ii) Event or a Section 13 Event, provided such Rights
were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a)
or Section 22 hereof ("original Rights") or pursuant to Section 11(i)
with respect to an adjustment to original Rights; or (B) the right to
vote pursuant to any agreement, arrangement or understanding (whether
or not in writing); provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", any
securities if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
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(iii) 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, whether or not in writing, for the purpose of acquiring,
holding, voting (except as described in clause (B) of subparagraph (ii)
of this paragraph (d)) or disposing of any securities of the Company.
Notwithstanding anything in this paragraph (d) to the contrary, a
Person engaged in the business of underwriting securities shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", any
securities acquired in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such acquisition.
(e) "Board of Directors" shall mean the Board of Directors of
the Company or any duly authorized committee thereof.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to close.
(g) "close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(h) "Common Stock" when used with reference to the Company
shall mean the common stock (currently $1.00 par value per share) of the
Company. "Common Stock" when used with reference to any Person other than the
Company which shall be organized in corporate form shall mean the capital stock
or other equity security with the greatest per share voting power of such
Person. "Common Stock" when used with reference to any Person other than the
Company which shall not be organized in corporate form shall mean units of
beneficial interest which shall represent the right to participate in profits,
losses, deductions and credits of such Person and which shall be entitled to
exercise the greatest voting power per unit of such Person.
(i) "common stock equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(j) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(k) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
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(m) "equivalent common stock" shall have the meaning set forth
in Section 11(b) hereof.
(n) "Exchange Act" shall have the meaning set forth in Section
1(c) hereof.
(o) "Exempt Person" shall mean the Company, any Subsidiary of
the Company, any employee benefit plan or employee stock plan, including, but
not limited to, a Stock Option Plan, of the Company or of any Subsidiary of the
Company, or any person or entity organized, appointed, established or holding
Common stock for or pursuant to the terms of any such plan.
(p) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(r) "Invalidation time" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(s) "NASDAQ" shall have the meaning set forth in Section 11(d)
hereof.
(t) "NYSE" shall have the meaning set forth in Section 9(b)
hereof.
(u) "Permitted Tender Offer" shall mean an all cash tender
offer for all outstanding shares of Common Stock of the Company on the same
terms (i) which is made pursuant to schedule 14D-1 filed with the Securities and
Exchange Commission, (ii) pursuant to which no purchases of Common Stock are
made for at least 60 days from the date the offer is first published, sent or
given within the meaning of Rule 14d-2(a) under the Exchange Act and (iii) which
is accepted by the holders of not less than the number of shares of Common Stock
that, when aggregated with the number of shares of Common Stock owned by the
person making the offer (and its Affiliates or Associates) equals or exceeds 80%
of the then outstanding shares of Common Stock.
(v) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(w) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(x) INTENTIONALLY OMITTED
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(y) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(z) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(aa) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(bb) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii)(A), (B) or (C) hereof.
(cc) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(dd) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(ee) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(ff) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that Acquiring Person
has become such or such earlier date as a majority of the Board of Directors of
the Company shall become aware of the existence of an Acquiring Person.
(gg) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(hh) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or other
persons performing similar functions are beneficially owned, directly or
indirectly, by such Person and any corporation or other entity that is otherwise
controlled by such Person.
(ii) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(jj) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(kk) "Triggering Event" shall mean any event described in
Section 11(a)(ii)(A), (B), or (C) or Section 13 hereof. Any determination
required by the definitions contained or referred to in this Section 1 shall be
made by the Board of Directors in good faith, and any such determination shall
be binding on the Rights Agent and the holders of the Rights.
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Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may change Rights Agents at its discretion. The Company
may from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable upon ten (10) days prior written notice to Rights Agent. The Rights
Agent shall have no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such Co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) Until the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day after the Stock Acquisition
Date or (ii) such date as the Board of Directors may fix following the
commencement by any Person (other than an Exempt Person) of, or the first public
announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer upon the successful consummation of which
such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 15% or more of the outstanding Common Stock (irrespective of
whether any shares are actually purchased pursuant to any such offer), provided
that such date fixed by the Board of Directors shall not be later than the
nineteenth Business Day after the date of such commencement or public
announcement (the date specified in clauses (i) and (ii) being subject to
extension by the Board of Directors pursuant to Section 25 hereof), (x) the
Rights will be evidenced (subject to the provisions of Section 3(c) hereof) by
the certificates for the Common Stock registered in the names of the holders of
the Common Stock and not by separate Right certificates, and (y) each Right will
be transferable only in connection with the transfer of a share (subject to
adjustment as hereinafter provided) of Common Stock; provided that if the
Distribution Date would be prior to the Record Date, the Record date shall be
the Distribution Date; and provided, further, that if a tender or exchange offer
referred to in clause (ii) above is cancelled or withdrawn prior to the
Distribution Date, such offer shall be deemed, for purposes of this Rights
Agreement, never to have been made. As soon as practicable after the
Distribution Date, the Rights Agent will mail, by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Distribution Date, as shown by the records of the Company, at the address of
such holder shown on such records, a Right certificate in substantially the form
of Exhibit A hereto ("Right Certificate") evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of the Right
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Right Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Distribution Date the rights
will be evidenced solely by such Right Certificates.
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(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Common Stock,
substantially in the form attached hereto as Exhibit B ("Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of Common Stock as of
the close of business on the Record Date, at the address of such holder shown on
the records of the Company.
(c) With respect to certificates for Common Stock outstanding
as of the Record Date, until the Distribution Date (or, if earlier, the
Expiration Date), the Rights will be evidenced by such certificates for Common
Stock registered in the names of the holders thereof together with a copy of the
Summary of Rights. Until the Distribution Date (or, if earlier, the Expiration
Date), the surrender for transfer of any certificate for Common Stock
outstanding on the Record Date, with or without a copy of the Summary of Rights,
shall also constitute the surrender for transfer of the Rights associated with
the Common Stock represented thereby.
