Exhibit 99.1
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
--------------------------------------------------------------------------------
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
June 30, 2002
between
PRAXAIR, INC.
and
REGISTRAR AND TRANSFER COMPANY,
as Rights Agent
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
PAGE
ARTICLE I
DEFINITIONS
1.1 Definitions......................................................2
ARTICLE II
THE RIGHTS
2.1 Summary of Rights...............................................11
2.2 Legend on Common Stock Certificates.............................12
2.3 Exercise of Rights; Separation of Rights........................13
2.4 Adjustments to Exercise Price; Number of Rights.................16
2.5 Date on Which Exercise is Effective.............................18
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates....................................................19
2.7 Registration, Registration of Transfer and Exchange.............20
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.......21
2.9 Persons Deemed Owners...........................................22
2.10 Delivery and Cancellation of Certificates.......................23
2.11 Agreement of Rights Holders.....................................23
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in.........................................................24
3.2 Flip-over.......................................................28
ARTICLE IV
THE RIGHTS AGENT
4.1 General.........................................................29
4.2 Merger or Consolidation or Change of Name of Rights Agent.......30
4.3 Duties of Rights Agent..........................................31
4.4 Change of Rights Agent..........................................34
-i-
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
ARTICLE V
MISCELLANEOUS
5.1 Redemption......................................................36
5.2 Expiration......................................................36
5.3 Issuance of New Rights Certificates.............................37
5.4 Supplements and Amendments......................................37
5.5 Fractional Shares...............................................38
5.6 Rights of Action................................................38
5.7 Holder of Rights Not Deemed a Stockholder.......................39
5.8 Notice of Proposed Actions......................................39
5.9 Notices.........................................................40
5.10 Suspension of Exercisability....................................41
5.11 Costs of Enforcement............................................41
5.12 Successors......................................................41
5.13 Benefits of this Agreement......................................42
5.14 Determination and Actions by the Board of Directors, etc........42
5.15 Descriptive Headings; Section References........................42
5.16 GOVERNING LAW...................................................43
5.17 Counterparts....................................................43
5.18 Severability....................................................43
EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of
Election to Exercise)
Exhibit B Form of Certificate of
Designation and Terms of
Participating Preferred
Stock
-ii-
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
STOCKHOLDER PROTECTION
RIGHTS AGREEMENT
---------------------------------------
STOCKHOLDER PROTECTION
RIGHTS AGREEMENT (as amended from time to
time, this "Agreement"), dated as of June 30, 2002, between Praxair, Inc., a
Delaware corporation (the "Company"), and Registrar and Transfer Company, a New
Jersey corporation, as Rights Agent (the "Rights Agent", which term shall
include any successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the
Rights Agreement, dated as of June 8, 1992, between the
Company and The Bank of New York will expire on June 30, 2002;
WHEREAS, the Board of Directors of the Company desires to have a new
Rights Agreement in place to replace the previous Rights Agreement upon the
expiration thereof;
WHEREAS, the Board of Directors of the Company has (a) authorized
and declared a dividend of one right ("Right") in respect of each share of
Common Stock (as hereinafter defined) held of record as of the close of business
on June 30, 2002 (the "Record Time") payable in respect of each such share upon
certification by the New York Stock Exchange to the Securities and Exchange
Commission that the Rights have been approved for listing and registration (the
"Payment Time") and (b) as provided in Section 2.4, authorized the issuance of
one Right in respect of each share of Common Stock issued after the Record Time
and prior to the Separation Time (as hereinafter defined) and, to the extent
provided in Section 5.3, each share of Common Stock issued after the Separation
Time;
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
WHEREAS, subject to the terms and conditions hereof, each Right
entitles the holder thereof, after the Separation Time, to purchase securities
or assets of the Company (or, in certain cases, securities of certain other
entities) pursuant to the terms and subject to the conditions set forth herein;
and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. For purposes of this Agreement, the following terms
have the meanings indicated:
"Acquiring Person" shall mean any Person who is or becomes the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock;
PROVIDED, HOWEVER, that the term "Acquiring Person" shall not include any Person
(i) who is the Beneficial Owner of 15% or more of the outstanding shares of
Common Stock on the date of this Agreement, or who shall become the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock solely as a
result of an acquisition by the Company of shares of Common Stock, until such
time hereafter or thereafter as such Person shall become the Beneficial Owner
(other than by means of a stock dividend or stock split) of any additional
shares of Common Stock while such Person is or as a result of which such
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
Person becomes the Beneficial Owner of 15% or more of the outstanding shares of
Common Stock, (ii) who becomes the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock but who acquired Beneficial Ownership of
shares of Common Stock without any plan or intention to seek or affect control
of the Company, if such Person promptly divests, or promptly enters into an
agreement with, and satisfactory to, the Company, in its sole discretion, to
divest, (without exercising or retaining any power, including voting power, with
respect to such shares), sufficient shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) so that
such Person ceases to be the Beneficial Owner of 15% or more of the outstanding
shares of Common Stock or (iii) who Beneficially Owns shares of Common Stock
consisting solely of one or more of (A) shares of Common Stock Beneficially
Owned pursuant to the grant or exercise of an option granted to such Person (an
"Option Holder") by the Company in connection with an agreement to merge with,
or acquire, the Company entered into prior to a Flip-in Date, (B) shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) Beneficially Owned by such Option Holder or its Affiliates or
Associates at the time of grant of such option and (C) shares of Common Stock
(or securities convertible into, exchangeable into or exercisable for Common
Stock) acquired by Affiliates or Associates of such Option Holder after the time
of such grant which, in the aggregate, amount to less than 1% of the outstanding
shares of Common Stock. In addition, the Company, any Subsidiary of the Company
and any employee stock ownership or other employee benefit plan of the Company
or a Subsidiary of the Company (or any entity or trustee holding shares of
Common Stock for or pursuant to the terms of any such plan or for the purpose
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
of funding any such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company) shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act, as such Rule is in
effect on the date of this Agreement.
