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UGI CORPORATION
and
MELLON BANK (EAST) N.A.
Rights Agent
Rights Agreement
Dated as of April 29, 1986
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TABLE OF CONTENTS
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Section 1. Certain Definitions................................................. 1
Section 2. Appointment of Rights Agent......................................... 3
Section 3. Issue of Right Certificates......................................... 3
Section 4. Form of Right Certificates.......................................... 5
Section 5. Countersignature and Registration................................... 5
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates............. 6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....... 7
Section 8. Cancellation and Destruction of Right Certificates.................. 8
Section 9. Reservation and Availability of Capital Stock....................... 9
Section 10. Preference Shares Record Date....................................... 10
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights.................................................... 10
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......... 18
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power............................................................... 18
Section 14. Additional Covenants................................................ 20
Section 15. Fractional Rights and Fractional Shares............................. 20
Section 16. Rights of Action.................................................... 21
Section 17. Agreement of Right Holders.......................................... 22
Section 18. Right Certificate Holder Not Deemed a Shareholder................... 22
Section 19. Concerning the Rights Agent......................................... 22
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<TABLE>
<S> <C>
Section 20. Merger or Consolidation or Change of Name of Rights Agent........... 23
Section 21. Duties of Rights Agent.............................................. 23
Section 22. Change of Rights Agent.............................................. 25
Section 23. Issuance of New Right Certificates.................................. 26
Section 24. Redemption and Termination.......................................... 26
Section 25. Notice of Certain Events............................................ 27
Section 26. Notices............................................................. 28
Section 27. Supplements and Amendments.......................................... 28
Section 28. Determination and Actions by the Board of Directors, etc............ 29
Section 29. Successors.......................................................... 29
Section 30. Benefits of this Agreement.......................................... 29
Section 31. Severability........................................................ 29
Section 32. Governing Law....................................................... 29
Section 33. Counterparts........................................................ 29
Section 34. Descriptive Headings................................................ 30
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RIGHTS AGREEMENT
----------------
Agreement, dated as of April 29, 1986, between UGI CORPORATION, a
Pennsylvania corporation (the "Company"), and MELLON BANK (EAST) N.A., a
national bank (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one right (a "Right") for each share of Common Stock, $4.50 par
value, of the Company ("Common Share") outstanding or held in the Company's
treasury at the close of business on May 19, 1986 (the "Record Date") and has
authorized the issuance of one Right for each Common Share that shall become
outstanding between the Record Date and the earlier of the Distribution Date and
the Expiration Date (as such terms are defined in Sections 3 and 7 hereof), each
Right representing the right to purchase one one-hundredth of a share of Series
A Junior Participating Preference Stock, without par value, of the Company
("Preference Share") upon the terms and subject to the conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
-------------------
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of shares of the Company which
entitle the holder to cast 20% or more of the votes that all shareholders of the
Company would be entitled to cast generally in the election of directors, but
shall not include the Company or any of its Subsidiaries (as such term is
hereinafter defined), or any employee benefit plan of the Company or any of its
Subsidiaries or an entity holding Common Shares for or pursuant to the terms of
any such plan.
(b) "Affiliate", "Associate" and "control" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only 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 at any time prior to the occurrence of a Triggering Event
(as such term is hereinafter defined), but thereafter including Rights
acquired from and after the Distribution Date (as
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defined in Section 3(a) below) other than Rights acquired pursuant to
Sections 3(a), 11(i) and 23 hereof), 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;
(ii) which such Person or any of such Person's Affiliates
or Associates directly or indirectly, has the right to vote or to
dispose of or "beneficial ownership" (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act) of,
including 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 pursuant to this
subparagraph (ii) if the agreement, arrangement or understanding to
vote such security (A) arises solely from a revocable proxy given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (B) is not also then reportable on
Schedule 13D 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 for the purpose of acquiring,
holding, voting (other than pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this paragraph (c)) or
disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the Commonwealth of Pennsylvania are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Philadelphia time, on such date; provided, however, that if such date is not a
-------- -------
Business Day it shall mean 5:00 P.M., Philadelphia time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
the shares of Common Stock of the Company. At the date hereof, the par value of
such Common Shares is $4.50 per share. "Common Shares" when used with reference
to any Person other than the Company shall mean the capital stock or other
equity securities or equity interests of such Person with the greatest voting
power or other power to control or direct the management of such Person, or, if
such Person is a Subsidiary of another Person, such capital stock or other
equity securities or equity interests of the Person which ultimately controls
such first-mentioned Person.
(g) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Company, while such Person is a member of the Board, who is not
an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, and
was a member of the Board prior to the date of
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this Agreement, or (ii) any Person who subsequently becomes a member of the
Board, while such Person is a member of the Board, who is not an acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or approved by a
majority of the Continuing Directors.
(h) "Person" shall mean any individual, firm, corporation,
partnership, limited partnership or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(i) "Preference Shares" shall mean shares of Series A Junior
Participating Preference Stock, without par value, of the Company.
(j) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include a report
filed pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(k) "Subsidiary" of a Person shall mean (i) any Person of which a
majority of any class equity securities or other equity interests is
beneficially owned, directly or indirectly, by such Person and (ii) any Person
that such Person otherwise controls.
(l) "Triggering Event" shall mean any event described in Sections
11(a)(ii)(A), (B) or (C) or 13(a) hereof.
Where reference is made in this Agreement to sections of, and the
General Rules and Regulations under, the Securities Exchange Act of 1934, such
reference shall mean such sections and rules as amended from time to time and
any successor provisions thereto.
Section 2. Appointment of Rights Agent. The Company hereby appoints
---------------------------
the Rights Agent to act as agent for the Company and the holders of the Rights
in accordance with the terms and Conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such Co-
Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates.
---------------------------
(a) Until the earlier of (i) the close of business on the tenth day
after the Shares Acquisition Date or (ii) the close of business on the tenth day
after the date of the commencement of, or first public announcement of the
intent of any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or any
entity holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer upon consummation of which any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such Plan) would beneficially
own shares of the Company which
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entitle the holder to cast 30% or more of the votes which all shareholders of
the Company would be entitled to cast generally in the election of directors
(the earlier of (i) and (ii) being herein referred to as the "Distribution
Date"), (x) the Rights will be represented (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates for Common
Shares shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the Rights will be transferable only in connection with
the transfer of Common Shares. As soon as practicable after the Distribution
Date, the Rights Agent will send, by first-class, insured, 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
Company, a Right Certificate, in substantially the form of Exhibit A hereto (a
"Right Certificate"), evidencing one Right for each Common Share so held,
subject to adjustment as provided herein. As of and after the Distribution Date,
the Rights will be represented solely by such Right Certificates.
(b) The Company will send a copy of a Summary of Rights to Purchase
Preference Stock, in substantially the form attached hereto as Exhibit B (the
"Summary of Rights"), by first-class, postage prepaid mail, to each record
holder of Common Shares as of the close of business on the Record Date at the
address of such holder shown on the records of the Company. Until the
Distribution Date, the registered holders of the Common Shares shall also be the
registered holders of the Rights. Until the earlier of the Expiration Date (as
such term is defined in Section 7 hereof) or the Distribution Date, the transfer
of any certificate for Common Shares, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights.
(c) Certificates for Common Shares which are issued after the Record
Date but prior to the earlier of the Distribution Date or the Expiration Date
shall have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate represents certain Rights as set forth in a Rights
Agreement between UGI Corporation and Mellon Bank (East) N.A. dated as
of April 29, 1986 (the "Rights Agreement"), the terms of which are
incorporated herein by reference and a copy of which is on file at the
principal executive offices of UGI Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be represented by separate certificates and will no longer be
represented by this certificate. UGI Corporation 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, Rights beneficially owned by Acquiring Persons and
their Affiliates and Associates (as defined in the Rights Agreement)
and any subsequent holder may become null and void.