(d) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to the earlier of
the Distribution Date or the expiration Date and, in certain circumstances
provided in Section 22 hereof, may be issued in respect of shares of Common
Stock that become outstanding after the Distribution Date. Certificates issued
for Common Stock (including, without limitation, certificates issued upon
original issuance, disposition from the Company's treasury or transfer or
exchange of Common Stock) after the Record date but prior to the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date (or, in
certain circumstances as provided in Section 22 hereof, after the Distribution
Date) shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Safety-Kleen
Corp. and Equiserve Trust Company, N.A., as Rights Agent, dated as of
October 15, 1999 (the "Rights Agreement"), the terms of which are
incorporated herein by reference and a copy of which is on file at the
principal executive office of Safety-Kleen Corp. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. Safety-Kleen Corp. will mail to the holder of this
certificate a copy of the Rights Agreement without charge within five
days after receipt by it of a written request therefor. Under certain
circumstances as provided in the Rights Agreement, Rights issued to or
beneficially owned by Acquiring Persons or their Associates or
Affiliates (as such terms are defined in the Rights Agreement) or any
subsequent holder of such Rights may become null and void as provided
in Section 11(a)(ii) of the Rights Agreement.
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With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the Distribution Date, be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
surrender for transfer of the Rights associated with the Common Stock
represented thereby.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in Exhibit A
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Rights
Agreement, or as may be required to comply with any 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 11 and 22 hereof, the Right
Certificates evidencing the Rights, whenever issued, shall be dated as of the
Record Date, and on their face Right Certificates shall entitle the holders
thereof to purchase one share of Common Stock, or other securities or property
as provided herein, as the same may from time to time be adjusted as provided
herein, at the price per share set forth therein, as the same may from time to
time be adjusted as provided herein (the "Purchase Price").
(b) Notwithstanding any other provision of this Rights
Agreement, any Right Certificate that represents Rights that are beneficially
owned by (i) an Acquiring Person or any Affiliate or Associate thereof, (ii) a
transferee of an Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the Acquiring Person became such or (iii) a
transferee of an Acquiring Person who becomes a transferee prior to or
concurrently with the Acquiring Person's becoming such pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to holders
of its equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (B)
a transfer (whether or not for consideration) which the Board of Directors has
determined is part of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of Section 11(a)(ii) hereof, and subsequent
transferees of such Persons (or of any transferee of such Rights), and any Right
Certificate issued pursuant to Section 6 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall have impressed on, printed on, written on or otherwise affixed
to it (if the Company or the Rights Agent has knowledge that such Person is an
Acquiring Person or an Associate or Affiliate thereof or transferee of such
Persons or a nominee of any of the foregoing) the following legend:
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The beneficial owner of the Rights represented by this Right
Certificate is an Acquiring Person or an Affiliate or Associate (as
defined in the Rights Agreement) of an Acquiring Person or a subsequent
holder of such Right Certificates beneficially owned by such Persons.
Accordingly, under certain circumstances as provided in the Rights
Agreement, this Right Certificate and the Rights represented hereby may
become null and void as provided in Section 11(a)(ii) of the Rights
Agreement.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, issued and delivered
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates, the
date of each of the Right Certificates, and the certificate numbers for each of
the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions hereof, at any time after the
close of business on the Distribution Date and at or prior to the close of
business on the Expiration Date, any Right Certificate or Certificates may be
(i) transferred or (ii) split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer any Right Certificate shall surrender the Right
Certificate at the shareholder services office of the Rights Agent with the form
of assignment on the reverse side thereof duly endorsed (or enclose with such
Right Certificate a written instrument of transfer in form satisfactory to the
Company and the Rights Agent), duly executed by the registered holder thereof or
his attorney duly authorized in writing, and with such signature duly
guaranteed. Any registered holder desiring to 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
split up, combined or exchanged at the shareholder services office of the Rights
Agent. Thereupon the Rights Agent, subject to the provisions hereof, shall
countersign (by
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manual signature) 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 or a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, if requested by
the Company, reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will execute and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
owner in lieu of the Right Certificate to lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Except as otherwise provided herein, the Rights shall
become exercisable at the close of business on the Distribution Date, and may be
exercised in whole or in part at any time after the Distribution Date upon
surrender of the Right Certificates, with the form of election to purchase on
the reverse side thereof duly executed (with such signature duly guaranteed), to
the Rights Agent at its principal office in New York, New York, together with
payment of the aggregate Purchase Price, subject to adjustment as hereinafter
provided, with respect to the number of shares of Common Stock (except as
otherwise provided herein) as to which such surrendered Rights are then being
exercised, at or prior to the close of business on the date (the "Expiration
Date") which is the earlier of (i) October 15, 2009 (the "Final Expiration
Date"), or (ii) the time at which the Rights are redeemed as provided in Section
23 hereof.
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(b) The Purchase Price shall initially be $50 for each share
of Common Stock issued pursuant to the exercise of a Right. The Purchase Price
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof. The Purchase Price shall be payable in lawful money of the United
States of America, in accordance with Section 7(c) hereof.
(c) Except as provided in Section 7(d) hereof, upon receipt of
a Right Certificate representing exercisable Rights with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the shares to be purchased and an amount equal to any applicable transfer
tax, by cash, certified or official bank check or draft payable to the order of
the Company or the Rights Agent, the Rights Agent shall, subject to Section
20(j) hereof, thereupon promptly (i) provide itself or requisition from any
transfer agent of the Common Stock certificates for the number of shares of
Common Stock so elected to be purchased and the Company will comply and hereby
authorizes and directs such transfer agent to comply with all such requests,
(ii) requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14(b) hereof, and (iii)
promptly after receipt of such Common Stock certificates cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and, when appropriate, after receipt promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate; provided,
however, that in the case of a purchase of securities, other than Common Stock
of the Company, pursuant to Section 13 hereof, the Rights Agent shall promptly
take the appropriate actions corresponding to the foregoing clauses (i) through
(iii). In the event that the Company is obligated to issue other securities of
the Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder 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.
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Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof the Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Common
Stock.
(a) The Company covenants and agrees that at all times it will
cause to be reserved and kept available, out of and to the extent of its
authorized and unissued shares of Common Stock not reserved for another purpose
or shares held in its treasury, the number of shares of Common Stock (and,
following the occurrence of a Triggering Event, other securities) that, as
provided in this Agreement, including Section 11(a)(ii) hereof, will be
sufficient to permit the exercise in full of all outstanding Rights; provided,
however, that the Company shall not be required to reserve and keep available
shares of Common Stock or other securities sufficient to permit the exercise in
full of all outstanding Rights pursuant to the adjustments set forth in Section
11(a)(ii), Section 11(a)(iii) or Section 13 hereof unless the Rights become
exercisable pursuant to such adjustments, and then only to the extent the Rights
become exercisable pursuant to such adjustments.
