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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
HAWKER PACIFIC AEROSPACE
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(Exact Name of Registrant as Specified in its Charter)
California 95-3528840
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(State of Incorporation (I.R.S. Employer
or Organization) Identification No.)
11240 Sherman Way
Sun Valley, California 91352
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(Address of Principal Executive Offices) (Zip Code)
Securities to be Registered Pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Securities to be Registered Pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
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(Title of Class)
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(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On February 25, 1999, the Board of Directors of Hawker Pacific Aerospace
(the "Corporation") declared a dividend distribution of one preferred share
purchase right (a "Right") for each outstanding share of Common Stock,
without par value (the "Common Shares"), of the Corporation. The dividend is
payable to the shareholders of record on March 25, 1999 (the "Record Date"),
and with respect to Common Shares issued thereafter until the Distribution
Date (as defined below) and, in certain circumstances, with respect to Common
Stock issued after the Distribution Date. Except as set forth below, each
Right, when it becomes exercisable, entitles the registered holder to
purchase from the Corporation one one-hundredth of a share of Series B Junior
Participating Preferred Stock, without par value (the "Preferred Shares"), of
the Corporation at a price of $15 per one one-hundredth of a Preferred Share
(the "Purchase Price"), subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Corporation and U.S. Stock Transfer Corporation, as Rights Agent
(the "Rights Agent") dated as of March 10, 1999.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the
earliest to occur of (i) ten days after a person or group of affiliated or
associated persons has acquired beneficial ownership of 20% or more of the
outstanding Common Shares (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) 10 Business Days (as defined in the Rights
Agreement) (or such later date as the Board may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person (as hereinafter defined) (the earliest of such
dates being called the "Distribution Date"). A person or group whose
acquisition of Common Shares causes a Distribution Date pursuant to clause
(i) above is an "Acquiring Person." The date that a person or group becomes
an Acquiring Person is the "Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred solely with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuances of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any certificates
for Common Shares outstanding as of the Record Date, even if such notation or
a copy of this Summary of Rights is not attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of
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record of the Common Shares as of the close of business on the Distribution
Date (and to each initial record holder of certain Common Shares issued after
the Distribution Date), and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on March 25, 2009, unless earlier redeemed by the
Corporation as described below.
In the event that any person becomes an Acquiring Person (except pursuant
to a tender or exchange offer which is for all outstanding Common Shares at a
price and on terms which a majority of members of the Board of Directors (who
are not also officers of the Corporation or an Acquiring Person or affiliate or
associate thereof) determines to be adequate and in the best interests of the
Corporation and its shareholders, other than such Acquiring Person, its
affiliates and associates (a "Permitted Offer"), each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive upon exercise, one
one-hundredths of a share of Preferred Shares having a market value (immediately
before such triggering event) equal to two times the exercise price of the
Right. At such time, all Rights that are beneficially owned by the Acquiring
Person or any affiliate, associate or transferee thereof will be null and void.
In the event that, at any time following the Shares Acquisition Date,
(i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately before the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power are sold or transferred, in either case
with or to an Acquiring Person or any affiliate or associate or any other person
in which such Acquiring Person, affiliate or associate has an interest or any
person acting on behalf of or in concert with such Acquiring Person, affiliate
or associate, or, if in such transaction all holders of Common Shares are not
treated alike, then each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right (the "Flip-Over
Right") to receive, upon exercise, common shares of the acquiring company having
a value equal to two times the exercise price of the Right. The holder of a
Right will continue to have the Flip-Over Right only to the extent that the
Flip-In Right has not previously been exercised.
The Purchase Price payable and the number of Preferred Shares, Common
Shares or other securities issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price (or
conversion price as the case may be),
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less than the then current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
before the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but, if greater, will be entitled
to an aggregate dividend per share of 100 times the dividend declared per Common
Share. In the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100 per share;
thereafter, and after the holders of the Common Shares receive a liquidation
payment of $1.00 per share, the holders of the Preferred Shares and the holders
of the Common Shares will share the remaining assets in the ratio of 1 to 1 (as
adjusted) for each Preferred Share and Common Share so held, respectively.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
With certain exceptions, no adjustment to the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are one one-hundredth or integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the Corporation, be
evidenced by depository receipts) and in lieu thereof, a payment in cash will be
made based on the market price of the Preferred Shares on the last Trading Day
(as defined in the Rights Agreement) before the date of exercise.
At any time before the earlier to occur of (i) a person becoming an
Acquiring Person, (ii) the expiration of the Rights, or (iii) in certain
circumstances, after the Shares Acquisition Date, the Corporation may redeem all
but not less than all of the Rights at a price of $.0001 per Right (the
"Redemption Price") which redemption shall be effective upon the action of the
Board of Directors.
All of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Corporation before the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, to make changes
which do not
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adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement.
The Rights Agreement is attached hereto as an exhibit and incorporated
herein by reference. The foregoing description of the Rights is qualified by
reference to such exhibit.
ITEM 2. EXHIBITS.
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<S> <C>
3.1 Amended and Restated Articles of Incorporation of the Corporation.
(1)
3.2 Amended and Restated Bylaws of the Corporation. (1)
3.3 Certificate of Amendment to the Amended and Restated Articles of
Incorporation of the Company. (1)
4.0 Rights Agreement dated as of March 10, 1999 between the Corporation
and U.S. Stock Transfer Corporation.
</TABLE>
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(1) Previously filed as exhibit to the Company's Registration Statement
Form S-1, as amended (Registration No. 333-40295, and incorporated
herein by reference.
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SIGNATURES
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, thereunto duly authorized.
Date: March 15, 1999 HAWKER PACIFIC AEROSPACE
(Registrant)
By: /s/ David L. Lokken
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David L. Lokken
President, Chief Executive Officer
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RIGHTS AGREEMENT
DATED AS OF MARCH 10, 1999
BETWEEN
HAWKER PACIFIC AEROSPACE
AND
U.S. STOCK TRANSFER CORPORATION
AS RIGHTS AGENT
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TABLE OF CONTENTS
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<CAPTION>
Page
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<S> <C> <C>
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . 4
Section 3. Issuance of Right Certificates. . . . . . . . . . . . . . . . . . . 5
Section 4. Form of Right Certificate . . . . . . . . . . . . . . . . . . . . . 6
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . 7
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . 8
Section 8. Cancellation and Destruction of Right Certificates. . . . . . . . . 10
Section 9. Reservation and Availability of Preferred Shares. . . . . . . . . . 11
Section 10. Preferred Shares Record Date. . . . . . . . . . . . . . . . . . . . 12
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or Number of Rights . . . . . . . . . . . 12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. . . . . 19
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . 21
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . . . . . . 23
Section 17. Right Certificate Holder Not Deemed a Shareholder . . . . . . . . . 24
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . 24
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . 24
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . 25
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . 27
Section 22. Issuance of New Right Certificates. . . . . . . . . . . . . . . . . 28
Section 23. Redemption and Termination. . . . . . . . . . . . . . . . . . . . . 28
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 25. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . . 31
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 27. Supplements and Amendments. . . . . . . . . . . . . . . . . . . . . 32
Section 28. Determination and Actions by the Board of Directors, etc. . . . . . 33
Section 29. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 30. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . . 33
