d975787_8-a12b.htm
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________________
FORM
8-A
FOR
REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT
TO SECTION 12(b) OR (g) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Euroseas
Ltd.
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(Exact
name of Issuer as specified in its chapter)
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Republic
of the Marshall Islands
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n/a
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(State
of incorporation
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(IRS
Employer
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or
organization)
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Identification
No.)
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Aethrion
Center
40
Ag. Konstantinou Street
151
24 Maroussi,
Greece
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(Address
of principal
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(Zip
Code)
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Executive
offices)
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If this form relates to
the registration of a class of securities pursuant to Section 12(b) of the
Exchange Act and is effective upon filing pursuant to General Instruction A.(c)
please check the following box. x
If this form relates to
the registration of a class of securities pursuant to Section 12(g) of the
Exchange Act and is effective pursuant to General Instruction A.(d), check the
following box. o
Securities
to be registered pursuant to Section 12(b) of the Act:
Preferred Stock Purchase
Rights
Securities
to be registered pursuant to Section 12(g) of the Act:
None
Exhibits
3.1, 3.2, 3.3 and 4.1 of the registrant’s registration statement on Form F-3,
filed on July 2, 2008 (file No. 333-152089) are incorporated herein by
reference.
Item
1. Description
of Registrants Securities to be Registered
1.
Euroseas
Ltd. (the “Company”) has entered into a shareholders rights agreement (the
“Rights Agreement”) and declared a dividend of one preferred share purchase
right, or a Right, to purchase one one-thousandth of the Company’s Series A
Participating Preferred Stock for each outstanding share of the Company’s common
stock, par value $0.03 per share (“Common Stock”). Each Right
entitles the registered holder, upon the occurrence of certain events, to
purchase from the Company one one-thousandth of a share of Series A
Participating Preferred Stock at an exercise price of $26, subject to adjustment
(the “Purchase Price”).
The
following summary of the principal terms of the Rights Agreement is a general
description only, and is subject to the specific terms and conditions set forth
in the Rights Agreement between the Company and American Stock Transfer and
Trust Company, LLC, as Rights Agent, attached as Exhibit 4.1 to this
Registration Statement and incorporated herein by reference.
Rights
Evidenced by Common Share Certificates
The
Rights will not be exercisable until the Distribution Date (defined
below). We will not send Certificates for the Rights (“Rights
Certificates”) to shareholders and the Rights will attach to and trade only
together with the Common Stock. Common Stock certificates outstanding
on the Record Date will evidence the Rights related thereto, and Common Stock
certificates issued after the Record Date will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption, exchange or expiration of the Rights), the surrender or
transfer of any certificates for Common Stock, outstanding as of the Record
Date, even without notation or a copy of the Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
Distribution
Date
The
Rights will be separate from the Common Stock, Rights Certificates will be
issued and the Rights will become exercisable upon the earlier of (a) the tenth
day (or such later date as may be determined by the Company’s Board of
Directors) after a person or group of affiliated or associated persons
(“Acquiring Person”) has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the Common Stock then outstanding, or (b) the tenth
business day (or such later date as may be determined by the Company’s Board of
Directors) after a person or group announces a tender or exchange offer, the
consummation of which would result in ownership by a person or group of 15% or
more of the Company’s then outstanding Common Stock. The earlier of
these dates is referred to as the “Distribution Date.” Persons who
are beneficial owners of 15% or more of the Common Stock outstanding on the
effective date of the rights agreement are excluded from the definition of
“Acquiring Person” until such time as they acquire additional shares of stock in
an amount equal to 2% of the Common Stock, and therefore until such time, these
stockholders will not be deemed to be Acquiring Persons.
Issuance
of Rights Certificates; Expiration of Rights
As soon
as practicable following the Distribution Date, a Rights Certificate will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and such separate Rights Certificate alone will evidence
the Rights from and after the Distribution Date. The Rights will expire on the
earliest of (i) May 27, 2019, (the “Final Expiration Date”), or (ii) redemption
or exchange of the Rights as described below.
Initial
Exercise of the Rights
Following
the Distribution Date, and until one of the further events described below,
holders of the Rights will be entitled to receive, upon exercise and the payment
of the Purchase Price, one one-thousandth of a share of the Series A
Participating Preferred Stock. In the event that the Company does not
have sufficient Series A Participating Preferred Stock available for all Rights
to be exercised, or the board of directors decides that such action is necessary
and not contrary to the interests of Rights holders, the Company may instead
substitute cash, assets or other securities for the Series A Participating
Preferred Stock for which the Rights would have been exercisable under this
provision or as described below.
Right
to Buy Company Common Stock
Unless
the Rights are earlier redeemed, in the event that an Acquiring Person obtains
15% or more of the Company’s then outstanding Common Stock, then each holder of
a Right which has not theretofore been exercised (other than Rights beneficially
owned by the Acquiring Person, which will thereafter be void) will thereafter
have the right to receive, upon exercise, Common Stock having a value equal to
two times the Purchase Price. Rights are not exercisable following
the occurrence of an event as described above until such time as the Rights are
no longer redeemable by the Company as set forth below.
Right
to Buy Acquiring Company Stock
Similarly,
unless the Rights are earlier redeemed, in the event that, after an Acquiring
Person obtains 15% or more of the Company’s then outstanding Common Stock, (i)
the Company is acquired in a merger or other business combination transaction,
or (ii) 50% or more of the Company’s consolidated assets or earning power are
sold, proper provision must be made so that each holder of a Right which has not
theretofore been exercised (other than Rights beneficially owned by the
Acquiring Person, which will thereafter be void) will thereafter have the right
to receive, upon exercise, shares of common stock of the acquiring company
having a value equal to two times the Purchase Price.
Exchange
Provision
At any
time after an Acquiring Person obtains 15% or more of the Company’s then
outstanding Common Stock and prior to the acquisition by such Acquiring Person
of 50% or more of the Company’s outstanding Common Stock, the board of directors
of the Company may exchange the Rights (other than Rights beneficially owned by
the Acquiring Person, which shall be void), in whole or in part, at an exchange
ratio of one share of Common Stock per Right.
Redemption
At any
time on or prior to the close of business on the earlier of (i) the Distribution
Date and (ii) the Final Expiration Date, the Company may redeem the Rights in
whole, but not in part, at a price of $0.001 per Right.
Adjustments
to Prevent Dilution
The
Purchase Price payable, the number of Rights, and the number of shares of Series
A Participating Preferred Stock or Common Stock or other securities or property
issuable upon exercise of the Rights are subject to adjustment from time to time
in connection with the dilutive issuances by the Company as set forth in the
Rights Agreement. With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price.
Cash
Paid Instead of Issuing Fractional Shares
No
fractional Common Stock will be issued upon exercise of a Right and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of
exercise.
No
Shareholders’ Rights Prior to Exercise
Until a
Right is exercised, the holder thereof, as such, will have no rights as a
stockholder of the Company (other than any rights resulting from such holder’s
ownership of Common Stock), including, without limitation, the right to vote or
to receive dividends.
Amendment
of Rights Agreement
The terms
of the Rights and the Rights Agreement may be amended in any respect without the
consent of the Rights holders on or prior to the Distribution Date; thereafter,
the terms of the Rights and the Rights Agreement may be amended without the
consent of the Rights holders in order to cure any ambiguities or to make
changes which do not adversely affect the interests of Rights holders (other
than the Acquiring Person).
Rights
and Preferences of the Series A Participating Preferred
Stock
Each one
one-thousandth of a share of Series A Participating Preferred Stock has rights
and preferences substantially equivalent to those of one share of Common
Stock.
Certain
Anti-Takeover Effects
The
Rights approved by the board of directors are designed to protect and maximize
the value of the Company’s securities in the event of an unsolicited attempt by
an acquirer to take over the Company in a manner or on terms not approved by the
board of directors. Takeover attempts may include coercive tactics,
which deprive the Company’s board of directors and its shareholders of a
meaningful chance to determine the Company’s future. The Rights have
been declared by the board of directors in order to deter such tactics, as they
unfairly pressure shareholders and may deprive them of the full value of their
shares.
The
Rights will not prevent a takeover of the Company. Subject to the
restrictions described above, the Rights may be redeemed by the Company at
$0.001 per Right at any time prior to the Distribution Date, and therefore,
should not interfere with any merger or business combination approved by the
board of directors.
Item
2.
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Exhibits
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Description
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4.1
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Form
of Shareholders Rights Agreement between Euroseas Ltd. and American Stock
Transfer and Trust Company, LLC, as Rights Agent, which includes as
Exhibit A the Form of Certificate of Designation of Series A Participating
Preferred Stock, as Exhibit B the Form of Rights Certificate and as
Exhibit C the Summary of Rights
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SIGNATURE
Pursuant to the
requirements of Section 12 of the Securities Exchange Act of 1934, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized.
Dated: May
18, 2009
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EUROSEAS
LTD.
By:
/s/Aristides J.
Pittas
Name: Aristides
J. Pittas
Title: President
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Exhibit 4.1
SHAREHOLDERS
RIGHTS AGREEMENT
Dated as
of May 18, 2009
between
EUROSEAS
LTD.
and
AMERICAN
STOCK TRANSFER AND TRUST COMPANY, LLC,
as Rights
Agent
This
Shareholders Rights Agreement (this “Rights
Agreement”) is made and entered into as of May 18, 2009, by and between
Euroseas Ltd., a Marshall Islands company (the “Company”),
and American Stock Transfer and Trust Company, LLC, as rights agent (the “Rights
Agent”).
WHEREAS,
the Board of Directors of the Company (the “Board”)
has (a) authorized and declared a dividend of one right (the “Right”)
for each share of the Company’s common stock, par value $0.03 per share (the
“Common
Stock”) held of record as of the Close of Business (as hereinafter
defined) on May 27, 2009 (the “Record
Date”) and (b) has further authorized the issuance of such Right in
respect of each share of Common Stock that shall become outstanding (i) at any
time between the Record Date and the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date (as such terms are hereinafter
defined) or (ii) upon the exercise or conversion, prior to the earlier of the
Redemption Date or the Final Expiration Date, of any option or other security
exercisable for or convertible into shares of Common Stock, which option or
other such security is outstanding on the Distribution Date; and
WHEREAS,
each Right represents the right of the holder thereof to purchase one
one-thousandth of a share of Series A Participating Preferred Stock (as such
number may hereafter be adjusted pursuant to the provisions hereof), upon the
terms and subject to the conditions set forth herein, having the rights,
preferences and privileges set forth in the Certificate of Designations of
Series A Participating Preferred Stock, attached hereto as Exhibit
A.