"Agreement" shall have the meaning set forth in the Preamble.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Exchange Act, as such Rules are in effect on the date of this Agreement, as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner", or to have "Beneficial Ownership" of, or to
"Beneficially Own", any security (i) solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered security is accepted
for payment or exchange or (ii) solely because such Person or any of such
Person's Affiliates or Associates has or shares the power to vote or direct the
voting of such security
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
pursuant to a revocable proxy or consent given in response to a public proxy or
consent solicitation made to more than ten holders of shares of a class of stock
of the Company registered under Section 12 of the Exchange Act and pursuant to,
and in accordance with, the applicable rules and regulations under the Exchange
Act, except if such power (or the arrangements relating thereto) is then
reportable under Item 6 of Schedule 13D under the Exchange Act (or any similar
provision of a comparable or successor report). Notwithstanding the foregoing,
no officer or director of the Company shall be deemed to Beneficially Own any
securities of any other Person by virtue of any actions such officer or director
takes in such capacity. For purposes of this Agreement, in determining the
percentage of the outstanding shares of Common Stock with respect to which a
Person is the Beneficial Owner, all shares as to which such Person is deemed the
Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in New York, New York are generally authorized
or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m. New York
City time on such date or, if such date is not a Business Day, 5:00 p.m. New
York City time on the next succeeding Business Day.
"Common Stock" shall mean the shares of Common Stock, par value $.01
per share, of the Company.
"Company" shall have the meaning set forth in the preamble.
"Election to Exercise" shall have the meaning set forth in
Section 2.3(d).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
"Exchange Ratio" shall have the meaning set forth in Section 3.1(c).
"Exchange Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 3.1(c).
"Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the Exercise Price
shall equal $300.
"Expansion Factor" shall have the meaning set forth in Section
2.4(a).
"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time, (iii) the Close of Business on the tenth anniversary
of the date of this Agreement, unless, for purposes of this clause (iii),
extended by action of the Board of Directors (in which case the applicable time
shall be the time at which it has been so extended) and (iv) immediately prior
to the effective time of a consolidation, merger or statutory share exchange
that does not constitute a Flip-over Transaction or Event.
"Flip-in Date" shall mean the tenth business day after any Stock
Acquisition Date or such earlier or later date and time as the Board of
Directors of the Company may from time to time fix by resolution adopted prior
to the Flip-in Date that would otherwise have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean (i) in
the case of a Flip-over Transaction or Event described in clause (i) of the
definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
exchanged and, if no such securities are being issued, the other Person that is
a party to such Flip-over Transaction or Event and (ii) in the case of a
Flip-over Transaction or Event referred to in clause (ii) of the definition
thereof, the Person receiving the greatest portion of the (A) assets or (B)
operating income or cash flow being transferred in such Flip-over Transaction or
Event, provided in all cases if such Person is a Subsidiary of another Person,
the ultimate parent entity of such Person shall be the Flip-over Entity.
"Flip-over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of directors
(or other persons similarly responsible for the direction of the business and
affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series
of transactions, on or after a Flip-in Date, in which, directly or indirectly,
(i) the Company shall consolidate or merge or participate in a statutory share
exchange with any other Person if, at the time of consummation of the
consolidation, merger or statutory share exchange or at the time the Company
enters into any agreement with respect to any such consolidation, merger or
statutory share exchange, the Acquiring Person is the Beneficial Owner of 90% or
more of the outstanding shares of Common Stock or controls the Board of
Directors of the Company and either (A) any term of or arrangement concerning
the treatment of shares of capital stock in such consolidation, merger or
statutory share exchange relating to the Acquiring Person is not identical to
the terms and arrangements relating to other holders of the Common Stock or (B)
the Person with whom the transaction or series of transactions occurs is the
Acquiring Person or an Affiliate or Associate of the Acquiring Person or (ii)
the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) assets (A) aggregating
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
more than 50% of the assets (measured by either book value or fair market value)
or (B) generating more than 50% of the operating income or cash flow, of the
Company and its Subsidiaries (taken as a whole) to any Person (other than the
Company or one or more of its wholly owned Subsidiaries) or to two or more such
Persons which are Affiliates or Associates or otherwise acting in concert, if,
at the time of the entry by the Company (or any such Subsidiary) into an
agreement with respect to such sale or transfer of assets, the Acquiring Person
or any of its Affiliates or Associates controls the Board of Directors of the
Company. For purposes of the foregoing description, the term "Acquiring Person"
shall include any Acquiring Person and its Affiliates and Associates, counted
together as a single Person. An Acquiring Person shall be deemed to control the
Company's Board of Directors when, on or following a Stock Acquisition Date, the
persons who were directors of the Company (or persons nominated and/or appointed
as directors by vote of a majority of such persons) before the Stock Acquisition
Date shall cease to constitute a majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall mean
the average of the daily closing prices per share of such securities (determined
as described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; PROVIDED, HOWEVER,
that if any event described in Section 2.4, or any analogous event, shall have
caused the closing prices used to determine the Market Price on any Trading Days
during such period of 20 Trading Days not to be fully comparable with the
closing price on such date, each such closing price so used shall be
appropriately adjusted in order to make it fully comparable with the closing
price on such date. The closing price per share of any securities on any date
shall be the
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
last reported sale price, regular way, or, in case no such sale takes place or
is quoted on such date, the average of the closing bid and asked prices, regular
way, for each share of such securities, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange, Inc. or, if the
securities are not listed or admitted to trading on the New York Stock Exchange,
Inc., as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the securities are listed or admitted to trading or, if the securities
are not listed or admitted to trading on any national securities exchange, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or such other system then in use, or, if on any such date the
securities are not listed or admitted to trading on any national securities
exchange or quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
securities selected by the Board of Directors of the Company; PROVIDED, HOWEVER,
that if on any such date the securities are not listed or admitted to trading on
a national securities exchange or traded in the over-the-counter market, the
closing price per share of such securities on such date shall mean the fair
value per share of such securities on such date as determined in good faith by
the Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
"Option Holder" shall have the meaning set forth in the definition
of Acquiring Person.