Section 31. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 34. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
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DEFINED TERM CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
<S> <C>
Acquiring Person . . . . . . . . . . . . . . . . . . . Section 1(a)
Act. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1(b)
Adjustment Shares. . . . . . . . . . . . . . . . . . . Section 11(a)(ii)
Adjusted Number of Shares. . . . . . . . . . . . . . . Section 11(a)(iii)
Adjusted Purchase Price. . . . . . . . . . . . . . . . Section 11(a)(iii)
Affiliate. . . . . . . . . . . . . . . . . . . . . . . Section 1(c)
Agreement. . . . . . . . . . . . . . . . . . . . . . . Preface
Appointment of Rights Agent. . . . . . . . . . . . . . Section 2
Associate. . . . . . . . . . . . . . . . . . . . . . . Section 1(c)
Beneficial Owner . . . . . . . . . . . . . . . . . . . Section 1(d)
Beneficially Own . . . . . . . . . . . . . . . . . . . Section 1(d)
Business Day . . . . . . . . . . . . . . . . . . . . . Section 1(e)
Capital Stock Equivalent . . . . . . . . . . . . . . . Section 11(a)(ii)
Close of Business. . . . . . . . . . . . . . . . . . . Section 1(f)
Common Shares. . . . . . . . . . . . . . . . . . . . . Section 1(g)
Corporation. . . . . . . . . . . . . . . . . . . . . . Preface
Current Per Market Price . . . . . . . . . . . . . . . Section 11(d)
Current Per Share Market Price . . . . . . . . . . . . Section 11(d)(i)
Distribution Date. . . . . . . . . . . . . . . . . . . Section 3(a)
Equivalent Preferred Shares. . . . . . . . . . . . . . Section 11(b)
Exchange Act . . . . . . . . . . . . . . . . . . . . . Section 1(c)
Final Expiration Date. . . . . . . . . . . . . . . . . Section 7(a)
Interested Shareholder . . . . . . . . . . . . . . . . Section 1(j)
Permitted Offer. . . . . . . . . . . . . . . . . . . . Section 1(k)
Person . . . . . . . . . . . . . . . . . . . . . . . . Section 1(l)
Preferred Shares . . . . . . . . . . . . . . . . . . . Section 1(m)
Principal Party. . . . . . . . . . . . . . . . . . . . Section 13(b)
Proration Factor . . . . . . . . . . . . . . . . . . . Section 11(a)(iii)
Purchase Price . . . . . . . . . . . . . . . . . . . . Section 4(a)
Record Date. . . . . . . . . . . . . . . . . . . . . . Preface
Redemption Date. . . . . . . . . . . . . . . . . . . . Section 7(a)
Redemption Price . . . . . . . . . . . . . . . . . . . Section 23
Right. . . . . . . . . . . . . . . . . . . . . . . . . Preface
Right Certificate. . . . . . . . . . . . . . . . . . . Section 3(a)
Rights Agent . . . . . . . . . . . . . . . . . . . . . Preface
Rights Agreement . . . . . . . . . . . . . . . . . . . Section 3
Section 11(a)(ii) Event. . . . . . . . . . . . . . . . Section 11(a)(ii)
Section 13 Event . . . . . . . . . . . . . . . . . . . Section 13(a)
Security . . . . . . . . . . . . . . . . . . . . . . . Section 11(d)(i)
Shares Acquisition Date. . . . . . . . . . . . . . . . Section 1(q)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . Section 1(r)
Summary of Rights. . . . . . . . . . . . . . . . . . . Section 3(b)
Then Outstanding . . . . . . . . . . . . . . . . . . . Section 1(d)(iii)
Trading Day. . . . . . . . . . . . . . . . . . . . . . Section 11(d)(i)
Triggering Event . . . . . . . . . . . . . . . . . . . Section 1(s)
Voting Securities. . . . . . . . . . . . . . . . . . . Section 13(a)
</TABLE>
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of March 10, 1999 (the "Agreement"), between
Hawker Pacific Aerospace, a California corporation (the "Corporation"), and U.S.
Stock Transfer Corporation (the "Rights Agent").
The Board of Directors of the Corporation has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as defined herein) of the Corporation outstanding at the Close of Business (as
defined herein) on March 25, 1999 (the "Record Date"), each Right representing
the right to purchase one one-hundredth of a Preferred Share (as defined
herein), upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date (as such terms are defined herein); PROVIDED, HOWEVER, that Rights may be
issued with respect to Common Shares that shall become outstanding after the
Distribution Date and before the earlier of the Redemption Date and the Final
Expiration Date in accordance with the provisions of Section 22 of this
Agreement.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as defined
herein) who or which, together with all Affiliates and Associates (as defined
herein) of such Person, shall be the Beneficial Owner (as defined herein) of
20% or more of the then outstanding Common Shares (other than as a result of
a Permitted Offer (as defined herein)) or was such a Beneficial Owner at any
time after the date hereof, whether or not such person continues to be the
Beneficial Owner of 20% or more of the then outstanding Common Shares.
Notwithstanding the foregoing, (A) the term "Acquiring Person" shall not
include (i) the Corporation, (ii) any Subsidiary of the Corporation, (iii)
any employee benefit plan of the Corporation or of any Subsidiary of the
Corporation, (iv) any Person organized, appointed or established by the
Corporation for or pursuant to the terms of any such plan, (v) any of the
executive officers of Hawker Pacific Aerospace Limited, a United Kingdom
company, a Subsidiary of the Corporation (the "Subsidiary Officers"), (vi)
Melanie L. Bastian or any entity owned by or controlled by Melanie L.
Bastian, or (vii) any Person, who or which together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 20% or more of the
then outstanding Common Shares as a result of the acquisition of Common
Shares directly from the Corporation, and (B) no Person shall be deemed to be
an "Acquiring Person" either (X) as a result of the acquisition of Common
Shares by the Corporation which, by reducing the number of Common Shares
outstanding, increases the proportional number of shares beneficially owned
by such Person, together with all Affiliates and Associates of such Person;
except that if (i) a Person would become an Acquiring Person (but for the
operation of this subclause X) as a result
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of the acquisition of Common Shares by the Corporation, and (ii) after such
share acquisition by the Corporation, such Person, or an Affiliate or
Associate of such Person, becomes the Beneficial Owner of any additional
Common Shares, then such Person shall be deemed an Acquiring Person, or (Y)
if the Board of Directors of the Corporation determines in good faith that a
Person who would otherwise be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this Section 1(a), has become such, and such
Person divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an Acquiring Person, as defined
pursuant to the foregoing provisions of this Section 1(a), then such Person
shall not be deemed as "Acquiring Person" for any purposes of this Agreement.
(b) "ACT" shall mean the Securities Act of 1933, as amended and
as in effect on the date of this Agreement.
(c) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and in effect
on the date of this Agreement (the "Exchange Act").
(d) A Person shall be deemed the "BENEFICIAL OWNER" of and
shall be deemed to "BENEFICIALLY OWN" any securities:
(i) of which such Person or any of such Person's
Affiliates or Associates directly or indirectly, has "beneficial ownership" as
determined in accordance with Rule 13d-3 of the General Rules and Regulations
under the Exchange Act;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options,
or otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, 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 (B) the right to vote or dispose of pursuant to
any agreement, arrangement or understanding; PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule 13D or Schedule
13G under the Exchange Act (or any comparable or successor report); or
(iii) 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 (other than customary agreements with
and between underwriters and selling group members with respect to a bona
fide public offering of securities) relating to the acquisition, holding,
voting (except to the extent
2.
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contemplated by the proviso to Section 1(d)(ii)(B)) or disposing of any
securities of the Corporation.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used herein with reference to
a Person's Beneficial Ownership of securities of the Corporation, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(e) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or U.S. federal holiday.
(f) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M.,
California time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., California time, on the next succeeding
Business Day.
(g) "COMMON SHARES" when used with reference to the Corporation
shall mean the shares of Common Stock, without par value, of the Corporation or,
in the event of a subdivision, combination or consolidation with respect to such
shares of Common Stock, the shares of Common Stock resulting from such
subdivision, combination or consolidation. "Common Shares" when used with
reference to any Person other than the Corporation 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.
(h) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3 hereof.
(i) "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7 hereof.
(j) "INTERESTED SHAREHOLDER" shall mean any Acquiring Person,
or any Affiliate or Associate of an Acquiring Person, or any other Person in
which any such Acquiring Person, Affiliate or Associate has an interest, or any
other Person acting directly or indirectly on behalf of or in concert with any
such Acquiring Person, Affiliate or Associate.
(k) "PERMITTED OFFER" shall mean a tender or exchange offer
which is for all outstanding Common Shares at a price and on terms
determined, before the purchase of shares under such tender or exchange
offer, by at least a majority of the members of the Board of Directors who
are not officers of the Corporation and who are not Acquiring Persons or
Affiliates, Associates, nominees or representatives of an Acquiring Person,
to be adequate (taking into account all factors that such members of the
Board of Directors deem relevant including, without limitation, prices that
could reasonably be achieved if the Corporation or its assets were sold on an
orderly basis designed to realize maximum value) and otherwise in the best
interests of the Corporation and its shareholders (other than the Person or
any Affiliate or
3.
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Associate thereof on whose basis the offer is being made) taking into account
all factors that such directors may deem relevant.