NOW
THEREFORE, in consideration of the premises and the mutual agreements set forth
herein, the parties hereby agree as follows:
1. Certain
Definitions. For purposes of this Rights Agreement, the
following terms have the meanings indicated:
“Acquiring
Person” shall mean any Person, other than a Permitted Person and/or its
Affiliates who or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, as reported in any SEC filing or submission, but shall
not include the Company, any Subsidiary of the Company, or any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person holding
shares of Common Stock for or pursuant to the terms of any employee benefit plan
of the Company or pursuant to a dividend or distribution paid in shares of
Common Stock.
Notwithstanding the
foregoing, no Person shall be deemed to be an Acquiring Person if such Person
shall become the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding solely as a result of a grant under a Company equity incentive
plan, a dividend or distribution paid or made by the Company on the outstanding
shares of Common Stock in shares of Common Stock or pursuant to a split or
subdivision of the outstanding shares of Common Stock; provided, however, that a
Person who (i) becomes the Beneficial Owner of 15% or more of the shares of
Common Stock of the Company then outstanding by reason of a grant under a
Company equity incentive plan, dividend or distribution paid or made by the
Company on the outstanding shares of Common Stock in shares of Common Stock or
pursuant to a split or subdivision of the outstanding shares of Common Stock and
(ii) becomes the Beneficial Owner of any additional shares of Common Stock of
the Company (other than pursuant to an additional grant under a Company equity
incentive plan, dividend or distribution paid or made by the Company on the
outstanding shares of Common Stock in shares of Common Stock or pursuant to a
split or subdivision of the outstanding shares of Common Stock), shall be deemed
to be an Acquiring Person unless upon becoming the Beneficial Owner of such
additional shares of Common Stock of the Company such Person does not
beneficially own 15% or more of the shares of Common Stock of the Company then
outstanding.
Notwithstanding
the foregoing, no Person shall be deemed to be an Acquiring Person as the result
of an acquisition of shares of Common Stock by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the shares of Common Stock
of the Company then outstanding; provided,
however,
that a Person who (i) becomes the Beneficial Owner of 15% or more of the shares
of Common Stock of the Company then outstanding by reason of share purchases by
the Company, any Subsidiary of the Company or any employee benefit plan of the
Company and (ii) after such share purchases, becomes the Beneficial Owner of
additional shares of Common Stock of the Company in an amount equal to or in
excess of 1% or more of the Company’s then outstanding Common Stock (other than
pursuant to a grant under a Company equity incentive plan, a dividend or
distribution paid or made by the Company on the outstanding shares of Common
Stock in shares of Common Stock or pursuant to a split or subdivision of the
outstanding shares of Common Stock), shall be deemed to be an Acquiring Person
unless upon becoming the Beneficial Owner of such additional shares of Common
Stock of the Company such Person does not beneficially own 15% or more of the
shares of Common Stock of the Company then outstanding.
Notwithstanding
the foregoing, (i) if the Company’s Board determines in good faith that a Person
who would otherwise be an “Acquiring Person,” as defined pursuant to the
foregoing provisions of this paragraph, has become such inadvertently
(including, without limitation, because (A) such Person was unaware that it
beneficially owned a percentage of the shares of Common Stock that would
otherwise cause such Person to be an “Acquiring Person,” as defined pursuant to
the foregoing provisions of this paragraph, or (B) such Person was aware of the
extent of the shares of Common Stock it beneficially owned but had no actual
knowledge of the consequences of such beneficial ownership under this Rights
Agreement) and without any intention of changing or influencing control of the
Company, and if such Person divested or divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would no longer
be an “Acquiring Person,” as defined pursuant to the foregoing provisions of
this paragraph, then such Person shall not be deemed to be or have ever been an
“Acquiring Person” for any purposes of this Rights Agreement; and (ii) if, as of
the date hereof, any Person, other than a Permitted Person and/or its
Affiliates, is the Beneficial Owner of 15% or more of the shares of Common Stock
outstanding, such Person shall not be or become an “Acquiring Person,” as
defined herein, unless and until such time as such Person shall become the
Beneficial Owner of additional shares of Common Stock in an amount equal to or
in excess of 2% or more of the Company’s then outstanding Common Stock
(calculated without including the shares of Common Stock already held by such
Person), other than pursuant to a grant under a Company equity incentive plan, a
dividend or distribution paid or made by the Company on the outstanding shares
of Common Stock in shares of Common Stock or pursuant to a split or subdivision
of the outstanding shares of Common Stock, unless upon becoming the Beneficial
Owner of such additional shares of Common Stock, such Person is not then the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding.
“Adjustment
fraction” shall have the meaning set forth in Section 11(a)(i)
hereof.
“Affiliate”
and “Associate”
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
of this Rights Agreement.
A Person
shall be deemed the “Beneficial
Owner” of, and shall be deemed to “Beneficially
Own” any securities:
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(i)
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which
such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly, for purposes of Section 13(d) of the
Exchange Act and Rule 13d-3 thereunder (or any comparable or successor law
or regulation);
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(ii)
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which
such Person or any of such Person’s Affiliates or Associates has (A) the
right to acquire or direct the acquisition of (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided,
however,
that a Person shall not be deemed pursuant to this subsection (ii)(A) to
be the Beneficial Owner of, or to Beneficially Own, (1) securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (2)
securities which a Person or any of such Person’s Affiliates or Associates
may be deemed to have the right to acquire pursuant to any merger or other
acquisition agreement between the Company and such Person (or one or more
of its Affiliates or Associates) if such agreement has been approved by
the Board of the Company prior to there being an Acquiring Person; or (B)
the right to vote pursuant to any agreement, arrangement or understanding
or otherwise; provided,
however,
that a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, any security under this subsection (ii)(B) if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response
to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act
and (2) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report);
or
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(iii)
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which
are Beneficially Owned, directly or indirectly, by any other Person (or
any Affiliate or Associate thereof) with which such Person or any of such
Person’s Affiliates or Associates has any agreement, arrangement or
understanding, whether or not in writing (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to
subsection (ii)(B) above) or disposing of any securities of the Company;
provided,
however,
that in no case shall an officer or director of the Company be deemed (x)
the Beneficial Owner of any securities beneficially owned by another
officer or director of the Company solely by reason of actions undertaken
by such persons in their capacity as officers or directors of the Company
or (y) the Beneficial Owner of securities held of record by the trustee of
any employee benefit plan of the Company or any Subsidiary of the Company
for the benefit of any employee of the Company or any Subsidiary of the
Company, other than the officer or director, by reason of any influence
that such officer or director may have over the voting of the securities
held in the plan.
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“Board”
shall have the meaning set forth in the recitals.
“Business
Day” shall mean any day other than a Saturday, a Sunday or a day on which
banking institutions in New York are 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 time, on
such date; provided,
however,
that if such date is not a Business Day it shall mean 5:00 P.M., New York time,
on the next succeeding Business Day.
“Common
Stock” shall have the meaning set forth in the
recitals. Common Stock when used with reference to any Person other
than the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
“Common
Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii)
hereof.
“Company”
shall have the meaning set forth in the preamble, subject to the terms of
Section 13(a)(iii)(C) hereof.
“Current
Per Share Market Price” of any security (a “Security”
for purposes of this definition), for all computations other than those made
pursuant to Section 11(a)(iii) hereof, shall mean the average of the daily
closing prices per share of such Security for the thirty (30) consecutive
Trading Days immediately prior to but not including such date, and for purposes
of computations made pursuant to Section 11(a)(iii) hereof, the Current Per
Share Market Price of any Security on any date shall be deemed to be the average
of the daily closing prices per share of such Security for the ten (10)
consecutive Trading Days immediately prior to but not including such date; provided,
however,
that in the event that the Current Per Share Market Price of the Security is
determined during a period following the announcement by the issuer of such
Security of (i) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares or (ii) any
subdivision, combination or reclassification of such Security, and prior to the
expiration of the applicable thirty (30) Trading Day or ten (10) Trading Day
period, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the Current Per Share Market Price shall be appropriately
adjusted to reflect the current market price per share equivalent of such
Security. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the Nasdaq Global Select Market
or, if the Security is not listed or admitted to trading on the Nasdaq Global
Select Market, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities
exchange, the last sale price or, if such last sale price is not reported, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Security selected by the Board of the Company. If on any such
date no market maker is making a market in the Security, the fair value of such
shares on such date as determined in good faith by the Board of the Company
shall be used. If the Preferred Shares are not publicly traded, the
Current Per Share Market Price of the Preferred Shares shall be conclusively
deemed to be the Current Per Share Market Price of the shares of Common Stock as
determined pursuant to this definition, as appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof, multiplied by 1000. If the Security is not publicly held or
so listed or traded, Current Per Share Market Price shall mean the fair value
per share as determined in good faith by the Board of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
“Current
Value” shall have the meaning set forth in Section 11(a)(iii)
hereof.
“Distribution
Date” shall mean the earlier of (i) the Close of Business on the tenth
calendar day after the Shares Acquisition Date (or, if the tenth calendar day
after the Shares Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date) or (ii) the Close of Business on the tenth Business
Day (or such later date as may be determined by action of the Company’s Board)
after the date that a tender or exchange offer by any Person (other than a
Permitted Person and/or its Affiliates, the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if, assuming the successful consummation
thereof, such Person would be an Acquiring Person.
“Equivalent
Shares” shall mean Preferred Shares and any other class or series of
capital stock of the Company which is entitled to the same rights, privileges
and preferences as the Preferred Shares.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended.
“Exchange
Ratio” shall have the meaning set forth in Section 24(a)
hereof.
“Exercise
Price” shall have the meaning set forth in Section 4(a)
hereof.
“Expiration
Date” shall mean the earliest to occur of: (i) the Close of Business on
the Final Expiration Date, (ii) the Redemption Date, or (iii) the time at which
the Board orders the exchange of the Rights as provided in Section 24
hereof.
“Final
Expiration Date” shall mean May 27, 2019.
“Permitted
Person” shall mean Friends Investment Company Inc., Eurobulk Marine
Holdings, Inc., Aristides Pittas or any of their respective
Affiliates.
“Person”
shall mean any individual, firm, corporation, limited liability company,
partnership, trust or other entity, and shall include any successor (by merger
or otherwise) thereof or thereto.