Until the earlier of the Expiration Date and the Distribution Date, the transfer
of any such certificate shall also constitute the transfer of the Rights.
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Section 4. Form of Right Certificates.
--------------------------
(a) The Right Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse thereof) shall be in substantially
the form set forth in Exhibit A hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this 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 23 hereof, the
Right Certificates, whenever issued, shall be dated as of the Record Date, and
on their face shall entitle the holders thereof to purchase such number of
Preference Shares as shall be set forth therein at the price per share set forth
therein (the "Purchase Price"), but the number of such shares and the Purchase
Price shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Sections 3(a), 11(i) or
23 hereof that represents Rights beneficially owned by: (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which is part of a plan, arrangement or understanding which has a primary
purpose or effect of avoidance of Section 7(e) hereof, and any Right Certificate
issued pursuant to Sections 6 or 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 may become void in the circumstances
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration. The Right Certificates
---------------------------------
shall be executed on behalf of the Company by its Chairman of the Board,
President or any Vice President, either manually or by facsimile signature, and
have affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
of the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered by the Company with the same
5
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force and effect as though the person who signed such Right Certificates
had not ceased to be such officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any person who, at the actual
date of the execution of such Right Certificate, shall be a proper officer
of the Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer.
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 of Right Certificates upon exercise or transfer, 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 date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
-----------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
---------------------------------------------------------------------
to the provisions of Sections 4(b), 7(e) and 15 hereof, at any time after the
close of business on the Distribution Date, and at or prior to the close of
business on the Expiration Date, any Right Certificate or Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
Preference Shares (or, following a Triggering Event, Common Shares, other
securities or property, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the principal office of the Rights Agent. Neither
the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have 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 Company shall reasonably request. Thereupon the
Rights Agent shall, subject to Sections 4(b) and 7(e) hereof, countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
Upon receipt by the Company 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 Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
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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 including, without limitation, the restrictions on exercise set
forth in Sections 9(c), 11(a)(iii) and 24(a) hereof) in whole or in part at any
time after the Distribution Date upon surrender of the Right Certificate, with
the form of election to purchase on the reverse side thereof duly executed, to
the Rights Agent at the principal office or offices of the Rights Agent
designated for that purpose, together with payment of the Purchase Price for the
Preference Shares (or other securities or property as the case may be) as to
which the Rights are exercised, at or prior to the earlier of (i) the close of
business on April 29, 1996 (the "Final Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 24 hereof (such earlier
time being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a Preference
Share pursuant to the exercise of a Right shall initially be $75, shall be
subject to adjustment from time to time as provided in Sections 11 and 13 hereof
and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable transfer tax in cash, or by certified check or bank draft
payable to the order of the Company, the Rights Agent shall thereupon promptly
(i) requisition from any transfer agent of the Preference Shares (or make
available, if the Rights Agent is the transfer agent) certificates for the
number of Preference Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 15, (iii) promptly
after receipt of such certificates, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is obligated to
issue other securities (including Common Shares) of the Company, pay cash or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash or other
property are available for the distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
countersigned by the Rights Agent and delivered to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to the provisions
of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the occurrence of a Triggering Event, any Rights beneficially owned by
(i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring
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Person (or such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which is part of a plan, arrangement or understanding which has a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action, and any holder of such Rights shall thereupon have
no rights whatsoever with respect to such rights, whether under any provision of
this Agreement or otherwise, from and after the occurrence of a Triggering
Event. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
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 Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
(g) In the event that the number of Preference Shares which are
authorized by a securities certificate registered by the Pennsylvania Public
Utility Commission under Chapter 19 of the Pennsylvania Public Utility Code are
not sufficient to permit the exercise in full of the Rights in accordance with
this Section 7, the Company shall take the steps provided in Section 11(a)(iii)
hereof with the following substitutions: (i) "Common Shares" shall mean
"Preference Shares" except that in clauses (D) and (xxx) "Common Shares" shall
mean "Common and Preference Shares"; (ii) "Authorization Period" shall mean
within 90 days of the Distribution Date; and (iii) "Adjustment Shares" shall
mean the number of Preference Shares for which a Right is exercisable.
Section 8. Cancellation and Destruction of Right Certificates. All
--------------------------------------------------
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
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Section 9. Reservation and Availability of Capital Stock.
---------------------------------------------
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preference Shares or
authorized and issued shares of Preference Shares held in its treasury, the
number of shares of Preference Shares that, except as provided in Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights. Upon the occurrence of a Triggering Event, the Company
covenants and agrees to comply with the foregoing sentence with respect to
Common Shares or other securities for which Rights may be exercised pursuant to
Sections 11(a)(ii) and (iii) hereof.
(b) So long as the Preference Shares (and, following the occurrence of
a Triggering Event, Common Shares or other securities) issuable and deliverable
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the expiration of the Substitution of Value Period (as
such term is defined in Section 11(a)(iii) hereof) or, if the Company
successfully authorizes sufficient additional Common Shares pursuant to Section
11(a)(iii) hereof, as soon as practicable following the expiration of the
Authorization Period, a registration statement under the Securities Act of 1933
(the "Act"), with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date. The Company
will also take such action as may be appropriate under the securities or "blue
sky" laws of the various states. The Company may temporarily suspend, for a
period of time not to exceed 90 days after the expiration of the Substitution of
Value Period or Authorization Period, as the case may be, the exercisability of
the Rights in order to prepare and file such registration statement. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preference Shares (and, following the
occurrence of a Triggering Event, Common Shares or other securities) delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates and
of any certificates for shares of Preference Shares (or Common Shares or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a person other
than, or the
9
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issuance or delivery of the shares of Preference Shares (or Common Shares or
other securities, as the case may be) in respect of a name other than that of,
the registered holder of the Right Certificates evidencing Rights surrendered
for exercise or to issue or deliver any certificates for shares of Preference
Shares (or Common Shares or other securities, as the case may be) in a name
other than that of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Preference Shares Record Date. Each person in whose name
-----------------------------
any certificate for Preference Shares (or Common Shares 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 Preference Shares (or Common
Shares 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
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surrender and payment is a date upon which the Preference Shares (or Common
Shares or other securities, as the case may be) transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preference Shares (or Common Shares or other securities, as the
case may be) transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
-------------------------------------------------------
or Number of Rights. The Purchase Price, the number of 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 Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preference Shares
payable in Preference Shares, (B) subdivide the outstanding Preference
Shares, (C) combine the outstanding Preference Shares into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preference Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e), 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 prior to such date
and at a time when the Preference Shares transfer books of the Company
were open, the holder would have owned
10
<PAGE>
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. 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
prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate
of any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, shall (1) merge with and
into the Company or otherwise combine with the Company and
the Company shall be the continuing or surviving corporation
of such merger or combination and the Common Shares of the
Company shall remain outstanding and unchanged, (2) in one
or more transactions, transfer any assets to the Company in
exchange (in whole or in part) for shares of any class of
equity securities of the Company or any of its Subsidiaries
or for securities exercisable for or convertible into shares
of any class of equity securities of the Company or any of
its Subsidiaries or otherwise obtain from the Company or any
of its Subsidiaries, with or without consideration, any
additional shares of any class of equity securities of the
Company or any of its Subsidiaries or securities exercisable
for or convertible into shares of any class of equity
securities of the Company or any of its Subsidiaries (other
than as part of a pro rata distribution to all holders of
Common Shares), (3) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose
of (in one or more transactions), to, from or with, as the
case may be, the Company or any of its Subsidiaries, assets
on terms and conditions less favorable to the Company or
such Subsidiary than the Company or such Subsidiary would be
able to obtain in arm's-length negotiation with an
unaffiliated third party, other than pursuant to a
transaction set forth in Section 13(a) hereof, (4) sell,
purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of (in one or more
transactions), to, from or with, as the case may be, the
Company or any of its Subsidiaries (other than incidental to
the lines of business, if any, engaged in as of the date
hereof between the Company and such Acquiring Person or
Associate or Affiliate) assets having an aggregate fair
market value of more than $5,000,000, other than pursuant to
a transaction set forth in Section 13(a) hereof, (5) receive
any compensation from the Company or any of its Subsidiaries
other than compensation for full-time employment as a
regular employee at rates in accordance with the Company's
and such Subsidiary's past practices, or (6) receive the
benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its
Subsidiaries, or
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<PAGE>
(B) any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan), alone or together with its Affiliates
and Associates, shall become the Beneficial Owner of shares of
the Company which entitle the holder to cast 40% or more of the
votes that all shareholders of the Company would be entitled to
cast generally in the election of directors, other than pursuant
to any transaction set forth in Section 13(a) hereof, or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any
merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions
(whether or not with or into or otherwise involving an Acquiring
Person or any Affiliate or Associate thereof) which has the
effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of
equity securities or of securities exercisable for or convertible
into equity securities of the Company or any of its Subsidiaries
which is directly or indirectly beneficially owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring
Person, then, and in each such case, proper provision shall be
made so that each holder of a Right, except as provided below and
in Section 7(e), shall thereafter have a right to receive, upon
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of Preference Shares,
such number of Common Shares as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then
number of one one-hundredth of a Preference Share for which a
Right is then exercisable and dividing that product by (y) 50% of
the current market price per Common Share (determined pursuant to
Section 11(d)) on the date of such first occurrence (such number
of shares, the "Adjustment Shares").