(l) "PERSON" shall mean any individual, firm, partnership,
corporation, trust, association, joint venture or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(m) "PREFERRED SHARES" shall mean shares of Series B Junior
Participating Preferred Stock, without par value, of the Corporation having the
relative rights, preferences and limitations set forth in the Form of
Certificate of Determination attached to this Agreement as Exhibit A.
(n) "REDEMPTION DATE" shall have the meaning set forth in
Section 7 hereof.
(o) "SECTION 11(a)(ii) EVENT" shall mean any event described in
Section 11(a)(ii) hereof.
(p) "SECTION 13 EVENT" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(q) "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 the Exchange Act) by the
Corporation 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 pursuant to Section 1(b)(Y) hereof, then no Shares Acquisition Date
shall be deemed to have occurred.
(r) "SUBSIDIARY" of any Person shall mean any corporation or
other Person of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
(s) "TRIGGERING EVENT" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation and the holders
of the Rights (who, in accordance with Section 3 hereof, shall before the
Distribution Date also be the holders of Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
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Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the Close of Business on the tenth Business Day (or
such later date as may be determined by action of the Corporation's Board of
Directors) after the date on which any Person (other than the Corporation,
any Subsidiary of the Corporation, the Subsidiary Officers, any employee
benefit plan of the Corporation or of any Subsidiary of the Corporation or
any Person or entity organized, appointed or established by the Corporation
for or pursuant to the terms of any such plan) commences or first publicly
announces the intent to commence (which intention to commence remains in
effect for five Business Days after such announcement), a tender or exchange
offer the consummation of which would result in any Person becoming an
Acquiring Person (including, in the case of both (i) and (ii), any such date
which is after the date of this Agreement and before the issuance of the
Rights), the earlier of such dates being herein referred to as the
"Distribution Date," (x) the Rights will be evidenced by (subject to the
provisions of Section 3(b) hereof) the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates,
and (y) the right to receive Right Certificates will be transferable only in
connection with the transfer of the underlying Common Shares (including a
transfer to the Corporation); PROVIDED, HOWEVER, that if a tender offer is
terminated before a Distribution Date occurs, then no Distribution Date shall
occur as a result of such tender offer. As soon as practicable after the
Distribution Date, the Corporation will prepare and execute, the Rights Agent
will countersign, and the Corporation will send or cause to be sent by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Corporation, a Right Certificate,
substantially in the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) As soon as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the address
of such holder shown on the records of the Corporation. With respect to
certificates for Common Shares 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 a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares outstanding on the Record
Date, with or without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with such Common Shares.
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(c) Certificates for Common Shares, which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (c)) after the Record Date but before the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date, shall be deemed also to be certificates for Rights and shall
bear the following legend:
This certificate also evidences and entities the holder hereof to
certain rights as set forth in a Rights Agreement between Hawker
Pacific Aerospace and U.S. Stock Transfer Corporation dated as of
March 10, 1999 (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 Hawker Pacific
Aerospace. 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.
Hawker Pacific Aerospace 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 an Affiliate or Associate thereof (as defined in the Rights
Agreement) and certain related persons, 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
Distribution Date, the Rights associated with the Common Shares 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 Common Shares represented thereby.
In the event that the Corporation purchases or acquires any Common Shares
after the Record Date but before the Distribution Date, any Rights associated
with such Common Shares shall be deemed cancelled and retired so that the
Corporation shall not be entitled to exercise any Rights associated with the
Common Shares that are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATE.
(a) The Right Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit A hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate and as
are consistent with the provisions of this Agreement, or as may-be required
to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the
price per Preferred Share set forth therein (the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as provided herein.
6.
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(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights which are null and void pursuant to
Section 7(e) of this Agreement and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Right 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 Right Certificate and the Rights represented hereby are null
and void.
Provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Right Certificate.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Corporation by its Chairman
of the Board, its Chief Executive Officer, its President, any of its Vice
Presidents, or its Treasurer, either manually or by facsimile signature,
shall have affixed thereto the Corporation's seal or a facsimile thereof, and
shall be attested by the Secretary or an Assistant Secretary of the
Corporation, either manually or by facsimile signature. The Right
Certificates shall be countersigned by the Rights Agent and shall be valid
for any purpose unless so countersigned. In the event that any officer of
the Corporation who signs any of the Right Certificates ceases to be such
officer of the Corporation before such countersignature by the Rights Agent
and issuance and delivery by the Corporation, such Right Certificates may
nevertheless be countersigned by the Rights Agent and issued and delivered by
the Corporation with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the
Corporation; and any Right Certificate may be signed on behalf of the
Corporation by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Corporation to sign such
Right Certificate, although at the date of the execution of this Agreement
any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office or offices designated as the appropriate
place for surrender or transfer of such Right Certificate, books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the certificate number and the date of each of the
Right Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATE.
Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the Close of Business on the Distribution Date, and
at or before the Close of Business on the earlier of the Redemption Date or
the Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the
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registered holder to purchase a like number of one one-hundredths of a
Preferred Share (or, following a Triggering Event, other securities, as the
case may be) as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request
in writing delivered to the Rights Agent and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Corporation shall be
obligated to take any action whatsoever with respect to the transfer of any
such surrendered Right Certificate until the registered holder has completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner), or Affiliates or Associates thereof, as the Corporation shall
reasonably request. Subject to Section 4(b), Section 7(e) and Section 14
hereof, the Rights Agent shall thereupon countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Corporation may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
Upon receipt by the Corporation and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the
Corporation's request, reimbursement to the Corporation and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the
Corporation will make and deliver a new Right Certificate of like tenor to
the Rights Agent for countersignature and delivery to the registered holder
in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of
any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price for the total number of one one-hundredths of a
Preferred Share (or other securities, as the case may be) as to which such
surrendered Rights are exercised, at or before the earliest of (i) the Close
of Business on February 27, 2008 (the "Final Expiration Date"), (ii) the date
on which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), or (iii) the date on which the Rights are exchanged
pursuant to Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a
Preferred Share pursuant to the exercise of a Right shall initially be $15,
subject to adjustment from time to time as provided in the next sentence and
in Sections 11 and 13(a) hereof, and shall be payable in
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accordance with paragraph (c) below. Notwithstanding anything in this
Agreement to the contrary, in the event that at any time after the date of
this Agreement and before the Distribution Date, the Corporation shall (i)
declare or pay any dividend on the Common Shares payable in Common Shares or
(ii) effect a subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such
case, each Common Share outstanding following such subdivision, combination
or consolidation shall continue to have a Right associated therewith, and the
Purchase Price following any such event shall be proportionately adjusted to
equal the result obtained by multiplying the Purchase Price immediately
before such event by a fraction the numerator of which shall be the total
number of Common Shares outstanding immediately before the event occurs and
the denominator of which shall be the total number of Common Shares
outstanding immediately after such event occurs. The adjustment provided for
in the preceding sentence shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or consolidation is
effected.
(c) Upon receiving a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment of the Purchase Price for the Preferred
Shares (or other securities, as the case may be) to be purchased, and an
amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 6 hereof, by certified
check, cashier's check or money order payable to the order of the
Corporation, the Rights Agent shall thereupon promptly (i)(A) requisition
from any transfer agent of the Preferred Shares certificates for the number
of Preferred Shares to be purchased, and the Corporation hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Corporation, in its sole discretion, shall have elected to deposit the
Preferred Shares issuable upon exercise of the Rights hereunder into a
depositary, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent), and the Corporation will direct the depositary agent to comply with
such requests, (ii) when appropriate, requisition from the Corporation the
amount of cash to be paid in lieu of issuance of fractional shares, in
accordance with Section 14 hereof, and (iii) after receipt of such
certificates or depositary receipts, cause the same, together with any cash
to be paid in lieu of fractional shares, to be delivered to, or upon the
order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by, such holder. In the event that the
Corporation is obligated to issue other securities (including Common Shares)
of the Corporation pursuant to Section 11(a) hereof, the Corporation will
make all arrangements necessary so that such other securities are available
for distribution by the Rights Agent, if and when appropriate.