“Post-Event
Transferee” shall have the meaning set forth in Section 7(e)
hereof.
“Preferred
Shares” shall mean shares of Series A Participating Preferred Stock,
$0.01 par value, of the Company having the rights and preferences set forth in
the Form of Certificate of Designation, Preferences and Rights included as
Exhibit A to this Rights Agreement.
“Pre-Event
Transferee” shall have the meaning set forth in Section 7(e)
hereof.
“Principal
Party” shall have the meaning set forth in Section 13(b)
hereof.
“Record
Date” shall have the meaning set forth in the recitals at the beginning
of this Rights Agreement.
“Redemption
Date” shall have the meaning set forth in Section 23(a)
hereof.
“Redemption
Price” shall have the meaning set forth in Section 23(a)
hereof.
“Right”
shall have the meaning set forth in the recitals.
“Rights
Agent” shall mean American Stock Transfer and Trust Company, LLC, or its
successor or replacement as provided in Sections 19 and 21 hereof.
“Rights
Agreement” shall have the meaning set forth in the preamble
hereof.
“Rights
Certificate” shall mean a certificate substantially in the form attached
hereto as Exhibit
B.
“Section
11(a)(iii) Trigger Date” shall have the meaning set forth in Section
11(a)(iii) hereof.
“Section
13 Event” shall mean any event described in clause (i), (ii) or (iii) of
Section 13(a) hereof.
“SEC”
shall mean the U.S. Securities and Exchange Commission and any successor
thereto.
“Securities
Act” shall mean the Securities Act of 1933, as amended.
“Shares
Acquisition Date” shall mean the first date of public announcement
(which, for purposes of this definition shall include, without limitation, a
report filed pursuant to Section 13(d) under the Exchange Act) by the Company or
an Acquiring Person that an Acquiring Person has become such; provided that, if
such Person is determined not to have become an Acquiring Person as defined
herein, then no Shares Acquisition Date shall be deemed to have
occurred.
“Spread”
shall have the meaning set forth in Section 11(a)(iii) hereof.
“Subsidiary”
of any Person shall mean any corporation or other entity of which an amount of
voting securities sufficient to elect a majority of the directors or Persons
having similar authority of such corporation or other entity is Beneficially
Owned, directly or indirectly, by such Person, or any corporation or other
entity otherwise controlled by such Person.
“Substitution
Period” shall have the meaning set forth in Section 11(a)(iii)
hereof.
“Summary
of Rights” shall mean a summary of this Rights Agreement substantially in
the form attached hereto as Exhibit
C.
“Total
Exercise Price” shall have the meaning set forth in Section 4(a)
hereof.
“Trading
Day” shall mean a day on which the principal national securities exchange
on which a referenced security is listed or admitted to trading is open for the
transaction of business or, if a referenced security is not listed or admitted
to trading on any national securities exchange, a Business Day.
A “Triggering
Event” shall be deemed to have occurred upon any Person, becoming an
Acquiring Person.
2. Appointment
of Rights Agent. The Company hereby appoints the Rights Agent
to act as rights agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights
Agent as it may deem necessary or desirable. The Rights Agent shall
have no duty to supervise, and in no event shall be liable for, the acts or
omissions of any such co-Rights Agent appointed by the Company.
3. Issuance
of Rights Certificates.
(a) Until
the Distribution Date, (i) the Rights will be evidenced (subject to the
provisions of Sections 3(b) and 3(c) hereof) by the certificates for shares of
Common Stock registered in the names of the holders thereof (which certificates
shall also be deemed to be Rights Certificates) and not by separate Rights
Certificates and (ii) the right to receive Rights Certificates will be
transferable only in connection with the transfer of shares of Common
Stock. Until the earlier of the Distribution Date or the Expiration
Date, the surrender for transfer of certificates for shares of Common Stock
shall also constitute the surrender for transfer of the Rights associated with
the shares of Common Stock represented thereby. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested and provided with all necessary
information, send) by first-class, postage-prepaid mail, to each record holder
of shares of Common Stock as of the Close of Business on the Distribution Date,
at the address of such holder shown on the records of the Company, or the
transfer agent or registrar for the Common Stock, a Rights Certificate, in
substantially the form of Exhibit B hereto, evidencing one Right for each share
of Common Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11 hereof, then at the time of distribution of
the Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates and may be
transferred by the transfer of the Rights Certificates as permitted hereby,
separately and apart from any transfer of shares of Common Stock, and the
holders of such Rights Certificates as listed in the records of the Company or
any transfer agent or registrar for the Rights shall be the record holders
thereof.
The
Company shall promptly notify the Rights Agent of the occurrence of the
Distribution Date and, if such notification is given orally, the Company shall
confirm same in writing on or prior to the next Business Day. Until
such notice is received by the Rights Agent, whether written or oral, the Rights
Agent may presume conclusively for all purposes that the Distribution Date has
not occurred.
(b) On
the Record Date or as soon as practicable thereafter, the Company will send a
copy of the Summary of Rights by first-class, postage-prepaid mail, to each
record holder of shares of Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company
or the transfer agent or registrar for the Common Stock. With respect
to certificates for shares of Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with the Summary of
Rights. Until the Distribution Date (or, if earlier, the Expiration
Date), the surrender for transfer of any certificate for shares of Common Stock
outstanding on the Record Date, with or without a copy of the Summary of Rights,
shall also constitute the transfer of the Rights associated with the shares of
Common Stock represented thereby.
(c) Unless
the Board by resolution adopted at or before the time of the issuance of any
shares of Common Stock specifies to the contrary, Rights shall be issued in
respect of all shares of Common Stock that are issued after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date or, in
certain circumstances provided in Section 22 hereof, after the Distribution
Date. Certificates representing such shares of Common Stock shall
also be deemed to be certificates for Rights, and shall bear a legend in
substantially the following form:
THIS
CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS
SET FORTH IN A SHAREHOLDERS RIGHTS AGREEMENT BETWEEN EUROSEAS LTD. AND AMERICAN
STOCK TRANSFER AND TRUST COMPANY, LLC, AS THE RIGHTS AGENT, DATED AS OF MAY 18,
2009, (THE “RIGHTS AGREEMENT”), THE TERMS OF WHICH ARE HEREBY INCORPORATED
HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICES OF EUROSEAS LTD. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND
WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. EUROSEAS LTD. WILL MAIL TO THE
HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES
SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO
IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND
VOID.
With
respect to such certificates containing the foregoing legend, until the earlier
of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated
with the shares of Common Stock represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the
shares of Common Stock represented thereby.
(d) In
the event that the Company purchases or acquires any shares of Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated
with such shares of Common Stock shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
shares of Common Stock which are no longer outstanding.
4. Form
of Rights Certificates.
(a) The
Rights Certificates (and the forms of election to purchase shares of Series A
Preferred Stock and of assignment to be printed on the reverse thereof) shall be
substantially in the form of Exhibit
B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate (but which do not affect the rights, duties or responsibilities of
the Rights Agent) and as are not inconsistent with the provisions of this Rights
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange or a national market system, on which the Rights may from time to
time be listed or traded, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date (or in the case of
Rights issued with respect to shares of Common Stock issued by the Company after
the Record Date, as of the date of issuance of such shares of Common Stock) and
on their face shall entitle the holders thereof to purchase such number of one
one-thousandth of a Preferred Share as shall be set forth therein at the price
set forth therein (such exercise price per one one-thousandth of a Preferred
Share being hereinafter referred to as the “Exercise
Price” and the aggregate Exercise Price of all Preferred Shares issuable
upon exercise of one Right being hereinafter referred to as the “Total
Exercise Price”), but the number and type of securities purchasable upon
the exercise of each Right and the Exercise Price shall be subject to adjustment
as provided herein.
(b) Any
Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Company’s Board has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent the
Rights Agent has knowledge thereof and to the extent feasible) a legend in
substantially the following form:
THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY
A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT
5. Countersignature
and Registration.
(a) The
Rights Certificates shall be duly executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its Chief Financial Officer,
its President or any Vice President, either manually or by facsimile signature,
and by the Secretary or an Assistant Secretary of the Company, either manually
or by facsimile signature, and shall have affixed thereto the Company’s seal (if
any) or a facsimile thereof. The Rights Certificates shall be either
manually or by facsimile signature countersigned by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates on behalf of the Company had not ceased to be such
officer of the Company; and any Rights Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following
the Distribution Date, receipt by the Rights Agent of notice to that effect and
all other relevant information referred to in Section 3(a), the Rights
Agent will keep or cause to be kept, at its office designated for such purposes,
books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights evidenced on
its face by each of the Rights Certificates and the date of each of the Rights
Certificates.
6. Transfer,
Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates.
(a) Subject
to the provisions of Sections 7(e), 14 and 24 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate or Rights Certificates
may be transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder to purchase
a like number of one one-thousandth of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets, as the case may be) as
the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up, combined
or exchanged at the office of the Rights Agent designated for such
purpose. The Rights Certificates are transferable only on the
registry books of the Rights Agent. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have properly completed and signed the certificate contained in the form
of assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject
to Sections 7(e), 14 and 24 hereof, countersign and deliver to the person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or security
satisfactory to them, and, at the Company’s request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will make and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
holder in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
7. Exercise
of Rights; Exercise Price; Expiration Date of Rights.
(a) Subject
to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date and
prior to the Close of Business on the Expiration Date by surrender of the Rights
Certificate, with the form of election to purchase on the reverse side thereof
properly completed and duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the Exercise
Price for each one one-thousandth of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) as
to which the Rights are exercised.
(b) The
Exercise Price for each one one-thousandth of a Preferred Share issuable
pursuant to the exercise of a Right shall initially be Twenty-Six Dollars, and
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon
receipt of a Rights Certificate representing exercisable Rights, with the form
of election to purchase duly executed, accompanied by payment of the Exercise
Price for the number of one one-thousandth of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) to
be purchased and an amount equal to any applicable tax or charge required to be
paid by the holder of such Rights Certificate in accordance with Section 9(e)
hereof, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Shares (or
make available, if the Rights Agent is the transfer agent for the Preferred
Shares) a certificate or certificates for the number of one one-thousandth of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests or
(B) if the Company shall have elected to deposit the total number of one
one-thousandth of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-thousandth of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) as are to be purchased (in which case
certificates for the Preferred Shares (or, following a Triggering Event, other
securities, cash or other assets as the case may be) represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company hereby directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt thereof, deliver such cash
to or upon the order of the registered holder of such Rights
Certificate. The payment of the Exercise Price (as such amount may be
reduced (including to zero) pursuant to Section 11(a)(iii) hereof) and an amount
equal to any applicable tax or charge required to be paid by the holder of such
Rights Certificate in accordance with Section 9(e) hereof, may be made in cash
or by certified bank check, wire transfer, cashier’s check or bank draft payable
to the order of the Company. In the event that the Company is
obligated to issue securities of the Company other than Preferred Shares, pay
cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent, if and
when necessary to comply with this Rights Agreement.
