Shareholders Rights Agreement (2005)Full Document 

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SHAREHOLDERS RIGHTS AGREEMENT

 

This Shareholders Rights Agreement (this “Rights Agreement”) is made and entered into as of                 , 2005, by and between Seaspan Corporation, a Marshall Islands corporation (the “Corporation”), and American Stock Transfer & Trust Company, as Rights Agent (the “Rights Agent”).

 

WHEREAS, the Board of Directors of the Corporation (the “Board”) has (a) authorized and declared a dividend of one right (the “Right”) for each share of the Corporation’s common shares, par value $.01 per share (the “Common Shares”) held of record as of the Close of Business (as hereinafter defined) on             , 2005 (the “Record Date”) and (b) has further authorized the issuance of one Right in respect of each share of Common Shares that shall become outstanding (i) at any time between the Record Date and the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date (as such terms are hereinafter defined) or (ii) upon the exercise or conversion, prior to the earlier of the Redemption Date or the Final Expiration Date, of any option or other security exercisable for or convertible into shares of Common Shares, which option or other such security is outstanding on the Distribution Date; and

 

WHEREAS, each Right represents the right of the holder thereof to purchase one one-thousandth of a share of Series A Participating Preferred Stock (as such number may hereafter be adjusted pursuant to the provisions hereof), upon the terms and subject to the conditions set forth herein, having the rights, preferences and privileges set forth in the Certificate of Designations of Series A Participating Preferred Stock, attached hereto as Exhibit A.

 

NOW THEREFORE, in consideration of the premises and the mutual agreements set forth herein, the parties hereby agrees as follows:

 

1. Certain Definitions.

 

Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 20% or more of the shares of Common Shares then outstanding, but shall not include the Corporation, any Subsidiary of the Corporation or any employee benefit plan of the Corporation or of any Subsidiary of the Corporation, or any entity holding shares of Common Shares for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring Person as the result of an acquisition of shares of Common Shares by the Corporation which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 20% or more of the shares of Common Shares of the Corporation then outstanding; provided, however, that a Person who (i) becomes the Beneficial Owner of 20% or more of the shares of Common Shares of the Corporation then outstanding by reason of share purchases by the Corporation and (ii) then after such share purchases by the Corporation, becomes the Beneficial Owner of any additional shares of Common Shares of the Corporation (other than pursuant to a dividend or distribution paid or made by the Corporation on the outstanding shares of Common Shares in shares of Common Shares or pursuant to a split or subdivision of the outstanding shares of Common Shares), such Person shall be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of such additional shares of Common Shares of the Corporation such Person does not beneficially own 20% or more of the shares of Common Shares of the Corporation then outstanding. Notwithstanding the foregoing, (i) if the Corporation’s Board of Directors determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined herein, has become such inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially owned a percentage of the shares of Common Shares that would otherwise cause such Person to be an “Acquiring Person,” as defined herein, or (B) such Person was aware of the extent of the shares of Common Shares it beneficially owned but had no actual knowledge of the consequences of such beneficial ownership under this Agreement) and without any intention of changing or influencing control of the Corporation, and if such Person divested or divests as promptly as practicable a sufficient number of shares of Common Shares so that such Person would no longer be an “Acquiring Person,” as defined herein, then such Person shall not be deemed to be or to have become an “Acquiring Person” for any purposes of this Agreement; and (ii) if, as of the date hereof, any Person is the Beneficial Owner of 20% or more of the shares of Common Shares outstanding, such Person shall not be or become an “Acquiring Person,” as defined herein, unless and until such time as such Person shall become the Beneficial Owner of additional shares of Common Shares (other than pursuant to a dividend or distribution paid or made by the Corporation on the outstanding shares of Common Shares in shares of Common Shares or pursuant to a split or subdivision of the outstanding shares of Common Shares), unless, upon becoming the Beneficial Owner of


such additional shares of Common Shares, such Person is not then the Beneficial Owner of 20% or more of the shares of Common Shares then outstanding.