In addition, in the case of an exercise of the Rights by a holder
pursuant to Section 11(a)(ii) hereof, the Rights Agent shall return such
Right Certificate to the registered holder thereof after imprinting, stamping
or otherwise indicating thereon that the rights represented by such Right
Certificate no longer include the rights provided by Section 11(a)(ii) of the
Rights Agreement, and if less than all the Rights represented by such Right
Certificate were so
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exercised, the Rights Agent shall indicate on the Right Certificate the
number of Rights represented thereby which continue to include the rights
provided by Section 11(a)(ii).
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof, or the Rights Agent shall place an appropriate notation on
the Right Certificate with respect to those Rights exercised.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any Affiliate or Associate thereof) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any Affiliate or Associate thereof) who becomes a transferee before 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 a continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Corporation, in its sole
discretion, has determined is part of a plan, arrangement or understanding
that has as a primary purpose or effect the avoidance of this Section 7(e)
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 Agreement or otherwise. The Corporation shall
use all reasonable efforts to insure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Corporation shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Corporation
shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Corporation or to
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The
Corporation shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Right
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Certificate purchased or acquired by the Corporation otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Corporation, or shall, at the written request of the
Corporation, destroy such cancelled Right Certificates and in such case,
shall deliver a certificate of destruction thereof to the Corporation.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. The
Corporation covenants and agrees that at all times before a Section 11(a)(ii)
Event occurs it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares, or any authorized and issued
Preferred Shares held in its treasury, the number of Preferred Shares that
will be sufficient to permit the exercise in full of all outstanding Rights
and after a Section 11(a)(ii) Event occurs, shall, to the extent reasonably
practicable, so reserve and keep available a sufficient number of Common
Shares (and/or other securities) which may be required to permit the exercise
in full of the Rights pursuant to this Agreement.
So long as the Preferred Shares (and, after a Section 11(a)(ii) Event
occurs, Common Shares or any other securities) issuable upon the exercise of
the Rights may be listed on any national securities exchange, the Corporation
shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
The Corporation covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares (or Common Shares
and/or other securities, as the case may be) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares or
other securities (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and non-assessable shares or
securities.
The Corporation further covenants and agrees that it will pay when due
and payable any and all U.S. federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Corporation
shall not, however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates or depository
receipts for the Preferred Shares (or Common Shares and/or other securities,
as the case may be) in a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered for exercise, or to issue
or to deliver any certificates or depositary receipts for Preferred Shares
(or Common Shares and/or other securities, as the case may be) upon the
exercise of any Rights, until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Corporation's reasonable
satisfaction that no such tax is due.
The Corporation shall use its best efforts to (i) file, as soon as
practicable following the Shares Acquisition Date, a registration statement
under the Act on an appropriate form, with respect to the securities
purchasable upon exercise of the Rights, (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
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of the Act and the rules and regulations thereunder) until the date of the
expiration of the rights provided by Section 11(a)(ii). The Corporation will
also take such action as may be appropriate or required under the blue sky
laws of the various states.
Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name
any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
Preferred Shares (or Common Shares and/or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was
made; PROVIDED, HOWEVER, that, if the date of such surrender and payment is a
date upon which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Corporation are closed,
such person shall be deemed to have become the record holder of such shares
on, and such certificate shall be dated, the next succeeding Business Day on
which the Preferred Shares (or Common Shares and/or other securities, as the
case may be) transfer books of the Corporation are open.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS.
The Purchase Price, the number and kind of shares 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) In the event the Corporation shall at any time
after the date of this 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 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 Corporation is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately before such date and at a
time when the Preferred Shares transfer books of the Corporation were open,
such holder would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification;
PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the shares
of capital stock of the Corporation issuable upon exercise of one Right. If
an event occurs which would require an adjustment under both Section 11(a)(i)
and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made before, any adjustment required
pursuant to Section 11(a)(ii).
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(ii) In the event any Person, alone or together with
its Affiliates and Associates, shall become an Acquiring Person, each holder
of a Right (except as provided below and in Section 7(e) hereof) shall, for a
period of 60 days after the later of the occurrence of any such event or the
effective date of an appropriate registration statement under the Act
pursuant to Section 9 hereof, have a right to receive, upon exercise thereof
at a price equal to the then current Purchase Price, in accordance with the
terms of this Agreement, such number of Common Shares (or, in the discretion
of the Board of Directors, one one-hundredth of a Preferred Share) as shall
equal the result obtained by (x) multiplying the then current Purchase Price
by the then number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately before the first occurrence of a Section
11(a)(ii) Event, and dividing that product by (y) 50% of the then current per
share market price of the Corporation's Common Shares (determined pursuant to
Section 11(d) hereof) on the date of such first occurrence (such number of
shares being referred to as the "Adjustment Shares"); PROVIDED, HOWEVER, that
if the transaction that would otherwise give rise to the foregoing adjustment
is also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply, and no adjustment shall be made
pursuant to this Section 11(a)(ii);
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued (and unreserved) Common Shares to
permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) and the Rights become so exercisable (and the Board has
determined to make the Rights exercisable into fractions of a Preferred
Share), notwithstanding any other provision of this Agreement, to the extent
necessary and permitted by applicable law, each Right shall thereafter
represent the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, (x) a number
of (or fractions of) Common Shares (up to the maximum number of Common Shares
which may permissibly be issued) and (y) one one-hundredth of a Preferred
Share or a number of, or fractions of other equity securities of the
Corporation (or, in the discretion of the Board of Directors, debt) which the
Board of Directors of the Corporation has determined to have the same
aggregate current market value (determined pursuant to Section 11(d)(i) and
(ii) hereof, to the extent applicable,) as one Common Share (such number of,
or fractions of, Preferred Shares, debt, or other equity securities or debt
of the Corporation) being referred to as a "capital stock equivalent"), equal
in the aggregate to the number of Adjustment Shares; provided, however, if
sufficient Common Shares and/or capital stock equivalents are unavailable,
then the Corporation shall, to the extent permitted by applicable law, take
all such action as may be necessary to authorize additional Common Shares or
capital stock equivalents for issuance upon exercise of the Rights,
including, if necessary, the calling of a meeting of shareholders; and
provided, further, that if the Corporation is unable to cause sufficient
Common Shares and/or capital stock equivalents to be available for issuance
upon exercise in full of the Rights, then each Right shall thereafter
represent the right to receive the Adjusted Number of Shares upon exercise at
the Adjusted Purchase Price (as such terms are hereinafter defined). As used
herein, the term "Adjusted Number of Shares" shall be equal to that number of
(or fractions of) Common Shares (and/or capital stock equivalents) equal to
the product of (x) the number of Adjustment Shares and (y) a fraction, the
numerator of which is the number of Common Shares (and/or capital stock
equivalents) available for issuance upon exercise of the Rights and the
denominator of which is the aggregate number of Adjustment Shares otherwise
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issuable upon exercise in full of all Rights (assuming there were a
sufficient number of Common Shares available) (such fraction being referred
to as the "Proration Factor"). The "Adjusted Purchase Price" shall mean the
product of the Purchase Price and the Proration Factor. The Board of
Directors may, but shall not be required to, establish procedures to allocate
the right to receive Common Shares and capital stock equivalents upon
exercise of the Rights among holders of Rights.
(b) In case the Corporation shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all
holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred
Shares (or shares having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities convertible
into Preferred Shares or equivalent preferred shares at a price per Preferred
Share or equivalent preferred share (or having a conversion price per share,
if a security convertible into Preferred Shares or equivalent preferred
shares) less than the then current per share market price of the Preferred
Shares (as determined pursuant to Section 11(d) hereof) on such record date,
the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately before such record
date by a fraction, the numerator of which shall be the number of Preferred
Shares outstanding on such record date plus the number of Preferred Shares
which the aggregate offering price of the total number of Preferred Shares
and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered)
would purchase at such current per share market price, and the denominator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Corporation 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 determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent. Preferred Shares
owned by or held for the account of the Corporation shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed; and in the event
that such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Preferred Shares (including
any such distribution made in connection with a consolidation or merger in
which the Corporation is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately before such record date
by a fraction, the numerator of which shall be the then current per share
market
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price (as determined pursuant to Section 11(d) hereof) of the Preferred
Shares on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Corporation, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; 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 Corporation to be issued upon exercise of one Right. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price shall again
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the thirty
(30) consecutive Trading Days (as such term is hereinafter defined)
immediately before such date; PROVIDED, HOWEVER, that in the event that the
current per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend
or distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision, combination
or reclassification of such Security and before the expiration of thirty (30)
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per share
equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such
other system then in use, or, if on any such date the Security is not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Corporation. If on any such date
no such market maker is making market in the Security, the fair value of the
Security on such date as determined in good faith by the Board of Directors
of the Corporation shall be used. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the Security is
listed or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national securities
exchange, a Business Day.