(d) In
case the registered holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, a new Rights Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Rights Certificate or to his or her duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding
anything in this Rights Agreement to the contrary, from and after the first
occurrence of a Triggering Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such (a “Post-Event
Transferee”), (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Company’s Board has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e) (a “Pre-Event
Transferee”) or (iv) any subsequent transferee receiving transferred
Rights from a Post-Event Transferee or a Pre-Event Transferee, either directly
or through one or more intermediate transferees, shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Rights Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but neither the Company nor the Rights Agent shall
have any liability to any holder of Rights Certificates or to any other Person
as a result of the Company’s failure to make any determinations with respect to
an Acquiring Person or any of such Acquiring Person’s Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding
anything in this Rights Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a
registered holder upon the occurrence of any purported exercise as set forth in
this Section 7 unless such registered holder shall, in addition to having
complied with the requirements of Section 7(a), have (i) properly completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
8. Cancellation
and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any Rights Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
9. Reservation
and Availability of Preferred Shares.
(a) The
Company covenants and agrees that it will use its best efforts to cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
not reserved for another purpose (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Common Stock and/or other
securities), the number of Preferred Shares (and, following the occurrence of
the Triggering Event, Common Stock and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) If
the Company shall hereafter list any of its Preferred Shares on a national
securities exchange, then so long as the Preferred Shares (and, following the
occurrence of a Triggering Event, shares of Common Stock and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The
Company shall use its best efforts to (i) file, as soon as practicable following
the earliest date after the first occurrence of a Triggering Event in which the
consideration to be delivered by the Company upon exercise of the Rights is
described in Section 11(a)(ii) or Section 11(a)(iii) hereof, or as soon as is
required by law following the Distribution Date, as the case may be, a
registration statement under the Securities Act with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities and (B) the date of expiration of the Rights. The
Company may temporarily suspend, for a period not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement and notify the
Rights Agent that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notification to the Rights Agent
at such time as the suspension is no longer in effect. The Company
will also take such action as may be appropriate under, or to ensure compliance
with, the securities or “blue sky” laws of the various states in connection with
the exercisability of the Rights. Notwithstanding any provision of
this Rights Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction, unless the requisite qualification in such jurisdiction shall
have been obtained, or an exemption therefrom shall be available, and until a
registration statement has been declared effective.
(d) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares (or other securities of the
Company) delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such securities (subject to payment of the Exercise Price), be
duly and validly authorized and issued and fully paid and non-assessable
shares.
(e) The
Company further covenants and agrees that it will pay when due and payable any
and all federal and state taxes or charges which may be payable in respect of
the original issuance or delivery of the Rights Certificates or of any Preferred
Shares (or other securities of the Company) upon the exercise of
Rights. The Company shall not, however, be required to pay any tax or
charge which may be payable in respect of any transfer or delivery of Rights
Certificates to a person other than, or the issuance or delivery of certificates
or depositary receipts for the Preferred Shares (or other securities of the
Company) in a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares (or other
securities of the Company) upon the exercise of any Rights until any such tax or
charge shall have been paid (any such tax or charge being payable by the holder
of such Rights Certificate at the time of surrender) or until it has been
established to the Company’s satisfaction that no such tax or charge is
due.
10. Record
Date. Each Person in whose name any certificate for a number
of one one-thousandth of a Preferred Share (or other securities of the Company)
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of Preferred Shares (or other securities of the
Company) represented thereon, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Total Exercise Price with respect to which the Rights have been
exercised (and any applicable taxes or charges) was made; provided,
however,
that if the date of such surrender and payment is a date upon which the transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a holder
of Preferred Shares (or other securities of the Company) for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
11. Adjustment
of Exercise Price, Number of Shares or Number of Rights. The
Exercise Price, the number and kind of shares or other property covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i)
Notwithstanding anything in this Rights Agreement to the contrary, in the event
the Company shall at any time after the date of this Rights Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares (by reverse stock split or otherwise) into a smaller number of
Preferred Shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11 and Section 7(e) hereof: (1) the Exercise Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification shall be adjusted so that
the Exercise Price thereafter shall equal the result obtained by dividing the
Exercise Price in effect immediately prior to such time by a fraction (the
“Adjustment
Fraction”), the numerator of which shall be the total number of Preferred
Shares (or shares of capital stock issued in such reclassification of the
Preferred Shares) outstanding immediately following such time and the
denominator of which shall be the total number of Preferred Shares outstanding
immediately prior to such time; provided,
however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of such Right; and (2) the number of one
one-thousandth of a Preferred Share (or share of such other capital stock)
issuable upon the exercise of each Right shall equal the number of one
one-thousandth of a Preferred Share (or share of such other capital stock) as
was issuable upon exercise of a Right immediately prior to the occurrence of the
event described in clauses (A)-(D) of this Section 11(a)(i), multiplied by the
Adjustment Fraction; provided,
however,
that, no such adjustment shall be made pursuant to this Section 11(a)(i) to the
extent that there shall have simultaneously occurred an event described in
clause (A), (B), (C) or (D) of Section 11(n) with a proportionate adjustment
being made thereunder. Each share of Common Stock that shall become
outstanding after an adjustment has been made pursuant to this Section 11(a)(i)
shall have associated with it the number of Rights, exercisable at the Exercise
Price and for the number of one one-thousandth of a Preferred Share (or shares
of such other capital stock) as one share of Common Stock has associated with it
immediately following the adjustment made pursuant to this Section
11(a)(i).
(ii)
Subject to Section 24 of this Rights Agreement, in the event a Triggering Event
shall have occurred, then promptly following such Triggering Event each holder
of a Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive for each Right, upon exercise thereof in accordance with the
terms of this Rights Agreement and payment of the Exercise Price in effect
immediately prior to the occurrence of the Triggering Event, in lieu of a number
of one one-thousandth of a Preferred Share, such number of shares of Common
Stock of the Company as shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to the occurrence of the Triggering
Event by the number of one one-thousandth of a Preferred Share for which a Right
was exercisable (or would have been exercisable if the Distribution Date had
occurred) immediately prior to the first occurrence of a Triggering Event, and
dividing that product by 50% of the Current Per Share Market Price for shares of
Common Stock on the date of occurrence of the Triggering Event; provided,
however,
that the Exercise Price and the number of shares of Common Stock of the Company
so receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(e) hereof to reflect any events
occurring in respect of the shares of Common Stock of the Company after the
occurrence of the Triggering Event.
(iii) In
lieu of issuing shares of Common Stock in accordance with Section 11(a)(ii)
hereof, the Company may, if the Company’s Board determines that such action is
necessary or appropriate and not contrary to the interest of holders of Rights
and, in the event that the number of shares of Common Stock which are authorized
by the Company’s Articles of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights, or if any necessary regulatory
approval for such issuance has not been obtained by the Company, the Company
shall: (A) determine the excess of (1) the value of the shares of Common Stock
issuable upon the exercise of a Right (the “Current
Value”) over (2) the Exercise Price (such excess, the “Spread”)
and (B) with respect to each Right, make adequate provision to substitute for
such shares of Common Stock, upon exercise of the Rights, (1) cash, (2) a
reduction in the Exercise Price, (3) other equity securities of the Company
including, without limitation, shares or units of shares of any series of
preferred stock which the Company’s Board has deemed to have the same value as
Common Stock (such shares or units of shares of preferred stock are herein
called “Common
Stock Equivalents”), except to the extent that the Company has not
obtained any necessary shareholder or regulatory approval for such issuance, (4)
debt securities of the Company, except to the extent that the Company has not
obtained any necessary shareholder or regulatory approval for such issuance, (5)
other assets or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined by
the Company’s Board based upon the advice of a nationally recognized investment
banking firm selected by the Company’s Board; provided,
however,
if the Company shall not have made adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Triggering Event and (y) the date on which the Company’s right
of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the “Section
11(a)(iii) Trigger Date”), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Exercise Price, Common Stock (to the extent available), except to
the extent that the Company has not obtained any necessary shareholder or
regulatory approval for such issuance, and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If
the Company’s Board shall determine in good faith that it is likely that
sufficient additional Common Stock could be authorized for issuance upon
exercise in full of the Rights or that any necessary regulatory approval for
such issuance will be obtained, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90) days after
the Section 11(a)(iii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares or take
action to obtain such regulatory approval (such period, as it may be extended,
the “Substitution
Period”). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights and (y)
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares, to
take any action to obtain any required regulatory approval and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of the Common Stock shall be the Current Per
Share Market Price of the Common Stock on the Section 11(a)(iii) Trigger Date
and the value of any Common Stock Equivalent shall be deemed to have the same
value as the Common Stock on such date.
(b) In
case the Company shall, at any time after the date of this Rights Agreement, fix
a record date for the issuance of rights, options or warrants to all holders of
Preferred Shares entitling such holders (for a period expiring within forty-five
(45) calendar days after such record date) to subscribe for or purchase
Preferred Shares or Equivalent Shares or securities convertible into Preferred
Shares or Equivalent Shares at a price per share (or having a conversion price
per share, if a security convertible into Preferred Shares or Equivalent Shares)
less than the then Current Per Share Market Price of the Preferred Shares or
Equivalent Shares on such record date, then, in each such case, the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Preferred Shares and
Equivalent Shares (if any) outstanding on such record date, plus the number of
Preferred Shares or Equivalent Shares, as the case may be, which the aggregate
offering price of the total number of Preferred Shares or Equivalent Shares, as
the case may be, to be offered or issued (and/or the aggregate initial
conversion price of the convertible securities to be offered or issued) would
purchase at such current market price, and the denominator of which shall be the
number of Preferred Shares and Equivalent Shares (if any) outstanding on such
record date, plus the number of additional Preferred Shares or Equivalent
Shares, as the case may be, to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
provided,
however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Company’s Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Preferred Shares and
Equivalent Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed, and
in the event that such rights, options or warrants are not so issued, the
Exercise Price shall be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.