(iii) In the event that the number of Common Shares which (x)
are authorized by the Company's articles but not outstanding or
reserved for issuance for purposes other than upon exercise of the
Rights or (y) are authorized by a securities certificate registered by
the Pennsylvania Public Utility Commission under Chapter 19 of the
Pennsylvania Public Utility Code, are not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be
necessary (unless the Board of Directors of the Company shall
determine in good faith that no such action would be successful (the
"Authorization Determination")) to have authorized additional Common
Shares for issuance upon exercise of the Rights; provided, however, if
--------
the Company is unable to cause the authorization of a sufficient
number of additional Common Shares within 90 days of the first
occurrence of an event set forth in Section 11(a)(ii)(A), (B), and (C)
hereof, (such
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<PAGE>
90 day period, the "Authorization Period"), then, in the event the
rights become so exercisable, the Company, with respect to each Right
and to the extent necessary and permitted by applicable law and any
agreements or instruments in effect on the Shares Acquisition Date to
which the Company or any of its Subsidiaries is a party which remain
in effect following such first occurrence, shall, upon the exercise of
any such Right, make adequate provision to: (A) pay an amount in cash
equal to, or issue Common Shares having an aggregate current market
price equal to, the excess of (1) the product of (xx) the number of
Adjustment Shares, multiplied by (yy) the current market price
(determined pursuant to Section 11(d) hereof) per Common Share on the
date of the first occurrence of an event set forth in Section
11(a)(ii)(A), (B) and (C) above (such product, the "Current Value"),
over (2) the Purchase Price, in lieu of issuing Common Shares and
requiring payment therefor, or (B) issue debt or equity securities
(other than Common Shares) having a value equal to the Current Value,
where the value of such securities shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors
of the Company, and requiring the payment of the Purchase Price, or
(C) issue a number of, or units of, Preference Shares equal to the
number of Adjustment Shares where the Board of Directors of the
Company shall have deemed such shares or units to have the same value
as the Common Shares (a "common stock equivalent"), and requiring the
payment of the Purchase Price, or (D) deliver any combination of cash,
property, Common Shares, common share equivalents or other securities
having the requisite value as determined by a nationally recognized
investment banking firm selected by the Board of Directors of the
Company and requiring the payment of all or any requisite portion of
the Purchase Price; provided further, however, if the Company shall
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not have made adequate provision to deliver value pursuant to clauses
(A), (B), (C), or (D) above within 30 days following the earlier of
(i) the date of the Authorization Determination, and (ii) the
expiration of the Authorization Period (such 30-day period, the
"Substitution of Value Period"), then the Company shall be obligated
to deliver cash in accordance with clause (A) above. To the extent
that the Company determines that some action need be taken pursuant to
clauses (A), (B), (C), or (D) of the first proviso to the first
sentence of this Section 11(a)(iii), the Company (xxx) shall provide,
subject to Section 7(e) hereof, that all outstanding Rights shall be
exercisable for the same combination of cash, property, Common Shares,
common share equivalents and/or other securities, and (yyy) may
suspend the exercisability of the Rights until the expiration of the
Substitution of Value Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first proviso and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(b) In the case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preference Shares entitling
them (for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preference Shares (or securities convertible into
Preference Shares) at a price per Preference Share (or having a
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<PAGE>
conversion price per Preference Share, if a security convertible into Preference
Shares) less than the current per share market price of the Preference Shares
(as defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preference Shares outstanding on such
record date plus the number of Preference Shares which the aggregate offering
price of the total number of Preference 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 market price and the denominator of
which shall be the number of Preference Shares outstanding on such record date
plus the number of additional Preference Shares to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Preference Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not so
issued, the 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 Company shall fix a record date for the making of a
distribution to all holders of Preference Shares (including any such
distribution made in connection with a merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular periodic cash dividend out of the earnings or retained
earnings of the Company or a dividend payable in Preference Shares) or rights,
options or warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price per
Preference Share (as defined in Section 11(d)) on such record date, less the
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of indebtedness so to be
distributed in respect of one Preference Share or of such rights, options or
warrants applicable to one Preference Share and the denominator of which shall
be such current market price per Preference Share. 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, other than
computations made pursuant to Section 11(a)(iii)(A) hereof, the
"current market price" per Common Share on any date shall be deemed to
be the average of the daily closing prices per Common Share for 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii)(A) hereof, the "current market price"
per Common Share on any date shall be deemed to be the average of the
daily closing prices per Common Share for ten consecutive Trading Days
14
<PAGE>
immediately following such date; provided, however, that in the event
--------
that the current market price per Common Share is determined during a
period following the announcement by the issuer of such Common Shares
of (A) a dividend or distribution on such Common Shares payable in
Common Shares or securities convertible into Common Shares (other than
the Rights), or (B) any subdivision, combination or reclassification
of such Common Shares, and prior to the expiration of the requisite 30
Trading Day or ten Trading Day period, as set forth above, 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 market price" shall be properly adjusted
to take into account ex-dividend trading. The closing price for each
day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if
the Common Shares 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 Common Shares are
listed or admitted to trading or, if the Common Shares are listed or
admitted to trading or, if the Common Shares 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 the
National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or such other system then in use, or, if on any such
date the Common Shares 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 Common Shares
selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Shares, the fair
value of such shares on such date as determined in good faith by the
Board of Directors of the Company shall be used. The term "Trading
Day" shall mean a day on which the principal national securities
exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are
not listed or admitted to trading on any national securities exchange,
a Business Day.