15.
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(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined
in accordance with the method set forth in Section 11(d)(i). 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 Common Shares as determined pursuant to Section
11(d)(i), (appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof), multiplied by one
hundred. If neither the Common Shares nor the Preferred Shares are 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 Directors of
the Corporation, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent.
(e) Notwithstanding anything herein to the contrary, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest one one-hundredth of a
Preferred Share or one ten-thousandth of any other share or security as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which
mandates such adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Corporation other than Preferred Shares, thereafter the number of other
shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained
in Section 11(a) through (c), inclusive, 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.
(g) All Rights originally issued by the Corporation
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Corporation shall have exercised its election
as provided in Section 11(i) hereof upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c) hereof,
each Right outstanding immediately before the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (calculated to the
nearest one one-hundredth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-hundredths of a share covered by a Right
immediately before this adjustment by (y) the Purchase
16.
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Price in effect immediately before such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-hundredths of a Preferred Share
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-hundredths of a Preferred Share for which a Right was
exercisable immediately before such adjustment. Each Right held of record
before such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately before the Purchase Price is
adjusted by the Purchase Price in effect immediately after such adjustment.
The Corporation shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at
least ten (10) days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Corporation shall, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Corporation, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
before the date of adjustment, and upon surrender thereof, if required by the
Corporation, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number
of one one-hundredths of a Preferred Share or other securities issuable upon
exercise of the Rights, the Corporation shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue such number of fully paid and
non-assessable one one-hundredths of a Preferred Share or other securities at
such adjusted Purchase Price.
17.
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(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Corporation may elect to defer until such event occurs
the issuance to the holder of any Right exercised after such record date the
Preferred Shares, Common Shares or other securities of the Corporation, if
any, issuable upon such exercise over and above the Preferred Shares, Common
Shares or other securities of the Corporation, if any, issuable upon exercise
on the basis of the Purchase Price in effect before such adjustment;
PROVIDED, HOWEVER, that the Corporation shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Notwithstanding anything in this Section 11 to the
contrary, the Corporation shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that (i) any consolidation or subdivision
of the Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at
less than the current market price, (iii) issuance wholly for cash of
Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Corporation to holders of its Preferred Shares shall not be taxable to
such shareholders.
(n) The Corporation covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Corporation in a transaction that does
not violate Section 11(n) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Corporation in a transaction that does not
violate Section 11(n) hereof) or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Corporation and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Corporation and/or any of its
Subsidiaries in one or more transactions each of which does not violate
Section 11(n) hereof), if (x) at the time of or immediately after such
consolidation, merger, sale or transfer there are any charter or by-law
provisions or any rights, warrants or other instruments or securities
outstanding or agreements in effect or other actions taken, which would
materially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) before, simultaneously with or immediately
after such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates. The
Corporation shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Corporation and such other Person shall
have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 11(n).
(o) The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section
27 hereof, take (or permit any Subsidiary to take) any action the purpose of
which is to, or if at the time such action is taken it is
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reasonably foreseeable that the effect of such action is to, materially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) The exercise of Rights under Section 11(a)(ii) shall
only result in the loss of rights under Section 11(a)(ii) to the extent so
exercised and shall not otherwise affect the rights represented by the Rights
under this Agreement, including the rights represented by Section 13 hereof.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 or 13
hereof, the Corporation shall promptly (a) prepare a certificate setting
forth such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 26
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, on or following the Shares
Acquisition Date, directly or indirectly, (x) the Corporation shall
consolidate with, or merge with and into, any Interested Shareholder or, if
in such merger or consolidation all holders of Common Shares are not treated
alike any other Person, (y) the Corporation shall consolidate with, or merge
with, any Interested Shareholder or, if in such merger or consolidation all
holders of Common Shares are not treated alike, any other Person, and the
Corporation shall be the continuing or surviving corporation of such
consolidation or merger (other than, in a case of any transaction described
in (x) or (y), a merger or consolidation which would result in all of the
securities generally entitled to vote in the election of directors ("voting
securities") of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into securities of the surviving entity) all of the voting
securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation and the holders of such
securities not having changed as a result of such merger or consolidation),
or (z) the Corporation shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Corporation and its Subsidiaries
(taken as a whole) to any Interested Shareholder or Shareholders or, if in
such transaction all holders of Common Stock are not treated alike, any other
Person (other than the Corporation or any Subsidiary of the Corporation in
one or more transactions each of which does not violate Section 11(n)
hereof), then, and in each such case (except as provided in Section 13(d)
hereof), proper provision shall be made so that (i) 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 then current
Purchase Price, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of freely tradeable Common Shares of the
Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of first
19.
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refusal or other adverse claims, as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to
Section 11(a)(ii)) and dividing that product by (B) 50% of the then current
per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such Section 13 Event; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Corporation pursuant to this Agreement; (iii)
the term "Corporation" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean in the case of any
transaction described in clause (x) or (y) of the first sentence of Section
13(a), the Person that is the issuer of any securities into which Common
Shares of the Corporation are converted in such merger or consolidation, and
if no securities are so issued, the Person that is the other party to such
merger or consolidation (including, if applicable, the Corporation if it is
the surviving corporation); and (ii) in the case of any transaction described
in clause (z) of the first sentence of Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions PROVIDED, HOWEVER,
that in any of the foregoing cases, (1) if the Common Shares of such Person
are not at such time and have not been continuously over the preceding twelve
(12) month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common Shares
of which are and have been so registered, "Principal Party" shall refer to
such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value; and (3) in case 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 (1) and (2) above shall apply to each of the chains of ownership
having an interest in such joint venture as if such party were a "Subsidiary"
of both or all of such joint venturers, and the Principal Parties in each
such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have
a sufficient number of its authorized Common Shares which 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 Corporation
and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and
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further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer mentioned in paragraph (a) of this
Section 13, the Principal Party at its own expense shall:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a prospectus at
all times meeting the requirements of the Act) until the Final Expiration
Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all respects
with the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. The rights under this
Section 13 shall be in addition to the rights to exercise Rights and
adjustments under Section 11(a)(ii) and shall survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, this Section 13 shall not be applicable to a transaction described
in subparagraphs (x) and (y) of Section 13(a) if: (i) such transaction is
consummated with a Person or Persons who acquired Common Shares pursuant to a
Permitted Offer (or a wholly owned Subsidiary of any such Person or Persons);
(ii) the price per Common Share offered in such transaction is not less than
the price per Common Share paid to all holders of Common Shares whose shares
were purchased pursuant to such Permitted Offer; and (iii) the form of
consideration offered in such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon consummation of
any such transaction contemplated by this Section 13(d), all Rights hereunder
shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Corporation shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately before the date
on which such fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
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securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the
Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such date the Rights
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Corporation. If on any
such date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board of
Directors of the Corporation shall be used.
(b) The Corporation shall not be required to issue fractions
of Preferred Shares (other than fractions which are one one-hundredth or
integral multiples of one one-hundredth of a Preferred Share) upon exercise
of the Rights or to distribute certificates which evidence fractional
Preferred Shares (other than fractions which are one one-hundredth or
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Corporation, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Corporation and a
depositary selected by it; provided that such agreement shall provide that
the holders of such depositary receipts shall have 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 one one-hundredth or integral multiples of one
one-hundredth of a Preferred Share, the Corporation shall pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Preferred Share. For the purposes of this
Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to Section
11(d)(ii) hereof) for the Trading Day immediately before the date of such
exercise.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 giving rise to the right to receive Common
Shares, capital stock equivalents (other than Preferred Shares) or other
securities upon the exercise of a Right, the Corporation shall not be
required to issue fractions of shares or units of such Common Shares, capital
stock equivalents or other securities upon exercise of the Rights or to
distribute certificates which evidence fractions of such Common Shares,
capital stock equivalents or other securities. In lieu of fractional shares
or units of such Common Shares, capital stock equivalents or other
securities, the Corporation may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of a
share or unit of such Common Shares, capital stock equivalents or other
securities. For purposes of this Section 14(c), the current market value
shall be determined in the manner set forth in Section 11(d) hereof for the
Trading Day immediately before the date of such exercise and, if such capital
stock equivalent is not traded, each such capital stock equivalent shall have
the value of one one-hundredth of a Preferred Share.