(c) In
case the Company shall, at any time after the date of this Rights Agreement, fix
a record date for the making of a distribution to all holders of the Preferred
Shares or of any class or series of Equivalent Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend, if any, or a dividend
payable in Preferred Shares) or subscription rights, options or warrants
(excluding those referred to in Section 11(b)), then, in each such case, the
Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Per Share Market
Price of a Preferred Share or an Equivalent Share on such record date, less the
fair market value per Preferred Share or Equivalent Share (as determined in good
faith by the Board of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a Preferred Share or Equivalent Share, as the case may
be, and the denominator of which shall be such Current Per Share Market Price of
a Preferred Share or Equivalent Share on such record date; provided,
however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. Such adjustments shall
be made successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Exercise Price shall be adjusted to be the
Exercise Price which would have been in effect if such record date had not been
fixed.
(d) Notwithstanding
anything to the contrary, no adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Exercise Price; provided,
however,
that any adjustments which by reason of this Section 11(d) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or one hundred-thousandth of a Preferred Share, as the case may
be. Notwithstanding the first sentence of this Section 11(d), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.
(e) If
as a result of an adjustment made pursuant to Section 11(a) or 13(a) hereof, the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Shares, thereafter the number of
such other shares so receivable upon exercise of any Right and, if required, the
Exercise Price thereof, shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in Sections 11(a), 11(b), 11(c),
11(d), 11(g), 11(h), 11(i), 11(j), 11(k) and 11(l), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply on
like terms to any such other shares.
(f) All
Rights originally issued by the Company subsequent to any adjustment made to the
Exercise Price hereunder shall evidence the right to purchase, at the adjusted
Exercise Price, the number of one one-thousandth of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(g) Unless
the Company shall have exercised its election as provided in Section 11(h), upon
each adjustment of the Exercise Price as a result of the calculations made in
Section 11(b) and (c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of Preferred Shares (calculated to the nearest one
hundred-thousandth of a share) obtained by (i) multiplying (x) the number of
Preferred Shares covered by a Right immediately prior to this adjustment, by (y)
the Exercise Price in effect immediately prior to such adjustment of the
Exercise Price, and (ii) dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment of the Exercise Price.
(h) The
Company may elect on or after the date of any adjustment of the Exercise Price
as a result of the calculations made in Section 11(b) or (c) to adjust the
number of Rights, in substitution for any adjustment in the number of Preferred
Shares purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-thousandth of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one hundred-thousandth) obtained by
dividing the Exercise Price in effect immediately prior to adjustment of the
Exercise Price by the Exercise Price in effect immediately after adjustment of
the Exercise Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Exercise Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(h), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates to be distributed
as such shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Exercise Price)
and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public
announcement.
(i) Irrespective
of any adjustment or change in the Exercise Price or the number of Preferred
Shares issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Exercise Price per
one one-thousandth of a Preferred Share and the number of one one-thousandth of
a Preferred Share which were expressed in the initial Rights Certificates issued
hereunder.
(j) Before
taking any action that would cause an adjustment reducing the Exercise Price
below the par or stated value, if any, of the number of one one-thousandth of a
Preferred Share issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue as fully paid and nonassessable
shares such number of one one-thousandth of a Preferred Share at such adjusted
Exercise Price.
(k) In
any case in which this Section 11 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the number of one
one-thousandth of a Preferred Share and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of one
one-thousandth of a Preferred Share and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder’s right to receive such additional shares (fractional or otherwise)
upon the occurrence of the event requiring such adjustment.
(l) Notwithstanding
anything in this Section 11 to the contrary, prior to the Distribution Date, the
Company shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Shares or
Common Stock, (ii) issuance wholly for cash of any Preferred Shares or Common
Stock at less than the current market price, (iii) issuance wholly for cash of
Preferred Shares or Common Stock or securities which by their terms are
convertible into or exchangeable for Preferred or Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Shares or
Common Stock shall not be taxable to such shareholders.
(m) The
Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Sections 23, 24 or 27 hereof, take (or permit to be
taken) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(n) In
the event the Company shall at any time after the date of this Rights Agreement
(A) declare a dividend on the Common Stock payable in shares of Common Stock,
(B) subdivide the outstanding shares of Common Stock, (C) combine the
outstanding Common Stock (by reverse stock split or otherwise) into a smaller
number of shares of Common Stock, or (D) issue any shares of its capital stock
in a reclassification of the shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such event,
except as otherwise provided in this Section 11(a) and Section 7(e) hereof: (1)
each share of Common Stock (or shares of capital stock issued in such
reclassification of the Common Stock) outstanding immediately following such
time shall have associated with it the number of Rights as were associated with
one share of Common Stock immediately prior to the occurrence of the event
described in clauses (A)-(D) above; (2) the Exercise Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that the
Exercise Price thereafter shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to such time by a fraction, the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the event described in clauses (A)-(D) above,
and the denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such event; provided,
however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of such Right; and (3) the number of one
one-thousandth of a Preferred Share (or shares of such other capital stock)
issuable upon the exercise of each Right outstanding after such event shall
equal the number of one one-thousandth of a Preferred Share (or shares of such
other capital stock) as were issuable with respect to one Right immediately
prior to such event. Each share of Common Stock that shall become
outstanding after an adjustment has been made pursuant to this Section 11(n)
shall have associated with it the number of Rights, exercisable at the Exercise
Price and for the number of one one-thousandth of a Preferred Share (or shares
of such other capital stock) as one share of Common Stock has associated with it
immediately following the adjustment made pursuant to this Section
11(n). If an event occurs which would require an adjustment under
both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(n) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
12. Certificate
of Adjusted Exercise Price or Number of Shares. Whenever an
adjustment is made as provided in Sections 11 and 13 hereof, the Company shall
promptly (a) prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof. Notwithstanding the
foregoing sentence, the failure of the Company to make such certification or
give such notice shall not affect the validity of such adjustment or the force
or effect of the requirement for such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment or statement contained therein and shall have no duty or liability
with respect to, and shall not be deemed to have knowledge of any adjustment
unless and until it shall have received such certificate.
13. Consolidation,
Merger or Sale or Transfer of Assets or Earning Power.
(a) In
the event that, following a Shares Acquisition Date, directly or
indirectly:
(i) the
Company shall consolidate with, or merge with or into, any other Person (other
than a wholly-owned Subsidiary of the Company in a transaction the principal
purpose of which is to change the state of incorporation of the Company and
which complies with Section 11(m) hereof);
(ii) any
Person shall consolidate with the Company, or merge with or into the Company and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such merger, all or part of the
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other person (or the Company); or
(iii) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or one or more of its wholly owned Subsidiaries in one
or more transactions, each of which individually (and together) complies with
Section 11(m) hereof),
then,
concurrent with and in each such case:
(A) each
holder of a Right (except as provided in Section 7(e) hereof) shall thereafter
have the right to receive, upon the exercise thereof, at a price equal to the
Total Exercise Price applicable immediately prior to the occurrence of the
Section 13 Event in accordance with the terms of this Rights Agreement, such
number of validly authorized and issued, fully paid, nonassessable and freely
tradeable shares of Common Stock of the Principal Party, free of any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by dividing such Total Exercise Price by 50% of the
Current Per Share Market Price of the shares of Common Stock of such Principal
Party on the date of consummation of such Section 13 Event, provided,
however,
that the Exercise Price and the number of shares of Common Stock of such
Principal Party so receivable upon exercise of a Right shall be subject to
further adjustment as appropriate in accordance with Section 11(e)
hereof;
(B) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to
this Rights Agreement;
(C) the
term “Company” shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13
Event;
(D) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to ensure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights;
(E) upon
the subsequent occurrence of any consolidation, merger, sale or transfer of
assets or other extraordinary transaction in respect of such Principal Party,
each holder of a Right shall thereupon be entitled to receive, upon exercise of
a Right and payment of the Total Exercise Price as provided in this Section
13(a), such cash, shares, rights, warrants and other property which such holder
would have been entitled to receive had such holder, at the time of such
transaction, owned the shares of Common Stock of the Principal Party receivable
upon the exercise of such Right pursuant to this Section 13(a), and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property; and
(F) For
purposes hereof, the “earning power” of the Company and its Subsidiaries shall
be determined in good faith by the Company’s Board on the basis of the operating
earnings of each business operated by the Company and its Subsidiaries during
the three fiscal years preceding the date of such determination (or, in the case
of any business not operated by the Company or any Subsidiary during three full
fiscal years preceding such date, during the period such business was operated
by the Company or any Subsidiary).
(b) For
purposes of this Rights Agreement, the term “Principal
Party” shall mean:
(i) in
the case of any transaction described in clause (i) or (ii) of Section 13(a)
hereof: (A) the Person that is the issuer of the securities into which the
shares of Common Stock are converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer the shares of Common Stock of
which have the greatest aggregate market value of shares outstanding, or (B) if
no securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one such
Person, the Person the shares of Common Stock of which have the greatest
aggregate market value of shares outstanding or (y) if the Person that is the
other party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (z) the Person
resulting from the consolidation; and
(ii) in
the case of any transaction described in clause (iii) of Section13(a) hereof,
the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if
more than one Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so transferred and each
such portion would, were it not for the other equal portions, constitute the
greatest portion of the assets or earning power so transferred, or if the Person
receiving the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons is the issuer of shares of Common Stock
having the greatest aggregate market value of shares outstanding; provided,
however,
that in any such case described in the foregoing clause (b)(i) or (b)(ii), if
the shares of Common Stock of such Person are not at such time or have not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary of
another Person the shares of Common Stock of which are and have been so
registered, the term “Principal Party” shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of which are and have been so registered, the term “Principal
Party” shall refer to whichever of such Persons is the issuer of shares of
Common Stock having the greatest aggregate market value of shares outstanding,
or (3) if such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly by the
same Person, the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the Person owned by
the joint venture was a Subsidiary of both or all of such joint venturers, and
the Principal Party in each such case shall bear the obligations set forth in
this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.