"Payment Time" shall have the meaning set forth in the Recitals.
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
"Person" shall mean any individual, firm, partnership, limited
liability company, association, group (as such term is used in Rule 13d-5 under
the Exchange Act, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
"Preferred Stock" shall mean the series of Participating Preferred
Stock, no par value, of the Company created by a Certificate of Designation and
Terms in substantially the form set forth in Exhibit B hereto appropriately
completed.
"Record Time" shall have the meaning set forth in the Recitals.
"Redemption Price" shall mean an amount equal to one tenth of
one cent, $0.001.
"Redemption Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1.
"Right" shall have the meaning set forth in the Recitals.
"Rights Agent" shall have the meaning set forth in the
Preamble.
"Rights Certificate" shall have the meaning set forth in Section
2.3(c).
"Rights Register" shall have the meaning set forth in Section
2.7(a).
"Separation Time" shall mean the earlier of (i) the Close of
Business on the tenth Business Day (or such later date as the Board of Directors
of the Company may from time to time fix by resolution adopted prior to the
Separation Time that would otherwise have occurred) after the date on which any
Person commences a tender or exchange offer which, if consummated, would result
in such Person's becoming an Acquiring Person and (ii) the time of the first
event causing a Flip-in Date to occur; PROVIDED, that if the foregoing results
in the Separation Time being prior to the Record Time, the Separation Time shall
be the Record Time and PROVIDED FURTHER, that if any tender or exchange offer
referred to in clause (i) of this paragraph is cancelled, terminated
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
or otherwise withdrawn prior to the Separation Time without the purchase of any
shares of Common Stock pursuant thereto, such offer shall be deemed, for
purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the earlier of (i) the first
date on which there shall be a public announcement by the Company (by any means)
that a Person has become an Acquiring Person or (ii) the date and time on which
any Acquiring Person becomes the Beneficial Owner of more than 25% of the
outstanding shares of Common Stock.
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities or
a majority of the equity or membership interest is Beneficially Owned, directly
or indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall mean
a day on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a Business Day.
ARTICLE II
THE RIGHTS
2.1 SUMMARY OF RIGHTS. As soon as practicable after the Record Time,
the Company will mail a letter summarizing the terms of the Rights to each
holder of
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
record of Common Stock as of the Record Time, at such holder's address as shown
by the records of the Company.
2.2 LEGEND ON COMMON STOCK CERTIFICATES. Certificates for the Common
Stock issued on or after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of June 30,
2002 (as such may be amended from time to time, the "Rights Agreement"),
between Praxair, Inc. (the "Company") and Registrar and Transfer Company,
as Rights Agent, the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed, may become exercisable for
securities or assets of the Company or securities of another entity, may
be exchanged for shares of Common Stock or other securities or assets of
the Company, may expire, may become void (if they are "Beneficially Owned"
by an "Acquiring Person" or an Affiliate or Associate thereof, as such
terms are defined in the Rights Agreement, or by any transferee of any of
the foregoing) or may be evidenced by separate certificates and may no
longer be evidenced by this certificate. The Company will mail or arrange
for the mailing of a copy of the Rights Agreement to the holder of this
certificate without charge after the receipt of a written request
therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall, together with the letter mailed pursuant to Section
2.1, evidence one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend.
If the Common Stock issued after the Record Time but prior to the
Separation Time shall be uncertificated, the registration of such Common Stock
on the stock transfer books of the Company shall evidence one Right for each
share of Common Stock represented thereby and the Company shall mail to every
Person that holds such
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
Common Stock a confirmation of the registration of such Common Stock on the
stock transfer books of the Company, which confirmation will have impressed,
printed, written or stamped thereon or otherwise affixed thereto the above
legend. The Company shall mail or arrange for the mailing of a copy of this
Agreement to any Person that holds Common Stock, as evidenced by the
registration of the Common Stock in the name of such Person on the stock
transfer books of the Company, without charge after the receipt of a written
request therefor.
2.3 EXERCISE OF RIGHTS; SEPARATION OF RIGHTS. (a) Subject to Sections
3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each Right will
entitle the holder thereof, at or after the Separation Time and prior to the
Expiration Time, to purchase, for the Exercise Price, one one-hundredth of a
share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and (ii)
each Right will be evidenced by the certificate for the associated share of
Common Stock (or, if the Common Stock shall be uncertificated, by the
registration of the associated Common Stock on the stock transfer books of the
Company and the confirmation thereof provided for in Section 2.2), together, in
the case of certificates issued prior to the Record Time, with the letter mailed
to the record holder thereof pursuant to Section 2.1, and will be transferable
only together with, and will be transferred by a transfer (whether with or
without such letter or confirmation) of, such associated share.
(c) Subject to the terms and conditions hereof, at or after the
Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independent of shares of Common Stock.
Promptly following the
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
Separation Time, the Rights Agent will mail to each holder of record of Common
Stock as of the Separation Time (other than any Person whose Rights have become
void pursuant to Section 3.1(b)), at such holder's address as shown by the
records of the Company (the Company hereby agreeing to furnish copies of such
records to the Rights Agent for this purpose), (x) a certificate (a "Rights
Certificate") in substantially the form of Exhibit A hereto appropriately
completed, representing the number of Rights held by such holder at the
Separation Time and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any national securities
exchange or quotation system on which the Rights may from time to time be listed
or traded, or to conform to usage, and (y) a disclosure statement describing the
Rights.