(ii) For the purpose of any computation hereunder, the "current
market price" per Preference Share shall be determined in the same
manner as set forth above for a Common Share in clause (i) of this
Section 11(d) (other than the next to last sentence thereof). If the
current market price per Preference Share cannot be determined in the
manner provided above or if the Preference Shares are not publicly
held or listed or traded in a manner described in clause (i) of this
Section 11(d), the "current market price" per Preference Share shall
be conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Shares
occurring after the date of this Agreement) multiplied by the current
market price per Common Share. If neither the
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<PAGE>
Common Shares nor the Preference Shares are publicly held or so listed
or traded, "current market price" per share shall mean the fair value
per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 11(e)
-------- -------
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Sections 11(a)
or 13(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Preference Shares, thereafter the
number of such 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 shares contained
in Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) and the
provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preference
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Preference Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares (calculated to
the nearest ten-thousandth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Preference Shares issuable 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 Preference Shares for which a
Right was exercisable for the number of Preference Shares for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately
16
<PAGE>
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 15 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Preference Shares issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated value, if any, of the Preference Shares
(or other shares of capital stock) issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preference Shares (or such other shares of capital
stock) at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preference Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preference Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
--------
however, that the Company shall deliver to such holder a due 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) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the
17
<PAGE>
Preference Shares, (ii) issuance wholly for cash of any of the Preference Shares
at less than the current market price, (iii) issuance wholly for cash of
Preference Shares or securities which by their terms are convertible into or
exchangeable for Preference Shares, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Preference Shares shall not be taxable to such
shareholders.
(n) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Record Date and prior to
the Distribution Date (i) declare a dividend on the outstanding Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common Shares, (iii)
combine the outstanding Common Shares into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of the outstanding
Common Shares, the number of Rights then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately adjusted
so that the number of Rights following any such event shall equal the result
obtained by multiplying the number of Rights immediately prior to such even by a
fraction the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of Common Shares outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of
----------------------------------------------------
Shares. Whenever an adjustment is made as provided in Sections 11 and 13
------
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preference and 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.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
-------------------------------------------------------
Earning Power.
-------------
(a) In the event that, following the Shares Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the Company)
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such consolidation or
merger, all or part of the outstanding Common Shares shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company), then, and in each
such case, 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 the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid, nonassessable and freely tradeable Common Shares (or
other securities or property as
18
<PAGE>
provided for herein) of the Principal Party (as such term is hereinafter
defined), not subject to any rights of first refusal, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preference Share for which a Right is then
exercisable, and dividing that product by (2) 50% of the current market price
(determined pursuant to Section 11(d)(i) hereof) per Common Share of such
Principal Party on the date of consummation of such consolidation, merger, sale
or transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof (including,
without limitation, the provisions of Section 11(a)(iii) which relate to the
first occurrence of an event set forth in Section 13(a) hereof) shall apply only
to such Principal Party following the first occurrence of an event set forth in
this Section 13(a); 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 its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) "Principal" Party" shall mean
(i) 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 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; 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 such case, (1) if the Common Shares of such
--------
Person are not at such time and have not been continuously over the preceding 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;
and (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.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company 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 further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
19
<PAGE>
(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 will 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 Expiration Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates 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. In the event that one of the
transactions described in Section 13(a) hereof shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii) hereof, the Rights
which have not theretofore been exercised shall thereafter become exercisable in
the manner described in Section 13(a).
Section 14. Additional Covenants.
--------------------
(a) Notwithstanding any other provision of this Agreement, from and
after the Shares Acquisition Date, no adjustment to the Purchase Price, the
number of Preference Shares (or fractions of a Preference Share) for which a
Right is exercisable or the number of Rights outstanding shall be made or be
effective if such adjustment would have the effect of reducing or limiting the
benefits the holders of the Rights would have had absent such adjustment,
including, without limitation, the benefits under Sections 11(a)(ii) and 13,
unless the terms of this Agreement are amended so as to preserve such benefits.
(b) The Company covenants and agrees that, from and after the Shares
Acquisition Date, it shall not engage in any transaction described in clauses
(a), (b) or (c) of the first sentence of Section 13 of this Agreement if at the
time of or after such transaction there are any charter or by-law provisions or
any rights, warrants or other instruments or securities outstanding or
agreements in effect, or any other action taken, which would eliminate or
otherwise diminish the benefits intended to be afforded by the Rights.
(c) The Company covenants and agrees that, from and after the Shares
Acquisition Date, it will not, directly or indirectly, take any action the
purpose or effect of which is to eliminate or otherwise diminish the benefits
intended to be afforded by the Rights.
Section 15. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(n), 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
20
<PAGE>
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
15(a), the current market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. 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 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 no 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 Company. 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 Company shall be
used.
(b) The Company shall not be required to issue fractions of
Preference Shares upon exercise of the Rights or to distribute certificates
which evidence fractional Preference Shares, other than fractions of Preference
Shares which are integral multiples of one one-hundredth of a Preference Share.
In lieu of fractional shares which are not integral multiples, the Company 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 one one-hundredth of a Preference Share. For purposes of
this Section 15(b), the current market value of one one-hundredth of a
Preference Share shall be one one-hundredth of the closing price of a Preference
Share (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of Common Shares upon exercise of the Rights
or to distribute certificates which evidence fractional Common Shares. In lieu
of fractional Common Shares, the Company 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 one
Common Share. For purposes of this Section 15(c), the current market value of
one Common Share shall be the closing price of one Common Share (as determined
pursuant to of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives the right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 15.
Section 16. Rights of Action. All rights of action in respect of
----------------
this
21
<PAGE>
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate without the
consent of the Rights Agent or of the holder of any other Right Certificate,
may, in the holder's own behalf and for the holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, the holder's 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 17. Agreement of Right Holders. Every holder of a Right by
--------------------------
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Shares;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the Common
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary.
Section 18. 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 Preference Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
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 19. Concerning the Rights Agent. The Company agrees to pay
---------------------------
22
<PAGE>
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted 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 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 the Preference Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons.
Section 20. Merger or Consolidation or Change of Name of Rights
----------------------------------------------------
Agent. Any corporation into which the Rights Agent or any successor Rights Agent
-----
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust business of the Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to 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 of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22 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 the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this 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 21. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
23
<PAGE>
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted 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 be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, a Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any adjustment required under the provisions of Sections 11
or 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common or Preference Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether any Common
or Preference Shares will, when so issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
24
<PAGE>
(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 President, a Vice President, the Secretary
or the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 22. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common and Preference Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common and Preference Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), 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 Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or of any state of the United
States so long as such corporation is authorized to do business as a banking
institution in any state, in good standing, which is authorized under such laws
to exercise corporate trust powers and is subject to supervision or examination
by federal or state authority, which has an office, agency or drop in the State
of New York and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a
corporation described in clause (a) of this sentence and controlled by such
corporation. 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;
25
<PAGE>
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
delivery any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common and Preference 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 22, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 23. Issuance of New Right Certificates. Notwithstanding any
----------------------------------
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price per share 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.
Section 24. Redemption and Termination.