(c) The
Company shall not consummate any Section 13 Event unless the Principal Party
shall have a sufficient number of authorized shares of Common Stock that have
not been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the Company
and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Rights Agreement in
accordance with Sections 13(a) and 13(b) hereof, that all rights of first
refusal or preemptive rights in respect of the issuance of shares of Common
Stock of such Principal Party upon exercise of outstanding Rights have been
waived, that there are no rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights and that such transaction shall
not result in a default by such Principal Party under this Rights Agreement, and
further providing that, as soon as practicable after the date of such Section 13
Event, such Principal Party will:
(i)
prepare and file a registration statement under the Securities Act with respect
to the Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use its best
efforts to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date, and similarly comply with applicable state securities
laws;
(ii) use
its best efforts to list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on a national securities
exchange or to meet the eligibility requirements for quotation on the Nasdaq
Global Select Market or another national securities exchange and list (or
continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on the Nasdaq Global Select Market or another national securities
exchange; and
(iii)
deliver to holders of the Rights historical financial statements for such
Principal Party which comply in all respects with the requirements for
registration on Form F-1 (or any successor form) under the Exchange
Act.
In the
event that at any time after the occurrence of a Triggering Event some or all of
the Rights shall not have been exercised at the time of a transaction described
in this Section 13, the Rights which have not theretofore been exercised shall
thereafter be exercisable in the manner described in Section 13(a) (without
taking into account any prior adjustment required by Section
11(a)(ii)).
(d) In
case the “Principal Party” for purposes of Section 13(b) hereof has provision in
any of its authorized securities or in its articles of incorporation or bylaws
or other instrument governing its corporate affairs, which provision would have
the effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to Section 13 hereof), in connection with, or as a
consequence of, the consummation of a Section 13 Event, shares of Common Stock
or Equivalent Shares of such Principal Party at less than the then Current Per
Share Market Price thereof or securities exercisable for, or convertible into,
shares of Common Stock or Equivalent Shares of such Principal Party at less than
such then Current Per Share Market Price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance of the shares
of Common Stock of such Principal Party pursuant to the provisions of Section 13
hereof, then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with or as a consequence of, the consummation of
the proposed transaction.
(e) The
Company covenants and agrees that it shall not, at any time after the
Distribution Date, effect or permit to occur any Section 13 Event, if (i) at the
time or immediately after such Section 13 Event there are any rights, warrants
or other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (ii) prior to, simultaneously with or immediately after
such Section 13 Event, the shareholders of the Person who constitutes, or would
constitute, the “Principal Party” for purposes of Section 13(b) hereof shall
have received a distribution of Rights previously owned by such Person or any of
its Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the
Rights.
(f) The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
14. Fractional
Rights and Fractional Shares.
(a) The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable, as determined pursuant to this Rights
Agreement.
(b) The
Company shall not be required to issue fractions of Preferred Shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share) upon exercise of the Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions that are integral multiples of
one one-thousandth of a Preferred Share). Interests in fractions of
Preferred Shares in integral multiples of one one-thousandth of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional
Preferred Shares that are not integral multiples of one one-thousandth of a
Preferred Share, the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of a Preferred
Share. For purposes of this Section 14(b), the current market value
of a Preferred Share shall be one thousand times the closing price of a share of
Common Stock (as determined pursuant to the terms hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The
Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock upon
the exercise or exchange of Rights. In lieu of such fractional shares
of Common Stock, the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of a share of
Common Stock. For purposes of this Section 14(c), the current market
value of a share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the terms hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The
holder of a Right by the acceptance of the Right expressly waives his or her
right to receive any fractional Rights or any fractional shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share) upon exercise of a Right.
(e) Whenever
a payment for fractional Rights or fractional Preferred Shares is to be made by
the Rights Agent, the Company shall (i) promptly prepare and deliver to the
Rights Agent a certificate setting forth in reasonable detail the facts related
to such payments and the prices and/or formulas utilized in calculating such
payments, and (ii) provide sufficient monies to the Rights Agent in the form of
fully collected funds to make such payments. The Rights Agent shall
be fully protected in relying upon such a certificate and shall have no duty
with respect to, and shall not be deemed to have knowledge of, any payment for
fractional Rights or fractional Preferred Shares under any Section of this
Rights Agreement relating to the payment of fractional Rights or fractional
Preferred Shares unless and until the Rights Agent shall have received such a
certificate and sufficient monies.
15. Rights
of Action. (a) All rights of action in
respect of this Rights Agreement, excepting the rights of action given to the
Rights Agent under Section 18 and Section 20 hereof, are vested in the
respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the shares of Common Stock); and
any registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the shares of Common Stock), without the consent of the Rights Agent or
of the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the shares of Common Stock), may, in his or her own behalf and for his
or her own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
or her right to exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Rights
Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Rights
Agreement and 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 Rights Agreement.
(b) Notwithstanding
anything in this Rights Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person
as a result of its inability to perform any of its obligations under this Rights
Agreement by reason of any preliminary or permanent injunction or other order,
judgment, decree or ruling (whether interlocutory or final) issued by a court or
by a governmental, regulatory, self-regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company shall use
all reasonable efforts to have any such injunction, order, judgment, decree or
ruling lifted or otherwise overturned as soon as possible.
16. Agreement
of Rights Holders. Every holder of a Right, by accepting the
same, consents and agrees with the Company and the Rights Agent and with every
other holder of a Right that:
(a) prior
to the Distribution Date, the Rights will be transferable only in connection
with the transfer of the shares of Common Stock;
(b) after
the Distribution Date, the Rights Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the principal office or
offices of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed; and
(c) subject
to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem and
treat the person in whose name the Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the associated
Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
17. Rights
Certificate Holder Not Deemed a Shareholder. No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose to be the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
18. The
Rights Agent.
(a) The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, delivery, amendment, administration and execution
of this Rights Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense (including, without
limitation, the reasonable fees and expenses of legal counsel), incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent (which gross negligence or bad faith must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction), for any action taken, suffered or omitted to be taken by the
Rights Agent in connection with the acceptance, administration, exercise and
performance of its duties under this Rights Agreement, including the costs and
expenses of defending against any claim of liability in the
premises. The costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company. The provisions of this
Section 18 and Section 20 below shall survive the termination of this Rights
Agreement, the exercise or expiration of the Rights and the resignation,
replacement or removal of the Rights Agent.
(b) The
Rights Agent shall be protected and shall incur no liability for, or in respect
of any action taken, suffered or omitted by it in connection with, its
administration of this Rights Agreement in reliance upon any Rights Certificate
or certificate for the Preferred Shares or shares of Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
19. 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 shall be a
party, or any Person succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, that such
Person would be eligible for appointment as a successor Rights Agent under
Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Rights Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have 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 shall have the full force provided in
the Rights Certificates and in this Rights Agreement.
(b) In
case at any time the name of the Rights Agent shall be changed and at such time
any of the 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 Rights Agreement.
20. Rights
and Duties of Rights Agent. The Rights Agent undertakes to
perform only the duties and obligations expressly imposed by this Rights
Agreement (and no implied duties) 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 or an employee of the Rights Agent), and the written advice or opinion
of such counsel shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in respect of
any action taken, suffered or omitted by it in accordance with such written
advice or opinion.
(b) Whenever
in the performance of its duties under this Rights Agreement the Rights Agent
shall deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination of
Current Per Share Market Price) be proved or established by the Company prior to
taking, suffering or omitting to take any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in respect of
any action taken, suffered or omitted to be taken by it in good faith under the
provisions of this Rights Agreement in reliance upon such
certificate.
(c) The
Rights Agent shall be liable hereunder to the Company and any other Person only
for its own gross negligence, bad faith or willful misconduct (which gross
negligence or bad faith must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction).
(d) The
Rights Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Rights Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The
Rights Agent shall not have any liability for or be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Rights
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights or any adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt by the Rights Agent of a certificate furnished
pursuant to Section 12 hereof, upon which the Rights Agent may rely, describing
such change or adjustment); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Rights Agreement or any Rights
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The
Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions
of this Rights Agreement.
(g) The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Chairman
of the Board, the Chief Executive Officer, the President, any Vice President,
the Chief Financial Officer, the Secretary or any Assistant Secretary of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and such instructions shall be full authorization and
protection to the Rights Agent and the Rights Agent shall not be liable for or
in respect of any action taken, suffered or omitted by it in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. The Rights Agent shall be fully authorized and
protected in relying upon the most recent instructions received by any such
officer. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken, suffered or omitted by the Rights Agent under
this Rights Agreement and the date on and/or after which such action shall be
taken or suffered or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission of, the Rights
Agent in accordance with a proposal included in any such application on or after
the date specified in such application (which date shall not be less than five
(5) Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The
Rights Agent and any shareholder, affiliate, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Rights Agreement. Nothing herein shall preclude the Rights Agent or
any such shareholder, affiliate, director, officer or employee from acting in
any other capacity for the Company or for any other Person.
(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 (through its directors,
officers and employees) or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company or any
other Person resulting from any such act, default, neglect or misconduct, absent
gross negligence or bad faith in the selection and continued employment thereof
(which gross negligence or bad faith must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).
(j) No
provision of this Rights Agreement shall require the Rights Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its rights if it believes
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If,
with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has either not been properly
completed or indicates an affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.
21. Change
of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Rights Agreement
upon thirty (30) days’ written notice, pursuant to Section 26 hereof, to the
Company and to each transfer agent of the Preferred Shares and the Common Stock
and to the holders of the Rights Certificates. The Company may remove
the Rights Agent or any successor Rights Agent upon written notice, pursuant to
Section 26 hereof, to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Preferred Shares and the Common Stock
and to the holders of the Rights Certificates. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of thirty (30) days after
giving notice of such removal or after receiving written notice of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his or
her Rights Certificate for inspection by the Company), then the registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a Person organized and doing business under the laws of the United States or of
any state of the United States, in good standing, which is authorized under such
laws to exercise stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million or (b) an Affiliate of such a Person. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Preferred Shares and the
Common Stock, and mail a written notice thereof to the registered holders of the
Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
22. Issuance
of New Rights Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board to reflect any adjustment or change in
the Exercise Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Rights Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement or upon the
exercise, conversion or exchange of other securities of the Company outstanding
at the date hereof or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company and (b) may, in any other case, if deemed
necessary or appropriate by the Board of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided,
however,
that (i) no such Rights Certificate shall be issued and this sentence shall be
null and void ab initio if, and to the extent that, such issuance or this
sentence would create a significant risk of or result in material adverse tax
consequences to the Company or the Person to whom such Rights Certificate would
be issued or would create a significant risk of or result in such options’ or
employee plans’ or arrangements’ failing to qualify for otherwise available
special tax treatment and (ii) no such Rights Certificate shall be issued if,
and to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
23. Redemption.
(a) The
Company may, at its option and with the approval of the Board, at any time prior
to the Close of Business on the earlier of (i) the Distribution Date and (ii)
the Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $0.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being herein referred to as the “Redemption
Price”) and the Company may, at its option, pay the Redemption Price
either in shares of Common Stock (based on the Current Per Share Market Price
thereof at the time of redemption) or cash. Such redemption of the
Rights by the Company may be made effective at such time, on such basis and with
such conditions as the Board in its sole discretion may
establish. The date on which the Board elects to make the redemption
effective shall be referred to as the “Redemption
Date”.