(d) Subject to the terms and conditions hereof, Rights may be exercised
on any Business Day on or after the Separation Time and prior to the Expiration
Time by submitting to the Rights Agent the Rights Certificate evidencing such
Rights with an Election to Exercise (an "Election to Exercise") substantially in
the form attached to the Rights Certificate duly completed, accompanied by
payment in cash, or by certified or official bank check or money order payable
to the order of the Company, of a sum equal to the Exercise Price multiplied by
the number of Rights being exercised and a sum sufficient to cover any transfer
tax or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates (or, if uncertificated, the registration on the stock transfer
books of
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
the Company) for shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d), and subject to the terms
and conditions hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent stock certificates evidencing such number of
shares or other securities to be purchased or, in the case of uncertificated
shares or other securities, requisition from a transfer agent a notice setting
forth such number of shares or other securities to be purchased for which
registration will be made on the stock transfer books of the Company (the
Company hereby irrevocably authorizing its transfer agents to comply with all
such requisitions), and (B) if the Company elects pursuant to Section 5.5 not to
issue certificates (or effect registrations on the stock transfer books of the
Company) representing fractional shares, requisition from the depositary
selected by the Company depositary receipts representing the fractional shares
to be purchased or requisition from the Company the amount of cash to be paid in
lieu of fractional shares in accordance with Section 5.5 and (ii) after receipt
of such certificates, depositary receipts, notices and/or cash, deliver the same
to or upon the order of the registered holder of such Rights Certificate,
registered (in the case of certificates, depositary receipts or notices) in such
name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns.
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RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
(g) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares delivered (or evidenced by
registration on the stock transfer books of the Company) upon exercise of Rights
shall, at the time of delivery of the certificates (or registration) for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered (or registered) and fully paid and
nonassessable; (ii) take all such action as may be necessary to comply with any
applicable requirements of the Securities Act of 1933, as amended or the
Exchange Act, and the rules and regulations thereunder, and any other applicable
law, rule or regulation, in connection with the issuance of any shares upon
exercise of Rights; and (iii) pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, PROVIDED, that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates (or the registration) for shares in a name other than that of
the holder of the Rights being transferred or exercised.
2.4 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS. (a) In the event
the Company shall at any time after the Record Time and prior to the Separation
Time (i) declare or pay a dividend on Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares of Common Stock, (x) the Exercise Price in
effect after such adjustment will be equal to the Exercise Price in effect
immediately prior to such adjustment divided by the number of shares of Common
Stock including any fractional
16
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
shares in lieu of which such holder received cash (the "Expansion Factor") that
a holder of one share of Common Stock immediately prior to such dividend,
subdivision or combination would hold thereafter as a result thereof and (y)
each Right held prior to such adjustment will become that number of Rights equal
to the Expansion Factor, and the adjusted number of Rights will be deemed to be
distributed among the shares of Common Stock with respect to which the original
Rights were associated (if they remain outstanding) and the shares issued in
respect of such dividend, subdivision or combination, so that each such share of
Common Stock will have exactly one Right associated with it. Each adjustment
made pursuant to this paragraph shall be made as of the payment or effective
date for the applicable dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share (or, if the
Common Stock shall be uncertificated, such Right shall be evidenced by the
registration of such Common Stock on the stock transfer books of the Company and
the confirmation thereof provided for in Section 2.2). Rights shall be issued by
the Company in respect of shares of Common Stock that are issued or sold by the
Company after the Separation Time only to the extent provided in Section 5.3.
(b) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Common Stock (other than pursuant to
any non-
17
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
extraordinary periodic cash dividend or a dividend paid solely in Common Stock)
whether by dividend, in a reclassification or recapitalization (including any
such transaction involving a merger, consolidation or statutory share exchange),
or otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this Section
2.4 shall be calculated to the nearest cent. Whenever an adjustment to the
Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate.
(d) Rights Certificates shall represent the right to purchase the
securities purchasable under the terms of this Agreement, including any
adjustment or change in the securities purchasable upon exercise of the Rights,
even though such certificates may continue to express the securities purchasable
at the time of issuance of the initial Rights Certificates.
2.5 DATE ON WHICH EXERCISE IS EFFECTIVE. Each Person in whose name any
certificate for shares is issued (or registration on the stock transfer books is
effected) upon the exercise of Rights shall for all purposes be deemed to have
become the holder of
18
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
record of the shares represented thereby on the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; PROVIDED, HOWEVER,
that if the date of such surrender and payment is a date upon which the stock
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate (or
registration) shall be dated, the next succeeding Business Day on which the
stock transfer books of the Company are open.
2.6 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman, President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Separation Time, the Company will notify the Rights
Agent of such Separation Time and will deliver Rights Certificates executed by
the Company to the Rights Agent for counter-signature, and, subject to Section
3.1(b), the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c). No Rights
Certificate shall be valid for any purpose unless manually countersigned by the
Rights Agent.
19
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. (a) After the
Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Sections 2.7(c) and (d), the Company will
execute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights issued
upon any registration of transfer or exchange of Rights Certificates shall be
the valid obligations of the Company, and such Rights shall be entitled to the
same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
20
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
(c) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
(d) The Company shall not register the transfer or exchange of any
Rights which have become void under Section 3.1(b), been exchanged under Section
3.1(c) or been redeemed under Section 5.1.
2.8 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES. (a) If
any mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company
shall execute and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a BONA FIDE purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate
21
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
evidencing the same number of Rights as did the Rights Certificate so destroyed,
lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and, subject to Section 3.1(b) shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 PERSONS DEEMED OWNERS. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate or notice of transfer, if uncertificated) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the Person in whose name such Rights Certificate
(or, prior to the Separation Time, such Common Stock certificate or Common Stock
registration, if uncertificated) is registered as the absolute owner thereof and
of the Rights evidenced thereby for all purposes whatsoever, including the
payment of the Redemption Price and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary. As used in this Agreement,
unless the context otherwise requires, the term "holder" of any Rights shall
mean the registered
22
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
holder of such Rights (or, prior to the Separation Time, the associated shares
of Common Stock).