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(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
share upon exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, before the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, before the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right
Certificate (or, before the Distribution Date, of the Common Shares), may, in
his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Corporation to enforce,
or otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right that:
(a) before the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right 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
purpose, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate form fully executed;
(c) subject to Section 6 and Section 7(f) hereof, the
Corporation and the Rights Agent may deem and treat the person in whose name
the Right Certificate (or, before the Distribution Date, the associated
Common Shares certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Shares certificate
made by anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be required to be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Corporation nor the Rights Agent shall have any
liability to any holder of a Right or a beneficial interest in a Right or
other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or
by a governmental, regulatory
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or administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
PROVIDED, HOWEVER, the Corporation must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Common Shares or any
other securities of the Corporation which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a shareholder of the
Corporation 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 other distributions or to exercise any
preemptive or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Corporation agrees to
pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Corporation also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises. The indemnity provided for herein shall survive
the expiration of the Rights and the termination of this Agreement.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of, any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for Common Shares or for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or all or substantially all of the corporate trust business of
the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any
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of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
only those duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Corporation and the
holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Corporation), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of an Acquiring Person
and the determination of the current market price of any Security) be proved
or established by the Corporation before taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Treasurer
or the Secretary of the Corporation and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
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(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature on such Right
Certificates) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its
countersignature thereof), nor shall it be responsible for any breach by the
Corporation of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 7(e) hereof) or any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after receipt of the certificate
described in Section 12 hereof); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation
of any Preferred Shares or Common Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Preferred Shares or
Common Shares will, when issued, be validly authorized and issued, fully paid
and non-assessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the
Corporation, and to apply to such officers for advice or instructions in
connection with its duties, and shall not be liable for any action taken or
suffered by it in good faith or lack of action in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written
instructions from the Corporation may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on or after which such action shall
be taken or such omission shall be effective. The Rights Agent shall not be
liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five
Business Days after the date any officer of the Corporation actually receives
such application, unless any such officer shall have consented in writing to
an earlier date) unless, before taking any such action (or the effective date
in the case of an omission), the Rights Agent shall have received written
instruction in response to such application specifying the action to be taken
or omitted.
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(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or
lend money to the Corporation or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Corporation or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Corporation resulting
from any such act, default, neglect or misconduct, provided reasonable care
was exercised in the selection and continued employment thereof.
(j) No provision of this 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 there shall be reasonable grounds for believing
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
not been completed, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with
the Corporation.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the
Corporation and to each transfer agent of the Common Shares or Preferred
Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Corporation may remove the Rights
Agent or any successor Rights Agent upon sixty (60) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Shares or Preferred Shares by registered
or certified mail, and to holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Corporation shall appoint a successor to the
Rights Agent. If the Corporation shall fail to make such appointment within
a period of sixty (60) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Corporation), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Corporation or by such a court, shall be a corporation
organized and doing business under the laws of the United States or any state
of the United States in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal
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or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $10 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Corporation shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent
of the Common Shares or Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and before the earlier of the Redemption Date
and the Final Expiration Date, the Corporation (a) shall with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Corporation, and
(b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Corporation, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) the Corporation shall not be obligated to issue
any such Right Certificates if, and to the extent that, the Corporation shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Corporation or the Person to whom
such Right Certificate would be issued, and (ii) no Right Certificate shall
be issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) (i) The Board of Directors of the Corporation may, at
its option, redeem all but not less than all the then outstanding Rights at a
redemption price of $.0001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"), at any time before the earlier of (x)
the occurrence of a Section 11(a)(ii) Event, or (y) the Final Expiration
Date. The Corporation may, at its option, pay the Redemption Price either in
Common Shares (based on the "current per share market price," as defined in
Section 11(d) hereof, of the Common Shares at the time of redemption) or
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cash; provided that if the Corporation elects to pay the Redemption Price in
Common Shares, the Corporation shall not be required to issue any fractional
Common Shares and the number of Common Shares issuable to each holder of
Rights shall be rounded down to the next whole share.
(ii) In addition, the Board of Directors of the
Corporation may, at its option, at any time following the occurrence of a
Section 11(a)(ii) Event and the expiration of any period during which the
holder of Rights may exercise the rights under Section 11(a)(ii) but before
any Section 13 Event, redeem all but not less than all of the then
outstanding Rights at the Redemption Price (x) in connection with any merger,
consolidation or sale or other transfer (in one transaction or in a series of
related transactions) of assets or earning power aggregating 50% or more of
the earning power of the Corporation and its subsidiaries (taken as a whole)
in which all holders of Common Shares are treated alike and not involving
(other than as a holder of Common Shares being treated like all other such
holders) an Interested Shareholder or (y)(aa) if and for so long as the
Acquiring Person is not thereafter the Beneficial Owner of 20% of the Common
Shares, and (bb) at the time of redemption no other Persons are Acquiring
Persons.
(b) In the case of a redemption permitted under Section
23(a)(i), immediately upon the date for redemption set forth (or determined
in the manner specified in) in a resolution of the Board of Directors of the
Corporation ordering the redemption of the Rights, evidence 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 will terminate, and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. In the case of a redemption
permitted only under Section 23(a)(ii), evidence of which shall have been
filed with the Rights Agent, the right to exercise the Rights will terminate
and represent only the right to receive the Redemption Price upon the later
of ten (10) Business Days following the giving of such notice or the
expiration of any period during which the rights under Section 11(a)(ii) may
be exercised. The Corporation shall promptly give public notice of any such
redemption; PROVIDED, HOWEVER, that the failure to give, or any defect in,
any such notice shall not affect the validity of such redemption. Within ten
(10) days after such date for redemption set forth in a resolution of the
Board of Directors ordering the redemption of the Rights, the Corporation
shall mail a notice of redemption to all the holders of the then outstanding
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, before the Distribution Date, on the registry books of the
transfer agent for the Common Shares. 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
Corporation 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 and other than in connection with
the purchase of Common Shares before the Distribution Date.
(c) The Corporation may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights in accordance with this
Agreement and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books
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of the Rights Agent or, before the Distribution Date, on the registry books
of the Transfer Agent of the Common Shares, and upon such action, all
outstanding Rights and Right Certificates shall be null and void without any
further action by the Corporation.
Section 24. EXCHANGE.
(a) The Board of Directors of the Corporation may, at its
option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares of the Corporation at an exchange ratio
of one Common Share 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 of Directors shall not be empowered
to effect such exchange at any time after any Person (other than the
Corporation, any Subsidiary of the Corporation, the Subsidiary Officers, any
employee benefit plan of the Corporation or any such Subsidiary, any entity
holding Common Shares for or pursuant to the terms of any such a plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Corporation ordering the exchange of any Rights pursuant to subsection
(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
Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Corporation shall promptly give public
notice of any such exchange; PROVIDED, HOWEVER, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange.
The Corporation shall promptly 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 Common Shares for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Corporation, at its option, may substitute Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for some
or all of the Common Shares exchangeable for Rights, at the initial rate of
one one-hundredth of a Preferred Share (or equivalent preferred share) for
each Common Share, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Shares pursuant to the terms thereof, so that
the fraction of a Preferred Share delivered in lieu of each Common Share
shall have the same voting rights as one Common Share.
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(d) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Corporation shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Corporation shall propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred Shares
or to make any other distribution to the holders of its Preferred Shares
(other than a regularly quarterly cash dividend), (ii) to offer to the
holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification
of its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with any other Person (other than a
Subsidiary of the Corporation in a transaction which does not violate Section
11(n) hereof), or to effect any sale, or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer) in one or more
transactions, of 50% or more of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Corporation and/or any of its Subsidiaries in one or
more transactions each of which does not violate Section 11(n) hereof), or
(v) to effect the liquidation, dissolution or winding up of the Corporation,
then, in each such case, the Corporation shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action to the extent feasible and file a certificate with the Rights Agent to
that effect, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Preferred Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days before the record date for
determining holders of the Preferred Shares for purposes of such action, and
in the case of any such other action, at least twenty (20) days before the
date of the taking of such proposed action or the date of participation
therein by the holders of the Preferred Shares, whichever shall be the
earlier.