(b) Immediately
upon the action of the Board of the Company ordering the redemption of the
Rights, written notice of which shall have been filed with the Rights Agent, and
without any further action and without any notice, the right to exercise the
Rights shall terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided,
however,
that the failure to give or any defect in, any such notice shall not affect the
legality or validity of such redemption. Within ten (10) days after
the action of the Board ordering the redemption of the Rights, the Company shall
mail a notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of shares of Common Stock prior to
the Distribution Date.
24. Exchange.
(a) Subject
to applicable laws, rules and regulations, and subject to subsection 24(c)
below, the Company may, at its option, by action of the Board, at any time after
the occurrence of a Triggering Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 7(e) hereof) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the “Exchange
Ratio”). Notwithstanding the foregoing, the Board shall not be
empowered to effect such exchange at any time after any Person (other than a
Permitted Person and/or its Affiliates, the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary, or any
entity holding Common Stock for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately
upon the action of the Board ordering the exchange of any Rights pursuant to
subsection 24(a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall give public
notice of any such exchange; provided,
however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become null and
void pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In
the event that there shall not be sufficient shares of Common Stock issued but
not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with Section 24(a), the Company shall either take
such action as may be necessary to authorize additional shares of Common Stock
for issuance upon exchange of the Rights or alternatively, at the option of a
majority of the Board, with respect to each Right (i) pay cash in an amount
equal to the Current Value, in lieu of issuing shares of Common Stock in
exchange therefor, or (ii) issue debt or equity securities or a combination
thereof, having a value equal to the Current Value, in lieu of issuing shares of
Common Stock in exchange for each such Right, where the value of such securities
shall be determined by a nationally recognized investment banking firm selected
by majority vote of the Board, or (iii) deliver any combination of cash,
property, shares of Common Stock and/or other securities having a value equal to
the Current Value in exchange for each Right. For purposes of this
Section 24(c) only, the Current Value shall mean the product of the Current Per
Share Market Price of shares of Common Stock on the date of the occurrence of
the event described above in subparagraph (a), multiplied by the number of
shares of Common Stock for which the Right otherwise would be exchangeable if
there were sufficient shares available. To the extent that the
Company determines that some action need be taken pursuant to clauses (i), (ii)
or (iii) of this Section 24(c), the Board may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following the
date on which the event described in Section 24(a) shall have occurred, in order
to seek any authorization of additional shares of Common Stock and/or to decide
the appropriate form of distribution to be made pursuant to the above provision
and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(d) The
Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, there shall
be paid to the registered holders of the Rights Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock (as determined pursuant to the terms hereof).
(e) The
Company may, at its option, by majority vote of the Board, at any time before
the Share Acquisition Date, exchange all or part of the then outstanding Rights
for rights of substantially equivalent value, as determined reasonably and with
good faith by the Board, based upon the advice of one or more nationally
recognized investment banking firms.
(f) Immediately
upon the action of the Board ordering the exchange of any Rights pursuant to
subsection 24(e) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of rights
in exchange therefor as has been determined by the Board in accordance with
subsection 24(e) above. The Company shall give public notice of any
such exchange; provided,
however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the transfer agent for the shares of
Common Stock of the Company. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which
the exchange of the Rights will be effected.
25. Notice
of Certain Events.
(a) In
case the Company shall propose to effect or permit to occur any Triggering Event
or Section 13 Event, the Company shall give notice thereof to each holder of
Rights in accordance with Section 26 hereof at least twenty (20) days prior to
occurrence of such Triggering Event or such Section 13 Event.
(b) In
case any Triggering Event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to the
Rights Agent and to each holder of a Rights Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
26. Notices. Notices
or demands authorized by this Rights Agreement to be given or made by the Rights
Agent or by the holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by facsimile, as a pdf attachment to an
e-mail or by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Euroseas
Ltd.
Aethrion
Center
40 Ag.
Konstantinou Street
151 24
Maroussi, Greece
Attention:
Aristides J. Pittas
with a
copy to:
Seward
& Kissel LLP
OneBattery
Park Plaza
New York,
New York 10004
Attention:
Lawrence Rutkowski, Esq.
Subject
to the provisions of Section 21 hereof, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by facsimile, as a pdf attachment to an e-mail or by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
American
Stock Transfer and Trust Company, LLC
59 Maiden
Lane
Plaza
Level
New York,
NY 10038
Attention: Mr.
Wilbert Myles
with a
copy to:
American
Stock Transfer & Trust Company, LLC
6201 15th
Avenue, 2nd Floor
Brooklyn,
NY 11219
Tel: (718)
921-8247
Fax: (718)
921-8323
e-mail:
gdeer-lois@amstock.com
Attention: Grace
Deer-Loiseau
Notices
or demands authorized by this Rights Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
27. Supplements
and Amendments. Prior to the occurrence of a Distribution
Date, the Company may supplement or amend this Rights Agreement in any respect
without the approval of any holders of Rights and the Rights Agent shall, if the
Company so directs, execute such supplement or amendment. From and
after the occurrence of a Distribution Date, the Company and the Rights Agent
may from time to time supplement or amend this Rights Agreement without the
approval of any holders of Rights in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen any
time period hereunder or (iv) to change or supplement the provisions hereunder
in any manner that the Company may deem necessary or desirable and that shall
not adversely affect the interests of the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided,
this Rights Agreement may not be supplemented or amended to lengthen, pursuant
to clause (iii) of this sentence, (A) a time period relating to when the Rights
may be redeemed at such time as the Rights are not then redeemable or (B) any
other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of
Rights (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Upon the delivery of a certificate from an
appropriate officer of the Company and, if reasonably requested by the Rights
Agent, an opinion of counsel, that states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything
contained in this Rights Agreement to the contrary, the Rights Agent may, but
shall not be obligated to, enter into any supplement or amendment that affects
the Rights Agent’s own rights, duties, obligations or immunities under this
Rights Agreement. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
28. Successors. All
the covenants and provisions of this Rights Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
29. Determinations
and Actions by the Board, etc. For all purposes of this Rights
Agreement, any calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange
Act. The Board of the Company shall have the exclusive power and
authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board, or the Company, or as may be necessary
or advisable in the administration of this Rights Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this Rights
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Rights Agreement (including a determination to redeem or
not redeem the Rights or to amend the Rights Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights Certificates
and all other parties and (y) not subject the Board to any liability to the
holders of the Rights. The Rights Agent is entitled always to assume
the Company’s Board acted in good faith and shall be fully protected and incur
no liability in reliance thereon.
30. Benefits
of this Rights Agreement. Nothing in this Rights Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of shares of Common Stock) any legal
or equitable right, remedy or claim under this Rights Agreement; but this Rights
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the shares of Common Stock).
31. Severability. If
any term, provision, covenant or restriction of this Rights Agreement is held by
a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated; provided,
however,
that notwithstanding anything in this Rights Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board of the Company determines in
its good faith judgment that severing the invalid language from this Rights
Agreement would adversely affect the purpose or effect of this Rights Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth Business Day following
the date of such determination by the Board. Without limiting the
foregoing, if any provision requiring a specific group of directors to act is
held by any court of competent jurisdiction or other authority to be
invalid, void or unenforceable, such determination shall then be made by the
Board in accordance with applicable law and the Company’s Certificate of
Incorporation and bylaws.
32. Governing
Law. This Rights Agreement and each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New York 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.
33. Counterparts. This
Rights Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
34. Descriptive
Headings. Descriptive headings of the several Sections of this
Rights Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
IN
WITNESS WHEREOF, the parties have executed this Shareholders Rights Agreement as
of the date first written above.
EUROSEAS
LTD.
By:_________________________________
Name: Aristides
J. Pittas
Title: Chief
Executive Officer, President and Director
AMERICAN
STOCK TRANSFER AND TRUST COMPANY, LLC, as Rights Agent
By:_________________________________
Name:
Title:
Exhibit
A
CERTIFICATE
OF DESIGNATIONS OF RIGHTS, PREFERENCES AND PRIVILEGES OF SERIES A PARTICIPATING
PREFERRED STOCK OF EUROSEAS LTD.
The
undersigned, Mr.Aristides J. Pittas and Ms. Stephania Karmiri do hereby
certify:
1. That
they are the duly elected and acting President and Secretary, respectively, of
Euroseas Ltd., a Marshall Islands company (the “Company”).
2. That
pursuant to the authority conferred by the Company’s Articles of Incorporation,
as amended, the Company’s Board on November 4, 2008 adopted the following
resolution designating and prescribing the relative rights, preferences and
limitations of the Company’s Series A Participating Preferred
Stock:
RESOLVED,
that pursuant to the authority vested in the Board (the “Board”)
of the Company by the Articles of Incorporation, the Board does hereby establish
a series of preferred stock, par value $0.01 per share, and the designation and
certain powers, preferences and other special rights of the shares of such
series, and certain qualifications, limitations and restrictions thereon, are
hereby fixed as follows:
Section
1. Designation
and Amount. The shares of such series shall be designated as
“Series
A Participating Preferred Stock”. The Series A Participating
Preferred Stock shall have a par value of $0.01 per share, and the number of
shares constituting such series shall initially be 1,000,000, which number the
Board may from time to time increase or decrease (but not below the number then
outstanding).
Section
2. Proportional
Adjustment. In the event the Company shall at any time after
the issuance of any share or shares of Series A Participating Preferred Stock
(i) declare any dividend on the common stock of the Company par value $0.03 per
share (the “Common
Stock”) payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the Company shall simultaneously effect a
proportional adjustment to the number of outstanding shares of Series A
Participating Preferred Stock.
Section
3. Dividends
and Distributions.
(a) Subject
to the prior and superior right of the holders of any shares of any series of
preferred stock ranking prior and superior to the shares of Series A
Participating Preferred Stock with respect to dividends, the holders of shares
of Series A Participating Preferred Stock shall be entitled to receive when, as
and if declared by the Board out of funds legally available for the purpose,
quarterly dividends payable quarterly (each such date being referred to herein
as a “Quarterly
Dividend Payment Date”), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Participating Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Participating Preferred Stock.