2.10 DELIVERY AND CANCELLATION OF CERTIFICATES. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any Person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificates
so delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.10, except as expressly
permitted by this Agreement. The Rights Agent shall destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Company.
2.11 AGREEMENT OF RIGHTS HOLDERS. Every holder of Rights by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of
Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Stock
23
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
certificate or Common Stock registration, if uncertificated) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the Person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate or
Common Stock registration, if uncertificated) is registered as the absolute
owner thereof and of the Rights evidenced thereby for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary;
(d) Rights Beneficially Owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4.
ARTICLE III.
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 FLIP-IN. (a) In the event that prior to the Expiration Time a
Flip-in Date shall occur, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof (but subject to Section 5.10), that number
of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date that gave rise to the Flip-in Date equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that on or after such Stock Acquisition Date any
of the events
24
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
described in Section 2.4(a) or (b), or any analogous event, shall have occurred
with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Company shall
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced thereby to be void and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at any
time after a Flip-in Date and prior to the time that an Acquiring Person becomes
the Beneficial Owner of more than 50% of the outstanding shares of Common Stock
elect to exchange all (but not less than all) the then outstanding Rights (which
shall not include Rights that have become void pursuant to the provisions of
Section 3.1(b)) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted in order to protect the interests
of holders of Rights generally in
25
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
the event that after the Separation Time any of the events described in Section
2.4(a) or (b), or any analogous event, shall have occurred with respect to the
Common Stock (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)), whether or not
previously exercised, will thereafter represent only the right to receive a
number of shares of Common Stock equal to the Exchange Ratio. Promptly after the
action of the Board of Directors electing to exchange the Rights, the Company
shall give notice thereof (specifying the steps to be taken to receive shares of
Common Stock in exchange for Rights) to the Rights Agent and the holders of the
Rights (other than Rights that have become void pursuant to Section 3.1(b))
outstanding immediately prior thereto by mailing such notice in accordance with
Section 5.9.
Each Person in whose name any certificate for shares is issued (or for
whom any registration on the stock transfer books of the Company is made) upon
the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall
for all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate (or registration on the stock
transfer books of the Company) shall be dated (or registered as of), the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of any applicable taxes and other governmental charges payable by
the holder was made; PROVIDED, HOWEVER, that if the date of such
26
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
surrender and payment is a date upon which the stock transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate (or registration on the stock transfer
books of the Company) shall be dated (or registered as of), the next succeeding
Business Day on which the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section 3.1(a) or
(c) to issue shares of Common Stock upon exercise of or in exchange for Rights,
the Company, at its option, may substitute therefor shares of Preferred Stock,
at a ratio of one one-hundredth of a share of Preferred Stock for each share of
Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock or Preferred Stock of the Company
to permit the exercise or exchange in full of the Rights in accordance with
Section 3.1(a) or if the Company so elects to make the exchange referred to in
Section 3.1(c), the Company shall take such action as shall be necessary to
ensure and provide, as and when and to the maximum extent permitted by
applicable law and any agreements or instruments in effect on the Stock
Acquisition Date (and remaining in effect) to which it is a party, that each
Right shall thereafter constitute the right to receive, (x) at the Company's
option, either (A) in return for the Exercise Price, debt or equity securities
or other assets (or a combination thereof) having a fair value equal to twice
the Exercise Price, or (B) without payment of consideration (except as otherwise
required by applicable law), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the Exercise Price, or (y) if
the Board of Directors of the Company
27
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
elects to exchange the Rights in accordance with Section 3.1(c), debt or equity
securities or other assets (or a combination thereof) having a fair value equal
to the product of the Market Price of a share of Common Stock on the Flip-in
Date times the Exchange Ratio in effect on the Flip-in Date, where in any case
set forth in (x) or (y) above the fair value of such debt or equity securities
or other assets shall be as determined in good faith by the Board of Directors
of the Company, after consultation with a nationally recognized investment
banking firm.
3.2 FLIP-OVER. (a) Prior to the Expiration Time, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-over Entity, for the benefit of the holders
of the Rights, providing that, upon consummation or occurrence of the Flip-over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence any of the events
described in Section 2.4(a) or (b), or any analogous event, shall have occurred
with respect to the Flip-over Stock) and (ii) the Flip-over Entity shall
thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
28
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
duties of the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 pursuant to an agreement entered into by the Company
prior to a Flip-in Date, the Company shall not enter into any agreement with
respect to, consummate or permit to occur any Flip-over Transaction or Event if
at the time thereof there are any rights, warrants or securities outstanding or
any other arrangements, agreements or instruments that would eliminate or
otherwise diminish in any material respect the benefits intended to be afforded
by this Rights Agreement to the holders of Rights upon consummation of such
transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 GENERAL. (a) 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 agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done by the Rights Agent in connection
29
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any certificate for
securities (or registration on the stock transfer books of the Company)
purchasable upon exercise of Rights, Rights Certificate, certificate for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
4.2 MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. (a) Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent is a
party, or any Person succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such Person
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 4.4. In case at the time such successor Rights Agent
succeeds to the agency created by this Agreement any of the Rights Certificates
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Rights
30
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights 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 Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
4.3 DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights 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 will be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter be proved
or
31
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
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 a person believed by the Rights Agent to be the
Chairman, 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 will be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates, if any, for securities purchasable upon exercise of Rights or the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any certificate, if any, for securities
purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
32
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
Section 3.1(b)) or any adjustment required under the provisions of Section 2.4,
3.1 or 3.2 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 after receipt of
the certificate contemplated by Section 2.4 describing any such adjustment); nor
will it by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any securities purchasable upon exercise
of Rights or any Rights or as to whether any securities purchasable upon
exercise of Rights will, when issued, be duly and validly authorized, executed,
issued and delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman, 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 persons for advice
or instructions in connection with its duties, and it shall not be liable for
any action taken or suffered by it in good faith in accordance with instructions
of any such person.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in Common Stock, Rights or other
33
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 CHANGE OF RIGHTS AGENT. The Rights Agent may resign and be discharged from
its duties under this Agreement upon 90 days' notice (or such lesser notice as
is acceptable to the Company) in writing mailed to the Company and to each
transfer agent of Common Stock by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9. The Company may remove the
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent and to
each transfer agent of the Common Stock by registered or certified mail, and to
the holders of the Rights in accordance with Section 5.9. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, the Company
will appoint a successor to the Rights Agent. If the Company fails to make such
appointment within a period of 30 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 any Rights (which
34
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights 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 Person organized and doing business under the laws of the United
States or any state of the United States, in good standing, which is authorized
under such laws to exercise the powers of the Rights Agent contemplated by this
Agreement 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. After appointment, the
successor Rights Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent 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 will 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 holders of the Rights. Failure to give any notice provided for in
this Section 4.4, 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.