(b) In case of a Section 11(a)(ii) Event, then (i) the
Corporation shall as soon as practicable thereafter give to each holder of a
Right 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, and (ii) all references in the preceding paragraph (a) to Preferred
Shares shall be deemed thereafter to refer also to Common Shares and/or, if
appropriate, other securities of the Corporation.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Corporation shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
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Hawker Pacific Aerospace
11240 Sherman Way
Sun Valley, CA 91352
Attention: Chief Financial Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Corporation or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Corporation) as follows:
U.S. Stock Transfer Corporation
1745 Gardena Avenue
Glendale, California 91204
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Right Certificate or, if
before the Distribution Date, to the holder of certificates representing
Common Shares 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 Corporation.
Section 27. SUPPLEMENTS AND AMENDMENTS. Before the Distribution
Date, the Corporation and the Rights Agent shall, if the Corporation so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing Common Shares. From and
after the Distribution Date, the Corporation and the Rights Agent shall, if
the Corporation so directs, supplement or amend this Agreement without the
approval of any holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to change or supplement
the provisions hereunder in any manner which the Corporation may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); PROVIDED, HOWEVER, that this
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. Upon the delivery of a certificate from an appropriate officer of
the Corporation which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment, provided that such supplement or amendment does
not adversely affect the rights or obligations of the Rights Agent under
Section 18 or Section 20 of this Agreement. Before the Distribution Date,
the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares.
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Section 28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. The Board of Directors of the Corporation shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board, or the Corporation, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including, without
limitation, a determination to redeem or not redeem the Rights or to amend
the Agreement and whether any proposed amendment adversely affects the
interests of the holders of Right Certificates). For all purposes of this
Agreement, any calculation of the number of Common Shares or other securities
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding Common Shares or any other
securities 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 as in effect on the date of this
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 Corporation, the
Rights Agent, the holders of the Right Certificates and all other parties,
and (y) not subject the Board to any liability to the holders of the Right
Certificates.
Section 29. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Corporation, the Rights Agent and the registered holders of the Right
Certificates (and, before the Distribution Date, the Common Shares) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Corporation, the Rights
Agent and the registered holders of the Right Certificates (and, before the
Distribution Date, the Common Shares).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
Section 32. GOVERNING LAW. This Agreement, each Right and each
Right Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of California 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.
<PAGE>
Section 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the date and year first above
written.
HAWKER PACIFIC AEROSPACE
Attest:
By /s/ Philip M. Panzera By /s/ Daniel L. Lokken
--------------------------------- ---------------------------------
Name: Philip M. Panzera Name:
Title: VP-Chief Financial Officer Title:
U.S. STOCK TRANSFER CORPORATION
Attest:
By /s/ Syed A Hussaini By /s/ Henry Artaza
--------------------------------- ---------------------------------
Name: Syed A Hussaini Name: Henry Artaza
Title: Assistant Vice President Title: Senior Vice President
34.
<PAGE>
EXHIBIT A
FORM OF
CERTIFICATE OF DETERMINATION
OF
HAWKER PACIFIC AEROSPACE
Daniel L. Lubeck and Philip M. Panzera hereby certify that:
1. They are the duly elected and acting Chairman of the Board and
Chief Financial Officer, respectively, of Hawker Pacific Aerospace, a California
corporation (the "Corporation").
2. The number of shares of Series B Junior Participating Preferred
Stock of the Corporation is 400,000, none of which has been issued.
3. The Board of Directors of the Corporation has duly adopted the
following recitals and resolutions.
WHEREAS, the Restated Articles of Incorporation of the Corporation
authorize the Preferred Stock of the Corporation to be issued in series and
authorize the Board of Directors of the Corporation to determine the rights,
preferences, privileges and restrictions granted to or imposed upon any wholly
unissued series of Preferred Stock and to fix the number of shares and
designation of any such series; and
WHEREAS, the Board of Directors of the Corporation desires, pursuant to
its authority as aforesaid, to determine and fix the rights, preferences,
privileges and restrictions relating to a series of Series B Junior
Participating Preferred Stock and the number of shares constituting and the
designation of said series;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes
and determines the designation of, the number of shares constituting, and the
rights, preferences, privileges and restrictions relating to, said series of
Series B Junior Participating Preferred Stock as follows:
A-1
<PAGE>
Series B Junior Participating Preferred Stock.
Section 1. DESIGNATION, PAR VALUE AND AMOUNT. The shares of such
series shall be designated as "Series B Junior Participating Preferred Stock"
(hereinafter referred to as "Series B Preferred Stock") and shall be without
par value, and the number of shares constituting such series shall be 400,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series B Preferred Stock with respect to dividends, the holders
of shares of Series B Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of assets legally available for
the purpose, quarterly dividends payable in cash on the first business day of
November, February, May and August in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1.00 or (b)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 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,
without par value, of the Corporation (the "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 B Preferred Stock.
(b) The Corporation shall declare a dividend or distribution
on the Series B 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); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series B
Preferred Stock, unless the date of issue of such shares is before the record
date for the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of issue of such shares,
or unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series B
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid
on the shares of Series B
A-2
<PAGE>
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series B Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60
days before the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the shareholders
of the Corporation.
(b) Except as otherwise provided herein or by law, the
holders of shares of Series B 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 Corporation.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred Stock
outstanding shall have been paid in full, the Corporation shall not
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series B Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except dividends paid ratably on the Series B 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 (except as provided in (iv) below) shares of any stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (either as
to dividends or upon dissolution, liquidation or winding up) to the Series B
Preferred Stock;
A-3
<PAGE>
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock, or any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Series B Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled 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 subject to the conditions and restrictions on
issuance set forth herein, in the Articles of Incorporation, in any other
Certificate of Amendment creating a series of Preferred Stock or as otherwise
required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) Subject to the prior and superior rights of holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series B Preferred Stock with respect to rights upon liquidation,
dissolution or winding up (voluntary or otherwise), no distribution shall be
made to the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series B Preferred
Stock unless, prior thereto, the holders of shares of Series B Preferred
Stock shall have received $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment (the "Series B Liquidation Preference"). Following the
payment of the full amount of the Series B Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series B
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Capital Adjustment") equal to
the quotient obtained by dividing (i) the Series B Liquidation Preference by
(ii) 100 (such number in clause (ii), the "Adjustment Number"). Following
the payment of the full amount of the Series B Liquidation Preference and the
Capital Adjustment in respect of all outstanding shares of Series B Preferred
Stock and Common Stock, respectively, holders of Series B Preferred Stock and
holders of Common Stock shall receive their ratable and proportionate share
of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
A-4
<PAGE>
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Series B Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of Series B
Preferred Stock and the holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of the Capital
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation
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 B Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 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 8. NO REDEMPTION. The shares of Series B Preferred Stock
shall not be redeemable.
Section 9. RANKING. The Series B Preferred Stock shall rank junior
to all other series of the Corporation'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 10. AMENDMENT. The Articles of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series B
Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of a majority or more of the outstanding shares of Series B
Preferred Stock, voting separately as a class.
(Remainder of page left blank intentionally.)
A-5
<PAGE>
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this certificate are true and
correct of our own knowledge.
Dated: , 1999
------------------ ----------------------------------------------
Name: Daniel L. Lubeck, Chairman of the Board
A-6
<PAGE>
We further declare under penalty of perjury under the laws of the
State of California that the matters set forth in this certificate are true
and correct of our own knowledge.