(b) The
Company shall declare a dividend or distribution on the Series A
Participating Preferred Stock as provided in paragraph (a) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock).
(c) Dividends
shall begin to accrue on outstanding shares of Series A Participating Preferred
Stock from the Quarterly Dividend Payment Date immediately preceding the date of
issue of such shares of Series A Participating Preferred Stock, unless the date
of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue
from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of
Series A Participating Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board may fix a record date for the determination of
holders of shares of Series A Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be no more than 30 days prior to the date fixed for the payment
thereof.
Section
4. Voting
Rights. The holders of shares of Series A Participating
Preferred Stock shall have the following voting rights:
(a) Each
share of Series A Participating Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the shareholders of the
Company.
(b) Except
as otherwise provided herein or by law, the holders of shares of Series A
Participating Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of shareholders of
the Company.
(c) Except
as required by law, holders of Series A Participating Preferred Stock shall have
no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section
5. Certain
Restrictions.
(a) The
Company shall not declare any dividend on, make any distribution on, or redeem
or purchase or otherwise acquire for consideration any shares of Common Stock
after the first issuance of a share or fraction of a share of Series A
Participating Preferred Stock unless concurrently therewith it shall declare a
dividend on the Series A Participating Preferred Stock as required by Section 3
hereof.
(b) Whenever
quarterly dividends or other dividends or distributions payable on the Series A
Participating Preferred Stock as provided in Section 3 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Participating Preferred Stock outstanding
shall have been paid in full, the Company shall not (i) declare or pay dividends
on, make any other distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Participating
Preferred Stock; (ii) declare or pay dividends on, make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with Series A Participating Preferred
Stock, except dividends paid ratably on the Series A Participating Preferred
Stock and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled; (iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Participating Preferred Stock,
provided that the Company may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of any
stock of the Company ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Participating Preferred Stock; (iv)
purchase or otherwise acquire for consideration any shares of Series A
Participating Preferred Stock, or any shares of stock ranking on a parity with
the Series A Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board) to all
holders of such shares upon such terms as the Board, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or
classes.
(c) The
Company shall not permit any subsidiary of the Company to purchase or
otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under paragraph (a) of this Section 5, purchase or otherwise
acquire such shares at such time and in such manner.
Section
6. Reacquired
Shares. Any shares of Series A Participating Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by resolution or resolutions of the Board, subject to the
conditions and restrictions on issuance set forth herein and, in the Articles of
Incorporation, as then amended.
Section
7. Liquidation,
Dissolution or Winding Up. Upon any liquidation, dissolution
or winding up of the Company, the holders of shares of Series A Participating
Preferred Stock shall be entitled to receive an aggregate amount per share equal
to 1,000 times the aggregate amount to be distributed per share to holders of
shares of Common Stock plus an amount equal to any accrued and unpaid dividends
on such shares of Series A Participating Preferred Stock.
Section
8. Consolidation,
Merger, etc. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of Series A
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged.
Section
9. No
Redemption. The shares of Series A Participating Preferred
Stock shall not be redeemable.
Section
10. Ranking. The
Series A Participating Preferred Stock shall rank junior to all other series of
the Company’s preferred stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall provide
otherwise.
Section
11. Amendment. The
Articles of Incorporation of the Company shall not be further amended in any
manner which would materially alter or change the powers, preference or special
rights of the Series A Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Participating Preferred Stock, voting separately
as a class.
Section
12. Fractional
Shares. Series A Participating Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder’s fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Participating Preferred Stock.
RESOLVED
FURTHER, that the President or any Vice President and the Secretary or any
Assistant Secretary of this Company be, and they hereby are, authorized and
directed to prepare and file a Certificate of Designation of Rights, Preferences
and Privileges in accordance with the foregoing resolution and the provisions of
Marshall Islands law and to take such actions as they may deem necessary or
appropriate to carry out the intent of the foregoing resolution.
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
We
further declare under penalty of perjury that the matters set forth in the
foregoing Certificate of Designation are true and correct of our own
knowledge.
Executed
in [ ], on [________ ___, 20__].
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________________________________
Aristides
J. Pittas
Chief
Executive Officer, President and Director
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________________________________
Stephania
Karmiri
Secretary
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Exhibit
B
[FORM OF
RIGHTS CERTIFICATE]
Certificate No.
R- |
Rights
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NOT
EXERCISABLE AFTER [___________, 20__] OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS
CERTIFICATE
EUROSEAS
LTD.
This
certifies that
[ ],
or registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of May 18, 2009 (the
“Rights
Agreement”), between Euroseas Ltd., a Marshall Islands company (the
“Company”),
and American Stock Transfer and Trust Company, LLC, as rights agent (the “Rights
Agent”), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
New York time, on [______________] at the office of the Rights Agent, or at the
office of its successor as Rights Agent, one one-thousandth of a fully paid
non-assessable share of Series A Participating Preferred Stock, $0.01 par value
per share (the “Preferred
Shares”), of the Company, at a purchase price of $26.00
per one one-thousandth of a Preferred Share (the “Purchase
Price”), upon presentation and surrender of this Rights Certificate with
the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one one-thousandths of a
Preferred Share which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
[______________], based on the Preferred Shares as constituted at such
date. As provided in the Rights Agreement, the Purchase Price and the
number of one one-thousandths of a Preferred Share which may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
This
Rights Certificate is subject to all of the terms, covenants and restrictions of
the Rights Agreement, which terms, covenants and restrictions 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 executive offices of the Company.
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 and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to
purchase. If this Rights Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $0.001
per Right or (ii) may be exchanged in whole or in part for Preferred Shares, par
value $0.01 per share, or shares of the Company’s Common Stock, par value $0.03
per share.
No
fractional Preferred Shares will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of
one one-thousandth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder
of this Rights Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Preferred Shares or of any other
securities of the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised 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.
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal. Dated as of [__________ ___, 20__].
ATTEST: |
EUROSEAS
LTD. |
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By
______________________________________
Name: Aristides
J. Pittas
Title: Chief Executive
Officer, President, and Director
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By
______________________________________
Name:
Title:
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Countersigned:
AMERICAN
STOCK TRANSFER AND TRUST COMPANY, LLC,
as Rights
Agent
By ____________________________________________
Authorized
Signature
Form of
Reverse Side of Rights Certificate
FORM OF
ASSIGNMENT
(To be
executed by the registered holder if such
holder
desires to transfer the Rights Certificate.)
FOR
VALUE RECEIVED
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hereby
sells, assigns and transfers unto
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(Please
print name and address of
transferee)
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this
Rights Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint American Stock Transfer and Trust
Company, LLC
as Attorney-in-Fact, to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution.
Signature
Guaranteed:
Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the Medallion Signature
Program.
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) this
Rights Certificate [ ] is [ ] is not being sold, assigned or transferred by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any Acquiring Person (as such terms are defined in the Rights
Agreement); and
(2) after
due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate
thereof.
FORM OF
ELECTION TO PURCHASE
(To be
executed by the registered holder if such holder
desires
to exercise Rights represented by the Rights Certificate.)
The
undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase the Preferred
Shares issuable upon the exercise of such Rights and requests that certificates
for such Preferred Shares be issued in the name of:
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(Please
print name and address)
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Please
insert social security
or
other tax identifying number
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If such
number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
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(Please
print name and address)
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Please
insert social security
or
other tax identifying number
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Signature
Guaranteed:
Signatures
must be guaranteed by a participant in the Securities Transfer Agent Medallion
Program, the Stock Exchanges Medallion Program or the Medallion Signature
Program.
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) this
Rights Certificate [ ] is [ ] is not being sold, assigned or transferred by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement); and
(2) after
due inquiry and to the best knowledge of the undersigned, it [ ] did [ ]
did not acquire the Rights evidenced by this Rights Certificate from any Person
who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
NOTICE
The
signature in the Form of Assignment or Form of Election to Purchase, as the case
may be, must conform to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the
event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the
Rights Agent will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such Assignment or Election to
Purchase will not be honored.
Exhibit
C
SUMMARY
OF RIGHTS
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Distribution
and Transfer of Rights;
Distribution
Date:
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The
rights will separate from the common stock and become exercisable upon the
earlier of (1) the 10th
day after public announcement that a person or group has acquired
ownership of 15% or more of the company’s common stock or (2) the 10th
business day (or such later date as determined by the company’s board of
directors) after a person or group announces a tender or exchange offer
which would result in that person or group holding 15% or more of the
company’s common stock.
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Preferred
Stock Purchaseable Upon Exercise of Rights:
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On
the Distribution Date, each holder of a right will be entitled to purchase
for Twenty-Six Dollars (the “Exercise Price”) a fraction (1/1000th) of one
share of the company’s preferred stock which has similar economic terms as
one share of common stock.
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Flip-in:
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If
an acquiring person (an “Acquiring Person”) acquires more than 15% of the
company’s common stock then each holder of a right (except that acquiring
person) will be entitled to buy at the Exercise Price, a number of shares
of the company’s common stock which has a market value of twice the
Exercise Price.
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Flip-over:
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If
after an Acquiring Person acquires more than 15% of the company’s common
stock, the company merges into another company (either as the surviving
corporation or as the disappearing entity) or the company sells more than
50% of its assets or earning power, then each holder of a right (except
for those owned by the acquirer) will be entitled to purchase at the
Exercise Price, a number of shares of common stock of the surviving entity
which has a then current market value of twice the Exercise
Price.
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Exchange
Provision:
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Any
time after the date an Acquiring Person obtains more than 15% of the
company’s common stock and before that Acquiring Person acquires more than
50% of the company’s outstanding common stock, the company may exchange
each right owned by all other rights holders, in whole or in part, for one
share of the company’s common stock.
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Redemption
of Rights:
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The
company can redeem the rights at any time prior to the Distribution Date
if a person has acquired ownership of 15% or more of the company’s common
stock.
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Expiration
of Rights:
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The
rights expire on the earliest of (1) May 27, 2019 or (2) the exchange or
redemption of the rights as described above.
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Amendment
of Terms of Rights:
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The
terms of the rights and the Shareholders Rights Plan may be amended
without the consent of the rights holders at any time on or prior to the
Distribution Date. After the Distribution Date, the terms of
the rights and the Shareholders rights Plan may be amended to make
changes, which do not adversely affect the rights of the rights holders
(other than the Acquiring Person).
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Voting
Rights:
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The
rights will not have any voting rights.
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Anti-dilution
Provisions:
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The
rights will have the benefit of certain customary anti-dilution
protections
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