35
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
ARTICLE V
MISCELLANEOUS
5.1 REDEMPTION. (a) The Board of Directors of the Company may, at its
option, at any time prior to the close of business on the Flip-in Date, elect to
redeem all (but not less than all) the then outstanding Rights at the Redemption
Price and the Company, at its option, may pay the Redemption Price either in
cash or shares of Common Stock or other securities of the Company deemed by the
Board of Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right,
whether or not previously exercised, will thereafter represent only the right to
receive the Redemption Price in cash or securities, as determined by the Board
of Directors. Promptly after the Rights are redeemed, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice in accordance with Section 5.9.
5.2 EXPIRATION. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1 or 5.1, respectively.
36
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Separation Time and prior to the Expiration Time pursuant to the
terms of securities convertible or redeemable into shares of Common Stock (other
than any securities issued or issuable in connection with the exercise or
exchange of Rights) or to options, in each case issued or granted prior to, and
outstanding at, the Separation Time, the Company shall issue to the holders of
such shares of Common Stock, Rights Certificates representing the appropriate
number of Rights in connection with the issuance or sale of such shares of
Common Stock; PROVIDED, HOWEVER, in each case, (i) no such Rights 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 to the Person to whom such Rights
Certificates would be issued, (ii) no such Rights Certificates shall be issued
if, and to the extent that, appropriate adjustment shall have otherwise been
made in lieu of the issuance thereof, and (iii) the Company shall have no
obligation to distribute Rights Certificates to any Acquiring Person or
Affiliate or Associate of an Acquiring Person or any transferee of any of the
foregoing.
5.4 SUPPLEMENTS AND AMENDMENTS. The Company and the Rights Agent may
from time to time supplement or amend this Agreement without the approval
37
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
of any holders of Rights (i) prior to the Close of Business on the Flip-in Date,
in any respect and (ii) after the Close of Business on the Flip-in Date, to make
any changes that the Company may deem necessary or desirable and which shall not
materially adversely affect the interests of the holders of Rights generally or
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be inconsistent with any other provisions herein or
otherwise defective. The Rights Agent will duly execute and deliver any
supplement or amendment hereto requested by the Company which satisfies the
terms of the preceding sentence, provided that any supplement or amendment shall
become effective immediately upon execution by the Company, whether or not also
executed by the Rights Agent.
5.5 FRACTIONAL SHARES. If the Company elects not to issue certificates
representing (or register on the stock transfer books of the Company) fractional
shares upon exercise, redemption or exchange of Rights, the Company shall, in
lieu thereof, in the sole discretion of the Board of Directors, either (a)
evidence such fractional shares by depositary receipts issued pursuant to an
appropriate agreement between the Company and a depositary selected by it,
providing that each holder of a depositary receipt shall have all of the rights,
privileges and preferences to which such holder would be entitled as a
beneficial owner of such fractional share, or (b) pay to the registered holder
of such Rights the appropriate fraction of the Market Price per share in cash.
5.6 RIGHTS OF ACTION. Subject to the terms of this Agreement (including
Sections 3.1(b) and 5.14), rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any Rights, without the
consent of the Rights
38
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
Agent or of the holder of any other Rights, may, on such holder's own behalf and
for such holder's own benefit and the benefit of other holders of Rights,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such holder's right to
exercise such holder's Rights in the manner provided in such holder's Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A STOCKHOLDER. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in Section 5.8), or to receive dividends or subscription rights, or
otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS. In case the Company shall propose at or
after the Separation Time and prior to the Expiration Time (i) to effect or
permit a
39
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
Flip-over Transaction or Event or (ii) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right, in accordance with Section 5.9, a notice of such
proposed action, which shall specify the date on which such Flip-over
Transaction or Event, liquidation, dissolution, or winding up is to take place,
and such notice shall be so given at least 20 Business Days prior to the date of
the taking of such proposed action.
5.9 NOTICES. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Praxair, Inc.
00 Xxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Registrar and Transfer Company
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder
40
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
at the address of such holder as it appears upon the registry books of the
Rights Agent or, prior to the Separation Time, on the registry books of the
transfer agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice.
5.10 SUSPENSION OF EXERCISABILITY. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 3.1 or to comply with federal or state securities laws, the Company may
suspend the exercisability of the Rights for a reasonable period in order to
take such action or comply with such laws. In the event of any such suspension,
the Company shall issue as promptly as practicable a public announcement stating
that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
5.11 COSTS OF ENFORCEMENT. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
41
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
5.13 BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) done
or made by the Board, shall (x) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company to any liability to the holders of
the Rights.