(b) The Company shall (i) use its best efforts to cause, from
and after such times as the Rights become exercisable, the Rights and all shares
of Common Stock (and following the occurrence of a Triggering Event, other
securities) issued or reserved for issuance upon exercise thereof to be listed
on the New York Stock Exchange (the "NYSE") and the Pacific Stock Exchange upon
official notice of issuance upon such exercise and (ii) if then necessary to
permit the offer and issuance of such shares of Common Stock (and, following the
occurrence of a Triggering Event, other securities), register and qualify such
shares of Common Stock (and, following the occurrence of a Triggering Event,
other securities) under the Securities Act and any applicable state securities
or "blue sky" laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are no longer
exercisable for such securities or the Expiration Date of the Rights. The
Company may temporarily suspend, for a period of time not to exceed ninety days,
the exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared effective.
13
(c) The Company covenants and agrees that it will take all
such actions as may be necessary to insure that all shares of Common Stock (and
following the occurrence of a Triggering Event, other securities) delivered upon
exercise of Rights shall, to the extent applicable, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of common Stock (or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than the registered holder of
the Right Certificate, or the issuance or delivery of certificates for Common
Stock (or other securities, as the case may be) upon exercise of Rights in a
name other than that of, the registered holder of the Right Certificate, and the
Company shall not be required to issue or deliver a Right Certificate or
certificate for Common Stock (or other securities, as the case may be) to a
person other than such registered holder until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose
name any certificate for shares of Common Stock (or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Common Stock (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such rights
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made.
14
Section 11. Adjustments to Number and Kind of Shares, Number
of Rights or Purchase Price. The number and kind of shares subject to purchase
upon the exercise of each Right, the number of Rights outstanding and the
Purchase Price are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any time after the
Record Date (A) declare or pay any dividend on Common Stock payable in shares of
Common Stock, (B) subdivide or split the outstanding shares of Common Stock into
a greater number of shares, (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock or (D) issue any shares of its capital stock
in a reclassification of the Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect immediately prior to the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of Common
Stock or capital stock, as the case may be, issuable upon exercise of a Right on
such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of an
amount equal to (x) the Purchase Price in effect immediately prior to the record
date or effective date of such dividend, subdivision, combination or
reclassification multiplied by (y) the number of shares of Common Stock or
capital stock, as the case may be, as to which a Right was exercisable
immediately prior to such date, the aggregate number and kind of shares of
Common Stock or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date, the holder thereof would have owned
upon such exercise and been entitled to receive, or would be deemed to have
owned, by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event, at any time after the date of this
Agreement
(A) any Acquiring Person, directly or
indirectly, other than pursuant to any transaction set forth
in Section 13(a) hereof, (1) shall merge with and into the
Company or any of its Subsidiaries or otherwise combine with
the Company or any of its Subsidiaries and the Company or such
Subsidiary shall be the continuing or surviving corporation of
such merger or combination and the Common Stock of the Company
shall remain outstanding and no shares thereof shall be
changed into or exchanged for stock or other securities of the
Company or of any other Person or cash or any other property,
or (2) shall, in one or more transactions, other than in
connection with the exercise of a Right or Rights and other
than in connection with the exercise or conversion of
securities exercisable for or convertible into securities of
the Company or of any Subsidiary of the Company (which
securities were outstanding prior to the time the Acquiring
Person became such), transfer any assets or property to the
Company or any of its Subsidiaries in exchange (in whole or in
part) for any shares of any class of capital stock of the
Company or any of its Subsidiaries or any securities
exercisable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries, or
otherwise obtain from the Company or any of its Subsidiaries,
with or without consideration, any additional shares of any
class of capital stock of the Company or any of its
Subsidiaries or any securities exercisable for or convertible
into shares of any class of capital stock of the Company or
any of its Subsidiaries (other than as part of a pro rata
offer or distribution by the Company or such Subsidiary to all
holders of such shares), or (3) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire
(other than as a pro rata dividend) or dispose, in one
transaction or a series of transactions, to, from or with, as
the case may be, the Company or any of its Subsidiaries,
assets (including securities) on terms and conditions less
favorable to the Company or such Subsidiary than the Company
or such Subsidiary
15
would be able to obtain in arm's-length negotiation with an
unaffiliated third party, or (4) shall receive any
compensation from the Company or any of its Subsidiaries for
services other than compensation for employment as a regular
or part time employee, or fees for serving as a director, at
rates in accordance with the Company's (or its Subsidiaries')
past practices, or (5) shall receive the benefit, directly or
indirectly (except proportionately as a shareholder), of any
loans, advances, guarantees, pledges or other financial
assistance or any tax credits or tax advantage provided by the
Company or any of its Subsidiaries, or (6) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire (other than as a pro rata dividend) or
dispose, in one transaction or a series of transactions, to,
from or with, as the case may be, the Company or any of its
subsidiaries (other than in connection with the lines of
business, if any, engaged in between the Company and the
Acquiring Person or Associate or Affiliate thereof prior to
the time the Acquiring Person became such) assets having an
aggregate fair market value of more than $100,000,000; or
(B) any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person;
other than pursuant to a Permitted Tender Offer; or
16
(C) during such time as there is an
Acquiring Person, there shall be any reclassification of
securities (including any reverse stock split), or any
recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or
any other transaction or series of transactions involving the
Company or any of its Subsidiaries (whether or not with or
into or otherwise involving an Acquiring Person or any
Affiliate or Associate of such Acquiring Person) which has the
effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any class
of equity securities of the Company or any of its
Subsidiaries, or securities exercisable for or convertible
into equity securities of the Company or any of its
Subsidiaries, which is directly or indirectly beneficially
owned by any Acquiring Person or any Affiliate or Associate of
any Acquiring Person;
then, subject to the last sentence of Section 23(a) hereof, and except as
otherwise provided in this Section 11, each holder of a Right shall thereafter
have the right to receive, upon exercise of a Right in accordance with the terms
of this Rights Agreement and payment of the aggregate Purchase Price with
respect to the total number of shares of Common Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11 (a)(ii)
Event, such number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the number
of shares of Common Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
by 50% of the Current Market Price per share of Common Stock on the date of such
first occurrence (such number of shares is herein called the "Adjustment
Shares"); provided that the number of Adjustment Shares shall be further
appropriately adjusted to reflect any events described in Sections 11(a)(i), (b)
or (c) hereof occurring after the date of such first occurrence; and provided,
further, that if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii).