--------------------------
(a) The Board of Directors of the Company may, at its option, at any
time prior to 5:00 P.M., Philadelphia time, on the earlier of (i) the close of
business on the tenth day following the Shares Acquisition Date (or, if the
Shares Acquisition Date shall have occurred prior to the Record Date, the close
of the business on the tenth day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at
a redemption price of $.05 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"); provided, however, if the Board of
--------
Directors of the Company authorized redemption of the Rights in either of the
circumstances set forth in clauses (i) and (ii) below, then there must be
Continuing Directors then in office and such authorization shall require the
concurrence of a majority of such Continuing Directors: (i) such authorization
occurs on or after the time a Person becomes an Acquiring Person, or (ii) such
authorization occurs on or after the date of a change (resulting from a proxy or
consent solicitation) in a majority of the directors in office at the
commencement of such solicitation if any Person who is a participant in such
solicitation has stated (or, if upon the commencement of such solicitation, a
majority of the Board of Directors of the Company, have determined in good
faith) that such Person (or any of its Affiliates or Associates) intends to
take, or may consider taking, any action which would result in such Person
becoming an Acquiring Person or which would cause the occurrence of a Triggering
Event unless, concurrent with such solicitation, such Person (or one or more of
its Affiliates or Associates) is making a cash tender offer pursuant to a
Schedule 14D-1 filed with the Securities and Exchange Commission for all
outstanding Common Shares not beneficially owned by such Person (or by its
Affiliates or Associates); provided further, however, that if, following the
-------- -------
occurrence of a Shares Acquisition Date and following the expiration of the
right of redemption hereunder but prior to any Triggering Event, each of the
following shall have occurred and remain in effect: (i) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a number of
shares in a transaction, or series of transactions, which did not result in the
occurrence of a Triggering Event such that such Person
26
<PAGE>
is thereafter a Beneficial Owner of shares of the Company which entitle the
holder to cast 10% or less of the votes that all shareholders of the Company are
entitled to cast generally in the election of directors, (ii) there are no other
Persons, immediately following the occurrence of the event described in clause
(i), who are Acquiring Persons, and (iii) the transfer or other disposition
described in clause (i) above was other than pursuant to a transaction, or
series of transactions, which directly or indirectly involved the Company or any
of its Subsidiaries; then the right of redemption shall be reinstated and
thereafter be subject to the provisions of this Section 24. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable pursuant to Section 11(a)(ii) prior to the expiration of the
Company's right of redemption hereunder.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent 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.
Section 25. Notice of Certain Events. In case the Company shall
------------------------
propose (a) to pay any dividend payable in stock of any class to the holders of
Preference Shares or to make any other distribution to the holders of Preference
Shares (other than a regular periodic cash dividend out of earnings or retained
earnings of the Company) or (b) to offer to the holders of Preference Shares
rights or warrants to subscribe for or to purchase any additional Preference
Shares or shares of stock of any class or any other securities, rights or
options, or (c) effect any reclassification of its Preference Shares (other than
a reclassification involving only the subdivision of outstanding Preference
Shares), or (d) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to, any other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, 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 Preference 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 (a) or (b) above at least 20 days prior to the record date for
determining holders of Preference Shares for purposes of such action, and in the
case of any such other action, at least 20 days prior to the date of the taking
of such proposed action or the date of participation therein by the holders of
Preference Shares whichever shall be the earlier.
27
<PAGE>
In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, (i) the Company 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 shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof and (ii) all references in the preceding paragraph to
Preference Shares shall be deemed thereafter to refer to Common Shares and, if
appropriate, other securities.
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 Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
UGI Corporation
Box 858
Irwin Building, Route 363
Valley Forge, PA 19482
Attention: Secretary
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company 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 Company) as follows:
Mellon Bank (East) N.A.
Four Mellon Bank Center
1421 Chestnut Street, 16th Floor
Philadelphia, PA 19101
Attention: Miss Sally J. Jones
Vice President
Corporate Trusts
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company and the Rights
--------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions
in regard to matters or questions arising hereunder (including but not limited
to extending the period of time during which the Rights may be redeemed,
provided that at the time of such amendment there is no Acquiring Person) which
the
28
<PAGE>
Company and the Rights Agent may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates.
Section 28. Determination and Actions by the Board of Directors, etc.
---------------------------------------------------------
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company (and, where specifically provided for
herein, the Continuing Directors) 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 Company (or, where specifically provided for
herein, the Continuing Directors), 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 a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purpose of clause (ii) below, all omissions with
respect to the foregoing) which are done or made by the Board (or, where
specifically provided for herein, by the Continuing Directors) in good faith,
shall (i) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Right Certificates and all other parties, and (ii) not subject to
the Board or the Continuing Directors 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 Company 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 other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to 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 Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 31. Severability. If any provision of this Agreement is held
------------
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the provisions of this Agreement and the
application of such provision to other persons or circumstances, shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate
-------------
issued hereunder shall be deemed to be a contract made under the laws of the
Commonwealth of Pennsylvania and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 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.
29
<PAGE>
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.
30
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
UGI CORPORATION
By: /s/ James A. Sutton
--------------------------
Title: President
MELLON BANK (EAST) N.A.
By: /s/ S. Jones
--------------------------
Title: Vice President
31
<PAGE>
Exhibit A
---------
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER APRIL 29, 1996 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AT $.05 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED
BY THIS RIGHT CERTIFICATE WERE OR ARE BENEFICIALLY OWNED BY
A PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OF OR
AN ASSOCIATE OF AN ACQUIRING PERSON. THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OF THE RIGHTS
AGREEMENT.]*
Right Certificate
UGI CORPORATION
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of April 29, 1986 (the "Rights Agreement") between UGI
Corporation, a Pennsylvania corporation (the "Company"), and Mellon Bank (East)
N.A. (the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M. (Philadelphia time) on April 29, 1996, at the corporate trust office
of the Rights Agent, or its successors as Rights Agent, in Philadelphia,
Pennsylvania, one one-hundredth of a fully paid, non-assessable share of the
Series A Junior Participating Preference Stock (the "Preference Shares") of the
Company, at a purchase price of $75 per one one-hundredth of a 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 shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of , 198__,
based on the Preference Shares as constituted at such date.
Upon the occurrence of a Triggering 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
_________________
* The portion of the legend in brackets shall be inserted only if applicable.
32
<PAGE>
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, 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 any such Triggering
Event.
As provided in the Rights Agreement, the Purchase Price and the number
of Preference Shares 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.
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 Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the corporate trust office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preference Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.05 per Right.
No fractional Preference Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preference Share), 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 Preference
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
33
<PAGE>
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
34
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ______________ _____, 19___.
ATTEST: UGI CORPORATION
________________________________ By:____________________________
Secretary Title:
Countersigned:
MELLON BANK (EAST) N.A.
By:_____________________________
Authorized Signature
35
<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 Company,
with full power of substitution.
Dated: ____________________, 19___
________________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ________________, 19___
________________________________
Signature
36
<PAGE>
NOTICE
------
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
37
<PAGE>
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To UGI CORPORATION:
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Right Certificate to purchase the Preference Shares
(or such other securities of the Company or of any other person) issuable upon
the exercise of such Rights and requests that certificates for such shares be
issued in the name of:
Please insert social security or other identifying number
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated:__________________, 19___
____________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
Signature Guaranteed:
38
<PAGE>
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:_______________, 19___
_______________________________
Signature
39
<PAGE>
Exhibit B
---------
SUMMARY OF RIGHTS TO PURCHASE PREFERENCE STOCK
On April 29, 1986, the Board of Directors of UGI Corporation (the
"Company") declared a dividend distribution of one right (a "Right") for each
outstanding share of Common Stock, $4.50 par value (the "Common Shares"), of the
Company. The distribution is payable on May 19, 1986 to the shareholders of
record at the close of business on that date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of share of
Series A Junior Participating Preference Stock, without par value (the
"Preference Shares") at a price of $75 per one one-hundredth of share, subject
to adjustment (the "Purchase Price"). The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the Company
and Mellon Bank (East) N.A., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten days following a public
announcement that a person or group of affiliated or associated persons has
acquired beneficial ownership (as defined in the Rights Agreement) of 20% or
more of the outstanding voting shares (an "Acquiring Person") or (ii) ten days
following the commencement of or announcement of an intention to make a tender
offer or exchange offer upon consummation of which a person or a group would
beneficially own 30% or more of the outstanding voting shares (the earlier of
such dates being called the "Distribution Date"), the Rights will be
represented, with respect to any of the Common Share certificates outstanding as
of May 19, 1986, by such Common Share certificate with a copy of this Summary of
Rights attached thereto. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Common
Shares. Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Share certificates issued after May 19, 1986 upon transfer
or new issuance of the 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 transfer of any certificates for
Common Shares outstanding as of May 19, 1986, even without a copy of this
Summary of Rights 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
such separate Right Certificates alone will evidence the rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on April 29, 1996, unless earlier redeemed by the Company as
described below.