5.15 DESCRIPTIVE HEADINGS; SECTION REFERENCES. Descriptive headings
appear herein for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof. Where a reference in this
Agreement is made to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated.
42
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
5.16 GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT 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.
5.17 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.18 SEVERABILITY. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
43
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
PRAXAIR, INC.
By: /S/ XXXXXX X. XXXXXXX
---------------------
Xxxxxx X. Xxxxxxx
Assistant Secretary
REGISTRAR AND TRANSFER COMPANY
By: /S/ XXXXXXX X. TATLER
---------------------
Xxxxxxx X. Tatler
Vice President
44
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE,
AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY
OF THE FOREGOING WILL BE VOID.
Rights Certificate
PRAXAIR, INC.
This certifies that ____________________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Stockholder Protection Rights Agreement, dated as of June 30,
2002 (as amended from time to time, the "Rights Agreement"), between Praxair,
Inc., a
Delaware corporation (the "Company"), and Registrar and Transfer
Company, a New Jersey corporation, as Rights Agent (the "Rights Agent", which
term shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Separation Time (as such term is
defined in the Rights Agreement) and prior to the close of business on June 30,
2012, one one-hundredth of a fully paid share of Participating Preferred Stock,
no par value (the "Preferred Stock"), of the Company (subject to adjustment as
provided in the Rights Agreement) at the Exercise Price referred to below,
1
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
upon presentation and surrender of this Rights Certificate with the Form of
Election to Exercise duly executed at the principal office of the Rights Agent
in Cranford, New Jersey. The Exercise Price shall initially be $300 per Right
and shall be subject to adjustment in certain events as provided in the Rights
Agreement.
In certain circumstances described in the Rights Agreement, the
Rights evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities of the Company
other than Preferred Stock or assets of the Company, all as provided in the
Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor evidencing an aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Rights Certificate or Rights Certificates surrendered.
If this Rights Certificate shall be exercised in part, the registered holder
shall be entitled to receive, upon surrender hereof,
2
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.001 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of Common Stock or one one-hundredth of a share of Preferred Stock per
Right (or, in certain cases, other securities or assets of the Company), subject
in each case to adjustment in certain events as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of any
securities 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 stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
3
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Date: ____________
ATTEST: PRAXAIR, INC.
___________________________ By______________________
Secretary
Countersigned:
REGISTRAR AND TRANSFER COMPANY
By____________________________
Authorized Signature
4
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
FORM OF RIGHTS CERTIFICATE [REVERSE SIDE]
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ________________________ hereby
sells, assigns and transfers unto ______________________________________________
(Please print name
________________________________________________________________________________
and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature
(Signature must correspond to
name as written upon the face
of this Rights Certificate in
every particular, without
alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee Medallion program), pursuant to
Exchange Act Rule 17Ad-15.
------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the
1
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
knowledge of the undersigned, have never been, Beneficially Owned by an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
-------------------------
Signature
------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Rights Certificate to be void and not transferable or
exercisable.
2
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: PRAXAIR, INC.
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of Common Stock or Participating Preferred
Stock issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
------------------------------------------
ADDRESS:
------------------------------------------
------------------------------------------
Social Security or Other Taxpayer
Identification Number:
------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
------------------------------------------
ADDRESS:
------------------------------------------
------------------------------------------
Social Security or Other Taxpayer
Identification Number:
------------------------------------------
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature
(Signature must correspond to
name as written upon the face
of the attached Rights
Certificate in every
particular, without
alteration or
1
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee Medallion program), pursuant to
Exchange Act Rule 17Ad-15.
------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by the attached
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
-------------------------
Signature
------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
2
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
EXHIBIT B
FORM OF CERTIFICATE OF DESIGNATION AND TERMS OF PARTICIPATING
PREFERRED STOCK OF PRAXAIR, INC.
Pursuant to Section 151 of the General
CORPORATION LAW OF THE STATE OF
DELAWARE
We, the undersigned, ____________________ and
____________________, the ____________________, and __________,
respectively, of Praxair, Inc., a
Delaware corporation (the
"Corporation"), do hereby certify as follows:
Pursuant to authority granted by Article IV of the Restated
Certificate of Incorporation of the Corporation, as amended, and in accordance
with the provisions of Section 151 of the General Corporation Law of the State
of
Delaware, the Board of Directors of the Corporation has adopted the following
resolutions fixing the designation and certain terms, powers, preferences and
other rights of a new series of the Corporation's Preferred Stock, no par value,
and certain qualifications, limitations and restrictions thereon:
RESOLVED, that there is hereby established a series of Preferred Stock, no
par value, of the Corporation, and the designation and certain terms, powers,
preferences and other rights of the shares of such series, and certain
qualifications, limitations and restrictions thereon, are hereby fixed as
follows:
(i) The distinctive serial designation of this series shall be "Participating
Preferred Stock" (hereinafter called "this Series"). Each share of this Series
shall be identical in all respects with the other shares of this Series except
as to the dates from and after which dividends thereon shall be cumulative.
(ii) The number of shares in this Series shall initially be _______,(1) which
number may from time to time be increased or decreased (but not below the number
then
----------
(1) Insert number equal to the number of shares of Common Stock outstanding on
date prior to filing certificate of designation divided by 100.
1
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
outstanding) by the Board of Directors. Shares of this Series purchased by the
Corporation shall be cancelled and shall revert to authorized but unissued
shares of Preferred Stock undesignated as to series. Shares of this Series may
be issued in fractional shares which are whole number multiples of one
one-hundredth of a share, which fractional shares shall entitle the holder, in
proportion to such holder's fractional share, to all rights of a holder of a
whole share of this Series.