Notwithstanding anything in this Rights Agreement to the
contrary, from and after the time (the "invalidation time") when (A) any Person
first becomes an Acquiring Person, other than through a Permitted Tender Offer
or (B) there occurs any event described in Section 11(a)(ii)(A) or (C) in
respect of any Acquiring Person who became such through a Permitted Tender
Offer, any Rights that are beneficially owned by (x) such Acquiring Person (or
any Associate or Affiliate of such Acquiring Person), (y) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
after the invalidation time or (z) a transferee of such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the invalidation time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of this paragraph, and subsequent transferees of such Persons,
shall be void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such rights under any
provision of this Rights Agreement. The Company shall use all reasonable effort
to insure that the provisions of this Section 11(a)(ii) and of Section 4(b)
hereof are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person whose Rights would be void pursuant to the provisions of this paragraph
or any Associate or Affiliate thereof; no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the provisions of this paragraph or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to the provisions of
this paragraph shall be cancelled.
17
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's certificate of incorporation
but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with Section 11(a)(ii) and the Rights shall become so
exercisable, the Company shall, to the extent permitted by applicable law and
any material agreements in effect on the date hereof to which the Company is a
party: (A) determine the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") and (B) with respect to each Right,
upon exercise of such Right, issue shares of Common Stock to the extent
available for the exercise in full of such Right and, to the extent shares of
Common Stock are not so available, make adequate provision to substitute for the
Adjustment Shares not received upon exercise of such Right (1) cash, (2) other
equity securities of the Company (including, without limitation, shares or units
of shares of preferred stock which, by virtue of having dividend, voting and
liquidation rights substantially comparable to those of the Common Stock, are
deemed in good faith by the Board of Directors to have substantially the same
value as shares of Common Stock (such shares or units of shares of preferred
stock are herein called "common stock equivalents")), (3) debt securities of the
Company, (4) other assets, (5) a reduction of the Purchase Price or (6) any
combination of the foregoing, having a value which, when added to the value of
the shares of Common Stock actually issued upon exercise of such Right, shall
have an aggregate value equal to the Current Value, where such aggregate value
has been determined in good faith by the Board of Directors based upon the
advice of a nationally recognized independent investment banking firm selected
in good faith by the Board of Directors; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within thirty days following the date (the "Section 11(a)(ii) Trigger Date")
which is the later of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company's right of redemption pursuant to Section
23(a) expires, then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the excess of
(x) the Current Value over (y) the Purchase Price times the number of shares of
Common Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event. If the Board of Directors shall
determine in good faith that it is likely sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights, the
thirty day period set forth above may be extended to the extent necessary, but
not more than ninety days after the Section 11(a)(ii) Trigger Date, in order
that the Company may seek shareholder approval for the authorization of such
additional shares (such thirty day period, as it may be extended, is herein
called the "Substitution Period"). To the extent that the Company determines
that some action must be taken pursuant to the first and/or second sentence of
this Section 11(a)(iii), the Company (x) shall provide, subject to Section
11(a)(ii) hereof and the last sentence of this Section 11(a)(iii), that such
action shall apply uniformly to all outstanding Rights until the expiration of
the Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no
18
longer in effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the Current Market Price per share of the Common Stock on
the Section 11(a)(ii) Trigger Date and the per share or per unit value of any
"common stock equivalent" shall be deemed to equal the Current Market Price per
share of the Common Stock on such date. The Board of Directors may, but shall
not be required to, establish procedures to allocate the right to receive Common
Stock upon the exercise of the Rights among holders of rights pursuant to this
Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of Common Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five calendar days after such record date) Common Stock,
shares having the same rights, privileges and preferences as the Common Stock
("equivalent common stock") or securities convertible into Common Stock or
equivalent common stock at a price per share of Common Stock or equivalent
common stock (or having a conversion price per share, if a security convertible
into Common Stock or equivalent common stock) less than the Current Market Price
per share of Common Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding on
such record date, plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock and/or equivalent
common stock (and/or the aggregate initial conversion price of the convertible
securities so to be offered, including the price required to be paid to purchase
such convertible security) would purchase at such current Market Price, and the
denominator of which shall be the number of shares of Common Stock outstanding
on such record date, plus the number of additional shares of Common Stock and/or
equivalent common stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such non-cash
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. Shares of Common stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
19
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Common Stock, but including
any dividend payable in stock other than Common Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Price per share of
Common Stock on such record date, less the fair market value (as described in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Common Stock and the
denominator of which shall be such Current Market Price per share of Common
Stock. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
(d) For the purpose of any computation hereunder (including
computations pursuant to Section 14 hereof), other than computations made
pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of the Common Stock for the thirty consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date, and for
purpose of computations made pursuant to Section 11(a)(iii) hereof, the "Current
Market Price" per share of the Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of the Common Stock for the
ten consecutive Trading Days immediately following such date; provided, however,
that in the event that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of the
Common Stock of (i) any dividend or distribution on the Common Stock (other than
a regular quarterly cash dividend) or (ii) any subdivision, combination or
reclassification of the Common Stock, and prior to the expiration of the
requisite thirty Trading Day or ten Trading Day period, as set forth above, the
ex-dividend date for such dividend or distribution, or the effective date of
such subdivision, combination or reclassification occurs, then, and in each such
case, the current Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the NYSE or, if the shares of
common stock are not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted sale price or, if not so quoted, the average of the
high bid and low asked price in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then is use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the average of the
closing bid and asked
20
prices as furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. If on any such date no
market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board of Directors shall
be used. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange,
a Business Day. If the Common Stock is not publicly held or not so listed or
traded, "Current Market Price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment, or (ii)
one month prior to the Expiration Date.