In the event that, at any time following the Distribution Date, (i)
the Company is the surviving corporation in a merger with an Acquiring Person
and its Common Shares are not changed or exchanged, (ii) a Person (other than
the Company and its affiliates) becomes the beneficial owner of more than 40% of
the then outstanding voting shares, (iii) an Acquiring Person engages in one or
more self-dealing transactions as set forth in Section 11(a)(ii)(A) of the
Rights Agreement, or (iv) during such time as there is an Acquiring Person, one
of the events set forth in Section 11(a)(ii)(C) occurs (e.g., a reverse stock
----
split), the Rights Agreement provides that proper provision shall be made so
that each holder of a Right will thereafter have the right to
40
<PAGE>
receive, upon exercise, Common Shares (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two (2)
times the exercise price of the Right.
In the event that, at any time following the Distribution Date, (i)
the Company engages in a merger or other business combination transaction in
which the Company is not the surviving corporation, (ii) the Company engages in
a merger or other business combination transaction with another person in which
the Company is the surviving corporation, but in which its Common Shares are
changed or exchanged, or (iii) 50% or more of the Company's assets or earning
power are sold or transferred, the Rights Agreement provides that proper
provision shall be made so that each holder of a Right shall thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, common stock of the acquiring company having a value equal to two
(2) times the exercise price of the Right. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph and
the preceding paragraph (the "Triggering Events"), any Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person shall immediately become null and
void.
The Purchase Price payable and the number of Preference Shares or
other securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preference
Shares, (ii) upon the grant to holders of the Preference Shares of certain
rights, options or warrants to subscribe for Preference Shares or convertible
securities at less than the then current market price of the Preference Shares
or (iii) upon the distribution to holders of the Preference Shares of evidences
of indebtedness or assets (excluding regular periodic cash dividends out of
earnings or retained earnings or dividends payable in Preference Shares (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued and in lieu thereof,
an adjustment in cash will be made based on the market price of the Preference
Shares on the last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of
$.05 per Right (the "Redemption Price") as follows: (1) By the Board as a whole
at any time prior to the earlier of: (A) the date that a person or group
acquires beneficial ownership of 20% or more of the outstanding voting shares,
or (B) the date of a change in the majority of the Board resulting from a proxy
or consent solicitation if the solicitor (or any participant) indicates an
intention to become an Acquiring Person or to cause the occurrence of a
Triggering Event; and (2) By the Company with the concurrence of a majority of
the Continuing Directors at any time from the first occurrence of clause (A) or
(B) above until ten days after the Shares Acquisition Date or the Record Date,
whichever is later. Thereafter, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial ownership to 10% or
less of the outstanding voting shares in a transaction or series of transactions
not involving the Company. Immediately upon the action of the Board of Directors
of the Company, with, where required, the concurrence of a majority of the
Continuing Directors, ordering redemption of the Rights, the
41
<PAGE>
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or a representative of an Acquiring Person or
of an affiliate or associate of an Acquiring Person.
Until a Right is exercised, the Right will confer upon the holder
thereof no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, except that any
such amendment may not adversely affect the interests of the holders of Rights.
Provided there is no Acquiring Person, such amendment may extend the period of
time during which the Rights may be redeemed.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company upon
written request to the Company at its principal place of business. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated herein
by reference.
42
<PAGE>
AMENDMENT NO. 1 TO
RIGHTS AGREEMENT
----------------
The date of this AMENDMENT NO. 1 is as of May 22, 1990. The parties are UGI
Corporation, a Pennsylvania corporation (the "Company"), and Mellon Bank (East)
N.A., a national bank (the "Rights Agent").
BACKGROUND
----------
The parties to this Amendment No. 1 entered into a Rights Agreement dated
as of April 29, 1986 (the "Rights Agreement"). Section 27 of the Rights
Agreement provides that the Company and the Rights Agent may amend the Rights
Agreement without the approval of any holders of Right Certificates in order to
cure any ambiguity, to correct or supplement defective or inconsistent
provisions or to make any other necessary or desirable provisions in regard to
questions thereunder which do not adversely affect the interests of the holders
of Right Certificates. Having determined that subsection 11(n) of the Rights
Agreement is defective, the Company and the Rights Agent desire to amend that
subsection as provided in this Amendment No. 1.
NOW THEREFORE, intending to be legally bound, the parties agree as follows:
Section 1. Amendment and Restatement. Subsection 11(n) of the Rights
--------------------------
Agreement is hereby amended and restated in its entirety as follows:
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Record Date and prior to the
Distribution Date (i) declare a dividend on the outstanding Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common Shares, (iii)
combine the outstanding Common Shares into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of the outstanding
Common Shares, the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights associated
with each Common Share following any such event shall equal the result obtained
by multiplying the number of Rights associated with each Common Share
immediately prior to such event by a fraction the numerator of which shall be
the total number of Common Shares outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of Common Shares outstanding immediately following the occurrence of such event.
Section 2. Ratification. All other terms and conditions of the Rights
------------
Agreement, including all Exhibits to the Rights Agreement, shall remain
unaffected by this Amendment No. 1 and are ratified and confirmed.
Section 3. Definitions. Capitalized terms used in this Amendment No. 1
-----------
but not defined shall have the meanings ascribed to those terms in the Rights
Agreement.
1
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be duly
executed as of the day and year first above written.
UGI CORPORATION
Date: May 23, 1990 By: /s/ Charles L. Ladner
---------------------------
Title: Senior Vice President
MELLON BANK (EAST) N.A.
Date: May 22, 1990 By: /s/ S. Jones
----------------------------
Title: Vice President
2
<PAGE>
AMENDMENT NO. 2 TO
RIGHTS AGREEMENT
----------------
The date of this AMENDMENT NO. 2 is as of April 30, 1991. The parties are
UGI Corporation, a Pennsylvania corporation (the "Company"), and Mellon Bank
N.A., successor to Mellon Bank (the "Rights Agent").
BACKGROUND
----------
The parties to this Amendment No. 2 entered into a Rights Agreement dated
as of April 29, 1986, as amended by Amendment No. 1 dated as of May 22, 1990
(the "Rights Agreement"). Section 27 of the Rights Agreement provides that the
Company and the Rights Agent may amend the Rights Agreement without the approval
of any holders of Right Certificates in order to cure any ambiguity, to correct
or supplement defective or inconsistent provisions or to make any other
necessary or desirable provisions in regard to questions thereunder which do not
adversely affect the interests of the holders of Right Certificates. Having
determined that subsection 1(c) of the Rights Agreement is defective, the
Company and the Rights Agent desire to amend that subsection as provided in this
Amendment No. 2.
NOW THEREFORE, intending to be legally bound, the parties agree as follows:
Section 1. Amendment and Restatement. Subsection 1(c) of the Rights
-------------------------
Agreement is hereby amended by adding the following proviso to the end thereof:
Provided, however, that nothing in this Subsection 1(c) shall cause a
person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "Beneficially Own," any securities acquired
through such person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such
acquisition.
Section 2. Ratification. All other terms and conditions of the Rights
------------
Agreement, including all Exhibits to the Rights Agreement, shall remain
unaffected by this Amendment No. 2 and are ratified and confirmed.
Section 3. Definitions. Capitalized terms used in this Amendment No. 2
-----------
but not defined shall have the meanings ascribed to those terms in the Rights
Agreement.
1
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment No. 2 to be duly
executed as of the day and year first above written.
UGI CORPORATION
Date: June 3, 1991 By: /s/ Charles L. Ladner
---------------------------------
Title: Senior Vice President
MELLON BANK N.A.