(iii) The holders of full or fractional shares of this Series shall be entitled
to receive, when and as declared by the Board of Directors, but only out of
funds legally available therefor, dividends, (A) on each date that dividends or
other distributions (other than dividends or distributions payable in Common
Stock of the Corporation) are payable on or in respect of Common Stock
comprising part of the Reference Package (as defined below), in an amount per
whole share of this Series equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common Stock of
the Corporation) that would be payable on such date to a holder of the Reference
Package and (B) on the last day of March, June, September and December in each
year, in an amount per whole share of this series equal to the excess (if any)
of $____(2) over the aggregate dividends paid per whole share of this Series
during the three month period ending on such last day. Each such dividend shall
be paid to the holders of record of shares of this Series on the date, not
exceeding sixty days preceding such dividend or distribution payment date, fixed
for the purpose by the Board of Directors in advance of payment of each
particular dividend or distribution. Dividends on each full and each fractional
share of this Series shall be cumulative from the date such full or fractional
share is originally issued; provided that any such full or fractional share
originally issued after a dividend record date and on or prior to the dividend
payment date to which such record date relates shall not be entitled to receive
the dividend payable on such dividend payment date or any amount in respect of
the period from such original issuance to such dividend payment date.
The term "Reference Package" shall initially mean 100 shares of Common
Stock, no par value ("Common Stock"), of the Corporation. In the event the
Corporation shall at any time after the close of business on ________, ____(3)
(A) declare or pay a dividend on any Common Stock payable in Common Stock, (B)
subdivide any Common Stock or
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(2) Insert an amount equal to 1/4 of 1% of the Exercise Price divided
by the number of shares of Preferred Stock purchasable upon
exercise of one Right (i.e., a guaranteed 1% dividend).
(3) For a certificate of designation relating to shares to be issued pursuant
to Section 2.3 of the Rights Agreement, insert the Separation Time. For a
certificate of designation relating to shares to be issued pursuant to
Section 3.1(d) of the Rights Agreement, insert the Flip-in Date.
2
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
(C) combine any Common Stock into a smaller number of shares, then and in each
such case the Reference Package after such event shall be the Common Stock that
a holder of the Reference Package immediately prior to such event would hold
thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of full cumulative
dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no dividend (other
than a dividend in Common Stock or in any other stock ranking junior to this
Series as to dividends and upon liquidation) shall be declared or paid or set
aside for payment or other distribution declared or made upon the Common Stock
or upon any other stock ranking junior to this Series as to dividends or upon
liquidation, unless the full cumulative dividends (including the dividend to be
paid upon payment of such dividend or other distribution) on all outstanding
shares of this Series shall have been, or shall contemporaneously be, paid. When
dividends are not paid in full upon this Series and any other stock ranking on a
parity as to dividends with this Series, all dividends declared upon shares of
this Series and any other stock ranking on a parity as to dividends shall be
declared pro rata so that in all cases the amount of dividends declared per
share on this Series and such other stock shall bear to each other the same
ratio that accumulated dividends per share on the shares of the Series and such
other stock bear to each other. Neither the Common Stock nor any other stock of
the Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation shall be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any shares of any such stock) by the Corporation
(except by conversion into or exchange for stock of the Corporation ranking
junior to this Series as to dividends and upon liquidation), unless the full
cumulative dividends (including the dividend to be paid upon payment of such
dividend, distribution, redemption, purchase or other acquisition) on all
outstanding shares of this Series shall have been, or shall contemporaneously
be, paid.
(iv) In the event of any merger, consolidation, reclassification or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such
case the shares of this Series shall at the same time be similarly exchanged or
changed in an amount per whole share equal to the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, that a holder of the Reference Package would be entitled to receive as a
result of such transaction.
(v) In the event of any liquidation, dissolution or winding up of the affairs of
the Corporation, whether voluntary or involuntary, the holders of full and
fractional shares of this Series shall be entitled, before any distribution or
payment is made on any date to the holders of the Common Stock or any other
stock of the Corporation ranking junior to this
3
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
series upon liquidation, to be paid in full an amount per whole share of this
Series equal to the greater of (A) $__________(4) or (B) the aggregate amount
distributed or to be distributed in connection with such liquidation,
dissolution or winding up to a holder of the Reference Package (such greater
amount being hereinafter referred to as the "Liquidation Preference"), together
with accrued dividends to such distribution or payment date, whether or not
earned or declared. If such payment shall have been made in full to all holders
of shares of this Series, the holders of shares of this Series as such shall
have no right or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution to
the holders of shares of this Series upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are entitled
pursuant to the first paragraph of this Section (v), no such distribution shall
be made on account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such liquidation,
dissolution or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably in proportion to the full
distributable amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation, the
holders of shares of this Series then outstanding shall be entitled to be paid
out of assets of the Corporation available for distribution to its stockholders
all amounts to which such holders are entitled pursuant to the first paragraph
of this Section (v) before any payment shall be made to the holders of Common
Stock or any other stock of the Corporation ranking junior upon liquidation to
this Series.
For the purposes of this Section (v), the consolidation or merger of, or
binding statutory share exchange by, the Corporation with any other corporation
shall not be deemed to constitute a liquidation, dissolution or winding up of
the Corporation.
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(4) Insert an amount equal to 100 times the Exercise Price in effect
as of the Separation Time.
4
RIGHTS AGREEMENT
BETWEEN PRAXAIR, INC.
AND REGISTRAR & TRANSFER COMPANY
DATED AS OF JUNE 30, 2002
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of stockholders required by law
or by the Restated Certificate of Incorporation, as amended, of the Corporation,
and except as otherwise required by law, each share (or fraction thereof) of
this Series shall, on any matter, vote as a class with any other capital stock
comprising part of the Reference Package and shall have the number of votes
thereon that a holder of the Reference Package would have.
IN WITNESS WHEREOF, the undersigned have signed and attested this
certificate on the ____ day of _________, _____.
---------------------------------
Attest:
-------------------------
5