21
(f) If as a result of an adjustment made pursuant to Section
11(a)(i) or (ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the applicable provisions with respect to the shares of common
stock contained in Sections 7, 9, 10, 11, 13, and 14 hereof, and such provisions
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase that number of shares of Common Stock (calculated
to the nearest ten-thousandth) obtained by (i) multiplying (x) the number of
shares covered by a Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights, in addition to
the adjustment provided in Section 11(p) hereof. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for a number
of shares of Common Stock equal to the number of shares of Common Stock for
which a Right was exercisable immediately prior to such adjustment multiplied by
a fraction the numerator of which shall be the total number of Rights
outstanding immediately prior to such adjustment and the denominator of which
shall be the total number of Rights outstanding immediately following such
adjustment. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least ten days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
22
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the shares of Common
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action, including using its best efforts to obtain any required shareholder
approvals, which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Common Stock and cash, other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of Common
Stock and cash, other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's right
to receive such additional shares of Common Stock and cash, other capital stock
or securities upon the occurrence of the event requiring such adjustment.
23
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Common Stock, (ii) issuance for cash of any
shares of Common Stock at less than the current market price, (iii) issuance for
cash of shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such shareholders. No reduction in the Purchase Price shall be
made as a consequence of the exercise of qualified or unqualified stock options
by employees of the Company to whom stock options have been granted.
(n) The Company covenants and agrees that it shall not, at any
time after the earlier of the Distribution Date or the Stock Acquisition Date,
(i) consolidate with any other Person, (ii) merge with or into any other Person,
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons, or (iv) engage
in any transaction described in Section 11(a)(ii)(A) or (C) hereof if (x) at the
time of or immediately after such consolidation, merger, sale or other
transaction there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (y)
prior to, simultaneously with or immediately after such consolidation, merger,
sale or other transactions, the shareholders of the Person who constitutes, or
would constitute, the "Principal Party" for purposes of Section 13(a) hereof
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates or (z) the form or nature of organization
of the Principal Party would preclude or limit the exercisability of the Rights.
(o) The Company covenants and agrees that, after the earlier
of the Distribution Date or the Stock Acquisition Date, it will not, except as
permitted by Section 23 or Section 26 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Rights Agreement to the contrary
notwithstanding, in the event that the Company shall at anytime after the Record
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common stock
outstanding immediately following the occurrence of such event.
24
Section 12. Certification of Adjustments. Whenever an
adjustment is made as provided in Sections 11 and 13 hereof, the Company shall
(a) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts giving rise to such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Common Stock a copy of
such certificate and (c) mail a brief summary thereof to each record holder of a
Right (or, if prior to the Distribution Date, to each holder of Common Stock) in
accordance with Section 25 hereof. Notwithstanding the foregoing sentence, the
failure of the Company to give such notice shall not affect the validity of or
the force or effect of or the requirement for such adjustment. The Rights Agent
shall be fully protected in relying on any certificate prepared by the Company
pursuant to Sections 11 and 13 and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, at anytime on or after the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate with
any other Person or Persons or shall merge with and into any other Person or
Persons and the Company shall not be the surviving or continuing corporation of
such merger, or (y) any Person or Persons shall merge with and into the Company,
and the Company shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the outstanding shares of
Common stock shall be changed into or exchanged for stock or other securities of
any other Person or of the Company or cash or any other property, or (z) the
Company or one or more of its subsidiaries shall sell or otherwise transfer to
any other Person or any Affiliate or Associate of such Person, in one or more
transactions, or the Company or one or more of its Subsidiaries shall sell or
otherwise transfer to any Person in one or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole), then, on the first
occurrence of any such event, except as may be contemplated by Section 13(d),
proper provision shall be made so that (i) each holder of record of a Right,
other than as provided in Section 11(a) (ii), shall thereafter have the right to
receive, upon the exercise thereof and payment of the aggregate Purchase Price
with respect to the total number of shares for which a Right was exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if earlier,
the first occurrence of a Section 11(a)(ii) Event) in accordance with the terms
of this Rights Agreement, such number of shares of validly issued, fully paid
and nonassessable-and freely tradeable Common Stock of the Principal Party (as
defined herein) not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of shares of Common
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section
25
13 Event, multiplying the Purchase Price in effect immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the number of shares of Common
Stock for which a Right was exercisable immediately prior to such first
occurrence of a Section 11(a) (ii) Event) and (2) dividing that product by 50%
of the Current Market Price (determined as provided in Section 11(d) hereof with
respect to the Common Stock) per share of the Common Stock of such Principal
Party on the date of consummation of such Section 13 Event; provided that the
Purchase Price and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided in
this Agreement to reflect any events occurring after the date of the first
occurrence of a Section 13 Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Rights Agreement; (iii)
the term "Company" for all purposes of this Rights Agreement shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with Section 9
hereof) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; provided, however, that,
upon the subsequent occurrence of any merger, consolidation, sale of all or
substantially all of the assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be entitled to receive, upon
exercise or a Right and payment of the Purchase Price, such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had he, at the time of such transaction, owned the shares of Common
Stock of the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property and (v) the provisions of Section
11(a) (ii) hereof shall be of no effect following the occurrence of any Section
13 Event.
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(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x)
or (y) of the first sentence of Section 13(a) hereof; (A) the Person
that is the issuer of the securities into which shares of Common stock
of the Company are converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer the Common Stock of
which has the greatest aggregate market value of shares outstanding or
(B) if no securities are so issued, (x) the Person that is the other
party to the merger, if such Person survives said merger or, if there
is more than one such Person, the Person the Common Stock of which has
the greatest aggregate market value of shares outstanding or (y) if the
Person that is the other party to the merger does not survive the
merger, the Person that does survive the merger (including the Company
if it survives) or (x) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in (z)
of the first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as is the issuer of
Common Stock having the greatest aggregate market value of shares
outstanding,
provided, however, that in any such case described in the foregoing (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time or has not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act, and (1) if such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common stocks
of all of which are and have been so registered, the term "Principal Party"
shall refer to whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value of shares outstanding or (3) if such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in clauses (1) and (2) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint venture
was a Subsidiary of both or all of such joint venturers, and the Principal
Party in each such case shall bear the obligations set forth in this Section 13
in the same ratio as its interest in such Person bears to the total of such
interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) unless prior thereto the
Company and the
27
Principal Party involved therein shall have executed and delivered to the Rights
Agent an agreement confirming that the requirements of Sections 13(a) and (b)
hereof shall promptly be performed in accordance with their terms and that such
consolidation, merger, sale or transfer of assets shall not result in a default
by the Principal Party under this Rights Agreement as the same shall have been
assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof and
further providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under
the Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date, and similarly comply with
applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities exchange,
to list (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on such securities exchange
and, if the Common Stock of the Principal Party shall not be listed on
a national securities exchange, to cause the Rights and the securities
purchasable upon exercise of the Rights to be reported by NASDAQ or
such other system then in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of the
Principal Party subject to purchase upon exercise of outstanding
Rights.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been exercised
shall thereafter be exercisable in the manner described in Section 13(a).