Date: June 3, 1991 By: /s/ Sally J. Jones
----------------------------------
Title: Vice President
2
<PAGE>
AMENDMENT NO. 3 TO
RIGHTS AGREEMENT
----------------
The date of this Amendment No. 3 is as of April 7, 1992. The parties are
UGI Corporation, a Pennsylvania corporation (the "Company"), and Mellon Bank
N.A., a national bank and successor to Mellon Bank (East) N.A. (the "Rights
Agent").
BACKGROUND
----------
The parties to this Amendment No. 3 entered into a Rights Agreement dated
as of April 29, 1986, as amended by Amendments Nos. 1 and 2 thereto dated as of
May 22, 1990 and as of April 30, 1991, respectively (as so amended, the "Rights
Agreement"). Section 27 of the Rights Agreement provides that the Company and
the Rights Agent may amend the Rights Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement defective or inconsistent provisions or to make any other necessary
or desirable provisions in regard to questions thereunder which do not adversely
affect the interests of the holders of Right Certificates. The Company is
proposing to create a holding company structure through a merger with a
subsidiary whereby the holders of Common Shares of the Company will become the
holders of Common Shares of a second subsidiary which will become the parent of
the Company holding all of its Common Shares. Having determined that the Rights
Agreement is defective in not providing for such a transaction, the Company and
the Rights Agent desire to add a new subsection 13(d) as provided in this
Amendment No. 3.
NOW, THEREFORE, the parties agree as follows:
Section 1. Amendment. The Rights Agreement is hereby amended to add
----------
subsection 13(d) as follows:
(d) In the event that the Company shall merge with and into a Subsidiary
of the Company and in connection with such merger all of the outstanding
Common Shares of the Company shall be changed into or exchanged for Common
Shares of another corporation (the "New Parent"), then the New Parent shall
either (x) be liable for, and assume, all the obligations and duties of the
Company pursuant to this Agreement in which case the term "Company" herein
shall thereafter be deemed to refer only to the New Parent, or (y) enter
into a new Rights Agreement containing all of the terms and conditions of
this Agreement and issue new rights thereunder in substitution for the
rights held hereunder so that the holders of Common Shares of the New
Parent shall have the same rights with respect to the New Parent as the
holders of the Common Shares of the Company had immediately prior to such
merger.
The Company shall not consummate any such merger unless prior thereto the
Company and the New Parent shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in this
paragraph or the New Parent shall have entered into a new Rights Agreement
in accordance herewith.
<PAGE>
The provisions of this paragraph shall similarly apply to successive
mergers with Subsidiaries.
Section 2. Ratification. All other terms and conditions of the Rights
-------------
Agreement, including all Exhibits to the Rights Agreement, shall remain
unaffected by this Amendment No. 3 and are ratified and confirmed.
Section 3. Definitions. Capitalized terms used in this Amendment No. 3
------------
but not defined shall have the meanings ascribed to those terms in the Rights
Agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 3 to be duly
executed as of the day and year first above written.
UGI CORPORATION
Date: April 7, 1992 By: /s/ George W. Westernman
-------------------------------
Title: Vice President
MELLON BANK N.A.
Date: April 7, 1992 By: /s/ S. Jones
-------------------------------
Title: Vice President
2
<PAGE>
AMENDMENT NO. 4 TO
RIGHTS AGREEMENT
The date of this Amendment No. 4 is as of April 17, 1996. The parties are
UGI Corporation, a Pennsylvania corporation (the "Company'), formerly New UGI
Corporation, and successor to UGI Utilities, Inc. ("UGI"), formerly UGI
Corporation, and Mellon Bank N.A., a national bank (the "Rights Agent"), and
successor to Mellon Bank (East) N.A. ("Mellon").
BACKGROUND
UGI and Mellon entered into a Rights Agreement dated as of April 29, 1986,
which was amended by Amendment Nos. 1, 2, and 3 dated as of May 22, 1990, April
30, 1991, and April 7, 1992, respectively (as so amended, the "Rights
Agreement").
Pursuant to an Assumption Agreement dated April 7, 1992 between the Company
and Mellon, the Company assumed and agreed to discharge and perform all
liabilities and obligations of UGI under the Rights Agreement. The effective
time of such assumption was April 10, 1992, the effective time of the Plan of
Merger which restructured UGI into a holding company system. As part of the
restructuring, holders of UGI Common Stock became holders of the Company's
Common Stock, as permitted by paragraph (d) of Section 13 of the Rights
Agreement, added by Amendment No. 3 thereto.
Section 27 of the Rights Agreement provides that the Company and the Rights
Agent may amend the Rights Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement any
defective or inconsistent provisions or to make any other necessary or desirable
provisions in regard to matters or questions thereunder which do not adversely
affect the interests of the holders of Right Certificates. The Company has
approved an extension of the term of the Rights until April 29, 2006 and a
Purchase Price of $120 per one one-hundredth of a Preference Share. Having
determined that delaying the Final Expiration Date and setting a Purchase Price
of $120 is desirable, the Company and the Rights Agent hereby amend the Rights
Agreement as provided in this Amendment No. 4.
NOW THEREFORE, the parties agree as follows:
Section 1. Amendment to Section 7. Paragraphs (a) and (b) of Section 7 of
the Rights Agreement, "Exercise of Rights; Purchase Price; Expiration Date of
Rights," are hereby amended to read in their entirety as follows:
(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 including, without limitation, the
restrictions on exercise set forth in Sections 9(c), 11(a) (iii) and
24(a) hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the Rights Agent
designated for that purpose,
1
<PAGE>
together with payment of the Purchase Price for the Preference Shares
(or other securities or property as the case may be) as to which the
Rights are exercised, at or prior to the earlier of (i) the close of
business on April 29, 2006 (the "Final Expiration Date"), or (ii) the
time at which the Rights are redeemed as provided in Section 24 hereof
(such earlier time being herein referred to as the "Expiration Date")
(b) The Purchase Price for each one one-hundredth of a Preference Share
pursuant to the exercise of a Right shall initially be $120, shall be
subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
Section 2. Amendment to Exhibit A. Exhibit A to the Rights Agreement is
hereby amended to read in its entirety as follows:
Exhibit A
[Form of Right Certificate]
Certificate No. R- ___ Rights
NOT EXERCISABLE AFTER APRIL 29, 2006 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.05 PER RIGHT ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE WERE OR ARE BENEFICIALLY OWNED BY A PERSON WHO WAS AN
ACQUIRING PERSON OR AN AFFILIATE OF OR AN ASSOCIATE OF AN
ACQUIRING PERSON. THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 11(a) (ii) OF THE RIGHTS AGREEMENT.]*
_______________
* The portion of the legend in brackets shall be inserted only if applicable.
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Right Certificate
UGI CORPORATION
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Agreement
dated as of April 29, 1986, as amended (the "Rights Agreement") between UGI
Corporation, a Pennsylvania corporation (the "Company"), and Mellon Bank N.A.
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 p.m. (Philadelphia time) on April 29, 2006, at the corporate trust office
of the Rights Agent, or its successors as Rights Agent, in Philadelphia,
Pennsylvania, one one-hundredth of a fully paid, non-assessable share of the
Series A Junior Participating Preference Stock (the "Preference Shares") of the
Company, at a purchase price of $120 per one one-hundredth of a 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 shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of [date], based on
the Preference Shares as constituted at such date.
Upon the occurrence of a Triggering 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, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, 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 any such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number of
Preference Shares 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.
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 Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent.
The Right Certificate, with or without other Right Certificates, upon
surrender at the corporate trust office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preference Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate
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shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number
of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.05 per Right.
No fractional Preference Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preference Share), 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 Preference Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
The Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ___________________.