Dated: , 1999
---------------- -------------------------------------------------
Name: Philip M. Panzera, Chief Financial Officer
A-7
<PAGE>
EXHIBIT B
FORM OF RIGHT CERTIFICATE
NO. R- RIGHTS
------
NOT EXERCISABLE AFTER MARCH 25, 2009 OR EARLIER IF REDEEMED
BY THE CORPORATION, THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.0001 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT
RIGHT CERTIFICATE
HAWKER PACIFIC AEROSPACE
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 that certain Rights Agreement, dated as of March 10, 1999 (the "Rights
Agreement"), between Hawker Pacific Aerospace, a California corporation (the
"Corporation"), and U.S. Stock Transfer Corporation (the "Rights Agent"), to
purchase from the Corporation at any time after the Distribution Date (as
such term is defined in the Rights Agreement) and before 5:00 P.M.,
California time, on March 25, 2009 unless the Rights evidenced hereby shall
have been previously redeemed by the Corporation, at the principal office or
offices of the Rights Agent designated for such purpose, or at the office of
its successor as Rights Agent, one one-hundredth of a fully paid
non-assessable share of Series B Junior Participating Preferred Stock,
without par value (the "Preferred Shares"), of the Corporation, at a purchase
price of $15 per one one-hundredth of Preferred Share (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one one-hundredths 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.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate
or Associate of any such Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate
or Affiliate who becomes a transferee after the Acquiring Person becomes
such, or (iii) under certain circumstances specified in the Rights Agreement,
a transferee of any such Acquiring Person, Associate or Affiliate who becomes
a transferee before or concurrently with the Acquiring Person becoming such,
such Rights shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
B-1
<PAGE>
As provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredths of a Preferred Share or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events, including Triggering Events (as such term is defined in the Rights
Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Corporation and the holders of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement. Copies of the Rights Agreement are on file at the
principal executive offices of the Corporation and the principal office or
offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares or other securities as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Corporation at a
redemption price of $.0001 per Right (subject to adjustment as provided in
the Rights Agreement) payable in cash.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are one
one-hundredth or integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Corporation, 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 Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Corporation which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Corporation or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
other distributions or to exercise any preemptive or subscription rights, or
otherwise, until the
B-2
<PAGE>
Right or Rights evidenced by this Right Certificate shall have been exercised
as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of ___________________.
HAWKER PACIFIC AEROSPACE
Attest:
By By
--------------------------------- ---------------------------------
Name: Name:
Title: Title:
Countersigned by Rights Agent:
U.S. Stock Transfer Corporation
By
---------------------------------
Name:
Title:
B-3
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________________________ hereby sells, assigns
and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated:
----------------------------
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------
Signature
B-4
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise
Rights represented by the Right Certificate.)
To: the Rights Agent:
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Right Certificate to purchase the Preferred Shares,
Common Shares or other securities issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares, Common Shares or other
securities to be issued in the name of:
Please insert social security
or other identifying number__________________________________________________
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number__________________________________________________
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
Dated:
------------------------
------------------------------------
Signature
B-5
<PAGE>
Form of Reverse Side of Right Certificate -- continued
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------------
Signature
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Corporation and the Rights Agent will deem the Beneficial
Owner of the Rights evidenced by this Right 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.
B-6
<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On February 25, 1999, the Board of Directors of Hawker Pacific
Aerospace (the "Corporation") declared a dividend distribution of one
preferred share purchase right (a "Right") for each outstanding share of
Common Stock, without par value (the "Common Shares"), of the Corporation.
The dividend is payable to the shareholders of record on March 25, 1999 (the
"Record Date"), and with respect to Common Shares issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with
respect to Common Stock issued after the Distribution Date. Except as set
forth below, each Right, when it becomes exercisable, entitles the registered
holder to purchase from the Corporation one one-hundredth of a share of
Series B Junior Participating Preferred Stock, without par value (the
"Preferred Shares"), of the Corporation at a price of $15 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Corporation and U.S.
Stock Transfer Corporation, as Rights Agent (the "Rights Agent") dated as of
March 10, 1999.
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Right
Certificates will be distributed. The Rights will separate from the Common
Shares upon the earliest to occur of (i) ten days after a person or group of
affiliated or associated persons has acquired beneficial ownership of 20% or
more of the outstanding Common Shares (except pursuant to a Permitted Offer,
as hereinafter defined); or (ii) 10 Business Days (as defined in the Rights
Agreement) (or such later date as the Board may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person (as hereinafter defined) (the earliest of such
dates being called the "Distribution Date"). A person or group whose
acquisition of Common Shares causes a Distribution Date pursuant to clause
(i) above is an "Acquiring Person." The date that a person or group becomes
an Acquiring Person is the "Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred solely with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuances of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any certificates
for Common Shares outstanding as of the Record Date, even if such notation or
a copy of this Summary of Rights is not attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date (and to each initial record
holder of certain Common Shares issued after the Distribution Date), and such
separate Right Certificates alone will evidence the Rights.
C-1
<PAGE>
THE RIGHTS ARE NOT EXERCISABLE UNTIL THE DISTRIBUTION DATE and will
expire at the close of business on March 25, 2009, unless earlier redeemed by
the Corporation as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding Common
Shares at a price and on terms which a majority of members of the Board of
Directors (who are not also officers of the Corporation or an Acquiring
Person or affiliate or associate thereof) determines to be adequate and in
the best interests of the Corporation and its shareholders, other than such
Acquiring Person, its affiliates and associates (a "Permitted Offer"), each
holder of a Right will thereafter have the right (the "Flip-In Right") to
receive upon exercise the number of Common Shares (or, in certain
circumstances, one one-hundredths of a share of Preferred Shares or other
securities of the Corporation) having a market value (immediately before such
triggering event) equal to two times the exercise price of the Right. At
such time, all Rights that are beneficially owned by the Acquiring Person or
any affiliate, associate or transferee thereof will be null and void.
In the event that, at any time following the Shares Acquisition Date,
(i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately before the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power are sold or transferred, in either case
with or to an Acquiring Person or any affiliate or associate or any other
person in which such Acquiring Person, affiliate or associate has an interest
or any person acting on behalf of or in concert with such Acquiring Person,
affiliate or associate, or, if in such transaction all holders of Common
Shares are not treated alike, then each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have
the right (the "Flip-Over Right") to receive, upon exercise, common shares of
the acquiring company having a value equal to two times the exercise price of
the Right. The holder of a Right will continue to have the Flip-Over Right
only to the extent that the Flip-In Right has not previously been exercised.
The Purchase Price payable and the number of Preferred Shares, Common
Shares or other securities issuable upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price (or conversion price as the case may be), less than the then current
market price of the Preferred Shares or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, before the Distribution Date.
C-2
<PAGE>
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but, if greater, will be
entitled to an aggregate dividend per share of 100 times the dividend
declared per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a minimum preferential liquidation
payment of $100 per share; thereafter, and after the holders of the Common
Shares receive a liquidation payment of $1.00 per share, the holders of the
Preferred Shares and the holders of the Common Shares will share the
remaining assets in the ratio of 1 to 1 (as adjusted) for each Preferred
Share and Capital Share so held, respectively. Finally, in the event of any
merger, consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive 100 times the
amount received per Common Share. These rights are protected by customary
antidilution provisions. In the event that the amount of accrued and unpaid
dividends on the Preferred Shares is equivalent to six full quarterly
dividends or more (whether or not consecutive), the holders of the Preferred
Shares shall have the right, voting as a class, to elect two directors in
addition to the directors elected by the holders of the Common Shares until
all cumulative dividends on the Preferred Shares have been paid through the
last quarterly dividend payment date or until non-cumulative dividends have
been paid regularly for at least one year.
With certain exceptions, no adjustment to the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other
than fractions which are one one-hundredth or integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the
Corporation, be evidenced by depositary receipts) and in lieu thereof, a
payment in cash will be made based on the market price of the Preferred
Shares on the last Trading Day (as defined in the Rights Agreement) before
the date of exercise.
At any time before the earlier to occur of (i) a person becoming an
Acquiring Person, (ii) the expiration of the Rights, or (iii) in certain
circumstances, after the Shares Acquisition Date, the Corporation may redeem
all but not less than all of the Rights at a price of $.0001 per Right (the
"Redemption Price") which redemption shall be effective upon the action of
the Board of Directors.
All of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Corporation before the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board in order to cure any ambiguity, defect or inconsistency, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, subject to certain
limitations, to shorten or lengthen any time period under the Rights
Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Corporation, including, without limitation,
the right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to shareholders of the Corporation, shareholders
may, depending upon the circumstances, recognize taxable income should the
Rights become exercisable or upon the occurrence of certain events thereafter.
C-3
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A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated March 15, 1999. A copy of the Rights Agreement is available free of
charge from the Corporation. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
C-4