(d) Furthermore, in case the Principal Party which is to be a
party to a transaction referred to in this Section 13 has provision in any of
its authorized securities or in its Certificate of Incorporation or By-laws or
other instrument governing its corporate affairs, which provision would have the
effect of (i) causing
28
such Principal Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
stock of such Principal Party at less than the then Current Market Price per
share (determined pursuant to Section 11(d) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then Current Market Price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar provisions
in connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13; then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any such
transaction unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have been
cancelled, waived or amended, or that the authorized securities shall be
redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. If
the Company shall not issue fractions of Rights, in lieu of such fractional
Rights, there shall be paid to the holders of record 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 then current market value of a
whole Right. For the purposes of this Section 14(a), the then current market
value of a Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which fractional Rights would have been
issuable, determined in the same manner as the closing price of a share of
Common Stock shall be determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of
shares of Common Stock or other securities of the Company upon exercise of the
Rights or to distribute certificates which evidence fractional shares. In lieu
of issuing fractions of shares of Common Stock or other securities of the
Company, there shall be paid to the holders of record of Right Certificates at
the time such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the then current market value of a share of
Common Stock or other securities of the Company. For purposes of this Section
14(b), the then current market value of a share of Common Stock or other
securities of the Company shall be the closing price thereof for the Trading Day
immediately prior to the date of such exercise, as determined pursuant to
Section 11(d) hereof or in the same manner as the closing price of a share of
Common Stock shall be determined pursuant to Section 11(d) hereof, as the case
may be.
29
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares of Common Stock or other securities of the Company upon exercise of a
Right.
Section 15. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective holders of record of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company or any other Person to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and, accordingly, that they will
be entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent if surrendered at
the shareholder services 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 the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent or the
transfer agent of the Common stock) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
and
30
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder of a Right, as such, shall be entitled to vote,
receive dividends in respect of or be deemed for any purpose to be the holder of
Common stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights, 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 or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders, or to receive dividends or subscription rights in respect of any
such stock or securities, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent for anything done or omitted
to be done by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the cost and expenses of
defending against any claim of liability in the premises. Further, the Rights
Agent shall only be liable to the company in the event of loss, liability, or
damages caused by Rights Agent's gross negligence, bad faith or willful
misconduct.
(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,
31
certificate for Common Stock or other securities of the Company, instrument or
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,
guaranteed, verified or acknowledged, by the proper person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 31 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by the 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 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 such Right Certificates so countersigned; and
in case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Rights Agreement.
Section 20. 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, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted to be taken by it in good faith and in accordance with such
opinion.
32
(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 be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, the President or any Vice President and by the Treasurer or any
Assistant Treasurer or the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Rights Agreement in reliance upon such
certificate.
(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 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 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by 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 shares of Common Stock to be
issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any shares of Common Stock will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Rights Agreement.
33
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of is duties hereunder from
the Chairman of the Board or the President or any Vice President or the
Secretary or any Assistant Secretary or the Treasurer or any Assistant Treasurer
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or 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 entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) If, with respect to any Rights Certificates surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or without cause)
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. Notwithstanding the foregoing provisions of this Section 21,
in no event shall the resignation or removal of a Rights Agent be effective
until a successor Rights Agent shall have been appointed and have accepted such
appointment.
34
If the Company shall fail to make such appointment within a period of 30 days
after such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Company), then the incumbent Rights Agent or the holder of
record of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or any State
thereof, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate controlled by a corporation described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 2 1, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this 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 the Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Rights
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company may, with respect to shares of Common
Stock so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, or in any other case, if deemed
necessary or appropriate by the Board of Directors, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Right Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued, and
(ii) no such Rights Certificate shall be issued, if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
35
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the close of business on the tenth day
following the Stock Acquisition Date, subject to extension by the Board of
Directors as provided in Section 26 hereof, or (ii) the close of business on the
Final Expiration Date, cause the Company to redeem all but not less than all of
the then outstanding Rights at a redemption price of $0.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). Notwithstanding
anything contained in this Rights Agreement to the contrary, the Rights shall
not be exercisable after the first occurrence of any of the transactions
referred to in Section 11(a)(ii) hereof until such time as the Board of
Directors' right of redemption hereunder has expired.
(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, without any interest thereon. Within 10 days after the action
of the Board of Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent of the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made and the time for such payment. The failure to give notice required
by this Section 23(b) or any defect therein shall not affect the legality or
validity of the action taken by the Company.
Section 24. Notice of Proposed Actions.
(a) In case the Company, after the earlier of the Distribution
Date or the Stock Acquisition Data, shall propose (i) to effect any of the
transactions referred to in Section 11(a)(i) or to pay any dividend to the
holders of record of its Common Stock payable in stock of any class or to make
any other distribution to the holders of record of its Common Stock (other than
a regular quarterly cash dividend), or (ii) to offer to the holders of record of
its Common Stock options, warrants, or other rights to subscribe for or to
purchase shares of Common Stock (including any security convertible into or
exchangeable for Common Stock) or shares of stock of any class or
36
any other securities, options, warrants, convertible or exchangeable securities
or other rights, or (iii) to effect any reclassification of its Common Stock or
any recapitalization or reorganization of the Company, or (iv) to effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of record of a Right Certificate, in accordance with Section 25
hereof, notice of such proposed action, which shall specify the record date for
the purpose of such transaction referred to in Section 11(a)(i), or such
dividend or distribution, or the date on which such reclassification,
recapitalization, reorganization, consolidation, merger, sale or transfer of
assets, liquidation, dissolution, or winding up is to take place and the record
date for determining participation therein by the holders of record of Common
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of record of the Common Stock for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of record of Common Stock, whichever shall
be the earlier. The failure to give notice required by this Section 24 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
(b) In case any of the transactions referred to in Section
11(a)(ii) (A) or (C) or Section 13 of this Rights Agreement are proposed after
the earlier of the Distribution Date or the Stock Acquisition Date, then, in any
such case, the Company shall give to each holder of Rights, in accordance with
Section 25 hereof, notice of the proposal of such transaction, which notice
shall specify the proposed event and the consequences of the event to holders of
Rights under Section 11(a)(ii)(A) or (C) or Section 13 hereof, as the case may
be, and, upon consummating such transaction, shall similarly give notice thereof
to each holder of Rights.