ATTEST: UGI CORPORATION
____________________________ By__________________________________
Secretary Title:
Countersigned:
MELLON BANK N.A.
By__________________________
Title
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[Form of Reverse Side of Right Certificate]
Form of Assignment
------------------
(To be executed by 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-name Company,
with full power of substitution.
Dated: __________________________
_________________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:__________________________ _________________________________
Signature
NOTICE
------
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
----------------------------
(to be executed if holder desires to
exercise the Right Certificate.)
To UGI CORPORATION:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the Preference Shares
(or such other securities of the Company or of any other person) issuable upon
the exercise of such Rights and requests that certificates for such shares be
issued in the name of:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated:__________________________
_________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
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Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:__________________________ _________________________________
Signature
* * * * * * *
Section 3. Ratification. All other terms and conditions of the Rights
Agreement shall remain unaffected by this Amendment No. 4 and are ratified and
confirmed.
Section 4. Definitions. Capitalized terms used in this Amendment No. 4 but
not defined herein shall have the meanings ascribed to those terms in the Rights
Agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 4 to be duly
executed as of the day and year first above written.
UGI CORPORATION
By: /s/ Brendan P. Bovaird
--------------------------------
Vice President
MELLON BANK N.A.
By: /s/ Grace Vicki
--------------------------------
Vice President
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AMENDMENT NO. 5 TO
RIGHTS AGREEMENT
The date of this Amendment No. 5 is as of August 18, 2000. The parties are
UGI Corporation, a Pennsylvania corporation (the "Company"), formerly New UGI
Corporation, and successor to UGI Utilities, Inc. ("UGI"), formerly UGI
Corporation, and Mellon Bank N.A., a national bank (the "Rights Agent"), and
successor to Mellon Bank (East) N.A. ("Mellon").
BACKGROUND
UGI and Mellon entered into a Rights Agreement dated as of April 29, 1986,
which was amended by Amendment Nos. 1, 2, 3 and 4 dated as of May 22, 1990,
April 30, 1991, April 7, 1992 and April 17, 1996, respectively (as so amended,
the "Rights Agreement").
Pursuant to an Assumption Agreement dated April 7, 1992 between the Company
and Mellon, the Company assumed and agreed to discharge and perform all
liabilities and obligations of UGI under the Rights Agreement. The effective
time of such assumption was April 10, 1992, the effective time of the Plan of
Merger which restructured UGI into a holding company system. As part of the
restructuring, holders of UGI Common Stock became holders of the Company's
Common Stock, as permitted by paragraph (d) of Section 13 of the Rights
Agreement, added by Amendment No. 3 thereto.
Section 27 of the Rights Agreement provides that the Company and the Rights
Agent may amend the Rights Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement any
defective or inconsistent provisions or to make any other necessary or desirable
provisions in regard to matters or questions thereunder which do not adversely
affect the interests of the holders of Right Certificates. The Company has
approved a change in the provisions of the Rights Agreement applicable to the
redemption of Rights so as to delete the requirement that a majority of
Continuing Directors concur in the authorization of the redemption of Rights in
certain circumstances. Having determined that omitting all requirements for
action on the part of Continuing Directors is desirable, the Company and the
Rights Agent hereby amend the Rights Agreement as provided in this Amendment No.
5.
NOW THEREFORE, the parties agree as follows:
Section 1. Amendment to Section 1. Paragraph (g) of Section 1 of the
Rights Agreement, "Continuing Director," is hereby deleted.
-------------------
Section 2. Amendment to Section 24. Paragraph (a) of Section 24 of the
Rights Agreement, "Redemption and Termination," is hereby amended to read in its
--------------------------
entirety as follows:
(a) The Board of Directors of the Company may, at its option, at any time
prior to 5:00 P.M., Philadelphia time, on the earlier of (i) the close of
business on the tenth day following the Shares Acquisition Date (or, if the
Shares Acquisition Date shall have occurred prior to the Record Date, the close
of business on the tenth day following the Record Date), or (ii) the Final
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Expiration Date, redeem all but not less than all the then outstanding Rights at
a redemption price of $.05 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"); provided, however, that if, following
--------
the occurrence of a Shares Acquisition Date and following the expiration of the
right of redemption hereunder but prior to any Triggering Event, each of the
following shall have occurred and remain in effect: (i) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a number of
shares in a transaction, or series of transactions, which did not result in the
occurrence of a Triggering Event such that such Person is thereafter a
Beneficial Owner of shares of the Company which entitle the holder to cast 10%
or less of the votes that all shareholders of the Company are entitled to cast
generally in the election of directors, (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i), who
are Acquiring Persons, and (iii) the transfer or other disposition described in
clause (i) above was other than pursuant to a transaction, or series of
transactions, which directly or indirectly involved the Company or any of its
Subsidiaries; then the right of redemption shall be reinstated and thereafter be
subject to the provisions of this Section 24. Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable pursuant
to Section 11(a)(ii) prior to the expiration of the Company's right of
redemption hereunder.
Section 3. Amendment to Section 28. Section 28, "Determination and Actions
-------------------------
by the Board of Directors, etc." is hereby amended to read in its entirety as
------------------------------
follows:
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purpose of clause (ii) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (i) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other parties, and
(ii) not subject the Board to any liability to the holders of the Right
Certificates.
Section 4. Ratification. All other terms and conditions of the Rights
Agreement shall remain unaffected by this Amendment No. 5 and are ratified and
confirmed.
Section 5. Definitions. Capitalized terms used in this Amendment No. 5
but not defined herein shall have the meanings ascribed to those terms in the
Rights Agreement.
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IN WITNESS WHEREOF, the parties have caused this Amendment No. 5 to be duly
executed as of the day and year first above written.
UGI CORPORATION
By: ________________________________
Vice President
MELLON BANK N.A.
By: _________________________________
Vice President
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ASSUMPTION AGREEMENT
--------------------
ASSUMPTION AGREEMENT dated April 7, 1992 between New UGI Corporation, a
Pennsylvania corporation ("Holdco"), and Mellon Bank N.A. ("Bank").
WHEREAS, pursuant to a Plan of Merger (the "Plan") to be submitted for
approval by the shareholders of UGI Corporation, a Pennsylvania corporation
("UGI"), at a special meeting to be held on April 9, 1992, it is proposed that
the holders of Common Shares of UGI will become the holders of Common Shares of
Holdco;
WHEREAS, UGI and Mellon Bank N.A. are parties to a Rights Agreement dated
as of April 29, 1986, as amended by Amendments Nos. 1, 2 and 3 thereto dated as
of May 22, 1990, April 30, 1991 and April 7, 1992, respectively (as so amended,
the "Rights Agreement");
WHEREAS, the Board of Directors of Holdco has approved, effective upon the
effective time of the Plan as set forth therein (the "Effective Time"), the
assumption by Holdco of the liabilities and obligations of UGI under the Rights
Agreement (the "Assumed Obligations") and the substitution of Holdco for UGI for
all purposes thereunder; and
WHEREAS, Holdco wishes to provide for such assumption of the Assumed
Obligations as provided in the Rights Agreement;
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, Holdco hereby assumes and agrees to discharge and
perform all liabilities and obligations of UGI under the Rights Agreement,
effective upon the Effective Time.
This instrument shall be governed by and interpreted and enforced in
accordance with the laws of the Commonwealth of Pennsylvania and shall be
binding upon Holdco, its successors and assigns.
IN WITNESS WHEREOF, Holdco has caused this Assumption Agreement to be duly
executed on the date first above written and the Bank has joined therein to
evidence its acceptance of the assumption.
NEW UGI CORPORATION
By: /s/ James A. Sutton
------------------------------
Title: President
MELLON BANK N.A.
By: /s/ S. Jones
------------------------------
Title: Vice President
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