 

Adjustment fraction” shall have the meaning set forth in Section 11(a)(i) hereof.

 

Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement.

 

A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially Own” any securities:

 

(i) which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable or successor law or regulation);

 

(ii) which such Person or any of such Person’s Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed pursuant to this subsection (ii)(A) to be the Beneficial Owner of, or to beneficially own, (1) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange, or (2) securities which a Person or any of such Person’s Affiliates or Associates may be deemed to have the right to acquire pursuant to any merger or other acquisition agreement between the Corporation and such Person (or one or more of its Affiliates or Associates) if such agreement has been approved by the Board of Directors of the Corporation prior to there being an Acquiring Person; or (B) the right to vote 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 under this subsection (ii)(B) if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or

 

(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, whether or not in writing (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to subsection (ii)(B) above) or disposing of any securities of the Corporation; provided, however, that in no case shall an officer or director of the Corporation be deemed (x) the Beneficial Owner of any securities beneficially owned by another officer or director of the Corporation solely by reason of actions undertaken by such persons in their capacity as officers or directors of the Corporation or (y) the Beneficial Owner of securities held of record by the trustee of any employee benefit plan of the Corporation or any Subsidiary of the Corporation for the benefit of any employee of the Corporation or any Subsidiary of the Corporation, other than the officer or director, by reason of any influence that such officer or director may have over the voting of the securities held in the plan.

 

Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking institutions in New York are authorized or obligated by law or executive order to close.

 

Close of Business” on any given date shall mean 5:00 P.M., New York time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., New York time, on the next succeeding Business Day.

 

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Common Shares” shall have the meaning set forth in the preamble. Common Shares when used with reference to any Person other than the Corporation shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person.

 

Common Shares Equivalents” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

Corporation” shall have the meaning set forth in the preamble, subject to the terms of Section 13(a)(iii)(C) hereof.

 

Current Per Share Market Price” of any security (a “Security” for purposes of this definition), for all computations other than those made pursuant to Section 11(a)(iii) hereof, shall mean the average of the daily closing prices per share of such Security for the thirty (30) consecutive Trading Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price of any Security on any date shall be deemed to be the average of the daily closing prices per share of such Security for the ten (10) consecutive Trading Days immediately prior to such date; provided, however, that in the event that the Current Per Share Market Price of the Security is determined during a period following the announcement by the issuer of such Security of (i) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares or (ii) any subdivision, combination or reclassification of such Security, and prior to the expiration of the applicable thirty (30) Trading Day or ten (10) Trading Day period, after the

 

Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

Distribution Date” shall mean the earlier of (i) the Close of Business on the tenth day after the Shares Acquisition Date (or, if the tenth day after the Shares Acquisition Date occurs before the Record Date, the Close of Business on the Record Date) or (ii) the Close of Business on the tenth Business Day (or such later date as may be determined by action of the Corporation’s Board of Directors) after the date that a tender or exchange offer by any Person (other than the Corporation, any Subsidiary of the Corporation, any employee benefit plan of the Corporation or of any Subsidiary of the Corporation, or any Person or entity organized, appointed or established by the Corporation for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if, assuming the successful consummation thereof, such Person would be an Acquiring Person.

 

Equivalent Shares” shall mean Preferred Shares and any other class or series of capital stock of the Corporation which is entitled to the same rights, privileges and preferences as the Preferred Shares.

 

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Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

Exchange Ratio” shall have the meaning set forth in Section 24(a) hereof.

 

Exercise Price” shall have the meaning set forth in Section 4(a) hereof.

 

Expiration Date” shall mean the earliest to occur of: (i) the Close of Business on the Final Expiration Date, (ii) the Redemption Date, or (iii) the time at which the Board of Directors orders the exchange of the Rights as provided in Section 24 hereof.