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
record of any Right Certificate or Right to or on the Company shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Safety-Kleen Corp.
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Secretary
37
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
record of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Equiserve Trust Company, N.A.
Xxxx Xxxxxx Xxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or Right shall be sufficiently given or made if sent by first class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
Section 26. Supplements and Amendments. For as long as the
Rights are then redeemable and except as provided in the penultimate sentence of
this Section 26, the Company may in its sole and absolute discretion, and the
Rights Agent shall if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of the Rights or the
Common Stock. At any time when the Rights are not then redeemable and except as
provided in the penultimate sentence of this Section 26, the Company may, and
the Rights Agent shall if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or (iii) to change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable; provided, that no such supplement
or amendment shall adversely affect the interests of the holders of Right
Certificates as such (other than any Acquiring Person who became such other than
pursuant to a Permitted Tender Offer or has participated in a Section 11(a)(ii)
Event or an Affiliate or Associate of such an Acquiring Person); provided,
further, that this Rights Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed or this Agreement amended at the sole and
absolute discretion of the Company at such time as the Rights are not then
redeemable or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights as such (other than any Acquiring Person who
became such other than pursuant to a Permitted Tender Offer or has participated
in a Section 11(a)(ii) or an Affiliate or Associate of such an Acquiring
Person). Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute such
supplement or amendment.
38
Notwithstanding anything contained in this Rights Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Final Expiration Date or the number of shares of Common Stock for which a Right
is exercisable. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock.
Section 27. Successors. All of the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 28. Benefits of this Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) 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 holders of record of the Right Certificates (and, prior to the
Distribution Date, the Common Stock).
Section 29. Delaware Contract. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts to
be made and performed entirely within such state.
Section 30. Counterparts. 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.
Section 31. 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
hereof.
Section 32. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, 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.
39
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
Attest: SAFETY-KLEEN CORP.
By: By: /s/ Xxxxxxx X. Xxxxxx
---------------------------- --------------------------------
Xxxxxxx X. Xxxxxx
Attest: EQUISERVE TRUST COMPANY, N.A.
By: By: /s/ Xxxxx Xxxxxxxx
---------------------------- --------------------------------
Xxxxx Xxxxxxxx
40
EXHIBIT A
[Form of Right Certificate]
Certificate No. _________________ Rights
NOT EXERCISABLE AFTER OCTOBER 5, 2009 OR EARLIER IF REDEEMED.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.01 PER RIGHT (SUBJECT TO ADJUSTMENT) ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN THE EVENT THAT THE
RIGHTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO A PERSON
WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON OR A TRANSFEREE OF THE RIGHTS PREVIOUSLY
OWNED BY SUCH PERSONS, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OF THE RIGHTS
AGREEMENT.
Right Certificate
Safety-Kleen Corp.
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 October 15, 1999
("Rights Agreement") between Safety-Kleen Corp., a Delaware corporation
("Company"), and Equiserve Trust Company, N.A. ("Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M. (New York City time) on
October 15, 2009 at the principal office of the Rights Agent, or its successors
as Rights Agent, in New York, New York, one fully paid and nonassessable share
of Common Stock, par value $1.00 per share ("Common Stock"), of the Company at a
purchase price of $50.00 as the same may from time to time be adjusted in
accordance with the Rights Agreement ("Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed.
As provided in the Rights Agreement, the Purchase Price and
the number of shares of Common Stock which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Common Stock, or other property,
may be acquired upon exercise of the Rights evidenced by this Right Certificate,
as provided by the Rights Agreement.
41
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities of the Rights
Agent, the Company and the holders of record of this Right Certificate. Copies
of the Rights Agreement are on file at the principal executive office of the
Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the shareholder services 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 of record to purchase
a like, aggregate number of shares of Common Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive, upon surrender hereof, another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company by the action of
the Board of Directors at its option at a redemption price of $0.01 per Right at
any time prior to the earlier of the close of business on (i) the tenth day
following the Stock Acquisition date (as such time period may be extended
pursuant to the Rights Agreement) and (ii) the Final Expiration Date.
No fractional shares of Common Stock or other securities of
the Company are required to be issued upon the exercise of any Right or Rights
evidenced hereby, and in lieu thereof, as provided in the Rights Agreement, a
cash payment will be made.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Common Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action or to receive notice of meetings or
other actions affecting shareholders or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
42
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ____________, 19__.
ATTEST: SAFETY-KLEEN CORP.
By:
------------------------ -----------------------------
Secretary Title:
Countersigned:
EQUISERVE TRUST COMPANY, N.A.,
as Rights Agent
By:
------------------------------
Authorized signature
[Form of Reverse Side of Right Certificate]
43
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer this
Right Certificate.)
FOR VALUE RECEIVED
---------------------------------------
hereby sells, assigns and transfers unto
---------------------------------------
---------------------------------------------------------------------
(Please print name and address of transferee)
---------------------------------------------------------------------
Rights evidenced by this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ______________________________________ Attorney to transfer the within
Right Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ____________________, 19___.
---------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, I, we or it [ ] did [ ] did not acquire the Rights evidenced by
this Right Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or any transferee of such Persons.
44
Dated: ________________, 19
------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing 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.
45
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires
to exercise the Right Certificate.)
TO: Safety-Kleen Corp.