 

Final Expiration Date” shall mean                 , 2015.

 

Nasdaq” shall mean the National Association of Securities Dealers, Inc. Automated Quotations System.

 

Person” shall mean any individual, firm, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity.

 

Post-event Transferee” shall have the meaning set forth in Section 7(e) hereof.

 

Preferred Shares” shall mean shares of Series A Participating Preferred Stock, $0.01 par value, of the Corporation.

 

Pre-event Transferee” shall have the meaning set forth in Section 7(e) hereof.

 

Principal Party” shall have the meaning set forth in Section 13(b) hereof. “Record Date” shall have the meaning set forth in the recitals at the beginning of this Rights Agreement.

 

Redemption Date” shall have the meaning set forth in Section 23(a) hereof.

 

Redemption Price” shall have the meaning set forth in Section 23(a) hereof.

 

Rights Agent” shall mean                 , or its successor or replacement as provided in Sections 19 and 21 hereof.

 

Rights Certificate” shall mean a certificate substantially in the form attached hereto as Exhibit B.

 

Section 11(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

Section 13 Event” shall mean any event described in clause (i), (ii) or (iii) of Section 13(a) hereof.

 

Securities Act” shall mean the Securities Act of 1933, as amended.

 

Shares Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by the Corporation or an Acquiring Person that an Acquiring Person has become such; provided that, if such Person is determined not to have become an Acquiring Person as defined herein, then no Shares Acquisition Date shall be deemed to have occurred.

 

Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

Subsidiary” of any Person shall mean any corporation or other entity of which an amount of voting securities sufficient to elect a majority of the directors or Persons having similar authority of such corporation or other entity is beneficially owned, directly or indirectly, by such Person, or any corporation or other entity otherwise controlled by such Person.

 

Substitution Period” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

Summary of Rights” shall mean a summary of this Agreement substantially in the form attached hereto as Exhibit C.

 

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Total Exercise Price” shall have the meaning set forth in Section 4(a) hereof.

 

Trading Day” shall mean a day on which the principal national securities exchange on which a referenced security is listed or admitted to trading is open for the transaction of business or, if a referenced security is not listed or admitted to trading on any national securities exchange, a Business Day.

 

A “Triggering Event” shall be deemed to have occurred upon any Person, becoming an Acquiring Person.

 

2. Appointment of Rights Agent. The Corporation hereby appoints the Rights Agent to act as agent for the Corporation and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the shares of Common Shares) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Corporation may from time to time appoint such co-Rights Agents as it may deem necessary or desirable.

 

3. Issuance of Rights Certificates.

 

(a) Until the Distribution Date, (i) the Rights will be evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by the certificates for shares of Common Shares registered in the names of the holders thereof (which certificates shall also be deemed to be Rights Certificates) and not by separate Rights Certificates and (ii) the right to receive Rights Certificates will be transferable only in connection with the transfer of shares of Common Shares. Until the earlier of the Distribution Date or the Expiration Date, the surrender for transfer of certificates for shares of Common Shares shall also constitute the surrender for transfer of the Rights associated with the shares of Common Shares represented thereby. As soon as practicable after the Distribution Date, the Corporation will prepare and execute, the Rights Agent will countersign, and the Corporation will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, postage-prepaid mail, to each record holder of shares of Common Shares as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Corporation, a Rights Certificate evidencing one Right for each share of Common Shares so held, subject to adjustment as provided herein. In the event that an adjustment in the number of Rights per share of Common Shares has been made pursuant to Section 11 hereof, then at the time of distribution of the Rights Certificates, the Corporation shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of the Distribution Date, the Rights will be evidenced solely by such Rights Certificates and may be transferred by the transfer of the Rights Certificates as permitted hereby, separately and apart from any transfer of shares of Common Shares, and the holders of such Rights Certificates as listed in the records of the Corporation or any transfer agent or registrar for the Rights shall be the record holders thereof.

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