The undersigned hereby irrevocably elects to exercise
______________ Rights represented by this Right Certificate to purchase the
shares of Common Stock issuable upon the exercise of such Rights and requests
that certificates for such share(s) be issued in the name:
--------------------------------------------------------------------------------
(Please print name and address)
Please insert social security
or other identifying number
--------------------------------
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 print name and address)
46
Please insert social security
or other identifying number
--------------------------------
Dated: ______________, 19____
----------------------------------------------
Signature
(Signature must conform in all respects to
name/s of holder/s as specified on the face of
this Right Certificate)
Signature Guaranteed:
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, I, we or it [ ] did [ ] did not acquire the Rights evidenced by
this Right Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or any transferee of such Persons.
Dated: , 19
----------------- -- -----------------------------------
Signature
Signature Guaranteed:
47
EXHIBIT B
SAFETY-KLEEN CORP.
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On October 5, 1999, the Board of Directors of Safety-Kleen Corp. (the
"Company") declared a dividend distribution of one Common Stock Purchase Right
for each outstanding share of Common Stock of the Company. The distribution is
payable as of October 25, 1999 to stockholders of record on that date. Each
Right entitles the registered holder to purchase from the Company one share of
Common Stock at a Purchase Price of $50 per share. The description and terms of
the Rights are set forth in a Rights Agreement between the Company and Equiserve
Trust Company, N.A., as Rights Agent.
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will automatically
trade with the Common Stock.
Until the close of business on the Distribution Date, which will occur
on the earlier of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons ("Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding Common Stock of the Company (the "Stock Acquisition Date") or
(ii) a date fixed by the Board of Directors of the Company which is not later
than the nineteenth business day after the commencement of a tender offer or
exchange offer which would result in the ownership of 15% or more of the
outstanding Common Stock, the Rights will be represented by and transferred
with, and only with, the Common Stock. Notwithstanding the foregoing, neither
Xxxxxxx Inc., a Canadian corporation, nor any Affiliate thereof, shall be deemed
to be an Acquiring Person. Until the Distribution Date, new certificates issued
for Common Stock after October 25, 1999 will contain a legend incorporating the
Rights Agreement by reference, and the surrender for transfer of any of the
Company's Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate Right Certificates will be mailed to
holders of record of the Company's Common Stock as of the close of business on
the Distribution Date, and thereafter the separate certificates alone will
evidence the Rights.
The Rights are not exercisable until an event occurs which gives rise
to a Distribution Date. The Rights will expire at the close of business on
October 15, 2009, unless earlier redeemed by the Company as described below. All
Common Stock certificates issued prior to the Distribution Date will be issued
with Rights. Common Stock issued after the Distribution Date will be issued with
Rights if such Common Stock certificates are issued pursuant to the exercise of
stock options or under an employee benefit plan.
48
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock at the time of grant or (iii) upon
the distribution to holders of the Common Stock of evidences of indebtedness or
assets (excluding regular cash dividends and dividends payable in Common Stock)
or of subscription rights or warrants (other than those referred to above).
Unless the Rights are earlier redeemed, in the event that, after the
Stock Acquisition Date, the Company were to be acquired in a merger or other
business combination (in which any shares of the Company's Common Stock are
changed into or exchanged for other securities or assets) or more than 50% of
the assets or earning power of the Company and its subsidiaries (taken as a
whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision shall be made
so that each holder of record of a Right will from and after such date have the
right to receive, upon payment of the Purchase Price, that number of shares of
common stock of the acquiring company having a market value at the time of such
transaction equal to two times the Purchase Price.
In the event (i) any Person becomes the beneficial owner of 15% or more
of the ten outstanding shares of Common Stock, other than pursuant to an
all-cash tender offer on the same terms for all outstanding shares of Common
Stock pursuant to which no purchases of Common Stock are made for at least 60
days from the date of commencement thereof and which is accepted by holders of
not less than the number of shares of Common Stock that, when aggregated with
the number of shares of Common Stock owned by the person making the offer (and
its affiliates of associates), equals or exceeds 80% of the outstanding Common
Stock, (a "Permitted Tender Offer"), or (ii) any Acquiring Person or any of its
affiliates or associates engaged in one or more "self-dealing" transactions as
described in the Rights Agreement, then each holder of a Right, other than the
Acquiring Person, will have the right to receive, upon payment of the Purchase
Price, a number of shares of Common Stock having a market value equal to twice
the Purchase Price. This same right will be available to each holder of record
of a Right, other than the Acquiring Person. If, while there is an Acquiring
Person, there occurs any reclassification of securities, any recapitalization of
the Company, or any merger or consolidation or other transaction involving the
Company or any of its subsidiaries which has the effect of increasing by more
than 1% the proportionate ownership interest in the Company or any of its
subsidiaries which is owned or controlled by the Acquiring Person. To the extent
that insufficient shares of Common Stock are available for the exercise in full
of the Rights, holders of Rights will receive upon exercise, shares of Common
Stock to the extent available and then cash, property or other securities of the
49
Company (which may be accompanied by a reduction in the Purchase Price), in
proportions determined by the Company, so that the aggregate value received is
equal to twice the Purchase Price. Rights are not exercisable following the
occurrence of the events described in this paragraph until the expiration of the
period during which the Rights may be deemed as described below. Notwithstanding
the foregoing, following the occurrence of the events described in this
paragraph, Rights that are (or, under certain circumstances, Rights that were)
beneficially owned by an Acquiring Person will be null and void.
No fractional shares of Common Stock or other Stock Acquisition Date
(subject to extension by the Board of Directors), the Board of Directors may
cause the Company to redeem the Rights in whole, but not in part, at a price of
$.01 per Right, subject to adjustment. Immediately upon the action of the Board
of Directors authorizing redemption of the Rights, the right to exercise the
Rights will terminate, and the holders of Rights will only be entitled to
receive the Redemption Price without any interest thereon.
For as long as the Rights are then redeemable, the Company may, except
with respect to the redemption price or date of expiration of the Rights, amend
the Rights in any manner, including an amendment to extend the time period in
which the Rights may be redeemed. At any time when the Rights are not then
redeemable, the Company may amend the Rights in any manner that does not
adversely affect the interest of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no rights as
a stockholder of the Company, including, without limitation, the right to vote
or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the rights agreement is available free of charge upon written request to
the Company, 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Secretary. 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 in this summary description by reference.
